The EU Renewable Electricity Regulatory
The EU Renewable Electricity Regulatory
DOCTOR OF PHILOSOPHY
In addition, I would like to thank Dr Aldo Zammit Borda for suggesting the theoretical
framework of Directive type (command and control/market and shared competence
or EU exclusive competence) used throughout this work.
This research benefited from various professional and academic experiences for
which thanks are due to friends, colleagues and mentors all assisting and
contributing to this research in their own special way but are too numerous to
mention.
This research considers the EU’s 21st century objective of mitigating climate change
by promoting renewable electricity and the multiple legal conflicts between this
objective and EU’s core legal principles of free movement, the prohibition of
distortion of competition and other forms of state aid.
The case law analysis confirms a lex specialis approach by the CJEU. This is
considered problematic from a legal consistency point of view, as it leads to unclear
investment signals and short-termism in an industry with long-term investment
horizons.
Uniquely, within the academic context, the empirical research considers how market
operators view these conflicts, via the findings of semi-structured interviews. The
research shows that market operators (i) prioritise regulatory stability to ensure long-
term asset business case validity, (ii) mitigate against uncertainty via higher financial
returns and (iii) lobby legislators and regulators to manage change. Market operators
recognise that diagonal conflicts exist and see the CJEU’s use of lex specialis as a
temporary expedient, surrounded by judicial and political risk.
The research proposes regulatory change to remove the ‘special’ status and outlined
diagonal conflicts, including carbon pricing mechanisms, removing fossil fuel
subsidies and enforcing network access rules. These proposals align the regulatory
framework with EU free trade principles - to create long-term regulatory stability,
valued by market operators.
1
https://www.un.org/press/en/2014/sgsm15839.doc.htm
2
http://www.presidency.ucsb.edu/ws/?pid=9266
Attention is drawn to the fact that copyright of this Thesis rests with:
(i) Anglia Ruskin University for one year following submission and thereafter with
This copy of the Thesis has been supplied on condition that anyone who consults it
is bound by copyright.
Abbreviation Definition
1.1 Introduction
The European Union (EU) is a unique economic and political organisation.3 Its main
objective at its formation in 1957 was the fostering of economic cooperation: the
principle being that countries linked by trade become economically interdependent
and thus likely to avoid armed conflict.4 Since 1957, the EU has evolved to address
changing political imperatives from a purely economic organisation into one
spanning policy areas such as energy,5 climate change mitigation, 6 environment
and health,7 external relations and security,8 justice and migration.9 In addressing
these expanded imperatives in relation to electricity the EU has evolved a complex,
polycentric, multi-layered regulatory 10 internal electricity market. 11 This research
contemplates to what extent the EU’s 21st century policy objective 12 to mitigate
climate change via the promotion of renewable electricity, 13 and the regulatory
framework14 put in place to facilitate this promotion, is in a form of legal diagonal
3
European Commission ‘Europe in 12 lessons’ available at https://publications.europa.eu/en/publication-detail/-
/publication/009305e8-2a43-11e7-ab65-01aa75ed71a1 accessed 25 July 2017
4
Karin Arts and Anna Dickson ‘EU development cooperation: from model to symbol? in Karin Arts and Anna K
Dickson (eds) EU development cooperation: from model to symbol? (Manchester University Press, 2004)
5
For an introduction to energy law see Raphael Heffron Energy Law: An Introduction (Springer, 2014); See Also
Peter Cameron and Raphael Heffron (eds) Legal Aspects of EU Energy Regulation (Oxford University Press,
2016); Martha Roggenkamp, Catherine Redgwell, Anita Ronne, and Inigo del Guayo (eds) Energy Law in Europe
National, EU and International Regulation (Oxford University Press, 2016)
6
Change in average temperature of earth’s surface is termed as climate change. ‘Climate change is a natural
phenomenon but post the industrial revolution period, human activity is cited as the important trigger for change in
climatic condition on the earth. Anthropocentric activities increase the carbon concentration in the atmosphere that
traps additional heat, leading to global warming and thus contributing to climate change’. -
http://www.powerplantccs.com/ref/glos/climate_change.html accessed 19 April 2018
7
The TFEU contains Article 168 (protection of public health), Article 114 (approximation of laws) and Article 153
(social policy) to facilitate the promotion of health across the EU. -
https://ec.europa.eu/health/policies/overview_en accessed 29 May 2018
8
The TFEU contains Article 75 (Area of freedom, security and justice)and Article 215 (‘specific provisions on the
common foreign and security policy); see Case C-130/10 Parliament v Council ECLI:EU:C:2012:472; See
https://europa.eu/european-union/topics/foreign-security-policy_en accessed 29 May 2018; See Also Annegret
Bendiek, ‘A Paradigm Shift in the EU’s Common Foreign and Security Policy: From Transformation to Resilience’
[2017] German Institute for International and Security Affairs; See Also Uwe Puetter, ‘The Latest Attempt at
Institutional Engineering: The Treaty of Lisbon and Deliberative Intergovernmentalism in EU Foreign and Security
Policy Coordination’ in Paul Cardwell (ed) EU External Relations Law and Policy in the Post-Lisbon Era (Asser
Press, 2012), 17
9
Willem Maas, ’The Origins, Evolution, and Political Objectives of EU Citizenship’, (2014) 15(5) German Law
Journal, 797; See also European Commission ‘EU in Brief’, https://europa.eu/european-union/about-eu/eu-in-
brief_en accessed 25 July 2017; Also to address changing ‘goals to be reached, generally an improvement in
some economic, political, or social feature of the community.’ Ronald Dworkin Taking Rights Seriously
(Bloomsbury, 2013), 22
10
Céline Gauer and Lars Kjølbye ‘Energy’ in by Ali Nikpay and Jonathan Faull (eds) The EC Law of Competition
(Oxford University Press, 2014)
11
Peter Cameron, ‘The Internal Energy Market – Redefining Objectives’ Peter Cameron and Raphael Heffron
(eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016), 3
12
Klaus Segbers, ‘The New Global Landscape and Energy Politics in the 21st Century’ in Rafael Leal-Arcas and
Jan Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
13
It being recognised that bio-diesel is regarded as a renewable energy source within the EU, however, such
sources are outside the scope of this research project, to allow the renewable electricity focus to be maintained
14
Within this research ‘regulatory structure’ is considered to be explicit legislative and administrative instruments,
as well as controls over any taxes or subsidies (including ‘support schemes’) of all sorts, including entry rates, and
other facets of economic activity – derived from Richard Posner, ‘Theories of economic regulation’ (1974) 5(2)
The Bell Journal of Economics and Management Science, 335. 335; George Stigler, ‘The Theory of Economic
Regulation’ (1971) 2(1) The Bell Journal of Economics and Management Science, 3; Sam Peltzman, ‘Towards a
More General Theory of Regulation’ (1976) 19(2) Journal of Law & Economics, 211. Furthermore ‘Support
Scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of Member States,
that promotes the use of energy from renewable sources by reducing the cost of that energy, increasing the price
at which it can be sold, or increasing, by means of a renewable energy obligation or otherwise, the volume of such
energy purchased. This includes, but is not restricted to, investment aid, tax exemptions or reductions, tax
refunds, renewable energy obligation support schemes including those using green certificates, and direct price
support schemes including feed-in tariffs and premium payments’ – Definition from Article 2 Renewable Energy
Directive (2009/28/EC)
15
Joost Pauwelyn, Conflict of Norms in Public International Law (Cambridge University Press 2003); see also
Sumudu Atapattu, ‘International Environmental Law and Soft Law: A New Direction or a Contradiction?’ in Cecilia
Bailliet (ed.), Non-State Actors, Soft Law and Protective Regimes: From the Margins (Cambridge University Press,
2012). In this research, diagonal conflict means a conflict between the regulatory framework of Directives and
Regulations which surrounds renewable energy and the Treaty articles relating to three cornerstones of EU law: the
free movement of goods; competition law; state aid. This is different from vertical conflict which would be, for
example a Directive being in conflict with the Treaty article from which it is derived; or horizontal being the conflict
between two Directives or two Treaty articles.
16
For an introduction to EU Energy Law See - Ana Stanic ‘An Overview of EU Energy Law’ in Peter Cameron and
Raphael Heffron (eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016); See also Hans
Vedder, Anita Rønne, Martha M Roggenkamp, and Íñigo del Guayo, ‘EU Energy Law’ in Martha Roggenkamp,
Catherine Redgwell, Anita Ronne, and Inigo del Guayo (eds) Energy Law in Europe (Oxford University Press,
2016)
17
Rike Krämer, ‘The Notion of Diagonal Conflicts as a Key Concept of European Conflicts Law’ in Christian Joerges
(ed) After Globalisation, New Patterns of Conflict and their Sociological and Legal Reconstructions (ARENA Report
No 4/11, 2011), 145, 158
18
Electricity known as ‘renewable electricity’ is in fact not renewable in its self, it is simply the originating energy
source that is renewable, e.g. wind, solar and hydro. Therefore using the term ‘renewable electricity’ is simply a
shorthand for electricity generated using a renewable form of energy as the motive force or fuel for the generating
facility
19
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80
20
Case C-164/17 Edel Grace and Peter Sweetman v An Bord Pleanala ECLI:EU:C:2018:593, para 55 – ‘projects
may be undertaken for imperative reasons of overriding public interest, including those of a social or economic
nature’
21
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
22
means ‘any instrument, scheme or mechanism applied by a Member State or a group of Member States, that
promotes the use of energy from renewable sources by reducing the cost of that energy, increasing the price at
which it can be sold, or increasing, by means of a renewable energy obligation or otherwise, the volume of such
energy purchased. This includes, but is not restricted to, investment aid, tax exemptions or reductions, tax
refunds, renewable energy obligation support schemes including those using green certificates, and direct price
support schemes including feed-in tariffs and premium payments’ – Definition from Article 2 Renewable Energy
Directive (2009/28/EC)
23
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
24
Ibid, Article 16(2)(b)
25
Means ‘a body, whatever its legal form, which has been made responsible, pursuant to a measure adopted by
the state, for providing a public service under the control of the state and has for that purpose special powers
beyond that which result from the normal rules applicable in relations between individuals.’ Case C-188/89 Foster
v British Gas plc ECLI:EU:C:1990:313
26
Thomas Schomerus, ‘Renewable energy: support mechanisms’ in Daniel Faber and Marjan Peeters (eds)
Climate Change Law (Elgar, 2016)
27
Feed-in Tariff is a contract mechanism between the owner of the renewable electricity generating facility and a
purchasing organisation which provides a guaranteed price for generated output (usually providing an enhanced
price above wholesale market prices) to the owner. This is generally combined with a purchase obligation.
Typically the costs are borne either by consumers or by the public budget; See Bert Saveyn, Antonio Soria
Ramírez and Tobias Wiesentha ‘Renewable electricity policy: feed-in tariffs versus tradeable green certificates’
[2008] Institute for Prospective Technological Studies
28
Green certificates are instruments certifying the production of electricity from renewable sources. Electricity
suppliers are expected to generate a given amount of electricity from renewable energy sources, an act which is
demonstrated by the possession of a green certificate which can be traded and thus revenues recovered -
Gestore Mercati Energetici, ‘About Green certificates’ <mercatoelettrico.org/en/mercati/cv/CosaSonoCv.aspx.
accessed 25 January 2016
29
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
30
Council Decision No 406/2009/EC 23 April 2009 ‘Reduction in carbon emissions to meet the Community’s
carbon emission reduction commitments up to 2020’ (Effort Sharing Decision)
31
Michael Hoffheimer Examples & Explanations: Conflict of Laws (Aspen, 2012); Adrian Briggs The Conflict of
Laws (Oxford University Press, 2008); Ronald Graveson Conflict of Laws: Private International Law (Sweet and
Maxwell, 1974)
32
Regulatory volatility is used within this work to mean changes in the regulatory framework that cannot be or are
not forecastable – a high rate of volatility would be the rapid unforecastable change in the regulatory framework.
33
Regulatory stability is the maintenance of the regulatory framework in place at the time the investment decision
is made across the lifecycle of the asset
34
Socio-legal research combines doctrinal and empirical methods which lead to the development of the grounded
theory, as well as policy orientated studies - https://sociolegaldcu.wordpress.com/what-is-socio-legal-research.
35
Ronald Dworkin Law's Empire (Harvard University Press, 1987) - Such that the law is an empire, liegemen to its
methods and ideals, including jurisprudence, politics, sociology, as well as morals, ethics and aesthetics as these
affect society; See also Ronald Dworkin Taking Rights Seriously (Bloomsbury, 2013),xi
36
Herbert Hart The Concept of Law (ed) Penelope Bulloch and Joseph Raz (Clarendon Press, 1994); See Also
Herbert Hart, ‘Positivism and the Separation of Law and Morals’ (1958) 71(4) Harvard Law Review 593, 601-2
37
Ibid, 95
38
Ronald Dworkin Law's Empire (Harvard University Press, 1987), 191
39
William Harvey, ‘Strategies for Conducting Elite Interviews’ (2011) 11(4) Qualitative Research, 431
40
David Silverman Interpreting Qualitative Data (SAGE, 2014); See Also Lorelli Nowell, Jill Norris, Deborah White
and Nancy Moules, ‘Thematic Analysis: Striving to Meet the Trustworthiness Criteria’ (2017) 16(1) International
Journal of Qualitative Methods; See also Moira Maguire and Brid Delahunt, ‘Doing a Thematic Analysis: A
Practical, Step-by-Step Guide for Learning and Teaching Scholars’ (2017) 8(3) All Ireland Journal of Teaching and
Learning in Higher Education
41
“Regulatory Risk” or ‘Regulatory Uncertainty’ is a process by which applicable regulators change the regulatory
framework undermining the business case for an asset before the end of the asset’s operational life or more
acutely before its finance arrangements have been discharged (put more simply it is the probability that the ‘rules
of the game’ existing at the time of the investment decision change during the operational life of the asset); See -
Cameron Hepburn, ‘Regulation by Prices, Quantities, or Both: A Review of Instrument Choice’, (2006) 22 (2)
Oxford Review of Economic Policy, 225; See also Harri Kalimo, Filip Sedefov and Max Jansson, ‘Market definition
as value reconciliation: The case of renewable energy promotion under the WTO Agreement on Subsidies and
Countervailing Measures’, (2017) 17(3),International Environmental Agreements: Politics, Law and Economics;
Colin Kirkpatrick, David Parker and Yin-Fang Zhang, ‘Foreign Direct Investment in Infrastructure in Developing
Countries: Does Regulation Make a Difference?’, (2006) 15(1) Transnational Corporations; Dieter Helm, Cameron
Hepburn and Richard Mash, ‘Credible Carbon Policy’, (2003) 19(3) Oxford Review of Economic Policy, 438;
Henok Birhanu Asmelash, ‘Energy subsidies and WTO dispute settlement: Why only renewable energy subsidies
are challenged’, (2015) 18 (2) Journal of International Economic Law, 261;
42
Reza Banakar, ‘Introducting Legal Uncertainty’, in Reza Banakar (ed.), Normativity in Legal Sociology:
Methodological Reflections on Law and Regulation in Late Modernity (Springer, 2014)
Before considering the specific legal conflicts that are focus of this research, this
section gives a brief outline of how legal conflicts occur and how they are managed
more widely within EU and international law,48 thus setting the discussion of diagonal
conflicts within the wider legal context of conflict resolution. In this context
international law is not considered a unified system but merely an aggregate of rules
that states have contracted.49
It has been stated50 that legal uncertainty is an almost universal feature of all
legal systems and there are four basic sources of this uncertainty,(i) value pluralism
(a collision of legal norms - legal system is pluralist when it contains inconsistent
rules), 51 with legal issues being governed by two or more conflicting rules, 52 (ii)
linguistic vagueness, resulting from poorly drafted legal text, (iii) rule instability, due
43
David Newbury ‘Questioning the EU Target Electricity Model – how should it be adapter to deliver the Trilemma’
[2016] Cambridge University, Energy Policy Research Group Working Paper: See Also Raphael Heffron Energy
Law: An Introduction (Springer, 2014)
48
International Law being considered as a body of law or a jurisdiction brought about by the collaboration of two
or more soverign states – Hans Kelsen Principles of International Law (Rinehart, 2003), 201
48
International Law being considered as a body of law or a jurisdiction brought about by the collaboration of two
or more soverign states – Hans Kelsen Principles of International Law (Rinehart, 2003), 201
48
International Law being considered as a body of law or a jurisdiction brought about by the collaboration of two
or more soverign states – Hans Kelsen Principles of International Law (Rinehart, 2003), 201
48
International Law being considered as a body of law or a jurisdiction brought about by the collaboration of two
or more soverign states – Hans Kelsen Principles of International Law (Rinehart, 2003), 201
48
International Law being considered as a body of law or a jurisdiction brought about by the collaboration of two
or more soverign states – Hans Kelsen Principles of International Law (Rinehart, 2003), 201
49
Herbert L A Hart The Concept of Law (Clarendon Press, 1961), 208
50
Gunnar Beck, ‘The Macro Level: The Structural Impact of General International Law on EU Law The Court of
Justice of the EU and the Vienna Convention on the Law of Treaties’ (2016) 35(1) Yearbook of European Law,
484
51
Nicholas Barber, ‘Legal Pluralism and the European Union’ (2006) 12(6) European Law Journal; See Also
Klemen Jaklic Constitutional Pluralism in the EU (Oxford University Press, 2014)
52
For example free movement and exceptions there to – See Case C-438/05 International Transport Workers’
Federation and Finnish Seamen’s Union v Viking Line ABP and OÜ Viking Line Eest ECLI:EU:C:2007:772 &
Case C-342/05 Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet ECLI:EU:C:2007:809
53
‘Precedent’ being used as not only binding decisions – but also in the EU context with no doctrine of formally
binding precedents - but where previous judicial decisions are principles upon which to issues can be adjudicated
– See Gunnar Beck, ‘The Macro Level: The Structural Impact of General International Law on EU Law The Court
of Justice of the EU and the Vienna Convention on the Law of Treaties’ (2016) 35(1) Yearbook of European Law,
484, 486
54
Pierre Larouche, ‘Coordination of European and Member State Regulatory Policy - Horizontal, Vertical and
Transversal Aspects’ (2004) 5(1) Journal of Network Industries, 277
55
Christian Joerges, Poul Kjaer and Tommi Ralli, ‘A New Type of Conflicts Law as Constitutional Form in the
Postnational Constellation’ (2011) 2(2) Transnational Legal Theory, 153, 155
56
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
57
Council Directive 2012/27/EU 25 October 2012 – Energy Efficiency Directive OJ L315/1 Available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:315:0001:0056:en:PDF
58
S Evju, ‘Revisiting the Posted Workers Directive: Conflict of Laws and Laws in Contrast’ (2009) 12 Cambridge
Yearbook of European Legal Studies; See Also L Zucca Constitutional Dilemmas: Conflicts of Fundamental Legal
Rights in Europe and the USA (Oxford University Press, 2008); A T Pérez Conflicts of Rights in the European
Union. A Theory of Supranational Adjudication (Oxford University Press, 2010); Marco Dani, ‘Economic and
Social Conflicts, Integration and Constitutionalism in Contemporary Europe’ [2009] London School of Economics
Europe in Question Series Paper No. 13/2009 46; J H Gerards, ‘Fundamental Rights and Other Interests: Should
It Really Make a Difference?’ in E Brems (ed), Conflicts Between Fundamental Rights (Intersentia 2008); T Novitz
and P Syrpis, ‘Economic and Social Rights in Conflict: Political and Judicial Approaches to Their Reconciliation’
(2008) 33 European Law Review; N Lindstrom, ‘Service Liberalization in the Enlarged EU: A Race to the Bottom
or the Emergence of Transnational Political Conflict?’ (2010) 48 Journal of Common Maket Studies 1307; Marco
Dani, ‘Rehabilitating Social Conflicts in European Public Law’ (2012) 18 European Law Journal 621; M Husovec,
‘Intellectual Property Rights and Integration by Conflict: The Past, Present and Future’ (2016) 18 Cambridge
Yearbook of European Legal Studies, 239
59
Regulation (EU) 2016/679 ‘The protection of natural persons with regard to the processing of personal data and
on the free movement of such data’ OJ L 119/1
60
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
61
means ‘any instrument, scheme or mechanism applied by a Member State or a group of Member States, that
promotes the use of energy from renewable sources by reducing the cost of that energy, increasing the price at
which it can be sold, or increasing, by means of a renewable energy obligation or otherwise, the volume of such
energy purchased. This includes, but is not restricted to, investment aid, tax exemptions or reductions, tax
refunds, renewable energy obligation support schemes including those using green certificates, and direct price
support schemes including feed-in tariffs and premium payments’ – Definition from Article 2 Renewable Energy
Directive (2009/28/EC)
62
Hans Vedder, Anita Rønne, Martha M Roggenkamp and Íñigo del Guayo, ‘EU Energy Law’ in Martha
Roggenkamp, Catherine Redgwell, Anita Ronne, and Inigo del Guayo (eds) Energy Law in Europe National, EU
and International Regulation (Oxford University Press, 2016)
63
Wilfred Jenks 'The Conflict of Law-Making Treaties' (1953) 30 British. Yearbook of International Law, 401
64
Joost Pauwelyn Conflict of Norms in Public International Law (Cambridge University Press, 2003), 176; See
also Erich Vranes, ‘The Definition of ‘Norm Conflict’ in International Law and Legal Theory’ (2006) 17(2) European
Journal of International Law, 395, 412
65
WTO Panel Report, Indonesia Certain Measures Affecting the Automobile Industry, WT/DS54/R, WT/DS59/R,
WT/DS64/R, adopted on 23 July 1998, at note 649
66
Martin Borowski ,’Legal Pluralism in the European Union’ in Agustín José Menéndez and John Erik Fossum
(eds) Law and Democracy in Neil MacCormick's Legal and Political Theory: The Post-Sovereign Constellation
(Springer, 2011)
67
Dirk Pulkowski The Law and Politics of International Regime Conflict (Oxford University Press, 2014)
68
Anne Peters, ‘The refinement of international law: From fragmentation to regime interaction and politicization’
(2017) 15(3) International Journal of Constitutional Law, 671, 671
69
Jus cogens literally means ‘compelling law’. It designates norms from which no derogation is permitted by way
of particular agreements. Note the Vienna Conventions on the Law of Treaties stipulate that a treaty is void if it
conflicts with jus cogens (Art. 53 and 64)
70
Andrea Bianchi, ‘Human Rights and the Magic of Jus Cogens’ (2008) 19(3) The European Journal of
International Law, 491
71
Joseph Weiler, ‘Why Should Europe be a Democracy: The Corruption of Political Culture and the Principle of
Tolerance’ in Francis Snyder (ed) The Europeanisation of Law: The Legal Effects of European Integration
(Bloomsbury, 2000)
72
Vienna Convention on the law of treaties (with annex). Concluded at Vienna on 23 May 1969. Authentic texts:
English, French, Chinese, Russian, and Spanish. 1155 U.N.T.S. 331, 8 I.L.M. 679, entered into force Jan. 27,
1980 - available at https://treaties.un.org/doc/publication/unts/volume%201155/volume-1155-i-18232-english.pdf
accessed 16 September 2017
73
Anne Peters, ‘The refinement of international law: From fragmentation to regime interaction and politicization’
(2017) 15(3) International Journal of Constitutional Law, 671, 692
74
Ibid Article 31(3)
75
Ibid Article 28
76
Ibid Article 30(3)
77
Ibid Article 53
78
Janelle Diller,’ Economic, Social and Cultural Human Rights: The Journey towards Peremptory Norms in
International Law’ (2018) 36(1) Nordic Journal of Human Rights, 19; See Also Kamrul Hossain, ‘The Concept of
Jus Cogens and the Obligation Under The U.N. Charter’ (2005) 3(1) Santa Clara Journal of International Law, 72
79
Silvia Zorzetto, ‘The Lex Specialis Principle and its Uses in Legal Argumentation: An Analytical Inquiry’ (2012) 3
Eunomia, 61, 66
80
Case 6/64, Flaminio Costa v Ente Nazionale Energia Elettrica (Enel) ECLI:EU:C:1964:66; See also Case 26/62,
NV Algemene Transport-en Expeditie Onderneming Van Gend en Loos v Nederlandse Administratie der
Belastinger, ECLI:EU:C:1963:1 ; Case C-266/16 Western Sahara Campaign UK v Commissioners for Her
Majesty's Revenue and Customs and Secretary of State for Environment, Food and Rural Affairs
ECLI:EU:C:2018:118; Case C-284/16 Slowakische Republik v Achmea BV ECLI:EU:C:2018:158
81
International Law being considered as a body of law or a jurisdiction brought about by the collaboration of two
or more soverign states – Hans Kelsen Principles of International Law (Rinehart, 2003), 201
82
Case 26/62, NV Algemene Transport-en Expeditie Onderneming Van Gend en Loos v Nederlandse
Administratie der Belastinger, ECLI:EU:C:1963:1, para 4
83
Jan-Wilem Rossem ‘The Autonomy of EU Law: More is Less?’ in Ramses Wessel and Steven Blockmans
Between Autonomy and Dependence: The EU Legal Order under the Influence of International Organisations
(Springer, 2013), 22; See also Opinion 1/91 Agreement between EEC & European Economic Area
ECLI:EU:C:1991:490
84
Opinion 2/13 Opinion pursuant to Article 218(11) TFEU — Draft international agreement — Accession of the
European Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms —
Compatibility of the draft agreement with the EU and FEU Treaties ECLI:EU:C:2014:2454, para 158
85
Lex specialis is a method of resolving legal conflicts where specialist legal provisions take precedence over
more general provisions.
86
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80
87
Case C-490/10 Parliament v Council ECLI:EU:C:2012:525 para 65 to 67
This research contributes to existing knowledge in the five main ways outlined below
and further detailed in Section 5.3.
Firstly, the research uses case law analysis to consider the interaction of EU
renewable electricity law,90 free movement (Article 34 TFEU) 91 and state aid (Article
107 TFEU),92 building on the academic literature surrounding vertical and horizontal
conflicts,93 to discuss diagonal conflicts in the context of renewable electricity.94 The
research shows the consistent use of lex specialis by the CJEU in resolving these
diagonal conflicts.
Secondly, the research points out that the CJEU’s use of lex specialis in
favour of the renewable electricity law 95 denies consistent application of other
provisions of the Treaty, such as the network provisions contained in Articles 170 to
172 TFEU. The research thus suggests other means of supporting renewable
electricity capacity that would temper the continued use of lex specialis. 96
88
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
89
Odile Ammann, ‘The Court of Justice of the European Union and the Interpretation of International Legal
Norms: To Be or Not to Be a “Domestic” Court?’ in Nicolas Levrat and Pola Cebulak (eds) The European Union
and International Law (Schulthess, 2015)
90
Renewable Energy Directive, Emissions Trading Directive, Effort Sharing Decision, Industrial Emissions
Directive, Energy Efficiency Directive, Electricity Market Directive, Energy Taxation Directive and others
91
Hans Vedder, Anita Rønne, Martha M Roggenkamp and Íñigo del Guayo, ‘EU Energy Law’ in Martha
Roggenkamp, Catherine Redgwell, Anita Ronne, and Inigo del Guayo (eds) Energy Law in Europe National, EU
and International Regulation (Oxford University Press, 2016)
92
Kamiel Mortelmans, 'Towards Convergence in the Application of the Rules on Free Movement and on
Competition?' (2001) 38,3 Common Market Law Review, 613, 613.
93
Sybe de Vries ‘The Protection of Fundamental Rights Within Europe’s Internal Market After Lisbon: An
endeviour for more harmony’ in Sybe de Vries, Ulf Bernitz and Stephen Weatherill (eds) The Protection of
Fundamental Rights in the EU After Lisbon (Hart, 2013); Philippe Sands and Paolo Galizzi Documents in
European Community Environmental Law (Cambridge University Press, 2006); Eva Heidbreder ‘Strategies in
multilevel policy implementation: moving beyond the limited focus on compliance’ (2017) 24(9) Journal of
European Public Policy, 1367;
94
Rike Krämer, ‘The Notion of Diagonal Conflicts as a Key Concept of European Conflicts Law’ in Christian Joerges
(ed) After Globalisation, New Patterns of Conflict and their Sociological and Legal Reconstructions (ARENA Report
No 4/11, 2011), 145, 158
95
Renewable Energy Directive, Emissions Trading Directive, Effort Sharing Decision, Industrial Emissions
Directive, Energy Efficiency Directive, Electricity Market Directive, Energy Taxation Directive and others
96
Aviel Verbruggen and Volkmar Lauber, ‘Basic Concepts for Designing Renewable Electricity Support Aiming at
a Full-scale Transition by 2050’ (2009) 37 Energy Policy 5732, 5734
97
Sybe de Vries ‘The Protection of Fundamental Rights Within Europe’s Internal Market After Lisbon: An
endeviour for more harmony’ in Sybe de Vries, Ulf Bernitz and Stephen Weatherill (eds) The Protection of
Fundamental Rights in the EU After Lisbon (Hart, 2013); Philippe Sands and Paolo Galizzi Documents in
European Community Environmental Law (Cambridge University Press, 2006); Eva Heidbreder ‘Strategies in
multilevel policy implementation: moving beyond the limited focus on compliance’ (2017) 24(9) Journal of
European Public Policy, 1367
98
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
99
Command and Control Regulation being ‘the direct regulation of an activity by legislation that states what is
permitted’ - Phil McManus Environmental Regulation (Elsevier, 2009); See also Beatriz Junquera and Jesús
Ángel Del Brío ‘Preventive Command and Control Regulation: A Case Analysis’ (2016) 99(8) Journal of
Sustainability
100
means ‘any instrument, scheme or mechanism applied by a Member State or a group of Member States, that
promotes the use of energy from renewable sources by reducing the cost of that energy, increasing the price at
which it can be sold, or increasing, by means of a renewable energy obligation or otherwise, the volume of such
energy purchased. This includes, but is not restricted to, investment aid, tax exemptions or reductions, tax
refunds, renewable energy obligation support schemes including those using green certificates, and direct price
support schemes including feed-in tariffs and premium payments’ – Definition from Article 2 Renewable Energy
Directive (2009/28/EC)
101
Arbitration 062/2012, Charanne B.V. & Construction Investments S.A.R.L v Kingdom of Spain (January 2016)
Available At http://www.italaw.com/sites/default/files/case-documents/italaw7097_0.pdf
102
Decision 10/2015, Scat Punti Vendita Spa v Agenzia delle entrate - Direzione provinciale di Reggio Emilia,
(October 2015) http://www1.agenziaentrate.gov.it/english/
103
Case C-6/64, Flaminio Costa v Ente Nazionale Energia Elettrica (Enel) ECLI:EU:C:1964:66; See also Case C-
26/62, NV Algemene Transport-en Expeditie Onderneming Van Gend en Loos v Nederlandse Administratie der
Belastinger, ECLI:EU:C:1963:1 ; Case C-266/16 Western Sahara Campaign UK v Commissioners for Her
Majesty's Revenue and Customs and Secretary of State for Environment, Food and Rural Affairs
ECLI:EU:C:2018:118; Case C-284/16 Slowakische Republik v Achmea BV ECLI:EU:C:2018:158
104
The Energy Charter Treaty 1994 – available at http://www.energycharter.org/process/energy-charter-Treaty-
1994/energy-charter-Treaty; For an introduction to the Energy Charter Treaty see Graham Coop and Bernhard
Maier, ‘External Relations of EU Energy Regulation’ in Peter Cameron and Raphael Heffron (eds) Legal Aspects
of EU Energy Regulation (Oxford University Press, 2016), 66
105
Case C-92/11 RWE Vertrieb AG v Verbraucherzentrale Nordrhein-Westfalen eV.,ECLI:EU:C:2013:180
106
Joined Cases C-359/11 and C-400/11 Alexandra Schulz v Technische Werke Schussental GmbH und Co. KG
and Josef Egbringhoff v Stadtwerke Ahaus GmbH, ECLI:EU:C:2014:2317
107
Case C-347/06 ASM Brescia SpA v Comune di Rodengo Saiano, ECLI:EU:C:2008:416
108
Case C-201/08 Plantanol GmbH & Co. KG v Hauptzollamt Darmstadt, ECLI:EU:C:2009:539
109
Geert van Calster,’ Climate Change and Renewable Energy as a Super Trump for EU Trade Law
However all Essent clear’ (2014) 1 2014 Renewable Energy Law & Policy Review, 60
110
Catherine Barnard, The Substantive Law of the EU: The Four Freedoms, (Oxford University Press 2007)
111
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
112
Joanna Lewis, ‘The rise of renewable protectionism: Emerging trade conflicts and implications for low carbon
development’ (2014) 14(4) Global Environmental Politics, 10
113
Case C-265/08 Federutility and others v Autorità per l’energia elettrica e il gas ECLI:EU:C:2010:205
114
Case C-242/10 Enel Produzione SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2011:861
115
Case C-264/09 Commission v Slovak Republic, ECLI;EU:C:2011:580
116
Joined Cases C-105/12 to C-107/12 Staat der Nederlanden v Essent NV, Essent Nederland BV, Eneco
Holding NV and Delta NV, ECLI:EU:C:2013:677
117
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
118
Geert van Calster,’ Climate Change and Renewable Energy as a Super Trump for EU Trade Law: However all
Essent clear’ (2014) 1 Renewable Energy Law & Policy Review, 60
119
Terry Hutchinson and Nigel Duncan ‘Defining & describing What We do: Doctrinal Legal Research’ (2012)
17(1) Deakin Law Review, 83, 101; See Also Susan Bartie, ‘The Lingering Core of Legal Scholarship’ (2010)
30(3) Legal Studies, 345; Paul Chynoweth, ‘Legal Research’ in Andrew Knight and Les Ruddock (eds), Advanced
Research Methods in the Built Environment (Wiley-Blackwell, 2008) 37
120
Rafael Leal-Arcas and Andrew Filis, ‘Conceptualizing EU Energy Security through an EU Constitutional Law
Perspective’ (2013) 36 Fordham International Law Journal, 1224; see also Joseph H H Weiler, The Constitution of
Europe – “Do the new clothes have an emperor?”, (Cambridge University Press 1999); Allan Rosas and Lorna
Armati EU Constitutional Law: An Introduction (Hart Publishing, 2012); Robert Schütze European Constitutional
Law (Cambridge University Press, 2012)
121
Ronald Dworkin Law's Empire (Harvard University Press, 1987), 191
122
Lorelli Nowell, Jill Norris, Deborah White and Nancy Moules, ‘Thematic Analysis: Striving to Meet the
Trustworthiness Criteria’ (2017) 16(1) International Journal of Qualitative Methods; See also Moira Maguire and
Brid Delahunt, ‘Doing a Thematic Analysis: A Practical, Step-by-Step Guide for Learning and Teaching Scholars’
(2017) 8(3) All Ireland Journal of Teaching and Learning in Higher Education
123
Robert Schütze - European Constitutional Law (Cambridge University Press, 2012), 83
124
Robert Schütze,’ EU Competences: Existence and Exercise’ in Damian Chalmers and Anthony Arnull (eds)
The Oxford Handbook of European Union Law (Oxford University Press, 2015): See Also Article 4(2)(e)
(Environment) and (i) TFEU (Energy) provide for a shared competence between the EU and the member state -
"Shared competence" means that both the EU and its member states may adopt legally binding acts in the area
concerned. However, the member states can do so only where the EU has not exercised its competence or has
explicitly ceased to do so.
125
Nicholas Tsagourias, Introduction – Constitutionalism: a theoretical roadmap’ in Nicholas Tsagourias (ed)
Transnational Constitutionalism: International & European Perspectives (Cambridge University Press 2007)
126
Paul-Henri Spaak, ‘Intergovernmental Committee on European Integration. The Brussels Report on the
General Common Market (abridged, English translation of document commonly called the Spaak Report) (June
1956) Information Service High Authority of The European Community for Coal and Steel
127
COM(2010) 639 final, ‘Energy 2020 - A strategy for competitive, sustainable and secure energy’, Available at
http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52010DC0639&from=EN ; See Also Klaus
Segbers, ‘The New Global Landscape and Energy Politics in the 21st Century’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
128
The EU is composed of 7 institutions - the European Parliament; the European Council; the Council of the
European Union (simply called 'the Council'); the European Commission; the Court of Justice of the European
Union; the European Central Bank - Article 13 of the Treaty on European Union
129
Giacinto della Cananea, ‘Is European Constitutionalism Really Multilevel’ [2009] German-Italian conference
of public law
130
Gary Marks, Liesbet Hooghe and Kermit Blank, ‘European Integration from the 1980’s; State-centric v Multi-
level Governance’ (1996) 34(3) Journal of Common Market Studies, 341
131
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
132
For an Introduction to the role of ACER see - Raphael Heffron 'Shared Governance': ACER and the Roles of
the National Energy and Competition Regulators in the EU’ in Peter Cameron and Raphael Heffron (eds) Legal
Aspects of EU Energy Regulation (Oxford University Press, 2016)
133
Fritz Scharpf, ‘Introduction: The Problem Solving Capacity of Multi-Level Governance’ (1997) 4(4) Journal of
European Public Policy, 520
134
John Brewer and Albert Hunter Foundations of Multimethod Research: Synthesizing Styles (Sage, 2006): See
also Ronet Bachman and Russell Schutt The Practice of Research in Criminology and Crimainal Justice (Sage,
2007)
135
Sanne Taekema and Bart van Klink, ‘On the border: Limits and Possibilities of Interdisciplinary Research’, in
Bart van Klink and Sanne Taekema (eds.), Law and Method, Interdisciplinary Research into Law (Tübingen: Mohr
Siebeck, 2011), 7; See Also Elizabeth Chambliss, ‘When do Facts Persuade? Some Thoughts on the Market for
‘Empirical Legal Studies’ (2008) 71(:2)Law and Contemporary Problems 17
136
Paddy Hillyard ‘Invoking Indignation: Reflections on Future Directions of Socio-legal Studies’ (2002) 29 Journal
of Law and Society, 650
137
Reza Banakar, ‘On the Paradox of Contextualisation’, in Reza Banakar (ed.), Normativity in Legal Sociology:
Methodological Reflections on Law and Regulation in Late Modernity (Springer, 2014), 91
138
William Harvey, ‘Strategies for Conducting Elite Interviews’ (2011) 11(4) Qualitative Research, 431; See Also
Thomas Diefenbach, ‘Are case studies more than sophisticated storytelling?:Methodological problems of
qualitative empirical research mainly based on semi-structured interviews’ (2009) 43 Quality & Quantity, 875; Lisa
Webley, ‘Qualitative Approaches to Empirical Legal Research’ in Peter Cane and Herbert Kritzer, (eds) The
Oxford Handbook of Empirical Legal Research (Oxford University Press, 2010)
139
The participants would be those described in academic literature as ‘elite’ – Kari Lancaster, ‘Confidentiality,
anonymity and power relations in elite interviewing: conducting qualitative policy research in a politicised domain’
(2017) 20(1), 93,93; See also Zoë Slote Morris, ‘The Truth about Interviewing Elites’ (2009) 29(3), 209
140
Robert Weiss, Learning from Strangers: The Art and Method of Qualitative Interview Studies (Free Press,
1994)
141
Ray Galvin, ‘How many interviews are enough? Do qualitative interviews in building energy consumption
research produce reliable knowledge?’ (2015) 1 Journal of Building Engineering 2,2
142
Global EPC Contract and Risk Management Conference (London / 12-13 OCT 2017)
143
Lorelli Nowell, Jill Norris, Deborah White and Nancy Moules, ‘Thematic Analysis: Striving to Meet the
Trustworthiness Criteria’ (2017) 16(1) International Journal of Qualitative Methods; See also Moira Maguire and
Brid Delahunt, ‘Doing a Thematic Analysis: A Practical, Step-by-Step Guide for Learning and Teaching Scholars’
(2017) 8(3) All Ireland Journal of Teaching and Learning in Higher Education
144
Coding is an analysis process whereby the transcripts of the interviews are broken down by phrase, verb or
noun and by so doing labelling it (a ‘code’) and grouping these parts into a more meaningful expression which can
be developed into a theme or finding. Code is a tag or label to give meaningful expression to a parcel of text –
developed from Matthew Miles and Michael Huberman Qualitative Data Analysis (SAGE, 1994)
145
‘Data saturation’ is generally definted in literature as the point where no additional or new themes will emerge
from the collection of more data - Barney Glaser and Anselm Strauss Discovery of Grounded Theory Strategies
for Qualitative Research (Routledge, 1967); See Also Melanie Birks and Jane Mills Grounded Theory: A Practical
Guide, (2nd edn. Sage, 2015); Lisa Given 100 Questions (and Answers) About Qualitative Research (Sage,
2016); Ellen Olshansky, Generating theory using grounded theory methodology. In: Mary de Chesnay (ed.)
Nursing Research Using Grounded Theory: Qualitative Designs and Methods in Nursing (Springer, 2015), 19-28
146
Benjamin Saunders, Julius Sim, Tom Kingstone, Shula Baker, Jackie Waterfield, Bernadette Bartlam, Heather
Burroughs and Clare Jinks, ‘Saturation in qualitative research: exploring its conceptualization and
operationalization’ (2018) 52(4) Quality & Quantity, 1893; Clive Boddy, ‘Sample size for qualitative research’
(2016) 19(4) Journal of Qualitative Market Research, 426; Alan Bryman, ‘How many qualitative interviews is
enough?’ in Sarah Baker and Rosalind Edwards (eds.) How Many Qualitative Interviews is Enough? Expert
Voices and Early Career Reflections on Sampling and Cases in Qualitative Research, ESRC National Centre for
Research Methods, University of Southampton, Southampton (2012), 18; Jill Francis, Marie Johnston, Clare
Robertson, Liz Glidewell, Vikki Entwistle, Martin Eccles and Jeremy Grimshaw ‘What is an adequate sample size?
Operationalising data saturation for theory-driven interview studies’ (2010) 25(10) Psychology & Health, 1229;
Patricia Fusch and Lawrence Ness, ‘Are we there yet? Data saturation in qualitative research’ (2015) 20(9) The
Qualitative Report, 1408; Greg Guest, Arwen Bunce and Laura Johnson, ‘How Many Interviews Are Enough? An
Experiment with Data Saturation and Variability’ (2006) 18(1) Field Method, 59; Konstantina Vasileiou, Julie
Barnett, Susan Thorpe and Terry Young, ‘Characterising and justifying sample size sufficiency in interview-based
studies: systematic analysis of qualitative health research over a 15-year period’ (2018) BMC Medical Research
Methodology; Monique Hennink, Bonnie Kaiser and Vincent Marconi, ‘Code Saturation Versus Meaning
Saturation: How Many Interviews Are Enough?’ (2016) 27(4) Qualitative Health Research, 591
147
Greg Guest, Arwen Bunce and Laura Johnson, ‘How Many Interviews Are Enough? An Experiment with Data
Saturation and Variability’ (2006) 18(1) Field Methods, 59
148
Ray Galvin, ‘How many interviews are enough? Do qualitative interviews in building energy consumption
research produce reliable knowledge?’ (2015) 1 Journal of Building Engineering, 2,2
Energy policy generally, and that related to electricity specifically, is important at the
EU and member state level. 149 In recent years the availability of electricity has
become core to the member states’ ability to discharge their economic and social
functions.150 Every aspect of modern life151 requires available and affordable energy
- from mass communications and transport, to food production and health. Therefore
‘security of supply’152 has become a highly political issue for EU members.153 It being
said that accessible and reliable supplies of electricity, have the characteristics of a
‘public good’.154 In relation to this ‘public good’ the EU Commission is said to be
acting as a ‘trustee of the regional interest’.155 In the long term, the EU's energy
security is inseparable from, and significantly fostered by, its need to move to a
competitive, low-carbon economy which reduces the use of imported fossil fuels.156
Energy policy is an area 157 where member states share sovereignty to derive a
better future for all.158
With this background, the EU’s current energy policy has two main themes;
(i) the lowering of carbon emissions 159 to reduce the environmental impact of
149
Penelope Crossley, ‘The role of renewable energy law and policy in meeting the EU’s energy security
challenges’ in Rafael Leal-Arcas and Jan Wouters (eds) Research Handbook on EU Energy Law and Policy
(Elgar, 2017)
150
Catherine Redgwell, ‘Energy, Environment and Trade in the European Community’ (1994) 12 Journal of
Energy & Natural Resources Law 128, 140
151
Thomas-Olivier Léautier and Claude Crampes,’ Liberalisation of the European electricity markets: a glass half
full’ (2016) Toulouse School of Economic Management Working Paper available at http://fsr.eui.eu/liberalisation-
european-electricity-markets-glass-half-full accessed 21 November 2017
152
Security of Supply means ‘the ability to ensure the continued satisfaction of essential energy needs by means
of, on the one hand, sufficient internal resources exploited under acceptable economic conditions and, on the
other, of accessible, stable and diversified energy sources’ found in
http://europedia.moussis.eu/books/Book_2/6/19/03/?all=1 accessed 14 March 2018
153
COM 330 (2014) ‘European Energy Security Strategy’
154
Public goods are those goods that cannot be provided selectively to only certain members of the public; See
Nicole Robins and Tridevi Chakma,’ State Aid in Energy under the Spotlight: The implications of the Hinkley Point
Decision’ (2016) 2 European State Aid Quarterly, 247, 251
155
Gerd Winter, ‘Introduction’ in Gerd Winter (ed.), Multilevel Governance and Global Environmental Change
(Cambridge University Press, 2006), 24 – The general duties of the Commission in this regard being set out in
Article 17(1) TEU: The Commission shall promote the general interest of the Union and take appropriate initiatives
to that end. It shall ensure the application of the Treaties, and of measures adopted by the institutions pursuant to
them. It shall oversee the application of Union law under the control of the Court of Justice of the European Union.
It shall execute the budget and manage programmes. It shall exercise coordinating, executive and management
functions, as laid down in the Treaties. With the exception of the common foreign and security policy, and other
cases provided for in the Treaties, it shall ensure the Unionʼs external representation. It shall initiate the Unionʼs
annual and multiannual programming with a view to achieving interinstitutional agreements’
156
COM 330 (2014) ‘European Energy Security Strategy’, 3; See Also Penelope Crossley, ‘The role of renewable
energy law and policy in meeting the EU’s energy security challenges’ in Rafael Leal-Arcas and Jan Wouters
(eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
157
Matthew Burke and Jennie Stephens, ‘Energy democracy: Goals and policy instruments for sociotechnical
transitions’ (2017) 33 Energy Research & Social Science, 35
158
John Gough, The Social Contract (Clarendon Press, 1936), 2-3; see also Celeste Friend Social Contract
Theory (International Encyclopaedia of Philosophy, 2004)
159
‘Carbon Gases are those gases, such as water vapour, carbon dioxide, nitrous oxide, methane,
hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride, that are transparent to solar
(short-wave) radiation but opaque to long-wave (infrared) radiation, thus preventing long-wave radiant energy
from leaving earth’s atmosphere. The net effect is a trapping of absorbed radiation and a tendency to warm the
planet's surface.’ - definition contained in Dag Klackenberg, Christian Egenhofer and Kyriakos Gialoglou
The EU’s energy policy seeks to reconcile several issues (i) it seeks to resolve the
trilemma of reliability, sustainability and affordability,165 as well as, in more recent
times, reducing climate change and achieving electricity market liberalisation166and
(ii) enhancing its social acceptance, 167 which allows development permits to be
obtained readily. To resolve these issues, a holistic regulatory framework 168 is
‘Rethinking the EU Regulatory Strategy for the Internal Energy Market’ (2004) Task Force Report No 52, Centre
for European Policy Studies
160
European Commission Com (2000) 769 ‘Towards a European Strategy for the Security of Energy Supply’
defines energy security as ‘The uninterrupted physical availability of energy products on the market, at a price
which is affordable for all consumers (private and industrial), while respecting environmental concerns and looking
towards sustainable development’
161
European Commission COM (2014) 330 ‘European Energy Security Strategy’; see also European
Commission ‘The European Union Leading In Renewables’ Dec 2015, 7; see also Dejan Ž. Đorđević and Milan
Veselinović ‘The Policy of Renewable Energy Sources in the Function of the Environmental Protection in the EU’
(2015) 53 (3) Economic Themes 343
162
Article 2.1 Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources
OJ L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-: In relation to a general
introduction to the regulatory framework see - European Commission COM(2013) 169 Green Paper ‘A 2030
framework for climate and energy policies’
163
EU Decision (406/2009/EC ) 23 April 2009, ‘The effort of Member States to reduce their carbon emissions to
meet the Community’s carbon emission reduction commitments up to 2020’ (known as the ‘Effort Sharing
Decision’), OJ L 140/137, preamble para 4
164
Directive 2009/28/EC Renewable Energy Directive, Recital 25
165
David Newbury ‘Questioning the EU Target Electricity Model – how should it be adapter to deliver the
Trilemma’ [2016] Cambridge University, Energy Policy Research Group Working Paper: See Also Raphael
Heffron Energy Law: An Introduction (Springer, 2014)
166
Christian Egenhofer, Integrating Security of Supply, Market Liberalization and Climate Change Appearing in
Michael Emerson, Readings in European Security, (Vol 4 Centre for European Policy Studies, 2007); See also
Hazel Nash, ‘The European Commission’s Sustainable Consumption and Production and Sustainable Industrial
Policy Action Plan’ (2009) 17 Journal of Cleaner Production 496
167
Lucia Elghali, Roland Clift, Philip Sinclair, Calliope Panoutsou and Ausillo Bauen, ‘Developing a Sustainability
Framework for the Assessment of Bioenergy Systems’ (2007) 35 Energy Policy 6075; See also Birgitte Olsen,
‘Renewable energy:public acceptance and citizens’ financial participation in Daniel Faber and Marjan Peeters
(eds) Climate Change Law (Elgar, 2016)
168
Carmelina Cosmi, Jolanta Dvarionienė, Isabel Marques, Senatro Di Leo, Giedrius Gecevičius, Inga
Gurauskienė, Gisela Mendes, Catarina Selada, ‘A Holistic Approach to Sustainable Energy Development at
Regional Level: The RENERGY Self-Assessment Methodology’ (2015) 49 Renewable and Sustainable Energy
Reviews, 693, 706
169
Matthew Burke and Jennie Stephens, ‘ Political power and renewable energy futures: A critical review’ (2018)
35 Energy Research & Social Science 78
170
Raphael Heffron, Darren McCauley, and Benjamin Sovacool, ‘Resolving society's energy trilemma through the
Energy Justice Metric’ (2015) 18 Energy Policy, 168
171
Ludwig Krämer, ‘The Genesis of EC Environmental Principles’ (2003) 7 College of Europe
172
Francis McGowan, ‘Can the European Union’s Market Liberalism Ensure Energy Security in a Time of
“Economic Nationalism”’ (2008) 4(2) Journal of Contemporary European Research, 93, 94
173
Christoph Knill and Duncan Liefferink, ‘The Establishment of EU Environmental Policy’ in Andrew Jordan and
Camilla Adelle (eds), Environmental Policy in the European Union: Contexts, Actors and Policy Dynamics (3rd
edn, Earthscan 2012); See Also Bulletin of the European Communities, (No. 10, 1972), ‘Meeting of the Heads of
State or Government – Paris 19-21 October 1972 - The First Summit Conference of the Enlarged Community -
Official Communiqué,
174
Philipp Hildebrand, ‘The European Community's environmental policy, 1957 to 1992', in David Judge (ed) A
Green Dimension for the European Community, (Frank Cass 1992),13
175
European Community COM ‘Programme of Action of the European Communities on the Environment’ 1973
OJ 112; See Also Philipp Hildebrand, ‘The European Community's environmental policy, 1957 to 1992', in David
Judge (ed) A Green Dimension for the European Community, (Frank Cass 1992),13; See Also Stanley Johnson
and Guy Corcelle, The Environmental Policy of the European Communities, (Graham & Trotman, 1989)
176
Laurens Jan Brinkhorst ‘The Road to Maastricht’ (1993) 20(1) Ecology Law Quarterly, 7
177
Uma Outka, ‘The Renewable Energy Footprint’ (2011) 30 Stanford Environmental Law Journal, 36; See also
Steven Ferrey, ‘The Failure of International Global Warming Regulation to Promote Needed Renewable Energy’
(2010) 37 Boston College Environmental Affairs Law Review, 67
178
Richard Lazarus, ‘Super Wicked Problems & Climate Change: Restraining the Present to Liberate the Future’
(2009) Cornell Law Review 1153
179
Al Gore, The Future: Six Drivers of Global Change (Random House 2013) 314
180
The Economist ‘Getting Warmer’ The Economist, 3 December, 2009, available (subscription required) at:
http://www.economist.com/specialreports/displaystory.cfm?story_id=E1_TQJJQRSN assessed 15 September
2015
181
Science for Environment Policy ‘The Precautionary Priniple: decision making under uncertainty’ (2017) Future
Brief 18. Produced for the European Commission DG Environment by the Science Communication Unit, UWE,
Bristol
182
Case T-263/07 Estonia v Commission ECLI:EU:T:2009:351 par 49
183
Dieter Helm, ‘The European framework for energy and climate policies’ Energy Policy Vol 64 January 2014, 29,
31
184
Christoph Knill and Duncan Liefferink, ‘The Establishment of EU Environmental Policy’ in Andrew Jordan and
Camilla Adelle (eds), Environmental Policy in the European Union: Contexts, Actors and Policy Dynamics (3rd
edn, Earthscan 2012)
185
Anita Halvorssen, ‘International Law and Sustainable Development – Tools for Addressing Climate Change’
(2010-2011) 39 Denver Journal International Law & Policy, 397
186
John McCormick, Environmental Policy in the European Union (Palgrave 2001)
187
Adapted from Ronald Dworkin Taking Rights Seriously (Bloomsbury, 2013), 43 – stating that principles of law
have the ‘dimensions of weight or importance’
188
Nicholas Stern, ’Stern Review: The economics of climate change’, (2006), Report presented to the UK Prime
Minister and the Chancellor of the Exchequer on the Economics of Climate Change. available at http://www.hm-
treasury.gov.uk/independent_reviews/stern_review_economics_climate_change/sternreview_index.cfm;.accessed
27 Sept 2017
189
Simon Dietz, Alex Bowen, Baran Doda, Ajay Gambhir, and Rachel Warren, ‘The Economics of 1.5°C Climate
Change’ (2018) 43 Annual Review of Environment and Resources
190
William Nordhaus The Climate Casino: Risk Uncertainty and Economics of a Warming World (Yale University
Press, 2013); See also Gernot Wagner and Martin Weitzman Climate Shock: The Economic Consequences of a
Hotter Planet (Princeton University Press, 2015)
191
Daniel Bodansky The Art and Craft of International Environmental Law (Harvard University Press, 2010)
192
Stephen Gardiner , Simon Caney and Dale Jamieson Climate Ethics: Essential Readings (Oxford University
Press, 2010); See Also Pope Francis ‘Laudato Si – Care for our common home’ [2015]
http://w2.vatican.va/content/francesco/en/encyclicals/documents/papa-francesco_20150524_enciclica-laudato-
si.html; See Also Raphael Heffron and Darren McCauley, ‘Achieving sustainable supply chains through energy
justice’ (2014) 123 Applied Energy 435
193
Klaus Segbers, ‘The New Global Landscape and Energy Politics in the 21st Century’ in Rafael Leal-Arcas and
Jan Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017); See Also World Commission
on Environment and Development (‘Brundtland Commission’), Our Common Future, (Oxford University Press,
1987), 43;.Rajendra Pachauri and Andy Reisinger, Contribution of Working Groups I, II and III to the Fourth
Assessment Report of the Intergovernmental Panel on Climate Change (Inter-Governmental Panel on Climate
The objective of reducing carbon emissions is very much within the sustainability
limb of the EU’s renewable energy policy. It is known that the energy industry and
the EU are complex entities 196 and as such the EU has set out the general
framework in its 2020 energy strategy. 197 This strategy was set out despite
challenges to the science of global warming from many traditional energy
companies.198
The complexity is reflected in the regulatory framework which contains a
broad set of initiatives ranging from support for the development of renewable
electricity (Renewable Energy Directive),199 to the carbon emissions reductions of
the Effort Sharing Decision. 200 As the renewable energy regulatory framework is
based on a Directives structure, it requires member state implementation which
Change 2009) , 104; see also Miranda Schreurs and Yves Tiberghien, ‘Multi-Level Reinforcement: Explaining
European Union Leadership in Climate Change Mitigation’ (2007) 7(4) Global Environmental Politics 19;
Sebastian Oberthur and Claire Roche Kelly, ‘EU Leadership in International Climate Policy: Achievements and
Challenges’ (2008) 43(3) International Spectator; John Schmidt, ‘Why Europe Leads on Climate Change’, (2008)
50(4) Survival 83
194
Council Directive 2009/31/EC 23 April 2009 on the geological storage of carbon dioxide OJ L140/114 (Carbon
Capture & Storage Directive)
195
Glenn Harrison ‘Stocks and Flows’ in Steven Durlauf and Lawrence Blume (eds) The New Palgrave Dictionary
of Economics (Palgrave Macmillan, 2008); See Also Daniel Bodansky, Jutta Brunnée, and Lavanya Rajamani
International Climate Change Law (Oxford University Press, 2017)
196
Giuseppe Martinico The Tangled Complexity of the EU Constitutional Process: The Frustrating Knot of Europe
(Routledge, 2013) 36; See also Peter Cameron, ‘The Internal Energy Market – Redefining Objectives’ Peter
Cameron and Raphael Heffron (eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016), 27
197
COM(2010) 639, ‘Energy 2020 - A strategy for competitive, sustainable and secure energy’, Available at
<http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52010DC0639&from=EN> accessed 16 July
2017; see also Michal Natorski and Anna Surralles, ‘Securitising Moves to Nowhere? The Framing of the
European Union’s Energy Policy’ (2008) 4 Journal of Contemporary European Research 71
198
David Levy, ‘Business and the Evolution of the Climate Regime: The Dynamics of Corporate Strategies’ in
David Levy and Peter Newell (eds), The Business of Global Environmental Governance (Massachusetts Institute
of Technology, 2005) 73
199
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
200
Council Decision No 406/2009/EC 23 April 2009 ‘Reduction in carbon emissions to meet the Community’s
carbon emission reduction commitments up to 2020’ (Effort Sharing Decision)
201
Bruno Simma, ‘Bliateralism and Community Interest in the Law of State Responsibility’ in Yoram Dinstein (ed),
International Law at a Time of Perplexity: Essays in Honour of Shabtai Rosenne (Martinus Nijhoff 1989) 822-23
202
Giuseppe Bellantuono ‘Renewables, Investments, and State Aids: Exploring the Legal Side of Polycentricity’
[2017] Institute of European Law Birmingham Law School Working Paper 04/2017
203
Rafael Leal-Arcas and Andrew Filis, ‘Legal Aspects of the Promotion of Renewable Energy within the EU and
in Relation to the EU's Obligation in the WTO’ (2014) 3(1) Renewable Energy Law & Policy
204
COM(2010) 639 final, ‘Energy 2020 - A strategy for competitive, sustainable and secure energy’, Available at
http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52010DC0639&from=EN
205
ibid para 1
206
Rajendra Pachauri and Andy Reisinger, Contribution of Working Groups I, II and III to the Fourth Assessment
Report of the Intergovernmental Panel on Climate Change (Inter-Governmental Panel on Climate Change 2009),
104; See Also The definition relating to which types of electricity facilities are regarded as renewable is contained
in the 2014 Guidelines on state aid for environmental protection and energy (Communication from the
Commission ‘Guidelines on State aid for environmental protection and energy 2014-2020’ - (2014/C 200/01)) -
with renewable energy including wind, solar and hydropower. It is interesting to note that nuclear energy, which
also does not emit carbon, is excluded whilst biomass, landfill gas, sewage treatment plant gas and biogases are
defined as renewable, all of which emit carbon as a bio-product of combustion to generate electricity
207
Eurostat ‘Europe 2020 indicators - climate change and energy’ (2016), available at
http://ec.europa.eu/eurostat/statistics-explained/index.php/Europe_2020_indicators_-
_climate_change_and_energy accessed 10 January 2016
208
EU COM 0482/2016 ‘on binding annual carbon emission reductions by Member States from 2021 to 2030 for a
resilient Energy Union and to meet commitments under the Paris Agreement’ available at http://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016PC0482 accessed 1 May 2018, Recital 1
209
Andreas Löschel and Oliver Schenker,’On the Coherence of Economic Instruments: Climate, Renewables and
Energy Efficiency Policies’ (2014) Energy Tax & Regulatory Policy Conference CESInfo
210
David Newbury ‘Reforming Competitive Electricity Markets to Meet Environmental Targets’ (2012) 1(1) Journal
of Economics of Energy & Environmental Policy
211
Energy Information Administration, ‘International Energy Outlook 2017’ 14 September 2017 available at
https://www.eia.gov/outlooks/ieo/pdf/0484(2017).pdf accessed 9 January 2018
212
Matthew Burke and Jennie Stephens, ‘Political power and renewable energy futures: A critical review’ (2018)
35 Energy Research & Social Science, 78; See also Anna-Kaisa Kosenius and Markku Ollikainen, ‘Valuation of
environmental and societal trade-offs of renewable energy sources’ (2013) 62 Energy Policy 1148; See also
Kirsten Gram-Hanssen, ‘Consuming Technologies – Developing Routines ‘ (2008) 16(11) Journal of Cleaner
Production 1181
213
Council Directive (EC) 2010/75/EC 24 November 2010 – Industrial Emissions (integrated pollution prevention
and control) OJ L334/17 Available at http://ec.europa.eu/environment/industry/stationary/ied/faq.htm
214
Council Directive 2012/27/EU 25 October 2012 – Energy Efficiency Directive OJ L315/1 Available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:315:0001:0056:en:PDF
215
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
216
Michael Grubb and Karsten Neuhoff, ‘Allocation & Competitiveness in the EU Emissions Trading Scheme:
Policy Overview’, (2006) 6 Journal of Climate Policy, 35
217
Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998) Annex A - carbon
dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and
sulphur hexafluoride (SF6); available at http://unfccc.int/kyoto_protocol/items/2830.php
218
Commission Decision No 406/2009/EC 23 April 2009 Reduction in carbon emissions to meet the Community’s
carbon emission reduction commitments up to 2020’ (Effort Sharing Decision) OJ L 40/136
219
Article 21 (1) Renewable Energy Directive
220
Bio-diesel is divided into two main types (i) Bio-diesel: produced through a process known as
transesterification, which separates glycerine from vegetable oil, leaving bio-diesel. The glycerine can then be
used in the making of other products, such as soap. Bio-diesel can be used as a straight fuel, or blended with
mineral diesel to create a diesel blend - both types can be used without any engine modification. Current EU
regulations allow for blends of transport fuel to be up to 7% bio-diesel, .(ii) Bio-ethanol: produced from plants such
as maize, wheat, sugar beet and sugar cane, through a process of fermentation, distillation and dehydration.
Brazil is currently the world’s largest producer, with almost half of all fuel used in Brazilian cars being bio-ethanol.
It can be used as a 5% blend with petrol in unmodified engines. Through the Fuel Quality Directive, EU
regulations now permit blends of up to 10% bio-ethanol. Higher blends or use as a direct substitute for petrol
require some engine modifications. Council Directive 98/07/EC 23 April 2009 The specification of petrol, diesel
and gas-oil and introducing a mechanism to monitor and reduce carbon emissions (Fuel Quality Directive) OJ
L140/88
221
Peter Cameron, ‘The Internal Energy Market – Redefining Objectives’ Peter Cameron and Raphael Heffron
(eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016), 27
222
Council Directives 96/92/EC concerning common rules for the internal market in electricity and 98/30/EC on
common rules for the internal market in natural gas
223 223
http://ec.europa.eu/competition/sectors/energy/overview_en.html
224
https://ec.europa.eu/energy/en/topics/markets-and-consumers/market-legislation
225
COM(2016) 860 30 November 2016 ‘Clean Energy For All Europeans’; See
www.ec.europa.eu/clima/policies/strategies/2030_en#tab-0-1
226
EU COM (2011) 112: A Roadmap for moving to a competitive low carbon economy in 2050 (08 Mar 2011)
available at www.ec.europa.eu/clima/policies/strategies/2050_en#tab-0-1 accessed 23 March 2018
227
Penelope Crossley ‘The role of renewable energy law and policy in meeting the EU’s energy security
challenges’ in Rafael Leal-Arcas and Jan Wouters (eds.) Research Handbook on EU Energy Law and Policy
(Elgar, 2017)
228
European Commission COM (2014) 330 ‘European Energy Security Strategy’; see also European
Commission ‘The European Union Leading In Renewables’ Dec 2015, 7; see also Dejan Đorđević and Milan
Veselinović ‘The Policy of Renewable Energy Sources in the Function of the Environmental Protection in the EU’
(2015) 53 (3) Economic Themes 343
229
Gokhan Ozkan, ‘Global Energy Security, International Politics and Renewable Energy Sources’ (2018) 5(1)
International Journal of Multidisciplinary Approach and Studies, 29
230
https://ec.europa.eu/energy/en/topics/renewable-energy accessed 28 December 2017
231
Francesco Gracceva and Peter Zeniewski,’ A systemic approach to assessing energy security in a low-carbon
EU energy system’ (2015) 123 Applied Energy, 345
232
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
233
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
234
Council Directive (EC) 2010/75/EC 24 November 2010 – Industrial Emissions (integrated pollution prevention
and control) OJ L334/17 (Industrial Emission Directive)
235
Council Decision No 406/2009/EC 23 April 2009 ‘Reduction in carbon emissions to meet the Community’s
carbon emission reduction commitments up to 2020’ (Effort Sharing Decision)
236
Directive 2005/89/EC of 18 January 2006 ‘concerning measures to safeguard security of electricity supply and
infrastructure investment’ OJ L 33/22
237
‘ Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints. ’ -P. Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE
It can be seen from the above that the EU and the member states have expanded
their environmental and energy objectives over the years, with competences 238
either held exclusively by the Commission or member states or shared between
them. To gain an understanding of the nature of the legal conflict between the
renewable regulatory framework and EU free trade principles this section gives a
brief introduction to those principles, allowing a better understanding of the research
issues outlined in Section 1.3.
The EU maintains that the operation of the single market is based on what
has been called the ‘four freedoms’;239 a shorthand for the ability of goods, services,
capital and persons to move freely within the EU without customs formalities or tariff
barriers.240 The application of free movement has been declared in Opel v Council
of Europe to require ‘equal treatment of individuals and economic
241 242
operators’. Additionally cases such as REWE and Commission v France
(Spanish Strawberries) 243 have affirmed that the free movement of goods is a
fundamental principle of the EU. The provision of free movement of goods is set out
within Articles 28 to 36 TFEU as well as case law such as Dassonville 244 (the
prohibition of measures or potentially hindering trade) Cassis de Dijon245(removal of
technical barriers to trade), Keck246 and Mickelsson & Roos247(selling arrangements
in a market must not discriminate between domestic and imported goods). These
cases have clear implications for the rules related to power station dispatch, 248 the
238
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
239
Catherine Barnard, The Substantive Law of the EU: The Four Freedoms, (Oxford University Press 2007)
240
Kamiel Mortelmans, ‘Towards a convergence of the application of the rules on free movement and
Competition’ (2001) Common Market Law Review 613, 613
241
Case T-115/94 Opel Austria GmbH v Council of the European Communities ECLI:EU:T:1997:3 para 108
242
Case 37/83 Rewe-Zentral AG v Direktor der Landwirtschaftskammer Rheinland.ECLI:EU:C:1984:89 para 18
243
C-265/95 Commission v France [1997] (Spanish Strawberries) ECLI:EU:C:1997:595, para 24
244
Case 8/74, Procureur du Roi v Dassonville ECLI:EU:C:1974:82, para 5
245
Case 120/78, REWE-Zentrale AG v Bundesmonopolverwaltung für Branntweien (Cassis de Dijon)
ECLI:EU:C:1979:42
246
Cases C-267/91 & C-268/91 Keck and Mithouard ECLI:EU:C:1993:905; the Keck judgement was also
followed in 1993 in Case 292/92 Hunermund v Landesapothekerkammer Baden-Wurttenberg
ECLI:EU:C:1993:932
247
Case C-142/05, Åklagaren v Mickelsson and Roos ECLI:EU:C:2009:336; See also, more recently, Case C-
639/11 Commission v Poland ECLI:EU:C:2014:173; Case C-16/12 Commission v Lithuania ECLI:EU:C:2012:426;
Case C-428/12 Commission v Spain ECLI:EU:C:2014:218 . The last time the Keck and Mithouard was cited by
the CJEU as good law dates from 2010: Case C-108/09, Ker-Optika bt v ÀNTSZ Dél-dunántúli Regionális Intézete
ECLI:EU:C:2010:725, para 51.
248
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P. Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE
249
The trading hub or power exchange is the heart of the electricity market. The power exchange’s members will
consist of producers, retailers and traders as well as large end users. The exchange will trade a series of standard
products in both volume and time, with the delivery location and other technical details relating to the trade set out
in a trade master agreement. Each individual trade will in effect be a supplemental agreement to this trade master
agreement. The market price is determined by supply and demand considerations, with both varying during the
day, a different price is determined for each trading period (usually an hour, or in the UK half hour). The market
price may vary somewhat between different market regions, depending on physical transmission limitations that
sometimes occur and the generation mix within each region. Available at https://corporate.vattenfall.com/about-
energy/energy-markets/ accessed 22 April 2018
250
Case 120/78, Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein (Cassis de Dijon)
ECLI:EU:C:1979:42
251
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80; Also Case C-164/17 Edel Grace and Peter Sweetman
v An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
252
Jukka Snell, ‘The Notion of Market Access: A Concept or a Slogan?’ (2010) 47(2) Common Market Law
Review. 437; see also Eleanor Spaventa. ‘Leaving Keck behind? The free movement of goods after the rulings in
Commission v. Italy and. Mickelsson and Roos’ (2009) 6 (34) European Law Review; Catherine Barnard and
Simon Deakin, ‘Market Access and Regulatory Competition’, Jean Monnet Working Paper 9/01. Available at:
http://www.jeanmonnetprogram.org/papers/01/012701.html accessed 17 January 2017
253
Joined Cases C-56/64 and C-58/64 Consten S.à.R.L. and Grundig-Verkaufs-GmbH v Commission
ECLI:EU:C:1966:41
254
Joined Cases C-264/01, C-306/01, C-354/01 and C-355/01 AOK Bundesverband v Ichthyol-Gesellschaft
Cordes Hermani ECLI:EU:C:2004:150 – defined as ‘an agreement or decision on the part of buyers to fix the
purchase price on a given market must be understood to have as its object to restrict competition, without the
need, at that stage of the analysis, for any investigation of its competitive effects.’
255
Example energy cases - Case T-360/09 E.ON Ruhrgas and E.ON v Commission ECLI:EU:T:2012:332; Case
T-370/09 GDF Suez v Commission ECLI:EU:T:2012:333; Case T-196/06 Edison v Commission
ECLI:EU:T:2011:281; See also Mark Jephcott, Law of Cartels (Jordan Publishing, 2011)
256
Case C-53/92 Hilti v Commission ECLI:EU:C:1994:77
257
Case 56/65 Société Technique Minière v Société Maschinenbau Ulm GmbH ECLI:EU:C:1966:38
258
Miek Van der Wee (Head of Unit International Relations DG Competition),’State Aid and the Distortion of
Competition’ 2011, 3 available at http://ec.europa.eu/competition/speeches/text/sp2011_17_en.pdf accessed 1
March 2018
259
Internal Market is an area without internal frontiers in which the free movement of goods, persons, services and
capital is ensured - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 516
260
European Commission, Decision of 18 December 2013 'State aid SA34947 (2013/C) (ex 2013/N)-United
Kingdom, Investment Contract (early Contract for Difference) for the Hinkley Point C New Nuclear Power Station',
269 OJ L/109/2015 See also Case T-356/15 Austria v Commission ECLI:EU:T:2018:439
261
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851 ; See also Case T-251/11 Austria v Commission, ECLI:EU:T:2014:1060
262
OECD Report ‘Aanalysis of the Scope of Energy Subsidies and Suggestions for the G-20 Initiative’ [2010]
Prepared for submission to the G-20 Summit Meeting Toronto (Canada), 26-27 June 2010 available at
https://www.oecd.org/env/45575666.pdf accessed 20 October 2016
263
EEA ‘Energy subsidies in the European Union: A brief overview’ [2010] Technical Report 1/2004 available at
https://www.eea.europa.eu/publications/technical_report_2004_1 accessed 20 October 2016
264
Jun Rentschler, Morgan Bazilian, ‘Principles for Designing Effective Fossil Fuel Subsidy Reforms’ (2017) 11(1)
Review of Environmental Economics and Policy 135; See Also Marcella Nicolini, Massimo Tavoni, ‘Are renewable
energy subsidies effective? Evidence from Europe’ (2017) 74(c) Renewable and Sustainable Energy Reviews
412; See Also Jun Rentschler, Morgan Bazilian, ‘Reforming fossil fuel subsidies: drivers, barriers and the state of
progress’ (2016) 17(7) Climate Policy 891; See Also Simon Commander, ‘A Guide to the Political Economy of
Reforming Energy Subsidies’ (2012) IZA Policy Paper No. 52 available at http://ftp.iza.org/pp52.pdf accessed 1
September 2018
265
David Coady, Ian Parry, Louis Sears and Baoping Shanga, ‘How Large Are Global Fossil Fuel Subsidies?’
(2017) 91 World Development 11
266
Monika Papież, Sławomir Śmiech and Katarzyna Frodyma, ‘Determinants of renewable energy development in
the EU countries. A 20-year perspective’ (2018) 91 Renewable and Sustainable Energy Reviews 918; See Also
Jean-Marc Burniaux and Jean Chateau, ‘Greenhouse gases mitigation potential and economic efficiency of
phasing-out fossil fuel subsidies’ (2014) 140 International Economics 71; See Also Gabriela Mundaca, ‘How
much can CO2 emissions be reduced if fossil fuel subsidies are removed?’ (2017) 64 Energy Economics 91
As stated above, this research project considers the nature of the diagonal conflict
between the renewable energy regulatory framework and the EU’s free trade
principles - free movement, undistorted competition, other elements of state aid and
the vertical conflict with the ‘polluter pays’ principle.
To introduce the day to day operation of the electricity market within the EU
Annex 3 outlines the timeline of the market structure as well as a series of key
concepts.
To address the research question, Chapter 2 lays out the scope of the
renewable energy regulatory framework.267 The chapter commences by illustrating
that the EU not only seeks to reduce carbon emissions and increase security of
supply, but also seeks to implement the EU’s external climate change commitments
via the UNFCCC,268 the Kyoto Protocol269 and COP 21.270 Mention is also made of
the post Kyoto ‘euphoria’271 which has aided the execution of current environmental
commitments.
Chapter 3 considers how the CJEU has sought to ensure the implementation
of environmental protection measures (via the renewables regulatory framework)
whilst reconciling this against the EU’s free trade principles. 272 The case law
analysis of Chapter 3 shows the CJEU supports an EU regulatory structure based
on nationally focussed renewables support schemes,273 granting member states a
267
Implemented via a series of Directives: Council Directive 2003/87 13 October 2003 Establishing a scheme for
carbon emission trading allowance trading within the Community OJ L275, 25.10.2003 the Directive was amended
by Directive 2009/29 ‘To improve and extend the carbon emission trading scheme of the Community’ OJ L140/63;
Council Decision No 406/2009/EC 23 April 2009 ‘Reduction in carbon emissions to meet the Community’s carbon
emission reduction commitments up to 2020’ (Effort Sharing Decision); Council Directive (EC) 2010/75/EC 24
November 2010 – Industrial Emissions (integrated pollution prevention and control) OJ L334/17 (Industrial
Emission Directive); Council Directive 2012/27/EU 25 October 2012 – Energy Efficiency Directive OJ L315/1;
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ L140/16
(Renewable Energy Directive)
268
See http://unfccc.int/parties and observers/items/2704.php.
269
See http://unfccc.int/kyoto-protocol/status of ratification/items/2613.php.
270
UNFCCC (2015), ‘Adoption of the Paris Agreement: Proposal by the President’, Draft Decision, 12 December
2015, https://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf (accessed 13 July 2016).
271
Jorge Viñuales, Joanna Depledge, David Reiner and Emma Lees ‘Climate policy after the Paris 2015 climate
conference’ (2017) 17(1) Climate Policy, 1, 7
272
Example cases covering free movement, competition and state aid - Case C-379/98 PreussenElektra AG v
Schleswag AG, ECLI:EU:C:2001:160 ; C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de
Elektriciteits- en Gasmarkt ECLI;U:C:2014:2192 ; Case C-573/12, Ålands Vindkraft AB v Energimyndigheten
ECLI:EU:C:2014:2037; Case C-492/14 Essent Belgium NV v Vlaams Gewest ECLI:EU:C:2016:732; Case C-
262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement durable, des
Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie, ECLI:EU:C:2013:85; Case T-
251/11 Austria v Commission, ECLI:EU:T:2014:1060 ; Case C-275/13, Elcogas SA v Adminstracion del Estado &
Iberdrola SA, ECLI:EU:C:2014:2314; Case T-47/15 Germany v Commission, ECLI:EU:T:2016:281; Case C-
393/92, Gemeente Almelo v NV Energiebedriif Ijsselmij ECLI:EU:C:1994:171
273
means ‘any instrument, scheme or mechanism applied by a Member State or a group of Member States, that
promotes the use of energy from renewable sources by reducing the cost of that energy, increasing the price at
which it can be sold, or increasing, by means of a renewable energy obligation or otherwise, the volume of such
energy purchased. This includes, but is not restricted to, investment aid, tax exemptions or reductions, tax
refunds, renewable energy obligation support schemes including those using green certificates, and direct price
support schemes including feed-in tariffs and premium payments’ – Definition from Article 2 Renewable Energy
Directive (2009/28/EC)
274
Torben Spaak, ‘Guidance and Constraint: The Action-Guiding Capacity of Theories of Legal Reasoning’,
(2007) 26 Law and Philosophy, 343
275
Carolyn Fischer and Louis Preonas, ‘Combining Policies for Renewable Energy: Is the Whole Less than the
Sum of its Parts?’ (2010) 4 International Review of Environmental and Resource Economics 51, 83; See also
Joyashree Roy, Duke Ghosh, Anupa Ghosh and Shyamasree Dasgupta, ‘Fiscal Instruments: Crucial Role in
Financing Low Carbon Transition in Energy Systems’ (2013) 5 Current Opinion in Environmental Sustainability
261; See also Christoph Burger and Jens Weinmann, ‘Germany’s Decentralized Energy Revolution’ (2014)
Distributed Generation and its Implications for the Utility Industry 49, 53;
276
Council Directive (EC) 2010/75/EC 24 November 2010 – Industrial Emissions (integrated pollution prevention
and control) OJ L334/17 Available at http://ec.europa.eu/environment/industry/stationary/ied/faq.htm
2.1 Introduction
277
Rafael Leal-Arcas and Andrew Filis, ‘Legal Aspects of the Promotion of Renewable Energy within the EU and
in Relation to the EU's Obligation in the WTO’ (2014) 3 Renewable Energy Law & Policy
278
EU Directive Electricity Liberalisation Directive (96/92/EC)
279
Rafael Leal-Arcas and Stephen Minas, ‘Mapping the International and European Governance of Renewable
Energy’, (2016) 35(1) Yearbook of European Law, 621; Sybille Roehrkasten, Global Governance on Renewable
Energy: Contrasting the Ideas of the German and Brazilian Governments (Springer, 2015); Marjan Peeters,
‘Governing Towards Renewable Energy in the EU: Competences, Instruments & Procedures’ (2014) 21(1)
Maastricht Journal of European & Comparative Law, 39; Maria Kottari and Panagiotis Roumeliotis, ‘Renewable
energy governance: Challenges within a “puzzled” institutional map’, in Evanthie Michalena, and Jeremy Maxwell
Hills (eds), Renewable Energy Governance: Complexities and Challenges (Springer, 2013); Nicolas de Sadeleer,
‘Environmental Governance & the Legal Basis Conundrum’ (2012) 31(1) Yearbook of European Law, 373; Dieter
Helm, ‘The European framework for energy and climate policies’ (2014) 64 Energy Policy 29; Tim Maxian
Rusche, EU Renewable Electricity Law and Policy: From National Targets to a Common Market (Cambridge
University Press, 2015); Volker Oschmann, ‘Introduction to European Law on Renewable Energy Sources’ in
Leslie Parker, Jennifer Ronk, and Rachel Maxwell (eds), From Debate to Design: Issues in Clean Energy and
Climate Change Law and Policy (Yale School of Forestry and Environmental Studies 2008); Angus. Johnston,
‘Recent Renewables Litigation in the UK: Some Interesting Cases’ (2015) Oil Gas and Energy Law available at
https://www.ogel.org/article.asp?key=3547; Andreas Goldthau and Nick Sitter, ‘Soft power with a hard edge: EU
policy tools and energy security’ (2014) European Policy Brief available at
http://cris.unu.edu/sites/cris.unu.edu/files/GREEN%20Goldthau%20Sitter%20Policy%20Brief%2037.pdf; Miranda
A Schreurs and Yves Tiberghien, ‘Multi-Level Reinforcement: Explaining European Union Leadership in Climate
Change Mitigation’ (2007) 7(4) Journal of Global Environmental Politics, 19
280
David Newbury ‘Questioning the EU Target Electricity Model – how should it be adapter to deliver the
Trilemma’ [2016] Cambridge University, Energy Policy Research Group Working Paper See Also Raphael Heffron
Energy Law: An Introduction (Springer, 2014)
281
‘The fragmentation of public international law is a long-observed phenomenon that demonstrates uneven
normative and institutional development and evolution in inter-state relations. Separate legal norms and
institutions have developed largely independently from one another, often instigated by non-identical groupings of
states and in response to specific functional issues.’ From Margrate Young, ‘Fragmentation’ Oxford
Bibliographies available at http://www.oxfordbibliographies.com/view/document/obo-9780199796953/obo-
9780199796953-0113.xml accessed 12 March 2019
282
See http://unfccc.int/parties and observers/items/2704.php.
283
See http://unfccc.int/kyoto-protocol/status of ratification/items/2613.php.
284
UNFCCC (2015), ‘Adoption of the Paris Agreement: Proposal by the President’, Draft Decision, 12 December
2015, https://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf accessed 13 July 2016
285
COM(2016) 860 30 November 2016 ‘Clean Energy For All Europeans’; See Also SWD(2014) 15 final, ’A policy
framework for climate and energy in the period from 2020 up to 2030’
286
COM (2011) 112: A Roadmap for moving to a competitive low carbon economy in 2050 (08 Mar 2011) see
www.ec.europa.eu/clima/policies/strategies/2050_en#tab-0-1
287
International Law being considered as a body of law or a jurisdiction brought about by the collaboration of two
or more soverign states – Hans Kelsen Principles of International Law (Rinehart, 2003), 201; See also Martti
Koskenniemi and Päivi Leino, ‘Fragmentation of International Law? Postmodern Anxieties’ (2002) 15 Leiden
Journal of International Law ,553
288
Daryl Mundis, ‘ICTY (Appeals Chamber): Prosecutor v. Delalić (Čelebići Case)’ (2001) 40(3) International
Legal Materials, 626
289
Anne Peters, ‘The refinement of international law: From fragmentation to regime interaction and politicization’
(2017) 15(3) International Journal of Constitutional Law, 671, 671
290
H.E. Judge Gilbert Guillaume, President of the International Court of Justice, Speech to the General
Assembly of the United Nations (30 Oct. 2001), http://www.icj-cij.org/files/press-releases/5/2995.pdf accessed 10
March 2019; See Also Mario Prost and Paul Clark, ‘Unity, Diversity and the Fragmentation of International Law:
How Much Does the Multiplication of International Organizations Really Matter?’ (2006) 5(2) Chinese Journal of
International Law, 34
291
Michael Zürn and Benjamin Faude, ‘Commentary: On Fragmentation, Differentiation and Coordination’ (2013)
13(3) Global Environmental Politics, 119, 125–126
292
Eyal Benvenisti and George Downs, ‘The Empire’s New Clothes: Political Economy and the Fragmentation of
International Law’ (2007) 60(2) Stanford Law Review 595
293
Martti Koskenniemi, ‘Fragmentation of International Law: Difficulties Arising From the Diversification and
Expansion of International Law’ [2006] International Law Commission
294
Fariborz Zelli, ‘The fragmentation of the global climate governance architecture’ (2011) 2 Climate Change, 255
295
Vattenfall v Germany International Center for Settlement of Investment Disputes Case No. Arb/09/06, 11 March
2011
296
EU Directive 2000/60/EC ‘a framework for Community action in the field of water policy’ OJ L 327/1
297
Energy Charter Treaty 1994 – available at http://www.energycharter.org/process/energy-charter-Treaty-
1994/energy-charter-Treaty; For an introduction to the Energy Charter Treaty see Graham Coop and Bernhard
Maier, ‘External Relations of EU Energy Regulation’ in Peter Cameron and Raphael Heffron (eds) Legal Aspects
of EU Energy Regulation (Oxford University Press, 2016), 66
298
Katja Ziegler, 'The Relationship Between EU Law and International Law', in D Patterson and A Soderston (eds)
A Companion to EU and International Law (Wiley Blackwell, 2016), 42
299
Case C-294/83, Parti écologiste “Les Verts” v European Parliament ECLI:EU:C:1986:166, para 23
300
Joined Cases C-402 & C-415/05 Yassin Abdullah Kadi and Al Barakaat International Foundation v Council and
Commission ECLI:EU:C:2008:461
301
International Law being considered as a body of law or a jurisdiction brought about by the collaboration of two
or more soverign states – Hans Kelsen Principles of International Law (Rinehart, 2003), 201
302
Opinion C-2/13 ‘Accession of the European Union to the European Convention for the Protection of Human
Rights and Fundamental Freedoms - Compatibility of the Draft Agreement With the EU and FEU Treaties’
ECLI:EU:C:2014:2454; See also Katja Ziegler, ‘Beyond Pluralism and Autonomy: Systemic Harmonization as a
Paradigm for the Interaction of EU and International Law’ (2016) 35(1) Yearbook of European Law, 667
303
Adam Lazowsky and Ramses Wessel, 'When Caveats Turn Into Locks: Opinion 2/13 on Accession of the
European Union to the ECHR' (2015) 16(1) German Law Journal, 179, 187
304
Electrabel SA v Republic of Hungary International Center for Settlement of Investment Disputes Case No.
ARB/07/19, Decision on Jurisdiction, Applicable Law and Liability, 30 November 2012, paras 27-34
305
EDE International v Hungary UNCITRAL, PCA, Award of 4 December 2014 available at
http://www.iareporter.com/articles/investigation-in-recent-briefs-europeancommission-casts-doubt-on-application-
of-energy-charter-treaty-to-any-intra-eudispute/ accessed 10 March 2019
306
loan Micula v Romania, International Center for Settlement of Investment Disputes Award of the Arbitral
Tribunal, Case No. ARB/05/20, 11 December 2013
307
Commission Decision (EU) 2015/1470 of 30 March 2015, State Aid SA.38517 (2014/C) implemented by
Romania — Arbitral award Micula v Romania OJ L 232/43, para. 2 [Letter from the Commission].
308
Voltaic Network GmbH v Czech Republic, PCA Case No. 2014-20, registered 8 May 2013; L C.W Europe
Investments Limited v Czech Republic, PCA Case No. 2014-22, registered 8 May 2013; Photovoltaic
KnopfBetriebs-GmbH v Czech Republic, PCA, registered 8 May 2013; WA Investments Europa Nova Limited v
Czech Republic, PCA Case No. 2014-19, registered 8 May 2013
309
Energy Charter Treaty 1994 – available at http://www.energycharter.org/process/energy-charter-Treaty-
1994/energy-charter-Treaty; For an introduction to the Energy Charter Treaty see Graham Coop and Bernhard
Maier, ‘External Relations of EU Energy Regulation’ in Peter Cameron and Raphael Heffron (eds) Legal Aspects
of EU Energy Regulation (Oxford University Press, 2016), 66
310
Ernst-Ulrich Petersmann ‘International Activities of the European Union and Sovereignty of Member States’ in
Enzo Cannizzaro (ed), The European Union as an Actor in International Relations (Kluwer Law International, 2002),
321; See Also Koen Lenaerts and Eddy de Smijter, ‘The European Union as an Actor in International Law’ (1999)
19(1) Yearbook of European Law, 95
In considering methods for resolving diagonal and other conflicts within EU and
international law314 it should be noted that there are several different actors that will
become involved in the resolution of these conflicts. At their most general these
actors can be categorised as legislators or judicial bodies. These different actors
may use different techniques for resolving conflicts. Disputes between sovereign
states tend to be settled at the political level,315 however, when states execute a
treaty between themselves they invariably agree to dispute processes which are
managed by a specific court or tribunal. The use of political processes to resolve
disputes between states is out with the scope of this research, thus the legal conflict
and dispute resolution methods analysed below focus of those generally used by
judicial bodies.
311
Sebastian Oberthür and Lisanne Groen, ‘Explaining goal achievement in international negotiations: the EU and
the Paris Agreement on climate change’ (2018) 25(5) Journal of European Public Policy, 708
312
Gareth Davies, ‘Interpretative Pluralism within EU Law’ in Gareth Davies and Matej Avbelj (eds) Research
Handbook on Legal Pluralism and EU Law (Elgar, 2018)
313
Rüdiger Wolfrum and Nele Matz Conflicts in International Environmental Law (Springer, 2003), 6-13
314
International Law being considered as a body of law or a jurisdiction brought about by the collaboration of two
or more soverign states – Hans Kelsen Principles of International Law (Rinehart, 2003), 201
315
Gerhard von Glahn and James Taulbee Law Among Nations: An Introduction to Public International Law
(Routledge, 2017)
316
Gunnar Beck, ‘The Macro Level: The Structural Impact of General International Law on EU Law The Court of
Justice of the EU and the Vienna Convention on the Law of Treaties’ (2016) 35(1) Yearbook of European Law,
484
317
Herbert L A Hart, ‘Positivism and the Separation of Law and Morals’ (1958) 71 Harvard Law Review, in H L A
Hart (ed) Essays in Jurisprudence and Philosophy ( Clarendon Press, 1983)
318
Ronald Dworkin Taking Rights Seriously (Harvard University Press, 1978)
319
Hans Kelsen General Theory of Law and State (Russell and Russell, 1945)
320
Herbert L A Hart, ‘Positivism and the Separation of Law and Morals’ (1958) 71 Harvard Law Review, in H L A
Hart (ed) Essays in Jurisprudence and Philosophy ( Clarendon Press, 1983)
321
Ronald Dworkin Taking Rights Seriously (Harvard University Press, 1978)
322
Lon Fuller, ‘Positivism and Fidelity to Law: a Reply to Professor Hart’ (1958) 71 Harvard Law Review, 630; See
also Lon Fuller The Morality of Law (Yale University Press, 1969)
323
Lon Fuller, ‘Positivism and Fidelity to Law: a Reply to Professor Hart’ (1958) 71 Harvard Law Review, 630; See
also Lon Fuller The Morality of Law (Yale University Press, 1969)
324
Herbert L A Hart, ‘Positivism and the Separation of Law and Morals’ (1958) 71 Harvard Law Review, in H L A
Hart (ed) Essays in Jurisprudence and Philosophy ( Clarendon Press, 1983), 72
325
Richard Gardiner Treaty Interpreatation (Oxford University Press, 2008); See Also Isabelle van Damme Treaty
Interpetation by the WTO Appellate Body (Oxford University Press, 2007)
326
Lex Specialis is a method of resolving legal conflicts where specialist legal provisions take precedence over more
general provisions
327
Lex Superior is a means of declaring a legal hierarchy between legal instruments such that superior laws are
deemed to take precedence over others -
328
Lex Posterior means that more recent legal instruments have precedence over older instruments
329
Ralf Michaels and Joost Pauwelyn, ‘Conflict of Norms or Conflict of Laws?: Different Techniques in the
Fragmentation of International Law’ (2012) 22(3) Duke Journal of Comparative & International Law, 349
330
Vienna Convention on the law of treaties (with annex). Concluded at Vienna on 23 May 1969. Authentic texts:
English, French, Chinese, Russian, and Spanish. 1155 U.N.T.S. 331, 8 I.L.M. 679, entered into force Jan. 27,
1980 - available at https://treaties.un.org/doc/publication/unts/volume%201155/volume-1155-i-18232-english.pdf
accessed 16 September 2017
331
Vienna Convention on the law of treaties (with annex). Concluded at Vienna on 23 May 1969. Authentic texts:
English, French, Chinese, Russian, and Spanish. 1155 U.N.T.S. 331, 8 I.L.M. 679, entered into force Jan. 27,
1980 - available at https://treaties.un.org/doc/publication/unts/volume%201155/volume-1155-i-18232-english.pdf
accessed 16 September 2017
332
Vienna Convention on the law of treaties (with annex). Concluded at Vienna on 23 May 1969. Authentic texts:
English, French, Chinese, Russian, and Spanish. 1155 U.N.T.S. 331, 8 I.L.M. 679, entered into force Jan. 27,
1980 - available at https://treaties.un.org/doc/publication/unts/volume%201155/volume-1155-i-18232-english.pdf
accessed 16 September 2017
Article 31
333
Ibid Article 32
334
Ibid Article 31(3)
335
Ibid Article 28
336
Ibid Article 30(3)
337
Ibid Article 53
338
Janelle Diller,’ Economic, Social and Cultural Human Rights: The Journey towards Peremptory Norms in
International Law’ (2018) 36(1) Nordic Journal of Human Rights, 19; See Also Kamrul Hossain, ‘The Concept of
Jus Cogens and the Obligation Under The U.N. Charter’ (2005) 3(1) Santa Clara Journal of International Law, 72
339
Case 6/64, Flaminio Costa v Ente Nazionale Energia Elettrica (Enel) ECLI:EU:C:1964:66; See also Case
26/62, NV Algemene Transport-en Expeditie Onderneming Van Gend en Loos v Nederlandse Administratie der
Belastinger, ECLI:EU:C:1963:1 ; Case C-266/16 Western Sahara Campaign UK v Commissioners for Her
Majesty's Revenue and Customs and Secretary of State for Environment, Food and Rural Affairs
ECLI:EU:C:2018:118; Case C-284/16 Slowakische Republik v Achmea BV ECLI:EU:C:2018:158
340
Case C-459/03 Commission v Ireland (MOX plant) ECLI:EU:C:2006:345; See also Nikos Lavranos, ‘The
Epilogue in the Mox Plant Dispute: An End Without Findings’ (2009) European Energy and Environmental Law
Review
341
Case C-181/73 Haegeman v Belgium ECLI:EU:C:1974:41, para 5; Case 104/81 Kupferberg v Hauptzollamt
Mainz ECLI:EU:C:1982:362, para 13; See Also Pieter Kuijper, ‘Customary International Law, Decisions of
International Organisations and Other Techniques for Ensuring Respect for International Legal Rules in Jan
Wouters, André Nollkaemper and Erika de Wet (eds.) European Community Law’ in The Europeanisation of
International Law: The Status of International Law in the EU and its Member States, (Asser Press, 2008), 87
342
Joined Cases 402 & 415/05 Yassin Abdullah Kadi and Al Barakaat International Foundation v Council and
Commission of EU ECLI:EU:C:2008:461
343
EU human rights norms were developed in this way by the Court; See Andrew Williams EU Human Rights
Policies. A Study in Irony (Oxford University Press, 2004), 145–57
344
Case C-366/10 Air Transport Association of America v Secretary of State for Energy and Climate Change
ECLI:EU:C:2011:864; See Also Eileen Denza, ‘International Aviation and the EU Carbon Trading Scheme:
Comment on the Air Transport Association of America Case’ (2012) 37 European Law Review, 314, 324
345
Case C-205/06 Commission v Austria ECLI:EU:C:2009:118, para 36; See also Case C-249/06 Commission v
Sweden ECLI:EU:C:2009:119; Case C-118/07 Commission v Finland ECLI:EU:C:2009:715
346
Case C-473/93 Commission v Luxembourg ECLI:EU:C:1996:263; Case C-62/98 Commission v Portugal
ECLI:EU:C:2000:358
347
Case C-53/96 Hermès International v FHT Marketing Choice BV ECLI:EU:C:1998:292, para 28; Case C-61/94
Commission v Germany ECLI:EU:C:1996:313, para 52
348
Katja Ziegler, 'The Relationship Between EU Law and International Law', in D Patterson and A Soderston (eds)
A Companion to EU and International Law (Wiley Blackwell, 2016), 16
349
Lex specialis is a method of resolving legal conflicts where specialist legal provisions take precedence over more
general provisions
350
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80
351
Case C-490/10 Parliament v Council ECLI:EU:C:2012:525 para 65 to 67
352
Martti Koskenniemi, ‘Fragmentation of International Law: Difficulties Arising From the Diversification and
Expansion of International Law’ [2006] International Law Commission
353
A teleological Court would be activitist in approach, fill gaps in the rules beyond necessarily simple linguistic
interpretation – the CJEU being an example – See Joost Pauwelyn and Manfred Elsig, ‘The Politics of Treaty
Interpretation: Variations and Explanations across International Tribunals’, in Jeffrey Dunoff and Mark Pollack
(eds) Interdisciplinary Perspectives on International Law and International Relations The State of the Art
(Cambridge University Press, 2012), 445
354
Koen Lenaerts and José Gutiérrez-Fons, ‘To Say What the Law of the EU Is: Methods of Interpretation and the
European Court of Justice’ [2013] EUI Working Paper AEL 2013/9; See also Ellen Vos, ‘Making Informal
International Law Accountable: Lessons from the EU’ in Joost Pauwelyn, Ramses Wessel and Jan Wouters (eds)
Informal Law Making (Oxford University Press, 2012)
355
Gunnar Beck The Legal Reasoning of the Court of Justice of the EU (Hart Publishing, 2013), 287
356
Violeta Moreno-Lax, ‘Systematising Systemic Integration: “War Refugees", Regime Relations, and a Proposal
for a Cumulative Approach to International Commitments’ (2014) 12 Journal of International Criminal Justice, 907,
analysing the interpretative methodology of the CJEU in Case C-285/12 Diakite´ ECLI:EU:C:2014:39 and building
on Article 31(3)(c) VCLT; using ‘cumulative’ to mean the outcome of the interpretative processes in cases of
concurrent obligations
357
Case C-6/64, Flaminio Costa v Ente Nazionale Energia Elettrica (Enel) ECLI:EU:C:1964:66; See also Case C-
26/62, NV Algemene Transport-en Expeditie Onderneming Van Gend en Loos v Nederlandse Administratie der
Belastinger, ECLI:EU:C:1963:1; Case C-11/70 Internationale Handelsgesellschaft mbH v Einfuhr- und
Vorratsstelle fu¨r Getreide und Futtermittel; ECLI:EU:C:1970:114 ; Case C-4/73 J. Nold, Kohlen-und
Baustoffgroßhandlung v Ruhrkohle Aktiengesellschaf ECLI:EU:C:1975:114 Case C-6/90 Andrea Francovich and
Danila Bonifaci and others v Italian Republic ECLI:EU:C:1991:428
358
For example see 8 Case C-62/14 Gauweiler and Others ECLI:EU:C:2015:7
359
Daniel Carter and Moritz Jesse, ‘The “Dano Evolution”: Assessing Legal Integration and Access to Social
Benefits for EU Citizens’ (2018) 3(3) European Papers , 1179
360
Case C-294/83 Les Verts v Parliament ECLI:EU:C:1986:166, para 25
361
Case C-292/82 Merck v Hauptzollamt Hamburg-Jonas ECLI:EU:C:1983:335, para 12
In analysing the EU Treaty Articles and Directives forming the renewable electricity
regulatory framework two criteria are used, (i) the competence 362 of the EU
institutions in relation to the Treaty Article or Directive and (ii) whether the Article or
Directive is a ‘command and control’363 or market type.
The EU is granted competence to develop, undertake and control activities
in specified areas by the member states via the terms of the Treaty (the principle of
conferral).364 As competence not conferred on the EU is retained by the member
states, it is imperative to define the competence holder in relation to an EU objective
or policy area, as this determines who has operational control over a particular field.
Lastly it being known that when a measure involves the competence granted to the
EU’s institutions, such a measure is required to have a basis in the Treaty365 and be
subject to judicial review.366
362
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
363
Command and Control Regulation being ‘the direct regulation of an activity by legislation that states what is
permitted’ - Phil McManus Environmental Regulation (Elsevier, 2009); See also Beatriz Junquera and Jesús
Ángel Del Brío ‘Preventive Command and Control Regulation: A Case Analysis’ (2016) 99(8) Journal of
Sustainability
364
Conferral is laid down in Article 13(2) TFEU (Previously Art 5 TEU). The institutions of the EU act only within
the limits of the powers (competences) that EU member states have conferred upon them via the Treaties. These
competences are defined in Articles 2–6 TFEU. Competences not conferred on the EU Institutions by the Treaties
remain with EU member states. While the principle of conferral governs the limits to EU competences, the use of
those competences is governed by the principles of subsidiarity and proportionality: See Olivier Beaud ‘The
Allocation of Competences in a Federation’ in Loïc Azoulai (ed) The Question of Competence in the European
Union (Oxford University Press, 2014); Also Inge Govaere ‘To Give or to Grab: The Principle of Full, Crippled and
Split Conferral of Powers Post-Lisbon’ (2016) 4 College of Europe Reseach Papers in Law
365
Case C-91/05 Commission v Council ECLI:EU:C:2008:288
366
Case C-295/90 Parliament v Council ECLI:EU:C:1992:294
367
‘Shared competence’ means that both the EU and its member states may adopt legally binding acts in the area
concerned. However, the member states can do so only where the EU has not exercised its competence or has
explicitly ceased to do so. Article 4 TFEU - http://ec.europa.eu/citizens-initiative/public/competences/faq#q3
368
Command and Control Regulation being ‘the direct regulation of an activity by legislation that states what is
permitted’ - Phil McManus Environmental Regulation (Elsevier, 2009); See also Beatriz Junquera and Jesús
Ángel Del Brío ‘Preventive Command and Control Regulation: A Case Analysis’ (2016) 99(8) Journal of
Sustainability
369
Robert Baldwin, Martin Cave and Martin Lodge Understanding Regulation: Theory, Strategy and Practice (2nd
ed. Oxford University Press, 2011)
370
Council Decision No 406/2009/EC 23 April 2009 ‘Reduction in carbon emissions to meet the Community’s
carbon emission reduction commitments up to 2020’ (Effort Sharing Decision)
371
Olaf Dilling, ‘From Compliance to Rulemaking: How Global Corporate Norms Emerge from Interplay with
States and Stakeholders’ (2012) 13 German Law Journal, 381, 404
372
Robert Baldwin, Martin Cave and Martin Lodge Understanding Regulation: Theory, Strategy and Practice (2nd
ed. Oxford University Press, 2011)
373
David Driesen, Robert Adler and Kirstin Engel Environmental Law: Conceptual and Pragmatic Approach
(Aspen, 2011), 267
374
Robert Stavins ‘Experience with Market-Based Environmental Policy Instruments’ in Karl-Göran Mäler and
Jeffrey Vincent (eds) Handbook of Environmental Economics (Elsevier Science, 2003)
375
Neil Gunningham and Darren Sinclair Leaders and Laggards: Next Generation Environmental Regulation
(Greenleaf Publishing, 2002)
376
Robert Stavins ‘Experience with Market-Based Environmental Policy Instruments’ in Karl-Göran Mäler and
Jeffrey Vincent (eds) Handbook of Environmental Economics (Elsevier Science, 2003), 358
377
Price discovery is the overall process, whether explicit or inferred, of setting the spot price of an asset or
service but most commonly the proper price of a security, commodity, or currency based on many factors. These
include supply and demand, intangible factors such as investor risk attitudes and the overall economic and
geopolitical environment. Simply put, it is where a buyer and a seller agree on a price and a transaction occurs.
Definition from https://www.investopedia.com/terms/p/pricediscovery.asp#ixzz5BR9NKHyG accessed 30 March
2018
378
Leigh Raymond Private Rights in Public Resources Equity and Property Allocation in Market-Based
Environmental Policy (Routledge, 2014)
379
Santiago Moreno-Bromberg and Luca Taschini ‘Pollution permits, strategic trading and dynamic technology
adoption’ [2011] Grantham Research Institute on Climate Change and the Environment Working Paper No. 45
380
Carolyn Fischer ‘Technical innovation and design choices for emissions trading and other climate policies, in:
Brend Hansjürgens (Ed) Emissions Trading for Climate Policy - US and European Perspectives (Cambridge
University Press, 2005), 40
381
Robert Stavins ‘Experience with Market-Based Environmental Policy Instruments’ in Karl-Göran Mäler and
Jeffrey Vincent (eds) Handbook of Environmental Economics (Elsevier Science, 2003), 359; see also Patricia
Birnie, Alan Boyle, and Catherine Redgwell, International Law and the Environment (3rd Ed, Oxford University
Press, 2009); David Driesen, ‘Free Lunch or Cheap Fix?: The Emissions Trading Idea and the Climate Change
Convention’ (1998) 26(1) Boston College Environmental Affairs Law Review
382
Command and Control Regulation being ‘the direct regulation of an activity by legislation that states what is
permitted’ - Phil McManus Environmental Regulation (Elsevier, 2009); See also Beatriz Junquera and Jesús
Ángel Del Brío ‘Preventive Command and Control Regulation: A Case Analysis’ (2016) 99(8) Journal of
Sustainability
383
EU Comm ‘Fifth European Community Environment Programme: Towards Sustainability’ available at
<http://europa.eu/scadplus/leg/en/lvb/128062.htm>
384
EU Comm ‘Sixth Environment Action Programme, Environment 2010: Our future, Our Choice’, available at
<http:Europa.eu.int/comm/environment/newprg>
385
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
386
David Newbury ‘Questioning the EU Target Electricity Model – how should it be adapter to deliver the
Trilemma’ [2016] Cambridge University, Energy Policy Research Group Working Paper See Also Raphael Heffron
Energy Law: An Introduction (Springer, 2014)
387
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
388
Council Directive 2012/27/EU 25 October 2012 – Energy Efficiency Directive OJ L315/1 Available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:315:0001:0056:en:PDF
389
Council Directive (EC) 2010/75/EC 24 November 2010 – Industrial Emissions (integrated pollution prevention
and control) OJ L334/17 Available at http://ec.europa.eu/environment/industry/stationary/ied/faq.htm
390
Commission Decision No 406/2009/EC 23 April 2009 Reduction in carbon emissions to meet the Community’s
carbon emission reduction commitments up to 2020’ (Effort Sharing Decision) OJ L 40/136
391
Council Directive 2009/31/EC 23 April 2009 on the geological storage of carbon dioxide OJ L140/114
392
Council Directive 2009/72/EC 13 July 2009 Concerning common rules for the internal market in electricity OJ L
211/55 (Electricity Markets Directive) available at https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0072&from=en
393
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
To illustrate that the EU’s carbon emissions reduction framework is not enacted in
isolation the wider international climate change abatement programme is set out
below.
In 1988, the Intergovernmental Panel on Climate Change (IPCC) was
established to provide scientific information on climate change and assist with the
formulation of response strategies to climate change.396 The IPPC in its 1990 first
assessment report stated that the greenhouse effect397 was real, increasing and
caused by human activity.398
Based on the successful implementation of a ban on the use of
chlorofluorocarbons (CFC’s)399 signatories to the UNFCCC400 sought in the same
way global undertakings 401 related to greenhouse gases 402 and international
agreement to the Kyoto Protocol403 However, certain countries failed to ratify the
394
EU Directive (2003/30/EC) 8 May 2003 ‘The promotion of the use of bio-fuels or other renewable fuels for
transport’ OJ L 123/42
395
Council Directive 98/07/EC 23 April 2009 The specification of petrol, diesel and gas-oil and introducing a
mechanism to monitor and reduce carbon emissions (Fuel Quality Directive) OJ L140/88
396
Preface to The Intergovernmental Panel on Climate Change ‘Report Prepared for IPCC by Working Group 1’
Intergovernmental Panel on Climate Change (IPCC) -; Also known as John Houghton, Gareth Jenkins and J
Ephraums (Eds.), Climate Change: The IPCC Scientific Assessment, (Cambridge University Press, 1990),
available www.ipcc.ch/ipcreports/far/wg_i/ippc_far_wg_i_full_report.pdf accessed 10 September 2015
397
Gases such as water vapour, carbon dioxide, nitrous oxide, methane, hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs) and sulphur hexafluoride, that are transparent to solar (short-wave) radiation but opaque
to long-wave (infrared) radiation, prevent long-wave radiant energy from leaving the earth’s atmosphere. The net
effect is a trapping of absorbed radiation and a tendency to warm the planet's surface. definition contained in Dag
Klackenberg, Christian Egenhofer and Kyriakos Gialoglou ‘Rethinking the EU Regulatory Strategy for the Internal
Energy Market’ (2004) Task Force Report No 52, Centre for European Policy Studies; See Also Catherine
Redgwell, ‘International Regulation of Energy Activities’ in Martha Roggenkamp, Catherine Redgwell, Anita
Ronne, and Inigo del Guayo (eds) Energy Law in Europe National, EU and International Regulation (Oxford
University Press, 2016)
398
The Intergovernmental Panel on Climate Change ‘Report Prepared for IPCC by Working Group 1’
Intergovernmental Panel on Climate Change (IPCC) -; Also known as John Houghton, Gareth Jenkins, J
Ephraums (Eds.), Climate Change: The IPCC Scientific Assessment, (Cambridge University Press, 1990), pXI
available www.ipcc.ch/ipcreports/far/wg_i/ippc_far_wg_i_full_report.pdf accessed 10 September 2015; See Also
Spencer Weart The Discovery of Global Warming (Harvard University Press, 2008)
399
Jutta Brunnée ‘Environment, Multilateral Agreements’ in R Wolfrum (ed) Max Planck Encyclopedia of Public
International Law (Oxford University Press, 2011)
400
United Nations Framework Concention for Climate Change
https://unfccc.int/sites/default/files/convention_text_with_annexes_english_for_posting.pdf
401
Joanna Depledge The Organization of Global Negotiations: Constructing he Climate Change Regime
(Earthscan, 2015) t
402
Scott Barrett Environment and Statecraft: The Strategy of Environmental Treaty-Making (Oxford University
Press, 2003)
403
See http://unfccc.int/kyoto-protocol/status of ratification/items/2613.php.
404
USA, Canada & Australia - See Irene Lorenzoni and Nick Pidgeon ‘Public Views on Climate Change:
European and USA Perspectives’ (2006) 77(1) Climate Change 73
405
Russia – See David Victor The Collapse of the Kyoto Protocol and the Struggle to Slow Global Warming
(Princeton University press, 2004); Igor Shishlov, Romain Morel and Valentin Bellassen, ‘Compliance of the
Parties to the Kyoto Protocol in the first commitment period’ (2016) 16(6) Climate Policy, 768; See Also Fiona
Harvey ‘The Kyoto Protocol is not quite dead’ (2012) http://www.theguardian.com/environ
ment/2012/nov/26/kyoto-protocol-not-dead (accessed 3 September 2015)
406
China & India - Valentina Bosetti and Jeffrey Frankel ‘Politically feasible emissions targets to attain 460 ppm
CO2 concentrations’ (2012) 6 Review of Environmental Economics and Policy; see also Sheila Olmstead and
Robert Stavins ‘Three key elements of a post-2012 international climate policy architecture’ (2012) 6 Review of
Environmental Economics and Policy
407
Scott Barrett Environment and Statecraft: The Strategy of Environmental Treaty-Making (Oxford University
Press, 2003)
408
Soft-Law can be defined as any instrument other than a Treaty or a Statute, containing principles, norms,
standards or other statements of expected behaviour, it can also be market rules developed from an instrument –
See Dinah Shelton, ‘International Law and Relative Normativity’ in Malcom Evans (ed) International Law (4th
Edition Oxford University Press, 2014), 137, 159
409
The terms of the UNFCCC, the Kyoto Protocol and the Paris COP 21 Agreement can be considered to produce
binding obligations as their terms fall within the Vienna Convention on the Law of Treaties 1969 Article 2.1 (a) as
they are drafted such as to be governed by international law. See Duncan Hollis ‘Defining Treaties’ in Duncan
Hollis (ed) The Oxford Guide To Treaties (Oxford University Press, 2013); See Also David Freestone ‘The United
Nations Framework Convention on Climate Change—The Basis for the Climate Change Regime’ in Kevin Gray,
Richard Tarasofsky, and Cinnamon Carlarne (eds) The Oxford Handbook of International Climate Change Law
(Oxford University Press, 2016)
411
https://unfccc.int/sites/default/files/kpeng.pdf
412
https://unfccc.int/sites/default/files/english_paris_agreement.pdf - for a discussion of the Paris Agreement see -
Lavanya Rajamani and Emmanuel Guérin ‘Central Concepts in the Paris Agreement and How They Evolved’ in
Daniel Klein, María Pía Carazo, Meinhard Doelle, Jane Bulmer, Andrew Higham, Emmanuel Guérin (eds) The
Paris Climate Agreement: Analysis and Commentary (Oxford University Press, 2017)
413
World Commission on Environment & Development, ‘Our Common Future’, 4 August 1987, UN, GA res,
A/42/427 (1987), Chapter 2, para 1
414
Edith Brown Weiss In Fairness to Future Genertions: International Law, Common Patrimony and
Intergenerational Equity (Transnational Publishers, 1989)
415
Lakshman Guruswamy, ‘Energy Justice and Sustainable Development’ (2010) 21 Colorado Journal of
International Environmental Law and Policy 231
416
Olaf Dilling and Till Markus, ‘The Transnationalisation of Environmental Law’ (2018) 30(2) Journal of
Environmental Law, 179
417
Article 6 Kyoto Protocol
418
Article 12 Kyoto Protocol
419
Article 17 Kyoto Protocol
420
European Environment Agency Report 17/2017 ‘Trends and projections in Europe 2017: Tracking progress
towards Europe's climate and energy targets’ available at https://www.eea.europa.eu//publications/trends-and-
projections-in-europe-2017 accessed 21 May 2018
421
Alan Boyle, ‘Soft Law in International Law-Making’ in Malcolm Evans (ed) International Law (4th Edition Oxford
University Press, 2014), 118, 123
422
Jorge Viñuales ‘The rise and fall of sustainable development’ (2013) 22(1) Review of European, Comparative &
International Environmental Law
423
Marie-Claire Cordonier Segger, Ashfaq Khalfan and Salim Nakjavani, ‘Weaving the Rules for our Common
Future: Principles, Practices and Prospects for International Sustainable Development Law’ (2002)
www.cisdl.org/wtr/pdf/WeavingtheRulesOct2002.pdf 20 accessed 25 July 2017
424
Jorge Viñuales, Joanna Depledge, David Reiner and Emma Lees ‘Climate policy after the Paris 2015 climate
conference’ (2017) 17(1) Climate Policy 1, 7
425
Hooi Hooi Lean and Russel Smyth, ‘Will Policies to Promote Renewable Electricity Generation be Effective?
Evidence from Panel Stationarity and Unit Root Tests for 115 Countries’ (2013) 22 Renewable and Sustainable
Energy Reviews 371
426
Jorge Viñuales, Joanna Depledge, David Reiner and Emma Lees ‘Climate policy after the Paris 2015 climate
conference’ (2017) 17(1) Climate Policy, 1, 7
427
Sebastien Oberthür ‘The Climate Change Regime: Interactions With ICAO, IMO and the EU Burden-Sharing
Agreement’ in Sebastian Oberthür and Thomas Gehring (eds) Institutional Interaction in Global Environmental
Governance: Synergy and Conflict Among International and EU Policies (MIT Press, 2006)
428
Daniel Bodansky, ‘The Legal Character of the Paris Agreement’ (2016) 25(2) Review of European,
Comparative, and International Environmental Law 142; See Also Lavanya Rajamani, ‘The 2015 Paris
Agreement: Interplay Between Hard, Soft and Non-Obligations’ (2016) 28(2) Journal of Environmental Law 337
429
A Conference of the Parties (COP) serves as the formal meeting of the parties to the UNFCCC. The COP is
the supreme decision-making body of the Convention, are undertaken to assess progress in dealing with climate
change, and to negotiate protocols and other legally binding obligations for the reduction of greenhouse gas
emissions - https://unfccc.int/process/bodies/supreme-bodies/conference-of-the-parties-cop accessed 21 August
2018. In effect the COP is an autonomous decision making body - Robin Churchill and Geir Ulfstein ,
‘‘Autonomous Institutional Arrangements in Multilateral Environmental Agreements: A Little-Noticed Phenomenon
in International Law’ (2000) 94 American Journal o f International Law 623
430
UNFCCC (2015), ‘Adoption of the Paris Agreement: Proposal by the President’, Draft Decision, 12 December
2015, https://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf (accessed 13 July 2016).
431
A Jordan, D Huitema, M Hildén, H van Asselt, T Rayner, J Schoenefeld, and E Boasson, ‘Emergence of
polycentric climate governance and its future prospects’ (2015) 5 Nature Climate Change, 977
432
Rafael Leal-Arcas and Luigi Carafa ‘Road to Paris COP21: Towards Soft Global Governance for Climate
Change’ (2014) 2 Renewable Energy Law and Policy
433
Richard Kinley ‘Climate change after Paris: from turning point to transformation’ (2016) 17 Climate Policy’; See
Also Fiona Harvey ‘Paris climate change agreement: the world's greatest diplomatic success’ The Guardian (14
December 2015) https://www.theguardian.com/environment/2015/dec/13/paris-climate-deal-cop-diplomacy-
developing-united-nations accessed 8 October 2018; Raphael Heffron and Peter Cameron, ‘The Future of EU
Energy Law’ in Peter Cameron and Raphael Heffron (eds) Legal Aspects of EU Energy Regulation (Oxford
University Press, 2016)
434
D Victor, J House and S Joy, ‘A Madisonian approach to climate policy’ (2005) 309(16) Science, 1820, 1820
435
Joanna Caytas, ‘The COP21 Negotiations: One Step Forward, Two Steps Back’ (2018) 19(1) Consilience: The
Journal of Sustainable Development, 1
436
Guri Bang, Jon Hovi and Tora Skodvin, ‘The Paris Agreement: Short-Term and Long-Term Effectiveness’
(2016) 4(3) Politics and Governance 209
437
J Sterman, A Jones, E Johnston and L Siegel, ’Climate Interactive Ratchet Success Pathway: Assumptions
and Results’ (2015) Climate Interactive, 4, https://www.climateinteractive.org/wp-
content/uploads/2015/12/Ratchet-Success-14-December-2015.pdf accessed 5 Apr. 2016
438
Deep Decarbonization Pathways Project (DDPP) (2015), ‘”Pathways to deep decarbonisation”, Sustainable
Development Solutions Network & the Institute for Sustainable Development & International Relations,
http://deepdecarbonization.org/wpcontent/uploads/2016/03/DDPP_2015_REPORT.pdf
accessed 5 April 2016
439
Article 4 of ‘Paris Climate Change Agreement of Parties to United Nations Framework Convention on Climate
Change’ (COP 21) available at
https://unfccc.int/files/essential_background/convention/application/pdf/english_paris_agreement.pdf accessed 30
October 2016
440
Sabina Hyseni ‘Carbon Capture and Storage as a Method to Mitigate Climate Change’ (2017) 9(3) Inquiries
Journal; see also D Leung, G Caramanna, and M Maroto-Valer ‘An overview of current status of carbon dioxide
capture and storage technologies’ (2014) 39 Renewable and Sustainable Energy Reviews, 426
441
B Caldecott, G Lomax, and M Workman, ’Stranded Carbon Assets and Negative Emissions Technologies:
Working Paper’ (2015) Smith School of Enterprise & the Environment, University of Oxford,
http://www.smithschool.ox.ac.uk/research-programmes/stranded-
assets/Stranded%20Carbon%20Assets%20and%20NETs%20-%2006.02.15.pdf (accessed 5 April 2016); See
also Lalisa Dugumar, Peter Minang and Meine van Noordwijk ‘Climate Change Mitigation and Adaptation in the
Land Use Sector: From Complementarity to Synergy’ (2014) Journal of Environmental Management; see also
Göran Berndes, Neil Bird and Annette Cowie ‘Bioenergy, Land Use Change and Climate Change Mitigation’
[2010] IEA Bioenergy
As described above the EU’s renewable energy policy was formulated to allow it to
discharge its UNFCCC obligations. In 1995 the UN defined renewable energy such
that its needs to be replaceable within the broad span of a human lifetime.447
In developing its 1995 Green Paper for a ‘European Union Energy Policy’448
the EU largely followed the UN drafting.
The EU’s definition has changed little since that time. However, the most
recent incarnation set out in the 2014 Guidelines on state aid for environmental
protection and energy449 states renewable energy is that derived from:-
442
Council Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological
storage of carbon dioxide OJ L140/114
443
V McGrane, ‘Trump’s Greatest Mission: Erasing Obama’s Legacy’ 16 December 2017 The Boston Globe;
Available at https://www.bostonglobe.com/news/nation/2017/12/16/trump-greatestmission-erasing-obama-
legacy/OA9M4qwS2hHlOj3MGLxGxK/story.html Accessed 28 December 2017
444
http://www2.assemblee-nationale.fr/langues/welcome-to-the-english-website-of-the-french-national-assembly
445
COM (2011) 112: A Roadmap for moving to a competitive low carbon economy in 2050 (08 Mar 2011) see
www.ec.europa.eu/clima/policies/strategies/2050_en#tab-0-1
446
Luke Kemp ‘US Proofing the Paris Climate Agreement’ (2017) 17(1) Climate Policy
447
http://unfccc.int/resource/cd_roms/na1/mitigation/Resource_materials/Greenhouse_Gas_Mitigation_Assessment_
Guidebook_1995/chap09.pdf accessed 27 August 2018
448
EU COM(94) 659 'Green Paper for a European Union energy policy’
449
EU COM (2014/C 200/01)’Guidelines on State aid for environmental protection and energy 2014-2020’ -
450
The inclusion of aero-thermal and hydrothermal energy reflects the extension of the renewables’ regulatory
framework to include not just electricity and transportation, but heating and cooling, as air conditioning within
buildings becomes more important across the EU – See Angus Johnston and Guy Block, EU Energy Law, (1st
edn. Oxford University Press, 2012), 309: Also The Renewable Energy Directive’s Article 5(3) allows multi-fuel
2.7 Renewables – Costs of Production & the Need for Revenue Support
The UN places obligations on the EU and its member states to transition 453 the
electricity sector from a largely coal and nuclear based sector to one based on
renewables.454
It should be noted that the price of electricity produced by any generating
facility is a combination of the cost of the fuel, maintenance and the recovery of the
capital build costs. 455 When the ‘transition’ commenced in the 1990s renewable
plants (hybrid-plants) to also be reported as renewable, as considered in Case C- 209/09 Lahti Energia Oy
ECLI:EU:C:2010:98
451
The Economist ‘Wood: The fuel of the future. Environmental lunacy in Europe’ (2013)
http://www.economist.com/news/business/21575771-environmental-lunacy-europe-fuelfuture Accessed 17 May
2017
452
http://ec.europa.eu/eurostat/web/energy/data/shares accessed 14 June 2018
453
Stuart Bruce ‘The sustainable energy transition through international and EU law’ in Stephen Minas
and Vassilis Ntousas (eds) EU Climate Diplomacy Politics, Law and Negotiations (Routledge, 2018); see also
Manuel Welsch Europe’s Energy Transition: Insights for Policy Making (Elsevier, 2017), Thomas Pellerin-Carlin,
Jean-Arnold Vinois, Eulalia Rubio, Sofia Fernandes Making the Energy Transition a European Success tackling
the Democratic Innovation, Financing and Social Chalaneges of the Energy Union (Jacques Delors Institute,
2017)
454
Sandra Enkhardt ‘Germany: Renewables beat coal for the first time’ [2018] pv magazine Deutschland; See
also Silvio Marcacci ‘Uneconomic coal could be squeezed out of European Union power markets by 2030’ [2018]
Energy Post
455
Monica Greer Electricity Cost Modeling Calculations (Elsevier, 2010)
456
Sergey Mityakov and Margarita Portnykh, ‘The Infant Industry Argument and Renewable Energy Production’
(2012) Marshall Institute Working Paper
457
Attila Hajos, Paget Fulcher, Ian Johnson, Goran Strbac and Danny Pudjianto ‘Supporting investments into
renewable electricity in context of deep market integration of RES-e after 2020: Study on EU-, regional- and
national-level options’, (2015) CEPA London, ENER/C1/2015-39
458
Capital rationing is essentially a management approach to allocating available funds across multiple
investment opportunities, increasing a company's bottom line. The combination of projects with the highest total
net present value (NPV) is accepted by the company. The number one goal of capital rationing is to ensure that a
company does not over-invest in assets. Without adequate rationing, a company might start realizing decreasingly
low returns on investments and may even face financial insolvency.
www.investopedia.com/terms/c/capitalrationing.asp#ixzz5Pkx7mwcb accessed 31 August 2018
459
Cost of capital is the required return necessary to make a project worthwhile. Cost of capital includes the cost
of debt and the cost of equity. Another way to describe cost of capital is the cost of funds used for financing a
business. Cost of capital depends on the mode of financing used — it refers to the cost of equity if the business is
financed solely through equity, or to the cost of debt if it is financed solely through debt. Many companies use a
combination of debt and equity to finance their businesses and, for such companies, the overall cost of capital is
derived from a weighted average of all capital sources, widely known as the weighted average cost of capital
(WACC). Since the cost of capital represents a hurdle rate that a company must overcome before it can generate
value, it is extensively used in the capital budgeting process to determine whether the company should proceed
with a project. https://www.investopedia.com/terms/c/costofcapital.asp#ixzz5Pky4NTyQ Accessed 31 August
2018
460
As the ‘fuel’ for renewable electricity (wind and solar) is free, ongoing costs are composed of financing and
operational costs. Therefore reducing the cost of capital (combination of equity and debt forms the weighted
average cost of capital or WACC) is important to ensure applicable rates of return are achieved; See J
Ondraczek, N Komendantova.and A Patt, ‘WACC the dog: The effect of financing costs on the levelised cost of
solar PV power’ (2015) 75, Renewable Energy, 888
461
Ensuring that maximum capital allowance are accrued during the development and construction phase
followed by minimisation of ongoing tax is important to minimise revenue leakage during the operational phase of
a project; See C Donovan, Renewable energy finance: powering the future, (Imperial College Press, 2015)
462
The concept of an industry in its infancy which is worthy of support should satisfy the two following conditions:
(1) the costs of production should eventually be below the costs of technologies currently utilised; and (2) future
savings in costs (compared to existing technologies) should compensate for the initial cost of supporting the infant
industry. More importantly, the infant industry argument requires some form of market failure, e.g., externalities or
imperfect financial markets; otherwise free markets would deliver the efficient outcome. Even in cases where such
imperfections exist, support in the form of production subsidies is an inappropriate policy instrument, since it is
unlikely to solve these market failures. – the so called Mill-Bastable test – Charles Bastable The Commerce of
Nations (Wentworth Press, 2016) – outline of the test contained in Sergey Mityakov and Margarita Portnykh, ‘The
Infant Industry Argument and Renewable Energy Production’ (2012) Marshall Institute Working Paper; For a
counter argument see Robert Baldwin, ‘The Case against Infant-Industry Tariff Protection’ (1969) 77(3) Journal of
Political Economy, 295
463
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Article 2
Renewable Energy Directive (2009/28/EC)
464
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
465
EU Regulation No 1588/2015 on the application of Articles 107 and 108 of the Treaty on the Functioning of the
European Union to certain categories of horizontal State aid, OJ 2015 L 248/1, and European Commission,
Regulation (EU) No651/2014 declaring certain categories of aid compatible with the internal market in application
of Articles 107 and 108 of the Treaty,OJ 2014 L 187/1. General Block Exemption Regulations for State aid
('GBER')
466
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy 2014
– 2020, 2014/C OJ 200/01.
467
The wholesale price is dynamic, changing half hourly based on the demand for electricity and the availability of
generating facilities. Generators submit ‘offers’ to the market operator indicating the amount of energy they are
willing to supply and at what price. http://www.rwe.com/web/cms/en/403722/rwe/press-news/how-the-electricity-
price-is-determined/
468
Paul Deane, Seán Collins, Brian Ó’Gallachóir, Cherrelle Eid, Rupert Hartel, Dogan Keles and Wolf Fichtner
‘Impact on Electricity Markets: Merit Order Effect of Renewable Energies’ in Manuel Welsch, Steve Pye, Dogan
Keles, Aurélie Faure-Schuyer, Audrey Dobbins, Abhishek Shivakumar, Paul Deane, Mark Howells (eds)
Europe's Energy Transition - Insights for Policy Making Findings (Elsevier, 2017)
469
European Power Exchange - https://www.epexspot.com/en/ - accessed 11 August 2016
470
Dieter Helm, ‘Cost of Energy Review’, 25 October 2017, Table 12, p. 104 available at
http://www.biee.org/wpcms/wp-content/uploads/Cost_of_Energy_Review.pdf.
471
W J Nuttall, Nuclear Renaissance: Technologies and Policies for the Future of Nuclear Power (CRC Press,
2004), 42; See Also Penelope Crossley, ‘The role of renewable energy law and policy in meeting the EU’s energy
security challenges’ in Rafael Leal-Arcas and Jan Wouters (eds) Research Handbook on EU Energy Law and
Policy (Elgar, 2017)
472
J Krzeminska, ‘Are Support Schemes for Renewable Energies Compatible with Competition Objectives? An
Assessment of National and Community Rules’ (2007) 7 Yearbook of European Environmental Law 132
473
G Winter, ‘The legal nature of environmental principles in international, EC and German law’ in R Macrory (ed.)
Principles of European Environmental Law (Europa Law Publishing, 2004), 19
474
Case C-378/08 Raffinerie Mediterranee (ERG) SpA, Polimeri Europa SpA and Syndial SpA v Ministero dello
Sviluppo economico and Others ECLI:EU:C:2010:126, para 46
475
Penelope Crossley, ‘The role of renewable energy law and policy in meeting the EU’s energy security
challenges’ in Rafael Leal-Arcas and Jan Wouters (eds) Research Handbook on EU Energy Law and Policy
(Elgar, 2017)
476
fuel poverty is: where fuel costs to that individual or consumer are such that post expenditure that individual or
consumer would be left with a residual income below the official poverty line – See ‘Fuel Poverty: a framework for
future action’ (2013) Department of Energy & Climate Change
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/211180/FuelPo
vFramework.pdf accessed 21 August 2018
477
https://ec.europa.eu/eurostat/statistics-
explained/index.php/Electricity_production,_consumption_and_market_overview#Electricity_generation accessed
31 August 2018
478
Peter Brown, ‘Lessons for Carbon Capture and Storage from the Rollout of Flue-gas Desulphurisation
Technology’ (2015) 2 Transform - Institute of Environmental Management & Assessment Working Paper
479
Stefan Bouzarovski and Saska Petrov, ‘A global perspective on domestic energy deprivation: Overcoming the
energy poverty–fuel poverty binary’ (2015) 10 Energy Research & Social Science, 31; See Also Steve Pye and
Audrey Dobbins, ‘Energy poverty and vulnerable consumers in the energy sector across the EU: analysis of
policies and measures’ (2015) INSIGHT_- European Commission 7th Framework Programme
480
Jesse Jenkins,’ Political economy constraints on carbon pricing policies: What are the implications for
economic efficiency, environmental efficacy, and climate policy design?’ (2014) 69 Energy Policy, 467
481
M Babiker, ‘Climate change policy, market structure, and carbon leakage’ (2005). 65 Journal of International
Economics, 421; See Also Mohamed Amine Boutabba and Sandrine Lardic,’ EU Emissions Trading Scheme,
Competitiveness and carbon leakage: new evidence from cement and steel industries’ (2017) 255(1) Annals of
Operations Research, 47; See Also Hui Zhou and Jichuan Sheng,’Has EU ETS caused carbon leakage in the EU
carbon-intensive industries? A study from the perspective of bilateral trade’ (2015) 13(2) Chinese Journal of
Population Resources and Environment, 132
482
The EU defines carbon leakage as the prospect of an increase in global greenhouse gas emissions when
companies shift production outside the Union because they cannot pass on the cost increases induced by the EU
ETS to their customers without significant loss of market share’ para 7 - Commission Communication 5 June
2012 ‘Guidelines on certain State aid measures in the context of the greenhouse gas emission allowance trading
scheme post-2012’ OJ 2012/C 158/04; Considering the issue more widely; carbon leakage theory postulates that
in the absence of a globally co-ordinated climate change policy, production of goods and services based on fossil
fuels will move to countries with less stringent environmental regulation therefore offsetting the carbon emission
savings realised in countries where climate change policy is in place. - Edward Foster, Marcello Contestabile,
Jorge Blazquez, Baltasar Manzano, Mark Workman, Nilay Shah, ‘The unstudied barriers to widespread renewable
energy deployment: Fossil fuel price responses’ (2017) 103 Energy Policy, 258: See Also Jean Tirole, ‘Some
Political Economy of Global Warming’. (2012) 1(1) Economics of Energy & Environmental Policy, 1; Mohamed
Amine Boutabba and Sandrine Lardic,’ EU Emissions Trading Scheme, Competitiveness and carbon leakage:
new evidence from cement and steel industries’ (2017) 255(1) Annals of Operations Research, 47; See Also Hui
Zhou and Jichuan Sheng,’Has EU ETS caused carbon leakage in the EU carbon-intensive industries? A study
from the perspective of bilateral trade’ (2015) 13(2) Chinese Journal of Population Resources and Environment,
132
In seeking to fulfil its obligation of reduced carbon emissions under the UNFCCC
(See Section 2.5) the EU, and its member states, set a proxy objective relating to
the installation of renewable electricity generating capacity. The conclusions of the
EU Council of 26 November 2015487 recognised that the governance of the ‘energy
union’488 will be an essential tool for the achievement of its objectives. To this end
an understanding of the three EU organisations providing governance within the
renewable energy sector is required.
483
Meaning that ‘measures should not exceed the limits of what is appropriate and necessary for attaining the
objective pursued, and that where is a choice between several appropriate measures must be had to the least
onerous’ Case T-419/03 Altsoff Recycling Austria v Commission ECLI:EU:T:2011:102, para 134; Also
‘proportionality’ or ‘being proportionate’ can be considered an ideal or a goal rather than being a principle with the
same status as ‘polluter pays’ or the ‘precautionary’ principle. – see Jonathon Verschuuren, ‘Sustainable
Development and the Nature of Environmental Legal Principles’ (2006) (1)9 Potschefstroom Electricity Law
Journal, 17; See Also Jurian Langer and Wolf Sauter ‘The Consistency Requirement in EU Law’ (2017) 39 Journal
of European Law
484
European Commission SWD(2013) 439 ‘European Commission guidance for the design of renewables support
schemes’
485
Daniel Radov, Alon Carmel and Clemens Koenig, ’Offshore Revolution? Decoding the UK Offshore Wind
Auctions & What the Results Means for a “Zero-Subsidy” Future’ (2017) NERA Economic Consulting
486
Energiekontor AG company press release 31 August 2018 – available at https://www.energiekontor.co.uk/news
accessed 31 August 2018
487
Conclusions of the Council of 26 November 2015 (14632/15)
488
Commission (Comm 2015) 25 February 2015 ‘A Framework Strategy for a Resilient Energy Union with a
Forward-Looking Climate Change Policy’; outlines the five pillars of the Energy Union (i) Energy security, solidarity
and trust; (ii) A fully integrated European energy market; (iii) Energy efficiency contributing to moderation of
demand; (iv) Decarbonising the economy, and (v) Research, innovation and competitiveness
489
https://web.archive.org/web/20070623104055/http://europa.eu/institutions/inst/comm/index_en.htm
490
Anne Bonnie, ‘The Evolving Role of the European Commission in the Enforcement of Community Law: From
Negotiating Compliance to Prosecuting Member States?’ (2010) 1(2) Journal of Consciousness Exploration &
Research
491
European Parliament resolution of 15 December 2010 on the situation of fundamental rights in the European
Union (2009) – effective implementation after the entry into force of the Treaty of Lisbon (2009/2161(INI)) 2012/C
169 E/07https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1551216984520&uri=CELEX:52010IP0483 –
accessed 1 October 2018
492
The principle of subsidiarity confirms which EU party (member states or European institutions) should act
where competence is shared (where the EU does not have exclusive competence). The principle acts where EU
objectives cannot be effectively achieved by member states, but can be better achieved at EU level – See Article
5 TFEU and Protocol 2 TFEU.
493
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
494
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy 2014
– 2020, 2014/C OJ 200/01
495
Case C-313/90 Comité International de la Rayonne et des Fibres Synthétiques v Commission
ECLI:EU:C:1993:111, para. 36; See Also Case C-351/98 Spain v Commission ECLI:EU:C:2002:530, para 53
496
Neil Nugent and Mark Rhinard, ‘The political roles of the European Commission’ [2019] Journal of European
Integration
497
Randy Mott, ‘New State Aid Guidelines for Renewable Energy Discourage Competition, Green Energy and
Energy Security’ (2015) 5(2) European Energy Journal
498
EU COM(2016) 615 ‘Better Regulation: Delivering better results for a stronger Union’
499
Neil Nugent and Mark Rhinard The European Commission (Palgrave Macmillan, 2105)
500
The development of Agencies such as ACER within the EU had been restricted due to what is known as the
‘Meroni Doctrine’ (developed from Case C-9/56 Meroni v High Authority ECLI:EU:C:1958:7). ‘The doctrine states
that competencies conferred on EU institutions cannot in turn be delegated to an EU agency without an explicit
decision, although an explicit Treaty base is not indispensable. If powers are delegated, they cannot be
‘discretionary’ to such an extent that the ‘wide margin of discretion’ might enable the ‘execution of actual economic
policy’. The latter would mean an illegal transfer of responsibility (it is the delegator, not the delegate, making the
policy choices) and would alter the balance of powers, later interpreted as the ‘institutional balance’ between the
EU institutions. Any delegated powers should be embedded in or accompanied by guarantees of judicial review,
transparency and active consultation. To this end, it is also required to delegate powers under precise rules and
within boundaries carefully defined by the EU legislator.’ – derived from Jacques Pelkmans and Marta Simoncini
‘Mellowing Meroni: How ESMA can help build the single market’ [2014] Centre for European Policy Studies
available at https://www.ceps.eu/system/files/Mellowing%20Meroni.pdf Accessed 12 February 2019. Following the
judgment of the CJEU in Case C-270/12 UK v Parliament & Council ECLI:EU:C:2014:18 (so called ESMA case)
the Meroni Doctrine has been softened such that reasonable delegation of power and discretion can be made to
agencies such as ACER. ;See Also Herman Lelieveldt and Sebastiaan Princen The Politics of the European
Union (Cambridge University Press, 2011), 271; Vassilis Hatzopoulos Regulating Services in the European Union
(Oxford University Press, 2012), 325
501
https://www.acer.europa.eu/en/The_agency/Pages/default.aspx
502
Briefing EU Legislation in Progress ‘New rules for the Agency for the Cooperation of Energy Regulators
(ACER)’ (2 May 2018)
http://www.europarl.europa.eu/RegData/etudes/BRIE/2017/599300/EPRS_BRI(2017)599300_EN.pdf accessed
22 June 2018
503
ACER/CEER - Annual Report on the Results of Monitoring the Internal Electricity and Gas Markets in 2016
(October 2017)
https://www.acer.europa.eu/Official_documents/Acts_of_the_Agency/Publication/ACER%20Market%20Monitoring
%20Report%202016%20-%20ELECTRICITY.pdf accessed 23 July 2018
504
REMIT is the EU Regulation ‘On energy market integrity and transparency (No 1227/2011). It provides a
consistent EU-wide regulatory framework specific to wholesale energy markets that: (i) defines market abuse,
including market manipulation, attempted market manipulation or insider trading , (ii) explicitly prohibits market
abuse (iii) requires effective and timely public disclosure of inside information by market participants (for all
practical purposes this relates to generating plant outage information), and (iv) obliges firms professionally
arranging transactions to report suspicious transactions - Regulation (1348/2014/EC) on data reporting
implementing Article 8(2) and Article 8(6) of Regulation (EU) No 1227/2011 OJ L336
505
Ana Stanic ‘An Overview of EU Energy Law’ in Peter Cameron and Raphael Heffron (eds) Legal Aspects of
EU Energy Regulation (Oxford University Press, 2016), 46
506
Olaf Dilling, ‘Proactive Compliance? – Repercussions of National Product Regulation in Standards of
Transnational Business Networks’ in Olaf Dilling, Martin Herberg and Gerd Winter (eds), Responsible Business:
Self-Governance and Law in Transnational Economic Transactions (Hart, 2008) 118–119
507
Damien Geradin and Nicolas Petit, ‘Judicial Review in European Union Competition Law: A Quantitative and
Qualitative Assessment’ (2011) 8 Tilburg Law and Economics Center, 7
508
Peak Gen Top Co Ltd & Ors, R (on the application of) v The Gas And Electricity Markets Authority & Anor,
Court of Appeal - Administrative Court, June 22, 2018, [2018] EWHC 1583 (Admin) - relating the process the
regulator had followed, where the UK administrative court found in Ofgem’s [UK Energy Markets Regulator] favour
Since the execution of the Treaty of Rome the priorities of the EU have developed,
because of the accession of several new member states 509 and the changing
objectives of society, 510 especially with regards to the environment and climate
change.511
Environmental and energy provisions are set out for the EU within the TEU
when it states in Article 3(3) that the EU shall implement measures that provide ‘a
high level of protection and improvement of the quality of the environment’.512 With
Article 6(3) TEU stating that ‘protection and improvement of human health’ is an EU
competence alone.513 The TFEU is differently drafted, stating in Article 4(2) that
environment, transport (in the renewable energy context bio-diesel), trans-European
networks and energy are shared competences between member states and the
EU.514
The EU is also required by Article 11 TFEU to integrate environmental
protection and sustainable development into the definition and implementation of its
policies. This requirement seems to be placed on the organisations of the EU and
not to the same extent on member states. 515 (See Section 2.9.1)
The EU and its member states are additionally required by the provisions of
the Articles 170 to 172 TFEU to update and increase the capacity of Europe’s energy
infrastructure (Article 170(1) TFEU), to link island, land locked and peripheral
regions with central regions of the EU (Article 170(2)). This is a requirement that has
significance for the findings of the CJEU within Ålands Vindkraft516 (See Section
3.5.2).
509
Finn Laursen, The Treaty of Nice: Actor Preferences, Bargaining and Institutional Choice (Martinus Nijhoff,
2005), 393
510
Willem Maas, ’The Origins, Evolution, and Political Objectives of EU Citizenship’, (2014) 15(5) German Law
Journal, 797 ; See also European Commission ‘EU in Brief’, https://europa.eu/european-union/about-eu/eu-in-
brief_en accessed 25 July 2017; See Also Joris Larik, ’From Speciality to a Constitutional Sense of Purpose: the
Changing Role of the Objectives of the European Union’ (2014) 63(4) International & Comparative Law Quarterly,
935; See Also European Centre for Development Management and Policy, ‘Evaluation Study on the EU
Institutions & member states’ Mechanisms for Promoting Policy Coherence for Development. Final Report’, May
2007
511
D Benson and A Jordan, ‘Grand bargain or ‘incomplete contract’? Environmental implications of the EU Reform
Treaty’ (2008) 17(5) European Energy and Environmental Law Review, 280; See also Saylor Academy Paper
available at https://www.saylor.org/site/wp-content/uploads/2011/05/Treaty-of-Lisbon.pdf accessed 15 September
2015; Roger Goebel, Eleanor Fox, George Bermann, Jeffery Atik, Frank Emmert and Damien Gerard Cases and
Materials on European Union Law 4th Edition (West Academic, 2016)
512
Treaty of the European Union, 2008 OJ (C 115) 16, article 3(3)
513
Alexander Proelss ‘The Scope of the EU’s Competences on the Field of the Environment’ In: Yumiko Nakanishi
(ed) Contemporary Issues in Environmental Law. Environmental Protection in the European Union, vol 5
(Springer, 2016)
514
Sanam Haghighi, ‘Energy Security and the Division of Competences between the European Community and its
member states’ (2008) 14(4) European Law Journal, 461
515
Beate Sjåfjell, ‘The Legal Significance of Article 11 TFEU for EU Institutions and Member States’ in Beate
Sjåfjell and Anja Wiesbrock (eds) The Greening of European Business under EU Law: Taking Article 11 TFEU
Seriously (Routledge 2015)
516
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
517
David Newbury ‘Questioning the EU Target Electricity Model – how should it be adapter to deliver the
Trilemma’ [2016] Cambridge University, Energy Policy Research Group Working Paper See Also Raphael Heffron
Energy Law: An Introduction (Springer, 2014)
518
Christian Egenhofer, Integrating Security of Supply, Market Liberalization and Climate Change Appearing in
Michael Emerson, Readings in European Security, (Vol 4 Centre for European Policy Studies, 2007); See also
Hazel Nash, ‘The European Commission’s Sustainable Consumption and Production and Sustainable Industrial
Policy Action Plan’ (2009) 17 Journal of Cleaner Production 496
519
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
520
Beate Sjåfjell, ‘The Legal Significance of Article 11 TFEU for EU Institutions and member states’ in Beate
Sjåfjell and Anja Wiesbrock (eds) The Greening of European Business under EU Law: Taking Article 11 TFEU
Seriously, (Routledge 2015; University of Oslo Faculty of Law Research Paper No. 2014-38; Nordic & European
Company Law Working Paper No. 14-08)
521
Ibid
522
For example Directive 92/43 15 May 1992 ‘the conservation of natural habitats and of wild fauna and flora’ OJ
L206/7; Directive 2009/125 31 October 2009 ‘establishing a framework for the setting of eco-design requirements
for energy-related products’ OJ L285/10; Directive 2008/56 17 June 2008 ‘establishing a framework for community
action on marine water quality in the field of marine environmental policy’ OJ L164/19; Directive 2009/147 30
November 2009 ‘the conservation of wild birds’ OJ L20/7; Regulation 2493/2000/EC 7 November 2000 ‘measures
to promote the full integration of the environmental dimension in the development process of developing countries’
OJ L288/1
523
Trilemma of reliability, sustainability and affordability – See David Newbury ‘Questioning the EU Target
Electricity Model – how should it be adapter to deliver the Trilemma’ [2016] Cambridge University, Energy Policy
Research Group Working Paper See Also Raphael Heffron Energy Law: An Introduction (Springer, 2014)
524
EU Regulation (2018) 353 Final 24 May 2018 ‘Establishment to facilitate a Framework for Sustainable
Investment’ Explanatory Memorandum 2; See also David Barnhizer, ‘Waking From Sustainability's "Impossible
Dream": The Decision Making Realities of Business and Government’ (2006) 8 Geo. International Environmental
Law Review, 595
525
World Commission of Environment and Development (WCED), Our Common Future, Chapter 2: Towards
Sustainable Development, From A/42/427. Our Common Future: Report of the World Commission on
Environment and Development, known as the Brundtland Report (available at http://www.un-documents.net/ocf-
02.htm#IV)
526
K van Hende, ‘Internal and External Policy and Legal Challenges in the EU in Achieving a Sustainable,
Competitive and Secure Internal Energy Market and the Integration of Electricity from Renewable Energy Sources
into the Energy system’ (2011) 2 Nordic Environmental Law Journal, 53
527
Ferdi De Ville and Jan Orbie, ‘The European Commission's Neoliberal Trade Discourse since the Crisis:
Legitimizing Continuity through Subtle Discursive Change’ (2014) 16(1) British Journal of Politics and International
Relations, 149
528
Per Ove Eikeland and Ingvild Andreassen Sæverud, ‘Market Diffusion of New Renewable Energy in Europe:
Explaining Front-runner and Laggard Positions’ (2007) 18(1) Energy and Environment, 13
529
EU Regulation (2018/353/EC) ‘Establishment to facilitate a Framework for Sustainable Investment’
530
Trilemma of reliability, sustainability and affordability – See David Newbury ‘Questioning the EU Target
Electricity Model – how should it be adapter to deliver the Trilemma’ [2016] Cambridge University, Energy Policy
Research Group Working Paper See Also Raphael Heffron Energy Law: An Introduction (Springer, 2014)
531
Case T-141/00 Artegodan v Commission ECLI:EU:T:2002:283
532
Case 176/03 Commission v Council (Ship-Source Pollution) ECLI:EU:C:2005:542
533
Ibid, para 42 to 48
534
Ibid, para 41
535
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
Whilst Article 11 places general obligations to implement and integrate the need to
reduce carbon emissions, Articles 170 to 172 TFEU are operative and place an
obligation on the EU to contribute to the establishment and development of trans-
European networks in the areas of transport, telecommunications and energy
infrastructures (the ‘network provisions’).542 The network provisions state their aim
is to link islanded, landlocked and peripheral regions with the central regions of the
543
EU to enhance the functioning of competitive markets. Additionally the
development of energy networks is stated as a means to increase energy security544
536
Sjåfjell, Beate ‘The Legal Significance of Article 11 TFEU for EU Institutions and Member States’ in Beate
Sjåfjell and Anja Wiesbrock (eds) The Greening of European Business under EU Law: Taking Article 11 TFEU
Seriously, (Routledge 2015; University of Oslo Faculty of Law Research Paper No. 2014-38; Nordic & European
Company Law Working Paper No. 14-08)
537
Regulations are directly effective . As Article 288 TFEU states that Regulations "Shall be binding in its entirety
and directly applicable in all Member States" the CJEU has confirmed that they are directly effective stating
‘Owing to their very nature and their place in the system of sources of Union law, regulations operate to confer
rights on individuals which the national courts have a duty to protect’ Case C-253/00 Antonio Muñoz y Cia SA
and Superior Fruiticola SA v Frumar Ltd and Redbridge Produce Marketing ECLI:EU:C:2002:497, para 27; Also if
a specific right is conferred therefore a regulation can be both vertically and horizontally directly effective. All
regulations are directly effective – Case C-43/71 Politi s.a.s. v Italian Ministry for Finance ECLI:EU:C:1971:122
538
EU Regulation (2018) 353 Final 24 May 2018 ‘Establishment to facilitate a Framework for Sustainable
Investment’
539
Peter Cameron, ‘The Internal Energy Market – Redefining Objectives’ Peter Cameron and Raphael Heffron
(eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016), 5
540
Julian Nowag, ‘The Environmental Integration Obligation of Article 11 TFEU’ in Julian Nowag (ed)
Environmental Integration in Competition and Free-Movement Laws (Oxford University Press, 2017)
541
Julian Nowag, ‘The Environmental Integration Obligation of Article 11 TFEU’ in Julian Nowag (ed)
Environmental Integration in Competition and Free-Movement Laws (Oxford University Press, 2017); See Also
Claire Dupont and Sebastian Oberthür ‘Insufficient Climate Policy Integration in EU Energy Policy: The
Importance of the Long-Term Perspective’ (2012) 8 Journal of Contemporary European Research, 228; See also
Camilla Adelle and Duncan Russel Climate Policy Integration: A Case of Déjà Vu?’ (2013) 23,1 Environmental
Policy and Governance, 1
542
Article 170 (1) TFEU
543
Article 170 (2) TFEU
544
COM(2014) 330 28 May 2014 ‘European Energy Security Strategy’ ; See also Directive 2005/89/EC
18 January 2006 ‘measures to safeguard security of electricity supply and infrastructure investment’ OJ L 33/4
545
European Commission COM (2014) 330 ‘European Energy Security Strategy’; see also European
Commission ‘The European Union Leading In Renewables’ Dec 2015, 7; see also Dejan Đorđević and Milan
Veselinović ‘The Policy of Renewable Energy Sources in the Function of the Environmental Protection in the EU’
(2015) 53 (3) Economic Themes 343
546
Jonathan Gaventa, Nick Mabey, Sandrine Dixonde-Cleve, Helen Spence-Jackson and Dries Acke, ‘EU Energy
Union Assessment 2015 –Towards a Resilient Energy Union with a Forward-Looking Climate Policy’ Briefing
Paper November 2015
547
Article 171 (1) TFEU - which will be undertaken largely by member states and market operators – with EU
contributing via the Cohesion Fund set up pursuant to Article 177 TFEU
548
Nicholas Stern, ‘Europe can Grow by Unleashing a Low Carbon Economy’ (2012) Social Europe Journal
http://www.social-europe.eu/2012/05/22821/ accessed on 16 September 2017
549
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
550
Trilemma of reliability, sustainability and affordability – See David Newbury ‘Questioning the EU Target
Electricity Model – how should it be adapter to deliver the Trilemma’ [2016] Cambridge University, Energy Policy
Research Group Working Paper See Also Raphael Heffron Energy Law: An Introduction (Springer, 2014)
See Also Raphael Heffron Energy Law: An Introduction (Springer, 2014)
551
The Hornsea 2 Project was found to bid 57.5£/MWh in the 2017 UK Renewable Auction – a price comparable
with coal and gas generation, however, this is very much a future price and not the cost derived from operational
wind farms - Daniel Radov, Alon Carmel and Clemens Koenig, ‘Offshore Revolution? Decoding the UK Offshore
Wind Auctions & What the Results Means for a “Zero-Subsidy” Future’ (2017) NERA Economic Consulting
552
Christof van Agt ‘The energy infrastructure challenge’ in Katinka Barysch (ed) Green, safe, cheap: Where next
for EU energy policy? (Centre for European Reform, 2011)
553
COM(2011)112 final ‘A roadmap for moving to a competitive low carbon economy’; COM(2011) 571 final
‘Roadmap to a Resource Efficient Europe’
554
SWD(2014) 330 ‘In-depth study of European Energy Security’
The core of the energy and environmental Treaty Articles are found in Articles 191
to 194 TFEU. These Articles place competency on the institutions of the EU and
member states for different aspects of the implementation of the provisions related
555
Communication from the Commission ‘Guidelines on State aid for environmental protection and energy 2014-
2020’ - (2014/C 200/01), para 202 – aid granted for objectives of the common interest is compatible with Article
107(3)(c) Case T-177/07 Mediaset v Commission ECLI:EU:T:2010:233 para 125
556
COM(2017) 718 final 23 November 2017 ‘Communication on strengthening Europe's energy networks’ Article
4.2
557
Booz & Co ‘Study on the benefits of an integrated European energy market’ [2013] available at
https://ec.europa.eu/energy/sites/ener/files/documents/20130902_energy_integration_benefits.pdf accessed 28
October 2017
558
NSL (Norway) 1,400MW, FAB Link (France) 1,400MW, IFA2 (France) 1,000MW, Viking (Denmark)
1,400MWand Greenlink (Ireland) 500MW -
https://www.ofgem.gov.uk/system/files/docs/2018/10/w1_fpa_update_letter.pdf accessed 3 October 2018
559
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/736152/Ch5.pd
f accessed 3 October 2018
560
IP/18/2122 Commission Investigation TenneT TSO GmbH's – 19 March 2018 available at
http://europa.eu/rapid/press-release_IP-18-2122_en.htm accessed 4 April 2018
561
Raphael Heffron and Peter Cameron, ‘The Future of EU Energy Law’ in Peter Cameron and Raphael Heffron
(eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016)
562
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
563
Council Decision No 406/2009/EC 23 April 2009 ‘Reduction in carbon emissions to meet the Community’s
carbon emission reduction commitments up to 2020’ (Effort Sharing Decision)
564
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To improve
and extend the carbon emission trading scheme of the Community’ OJ L140/63
565
David Driesen, Robert Adler and Kirstin Engel Environmental Law: Conceptual and Pragmatic Approach
(Aspen, 2011), 267
566
Opinion C-2/00 Cartagena Protocol ECLI:EU:C:2001:664, para 43-44; Thomas Delreux, ‘The EU as an Actor
in global environmental politics’ in Andrew Jordan and Camilla Adelle (eds), Environmental Policy in the European
Union: Contexts, Actors and Policy Dynamics (3rd edn, Earthscan 2012); Catherine Barnard and Steve Peers
European Union Law (Oxford University Press, 2014)
567
Case C-379/92, Re Paralta ECLI:EU:C:1994:296, para 57
568
Alexander Proelss ‘The Scope of the EU’s Competences on the Field of the Environment’ In: Yumiko Nakanishi
(ed) Contemporary Issues in Environmental Law. Environmental Protection in the European Union, vol 5
(Springer, 2016)
569
These objectives are given in Article 191 TFEU. The original environmental competence article was
article 130 of the European Economic Community Treaty, introduced by the Single European Act in
1987. The Maastricht Treaty amended this article and introduced qualified majority voting as a general rule for
environmental legislation.
570
Jutta Brunnée ‘Sources of International Environmental Law: Interactional Law’ in Samantha Besson and Jean
d’Aspremont (eds) The Oxford Handbook of the Sources of International Law (Oxford University Press, 2017)
571
Council Directive 2009/72/EC 13 July 2009 Concerning common rules for the internal market in electricity OJ L
211/55 (Electricity Markets Directive) available at https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0072&from=en
572
Penelope Crossley, ‘The role of renewable energy law and policy in meeting the EU’s energy security
challenges’ in Rafael Leal-Arcas and Jan Wouters (eds) Research Handbook on EU Energy Law and Policy
(Elgar, 2017)
573
EU Directive 2005/89/EC ‘Measures to safeguard security of electricity supply and infrastructure investment’
OJ L 33/22
574
Council Directive 2012/27/EU 25 October 2012 – Energy Efficiency Directive OJ L315/1 Available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:315:0001:0056:en:PDF
575
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
576
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
577
Case T-370/11 Poland v Commission, ECLI:EU:T:2013:113
578
Commission Decision 2011/278/EU determining transitional Union-wide rules for harmonised free allocation of
emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament of the Council
OJ 2011 L 130, 1
579
Article 10a(6) of the Emissions Trading Directive requires that product benchmarks correspond to the most
efficient methods of electricity production
580
A combined cycle gas turbine generating plant (CCGT) uses waste heat from the gas turbine to run a steam
turbine to form a combined cycle both of which are used to provide motive force for the electricity generator
increasing the efficiency from circa 35% for coal to 55% to 62% for CCGT -
http://www.powerplantccs.com/ref/glos/combined_cycle_gas_turbine__ccgt_.html &
https://www.gepower.com/about/insights/articles/2016/04/power-plant-efficiency-record accessed 19 April 2018
581
Ibid. para. 10
582
Case T-370/11 Poland v Commission, ECLI:EU:T:2013:113. para. 24
583
Commission Decision 2011/278/EU determining transitional Union-wide rules for harmonised free allocation of
emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament of the Council
OJ 2011 L 130, 1
584
Case C-490/10 Parliament v Council ECLI:EU:C:2012:525
585
Article 194(2) TFEU – ‘Without prejudice to the application of other provisions of the Treaties, the European
Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall establish the
measures necessary to achieve the objectives in paragraph 1. Such measures shall be adopted after consultation
of the Economic and Social Committee and the Committee of the Regions’ For ease of reference Article 194 (1)
state ‘In the context of the establishment and functioning of the internal market and with regard for the need to
preserve and improve the environment, Union policy on energy shall aim, in a spirit of solidarity between Member
States, to: (a) ensure the functioning of the energy market; (b) ensure security of energy supply in the Union; (c)
promote energy efficiency and energy saving and the development of new and renewable forms of energy; and
(d) promote the interconnection of energy networks.
586
Trilemma of reliability, sustainability and affordability – See David Newbury ‘Questioning the EU Target
Electricity Model – how should it be adapter to deliver the Trilemma’ [2016] Cambridge University, Energy Policy
Research Group Working Paper See Also Raphael Heffron Energy Law: An Introduction (Springer, 2014)
587
Daniel Radov, Alon Carmel and Clemens Koenig, ’Offshore Revolution? Decoding the UK Offshore Wind
Auctions & What the Results Means for a “Zero-Subsidy” Future’ (2017) NERA Economic Consulting
588
Angus Johnston and Eva van der Marel, ‘Ad Lucem? Interpreting the New EU Energy provision and in
particular the Meaning of Article 194 (2) TFEU’ (2013) European Energy and Environmental Law Review, 181;
See Also H Schmitt von Sydow, ‘The Dancing Procession of Lisbon: Legal Bases for European Energy Policy’
(2011) 1 European Energy Journal, 33
589
Phil McManus Environmental Regulation (Elsevier, 2009); See also Beatriz Junquera and Jesús Ángel Del
Brío ‘Preventive Command and Control Regulation: A Case Analysis’ (2016) 99(8) Journal of Sustainability
590
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
591
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
592
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
593
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
594
Commission Decision No 406/2009/EC 23 April 2009 Reduction in carbon emissions to meet the Community’s
carbon emission reduction commitments up to 2020’ (Effort Sharing Decision) OJ L 40/136
595
Council Directive (EC) 2010/75/EC 24 November 2010 – Industrial Emissions (integrated pollution prevention
and control) OJ L334/17 Available at http://ec.europa.eu/environment/industry/stationary/ied/faq.htm
596
Council Directive 2012/27/EU 25 October 2012 – Energy Efficiency Directive OJ L315/1 Available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:315:0001:0056:en:PDF
597
Council Directive 2009/31/EC 23 April 2009 on the geological storage of carbon dioxide OJ L140/114
598
Council Directive 2009/72/EC 13 July 2009 Concerning common rules for the internal market in electricity OJ L
211/55 (Electricity Markets Directive) available at https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0072&from=en
599
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
600
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
601
Benjamin Görlacha ‘Emissions Trading in the Climate Policy Instrument Mix: understanding and Managing
Interactions with other Policy Instruments’, (2014) 25(34) Energy & Environment 733-49
602
Jørgen Wettestad, ‘The Making of the 2003 EU Emissions Trading Directive: An Ultra-Quick Process due to
Entrepreneurial Proficiency?’ (2005) 5(1) Global Environmental Politics, 1, 17; See Also Jon Birger Skjærseth and
Jørgen Wettestad ' Making the EU Emissions Trading System: The European Commission as an entrepreneurial
epistemic leader' (2010) 20(2) Global Environmental Change, 314; Also Stavros Dimas, ‘Climate Change –
International and EU Action’ (31 October 2008) Speech of the EU Environment Commissioner at the Climate
Change Conference in Prague. Available at: http:/europa.eu/rapid/press-release_SPEECH-07-199_en.pdf
Accessed 21 March 2017
603
Denny Ellerman, Frank Convery and Christian de Perthuis, Pricing Carbon: The European Union Emissions
Trading Scheme (Cambridge University Press, 2010)
604
Case C-41/11 Inter-Environnement Wallonie and Terre wallonne ECLI:EU:C:2012:103, para 61 ; Case C-
127/07 Arcelor Atlantique and Lorraine ECLI:EU:C:2008:728, para 31
605
Ibid, 191; See also European Commission, ‘Climate change: Progress report shows EU on track to meet or
over-achieve Kyoto emissions target,’ press release, Brussels, November 12, 2009, available at
europa.eu/rapid/pressReleasesActiondo?reference=IP/09/1703&format=HTML&aged=0&language=EN&guiLangu
age=en accessed 17 January 2017
606
Christian Egenhofer, Monica Alessi, Anton Georgiev, and Noriko Fujiwara, ‘The EU Emissions Trading System
and Climate Policy towards 2050: Real incentives to reduce emissions and drive innovation?’ CEPS Special
Report, January 2011, available at papers.ssrn.com/sol3/papers.cfm?abstract_id=1756736&. accessed 17
January 2018 See also ‘Emissions from the EU ETS down 3% in 2008’ New Carbon Finance, 16 February 2009,
press release, available at bnef.com/Downloads/pressreleases/38/pdffile; accessed 17 January 2018; Frank
Watson, ‘EC CO2 data shows that EU carbon trading is working: analysts’ (2011) Platts, available at
platts.com/NewsFeature/2011/emissionsdata/index; See also Jan Abrell, Anta Ndoye Faye, and Georg
Zachmann, ‘Assessing the impact of the EU ETS using firm level data’ (2011), available at
bruegel.org/publications/publication-detail/publication/579-assessing-the-impact-of-the-eu-ets-using-firm-level-
data/ accessed 17 January 2018
607
Johanna Arlinghaus, Luisa Dressler, Florans Flues, Michelle Harding and Kurt van Dender Effective Carbon
Rates Pricing CO2 through Taxes and Emissions Trading Systems (OECD Publishing, 2016) 15
608
Anja Kollmuss, Helge Zink and Clifford Polycarp, ‘'Making Sense of the Voluntary Carbon Market: A
Comparison of Carbon Offset Standards’ [2008] Stockholm Environmental Institute Working Paper
609
Jessica Green, ‘Order out of Chaos: Public and Private Rules for Managing Carbon’ (2013) 13(2) Global
Environmental Politics 2
610
Sabine Fuss, Christian Flachsland, Nicolas Koch, Ulrike Kornek, Brigitte Knopf and Ottmar Edenhofer, ‘A
Framework for Assessing the Performance of Cap-and-Trade Systems: Insights from the European Union
Emissions Trading System’ (2018) 12(2) Review of Environmental Economics and Policy 220
;See Also A Denny Ellerman, Claudio Marcantonini and Aleksandar Zaklan, ‘The European Union Emissions
Trading System: Ten Years and Counting’ (2016) 10(1) Review of Environmental Economics and Policy 89
611
Kati Kulovesi, ‘EU Emissions Trading Scheme: preventing carbon leakage before and after the Paris
Agreement’ in Rafael Leal-Arcas and Jan Wouters (eds.) Research Handbook on EU Energy Law and Policy
(Elgar, 2017)
612
Case T-370/11 Poland v Commission, ECLI:EU:T:2013:113
613
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
614
The Hornsea 2 Project was found to bid 57.5£/MWh in the 2017 UK Renewable Auction – a price comparable
with coal and gas generation, however, this is very much a future price and not the cost derived from operational
wind farms - Daniel Radov, Alon Carmel and Clemens Koenig, ‘Offshore Revolution? Decoding the UK Offshore
Wind Auctions & What the Results Means for a “Zero-Subsidy” Future’ (2017) NERA Economic Consulting
615
Preamble, para 5 of Emission Trading Directive; see also Article 1 of Emissions Trading Directive related to
economic efficiency of operation; See Also David Driesen, Robert Adler and Kirstin Engel Environmental Law:
Conceptual and Pragmatic Approach (Aspen, 2011), 267
616
Ronald Coase, ‘The problem of social costs’ (1960), 3 Journal of Law & Economics, 1
617
European Commission ‘Analysis of the use of Auction Revenues by the member states’ (March 2017), 6; see
also Tim Laing, Misato Sato, Michael Grubb and Claudia Comberti, ‘Assessing the effectiveness of the EU
Emissions Trading Scheme’ (January 2013) Grantham Research Institute on Climate Change and the
Environment Working Paper No. 106
618
Ronald Coase, ‘The Problem of Social Cost’ (1960) 3 Journal of Law and Economics 1; See also Thomas
Tietenberg, Emissions Trading: Principles and Practice (2nd Ed, Earthscan, 2006)
619
Article 6 Emission Trading Directive - EC Directive 2003/87/EC 13 October 2003 ‘A scheme for carbon
emission allowance trading within the Community’ OJ L275/32 (Emissions Trading Directive)
620
Cash-out prices are designed to provide market participants with commercial incentives to balance their
contractual and physical positions and therefore avoid exposure to cash out price. Hence if actual emissions were
higher than the allowances held by an undertaking and it was not able to purchase additional allowances then it
would have the pay the cash-out price. - https://www.ofgem.gov.uk/gas/wholesale-market/market-efficiency-
review-and-reform/cash-out-arrangements accessed 31 August 2018
621
Rabah Amir, Adriana Gama and Katarzyna Werner ‘On Environmental Regulation of Oligopoly Markets:
Emission versus Performance Standards’ (2018) 70(1) Environmental Resource Economics, 147
The EU-ETS is a hybrid of the cap and trade and project-based trading, with
performance standards included for some schemes.623
The EU-ETS has been amended several times over the years to include
different market sectors, including aviation (although the enforcement of this element
has been delayed).624
The EU emission trading scheme is divided into 4 phases (i) Phase 1 2005-
2007, (ii) Phase 2: 2008-2012, (iii) Phase 3: 2013-2020 and (iv) Phase 4: 2021-2028.
Phase 1 was an initial phase to test the system, very much ‘learning by
doing’. 625 EU member states were free to allocate emission allowances to
installations within their territory in accordance with national allocation plans (NAPs).
Almost all allowances were allocated free on the basis of historic emission patterns
(so called ‘grandfathering’),626 resulting in allowances exceeding emissions across
the EU by broadly 4%.627 With nearly 60% of the allowances being allocated to the
electricity sector there was a reported potential for windfall profits.628 Such profits
were not realised within Phase 1 by generating companies due to (i) the expectation
that emissions would be used to determine future allowances, (ii) voluntary
622
Carolyn Fischer ‘Project-Based Mechanisms for Emissions Reductions: Balancing Trade-offs with Baselines’
(2004) Discussion Paper, Resources for the Future
623
E Woerdman and A Nentjes, ‘The European Union Emissions Trading Hybrid: Inefficiencies in the Revised
Rules After 2013’, University of Groningen working paper series
624
30 April 2014 - Consolidated version of Directive 2003/87/EC of the European Parliament and of the Council
establishing a scheme for carbon emission allowance trading within the Community and amending Council
Directive 96/61/EC; 23 April 2009 - Directive 2009/29/EC of the European Parliament and of the Council
amending Directive 2003/87/EC so as to improve and extend the carbon emission allowance trading scheme of
the Community; 19 November 2008 - Directive 2008/101/EC of the European Parliament and of the Council
amending Directive 2003/87/EC so as to include aviation activities in the scheme for carbon emission allowance
trading within the Community; 27 October 2004 - Directive 2004/101/EC of the European Parliament and of the
Council amending Directive 2003/87/EC establishing a scheme for carbon emission allowance trading within the
Community, in respect of the Kyoto Protocol's project mechanisms
625
Nick Feinstein, ‘Learning from Past Mistakes: Future Regulation to Prevent Greenwashing’ (2013) 40(1)
Boston College Environmental Affairs Law Review, 229
626
The allocation for free of EU-ETS allowance on the basis of historic emission patterns. With the view that prior
emissions increased entitlements to future emissions allowances - Carl Knight, ‘What is grandfathering?’ (2013)
22(3) Environmental Politics, 410 See Also Mehdy Abbas Khayli ‘The Roles Played by the Polluter Pays Principle
in state aid Law’ (2013) 6 Jean Monnet Working Paper Series available at www.tradevenvironment.eu accessed
28 October 2017
627
D Ellerman and B Buchner, ‘Over-allocation or Abatement? A Preliminary Analysis of the EU ETS based on the
2005-06 Emissions Data’, (2008) 41(2) Environmental & Resource Economics 267
628
Jos Sijm, Karsten Neuhoff and Yihsu Chen, ‘CO2 Cost Pass Through and Windfall Profits in the Power Sector’
(May 2006) 1Energy research Centre of the Netherlands & Energy Policy Research Group 0617, Cambridge
University Press; See Also Michael Grubb and Karsten Neuhoff, Emissions Trading & Competitiveness, ( Taylor &
Francis, 2006)
629
Jos Sijm, Stefan Bakker, Yishu Chen, Henk Harmsen, and Wietze Lise, ‘CO 2 price dynamics: the implications
of EU emissions trading for the price of electricity’ (2005) ECN-C--05-081, Energy Research Centre of the
Netherlands
630
http://markets.businessinsider.com/commodities/co2-emissionsrechte accessed 17 January 2018
631
Johanna Arlinghaus, Luisa Dressler, Florans Flues, Michelle Harding and Kurt van Dender Effective Carbon
Rates Pricing CO2 through Taxes and Emissions Trading Systems (OECD Publishing, 2016) 15
632
European Directive 23 April 2009, ‘Amending Directive 2003/87/EC so as to improve and extend the carbon
emission allowance trading scheme’ OJ L 140/71
633
Ibid, Article 9(2)
634
Ibid, Preamble Para 21
635
Trilemma of reliability, sustainability and affordability – See David Newbury ‘Questioning the EU Target
Electricity Model – how should it be adapter to deliver the Trilemma’ [2016] Cambridge University, Energy Policy
Research Group Working Paper See Also Raphael Heffron Energy Law: An Introduction (Springer, 2014)
636
Dieter Helm, ‘The European framework for energy and climate policies’ (2014) 64 Energy Policy 29
637
Article 9 of Emission Trading Directive
638
Sanja Bogojević, ‘The EU ETS Directive Revised: Yet Another Stepping Stone’ (2009) 11(4) Environmental
Law Review
639
Sara Segura, Luis Ferruz, Pilar Gargallo and Manuel Salvador ‘Environmental versus economic performance in
the EU ETS from the point of view of policy makers: A statistical analysis based on copulas’ (2018) 176 Journal of
Cleaner Production, 1111; See Also Jan Jans and Hans Vedder. European Environmental Law, (4th Ed Europa
Law Publisher, 2011), 32; Joelle de Sepibus, ‘The European Emission Trading Scheme Put to the Test of state
aid Rules’ (2007) NCCR Trade Working Paper 12; Angus Johnson ‘Free Allocation of Allowances Under the EU
Emissions Trading Scheme – Legal Issues’ (2006) 6 Journal of Climate Policy, 115
640
EU Commission ‘EU ETS Handbook’ (2015), 43 available at
https://ec.europa.eu/clima/sites/clima/files/docs/ets_handbook_en.pdf accessed 21 December 2017
641
Case T-183/07 Poland v Commission ECLI:EU:T:2009:350 para 120 & 131, the appeal C-504/09P
Commission v Poland ECLI:EU:C:2012:178 para 78 was unsuccessful; See also C-505/09 Commission v Estonia
ECLI:EU:C:2012:179 para 80 & 81
642
Case T-387/04, EnBW Energie Baden-Württemberg v Commission ECLI:EU:T:2007:117; Case C-295/14 DOW
Benelux BV v Staatssecretaris van Infrastructuur en Milieu ; Case T-233/04 Netherlands v Commission
ECLI:EU:T:2008:102; Case C-279/08 Commission v Netherlands ECLI:EU:C:2011:551; Joined Cases C-191/14
and C-192/14 Borealis Polyolefine GmbH v Bundesminister für Land- und Forstwirtschaft, Umwelt und
Wasserwirtschaft ECLI:EU:C:2016:311; Case 540/14 DK Recycling und Roheisen GmbH v Commission
ECLI:EU:C:2016:469
643
Case T-370/11 Poland v Commission, ECLI:EU:T:2013:113
644
Case C-239/01 Germany v Commission ECLI:EU:C:2003:514 para 37 and Case C-244/03 France v Parliament
& Council ECLI:EU:C:2005:299, para 14
645
Commission Regulation 600/2012 (21 June 2012) ‘the verification of carbon emission reports and tonne-
kilometre reports and the accreditation of verifiers pursuant to Directive 2003/87/EC’ OJ L 181/1
646
Commission Regulation 601/2012 (21 June 2012) ‘the monitoring and reporting of carbon emissions pursuant
to Directive 2003/87/EC’ OJ L 181/30
647
Article 4, European Directive 23 April 2009, ‘Amending Directive 2003/87/EC so as to improve and extend the
carbon emission allowance trading scheme’ OJ L 140/71
648
COM (2014) 20/2 ‘concerning the establishment and operation of a market stability reserve for the Union
carbon emission trading scheme and amending Directive 2003/87/EC’ available at
www.ec.europa.eu/clima/policies/ets/reform/docs/com_2014_20_en.pdf accessed on 5 April, 2016
649
Jing Hu, Wina Crijns-Graus, Long Lam and Alyssa Gilbert, ‘Ex-ante Evaluation of EU ETS During 2013-2030:
EU Internal Abatement’ (2015) 77 Energy Policy 152
650
Commission Regulation (1031/2010/EU) ‘the timing, administration and other aspects of auctioning of carbon
emission allowances pursuant to Directive 2003/87/EC’ http://ec.europa.eu/clima/pol accessed 12 January 2018
651
carbon dioxide (CO2), carbon monoxide (CO), nitrogen dioxide (NO 2) – which combines with rain to form nitric
acid, sulphur dioxide (SO 2) – which combines with rain to form sulphuric acid – so called acid rain - European
Commission, ‘EU ETS Handbook’ (2015) https://ec.europa.eu/clima/sites/clima/files/docs/ets_handbook_en.pdf
accessed 17 January 2018
652
Acid Rain is mainly caused by combustion of fossil fuels which results in emissions of sulphur dioxide (SO2)
and nitrogen oxides (NOx) - https://www.conserve-energy-future.com/causes-and-effects-of-acid-rain.php
653
The allocation for free of EU-ETS allowance on the basis of historic emission patterns. With the view that prior
emissions increased entitlements to future emissions allowances - Carl Knight, ‘What is grandfathering?’ (2013)
22(3) Environmental Politics, 410 See Also Mehdy Abbas Khayli ‘The Roles Played by the Polluter Pays Principle
in state aid Law’ (2013) 6 Jean Monnet Working Paper Series available at www.tradevenvironment.eu accessed
28 October 2017
654
J Bushnell, H Chong and E Mansur, ‘Profiting from regulation: Evidence from the European Carbon Market’
(2013) 5(4) American Economic Journal: Economic Policy, 78; see also Ulrich Wagner, Mirabelle Muûls, Ralph
Martin and Jonathan Colmer, ’An evaluation of the impact of the EU emissions trading system on the industrial
sector. Plant-level evidence from France’ (6 June 2015) AERE Conference, Canada
655
E Woerdman A Arcuri and S Clo, ‘Emissions Trading and the Polluter Pay Principle: Do Polluters Pay under
Grandfathering’ (2008) 4(2) Review of Law & Economics, 565
656
Opinion of Advocate General Kokott delivered on 21 March 2013, Joined cases C-566/11, C-567/11, C-580/11,
C-591/11, C-620/11 and C-640/11, Iberdrola, SA and Others v Administración del Estado ECLI:EU:C:2013:191,
para. 2. On windfall profits, also with regard to their State aid implications, see, Stefan Weishaar, ‘Auctions – The
Solution To Windfall Profits and End of All state aid Problems?’ (2010) Amsterdam Law Forum; See also Stefan
Weishaar and W. Woerdman, ‘Does Auctioning Emission Rights Avoid state aid? Empirical Evidence from
Germany’ (2012) 6(2) Carbon and Climate Law Review, 114; See Also C Egenhoffer, M Alessi, A Georgiev, N
Fujiwara, ‘The EU ETS and Climate Policy towards 2050: Real Incentives to Reduce Emissions and Drive
Innovation?’ (2011) CEPS Special Report 14; See Also Angus Johnston, ‘Free Allocation of Allowances Under the
EU Emissions Trading Scheme - legal Issues’ (2006) Climate Policy, 115; Joëlle de Sepibus, ‘The European
Emissions Trading Scheme Put to the Test of state aid Rules’ (2007) NCCR Working Paper, 1
657
Case C-1/03 Van de Walle ECLI:EU:C:2004:490 para 42-53; See also Case C-188/07 Commune de Mesquer
v Total France SA and Total International Ltd ECLI:EU:C:2008:359 para 49-63
658
Article 10(a) Emissions Trading Directive
659
Carbon sequestration describes long-term storage of carbon dioxide or other forms of carbon to either mitigate
or defer global warming and avoid dangerous climate change – Roger Sedjo and Brent Sohngen, ‘Carbon
Sequestration in Forests and Soils; (2012) 4 Annual Review of Resource Economics, 127
660
C-293/97 R v Minister of Agriculture, Fisheries and Food, ex parte Standley ECLI:EU:C:1999:215 para 51-52;
See Also Case C-254/08 Futura Immobiliare srl Hotel Futura v Comune di Casoria ECLI:EU:C:2009:479 para 64-
67
661
Case T-183/07 Poland v Commission ECLI:EU:T:2009:350 para 120 & 131, the appeal C-504/09P
Commission v Poland ECLI:EU:C:2012:178 para 78 was unsuccessful; See also C-505/09 Commission v Estonia
ECLI:EU:C:2012:179 para 80 & 81
661
Case T-387/04, EnBW Energie Baden-Württemberg v Commission ECLI:EU:T:2007:117; Case C295/14 DOW
Benelux BV v Staatssecretaris van Infrastructuur en Milieu ; Case T-233/04 Netherlands v Commission
ECLI:EU:T:2008:102; Case C-279/08 Commission v Netherlands ECLI:EU:C:2011:551; Joined Cases C-191/14
and C-192/14 Borealis Polyolefine GmbH v Bundesminister für Land- und Forstwirtschaft, Umwelt und
Wasserwirtschaft ECLI:EU:C:2016:311; Case 540/14 DK Recycling und Roheisen GmbH v Commission
ECLI:EU:C:2016:469
662
Jan Jans & Hans Vedder. European Environmental Law, (4th Ed Europa Law Pub, 2011), 321; Joelle de
Sepibus, ‘The European Emission Trading Scheme Put to the Test of state aid Rules’ (2007) NCCR Trade
Working Paper 12; Angus Johnston ‘Free Allocation of Allowances Under the EU Emissions Trading Scheme –
Legal Issues’ (2006) 6(1) Journal of Climate Policy, 115
663
Joelle de Sepibus, ‘Scarcity and Allocation of Allowances in the EU Emissions Trading Scheme - A Legal
Analysis’ (2007) NCCR Trade Working Paper, 36
664
Wolf Sauter and Hans Vedder, ‘State Aid and Selectivity in the Context of Emissions Trading: Comment on the
NOx Case’ (2012) 3, European Law Review; See Also Commission decision 29 March 2000, Case N 653/1999,
‘Denmark - CO2-quota system’ OJ C 322, 9; See Also Commission decision of 28 November 2001, Case N
416/2001, United Kingdom - Emission trading scheme OJ C 88, 16; Commission decision of 25 Jul 2001, Case N
550/2000, ‘Belgium, Green Electricity Certificates’ OJ C 330, 3
665
Commission Communication C158/4, ‘Guidelines on Certain state aid Measures in the Context of the Carbon
Emission Allowance Trading Scheme Post 2012’ 5 June 2012
The Effort sharing Decision allows the EU to directly fulfil its obligations under the
Kyoto Protocol to manage the listed greenhouse gases. The Effort Sharing Decision
sets mandatory limits for the six Kyoto Protocol670 greenhouse gases not traded
within the EU-ETS. Due to the sectors which form part of the Decision’s scope they
influence the demand for electricity, thus the type of generation that is dispatched671
and hence the wholesale price for electricity. Any regulatory instrument which affects
the wholesale price for electricity has a feedback mechanism into the renewable
666
The ‘spread’ is the difference between the selling price for electricity and the cost of production – clean spread
includes the carbon allowance price and dirty spread does not include the carbon price
667
Case C-279/08 Commission v Netherlands ECLI:EU:C:2011:551
668
Benjamin Görlacha ‘Emissions Trading in the Climate Policy Instrument Mix: understanding and Managing
Interactions with other Policy Instruments’, (2014) 25(34) Energy & Environment 733-49
669
Council Decision No 406/2009/EC 23 April 2009 ‘Reduction in carbon emissions to meet the Community’s
carbon emission reduction commitments up to 2020’ (Effort Sharing Decision)
670
Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998) Annex A - carbon
dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and
sulphur hexafluoride (SF6); available at http://unfccc.int/kyoto_protocol/items/2830.php
671
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE
672
‘suport scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
673
https://ec.europa.eu/energy/en/topics/markets-and-consumers/market-legislation
674
A Member State is allowed to carry over unused entitlement of a specific year to any future compliance year
until 2020 without limitations
675
A Member State is allowed to borrow up to 5% of its entitlements from its future compliance years
676
Kyoto units are Certified Emission Reductions issued from Clean Development Mechanism projects, Emission
Reduction Units issued from Joint Implementation projects, Removal Units generated from carbon sink activities,
Assigned Amount Units which are tradeable fractions of Annex 1 Countries’ to the Kyoto Protocol emission
allocations
677
A Member State is allowed to transfer its Kyoto unit quota to another Member State up to an amount
corresponding to 3% of its 2005 emissions
678
A project defined in Article 6 of the Kyoto Protocol, allows a country with an emission reduction or limitation
commitment under the Kyoto Protocol (Annex B Party) to earn emission reduction units (ERUs ) from an
emission-reduction or emission removal project in another Annex B Party
679
In the second commitment period of the Kyoto Protocol the EU did not commit to a tighter target, thus such a
review process has not been triggered to-date
680
Anja Kollmuss, ‘Tackling 60% of the EU’s Climate Problem the Legislative Framework of the Effort Sharing
Decision’ (May 2013) Carbon Market Watch Report, 4
681
Christina Hood, ‘Reviewing existing and proposed emissions trading systems’ (2010) OECD/IEA, Paris
682
European Council (2014): European Council Conclusions, 23/24 October 2014. EUCO 169/14, para. 2.12.
683
Frans Duijnhouwer, ‘Enhancing existing flexibility instruments to ensure cost-effectiveness, presentation’
(2015) Brussels; See also European Commission Auctioning,
http://ec.europa.eu/clima/policies/ets/cap/auctioning/index_en.htm.
684
Price discovery is the overall process, whether explicit or inferred, of setting the spot price of an asset or
service but most commonly the proper price of a security, commodity, or currency based on many factors. These
include supply and demand, intangible factors such as investor risk attitudes and the overall economic and
geopolitical environment. Simply put, it is where a buyer and a seller agree on a price and a transaction occurs.
Definition from https://www.investopedia.com/terms/p/pricediscovery.asp#ixzz5BR9NKHyG accessed 30 March
2018
685
Nils Meyer-Ohlendorf, Benjamin Görlach and Ennid Roberts, ‘EU Effort Sharing Decision after 2020:
Auctioning of AEAs’ (19 January 2016) Ecological Institute, Berlin
686
Trilemma of reliability, sustainability and affordability – See David Newbury ‘Questioning the EU Target
Electricity Model – how should it be adapter to deliver the Trilemma’ [2016] Cambridge University, Energy Policy
Research Group Working Paper See Also Raphael Heffron Energy Law: An Introduction (Springer, 2014)
687
Kirk Hamilton, Milan Brahnobhatt and Jiemei Lui ‘Multiple Benefits from Climate Change Mitigation’ (2017) LSE
Graham Research Institute for Climate Change Working Paper; See Also Kirk Hamilton, ‘ Economic co-benefits of
reducing CO2 emissions outweigh the cost of mitigation for most big emitters’ (2017) LSE Graham Research
Institute for Climate Change Working Paper
688
Frédéric Babonneau, Alain Haurie and Marc Vielle, ‘Welfare implications of EU effort sharing decision and
possible impact of a hard Brexit’ (May 2017) 5th International Symposium on Environment Energy Finance Issues,
Paris
689
EU COM 0482/2016 ‘on binding annual carbon emission reductions by Member States from 2021 to 2030 for a
resilient Energy Union and to meet commitments under the Paris Agreement’ available at http://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016PC0482 accessed 1 May 2018, Recital 1
690
Ibid, Recital 2
691
Ibid, Article 4
692
Femke de Jong, ‘The 2030 Effort Sharing Regulation: How can the EU’s largest climate tool spur Europe’s low-
carbon transition’ [2016] Carbon Market Watch Policy Briefing available at https://carbonmarketwatch.org/wp-
content/uploads/2016/09/CMW_THE-2030-EFFORT-SHARING-REGULATION_final2016_WEB.pdf accessed 21
May 2018
693
EU Regulation on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030
contributing to climate action to meet commitments under the Paris Agreement and amending Regulation (EU) No
525/2013, 26 April 2018, 2016/0231 (COD), PE-CONS 3/18
694
http://www.consilium.europa.eu/en/press/press-releases/2018/01/17/effort-sharing-regulation/
695
http://www.consilium.europa.eu/en/press/press-releases/2018/05/14/effort-sharing-regulation-council-adopts-
emission-reduction-
targets/?amp;utm_medium=email&utm_campaign=Effort+sharing+regulation%3a+Council+adopts+emission+red
uction+targets
696
Case C-126/01 Ministère de l'Économie, des Finances et de l'Industrie v GEMO ECLI:EU:C:2003:622, para. 31
to 34. AG Jacobs had considered that ‘the provision free of charge of a collection and disposal service for
dangerous animal waste [was relieving the] … farmers and slaughterhouses of an economic burden which would
normally, in accordance with the polluter-pays principle, have to be borne by those undertakings’. See Opinion AG
Jacobs in Case C-126/01 Ministère de l'Économie, des Finances et de l'Industrie v GEMO ECLI:EU:C:2002:273,
para. 64
697
Case C-345/02 Pearle BV, Hans Prijs Optiek Franchise BV and Rinck Opticiëns BV v Hoofdbedrijfschap
Ambachten ECLI:EU:C:2004:448para 33
698
European Directive 2010/75/EU (24 November 2010) ‘Industrial emissions (integrated pollution prevention and
control)’ OJ L 334/17
699
ibid para 1
700
To this end in November 2005, the European Commission launched a review of legislation on industrial
emissions (European Commission COM (2005) 540 ‘Report of the Commission on the implementation of Directive
96/61/EC concerning integrated pollution prevention and control’).This led to the Commission proposing an
Industrial Emissions Directive on 21 December 2007 (European Commission COM (2007) 844 ‘Industrial
emissions (integrated pollution prevention and control’). The Directive was ratified by the European Council on 8
November 2010 and came into force on 6 January 2011.
701
The polluter pays principle is set out in the Article 191(2) Treaty on the Functioning of the European Union and
Directive 2004/35/EC (21 April 2004) ‘environmental liability with regard to the prevention and remedying of
environmental damage is based on this principle’
702
European Directive 2010/75/EU (24 November 2010) ‘Industrial emissions (integrated pollution prevention and
control)’ OJ L 334/17, Preamble para 2
703
The integrated approach means that the permits must take into account the whole environmental performance
of the plant, covering e.g. emissions to air, water and land, generation of waste, use of raw materials, energy
efficiency, noise, prevention of accidents, and restoration of the site upon closure -
http://ec.europa.eu/environment/industry/stationary/ied/legislation.htm accessed 1 May 2018; See also Industrial
Emissions Directive Article 14
704
Best available techniques (BATs): the most effective techniques for preventing or reducing emissions that are
technically feasible and economically viable within the sector - http://eur-lex.europa.eu/legal-
content/EN/TXT/HTML/?uri=LEGISSUM:ev0027&from=EN accessed 1 May 2018; Industrial Emissions Directive
Article 11, 13, 14, 19, Annex III
705
Competent authorities have flexibility to set less strict emission limits, where an assessment shows that
achieving the emission levels associated with BAT leads to disproportionately high costs compared to the
environmental benefits: Till Bachmann and Jonathan van der Kamp, ‘Environmental cost-benefit analysis and the
EU Industrial Emissions Directive: Exploring the societal efficiency of a DeNOx retrofit at a coal-fired power plant’
(2014) 68 Energy, 125
706
Industrial Emissions Directive Articles 30(9) and 73
707
Industrial Emissions Directive Article 24
708
January 2013 – applied to all new installations, January 2014 – applied to installations already in existence and
regulated under the Integration Pollution Coordination & Control Directive before 6 January 2013 (except large
combustion plants), July 2015 – applied to existing industrial activities with newly prescribed activities that are not
subject to the Integration Pollution Coordination & Control Directive, January 2016 – applied to large combustion
plants (effectively thermal power stations) already in existence before 6 January 2013, thus effectively replacing
the Large Combustion Plan Directive from January 2016.
709
Industrial Emissions Directive, Recital 1
710
Directive 2001/80/EC of 23 October 2001 ‘on the limitation of emissions of certain pollutants into the air from
large combustion plants’ OJ L 309, 27.11.2001
711
Directive 2008/1/EC of 15 January 2008, ‘concerning integrated pollution prevention and control’ OJ L 24/8
29.1.2008
712
Directive 2000/76/EC of 4 December 2000, ‘on the incineration of waste’ OJ L 332, 28.12.2000,
713
Directive 1999/13/EC of 11 March 1999, ‘on the limitation of emissions of volatile organic compounds due to
the use of organic solvents in certain activities and installations’ OJ L85/1 29.3.1999
714
Directives on (i) disposal (Council Directive 78/176/EEC), (ii) monitoring and surveillance (Council Directive
82/883/EEC) and (iii) programs for the reduction of pollution (Council Directive 92/112/EEC)
• ’Opt in’ Option 1 by committing to the emission limit values from 2016. So-
called ’peaking plants’ (i.e. those operating for no more than 1500 hours per
year on a 5 year rolling average) will be subject to higher (i.e. less stringent
than set out in the main body of the Directive) emission limits (relating to
nitrogen oxide, sulphur dioxide and dust716 – hence the reason many power
stations that have standby diesel generators for black start717 purposes have
started burning bio-diesel and increasing their running hours to just below
1500 per year (for reference there are 8760 hours in a year).
• ’Opt in’ Option 2 generation plant permitted before 27 November 2002 and
operating by 27 November 2003, can enter into a transitional plan from 2016
to June 2020 and agree to comply with set emission limits (nitrogen oxide,
sulphur dioxide and dust)718 from July 2020 can continue operation.719
715
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
716
Ibid, Article 30(2)
717
Black Start is the technical term given to the process whereby a power system is restarted following a total
system failure. Many power plants are required to install diesel generators that can start and operate without the
need to have a functioning electricity system into which electricity can be transmitted. A generating plant has a
considerable “house” load in the form of pumps, fuel systems and control apparatus in order to operate, all of
which must be running prior to starting the main generating plant
718
Article 30(2) Industrial Emissions Directive
719
Article 32 Industrial Emissions Directive
720
EU Directive 2001/80/EC 23 October 2001 ‘on the limitation of emissions of certain pollutants into the air from
large combustion plants’ OJ L309/44
721
Article 33(1) Industrial Emissions Directive
722
Article 32 Industrial Emissions Directive
723
Industrial Emissions Directive, Article 32(2) using rates in Article
724
Bloomberg ‘Poland Faces Harsh EU Reality in Push for Coal Exemptions’, 17 May 2017, available at
www.bloomberg.com/news/articles/2017-05-16/poland-faces-harsh-eu-reality-in-its-push-for-coalexemptions
accessed 20 January 2018; See Also Michal Wierzbowski, Izabel Filipiak and Wojciech Lyzwa,’ Polish energy
policy 2050 – An instrument to develop a diversified and sustainable electricity generation mix in coal-based
energy system’ (2017) 74 Renewable and Sustainable Energy Reviews, 51
725
Mariana Heinrich and Phil Hare,’Outlook for New Coal Fired Power Stations in Germany, The Netherlands and
Spain’ [2013] Pöyry Management Consulting Report for DECC UK; See Also DW ‘Pressure on Germany to ditch
coal intensifies’, 2 October 2017 available at www.dw.com/en/pressure-on-germany-to-ditch-coal-intensifies/a-
40778356
726
Simone Tagliapietra, ’Beyond Coal: Facilitating the Transition in Europe’ (2017) 5 Bruegel Institute Policy Brief
727
Matthias Buck, Michael Hogan and Christian Redl, ’The Market Design Initiative and Path Dependency: Smart
retirement of old, high-carbon, inflexible capacity as a prerequisite for a successful market design’ [2015] Agora
Energiewende
728
A generation gap is simply a shortfall in available generating capacity to meet demand for electricity present on
the network
729
‘best available techniques’ Article 10 and 13 Industrial Emissions Directive; ‘Best’ is the most effective way of
achieving a ‘high general level of protection of the environment as a whole’. What this high general level may
mean is not defined in the directive, but defined in several other EU legislation (e.g. Birds and Habitats Directive,
Air Quality Framework Directive and the respective daughter directives, Water Framework Directive and daughter
directives, Waste Framework Directive, chemicals legislation such as REACH etc.). The quality of ‘Best’ depends
on the quality of legislative work of the EU and member states. ‘Available’ implies that several conditions be met:
scale, economic viability, efficiency and accessibility. Available techniques are already developed in terms of
scale; they are hence ‘ripe’ techniques and capable of being applied widely across Europe. They must have
proven the market test – that means they must have been applied under normal market conditions (economically
and technically viable conditions). Establishing the external financial costs of pollution and hence the benefits of
its reduction is still an ongoing methodological problem, which has produced many scientific controversies. In
determining whether or not a technology is really economically viable, the crucial factor is the choice of
methodology used to identify the external costs being defined. The Directive also states that the techniques need
to be ‘reasonable accessible to the operator’, irrespective of whether produced or used in the member state in
question. ‘Techniques’ is not to be limited to ‘technology used’, it also refers to the way in which the installation is
designed, built, maintained, operated and decommissioned. Christian Schaible ‘New Features under the Industrial
Emissions Directive: critical assessment of main provisions under the new IPPC framework’ (2011) European
Environmental Bureau
730
Till Bachmann and Jonathan van der Kamp, ‘Environmental cost-benefit analysis and the EU (European Union)
Industrial Emissions Directive: Exploring the societal efficiency of a DeNOx retrofit at a coal-fired power plant’
(2015) Energy, 68
731
Article 52 (5) Industrial Emissions Directive
732
Council Directive (EC) 2010/75/EC 24 November 2010 – Industrial Emissions (integrated pollution prevention
and control) OJ L334/17 Available at http://ec.europa.eu/environment/industry/stationary/ied/faq.htm
733
H Sithole, T Cockerill, K Hughes, D Ingham, L Ma, R Porter and M Pourkashanian, ’Developing a Sustainable
Electricity Generation Mix for the UK’s 2050 Future’ (2016) 100 Energy, 363
734
The accounting treatment for an asset that is fully depreciated and continues to be used in the business will be
to report it on the balance sheet at its cost along with its accumulated depreciation. There will be no depreciation
expense recorded after the asset is fully depreciated - www.accountingcoach.com/blog/fully-depreciated-assets
735
Net book value is the value at which a company carries an asset on its balance sheet. It is equal to the cost of
the asset minus accumulated depreciation. For a fully depreciated asset the net book value will be zero. Net book
value is one of the most popular financial measures, particularly when it comes to valuing companies. It is
important to note that net book value almost never equals market value. This happens when assets are listed on
the balance sheet at construction cost, meaning their balance sheet value is not updated as prices change. A
company that holds a lot of physical assets (like power stations) on its balance sheet will likely have a net book
value far below its market value. Also revenues are derived from the assets and placed in the profit and loss
account without the need to place a depreciation liability on the balance sheet. – Ray Ball, Joseph Gerakos,
Juhani Linnainmaa and Valeri Nikolaev ‘Earnings, Retained Earnings, and Book-to-Market in the Cross Section
of Expected Returns’ (2018) 17(3) Chicago Booth Research Paper
736
One of the elements of a Company’s balance sheet is the net book value of its assets. Net book value is
calculated as the original cost of an asset, minus any accumulated depreciation and other impairments required
by accounting standards. Utility companies tend to drive their business by the requirement to recover a certain
rate of return on the net book value of its assets, therefore with income determined by the wholesale price of
electricity a low network value company will have a higher reported return.
737
Diego García-Gusano, Diego Iribarren and Javier DuFour, ‘Is coal extension a sensible option for energy
planning? A combined energy systems modelling and life cycle assessment approach’ (2018) 114 Energy Policy,
413
738
Julia Fioretti, ‘EU states approve plans for stricter limits on pollutants from power plants’ Reuters,
https://www.reuters.com/article/us-eu-coal-pollutants/eu-states-approve-plans-for-stricter-limits-on-pollutants-from-
power-plants-idUSKBN17U1ZO accessed 28 December 2017
739
Till Bachmann and Jonathanvan der Kamp, ‘Environmental cost-benefit analysis and the EU (European Union)
Industrial Emissions Directive: Exploring the societal efficiency of a DeNOx Retrofit at a coal-fired power plant’
(2014) 68 Energy, 125
740
Council Directive (EC) 2010/75/EC 24 November 2010 – Industrial Emissions (integrated pollution prevention
and control) OJ L334/17 Available at http://ec.europa.eu/environment/industry/stationary/ied/faq.htm
741
Christian Schaible ‘New Features under the Industrial Emissions Directive: critical assessment of main
provisions under the new IPPC framework’ [2011] European Environmental Bureau
742
Case C-2/90 Commission v Belgium ECLI:EU:C:1992:310
743
Council Decision No 406/2009/EC 23 April 2009 ‘Reduction in carbon emissions to meet the Community’s
carbon emission reduction commitments up to 2020’ (Effort Sharing Decision)
744
Case C-126/01 Ministère de l'Économie, des Finances et de l'Industrie v GEMO ECLI:EU:C:2003:622, para. 31
to 34. AG Jacobs had considered that ‘the provision free of charge of a collection and disposal service for
dangerous animal waste [was relieving the] … farmers and slaughterhouses of an economic burden which would
normally, in accordance with the polluter-pays principle, have to be borne by those undertakings’. See Opinion AG
Jacobs in Case C-126/01 Ministère de l'Économie, des Finances et de l'Industrie v GEMO ECLI:EU:C:2002:273,
para. 64
The Energy Efficiency Directive is a key pillar of the Third Energy Package747 as it
seeks to reduce the overall demand for energy across the EU. The Directive is a
C&C regulatory framework rather than a market-based instrument. The Directive’s
objectives are highly interactive with those of the Emissions Trading Directive748 in
that when efficiency increases, energy demand decreases, and the need for
emissions allowances thus reduces. However, there is no feedback loop between
the two Directives, as reductions in electricity demand simply increases the number
of unrequired emission allowances, further depressing the price for carbon
emissions via the EU-ETS.
The promotion of energy efficiency is specifically set out in Article 194 (1)(c)
TFEU. In addition to the specific obligation set out in Article 194, energy efficiency
related acts have also been adopted on the legal basis of the Common Commercial
Policy, relating to external trade. 749 The EU has stated that ‘energy efficiency’
provides the most universally available source of energy. Hence putting energy
efficiency first means that the cheapest and cleanest source of energy is the energy
that does not need to be produced or used.750 Increasing the efficient use of energy
is seen to be a form of economic development751 which is a core EU objective.752
745
Case T-183/07 Poland v Commission ECLI:EU:T:2009:350 para 120 & 131, the appeal C-504/09P
Commission v Poland ECLI:EU:C:2012:178 para 78 was unsuccessful; See also C-505/09 Commission v Estonia
ECLI:EU:C:2012:179 para 80 & 81
745
Case T-387/04, EnBW Energie Baden-Württemberg v Commission ECLI:EU:T:2007:117; Case C295/14 DOW
Benelux BV v Staatssecretaris van Infrastructuur en Milieu ; Case T-233/04 Netherlands v Commission
ECLI:EU:T:2008:102; Case C-279/08 Commission v Netherlands ECLI:EU:C:2011:551; Joined Cases C-191/14
and C-192/14 Borealis Polyolefine GmbH v Bundesminister für Land- und Forstwirtschaft, Umwelt und
Wasserwirtschaft ECLI:EU:C:2016:311; Case 540/14 DK Recycling und Roheisen GmbH v Commission
ECLI:EU:C:2016:469
746
Council Directive 2012/27/EU 25 October 2012 – Energy Efficiency Directive OJ L315/1 Available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:315:0001:0056:en:PDF
747
https://ec.europa.eu/energy/en/topics/markets-and-consumers/market-legislation
748
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
749
Case C-281/01 Commission v Council (Energy Star) ECLI:EU:C:2002:761
750
COM(2016) 860, ‘Clean Energy For All Europeans’, 4
751
Sanya Carley, ‘Energy-based Economic Development’ (2011) 15 Renewable and Sustainable Energy Reviews
282, 287
752
Pernille Schiellerup ‘Energy saving is the key to EU energy and climate goals’ in Katinka Barysch (ed) Green,
safe, cheap: Where next for EU energy policy? (Centre for European Reform, 2011)
753
Council Directive 2012/27/EU 25 October 2012 – Energy Efficiency Directive OJ L315/1 Available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:315:0001:0056:en:PDF
754
Angus Johnston and Guy Block, EU Energy Law (OUP, Oxford, 2012), 408
755
Article 7 (1), Energy Efficiency Directive
756
Article 4, Energy Efficiency Directive
757
Case C-513/99 Concordia Bus Finland Oy Ab v Helsingin kaupunki and HKL-Bussiliikenne
ECLI:EU:C:2002:495 and Case C-448/01 EVN AG and Wienstrom GmbH v Austria ECLI:EU:C:2003:651
758
Article 5, Energy Efficiency Directive
759
Article 9, Energy Efficiency Directive
760
Article 8, Energy Efficiency Directive
Energy Efficiency Directive Article 15(5) requires member states to ensure that
transmission and distribution system operators provide priority or guaranteed
764
access to the electricity network and priority dispatch for high-efficiency
cogeneration. These obligations are explicitly without prejudice to Article 16(2) of the
Renewable Energy Directive, which provides priority grid access and priority
dispatch for renewable generating facilities. The whole issue of priority dispatch and
its distortive effect on competition and thus status as state aid, is discussed in
Sections 2.10.6 (Electricity Markets Directive) and 2.10.7 (Renewable Energy
Directive).
The Energy Efficiency Directive also requires that certain large buildings
install photovoltaic cells or small wind turbines, within the building or nearby, to
reduce the energy demand of the building. This it is argued restricts free movement
of goods as it reduces the incentive to buy imported low-cost renewable energy –
also it being regarded as anti-competitive, as it is known that electricity generated
from photovoltaic cells is more expensive than that produced by largescale wind
farms, a conflict with Article 107(1) (state aid) as it is distortive of competition
(controlling production and markets by statute and hence the state).
The EU, in line with its climate and energy strategy, has presented a renewed
ambition for the post-2020 period, towards 2030, through the Clean Energy for All
Europeans765 package of proposals. The proposals include a new binding target
where a minimum 30% for energy efficiency improvements is suggested. However,
the need for a stronger governance framework to support the delivery of this target
is also considered necessary.766 The framework is stated to mean that on average
761
Large Enterprise has more than 250 employees and an annual turnover of more than €250m, Commission
Recommendation of the Definition of Small & Medium Enterprise (2003/361/EC), available at http://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32003H0361&from=EN
762
Article 8, Energy Efficiency Directive
763
Article 15, Energy Efficiency Directive
764
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
765
COM(2016) 860 30 November 2016 ‘Clean Energy For All Europeans’
766
Guillermo Ivan Pereira and Patrícia Pereira da Silva, ‘Energy efficiency governance in the EU-28: analysis of
institutional, human, financial, and political dimensions’ (2017) 10(5), Energy Efficiency, 1279
767
SWD(2016) 405 ‘Impact Assessment for the amendment of the Energy Efficiency Directive’
768
SWD(2016) 418 ‘Impact Assessment for the recast of the Renewables Directive’
769
World Commission on Environment & Development, ‘Our Common Future’, 4 August 1987, UN, GA res,
A/42/427 (1987), Chptr 2, para 1
770
Raphael Heffron, Darren McCauley and Gerardo Zarazua de Rubens, ‘Balancing the energy trilemma through
the Energy Justice Metric’ [2018] (Energy Justice Special Issue), Applied Energy
771
Itziar Martinez de Alegria Mancisidor, Pablo Díaz de Basurto Uraga Iñigo Martínez de Alegría Mancisidor and
Patxi Ruiz de Arbulo López., ‘European Union’s Renewable Energy Sources and Energy Efficiency Policy Review:
The Spanish Perspective’ (2009) 13 Renewable and Sustainable Energy Reviews 100, 112
772
Ibid
773
World Commission on Environment & Development, ‘Our Common Future’, 4 August 1987, UN, GA res,
A/42/427 (1987), Chapter 2, para 1
774
Susan Baker, Maria Kousis, Dick Richardson and Ivor Gaber, Routledge, The Politics of Sustainable
Development: Theory, Politics and Practice within the European Union (Routledge 1997)
775
Marc Ringel, Barbara Schlomann, Michael Krail and Clemens Rohde, ‘Towards a green economy in Germany?
The role of energy efficiency policies’ (2016) 179 Applied Energy, 1293
776
Energy Efficiency Watch ;Good practice ways out of energy debt’ Available at www.energy-efficiency-
watch.org/fileadmin/eew_documents/Documents/EEW2/Good_practice_ways_out_of_energy_debt_BROCHURE.
pdf
777
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
778
Bianka Shoani-Tehrani and Pascal da Costa ‘ The Paradoxes of the Euopean Energy Market Regulation: A
Historical & Structural Analysis of the Electricity Mix’ in Pascal da Costa and Danielle Attias (eds) Towards
Sustainable Economy: Paradoxes & Trends in Energy & Transportation (Springer, 2018)
779
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
780
Comm (2017) 56 final ‘2016 assessment of the progress made by Member States in 2014 towards the national
energy efficiency targets for 2020 and towards the implementation of the Energy Efficiency Directive 2012/27/EU’;
This finding was confirmed by the International Energy Agency and the Odyssee-Mure decomposition analysis –
available at https://www.iea.org/eemr16/files/medium-term-energy-efficiency-2016_WEB.PDF and Annex 5 of
SWD (2016)405.
781
Tobias Bossmann and Iain Staffell, ‘ The shape of future electricity demand: Exploring load curves in 2050s
Germany and Britain’ (2015) 90 Journal of Energy, 1317
782
Ibid
783
Ibid
784
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE
Carbon capture and storage technology is not currently widely developed across the
EU; however, it is likely to be a feature of any future ‘coal renaissance’.786 A ‘coal
renaissance’ would occur where the costs of renewables do not reduce to a price
that would make European electricity compatible with the price of electricity in other
industrial regions of the world.787 Also the global warming phenomenon is really a
function of the volume (stock) of carbon emissions in the atmosphere rather than the
788
speed of flow of emissions from electricity generation and other sources.
Therefore deploying a technology which reduces the volume of carbon in the
atmosphere is likely to grow in importance in the future. It is argued that the EU’s
renewables regulatory framework does not adequately address the need to reduce
the volume of carbon emissions in the atmosphere.
785
Council Directive 2009/31/EC 23 April 2009 on the geological storage of carbon dioxide OJ L140/114 (Carbon
Capture & Storage Directive)
786
‘Coal Renaissance’ is a term given to an increased use of coal generation due to pricing and the restriction of
other capacity types - Michael Le Page, ‘Coal renaissance means switching to plan B on climate change’ (2015)
3030 New Scientist; See Also Vanessa Mock, ‘Coal Renaissance Risks Tarnishing the EU’s Green-Energy
Credentials’ 2 Sept 2014 The Wall Street Journal; Iain Staffell, ‘Coal comeback pushes up UK’s carbon emissions’
[2018] Imperial College London Working Paper
787
Stephen Rackley Carbon capture and storage (Butterworth-Heinemann, 2017); See also Farahiyah Abdul
Rahman, Md Maniruzzaman Aziza, R Saidur, Wan Azelee Wan Abu Bakar, M.R Hainin, Ramadhansyah
Putrajaya, Norhidayah Abdul Hassana, ‘Pollution to solution: Capture and sequestration of carbon dioxide (CO2)
and its utilization as a renewable energy source for a sustainable future’ (2017) 71 Renewable and Sustainable
Energy Reviews, 112
788
Glenn Harrison ‘Stocks and Flows’ in Steven Durlauf and Lawrence Blume (eds) The New Palgrave Dictionary
of Economics (Palgrave Macmillan, 2008); See Also Daniel Bodansky, Jutta Brunnée and Lavanya Rajamani
International Climate Change Law (Oxford University Press, 2017)
Due to the long-term liabilities795 for the operators of such technology there have not
been any serious investigations into permitting such a facility and as such the
Directive has not been tested as a viable regulatory framework.796 The Directive is
789
Directive 2009/31 – ‘Geological storage of carbon dioxide” April 2009; Recital 4
790
Council Directive (EC) 2010/75/EC 24 November 2010 – Industrial Emissions (integrated pollution prevention
and control) OJ L334/17 Available at http://ec.europa.eu/environment/industry/stationary/ied/faq.htm
791
OECD ‘Effective Carbon Rates 2018 Pricing Carbon Emissions Through Taxes and Emissions Trading’ (2018)
available from http://www.oecd.org/tax/effective-carbon-rates-2018-9789264305304-en.htm accessed 18
September 2018
792
Comm (2008) 18, ‘Report on the amending proposal for Carbon Capture and Storage Directive’
793
Including manufacturing, construction and decommissioning
794
Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 454
795
A Haan-Kamminga, ‘Long-term Liability for Geological Carbon Storage in the EU’ (2011) 29 Journal of Energy
& Natural Resources Law 309
796
S Brockett, ‘The EU Enabling Legal Framework for Carbon Capture & Storage and Geological Storage’ (2009)
Energy Procedia 4433
The Renewable Energy Directive 799 seeks to put a structure in place which will
support 20% of the EU’s energy being derived from renewables by 2020 (with higher
levels of renewable exploitation being proposed for 2030 and 2050 800 – See
Sections 2.11.1 and 2.11.2), the other 80% of demand in the market is supplied by
coal, gas, hydro and nuclear. Without the advantages of revenue support and priority
dispatch, 801 the structure of the electricity market and the price signals that it gives
are critical to this conventional generation.
Moreover, to reduce costs and liberalise the market the EU published a
series of regulatory packages. The First Energy Package802 was composed of only
one Directive related to electricity and one for gas. The Second803 Energy Package,
sought to strengthen the unbundling rules for transmission system operators and
sought to ensure consumers were free to choose their supplier. The Third, and most
recent, Energy Package brought together a series of measures based on two main
principles to develop a more competitive and better-functioning energy market (i)
unbundling,804 and (ii) third party access.805
One of the mainstays of the Third Energy Package is the 2009 Electricity
Market Directive, which is derived from the requirements of TFEU Article 194, and
sets out provisions in the following areas:
797
Trilemma of reliability, sustainability and affordability – See David Newbury ‘Questioning the EU Target
Electricity Model – how should it be adapter to deliver the Trilemma’ [2016] Cambridge University, Energy Policy
Research Group Working Paper See Also Raphael Heffron Energy Law: An Introduction (Springer, 2014)
798
Council Directive 2009/72/EC 13 July 2009 Concerning common rules for the internal market in electricity OJ L
211/55 (Electricity Markets Directive) available at https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0072&from=en
799
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
800
COM (2011) 112: A Roadmap for moving to a competitive low carbon economy in 2050 (08 Mar 2011) see
www.ec.europa.eu/clima/policies/strategies/2050_en#tab-0-1
801
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
802
Council Directives 96/92/EC concerning common rules for the internal market in electricity and 98/30/EC on
common rules for the internal market in natural gas
803
http://ec.europa.eu/competition/sectors/energy/overview_en.html
804
Regulation (EU) No 1227/ 2011 Regulation on Wholesale Energy Market Integrity and Transparency
805
Regulation (EU) No 347/2013 Regulation on Guidelines for Trans-European Energy Infrastructure
The 2009 Electricity Market Directive recognises in Recital 3 and 4 that the free
movement of goods and the freedom to deliver electricity to customers are freedoms
outlined by the Treaty, however it being recognised that not all member states
provide the non-discriminatory network access and regulatory supervision
necessary to achieve these goals. These goals are in horizontal conflict with the
Article 3(3) of the 2009 Renewable Energy Directive which allows nationally
focussed renewable energy support schemes810 to be put in place by member states
which restrict free movement (See Section 3.5.1 to 3.5.5). 811
In principle, rules favouring one type of electricity generation over others
(renewables v coal – with revenue support and priority dispatch812 for renewables)
806
EU Directive 2009/72/EC 13 Jul 2009 – Electricity Market Directive, Article 9 to Article 14
807
EU Directive 2009/72/EC 13 Jul 2009 – Electricity Market Directive, Article 35
808
EU Directive 2009/72/EC 13 Jul 2009 – Electricity Market Directive, Annex 1
809
Eglė Dagilyte, ‘Solidarity - a General Principle of EU Law? Two Variations on the Solidarity Theme’ in A Biondi,
Egle Dagilyte and E Kucuk.(Eds.), Solidarity in EU Law: Legal Principle in the Making (Edward Elgar, 2018)
810
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Article 2
Renewable Enerrgy Directive
811
Peter Cramton ‘Electricity Market Design’ (2017) 33(4) Oxford Review of Economic Policy, 589;See Also Hans
Vedder, Anita Rønne, Martha M Roggenkamp and Íñigo del Guayo, ‘EU Energy Law’ in Martha Roggenkamp,
Catherine Redgwell, Anita Ronne, and Inigo del Guayo (eds) Energy Law in Europe National, EU and
International Regulation (Oxford University Press, 2016)
812
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
813
EU Directive 2009/72/– Electricity Market Directive, Article 7
814
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
815
Andreas Gunst, ‘Impact of European Law on the Validity and Tenure of National Support Schemes for Power
Generation from Renewable Energy Sources’ (2005) 23 Journal of Energy & Natural Resources Law 95, 97
816
Internal Market is an area without internal frontiers in which the free movement of goods, persons, services and
capital is ensured - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 516
817
CEPS Task Force Report, ‘Energy Policy for Europe: Identifying the European Added-Value’ [2008] Centre for
European Policy Studies 61
818
Peter Cameron, ‘The Internal Energy Market – Redefining Objectives’ Peter Cameron and Raphael Heffron
(eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016), 5
819
CEPS Task Force Report, ‘Energy Policy for Europe: Identifying the European Added-Value’ [2008] Centre for
European Policy Studies 61
820
Case 120/78, Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein (Cassis de Dijon)
ECLI:EU:C:1979:42
821
The trading hub or power exchange is the heart of the electricity market. The power exchange’s members will
consist of producers, retailers and traders as well as large end users. The exchange will trade a series of standard
products in both volume and time, with the delivery location and other technical details relating to the trade set out
in a trade master agreement. Each individual trade will in effect be a supplemental agreement to this trade master
agreement. The market price is determined by supply and demand considerations, with both varying during the
day, a different price is determined for each trading period (usually an hour, or in the UK half hour). The market
price may vary somewhat between different market regions, depending on physical transmission limitations that
sometimes occur and the generation mix within each region. Available at https://corporate.vattenfall.com/about-
energy/energy-markets/ accessed 22 April 2018
822
The price differential, or spread, that may arise between differently dated futures contracts; Time spreads can
be mitigated by purchasing options on the difference between average annual prices. In effect, such options
provide protection against a reshaping of the forward price curve - Pricewaterhousecooper ‘glossary of oil and
gas, utilities and mining commodity trading and risk management terms’ 2008 https://www.pwc.com/gx/en/energy-
utilities-mining/pdf/eumcommoditiestradingriskmanagementglossary.pdf
823
A point on the grid where one electric utility can transfer its available energy to another utility’s system – Ibid
824
Case C-2/73 Geddo v Ente Nationale Rissi ECLI:EU:C:1973:89 para 7
825
Case 120/78, Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein (Cassis de Dijon)
ECLI:EU:C:1979:42
826
Regulation (EC) No 714/2009 of 13 July 2009 ‘on conditions for access to the network for cross-border
exchanges in electricity and repealing Regulation (EC) No 1228/2003’ OJ L 211/27
827
Price discovery is the overall process, whether explicit or inferred, of setting the spot price of an asset or
service but most commonly the proper price of a security, commodity, or currency based on many factors. These
include supply and demand, intangible factors such as investor risk attitudes and the overall economic and
geopolitical environment. Simply put, it is where a buyer and a seller agree on a price and a transaction occurs.
Definition from https://www.investopedia.com/terms/p/pricediscovery.asp#ixzz5BR9NKHyG accessed 30 March
2018
828
Malcolm Keay, ‘The EU target model for electricity markets: fit for purpose?’ [2013] Oxford Institute for Energy
Supplies, 2
829
The wholesale price of electricity is set by the most expensive generating facility operating at any particular
time - The wholesale price is dynamic, changing half hourly based on the demand for electricity and the
availability of generating facilities. Generators submit ‘offers’ to the market operator indicating the amount of
energy they are willing to supply and at what price. http://www.rwe.com/web/cms/en/403722/rwe/press-news/how-
the-electricity-price-is-determined. – a concept known as the ‘marginal cost’ - Paul Deane, Seán Collins, Brian
Ó’Gallachóir, Cherrelle Eid, Rupert Hartel, Dogan Keles and Wolf Fichtner ‘Impact on Electricity Markets: Merit
Order Effect of Renewable Energies’ in Manuel Welsch, Steve Pye, Dogan Keles, Aurélie Faure-Schuyer, Audrey
Dobbins, Abhishek Shivakumar, Paul Deane, Mark Howells (eds) Europe's Energy Transition - Insights for Policy
Making Findings (Elsevier, 2017)
830
Ibid
831
Madeleine Cuff,’ Explained: Why Europe's businesses enjoy cheaper energy than the UK - and how to fix it’ 5
Feb 2018 https://www.businessgreen.com/bg/analysis/3025947/explained-why-europes-businesses-enjoy-
cheaper-energy-than-the-uk-and-how-to-fix-it; See Also Jonathan Gaventa,’ Infrastructure networks and the 2030
climate and energy framework’ (2013) E3G Working Paper; A Henriot, ’Financing Investment in the European
Electricity Transmission Network: Consequences on Long-Term Sustainability of the TSOs Financial Structure’
(2013) FSR Policy Brief; Kim Talus Introduction to EU Energy Law (Oxford University Press, 2016),
832
Raphael Heffron and Peter Cameron, ‘The Future of EU Energy Law’ in Peter Cameron and Raphael Heffron
(eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016)
833
Interconnection Levels of 15% by 2030 are set out in the EU’s ‘Communication on strengthening Europe's
energy networks’ – See Section 2.9.2 – available at
https://ec.europa.eu/energy/sites/ener/files/documents/communication_on_infrastructure_17.pdf accessed 10 July
2018
834
Case 8/74, Procureur du Roi v Dassonville ECLI:EU:C:1974:82, para 5
835
Case 120/78, Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein (Cassis de Dijon)
ECLI:EU:C:1979:42
836
Case C-3/76 Kramer ECLI:EU:C:1976:114
The Renewable Energy Directive838 is a C&C style instrument, set up under a shared
competence839 model between the commission and the member states,840 with the
national renewable capacity targets determined by the Commission, but with the
details of the support schemes841 left to member states.
In 2007 the Commission published a ‘Renewable Energy Road Map’ 842
setting out a strategy for the EU’s renewable energy sector. It confirmed the
importance of a robust and comprehensive regulatory framework to increase the
share of renewable energy consumption. After highlighting the absence of binding
capacity targets as an implementation failure of the 2001 Renewable Energy
Directive,843 the Commission proposed long-term binding targets on a member state
by member state basis in new legislation.844 The main outcome of these mandatory
national targets845 is certainty for investors in renewable energy facilities,846 which is
needed for long-term investments. 847 It being stated that, ‘without the member
837
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
838
It should be noted that TFEU was introduced by the Lisbon Treaty on 1 December 2009 – after the adoption of
the 2009 Renewable Energy Directive in April 2009. Thus to avoid any debate that might have arisen surrounding
the Renewable Energy Directive and its potential to significantly affect a member state’s choice of energy sources
it was passed unanimously by the EU Council. (See Council of the European Union, Interinstitutional File:
2008/0016 (COD), Brussels, 6 April 2009)
839
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
840
Case C-370/07 Commission v Council, ECLI :EU:C:2009:590, para 49
841
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Article 2
Renewable Enerrgy Directive
842
COM(2006) 848 ‘Renewable Energy Road Map: Renewable energies in the 21st century: building a more
sustainable future’
843
EU Directive (2001/77/EC) 27 September 2001 ‘The promotion of electricity produced from renewable energy
sources in the internal electricity market’ OJ L 283/33
844
Ibid, p. 5
845
The targets are based on final energy consumption, which avoids converting problems in view of the different
energy sources - Doerte Fouquet and Thomas Johannson, ‘European Renewable Energy Policy at Crossroads -
Focus on Electricity Support Mechanisms’ (2008) 36 Energy Policy, 4079
846
Evanthie Michalena and Jeremy Hills, ‘Renewable Energy Issues and Implementation of European Energy
Policy: The Missing Generation?’ (2012) 45 Energy Policy, 201
847
Danyel Reiche and Mischa Bechberger, ‘Policy Differences in the Promotion of Renewable Energies in the EU
Member States’ (2004) 32 Energy Policy 843, 847
• A 20% share for renewable energy in the EU total energy mix (including
transport). 853 With each member state having an individual differentiated
target 854 (Set out in Annex I of the Directive) dependent on the deemed
potential of the member state to develop renewable energy schemes855 as
well as GDP per capita.856
• A uniform 10% target for the use of bio-fuels in the transport sector of each
member state (although on 28 April 2015, the European Parliament, in
plenary session, enacted a revision such that the target is revised to 7% for
conventional ‘food crop’ based bio-fuels).857
• A framework to provide certificates of origin so that end consumers could be
ensured as to the source of the energy consumed.858
As has been said, despite reductions in the capital cost of renewable sources,859
848
‘support shceme’ means any ‘instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
849
Fernando Hervás and Soriano, Fulvio Mulatero, ‘EU Research and Innovation (R&I) in renewable energies:
The role of the Strategic Energy Technology Plan (SET-Plan)’ (2011) 39(6) Energy Policy, 3582; See also
Kyriakos Maniatis and Stefan Tostmann, ‘EU Technology Strategy on Bioenergy: From Blue-Sky Research to
Targeted Technology Development’ (2010) Renewable Energy Law & Policy Review 169, 173; See also Karl
Mallon, Renewable Energy Policy and Politics: A Handbook for Decision-Making (Earthscan, 2006) 1-2; See also
Com (2009) 519 ‘Investing in the Development of Low Carbon Technologies’ available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0519:FIN;EN:PDF accessed on 9 August 2017.
850
Sophia Ruester, Sebastian Schwenen, Matthias Finger and Jean-MichelGlachant, ‘A Post-2020 EU Energy
Technology Policy: Revisiting the Strategic Energy Technology Plan’ (2014) 66 Energy Policy 209, 212 and 216
851
Sergey Mityakov and Margarita Portnykh, ‘The Infant Industry Argument and Renewable Energy Production’
(2012) Marshall Institute Working Paper
852
COM (2008) 30, ‘2020 by 2020 Europe’s Climate Change Opportunity’ p 7-8; See Also COM(2007) 2 ‘Limiting
Global Climate Change to 2 degrees Celsius The way ahead for 2020 and beyond’; See also COCL 5 17271/1/08
‘Presidency Conclusions of the Brussels European Council (11 and 12 December 2008)’ para 5
853
Directive 2009/28/EC Renewable Energy Directive, Article 3(1)
854
Harald Winkler and Lavanya Rajamani ‘Common, but Differentiated, Responsibilities and Respective
Capabilities in a Regime Applicable to All’ (2014) 14(1) Climate Policy 50
855
Directive 2009/28/EC Renewable Energy Directive, Annex 1
856
Aviel Verbruggen and Volkmar Lauber, ‘Basic Concepts for Designing Renewable Electricity Support Aiming at
a Full-scale Transition by 2050’ (2009) 37 Energy Policy 5732, 5734
857
Directive 2009/28/EC Renewable Energy Directive, Article 3(4)
858
Directive 2009/28/EC Renewable Energy Directive Article 15
859
The Hornsea 3 Project was found to bid 57.5£/MWh in the 2017 UK Renewable Auction – a price comparable
with coal and gas generation, however, this is very much a future price and not the cost derived from operational
wind farms - Daniel Radov, Alon Carmel and Clemens Koenig, ‘Offshore Revolution? Decoding the UK Offshore
Wind Auctions & What the Results Means for a “Zero-Subsidy” Future’ (2017) NERA Economic Consulting
860
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
861
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
862
Directive 2009/28/EC Renewable Energy Directive Article 2(k)
863
Directive 2009/28/EC Renewable Energy Directive, Recital 25
864
Barry Solomon and Karthik Krishna, ‘The Coming Sustainable Energy Transition: Histories, Strategies and
Outlook’ (2011) 39(11) Energy Policy, 7422, 7428; See Also Staffan Jacobsson, Anna Bergek, Dominique Finon,
Volkmar Lauber, Catherine Mitchell, David Toke, Aviel Verbruggen, ‘EU Renewable Energy Support Policy: Faith
or Facts?’ (2009) 37 Energy Policy 2143
865
German Act, Erneuerbare Energien Gesetz (2000) - Renewable Energy Sources Act – Granting Priority to
Renewable Energy Sources (German Feed-in-Tariff)
866
Swedish Act - Electricity Certificates Act (2003)
867
European Commission Memo 14/276 (2014) – Requiring New Renewable Facilities to bid for a support
scheme contract
868
C Klessman, ‘Experience with renewable electricity (RES-E) support schemes in Europe: Current status and
recent trends Presentation’ (2014) http://www.leonardoenergy.org/sites/leonardo-energy/files/documents-and-
links/ecofyssupport_policies_2014_04.pdf (accessed 3 September 2016)
869
Jeremy Hills and Evanthie Michalena, ‘Renewable energy pioneers are threatened by EU policy reform’ (2017)
108 Renewable Energy, 26
870
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
871
Directive 2009/28/EC Renewable Energy Directive, Annex 1
872
Marjan Peeters, ‘Emissions trading as a new dimension to European Environmental Law: The political
agreement of the European Council on carbon allowance trading’, (2003) 12(3) European Environmental Law
Review, 82
873
EU Commissions’s consultation on the future Renewable Energy Directive showed little support for a
harmonised EU-wide support scheme: see the assessment at
https://ec.europa.eu/energy/en/consultations/preparation-new-renewable-energy-directive-period-after-2020,
accessed 7 July 2018
874
EU Regulation No 1588/2015 on the application of Articles 107 and 108 of the Treaty on the Functioning of the
European Union to certain categories of horizontal State aid, OJ 2015 L 248/1, and European Commission,
Regulation (EU) No651/2014 declaring certain categories of aid compatible with the internal market in application
of Articles 107 and 108 of the Treaty,OJ 2014 L 187/1. General Block Exemption Regulations for State aid
('GBER')
875
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy 2014
– 2020, 2014/C OJ 200/01
876
‘support scheme’ means any ‘instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
877
Directive 2009/28/EC Renewable Energy Directive, Article 3(3); See Also Hans Vedder, Anita Rønne, Martha
M Roggenkamp and Íñigo del Guayo, ‘EU Energy Law’ in Martha Roggenkamp, Catherine Redgwell, Anita
Ronne, and Inigo del Guayo (eds) Energy Law in Europe National, EU and International Regulation (Oxford
University Press, 2016)
878
Ibid, Recital 25
879
Council of European Energy Regulators,’ Implications of Non-harmonised Renewable Support Schemes A
CEER Conclusions Paper’ (2012) C12-SDE-25-04b, 13
880
Corinna Klessmann, Erika de Visser, Fabian Wigand, Malte Gephart, Gustav Resch and Sebastian Busch,
‘Cooperation between EU Member States under the RES Directive. Task 1 Report (2014)’, available at
http://ec.europa.eu/energy/renewables/studies/doc/2014_design_features_of_support_schemes_task1.pdf
accessed 1 July 2016, 2; See also Henrik Klinge Jacobsen, Lise Lotte Pade, Sascha Thorsten, Schröder Lena
Kitzing, ‘Cooperation Mechanisms to Achieve EU Renewable Targets’ (2014) 63 Renewable Energy 345, 351;
See also Jean-Michel Glachant and Sophia Ruester, ‘The EU Internal Electricity Market: Done Forever?’ (2014)
31 Utilities Policy 221, 228
881
Ibid p 4
882
Price discovery is the overall process, whether explicit or inferred, of setting the spot price of an asset or
service but most commonly the proper price of a security, commodity, or currency based on many factors. These
include supply and demand, intangible factors such as investor risk attitudes and the overall economic and
geopolitical environment. Simply put, it is where a buyer and a seller agree on a price and a transaction occurs.
Definition from https://www.investopedia.com/terms/p/pricediscovery.asp#ixzz5BR9NKHyG accessed 30 March
2018
883
Christian Bussarcd, Melchior Moosa, Ricardo Alvarez, Philipp Wolf, Tjark Thien, Hengsi Chen, Zhuang Cai,
Matthias Leutholda, Dirk Uwe Sauera and Albert Moser, ‘Optimal Allocation and Capacity of Energy Storage
Systems in a Future European Power System with 100% Renewable Energy Generation’ (2014) 46 Energy
Procedia, 40
884
Ibid p 7
885
COM (2011) ‘Review of European and National Financing of Renewable Energy in Accordance With Article
23(7) of Directive 2009/28’ SEC (2011) 131 Final 7-8
886
EU Neighbourhood information Centre, ‘The Mediterranean Solar Plan’, 2010 available at www.enpi-
infor.eu/files/interview/Mediterranean%20Solar%20Plan.pdf accessed 15 September 2015
887
Case C‑66/13 Green Network SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2014:2399
888
For example Directive 92/43 15 May 1992 ‘the conservation of natural habitats and of wild fauna and flora’ OJ
L206/7; Directive 2009/125 31 October 2009 ‘establishing a framework for the setting of eco-design requirements
for energy-related products’ OJ L285/10; Directive 2008/56 17 June 2008 ‘establishing a framework for community
action on marine water quality in the field of marine environmental policy’ OJ L164/19; Directive 2009/147 30
November 2009 ‘the conservation of wild birds’ OJ L20/7; Regulation 2493/2000/EC 7 November 2000 ‘measures
to promote the full integration of the environmental dimension in the development process of developing countries’
OJ L288/1
889
Meaning that ‘measures should not exceed the limits of what is appropriate and necessary for attaining the
objective pursued, and that where is a choice between several appropriate measures must be had to the least
onerous’ Case T-419/03 Altsoff Recycling Austria v Commission ECLI:EU:T:2011:102, para 134; Also
‘proportionality’ or ‘being proportionate’ can be considered an ideal or a goal rather than being a principle with the
same status as ‘polluter pays’ or the ‘precautionary’ principle. – see Jonathon Verschuuren, ‘Sustainable
Development and the Nature of Environmental Legal Principles’ (2006) (1)9 Potschefstroom Electricity Law
Journal, 17; See Also Jurian Langer and Wolf Sauter ‘The Consistency Requirement in EU Law’ (2017) 39 Journal
of European Law
890
Case C-2/10 Azienda Agro-Zootecnica Franchini Sari, Eolica di Atlamura Srl v Regione Puglia
ECLI:EU:C:2011:502
891
Joel Eisen, Jim Rossi, David Spence and Hannah Wiseman Energy, Economics and the Environment: Cases
and Materials (West Academic, 2015), 625
892
Priority network access is the obligation placed on member states to establish transparent and proportionate
administrative procedures for the conclusion of network connection for renewable electricity facilities in
accordance with Article 13 and 16 of the Renewable Energy Directive
893
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
894
The term ‘socialisation’ within the electricity industry describes a process whereby costs of the function or
activity is spread across all consumers and as such is seen an activity of general economic interest - Michael
Rivier, Ignacio Pérez-Arriaga and Luis Almos ‘Electricity Transmission’ in Ignacio Pérez-Arriaga (ed) Regulation of
the Power Sector (Springer, 2014), 294
895
Edith Bayer, ‘Report on the German power system’ (2015) Agora Energiewende, 25 available at
https://www.agora-
energiewende.de/fileadmin/downloads/publikationen/CountryProfiles/Agora_CP_Germany_web.pdf accessed 23
January 2018
896
National Grid Electricity Transmission, ‘The Statement of Use of System Charges’ - The levying of charges
associated with connection assets undertaken by the United Kingdom network charging model has, for example,
prevented the development of wide scale renewable projects in the western isles of Scotland; where wind
conditions are the same as would be found offshore, but development costs are lower being onshore yet with the
transmission reinforcement being priced at broadly £1bn this has effectively killed the project -
http://www.stornowaywind.co.uk/the-location/
897
Case C-126/01 Ministère de l'Économie, des Finances et de l'Industrie v GEMO ECLI:EU:C:2003:622
898
Case C-492/14 Essent Belgium NV v Vlaams Gewest ECLI:EU:C:2016:732
899
Miguel Arias Cañete (EU Commissioner for Climate Action & Energy). ‘The European Union Leading In
Renewables’ available at http://europa.eu/rapid/press-release_SPEECH-18-5909_en.htm accessed 2 July 2018
900
European Commission, ‘EU energy in figures, Statistical Pocketbook’, 2015
901
European Commission, ‘2030 Energy Efficiency Impact Assessment’ (SWD(2014) 255 final)
902
European Commission, ‘State of the Energy Union 2015’ (COM(2015) 572 final
903
European Commission, ‘EU energy in figures, Statistical Pocketbook’, 2015
904
Vicki Duscha and Pablo del Rıo, ‘An economic analysis of the interactions between renewable support and
other climate and energy policies’ (2017) 28(1–2) Energy & Environment, 11
905
Pablodel Río, ‘Why does the combination of the European Union Emissions Trading Scheme and a renewable
energy target makes economic sense?’ (2017) 74 Renewable and Sustainable Energy Reviews, 824
EU has decoupled carbon emissions from economic growth as, compared to 1990,
European GDP had increased by 46% but total carbon emissions decreased by over
906
Ibid
907
Trilemma of reliability, sustainability and affordability – See David Newbury ‘Questioning the EU Target
Electricity Model – how should it be adapter to deliver the Trilemma’ [2016] Cambridge University, Energy Policy
Research Group Working Paper See Also Raphael Heffron Energy Law: An Introduction (Springer, 2014)
908
https://unfccc.int/sites/default/files/convention_text_with_annexes_english_for_posting.pdf
909
https://unfccc.int/sites/default/files/kpeng.pdf
910
https://unfccc.int/sites/default/files/english_paris_agreement.pdf
911
European Commission, ‘State of the Energy Union 2015’ (COM(2015) 572 final
912
COM(2016) 860 30 November 2016 ‘Clean Energy For All Europeans’
913
Raphael Heffron and Peter Cameron, ‘The Future of EU Energy Law’ in Peter Cameron and Raphael Heffron
(eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016)
914
EU COM 482/2016 ‘on binding annual carbon emission reductions by Member States from 2021 to 2030 for a
resilient Energy Union and to meet commitments under the Paris Agreement’ available at http://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016PC0482 accessed 1 May 2018, Recital 1
915
SWD(2014) 15 final, ‘A policy framework for climate and energy in the period from 2020 up to 2030’ Section
2.11.1
916
Vicki Duscha, Arnaud Fougeyrollas, Carsten Nathani, Matthias Pfaff, Mario Ragwitz, Gustav Resch, Wolfgang
Schade, Barbara Breitschopf and Rainer Walz, ‘Renewable energy deployment in Europe up to 2030 and the aim
of a triple dividend’ (2016) 95 Energy Policy, 314
917
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
918
Directive 2009/28/EC Renewable Energy Directive, Recital 25
919
Arbitration 062/2012, Charanne B.V. & Construction Investments S.A.R.L v Kingdom of Spain (January 2016)
Available At http://www.italaw.com/sites/default/files/case-documents/italaw7097_0.pdf
920
Decision 10/2015, Scat Punti Vendita Spa v Agenzia delle entrate - Direzione provinciale di Reggio Emilia,
(October 2015) http://www1.agenziaentrate.gov.it/english/
921
Department of Energy & Climate Change v Breyer Group PLC & Others, [2015] EWCA Civ 408
922
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
923
Graham Coop and Bernhard Maier ‘The External Relations of EU Energy Regulation’ in Peter Cameron and
Raphael Heffron (eds.), Legal Aspects of EU Energy Regulation, (2nd ed, Oxford University Press, 2016), 80
provides a discussion of the right to regulate and investor protection contained in the EU-Canada Comprehensive
Economic and Trade Agreement, the EU-Singapore Free Trade Agreement and the Transatlantic Trade and
Investment Partnership
924
Council Directive (EC) 2010/75/EC 24 November 2010 – Industrial Emissions (integrated pollution prevention
and control) OJ L334/17 Available at http://ec.europa.eu/environment/industry/stationary/ied/faq.htm
925
SWD(2014) 15 final, “A policy framework for climate and energy in the period from 2020 up to 2030”, Section
2.11.1
926
It should be noted that generation capacity does not equate to energy production. A renewable facility will not
be able to operate 24/7 due to the need for maintenance and with regards to renewables generated output is
dependent on wind and solar resources being available – in borad terms a wind turbine operates for about 35% of
the year.
927
http://europa.eu/rapid/press-release_STATEMENT-18-4155_en.htm accessed 15 June 2018
928
Peter Cameron, ‘The Internal Energy Market – Redefining Objectives’ Peter Cameron and Raphael Heffron
(eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016), 25
929
David Newbery, Michael Pollitt, Robert Ritz and Wadim Strielkowski, ‘Market design for a high-renewables
European electricity system’ (2018) 91 Renewable and Sustainable Energy Reviews, 695
930
Hayley Dunning, Joeri Rogelj and Gunnar Luderer, ‘Greener energy generation alone will not help us reach
climate goals’ [2018] Grantham Institute of Climate Change and Environment Working Paper
931
Council Directive 2009/31/EC 23 April 2009 on the geological storage of carbon dioxide OJ L140/114
932
Ofgem ‘The Decarbonisation of Heat’ [2016] 3 available at
https://www.ofgem.gov.uk/system/files/docs/2016/11/ofgem_future_insights_programme_-
_the_decarbonisation_of_heat.pdf accessed 1 September 2018
933
Pranab Baruah, Nicholas Eyre, Meysam Qadrdan, Modassar Chaudry, Simon Blainey, Jim Hall, Nicholas
Jenkins and Martino Tran, ‘Energy system impacts from heat and transport electrification’ (2014) 167(3)
Proceedings of the Institution of Civil Engineers
934
Steve Pye, Francis Li, James Price and Brigit Fais, ‘Achieving net-zero emissions through the reframing of UK
national targets in the post-Paris Agreement era’ (2017) 2(3) Nature Energy
The EU has developed a long-term decarbonisation vision for the period 2030 to
2050, with carbon reductions of 80% to 95% compared to 1990 levels by 2050937
without compromising growth and prosperity across the EU or energy security. 938
In order to achieve its 2050 targets the EU has set intermediate goals of a
60% reduction in carbon emissions by 2040.939 The Commission acknowledged the
development in generation technology that would be necessary to achieve the 2050
target and that in many respects this technology is not available today.940 The EU
also seeks to reduce its dependency on imported energy and increasing energy
security, therefore producing renewable electricity and transport fuel within the EU
will achieve this goal.941
To achieve the 2050 renewables production targets, it is important to start
preparations promptly as investors are considered to need a stable policy
framework, some 15-20 years ahead.942
The 2018 Special Report943 from the Intergovernmental Panel on Climate
Change (IPCC) has said that limiting global warming to 1.50C would require ‘rapid
and far-reaching’ 944 transitions and with the frequency of extreme weather
increasing if applicable steps are not taken now.
935
Jutta Brunnée, ‘Promoting compliance with multilateral environmental agreements’ in Jutta Brunnée, Meinhard
Doelle and Lavanya Rajamani (eds) Promoting Compliance in an Evolving Climate Regime (Cambrdige University
Press, 2012) 38
936
COM (2011) 112: A Roadmap for moving to a competitive low carbon economy in 2050 (08 Mar 2011) see
www.ec.europa.eu/clima/policies/strategies/2050_en#tab-0-1
937
European Council & Presidency Conclusions 29 & 30 October 2009, available at
www.consilium.europa.eu/doc/srv?l=en&f=st%2015265%202009%20INIT accessed 15 September 2015
938
Penelope Crossley, ‘The role of renewable energy law and policy in meeting the EU’s energy security
challenges’ in Rafael Leal-Arcas and Jan Wouters (eds) Research Handbook on EU Energy Law and Policy
(Elgar, 2017)
939
EU COM 482/2016 ‘on binding annual carbon emission reductions by Member States from 2021 to 2030 for a
resilient Energy Union and to meet commitments under the Paris Agreement’ available at http://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016PC0482 accessed 1 May 2018, Recital 1
940
Comm (2011) 112, ‘A roadmap for moving to a competitive low carbon economy in 2050’ p 6
941
Ibid, p 11
942
Jaap Jansen and Martine Uyterlinde, ‘A Fragmented Market on the Way to Harmonisation? EU Policy Making
on Renewable Energy Promotion’ (2004) 8(1) Energy for Sustainable Development 93, 105.; See also Dorte
Fouquet, ‘Policy Instruments for Renewable Energy – From a European Perspective’ (2013) 49 Renewable
Energy 15
943
IPCC Special Report ‘Global Warming of 1.5 °C an IPCC special report on the impacts of global warming of 1.5
°C above pre-industrial levels and related global greenhouse gas emission pathways’ 48th Session of the IPCC,
Incheon, Republic of Korea, 6 October 2018 available at http://www.ipcc.ch/report/sr15/ Accessed 8 October 2018
944
Ibid, Section C2
945
Ibid, Section C2.2
946
Ibid, Section C2.6
947
Bloomberg New Energy Finance 16 January 2019 available at
https://www.bloomberg.com/subscriptions?utm_source=google&utm_medium=cpc&utm_campaign=1494479466&
utm_term=%2Bbloomberg%20%2Bfinance&gclid=Cj0KCQiA-JXiBRCpARIsAGqF8wUJoL5wai3pNG69cQ-
A4u9Sh4UiBL-OSsF7yS6gbFUE9kk4MbbjSjMaAv1xEALw_wcB accessed 19 January 2019
948
P de Schoutheete, ‘The Evolution of Intergovernmental Cooperation in the European process’ [2006]
Challenge Europe 2 Egmont European Affairs Publication (Working Paper)
949
European Commission, ‘Guide to the implementation of directives based upon the New Approach and the
Global Approach’, Article 8, http://ec.europa.eu/enterprise/policies/single-market-goods/files/blue-
guide/guidepublic_en.pdf (accessed 15 September 2016)
950
Case 148/78 Pubblico Ministero v Ratti ECLI:EU:C:1979:110, para 26f
951
Internal Market is an area without internal frontiers in which the free movement of goods, persons, services and
capital is ensured - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 516; See also Peter
Cameron, ‘The Internal Energy Market – Redefining Objectives’ Peter Cameron and Raphael Heffron (eds) Legal
Aspects of EU Energy Regulation (Oxford University Press, 2016), 5
952
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
953
Jaap Jansen and Martine Uyterlinde, ‘A Fragmented Market on the Way to Harmonisation? EU Policy Making
on Renewable Energy Promotion’ (2004) 8(1) Energy for Sustainable Development 93, 103
954
CEER, ‘Implications of non-harmonised renewable support schemes’ (June 2012), available at:
http://www.energy-
regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICATIONS/CEER_PAPERS/Electricity/Tab/C12-SDE-
25-04b_SDE%20NHSS-Conclusions_18-Jun-2012.pdf. (accessed 15 September 2016)
955
CEER, ‘Implications of non-harmonised renewable support schemes’ (June 2012), available at:
http://www.energy-
regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICATIONS/CEER_PAPERS/Electricity/Tab/C12-SDE-
25-04b_SDE%20NHSS-Conclusions_18-Jun-2012.pdf, at 14 accessed 15 September 2016; See Also Hagenbuch
Tyler, ‘Establishing an Aggressive Legal Framework for the Future of Wind Energy in Europe’ (2012) 42
Vanderbilt Journal of Transnational Law 1595, 1620
956
Ibid, at 19
957
Nicolas de Sadeleer, ‘Principle of Subsidiarity and the EU Environmental Policy’ (2012) 9 Journal for European
Environmental & Planning Law 63, 69
958
Angus Johnston & Guy Block, EU Energy Law (1st edn. Oxford University Press, 2012), 338
959
Com (2005) 627, ‘The Support of Electricity from Renewable Energy Sources’ available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2005:0627:FIN:EN:PDF accessed on 31 July 2017;
960
Ibid, 11
961
Marc Ringel, ‘Fostering the use of Renewable Energies in the European Union: The Race between Feed-in-
Tariffs and Green Certificates’ (2006) 31(1) Renewable Energy, 13-14
962
Reinhard Haas, Wolfgang Eichhammer, Claus Huber, Ole Langniss, Arturo Lorenzonid, Reinhard Madlenere,
Phillipe Menanteau, P Morthorst, A Martinsh, A Oniszki, Joachim Schleich, Adrian Smith, Z Vassk and A
Verbruggen, ‘How to Promote Renewable Energy Systems Successfully and Effectively’ (2004) 32 Energy Policy
833, 838
963
EurActiv.com, “Hollande calls for EU ’harmonization’ on renewable energy”,
http://www.euractiv.com/energy/hollande-calls-eu-harmonization-news-519965
964
Ibid
965
M Karnitschnig, ‘Germany's Expensive Gamble on Renewable Energy’ The Wall Street Journal, 26 August
2014 http://online.wsj.com/articles/germanys-expensive-gamble-on-renewable-energy-1409106602 (accesses 1
September 2016)
966
Peter Cameron, ‘The Internal Energy Market – Redefining Objectives’ Peter Cameron and Raphael Heffron
(eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016), 14
967
Sanam Haghighi, Energy Security: The External Relations of the European Union with Major Oil and Gas
Supplying Countries (Hart, 2007), 46-53, 56-62
968
Angus Johnson and Guy Block, EU Energy Law (Oxford University Press, 2012) 4-6
969
Daniel Tulloch, Ivan Diaz-Rainey and I Premachandra, ‘The impact of regulatory change on EU energy utility
returns: the three liberalization packages’ (2018) 50(9) Applied Economics
970
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
971
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
972
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
973
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
974
Bianka Shoani-Tehrani and Pascal da Costa ‘ The Paradoxes of the Euopean Energy Market Regulation: A
Historical & Structural Analysis of the Electricity Mix’ in Pascal da Costa and Danielle Attias (eds) Towards
Sustainable Economy: Paradoxes & Trends in Energy & Transportation (Springer, 2018)
975
Christoph Böhringer, Andreas Keller, Markus Bortolamedi and Anelise Rahmeier Seyffarth, ’Good things do not
always come in threes: On the excess cost of overlapping regulation in EU climate policy’ (2016) 94 Energy Policy,
502
976
Ibid
977
EU Comm ‘Fifth European Community Environment Programme: Towards Sustainability’ available at
<http://europa.eu/scadplus/leg/en/lvb/128062.htm>
978
EU Comm ‘Sixth Environment Action Programme, Environment 2010: Our future, Our Choice’, available at
<http:Europa.eu.int/comm/environment/newprg>
979
Robert Stavins ‘Experience with Market-Based Environmental Policy Instruments’ in Karl-Göran Mäler and
Jeffrey Vincent (eds) Handbook of Environmental Economics (Elsevier Science, 2003), 359; see also Patricia
Birnie, Alan Boyle, and Catherine Redgwell, International Law and the Environment (3rd Ed, Oxford University
Press, 2009); David Driesen, ‘Free Lunch or Cheap Fix?: The Emissions Trading Idea and the Climate Change
Convention’ (1998) 26(1) Boston College Environmental Affairs Law Review
980
Eurostat ‘Europe 2020 indicators - climate change and energy’ (2016), available at
http://ec.europa.eu/eurostat/statistics-explained/index.php/Europe_2020_indicators_- limate_change_and_energy
accessed 10 January 2016
981
Trilemma of reliability, sustainability and affordability – See David Newbury ‘Questioning the EU Target
Electricity Model – how should it be adapter to deliver the Trilemma’ [2016] Cambridge University, Energy Policy
Research Group Working Paper See Also Raphael Heffron Energy Law: An Introduction (Springer, 2014)
982
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
983
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
3.1 Introduction
984
Giuseppe Bellantuono ‘Renewables, Investments, and State Aids: Exploring the Legal Side of Polycentricity’
[2017] Institute of European Law Birmingham Law School Working Paper 04/2017
985
‘The fragmentation of public international law is a long-observed phenomenon that demonstrates uneven
normative and institutional development and evolution in inter-state relations. Separate legal norms and
institutions have developed largely independently from one another, often instigated by non-identical groupings of
states and in response to specific functional issues.’ From Margrate Young, ‘Fragmentation’ Oxford
Bibliographies available at http://www.oxfordbibliographies.com/view/document/obo-9780199796953/obo-
9780199796953-0113.xml accessed 12 March 2019
986
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
987
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
988
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
989
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ELCI:EU:C:2014:2192
990
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
991
Case C‑66/13 Green Network SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2014:2399
992
Stadtwerke are communal companies, owned by a city or region, which offers public services for to the city
and/or the region. For example Stadtwerke München (Munich City Utilities) or SWM is a German communal
company, owned by the city of Munich, which offers public services for the city and the region of Munich. The
company supplies electricity for more than 95% of Munich's 750.000 households as well as natural gas, drinking
water and, through its stake in the M-net Telekommunikations, telecommunications services. SWM is Europe's
largest municipal utility company and ranks among Germany's principal energy providers. Expanding use of
renewable energy has been a central element in the company's strategy since 2008. – Sophie Vorrath, ‘Will
Munich be the world's first 'megacity' to reach 100% renewables?’ [2014] Renewable Economy available from
https://reneweconomy.com.au/will-munich-be-worlds-first-megacity-to-reach-100-renewables-28292/ ; See Also
the undertaking’s web site https://www.swm.de/english.html
993
Case C-213/96 Outokumpu Oy ECLI:EU:C:1998:155
994
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160
995
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ELCI:EU:C:2014:2192
996
Arbitration 062/2012, Charanne B.V. & Construction Investments S.A.R.L v Kingdom of Spain (January 2016)
Available At http://www.italaw.com/sites/default/files/case-documents/italaw7097_0.pdf
997
Decision 10/2015, Scat Punti Vendita Spa v Agenzia delle entrate - Direzione provinciale di Reggio Emilia,
(October 2015) http://www1.agenziaentrate.gov.it/english/
998
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160
999
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851
Futura Immobiliare1009
Raffinerie Mediterranee1010
Amia 1012
Mesquer 1013
Standley 1014
1000
Case T-251/11 Austria v Commission ECLI:EU:T:2014:1060
1001
Commission Decision 2015/1585, Aid Scheme SA 33995 –“ implemented by Germany for the support of
renewable electricity and of energy-intensive users”, available at http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv%3AOJ.L_.2015.250.01.0122.01.ENG accessed 30 March 2018
1002
Case C-492/14 Essent Belgium NV v Vlaams Gewest and Others ECLI:EU:C:2016:732
1003
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
1004
Case C-505/09 Commission v Estonia ECLI:EU:C:2012:179
1005
Case T-370/11 Poland v Commission, ECLI:EU:T:2013:113
1006
Joined Cases C-191/14 and C-192/14 Borealis Polyolefine GmbH v Bundesminister für Land- und
Forstwirtschaft, Umwelt und Wasserwirtschaft ECLI:EU:C:2016:311
1007
Case 540/14 DK Recycling und Roheisen GmbH v Commission ECLI:EU:C:2016:469
1008
Case C-126/01 Ministère de l'Économie, des Finances et de l'Industrie v GEMO ECLI:EU:C:2003:622
1009
Case C-254/08 Futura Immobiliare srl Hotel Futura v Comune di Casoria ECLI:EU:C:2009:479
1010
Case C-378/08 Raffinerie Mediterranee (ERG) SpA, Polimeri Europa SpA and Syndial SpA v Ministero dello
Sviluppo economico ECLI:EU:C:2010:126
1011
Case C-1/03 Ministère public v Paul van de Walle ECLI:EU:C:2004:67
1012
Case C-97/11 Amia SpA, in liquidation v Provincia Regionale di Palermo ECLI:EU:C:2012:306
1013
Case C-188/07 Commune de Mesquer v Total France SA and Total International Ltd ECLI:EU:C:2008:359
1014
Case C-293/97 R v Secretary of State for the Environment and Ministry of Agriculture, Fisheries and Food,
exp Standley and Metson ECLI:EU:C:1999:215
The generation of electricity is essentially an activity very different from the supply
of electricity to consumers. Due to modern life’s reliance on the availability of
electricity these activities can be considered ‘Services of General Economic Interest’
and fall within the provisions of Article 106 (2) TFEU. Article 106 TFEU stipulates
that such services are subject to the other provisions in the Treaties, particularly the
rules on competition, if these rules do not prevent the operation of the service.
However, in relation to the analysis undertaken in this research it is not the provision
of the service that is important, but the status of electricity as a product and therefore
can it be considered ‘goods’ despite its intangible nature, even in physics where it
could be considered a flow of the fundamental particles called electrons or in fact
simply a standing node in a Schrödinger wave equation.1015
Prior to setting out the nature of electricity, a brief review of the principles of
free movement of goods will be undertaken.
The CJEU held Commission v Italy 1016 that ‘free movement of goods,
constitutes a fundamental rule which, without prejudice to the other provisions of the
Treaty, does not permit any exceptions’. Also, in Commission v France it was stated
that ‘free movement of goods is one of the fundamental principles of the Treaty’.1017
Therefore, confirming if these provisions apply to electricity is an important legal
issue. The scope of the term ‘goods’ was explained in the Italian Art Treasures1018
case as items ‘valued in money and which are capable, as such of forming the
subject of commercial transactions’ even if those transactions ascribe a negative
value to the items in question (Walloon Waste).1019
Interestingly, it has been argued that the transaction or exchange of goods
does not have to be part of an economic activity.1020 The cross-border requirement
1015
Erwin Schrödinger, ‘An Undulatory Theory of the Mechanics of Atoms and Molecules’ (1926) 28(6) Physical
Review 1049
1016
Case 24/68 Commission v Italy ECLI:EU:C:1969:29
1017
Case C-265/95 Commission v France (Spanish Strawberries) ECLI:EU:C:1997:595, para 24
1018
Case C-7/68 Commission v Italy (Re Art treasures 1) ECLI:EU:C:1968:51
1019
Case C-2/90 Commission v Belgium ECLI:EU:C:1992:310
1020
Okeoghene Odudu, ‘Economic activity has a limit to Community law’ in Catherine Barnard & Okeoghene
Odudu (eds), The Outer Limits of European Union Law (Hart Publishing, 2009), 225, 238; See Also Vassilis
Hatzopoulos, ‘The concept of ‘economic activity’ in the EU Treaty: From ideological dead-ends to workable judicial
concepts’ (2012) European Business Law Review
1021
Case C-320/03, Commission v Austria ECLI:EU:C:2005:684 , para 65
1022
Joined cases C-176/90, Aragonesa de Publicidad Exterior SA v Departmento de Sanidad y Seguridad Social
de la Generalitat de Cataluna ECLI:EU:C:1991:327 , para 8 & Case C-45/87 Commission v Ireland (Dundalk
Water) ECLI:EU:C:1988:435
1023
Case C-5/94 R v Ministry of Agriculture Fisheries & Food, exp Hedley Lomas (Ireland) Ltd
ECLI:EU:C:1996:205
1024
A Stadtwerke is a German communal company, owned by a city or regional government, which offers public
services for the city and the region
1025
https://www.cleanenergywire.org/factsheets/small-powerful-germanys-municipal-utilities accessed 24 April
2018: As Stadtwerke are public bodies their electricity procurement is undertaken in accordance with the Public
Procurement Direct (Directive 2014/24/EU of 26 February 2014 on public procurement) which allows within Article
43 for Eco-Certificates to be required on the electricity purchased, also environmental criteria can be set out in the
technical specification of the tender in accordance with Articles 62 and 67(3)
1026
Means ‘a body, whatever its legal form, which has been made responsible, pursuant to a measure adopted by
the state, for providing a public service under the control of the state and has for that purpose special powers
beyond that which result from the normal rules applicable in relations between individuals.’ Case C-188/89 Foster
v British Gas plc ECLI:EU:C:1990:313; See Also Case 6/64, Flaminio Costa v Ente Nazionale Energia Elettrica
(Enel) ECLI:EU:C:1964:66, In 1964 the European Court of Justice, ruling on the case indirectly suggested that
electricity could fall within the scope of Article 37 of the EEC Treaty, but it did not determine any change for the
national electricity monopolies
1027
Case C393/92, Gemeente Almelo v NV Energiebedriif Ijsselmij ECLI:EU:C:1994:171, para 28
1028
Case 157/94 Commission v Netherlands ECLI:EU:C:1997:499
1029
Nicolas Bernard ‘Discrimination and Free Movement in EC Law’ (1996) 45(1) International & Comparative Law
Quarterly, 82, 83
1030
Case C-110/05 Commission v Italy ECLI:EU:C:2009:66, para 37
1031
Case C-171-11, Fra.bo SpA v Deutsche Vereinigung des Gas- und Wasserfaches eV (DVGW) — Technisch-
Wissenschaftlicher Verei, ECLI:EU:C:2012:453
1032
Case C-8/74 Procureur du Roi v Benoît and Gustave Dassonville ECLI:EU:C:1974:837
1033
Case C-15/83 Denkavit Nederland ν Hoofdproduktschap voor Akkerbouwprodukten ECLI:EU:C:1984:183,
para 15
1034
Case C-53/76 Procureur de la Republique de Vesancon v Les Sieurs Bouhelier ECLI:EU:C:1977:17 ; Case C-
68/76 Commission v France ECLI:EU:C:1977:48, paras 15-16
1035
Case 120/78, Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein (Cassis de Dijon)
ECLI:EU:C:1979:42
1036
Cases C-267/91 & C-268/91, Keck & Mithouard CCLI:EU:C:1993:905
1037
Case C-412/93, Sociéte d´Importation Edouard Leclerc-Siplec v TFI Publicité & M6 Publicéte
ECLI:EU:C:1995:26, para 41 ; AG Maduro also questioned the reasoning in Keck - Case C-158-159/04 Alfa Vita
Vassilopoulos ECLI:EU:C:2006:212
1038
Ibid, para 41
1039
Ibid, para 42
1040
S Weatherill, Cases and Materials on EU Law (10th Edition, Oxford University Press 2012) 332.
1041
Case C-412/93 Leclerc-Siplec ECLI:EU:C:1994:393; para 39
1042
Jukka Snell, ‘The Notion of Market Access: A Concept or a Slogan?’ (2010) 47 Common Market Law Review
437, 450
1043
G Davies, ’Understanding Market Access: Exploring the economic rationality of different conceptions of free
movement law’ (2010) 11 German Law Journal 671, 673.
1044
Case C-142/05, Åklagaren v Mickelsson and Roos ECLI:EU:C:2009:336
1045
Case C-639/11 Commission v Poland ECLI:EU:C:2014:173
1046
Case C-61/12 Commission v Lithuania ECLI:EU:C:2014:172
1047
Case C-629/11 Commission v Poland ECLI:EU:C:2014:173, para 52; Case C-61/12 Commission v Lithuania
ECLI:EU:C:2014:172, para 57
1048
Case C-428/12 Commission v Spain ECLI:EU:C:2014:2018
1049
Case C-110/05 Commission v Italy ECLI:EU:C:2009:66
1050
Ionnis Lianos, ‘In Memoriam Keck: The reformation of the EU law on the free movement of goods’ [2015]
European Law Review 225, 237
1051
Case C-639/11 Commission v Poland ECLI:EU:C:2014:173; Case C-16/12 Commission v Lithuania
ECLI:EU:C:2012:426; Case C-428/12 Commission v Spain ECLI:EU:C:2014:218; Additionally - The last time the
Keck case law was found to be cited by the CJEU as good law dates from 2010: Case C-108/09, Ker-Optika bt v
ÀNTSZ Dél-dunántúli Regionális Intézete ECLI:EU:C:2010:725, para 51
1052
Eleanor Spaventa, ‘Leaving Keck behind? The free movement of goods after the rulings in the Commission v
Italy and Micklesson and Roos’ (2009) 34 European Law Review, 914, 928; See Also Ionnis Lianos, ‘In Memoriam
Keck: The reformation of the EU law on the free movement of goods’ [2015] European Law Review 225, 236.
The EUs free movement of goods provisions create a market place where willing
buyers and sellers can trade without the interference of national governments.
However, Article 36 TFEU provides a list of exceptions to the mandatory
application of free movement being public morality,1056 security,1057 public policy,1058
protection of human life, animals & plants,1059 the protection of national treasures
possessing artistic, historic or archaeological value,1060 or the protection of industrial
and commercial property.1061
Initially the ECJ held in Commission v Ireland1062 that the Article 36 TFEU list
was exhaustive and only capable of being invoked if the national measure in
question does not constitute ‘a means of arbitrary discrimination or a disguised
restriction on trade between member states’.1063
As the list within Article 36 TFEU does not take account of every possible
scenario, the Court developed additional exceptions in Cassis de Dijon1064 which
could be evoked as necessary – the so called ’mandatory’ or ’imperative’
requirements.1065 Additionally, the Court saw the need to balance the competing
interests of traders and national technical requirements for products. The result of
Cassis de Dijon is to replace dual regulation of a product by exporting and importing
1053
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ELCI:EU:C:2014:2192
1054
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
1055
Case C‑66/13 Green Network SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2014:2399
1056
Lorna Woods, Free Movement of Goods and Services within the European Community (Ashgate Publishing
2004)115; see also pornography cases Case 34/79 R v Henn and Darby ECLI:EU:C:1979:295 & Case 121/85
Conegate Ltd v Commissioners of Customs and Excise ECLI:EU:C:1986:114
1057
Case 72/83 Campus Oil Ltd v Minister for Industry and Energy ECLI:EU:C:1984:256
1058
Case 231/83 Cullet v Centre Leclerc ECLI:EU:C:1985:29 Case 30/77 R v Bouchereau ECLI:EU:C:1977:172;
see also Case 7/78 R v Thompson, Johnson and Woodiwiss ECLI:EU:C:1978:209; Lorna Woods and Philippa
Watson EU Law (Oxford University Press 2014) 409; Peter Oliver, Free Movement of Goods in the European
Community (Hart Publishing 2003) 248
1059
Case 40/82 Commission v UK ECLI:EU:C:1984:33; Case 16/74, Centrafarm BV et Adriaan de Peijper v
Winthrop B, ECLI:EU:C:1974:115; Case C-420/01 Commission v Italy ECLI:EU:C:2003:363
1060
Case C-7/68 Commission v Italy (Art Treasures) ECLI:EU:C:1968:51
1061
Case C-78/70 Deutsche Grammophon Gesellschaft mbH v Metro-SB-GrolmArkte GmbH & Co. KG
ECLI:EU:C:1971:59; See Also Case C-62/79 S.A. Compagnie Gdndral pour la Diffusion de la Tldvision v Cin6
Vog Films ECLI:EU:C:1980:84; Case C-55/80 Musik-Vertrieb Membran GmbH v Gesellschaft Fur Musikalische
Auffuhrungs und Mechanische Verviel-Faligungsrechte (GEMA) ECLI:EU:C:1981:10
1062
Case 113/80 Commission v Ireland ECLI:EU:C:1981:139, para 7
1063
TFEU Article 36
1064
Case 120/78, REWE-Zentrale AG v Bundesmonopolverwaltung für Branntweien (Cassis de Dijon)
ECLI:EU:C:1979:42
1065
Ibid, para 8
1066
Nick Bernard, ‘Flexibility in the European Single Market’ in Catherine Barnard and Joanne Scott (eds), The
Law of the Single European Market: Unpacking the Premises (Hart Publishing, 2002)
1067
Commission Communication (2007) 35 – ‘Package on the internal market of goods’
1068
Regulation (EC) No 764/2008 of 9 July 2008 ‘Laying down procedures relating to the application of certain
national technical rules to products lawfully marketed in another member state and repealing Decision No
3052/95/EC OJ L 218/21’
1069
https://teslaresearch.jimdo.com/war-of-currents/
1070
Examples of standards institutes being - ISO (International Organization for Standardization) a worldwide
federation of national standards bodies, The International Electrotechnical Commission (IEC) is the international
standards and conformity assessment body for all fields of electrotechnology..
1071
Case C-120/78, REWE-Zentrale AG v Bundesmonopolverwaltung für Branntweien (Cassis de Dijon)
ECLI:EU:C:1979:42, para
1072
Santiago Barón-Escámez, Sylvia Ferretti, Juliana Frendo, Octavien Ginalski, Maciej Górka, Hans Ingels,
Christos Kyriatzis, Florian Schmidt, Carolina Stege, Laura Stočkutė and Yiannos Tolias ’Free movement of goods:
Guide to the application of Treaty provisions governing the free movement of goods’ EU DirectorateGeneral for
Enterprise and Industry 29-30
This case is significant as it was decided two years before the entry into force of the
Single European Act, which brought into the Treaty for the first time an explicit legal
basis on which to develop an EU/Community environmental policy (Title VII, headed
‘Environment).1074
Following the ADBHU case the CJEU went on to hold in Danish Bottle1075
that environmental protection could be added to the list of potential exceptions to the
application of free movement of goods:
1073
Case C-240/83 Procureur de la République v Association de Défense des Brûleurs d'Huiles Usagées
ECLI:EU:C:1985:59, para 13
1074
Francis Jacobs,’The Role of the European Court of Justice in the Protection of the Environment’ (2006) 18(2)
Journal of Environmental Law, 185
1075
Case C-302/86, Commission v Denmark ECLI:EU:C:1988:421, para 8 & 9
1076
EU Communication (COM(2000) 1‘on the precautionary principle’ – see also Case C-157/96 R v Ministry of
Agriculture Fisheries & Food Exp NFU ECLI:EU:C:1998:191
1077
The precautionary principle presupposes that potentially dangerous effects deriving from a
phenomenon, product or process have been identified, and that scientific evaluation does not allow the risk to be
determined with sufficient certainty. The implementation of an approach based on the precautionary principle
should start with a scientific evaluation, as complete as possible, and where possible, dentifying at each stage the
degree of scientific uncertainty – EU Communication (COM(2000) 1‘on the precautionary principle’
1078
Meaning that ‘measures should not exceed the limits of what is appropriate and necessary for attaining the
objective pursued, and that where is a choice between several appropriate measures must be had to the least
onerous’ Case T-419/03 Altsoff Recycling Austria v Commission ECLI:EU:T:2011:102, para 134; Also
‘proportionality’ or ‘being proportionate’ can be considered an ideal or a goal rather than being a principle with the
same status as ‘polluter pays’ or the ‘precautionary’ principle. – see Jonathon Verschuuren, ‘Sustainable
Development and the Nature of Environmental Legal Principles’ (2006) 9(1) Potschefstroom Electricity Law
Journal, 17; See Also Jurian Langer and Wolf Sauter ‘The Consistency Requirement in EU Law’ (2017) 39 Journal
of European Law
1079
Case C-261/81Walter Rau Lebensmittelwerke v De Smedt ECLI:EU:C:1982:382 para 12
1080
Case C-72/83, Campus Oil Limited v Minister for Industry and Energy, ECLI:EU:C:1984:256
1081
Case C-142/05 Åklagaren v Mickelsson & Roos ECLI:EU:C:2009:336 para 39
1082
Case C-219/07 Nationale Radd van Dierenwerkers en Liefhebber v Belgische Staat ECLI:EU:C:2008:353,
para 41
1083
Case 110/05, Commission v Italy ECLI:EU:C:2009:66, para 62
1084
Ibid, para 66
1085
Case C-2/90 Commission v Belgium ECLI:EU:C:1992:310
1086
Case C-203/96 Chemische Afvalstoffen Dusseldorp BV and Others v Minister van Volkshuisvesting,
Ruimtelijke Ordening en Milieubeheer ECLI:EU:C:1998:316
1087
Case C-389/96 Aher-Waggon GmbH ν Germany ECLI:EU:C:1998:357
1088
Case C-213/96 Outokumpu Oy, ECLI:EU:C:1998:155
1089
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH & Land
Schleswig-Holstein ECLI:EU:C:2001:160
1090
David Edward, ‘Judging Environmental Law’ in Gil Carlos and Rodríguez Iglesias (eds) Une communauté de
droit (BWV Berliner Wissenshafts, 2003) 487,491
3.4 State Aid Policy and its Conflict with Renewable Energy
The prohibition of state aid is set out in Article 107 TFEU. The CJEU has clarified
state aid to be an advantage of any nature (cash or kind) conferred on a selective
basis to the recipient1097 by a member state1098 or through State resources1099 which
distorts, or threatens to distort, competition1100 and as such is ‘incompatible with the
1091
Case C-331/88 R v Ministry of Agriculture Fisheries & Food, ex parte Fedesa ECLI:EU:C:1990:391, para 17
1092
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ELCI:EU:C:2014:2192
1093
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
1094
Case C‑66/13 Green Network SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2014:2399
1095
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
1096
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
1097
Case C-173/73 Italy v Commission ECLI:EU:C:1974:71 ; See Also Defined by the CJEU as ‘entities engaged
in an economic activity, regardless of their legal status and the way in which they are financed’ Joined Cases C-
180/98 to C-184/98, Pavlov v Stichting Pensioenfonds Medische Specialisten ECLI:EU:C:2000:428 para 74; See
also Case C-222/04, Ministero dell'Economia e delle Finanze v Cassa di Risparmio di Firenze SpA, Fondazione
Cassa di Risparmio di San Miniato and Cassa di Risparmio di San Miniato SpA ECLI:EU:C:2006:8, para 107
1098
Case C-39/94 SFEI v La Poste ECLI:EU:C:1996:285, para 58
1099
Case C-345/02 Pearle BV, Hans Prijs Optiek Franchise BV and Rinck Opticiëns BV v Hoofdbedrijfschap
Ambachten ECLI:EU:C:2004:448; Case T-351/02 Deutsche Bahn v Commission ECLI:EU:T:2006:104; Case C-
173/73 Italy v Commission ECLI:EU:C:1974:71; Case 82/77 Van Tiggele, ECLI:EU:C:1978:10, paras 25 and 26;
Case T-358/94 Air France v Commission, ECLI:EU:T:1996:194, para 63; See Also
http://ec.europa.eu/competition/state_aid/overview/index_en.html
1100
Case C-173/73 Italy v Commission ECLI:EU:C:1974:71
1101
Article 107 (1) TFEU; See Also Case C-487/06 British Aggregates Association v Commission and UK
ECLI:EU:C:2008:757, para 111; See Also Case C-730/79 Philip Morris ECLI:EU:C:1980:209
1102
Subsidies and direct payments (a mechanism which is very important in the renewable energy sector due to the
wide use of feed-in tariffs and other incentives) - Case C-30/59 Steenkolenmijnem v High Authority
ECLI:EU:C:1961:2; Exemption from duties and taxes - Case C-492/14 Essent Belgium NV v Vlaams Gewest and
Others ECLI:EU:C:2016:732; Exemption from para-fiscal charges - Cases C-128/03 and C-129/03 AEM and AEM
Torino v Autorità per l'energia elettrica e per il gas ECLI:EU:C:2005:224, para 38 to 51; Preferential interest rates
– Joined Cases C-278/92 to 280/92 Spain v Commission ECLI:EU:C:1994:325; Guarantees of loans at favourable
rates - Case C-323/82, Intermills SA v Commission ECLI:EU:C:1984:345; Making land or buildings available for
free or at reduced rates – Case C-239/09 Seydaland Vereinnigte Agrabetriebe v BVVG Bodenverwertungs-
undverwaltungs ECLI:EU:C:2010:778; cancelling property and other debts Case C-150/16 Fondul Proprietatea SA
v Complexul Energetic Oltenia SA ECLI:EU:C:2017:388
1103
Case C-39/94 SFEI v La Poste ECLI:EU:C:1996:285, para 60; Case C-342/ 96 Spain v Commission,
ECLI:EU:C:1999:210, para 41
1104
Nicole Robins and Tridevi Chakma, ’State Aid in Energy under the Spotlight: The implications of the Hinkley
Point Decision’ (2016) 2 European state aid Quarterly, 247
1105
EU Commission's state aid Scoreboard, available at:
http://ec.europa.eu/competition/state_aid/scoreboard/index_en.html, accessed 29 March 2019
1106
Commission, Decision 2013/269 of 18 December 2013 'State aid SA34947 (2013/C) (ex 2013/N)-United
Kingdom, Investment Contract (early Contract for Difference) for the Hinkley Point C New Nuclear Power Station',
OJ L/109/2015, 269; See also Case T-356/15 Austria v Commission ECLI:EU:T:2018:439
1107
Case C-487/06 British Aggregates Association v Commission and UK ECLI:EU:C:2008:757 para 92
1108
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1109
Case 302/86, Commission v Denmark, ECLI:EU:C:1988:421, para 8 & 9
1110
The Circular Economy within the EU is composed of a set of ten key indicators which cover each phase – i.e.
production, consumption, waste management and secondary raw materials – as well as economic aspects –
investments and jobs - and innovation. EU Communication Com(2018) 29 ‘on a monitoring framework for the
circular economy’
• the existence of an advantage is not ruled out by the mere fact that
competing undertakings in other member states are in a more favourable
position1117
• that the existence of an advantage must be assessed irrespective of the
competitive playing field in other member states1118
• the very nature of the preferential tariff or payment is enough to conclude
that the undertaking concerned was not bearing all the charges which
should have normally burdened its budget1119
• the existence of an advantage results from the simple description of the
price differentiation mechanism (a compensation mechanism), the purpose
of which is to exonerate a company from the payment of a part of the price
of materials necessary for producing goods that are sold within the EU1120
1111
http://ec.europa.eu/competition/sectors/energy/environment_en.html accessed 30 March 2018
1112
Internal Market is an area without internal frontiers in which the free movement of goods, persons, services
and capital is ensured - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 516
1113
Kaisa Huhta, James Kroeger, Tade Oyewunmi and Piti Eiamchamroonlarp , ‘Legal and Policy issues for
Capacity Remuneration Mechanisms in the Evolving European Internal Market’ (2014) European Energy &
Environmental Law Review, 76, 87
1114
Case C-345/02 Pearle BV, Hans Prijs Optiek Franchise BV and Rinck Opticiëns BV v Hoofdbedrijfschap
Ambachten ECLI:EU:C:2004:448 para 33
1115
Case T-351/02, Deutsche Bahn v Commission, EU:T:2006:104, para 103
1116
Case T-177/10, Alcoa Trasformazioni v Commission, ECLI:EU:T:2014:897
1117
Ibid, para 85
1118
Ibid, para 82 to 85
1119
Ibid, para 82
1120
Ibid, para 84
1121
Ibid, para 85
1122
Joined Cases T-298/97, T-312/97, T-313/97, T-315/97, T-600/97 to 607/97, T-1/98, T-3/98 to T-6/98 and T-
23/98 Alzetta v Commission ECLI:EU:T:2000:151, para 141-147;Case C-280/00 Altmark Trans GmbH and
Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft Altmark GmbH, and Oberbundesanwalt beim
Bundesverwaltungsgericht ECLI:EU:C:2003:415
1123
Case 730/79 Phillip Morris Holland BV v Commission ECLI:EU:C:1980:209, para 11
1124
Case C-206/06 Essent Netwerk Noord BV v Nederlands Elektriciteit Administratiekantoor BV and Saranne BV
ECLI:EU:C:2008:413, para 40 to 59
1125
Case C-71/09, C-73/09 & C-76/09 Comitato “Venezia vuole vivere” & Others v Commission,
ECLI:EU:C:2011:386, para 94
1126
Case C-172/03, Heiser, ECLI:EU:C:2005:130, para 54
1127
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851
1128
Case T-251/11 Austria v Commission, ECLI:EU:T:2014:1060
1129
Case T-47/15 Germany v Commission, ECLI:EU:T:2016:281
1130
Case T-210/02 British Aggregates v Commission ECLI:EU:T:2012:110 para 46
1131
Case 78/76 Steinike & Weinlig v Germany ECLI:EU:C:1977:52, para 21
1132
Case 72/91 & 73/91 Sloman Neptun ECLI:EU:C:1993:97, para 19
1133
Case C-482/99 France v Commission ECLI :EU:C:2002:294, para 23
1134
Case T-67/94, Ladbroke Racing v Commission ECLI:EU:T:1998:7, para 106 to 108
1135
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160
1136
EU Regulation No 1588/2015 on the application of Articles 107 and 108 of the Treaty on the Functioning of the
European Union to certain categories of horizontal State aid, OJ 2015 L 248/1, Article 1 (1), a, iii) environmental
protection; and European Commission, Regulation (EU) No651/2014 declaring certain categories of aid
compatible with the internal market in application of Articles 107 and 108 of the Treaty, OJ 2014 L 187/1. ('GBER')
1137
European Commission, Guidelines on State aid for environmental protection and energy 2014-2020, OJ 2014
C 200/1. ('EEAG')
1138
Conor Quigley and Anthony Collins EC state aid Law and Policy (2nd Ed Hart, 2009), 48; See also Case C-
164/02 Netherlands v Commission ECLI:EU:C:2004:54, para 7
The main features of the Renewable Energy Directive were outlined in Section
2.10.7. Also set out were the basic conflicts with Treaty provisions that the
Renewable Energy Directive has. It should be recalled that the Renewable Energy
Directive is C&C in style and falls within a shared competency1140 model between
the Commission and the member states. The Directive grants member states a wide
discretion as to the renewables support scheme1141 implemented by the member
state to meet their target within the overall 20% target for renewables across the
EU.1142
This section undertakes a detailed analysis of the conflicts outlined above
using case law and seeks to ascertain if it is the Directive’s style or the nature of the
competency framework which creates conflicts that would not otherwise exist. The
analysis commences with free movement of goods, continues with price fixing and
concludes with various other aspects of state aid.
The Essent 1 case illustrates the conflict between the national renewables support
scheme set up under the Renewables Energy Directive and free movement of
goods.
The Essent 1 case concerned the nature of the Flemish support scheme for
renewable electricity, which issued renewable energy certificates to generators of
renewable electricity only if they were in the Flemish Region of Belgium, and
1139
EU Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ L140/16
(Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
1140
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
1141
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1142
Case C-195/12 IBV & Cie ECLI:EU:C:2013:598
1143
For an introduction to the Belgium electricity market see Damien Verhoeven and Guillaume Possoz, ‘Belgium’
in Peter Cameron and Raphael Heffron (eds) Legal Aspects of EU Energy Regulation (Oxford University Press,
2016)
1144
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ELCI:EU:C:2014:2192
1145
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH & Land
Schleswig-Holstein ECLI:EU:C:2001:160
1146
Case 120/78, REWE-Zentrale AG v Bundesmonopolverwaltung für Branntweien (Cassis de Dijon)
ECLI:EU:C:1979:42
1147
G van Calster International and EC trade law - The environmental challenge (Cameron May, 2000) 564
1148
Principle 13 ‘In order to achieve a more rational management of resources and thus to improve the
environment, States should adopt an integrated and co-ordinated approach to their development planning so as to
ensure that development is compatible with the need to protect and improve environment for the benefit of their
population’ UN General Assembly, United Nations Conference on the Human Environment, 15 December 1972,
A/RES/2994, available at: http://www.refworld.org/docid/3b00f1c840.html accessed 22 September 2018; See Also
André Nollkaemper ‘Three Conceptions of the Integration Principle in International Environmental Law’ in Andrea
Lenschow (ed) Environmental Policy Integration Greening Sectoral Policies in Europe (Routledge, 2002)
The Renewable Energy Directive (Directive Article 3(2)) simply requires member
states to put in place a renewables support scheme1150 to ensure the development
of sufficient renewable electricity capacity to reach or exceed the member state’s
national energy target contained in Directive Article 3(3) (See Section 2.10.7). This
fact was used by proponents of support schemes such as the Flemish one, to argue
that discriminative support may be required to assist the industry to work towards
the development of the renewable sector and that a national or regional support
scheme can focus on the needs of renewable generation in a particular country or
region.
The CJEU did not rule on the qualification of the certificates of origin as being
'goods' in their own right or not (despite the Court finding that the certificates were
traded on a market – ‘valued in money and subject of commercial transactions’
criteria to be held as goods (Italian Art Treasures)1151 – finding in a similar manner
to Dassonville1152 that the whisky was the goods and not the certificate of origin),1153
but held that the legislation hinders the free movement of the electricity underlying
the certificates.1154
The CJEU confirmed the following:
1149
Case C-8/74 Procureur du Roi v Benoît and Gustave Dassonville ECLI:EU:C:1974:837, para 5
1150
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1151
Case C-7/68 Commission v Italy (Re Art treasures 1) ECLI:EU:C:1968:51
1152
Case C-8/74 Procureur du Roi v Benoît and Gustave Dassonville ECLI:EU:C:1974:837
1153
Case C-7/68 Commission v Italy (Re Art treasures 1) ECLI:EU:C:1968:51
1154
The following cases showing that the CJEU, on numerous occations has held that Article 34 TFEU prohibits
national legislation which, even at the most simple level, requires a licence for the import of goods from another
member state. Joined Cases C-51/71 to C-54/71 International Fruit Company NV v Produktschap voor groenten
en fruit ECLI:EU:C:1971:128, para 9; Case C-124/81 Commission v UK (UHT milk) ECLI:EU:C:1983:30, para 9;
Case 40/82 Commission v UK ECLI:EU:C:1984:33, para 24; Case C‑304/88 Commission v Belgium
ECLI:EU:C:1990:122, para 9; Case C‑235/91 Commission v Ireland ECLI:EU:C:1992:443, para 5
In Essent 1, the final judgement was left to the national court. The CJEU referred
back to the national court the criteria with which the assessment was to be made:
• For the Flemish scheme to meet the proportionality test, it is important that
mechanisms be established which ensure the creation of a genuine market
for certificates in which supply can match demand, reaching some kind of
balance, so that it is possible for the relevant suppliers to obtain certificates
under fair terms.1159
• Furthermore, the fine in the absence of certificate quota fulfilment must not
impose excessive penalties on the traders concerned.1160
The CJEU found there to be an imbalance between foreign and domestic suppliers.
Most of the larger electricity suppliers in the Flemish Region also operate as
generators.1161 This makes the market and its prices subject to the overall corporate
strategy of these supplier/generator undertakings. They choose whether their
producers' certificates are kept for meeting their own obligation to surrender
certificates, being a supplier; or whether these are sold (to competitor suppliers),
via the energy exchange, or via the grid operator, who guarantees a legal minimum
price for certificates. Such varieties of strategies in managing one's certificates stock
are not open to suppliers producing outside of the Flemish Region. Such suppliers
can only buy certificates and must do so to a considerable extent from competitors
on the supply market. These criteria mean that the market is effectively closed, or
servery restricted, for undertakings outside the Flemish region, meaning that
renewable generators within the region are protected from competition in
contravention of one of the core principles of EU law. The market framework put in
1155
Case 120/78, REWE-Zentrale AG v Bundesmonopolverwaltung für Branntweien (Cassis de Dijon)
ECLI:EU:C:1979:42, para
1156
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ECLI:EU:C:2014:2192, para 103
1157
Case 240/83 Procureur de la République v Association de Défense des Brûleurs d'Huiles Usagées
ECLI:EU:C:1985:59, para 13
1158
Case 302/86, Commission v Denmark ECLI:EU:C:1988:421, para 8 & 9
1159
Ibid, para 112
1160
Ibid, para 114
1161
Ibid, para 115
1162
Renato Nazzini Foundations of European Competition Law: The Objective & Principles of Article 102 (Oxford
University Press, 2011), 108
1163
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
1164
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1165
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ECLI:EU:C:2014:2192, para 131
1166
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH & Land
Schleswig-Holstein ECLI:EU:C:2001:160
1167
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
1168
Case C‑66/13 Green Network SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2014:2399
1169
Case C-492/14 Essent Belgium NV v Vlaams Gewest ECLI:EU:C:2016:732
1170
Fabien Roques,’European Electricity Markets in Crisis: Diagnostic and Way Forward’ (2013) Mission du
Commissariat Général à la Stratégie et à la Prospective available at
http://www.strategie.gouv.fr/sites/strategie.gouv.fr/files/atoms/files/Roques_CGSPreport_12November20131.pdf
accessed 27 April 2018
1171
Case 240/83 Procureur de la République v Association de Défense des Brûleurs d'Huiles Usagées
ECLI:EU:C:1985:59, para 13
1172
Case 302/86, Commission v Denmark ECLI:EU:C:1988:421, para 8 & 9
1173
Case C-294/83 Les Verts v Parliament ECLI:EU:C:1986:166, para 25
1174
De facto means a situation true in fact, but that is not legally required or sanctioned. In contrast, de jure means
a situation that is in accordance with law.
1175
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
1176
Ronald Dworkin Law's Empire (Harvard University Press, 1987), 191
1177
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
Building from the Essent 1 case the CJEU sought to determine the related Ålands
Vindkraft case. The Ålands Vindkraft case is one of the most academically
discussed1182 of the renewable energy cases and relates to the Swedish authority’s
refusal to allow access to its national renewables support certificate scheme to a
wind farm on an island in Finish sovereign territory in contravention of Article 34
TFEU. 1183 The case illustrates the conflict of the national renewables support
scheme set up under Articles 3(2) and 3(3) of the Renewables Energy Directive with
free movement of goods.
Sweden promotes renewable electricity through a series of different legal
incentives, the most important of which is a quota system for renewable electricity
produced in Sweden, based on a certificate trading system. 1184 The Ålands
1178
David Florysiak and Vidhan Goyal ‘Capital Market Access and Cash Flow Allocation during the Financial
Crisis’ [2016] Asian Finance Association (AsianFA) 2016 Conference ; See Also Victoria Ivashina and David
Scharfstein ‘Bank lending during the financial crisis of 2008’ (2010) 97(3) Journal of Financial Economics, 319;
See Also Manju Puri, Jörg Rocholl and Sascha Steffen ‘Global retail lending in the aftermath of the US financial
crisis: Distinguishing between supply and demand effects’ (2011) 100(3) Journal of Financial Economics 556
1179
A thin market is a market with a low number of buyers and sellers. Since few transactions take place in a thin
market, prices are often more volatile and assets are less liquid. The low number of bids and asks will also
typically result in a larger spread between the two quotes. - https://www.investopedia.com/terms/t/thinmarket.as
accessed 27 April 2018
1180
For an introduction to the Swedish electricity market see Hans Andreasson, ‘Sweden’ in Peter Cameron and
Raphael Heffron (eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016)
1181
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
1182
Marek Szydło, 'How to reconcile national support for renewable energy with internal market obligations? The
task for the EU legislature after Ålands Vindkraft and Essent' (2015) 52(2) Common Market Law Review, 489;
Anouk van Der Wansem, 'Judgment of the European Court of Justice, 1 July 2014: Case C-573/12, Ålands Vindkraft
AB v. Energimyndigheten' (2015) 42(4) Legal Issues of Economic Integration, 401; Armin Steinbach and Robert
Brückmann, ‘Renewable Energy and the Free Movement of Goods’ (2015) 27(1) Journal of Environmental Law, 1;
Eirini Tsifopoulou, ‘Renewable-Energy Support Schemes in the Case Law of the Court of Justice of the EU:
Tensions Between Trade and Climate Objectives’ (2016) 6(3-4) Climate Law, 264; Dorte Fouquet and Angela
Guarrata, ‘Judgment of 1 st July 2014 in Alands Vindkraft AB v Energimyndigheten Comments on Case C-573/12’
(2014) 1 Renewable Energy Law and Policy Review, 52; Étienne Durand and Malcolm Keay,’ National support for
renewable electricity and the single market in Europe: the Ålands Vindkraft case’ [2014] Oxford Institute for Energy
Studies; Geert van Calster, Climate change and renewable energy as a super trump for EU trade law’ (2014) 1
Renewable Energy Law and Policy Review; Dorte Fouquet and J Nysten, ‘Guarantees of Origin and Green
Electricity Certificates in Flanders and in Sweden national design weaknesses or violation of European rules?
(2013) 3(3) ,European Energy Journal, 72; Alex McLean,’ The ECJ / Ålands case – Implications for National
Renewables Support Systems’ [2014] Energy & Resources; A Sánchez Graells, ’CJEU protects discriminatory
green energy schemes and keeps inconsistency in EU free movement of goods law (C-573/12)’ (2014)
http://howtocrackanut.blogspot.no/2014/07/cjeu-protects-discriminatory-green.html (accessed 10 May 2016); C
Ryckman, “EU Court Allows Discriminatory Green Energy Support Schemes”, National Law Review (2014),
www.natlawreview.com/article/eu-court-allows-discriminatory-green-energy-support-schemes (accessed 1 April
2016); C Banet, ’The EU Court Of Justice rules in favour of Sweden in the Åland Vindkraft Case’ July 2014,
www.ecohz.com/facts-news/news/aaland-case (accessed 1 September 2016)
1183
Laurens Ankersmit, ’Facilitating” Infringments of Article 34TFEU and the Territorial Nature of Green Electricity
Support schemes: Case C-573/12 Ålands Vindkraft v Energimyndigheten’ [2014] European Law
1184
Swedish legal Act No. 2011:1200 imposes on electricity suppliers, certain electricity consumers and energy-
intensive companies to annually acquire renewable energy certificates in relation to the proportion to their
electricity sales and their consumption within a specific time frame (Chapter 4 §§ 1 and 4 Act No. 2011:1200)
1185
Opinion of AG Bot in Case C-573/12 Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:37, para 10
1186
Recital 1, Renewable Energy Directive 2009/28
1187
SWD(2012) 164 final, “Commission staff working document — Renewable energy: a major player in the
European energy market “, para 3.1 pg 8
1188
Interpretation of legal instruments based on their wording in the ordinary meaning of the text, sometimes
known as the ligiustic approach – Giulio Itzcovich, ‘The Interpretation of Community Law by the European Court of
Justice’ (2009) 10(5) German Law Journal, 537
1189
Opinion of AG Bot in Case C-573/12 Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:37 para 44
and 51
1190
Ibid para 48
1191
Ibid para 45
1192
Opinion of AG Bot in Case C-573/12 Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:37, para 65
1193
Case C-59/11 Association Kokopelli v Graines Baumaux SAS ECLI:EU:C:2012:447, para 80
1194
Case C-37/83 Rewe-Zentral AG v Direktor der Landwirtschaftskammer Rheinland ECLI:EU:C:1984:89, para
18
1195
Case C-305/05 Ordre des barreaux francophones et germanophone and Others v Conseil des Ministres
ECLI:EU:C:2007:383, para 28
1196
Opinion of AG Bot in Case C-573/12 Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:37, para 61
1197
Case C-216/11 Commission v France ECLI:EU:C:2013:162, para 27
1198
Ingg Margrete Ydersbond and Thea Sveen, ‘The Aland Case and the Future of Renewables in Europe’. Energi
Klima. Available at www.energiogklima.no/kommentar/the-aland-case-and-the-future-of-renewables-in-Europe.
Accessed on 26 April, 2016
1199
Case C-8/74 Procureur du Roi v Benoît and Gustave Dassonville ECLI:EU:C :1974:837, para 5 - capable of
hindering, directly or indirectly, actually or potentially, trade are prohibited
1200
Opinion of AG Bot in Case C-573/12 Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:37, para 74
1201
Opinion of AG Bot in Case C-573/12 Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:37, para 77
1202
Case C-204/12, Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt -
ECLI:EU:C:2014:2192
1203
Opinion of AG Bot in Case C-573/12 Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:37, para 79
1204
Opinion of AG Bot in Case C-573/12 Ålands Vindkraft AB v Energimyndigheten, ECLI:EU:C:2014:37, para 90
1205
Ibid para 104
1206
Ibid para 128
1207
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037, para 67
1208
Ibid para 54
1209
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1210 I
bid para 50
1211
Case C-8/74 Procureur du Roi v Benoît and Gustave Dassonville ECLI:EU:C:1974:837,para. 5, and Case C-
379/98 PreussenElektra, para. 69.
1212
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037, para. 66.
1213
Ibid, para. 67
1214
Ibid, para. 67 70
1215
Ibid, para 71 -73
1216
Ibid, para 105-106
1217
Ibid, para 115
1218
Ibid, para 75
1219
Ibid, para 92
1220
Ibid, para 104
1221
Ibid, para 94
1222
Ibid, para 95
1223
Ibid, para 98
1224
Ibid, para 99
The Court again used a lex specialis approach to resolve the conflict between the
Renewable Energy Directive and the provisions of the Treaty by simply applying the
ADBHU1226and Danish Bottle1227 findings as was done in Essent 11228 – renewable
energy is an EU ‘overriding objective’, which may justify certain limitations of the
principle of free movement of goods.
Accordingly, it seems that the Court's general position regarding the
possibility of justifying restrictions on trade within the EU is that they can be justified
as an express derogation – the lex specialis approach. 1229 The Court simply
confirmed that situations capable of hindering intra-EU trade may be justified by the
overriding objective1230 of environmental protection. Consequently, case law seems
to have put in place an extension of the grounds for a derogation related to free
movement of goods.1231 This extension to the grounds for derogation was seen as a
long-term regulatory risk by Developer Operators during the empirical research.
In looking at the judgement, wider EU law must be considered. An example
of the issues, not considered by the AG or the CJEU, would be the implications of
the network development provisions contained in Articles 170 to 172 TFEU. The
network development provisions are put in place to facilitate the objectives of Article
26 TFEU (internal market) 1232 and Article 174 (social cohesion) again issues not
considered by the AG or the CJEU. As the proposed renewables facility was on a
remote island not connected to the electricity network of its host country,
incentivising the facility to be developed would have complied with the policy
objectives of integrating remote islands and peripheral regions to the central regions
of the EU contained in Article 170(2) TFEU. Additionally, the facility would have
complied with the objectives set out in the Electricity Market Directive where it states
1225
Ibid, para 100
1226
Case 240/83 Procureur de la République v Association de Défense des Brûleurs d'Huiles Usagées
ECLI:EU:C:1985:59, para 13
1227
Case 302/86 Commission v Denmark ECLI:EU:C:1988:421, para 8 & 9
1228
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt ELCI:EU:
C:2014:2192
1229
Opinion of Advocate General Bot (2013), Joined Cases C-204/12 to C-208/12, Essent Belgium NV v Vlaamse
Reguleringsinstantie voor de Elektriciteits- en Gasmarkt ECLI:EU:C:2013:294 , para. 87 and relevant case law
such as e.g. the Judgment in Case C-17/92 Federación de Distribuidores Cinematográficos v Estado Español
and Unión de Productores de Cine y Televisión ECLI:EU:C:1993:172, para 16
1230
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
1231
Opinion of AG Bot in Essent 1, para. 88.
1232
Internal Market is an area without internal frontiers in which the free movement of goods, persons, services
and capital is ensured - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 516
Also, in determining Ålands case the CJEU has ignored EU Commission 2010
decision rendering legally binding commitments offered by Svenska Kraftnät (SvK)
that increased trade in electricity between Sweden and neighbouring countries
contributing to a better allocation of resources and, ultimately, to lower prices for
customers and end consumers.1239 The development of the Ålands Vindkraft wind
farm would have brought about benefits in the form of financial and material
contributions1240 to the local community’s interconnection with the central regions of
the EU (Article 170(2) TFEU).
1233
EU Directive 2009/72 (Electricity Markets Directive), Recitals 5 and 6
1234
Directorate-General Energy European Commission, Booz & Co, “Benefits of an Integrated European Energy
Market”, July 2013 – available at
https://ec.europa.eu/energy/sites/ener/files/documents/20130902_energy_integration_benefits.pdf
1235
Case 240/83 Procureur de la République v Association de Défense des Brûleurs d'Huiles Usagées
ECLI:EU:C:1985:59, para 13
1236
Case 302/86, Commission v Denmark ECLI:EU:C:1988:421, para 8 & 9
1237
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt ELCI:EU:
C:2014:2192
1238
P/18/2122 Commission Investigation TenneT TSO GmbH's – 19 March 2018 available at
http://europa.eu/rapid/press-release_IP-18-2122_en.htm accessed 4 April 2018
1239
IP/10/425 Commission Decision Transmission Capacity from Svenska Kraftnät for Sweeden – 14 April 2010
available at http://europa.eu/rapid/press-release_IP-10-425_en.htm#top-page accessed 4 April 2018
1240
Gillian Bristow, Richard Cowell and Max Munday,’Windfalls for Whom? The Evolving Notion of “Community” in
Community Benefits Provisions from Wind Farms’ (2012) 43 Geoforum, 1108,1108
1241
Corinna Klessmann, Erika de Visser, Fabian Wigand, Malte Gephart, Gustav Resch and Sebastian Busch,
‘Cooperation between EU member states under the RES Directive. Task 1 Report (2014)’,
http://ec.europa.eu/energy/renewables/studies/doc/2014_design_features_of_support_schemes_task1.pdf
accessed 1 July 2016, 2; See also Henrik Klinge Jacobsen, Lise Lotte Pade, Sascha Thorsten, Schröder Lena
Kitzing, ‘Cooperation Mechanisms to Achieve EU Renewable Targets’ (2014) 63 Renewable Energy 345, 351
1242
Lena Kitzing, Catherine Mitchell and Poul Erik Morthorst, ‘Renewable Energy Policies in Europe: Converging
or Diverging?’ (2012) 51 Energy Policy, 192, 199
1243
Ibid
1244
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
1245
Jan Steinbach, Mario Ragwitz, Veit Bürger, Liv Becker, Lukas Kranzl, Marcus Hummel, Andreas Müller,
‘Analysis of Harmonisation Options for Renewable Heating Support Policies in the European Union’ (2013) 59
Energy Policy 59
1246
Ibid, 61; See Also Peter Cameron, ‘The Internal Energy Market – Redefining Objectives’ Peter Cameron and
Raphael Heffron (eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016), 16
1247
Tom Casier, ’The Geopolitics of the EU’s Decarbonization Strategy: A Bird’s Eye Perspective’, in Claire
Dupont and Sebastian Oberthür (eds) Decarbonization in the European Union: Internal Policies and External
Strategies (Palgrave Macmillan, 2015), 159; See Also Alexander Mirtchev ‘The Greening of Geopolitics’ [2013]
European Energy Review, 2
1248
Laurens Ankersmit, ‘”Facilitating” Infringments of Article 34TFEU and the Territorial Nature of Green Electricity
Support schemes: Case C-573/12 Ålands Vindkraft v Energimyndigheten’ [2014] European Law
1249
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1250
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten, ECLI:EU:C:2014:2037 para 84
1251
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
1252
Example cases covering free movement, competition and state aid - Case C-379/98 PreussenElektra AG v
Schleswag AG, in the presence of Windpark Reußenköge GmbH & Land Schleswig-Holstein
ECLI:EU:C:2001:160 ; C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en
Gasmarkt ECLI;U:C:2014:2192 ; Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:203;
Case C-492/14 Essent Belgium NV v Vlaams Gewest ECLI:EU:C:2016:732; Case C-262/12, Association Vent De
Colère Fédération nationale v Ministre de l’Écologie, du Développement durable, des Transports et du Logement,
Ministre de l’Économie, des Finances et de l’Industrie, ECLI:EU:C:2013:85; Case T-251/11 Austria v
Commission, ECLI:EU:T:2014:1060 ; Case C-275/13, Elcogas SA v Adminstracion del Estado & Iberdrola SA,
ECLI:EU:C:2014:2314; Case T-47/15 Germany v Commission, ECLI:EU:T:2016:281; Case C-393/92, Gemeente
Almelo v NV Energiebedriif Ijsselmij ECLI:EU:C:1994:171
1253
Ronald Dworkin Law's Empire (Harvard University Press, 1987), 191
1254
W Molle, The Economics of European Integration: Theory, practice, policy (Ashgate, 2006), 218
1255
A Sánchez Graells, ‘CJEU protects discriminatory green energy schemes and keeps inconsistency in EU free
movement of goods law (C-573/12), (2014) http://howtocrackanut.blogspot.no/2014/07/cjeu-protects-
discriminatory-green.html (accessed 10 May 2016)
1256
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
1257
C Ryckman, ‘EU Court Allows Discriminatory Green Energy Support Schemes’, (2014) National Law Review
http://www.natlawreview.com/article/eu-court-allows-discriminatory-green-energy-support-schemes (accessed 1
April 2016)
1258
Catherine Banet, ‘The EU Court Of Justice rules in favour of Sweden in the Åland Vindkraft Case’, July 2014,
http://www.ecohz.com/facts-news/news/aaland-case (accessed 1 September 2016)
1259
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281
1260
Case C-492/14 Essent Belgium NV v Vlaams Gewest and Others ECLI:EU:C:2016:732
1261
From 2016 renewable electricity projects are required to enter an auction process such that the lowest cost
projects would receive price support at the price the project has bid into the auction. The resulting renewables
support scheme instrument is a contract for difference in accordance with Renewable Energy Directive Article
3(2); See European Commission guidance for the design of renewables support schemes, SWD(2013) 439 final;
COM(2015)80 final; http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2015:80:FIN
1262
The concession tendering round established in accordance with the Finnish Electricity Produced from
Renewable Energy Sources Act (1396/2010): See Sanna-Mari Seppälä ‘Renewable Energy Tenders are Won by
Well-Planned Projects’ [2018] Castrén & Snellman available at https://www.castren.fi/blogandnews/news-
2018/renewable-energy-tenders-are-won-by-well-planned-projects/ accessed 25 October 2018
1263
Svenn Jensen, Kristina Mohliny, Karen Pittelz, and Thomas Sterner, ‘An introduction to the green paradox: the
unintended consequences of climate policies’ (2015) 9 Review of Environmental Economics and Policy, 246
1264
EURELECTRIC Secretary General Hans ten Berge http://www.eurelectric.org/news/2014/efforts-towards-
europeanisation-of-res-policies-remain-crucial,-eurelectric-reaffirms/
1265
Renewable Energy CS International http://www.recs.org/news/european-court-of-justice-rules-against-the-
advocate-general-s-opinion-in-alands-vindkraft-case
1266
Justin Wilkes Deputy Executive Officer of The European Wind Energy Association
1267
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten, ECLI:EU:C:2014:2037 para 76 and 80
1268
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
1269
COM(2016) 860 30 November 2016 ‘Clean Energy For All Europeans’
1270
COM (2011) 112: A Roadmap for moving to a competitive low carbon economy in 2050 (08 Mar 2011) see
www.ec.europa.eu/clima/policies/strategies/2050_en#tab-0-1
A third case related to the diagonal conflict between the Renewable Energy
Directive1272 and free movement of goods and very much building on the findings in
Essent 11273 and Ålands Vindkraft1274 is Green Network. The Green Network case
relates to the recognition of a certificate of origin similar to Dassonville.1275 Whilst
Ålands Vindkraft1276 related to the refusal by a member state to allow renewable
electricity from another member state to have access to its green certificate scheme,
Green Network looks at the refusal of the Commission to allow recognition of a
certificate of origin for renewable electricity from non-EU member country
(Switzerland) to be recognised by a utility company in a member state, namely Italy.
The case is important as at the time Italy was also importing renewable electricity
from Serbia, a practice which manged to be unaffected by this dispute. 1277
An Italian energy company, Green Network SpA (‘Green Network’), imported
renewable electricity from Switzerland. Under Italian law, energy companies were
required to purchase a certain number of green certificates each year but could
seek an exemption where they imported renewable energy from countries with
analogous laws promoting renewable energy. Where the exporting country was not
a member of the EU, the exemption was available only upon prior agreement
between the importing and exporting countries regarding recognition of guarantees
of origin. When Green Network requested an exemption from its obligation to
purchase green certificates, the Italian transmission system operator rejected the
request because there was no agreement regarding guarantees of origin between
Italy and Switzerland at the time the renewable energy was imported. Green
Network brought an action via the Italian courts, which was dismissed. Green
Network appealed the dismissal, because the Italian grid operator had a technical
1271
Case C‑66/13 Green Network SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2014:2399
1272
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
1273
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ELCI:EU:C:2014:2192
1274
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
1275
Case C-8/74 Procureur du Roi v Benoît and Gustave Dassonville ECLI:EU:C:1974:837
1276
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
1277
Lena Kitzing, Catherine Mitchell and Poul Erik Morthorst, ‘Renewable Energy Policies in Europe: Converging
or Diverging?’ (2012) 51 Energy Policy, 192, 199; See Also http://www.balkaninsight.com/en/article/serbia-italy-
sign-energy-deal
1278
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
1279
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
1280
Ibid, para 65
1281
Switzerland & EU Free Trade Agreement, 22 July 1972 OJ L 300, 31/12/1972 available at
http://trade.ec.europa.eu/doclib/docs/2007/january/tradoc_133045.pdf accessed 20 August 2018
1282
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE
1283
Case C‑66/13 Green Network SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2014:2399, para 74;
the Court stating the issue was the same as was analysed in Case C-22/70 Commission v Council (European
Road Transport Agreement) ECLI:EU:C:1971:32
1284
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
1285
The fact of the numerous corporate law firms that have reports (‘how to documents’) on this subject on their
web sites shows how important this is to the developers of renewable electricity - Baker McKenzie ‘The Rise of
Corporate PPAs; A New Driver for Renewables’ [2018] https://www.bakermckenzie.com/-/media/...corporate-
ppas/risecorporateppas.pdf?; Norton Rose Fulbright ‘Corporate renewable PPAs – a framework for the future?’
[2017] http://www.nortonrosefulbright.com/knowledge/publications/149117/corporate-renewable-ppas-a-
framework-for-the-future; DLA Piper ‘Corporate Power Purchase Agreements (PPAs): What are they?’ [2016]
https://www.dlapiper.com/en/uk/insights/publications/2016/06/renewable-energy-global-paper/what-are-corporate-
power-purchase-agreements-ppa/; Bird & Bird ‘Corporate PPAs: An International Perspective’ [2017]
https://www.twobirds.com/~/media/articles/international-corporate-ppas-brochure.pdf?la=en; CMS ‘Unlocking the
Corporate PPA Market’ [2018] https://cms.law/en/GBR/Events/Breakfast-Seminar-Unlocking-the-Corporate-PPAs-
Market
The procurement of electricity by public bodies either for their own consumption or
consumption by others is an increasingly important issue. The purchase of electricity
by public bodies falls within the EU’s public procurement regulatory framework. A
very important group in this context is the German Stadtwerke system as they can
directly support the development of renewable electricity facilities via the purchase
criteria and pricing mechanisms applied – especially important as renewables
moves from a regulatory regime of state intervention via member state sponsored
support scheme, to a corporate power purchase agreement regime. As an example
of the volume of wind energy being sold via the corporate power purchase
agreement route it has been reported that some 235MW of capacity is subject to this
arrangement in the UK.1288
Public procurement rules have the same basic objectives as the rules
prohibiting state aid (Article 107 TFEU): both seek to prevent distortions to
competition caused by the behaviour of public authorities, 1289 yet they protect
competition by preventing different kinds of behaviour. Public procurement rules
prohibit the granting of discriminatory rights and privileges in the form of contracts,
1286
Daniel Radov, Alon Carmel and Clemens Koenig, ’Offshore Revolution? Decoding the UK Offshore Wind
Auctions & What the Results Means for a “Zero-Subsidy” Future’ (2017) NERA Economic Consulting
1287
Stadtwerke are communal companies, owned by a city or region, which offers public services for to the city
and/or the region. For example Stadtwerke München (Munich City Utilities) or SWM is a German communal
company, owned by the city of Munich, which offers public services for the city and the region of Munich. The
company supplies electricity for more than 95% of Munich's 750.000 households[3] as well as natural gas,
drinking water and, through its stake in the M-net Telekommunikations, telecommunications services. SWM is
Europe's largest municipal utility company and ranks among Germany's principal energy providers. Expanding
use of renewable energy has been a central element in the company's strategy since 2008. – Sophie Vorrath, ‘Will
Munich be world's first 'megacity' to reach 100% renewables?’ [2014] Renewable Economy available from
https://reneweconomy.com.au/will-munich-be-worlds-first-megacity-to-reach-100-renewables-28292/ ; See Also
the undertaking’s web site https://www.swm.de/english.html
1288
The capacity is composed of EDF 72MW, BSR 61MW, Eneco 60MW, Pennant Walters 23MW, Baywa 15MW
and Shanks 4MW – Ben Hall, ‘ Stready as she goes: the rise of the Corporate PPA’ [2018] Energy Perspectives
Cornwall Consulting Market Report 24 September 2018; See also Baker MacKenzie ‘The rise of corporate PPAs:
A new driver for renewables’ [2015] available at https://www.bakermckenzie.com/-
/media/files/insight/publications/2015/12/the-rise-of-corporate-ppas/risecorporateppas.pdf?la=en accessed 24
September 2018; Norton Rose Fulbright ‘Corporate renewable PPAs – a framework for the future?’ [2017]
http://www.nortonrosefulbright.com/knowledge/publications/149117/corporate-renewable-ppas-a-framework-for-
the-future; DLA Piper ‘Corporate Power Purchase Agreements (PPAs): What are they?’ [2016]
https://www.dlapiper.com/en/uk/insights/publications/2016/06/renewable-energy-global-paper/what-are-corporate-
power-purchase-agreements-ppa/; Bird & Bird ‘Corporate PPAs: An International Perspective’ [2017]
https://www.twobirds.com/~/media/articles/international-corporate-ppas-brochure.pdf?la=en; CMS ‘Unlocking the
Corporate PPA Market’ [2018] https://cms.law/en/GBR/Events/Breakfast-Seminar-Unlocking-the-Corporate-PPAs-
Market
1289
Phedon Nicolaides, ‘Public Procurement and State Aid’ [2018] State Aid Hub
http://stateaidhub.eu/blogs/stateaiduncovered/post/9299
1290
EU Directive 2014/24/EU ‘Directive on Public Procurement’ OJ L 94
1291
Ibid Directive Article 4
1292
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
Another area which potentially restricts the free movement of goods and is
incompatible with the single market, is cross-border energy taxation.1294 Whilst tax
authorities enjoy considerable discretion in schemes of taxation, the other side of
that coin is that tax is a selective measure and thus potentially state aid.1295
Energy taxation is a member state competence1296 (a measure of a fiscal
nature Article 194(3) TFEU), 1297 however, coordination is necessary, as energy
traded in one country can be used in another. Hence when neighbouring member
states put in place different energy taxation systems, this induces sub-optimal
decisions with regards to the development of renewable electricity generating
facilities, especially as the interactions with the wider economy and industrial policies
are considered.1298
In certain instances such tax outcomes discourage the development of
renewable electricity as a conflict exists between the desires of the Renewable
Energy Directive1299 and general energy taxation. Noting the EU can only act where
such nationally imposed taxes distort the internal market, 1300 and in any event the
Council has to act unanimously in accordance with Article 113 TFEU to put in place
a harmonised energy tax regime which seems to be unlikely in the near future.1301
1293
Case C-213/96 Outokumpu Oy ECLI:EU:C:1998:155
1294
Gloria Marín Benítez, ‘The European Union, the State Competence in Tax Matters and Abuse of
the EU Freedoms’ in José Manuel Almudí Cid, Jorge Ferreras Gutierrez and Pablo Hernandez Gonzalez-Barreda
(eds) Combating Tax Avoidance in the EU: Harmonization and Cooperation in Direct Taxation (Wolters Kluwer,
2019)_
1295
Cases T‑131/16, Belgium v Commission ECLI:EU:T:2019:91 and T‑263/16, Magnetrol International v
Commission ECLI:EU:T:2019:9 - annulled Commission decision 2016/1699
1296
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
1297
Ian Parry and Herman Vollebergh, ‘ Reforming the EU Energy Tax Directive: Assessing to Options’ (2016)
CESIFO Working Paper No 5749, 2 ; See Also Dörte Fouquet and Jana Viktoria Nysten, ‘The Legal Helpdesk
Energy Taxation in the EU’ Becker, Butner and Held
1298
Edward Foster, Marcello Contestabile, Jorge Blazquez, Baltasar Manzano, Mark Workman and Nilay Shah,
’The unstudied barriers to widespread renewable energy deployment: Fossil fuel price responses’ (2017) 103
Energy Policy, 258
1299
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
1300
Internal Market is an area without internal frontiers in which the free movement of goods, persons, services
and capital is ensured - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 516
1301
Article 113 TFEU, specifically provides for the Council, acting unanimously in accordance with a special
legislative procedure and after consulting the European Parliament and the Economic and Social Committee, to
adopt provisions for the harmonisation of member states' rules in the area of indirect taxation because indirect
taxes may create an immediate obstacle to the free movement of goods. Directives related to environmental and
energy taxation have established the EU’s position: available https://ec.europa.eu/taxation_customs/general-
information-taxation/eu-tax-policy-strategy/lisbon-Treaty-tax-legislation-eu_en accessed 30 March 2018
1302
Sanja Filipović, and Mirjana Golušin, ‘Environmental taxation policy in the EU—New methodology approach’
(2015) 88 Journal of Clean Products, 308; See Also Ernst von Weizsäcker ‘Ecological Tax Reform’ in Ernst von
Weizsäcker (eds) A Pioneer on Environmental, Climate and Energy Policies (Springer, 2014), 99; Mikael Skou
Andersen, ‘Towards a level playing field for EU’s energy-related taxation’ in Karen Pittel, Ian Parry and Herman
Vollebergh (eds) Energy Tax and Regulatory Policy in Europe: Reform Priorities (MIT Press, 2017)
1303
Friedemann Polzin, Michael Migendt, Florian Täube and Paschenvon Flotow, ‘Public policy influence on
renewable energy investments—A panel data study across OECD countries’ (2015) 80 Energy Policy, 98
1304
Directive (2003/96/EC) 27 October 2003 ‘Restructuring the Community framework for the taxation of energy
products and electricity’ (Energy Taxation Directive) (OJ L 283, 31.10.2003, pp. 51–70)
1305
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160
1306
Maria Alejandra Calle Saldarriaga, ‘Non-product related environmental process and production methods
(NPR-PPMs): a view from international trade law and international environmental governance’ (2014) PhD Thesis,
University College Cork; See Also Erich Vranes, ‘Processes and Production Methods: A Special Case under the
GATT and the TBT Agreement?’ in Erich Vranes (ed) Trade and the Environment Fundamental Issues in
International Law, WTO Law, and Legal Theory (Oxford University Press, 2009)
1307
Jeremy Carl and David Fedor, ’Tracking global carbon revenues: A survey of carbon taxes versus cap-and-
trade in the real world’ (2016) 96 Energy Policy, 50; See Also Ian Parry, Dirk Heine, Shanjun Li and Eliza Lis,
‘Getting Energy Prices Right From Principle to Practice’ (2014) International Monetary Fund
1308
Steven Geroe, ‘Addressing Climate Change Through a Low-Cost, High-Impact Carbon Tax’ (2019) 28(1)
Journal of Environment & Development, 3
1309
Energy Taxation Directive, Article 4
1310
Ian Parry and Herman Vollebergh, ‘ Reforming the EU Energy Tax Directive: Assessing to Options’ (2016)
CESIFO Working Paper No 5749, 2
1311
In moving the EU’s climate change forward the EU has a commitment to bring energy taxation more closely in
line with its energy and climate change objectives (See March 2008 European Council Conclusion - European
Council of 13-14 March 2008, Presidency conclusions (7652/1/08 rev.1, 20/05/2008). In 2012 a proposal to
amend the Energy Taxation Directive (2003/96/EC) was made to implement the 2008 Council resolution
(European Parliament, Legislative resolution of 19 April 2012 on the proposal for a Council Directive amending
Directive 2003/96/EC restructuring the Community framework for the taxation of energy products and electricity,
2011/0092(CNS)), such that tax rates would be aligned to a fuel’s carbon content and develop a minimum price
for carbon emissions to create a floor price within the European Emission Trading System. However, in 2015 the
Commission issued a notice of withdrawal of the proposals related to tax harmonisation (European Commission,
Withdrawal of Commission proposals, 2015/C 80/08), due to practical difficulties of implementation and concerns
related to the damage a carbon floor price would have on the economies of new accession countries. – See Ian
Parry and Herman Vollebergh, ‘ Reforming the EU Energy Tax Directive: Assessing to Options’ (2016) CESIFO
Working Paper No 5749, 2
1312
Case C-213/96 Outokumpu Oy ECLI:EU:C:1998:155
1313
Étienne Durand and Malcolm Keay,’ National support for renewable electricity and the single market in
Europe: the Ålands Vindkraft case’ [2014] Oxford Institute for Energy Studies
1314
Law No 1473/94 Excise Duty, Para 4
1315
Case C-213/96 Outokumpu Oy ECLI:EU:C:1998:155, para 33
1316
Case C-213/96 Outokumpu Oy ECLI:EU:C:1998:155, para 31
1317
Ibid, para 24
1318
Case C-152/89, Commission v Luxembourg ECLI:EU:C:1991:272 , para 20
1319
Case C-213/96 Outokumpu Oy ECLI:EU:C:1998:155, para, 37
1320
Ibid, para 36
1321
Ibid, para 39-41
1322
Case C-90/94 Haahr Petroleum v Åbenrå Havn, Ålborg Havn, Horsens Havn, Kastrup Havn NKE A/S,
Næstved Havn, Odense Havn, Struer Havn and Vejle Havn, and Trafikministeriet. ECLI:EU:C:1997:368
1323
Case C-57/65 Alfons Lütticke GmbH v Hauptzollamt Sarrelouis ECLI:EU:C:1966:34
1324
Internal Market is an area without internal frontiers in which the free movement of goods, persons, services
and capital is ensured - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 516; See Also Peter
Cameron, ‘The Internal Energy Market – Redefining Objectives’ Peter Cameron and Raphael Heffron (eds) Legal
Aspects of EU Energy Regulation (Oxford University Press, 2016), 5
1325
Case C-221/06 Stadtgemeinde Frohnleiten and Gemeindebetriebe Frohnleiten GmbH v Bundesminister für
Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft ECLI:EU:C:2007:657 , para 40
1326
Case C-68/96 Crundig Italiana SpA v Minestero delle Finanze, ECLI:EU:C:1998:299
1327
Case C-324/99 DaimlerChrysler AG v Land Baden-Württemberg ECLI:EU:C:2001:682
1328
Ian Parry and Herman Vollebergh, ‘ Reforming the EU Energy Tax Directive: Assessing to Options’ (2016)
CESIFO Working Paper No 5749, 2
1329
Renewable Energy Directive Article 15
1330
The trading hub or power exchange is the heart of the electricity market. The power exchange’s members will
consist of producers, retailers and traders as well as large end users. The exchange will trade a series of standard
products in both volume and time, with the delivery location and other technical details relating to the trade set out
in a trade master agreement. Each individual trade will in effect be a supplemental agreement to this trade master
agreement. The market price is determined by supply and demand considerations, with both varying during the
day, a different price is determined for each trading period (usually an hour, or in the UK half hour). The market
price may vary somewhat between different market regions, depending on physical transmission limitations that
sometimes occur and the generation mix within each region. Available at https://corporate.vattenfall.com/about-
energy/energy-markets/ accessed 22 April 2018
1331
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1332
European Federation of Energy Traders ‘Towards a single European energy market’ (2012), 15 available at
http://www.efet.org/Files/Documents/Energy%20Background/Highlights-II-Final.pdf accessed 30 March 2018
1333
renewable energy guarantees of origin – EU COM ‘The Energy community Legal Framework 2018’ 4th Edition
OJ L198, 20/07/2006, p 18 available at https://www.energy-community.org/legal/Treaty.html accessed 30 March
2018
1334
Karsten Neuhoff, Carlos Batlle, Gert Brunekreeft, Christos Konstantinidis, Christian Nabe, Giogia Oggioni,
Pablo Rodilla, Sebastian Schwenen, Tomasz Siewierski and Goran Strbac, ‘Flexible Short-Term Power Trading:
Gathering Experience in EU Countries’ (2015). DIW Berlin Discussion Paper No. 1494.
1335
Price discovery is the overall process, whether explicit or inferred, of setting the spot price of an asset or
service but most commonly the proper price of a security, commodity, or currency based on many factors. These
include supply and demand, intangible factors such as investor risk attitudes and the overall economic and
geopolitical environment. Simply put, it is where a buyer and a seller agree on a price and a transaction occurs.
Definition from https://www.investopedia.com/terms/p/pricediscovery.asp#ixzz5BR9NKHyG accessed 30 March
2018
1336
Craig Holden, Stacey Jacobsen and Avanidhar Subrahmanyam, ‘The Empirical Analysis of Liquidity’ (2014)
8(4) Foundations and Trends in Finance, 263
1337
Hornsea Project Two: offshore wind farm supply chain plan: available at
https://www.gov.uk/government/publications/contracts-for-difference-2nd-allocation-round-supply-chain-plans-for-
projects-over-300mw-which-secured-contracts-2017 accessed 30 March 2018
1338
Trine Krogh Boomsma and Kristin Linnerud, ‘Market and policy risk under different renewable electricity
support schemes (2015) 89 Energy, 435
1339
Daniel Radov, Alon Carmel and Clemens Koenig, ‘Offshore Revolution? Decoding the UK Offshore Wind
Auctions & What the Results Means for a “Zero-Subsidy” Future’ (2017) NERA Economic Consulting
1340
Carsten Bartholl and Markus Böhme, ‘Corporate PPAs - A future financing model for renewable energies’
[2018] Taylor Wessing
1341
Joined Cases C-145/06 and C-146/06 Fendt Italiana Srl v Agenzia Dogane - Ufficio Dogane di Trento
ECLI:EU:C:2007:411, para 36; Case C-5/14 Kernkraftwerke Lippe-Ems GmbH v Hauptzollamt Osnabrück
ECLI:EU:C:2015:354, para 45; Joined Cases C-43/13 and C-44/13 Hauptzollamt Köln v Kronos Titan GmbH and
Hauptzollamt Krefeld v Rhein-Ruhr Beschichtungs-Service GmbH, ECLI:EU:C:2014:216, para 31 and 33; Case
C-418/14 ROZ-ŚWIT Zakład Produkcyjno-Handlowo-Usługowy Henryk Ciurko, Adam Pawłowski spółka jawna v
Dyrektor Izby Celnej we Wrocławiu, ECLI:EU:C:2016:400, para 32; Case C-465/15 Hüttenwerke Krupp
Mannesmann GmbH v Hauptzollamt Duisburg , ECLI:EU:C:2017:640, para 2
1342
Case C-31/17 Cristal Union (legal successor) Sucrerie de Toury SA v Ministre de l'Économie et des Finances
ECLI:EU:C:2018:168
1343
EC Directive 2003/96/EC 27 October 2003 ‘Taxation of Energy Products and Electricity’ OJ L 283/51
1344
Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Latvia, Lithuania, Norway, The Netherlands,
Portugal, Spain and Sweden. Most other European countries are due to take part in a second ‘wave’ go -live with
XBID in Summer 2019 - https://www.epexspot.com/en/press-media/press/details/press/European_Cross-
Border_Intraday_XBID_Solution_and_10_Local_Implementation_Projects_confirm_go-live_date_for_June_2018_
accessed 30 May 2018
1345
The delay from 1998 until 2016 to implement this kind of solution is in no small part a reflection of the need to
to put in place computing power to model ten country's transmission constraints in real time
1346
An order book is an electronic list of buy and sell orders for a specific financial instrument, organised by price
level. An order book lists the quantity of energy being bid or offered at each price point. -
https://www.investopedia.com/terms/o/order-book.asp accessed 30 May 2018
1347
All electricity flowing from one selling (or exporting point) to one consignee or intermediate consignee on the
same transmission system is modelled in a single system
1348
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160
1349
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ELCI:EU:C:2014:2192
1350
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
1351
Case C‑66/13 Green Network SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2014:2399
1352
Case 240/83 Procureur de la République v Association de Défense des Brûleurs d'Huiles Usagées
ECLI:EU:C:1985:59, para 13
1353
Case 302/86, Commission v Denmark ECLI:EU:C:1988:421, para 8 & 9
1354
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851
1355
Case T-251/11 Austria v Commission ECLI:EU:T:2014:1060
1356
Commission Decision 2015/1585, Aid Scheme SA 33995 –‘implemented by Germany for the support of
renewable electricity and of energy-intensive users’ available at http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv%3AOJ.L_.2015.250.01.0122.01.ENG accessed 30 March 2018
1357
The Gesetz zur Sicherung des Einsatzes von Steinkohle in der Verstromung und zur Änderung des
Atomgesetzes und des Stromeinspeisungsgesetzes (Law ensuring the supply of coal to power stations and
amending the Law on Nuclear Energy and the Stromeinspeisungsgesetz) of 19 July 1994 (BGBl. 19941, p. 1618;
'the 1994 Law')
1358
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160, para 3
1359
The sale price to end users was composed of the costs of generation plus the costs of transmission and
distribution and as such was considerably above the cost of generation. In 2015 the end user sales price in
Germany was circa 13.89 €cents / kWh compared to a generation costs of 4.69 €cents/ kWh - Electricity Costs of
Energy Intensive Industries An International Comparison [2015] for the German Ministry of Economic Affairs and
Energy – available at https://www.isi.fraunhofer.de/content/dam/isi/dokumente/ccx/2015/Electricity-Costs-of-
Energy-Intensive-Industries.pdf accessed 22 August 2018
1360
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160, para 3(2) and 3(3)
1361
Ibid, para 20
1362
Ibid, para 11
1363
Ibid
1364
Schleswag is the electricity network operator in Schleswig-Holstein and Northern Lower Saxony region of
Germany. They are one of the largest energy service providers in the north of Germany, offering municipal utilities
(Stadtwerke)and other companies a wide range of connection and network services. See www.sh-
netz.com/&prev=search accessed 22 August 2018; Peter Cameron, ‘The Internal Energy Market – Redefining
Objectives’ Peter Cameron and Raphael Heffron (eds) Legal Aspects of EU Energy Regulation (Oxford University
Press, 2016), 13
1365
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160, para 20
1366
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1367
Ibid, para 30
1368
Ibid, para 71
1369
Ibid, para 75 and 81
1370
Ibid, para 77
1371
Case 240/83 Procureur de la République v Association de Défense des Brûleurs d'Huiles Usagées
ECLI:EU:C:1985:59, para 13
1372
Case 302/86, Commission v Denmark ECLI:EU:C:1988:421, para 8 & 9
1373
Case C-72/83, Campus Oil Limited v Minister for Industry and Energy, ECLI:EU:C:1984:256, para 16
1374
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160 para 75
1375
EU Directive (2001/77/EC) 27 September 2001 ‘The promotion of electricity produced from renewable energy
sources in the internal electricity market’ OJ L 283/33
1376
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160 para 81
The Essent 1 case was discussed above in terms of the justifications used by the
CJEU for finding in favour of the nationally focussed renewables support scheme
which effectively excluded renewable facilities not in the target area – diagonal
conflict with free movement.
In this section, that part of the justification for this derogation from the
application of free movement which relates to the trading of the green certificates is
analysed.
1377
Price discovery is the overall process, whether explicit or inferred, of setting the spot price of an asset or
service but most commonly the proper price of a security, commodity, or currency based on many factors. These
include supply and demand, intangible factors such as investor risk attitudes and the overall economic and
geopolitical environment. Simply put, it is where a buyer and a seller agree on a price and a transaction occurs.
Definition from https://www.investopedia.com/terms/p/pricediscovery.asp#ixzz5BR9NKHyG accessed 30 March
2018
1378
Ronald Dworkin Law's Empire (Harvard University Press, 1987), 191
1379
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1380
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ELCI:EU:C:2014:2192
1381
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ECLI:EU:C:2014:2192, para 111
1382
Price discovery is the overall process, whether explicit or inferred, of setting the spot price of an asset or
service but most commonly the proper price of a security, commodity, or currency based on many factors. These
include supply and demand, intangible factors such as investor risk attitudes and the overall economic and
geopolitical environment. Simply put, it is where a buyer and a seller agree on a price and a transaction occurs.
Definition from https://www.investopedia.com/terms/p/pricediscovery.asp#ixzz5BR9NKHyG accessed 30 March
2018
1383
J Krzeminska, ‘Are Support Schemes for Renewable Energies Compatible with Competition Objectives? An
Assessment of National and Community Rules’ (2007) 7 Yearbook of European Environmental Law
1384
Richard Bronk, ‘Hayek on the wisdom of prices: a reassessment’ (2013) 6(1) Erasmus Journal for Philosophy
and Economics 82, 91
1385
Richard Bronk,’ Hayek on the wisdom of prices: a reassessment’ (2013) 6(1) Erasmus Journal for Philosophy
and Economics, 82, 103
1386
A thin market is a market with a low number of buyers and sellers. Since few transactions take place in a thin
market, prices are often more volatile and assets are less liquid. The low number of bids and asks will also
typically result in a larger spread between the two quotes. - https://www.investopedia.com/terms/t/thinmarket.as
accessed 27 April 2018
1387
George Akerlof, ‘The market for “lemons”: quality uncertainty and the market mechanism’ (1970) 84(3) The
Quarterly Journal of Economics, 488
The 2008 financial crisis saw many EU countries experience deflation and reduced
economic activity. 1390 One of the outcomes of the financial crisis was reduced
demand for electricity which caused deficits and dispatch1391 issues in a series of
electricity markets across the EU. 1392 In the ensuing judicial and arbitrational
processes that followed the retrospective reductions in renewable electricity support
schemes1393 in certain member states, three issues were brought to the fore (i) state
aid, (ii) legitimate expectation and (iii) the right of member states to regulate within
their competency. What also became clear was that international investment law
conflicted with EU law generally and EU environmental law specifically, challenging
the legitimacy and utility of the investor-state arbitral system.1394
1388
Eugene Fama and Kenneth French, ‘Size, value, and momentum in international stock returns’ (2012) 105(3)
Journal of Financial Economics, 457; See Also Zhe Lu, ZhaoYang Dong and Penelope Sanderson ‘The Efficient
Market Hypothesis and Electricity Market Efficiency Test’ [2008] Third International Conference on Electric Utility
Deregulation and Restructuring and Power Technologies, 436;
1389
Electricity Consumption by EU member state https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=File:Electricity_consumption_and_trade,_GWh,_2016_new.png
1390
Murillo Campello, John Graham and Campbell Harvey, ‘The real effects of financial constraints: Evidence from
a financial crisis’ (2010) 97(3) Journal of Financial Economics, 470
1391
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE
1392
Germà Bel and Stephan Joseph, ‘Emission abatement: Untangling the impacts of the EU ETS and the
economic crisis’ (2015) 49 Energy Economics, 531
1393
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1394
Ahmad Ghouri Interaction and conflict of treaties in investment arbitration (Wolters Kluwer, 2015)
1395
For an introduction to the electricity market in Spain see Iñigo del Guayo, ‘Energy Law in Spain’ in Martha
Roggenkamp, Catherine Redgwell, Anita Ronne, and Inigo del Guayo (eds) Energy Law in Europe National, EU
and International Regulation (Oxford University Press, 2016); See Also Alberto Artés and Gonzalo Olivera,
‘Renewable Energy in Spain’ [2019] King & Wood Mallesons
1396
For an introduction to the electricity market in Italy see Giuseppe Franco Ferrari, ‘Energy Law in Italy’ in
Martha Roggenkamp, Catherine Redgwell, Anita Ronne, and Inigo del Guayo (eds) Energy Law in Europe
National, EU and International Regulation (Oxford University Press, 2016)
1397
Case T-347/03 Branco v Commission ECLI:EU:T:2005:265, para 102
1398
The Energy Charter Treaty 1994 – available at http://www.energycharter.org/process/energy-charter-Treaty-
1994/energy-charter-Treaty; For an introduction to the Energy Charter Treaty see Graham Coop and Bernhard
Maier, ‘External Relations of EU Energy Regulation’ in Peter Cameron and Raphael Heffron (eds) Legal Aspects
of EU Energy Regulation (Oxford University Press, 2016), 66
1399
Electrabel SA v Hungary ICSID Case No ARB/07/19; See also Kaj Hober, ‘Investment Arbitration and the
Energy Charter Treaty’ (2010) 1(1) Journal of International Dispute Settlement 153, 155; See Also Anatole Boute,
‘Energy Trade & Investment Law: International Limits to EU Energy Law & Policy’ in Martha Roggenkamp,
Catherine Redgwell, Anita Ronne, and Inigo del Guayo (eds) Energy Law in Europe National, EU and
International Regulation (Oxford University Press, 2016)
1400
Arbitration 062/2012, Charanne B.V. & Construction Investments S.A.R.L v Kingdom of Spain (January 2016)
Available At http://www.italaw.com/sites/default/files/case-documents/italaw7097_0.pdf accessed 20 January
2017
1401
Daniel Behn, Ole Fauchald and Laura Letourneau-Tremblay ‘Promoting Renewable Energy in the EU: Shifting
trends in Member State policy space’ (2017) 28(2) European Business Law Review, 217
1402
Graham Coop and Bernhard Maier ‘The External Relations of EU Energy Regulation’ in Peter Cameron and
Raphael Heffron (eds.), Legal Aspects of EU Energy Regulation, (2nd ed, Oxford University Press, 2016), 80
provides a discussion of the right to regulate and investor protection contained in the EU-Canada Comprehensive
Economic and Trade Agreement, the EU-Singapore Free Trade Agreement and the Transatlantic Trade and
Investment Partnership
1403
International Law being considered as a body of law or a jurisdiction brought about by the collaboration of two
or more soverign states – Hans Kelsen Principles of International Law (Rinehart, 2003), 201
1404
Gokce Mete and Ernesto Bonafé, ‘Construction of Regional Energy Market Within a Multilateral Regulatory
Framework: Escalated interactions between EU energy law and the Energy Charter Treaty’ (2016) 9(3) The
Journal of World Energy Law & Business
1405
Daryl Mundis, ‘ICTY (Appeals Chamber): Prosecutor v. Delalić (Čelebići Case)’ (2001) 40(3) International
Legal Materials, 626
1406
Eiser Infrastructure Limited and Energía Solar Luxembourg SARL v Kingdom of Spain, ICSID Case No.
ARB/13/36 available at https://www.italaw.com/cases/5721 accessed 20 January 2017
1407
Eurostat (2015). Eurostat data explorer - http://ec.europa.eu/eurostat. (accessed 15 May 2016)
1408
Arjun Mahalingam and David Reiner, ‘Energy subsidies at times of economic crisis: A comparative study and
scenario analysis of Italy and Spain’, (2016) EPRG Working Paper 1603, Cambridge Working Paper in Economics
1608 – 23 Jan 2016, www.eprg.group.cam.ac.uk (accessed 15 July 2016)
1409
Decision 10/2015, Scat Punti Vendita Spa v Agenzia delle entrate - Direzione provinciale di Reggio Emilia,
(October 2015) http://www1.agenziaentrate.gov.it/english/
1410
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
1411
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1412
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
1413
Alexander Reuter ‘Retroactive Reduction of Support for Renewable Energy and Investment Treaty Protection
from the Perspective of Shareholders and Lenders’ (2015) 13(3) Oil, Gas & Energy Law, 36
1414
Gus Van Harten, Sovereign Choices and Sovereign Constraints: Judicial Restraint in Investment Treaty
Arbitration (Oxford University Press, 2013)
1415
Tim Maxian Rusche, EU Renewable Electricity Law and Policy: From National Targets to a Common Market
(Cambridge University Press, 2015), 226; See Also See Also Daniel Pérez Rodriguez, ‘Electricity Generation and
State Aid: Compatibility is the Question’ (2016) 15 European State Aid Law Quarterly, 207
1416
Ioan Micula v Romania, ICSID Case No. ARB/05/20 (http://www.italaw.com/cases/697); See Also Hanno
Wehland ‘The Enforcement of Intra-EU BIT Awards: Micula v Romania and Beyond’ (2016) 17(6) Journal World
Investment and Trade, 942 (2016)
1417
Commission Decision (EU) 2015/1470 of 30 March 2015, OJ L232/43 of 4 April 2015. Appeals against this
decision are pending Cases T-624/15 European Food v Commission, T-694/15 Micula v Commission and T-
704/15 Micula v Commission
1418
Case C-284/16 Slowakische Republik v Achmea BV ECLI:EU:C:2018:158, para 60; See Also Andrea Pinna
‘The Incompatibility of Intra-EU BITs with European Union Law, Annotation Following ECJ, 6 March 2018, Case
284/16, Slovak Republic v Achmea BV’ (2018) 1 Paris Journal of International Arbitration, 73
1419
Graham Coop and Bernhard Maier ‘The External Relations of EU Energy Regulation’ in Peter Cameron and
Raphael Heffron (eds.), Legal Aspects of EU Energy Regulation, (2nd ed, Oxford University Press, 2016), 80
provides a discussion of the right to regulate and investor protection contained in the EU-Canada Comprehensive
Economic and Trade Agreement, the EU-Singapore Free Trade Agreement and the Transatlantic Trade and
Investment Partnership
1420
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
The third area of conflict between the Renewable Energy Directive1422 and primary
EU law concerns aid provided to renewable electricity facilities via state resources.
With renewable electricity facilities generally receiving some form of revenue
support, the potential for this support to be state aid is easily apparent. What the
cases analysed show, is that the design of the renewables support scheme is key
to it being declared compatible with the internal market1423 and not found to be
distortive and thus state aid.
The first situation analysed in relation to state aid is PreussenElektra where
the CJEU considered the structure of the support scheme (a feed-in tariff regime),
the collection of the levy to fund it and its payment by a private body. The Court
confirmed that the finding of monies paid as prohibited state aid is a two stage
cumulative process (i) aid granted by the State (even via statute only) and (ii) being
granted through state resources.1424 As the applicable Minister of State had refused
to allow the increase in tariffs to end users,1425 meaning that the network companies
effectively funded the monies paid to the renewable generators, the AG1426 opined
and the Court1427 held that no state resources were involved and thus the payments
were not state aid.
The findings in PreussenElektra are significant for the renewables sector as
following the case, the Commission issued several decisions where it recognised
1421
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160
1422
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
1423
Internal Market is an area without internal frontiers in which the free movement of goods, persons, services
and capital is ensured - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 516
1424
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160, para 58
1425
Ibid, para 22
1426
Opinion of Advocate General Jacobs Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of
Windpark Reußenköge GmbH & Land Schleswig-Holstein ECLI:EU:C:2000:585, para 177
1427
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160, para 60
1428
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1429
Commission Decision, state aid NN/30/B/2000 - The Netherlands, Zero tariff for green electricity, OJ C 30, 2
February 2002
1430
Commission Decision, state aid NN 27/2000 - Germany, Act on granting priority to renewable energy sources,
in force since 1 April 2000, OJ C 164, 10 July 2002; NN 68/2000 - Germany, Law on the protection of electricity
generated from combined heat and power, OJ C 164, 10July 2002
1431
In the context of the liberalisation of electricity markets, Article 24 of Directive 96/92/EC provided for the
possibility of establishing transitional regimes to respect previous commitments or guarantees of operation given
to operators before the entry into force of the Directive.
1432
Commission Decision, state aid NN 49/99 -Spain, 25 July 2001, SG (2001) D/290553
1433
EU COM 2001, 'Commission gives Green light to "stranded costs" compensation by Spain, Austria and The
Netherlands', Press Release, Brussels, 25 July 2001, IP/01/1 079
1434
Commission Decision, state aid C 31/2000 - Belgium, Transitory Regime of the electricity market, OJ C 222,
18 Sept 2002
1435
Internal Market is an area without internal frontiers in which the free movement of goods, persons, services
and capital is ensured - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 516
1436
European Commission, state aid N 74/C/2002 - Finland, Aid to power plants, OJ C 148, 25 June 2003 (see
also European Commission, Decision in state aid N 515/98); European Commission, state aid N 175a/2005 -
Germany, Support of demonstration projects for use of energy from renewable sources, OJ C 89, 12 April 2006;
European Commission, Decision of 24 April 2007 concerning state aid granted by Slovenia in the framework of its
legislation concerning qualified energy producers, COM (2007) 1181 final; European Commission, state aid N
567/2007 - Denmark, Modification of electricity production grant, Brussels, 21 December 2007, K (2007) 6876
1437
European Commission, state aid NN/30/B/2000 - The Netherlands, Zero tariff for green electricity, OJ C 30, 2
February 2002 - As it would be the case of renewables not paying a carbon emissions tax, due to the fact that
they do not deliver those emission to the atmosphere
1438
For example: European Commission, state aid N 239/2001 The Netherlands, Partial Exemption of the energy
tax for waste incineration units, OJ C 32, 5 February 2002; European Commission, state aid N 56/2006 - United
Kingdom, climate change levy rebate extension, Brussels, 4 April 2006, C (2006) 1536; European Commission,
state aid N 907/2006 - Hungary, Aid to Mitrai Eromu Zrt - MSF 2002 , Brussels, 10 July 2007, C(2007)3254 final;
European Commission, state aid N391/2006 - Denmark, Tax rate reductions: heat produced in CHPs, heat
produced by electricity and process heat, Brussels, 9 November 2007, C (2007) 5520; European Commission,
state aid N394/2007 - Denmark, non-appliance to wind power plants of lower depreciation rate, Brussels, 13
March 2008, C(2008)1083
1439
For an introduction to the French electricity market see Mathias Dantin, Christophe Lefort, Thomas Herman
and Raphaelle Buot de L'Epine, ‘France’ in Peter Cameron and Raphael Heffron (eds) Legal Aspects of EU
Energy Regulation (Oxford University Press, 2016); See Also Thierry Lauriol, ‘Energy Law in France’ in Martha
Roggenkamp, Catherine Redgwell, Anita Ronne, and Inigo del Guayo (eds) Energy Law in Europe National, EU
and International Regulation (Oxford University Press, 2016)
1440
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851
1441
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160
1442
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1443
Adrien Giraud,’Vents De Colère! – Testing the Limits of PreussenElektra’ (2014) 13(2) European state aid Law
Quarterly 345, 345
1444
Case C-305/89 Italy v Commission ECLI:EU:C:1991:142, para. 14.
1445
AG Jääskinen Opinion - Case C-262/12, Association Vent De Colère! Fédération nationale and Others v
Ministre de l’Écologie, du Développement durable, des Transports et du Logement and Ministre de l’Économie,
des Finances et de l’Industrie ECLI:EU:C:2013:469, Para 31.
1446
Ibid, para 10
1447
Ibid, para 10
1448
Ibid, para 11
1449
Ibid, para 41 & 44
1450
Ibid, para 44
1451
Case C-345/02 Pearle BV, Hans Prijs Optiek Franchise BV and Rinck Opticiëns BV v Hoofdbedrijfschap
Ambachten ECLI:EU:C:2004:448, concerning the finding of an advertising campaign decided upon by the
members of a professional organisation
1452
AG Jääskinen Opinion - Case C-262/12, Association Vent De Colère! Fédération nationale and Others v
Ministre de l’Écologie, du Développement durable, des Transports et du Logement and Ministre de l’Économie,
des Finances et de l’Industrie ECLI:EU:C:2013:469, para 45
1453
Ibid, para 46
1454
Ibid, para 47
1455
Ibid, para 50
1456
Ibid, para 56
1457
Ibid, para 54
1458
Ibid, para 60
1459
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851 para. 45
1460
Ibid, para 16
1461
Case C-482/99, France v Commission, ECLI:EU:C:2002:294, para 23
1462
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851 para 34
1463
Ibid, para 23
1464
Ibid, para 30
1465
Ibid, para 28
1466
Ibid, para 29
1467
Ibid, para 27
1468
Case C-275/13 Elcogas S.A. v Administracion del Estado ECLI:EU:C:2014:2314
1469
Ibid, para 27
1470
Ibid, para 28
1471
Ibid, para 29
1472
Ibid, para 30
1473
Ibid, para 31
3.5.11 Austria1476 - Intensive Energy Users & Exemption from Austrian Green
Levy1477
The case of Austrian Green Levy is another example of a case showing that
renewable support scheme1478 design is critical to the compatibility of the scheme
with the provisions against state aid (Article 107 TFEU). The CJEU in
PreussenElektra1479 showed that a renewables support scheme could be compatible
with state aid provided it was designed and operated correctly. The Vent De
Colère1480case showed that seeking to manage a renewable support scheme via
government-controlled entities was not an appropriate design to allow a finding of
compatibility with state aid for the support scheme. The Austrian Green Levy case
looks at a different aspect of support scheme design, namely the conferral of a
differential advantage due to the exemption of certain users from paying the
applicable green levy to support the payments made to renewable electricity facilities
via the support scheme.
1474
Ibid, para 32
1475
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
1476
For an introduction to the Austrian electricity market see Thomas Starlinger ‘Austria’ in Peter Cameron and
Raphael Heffron (eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016
1477
Case T-251/11 Austria v Commission ECLI:EU:T:2014:1060
1478
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1479
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160
1480
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851
1481
Commission Decision (2008) SA.26036 Aid to energy intensive businesses, Green Electricity Act
(Ökostromgesetznovelle 2008)
1482
Internal Market is an area without internal frontiers in which the free movement of goods, persons, services
and capital is ensured - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 516
1483
Commission Decision (2013) state aid SA.33384 Green Electricity Act 2012, Austria
1484
subsequently the Austrian Federal Minister for the Economy, the Family and Young Persons and then the
Austrian Federal Minister for Science, Research and the Economy
1485
The Green Electricity Act (Ökostromgesetz 2009; Federal Gazette No. 114/2008) - Para 22c (5)
1486
Case T-251/11 Austria v Commission ECLI:EU:T:2014:1060
1487
Ibid, para 37
1488
The ÖMAG was set up by the Austrian Government in 2006 with the express purpose of undertaking the
settlement function with regards to the green levy and the organisation was considered a state concession - Ibid,
para 67
1489
Ibid, para 38
1490
Ibid, para 68
1491
Ibid, para 69
1492
Ibid, para 71
1493
Case T-67/94 Ladbrook Racing v Commission, ECLI:EU:T:1998:7, para 105
1494
Case T-251/11 Austria v Commission, ECLI:EU:T:2014:1060- para 87
1495
C-487/06, British Aggregates Association v Commission and United Kingdom ECLI:EU:C:2008:757, para 86
1496
Case T-251/11 Austria v Commission, ECLI:EU:T:2014:1060- para 118
1497
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851
The case of German Green Levy is the third in a line of state aid cases in the post
PreussenElektra 1500 era where in a similar manner to that in the Austrian Green
Levy1501case the German State sought to exempt certain of its intensive energy
users from the requirement to pay the levy on electricity supplied to end users used
to fund the renewables support scheme. 1502
The promotion of renewable electricity has been one of the cornerstones
of German energy policy since the 1980s.1503 However, the increase in the use of
renewable electricity has not been universally welcomed due to its impact on the
economy and cost structure of intensive energy users.1504
Since PreussenElektra1505 (See Section 3.5.9) German Renewable Energy
law has undergone a number of changes, with the entry into force of the Renewable
Energy Sources Act 2012 (Erneuerbare Energien Gesetz – ‘EEG’).
As outlined above, resulting from lobbying, the Commission published state
aid guidelines 1506 allowing the exemption of certain industry sectors from the
payment of the carbon price. The content of the Commission’s state aid guidelines
is thought to have contributed to the belief within Germany that it could go further in
its renewable energy regulations and exempt intensive energy users from paying
the green levy.1507
1498
For an introduction to the German electricity market see Kai Pritzsche and Sebastian Pooschke, ‘Germany’ in
Peter Cameron and Raphael Heffron (eds) Legal Aspects of EU Energy Regulation (Oxford University Press,
2016); See Also Johann-Christian Pielow and Hans-Martin Koopmann, ‘Energy Law in Germany’ in Martha
Roggenkamp, Catherine Redgwell, Anita Ronne, and Inigo del Guayo (eds) Energy Law in Europe National, EU
and International Regulation (Oxford University Press, 2016)
1499
Commission Decision 2015/1585, Aid Scheme SA 33995 – ‘implemented by Germany for the support of
renewable electricity and of energy-intensive users’, available at http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv%3AOJ.L_.2015.250.01.0122.01.ENG accessed 30 March 2018
1500
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160
1501
Case T-251/11 Austria v Commission ECLI:EU:T:2014:1060
1502
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1503
Staffan Jacobsson and Volkmar Lauber,’ The politics and policy of energy system transformation – explaining
the German diffusion of renewable energy technology’ (2006) 34(3) Energy Policy, 256, 256 – use of Enquete
Commission to define energy policy
1504
Andreas Haak and Michael Brüggemann, ‘Compatibility of Germany’s Renewable Energy Support Scheme with
European state aid Law – Recent Developments and Political Background’ (2016), 15(1) European State Aid Law
Quarterly, 91
1505
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH & Land
Schleswig-Holstein
1506
EU Commission Communication C158/4, ‘Guidelines on Certain state aid Measures in the Context of the
Carbon Emission Allowance Trading Scheme Post 2012’ 5 June 2012
1507
Christian Rammer, Sandra Gottschalk, Michael Peneder, Martin Wörter, Tobias Stucki and Spyros Arvanitis,
‘Does energy policy hurt international competitiveness of firms? A comparative study for Germany, Switzerland
and Austria’ (2017) 109 Energy Policy 154; See Also Ortwin Renna and Jonathan Marshall, ‘Coal, nuclear and
renewable energy policies in Germany: From the 1950s to the “Energiewende”’ (2016) 99 Energy Policy 224;
Bernice Lee, ‘Managing the Interlocking Climate and Resource Challenges’ (2009) 85(6) International Affairs
1101, 1111; See also M Kanellakis, G Martinopoulos and T Zachariadis, ‘European Energy Policy – A Review’
(2013) 62(c) European Energy Policy, 1020, 1029
1508
Erneuerbare Energien Gesetz – “EEG 2012” para 5-7
1509
Ibid para 8-12
1510
Ibid para 16-33
1511
Ibid para 34
1512
Ibid para 35
1513
Ibid para 37
1514
Ibid para 39
1515
Ibid para 40
1516
Ibid para 50
1517
Ibid para 61
1518
Internal Market is an area without internal frontiers in which the free movement of goods, persons, services
and capital is ensured - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 516
1519
Commission Decision 2015/1585, on the aid scheme SA.33995 (2013/C - ex 2013/NN) implemented by
Germany for the support of renewable electricity and of energy-intensive users, C(2014) 8786 final
1520
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281
1521
Case 280/00, Altmark Trans ECLI:EU:C:2008;413
1522
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281, para 46 to 48
1523
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281, para 58
1524
Case 262/12, Associated Vent de Colère ECLI:EU:C:2013:851
1525
Case T-251/11 Austria v Commission ECLI:EU:T:2014:1060
1526
Internal Market is an area without internal frontiers in which the free movement of goods, persons, services
and capital is ensured - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 516
1527
Ibid, para 62
1528
Ibid para 66
1529
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281, para 77
1530
Case C-345/02 Pearle BV, Hans Prijs Optiek Franchise BV and Rinck Opticiëns BV v Hoofdbedrijfschap
Ambachten ECLI:EU:C:2004:448 para 33 - an intervention by the State, through State resources, affect trade
between member states, conferring an advantage on the recipient, distorts, or threaten to distort, competition
1531
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281, para 41
1532
Ibid, para 112
1533
Case T-210/02, British Aggregates v Commission, ECLI:EU:T:2012:110, para 46
1534
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281, para 49
1535
Case C-172/03, Heiser v Finanzamt Innsbruck , ECLI:EU:C:2005:130 para 54
1536
Case C-399/08, Commission v Deutsche Post, ECLI:EU:C:2010:481, para 40
1537
Case C-71/09, Comitato ‘Venezia vuole vivere’ v Commission, ECLI:C:2011:368 para 94
1538
Services of general economic interest are economic activities that public authorities identify as being of
particular importance to citizens and that would not be supplied (or would be supplied under different conditions) if
there were no public intervention - examples being transport networks, postal services and social services - EU
Communication 2012/C 8/02, ‘State aid rules to compensation granted for the provision of services of general
economic interest’OJ C8/4; See Also EU Communication ‘Services of General Interest In Europe’ OJ 2001 C17 –
this was confirmed in April 2018 via Case C-91/17 Cellnex Telecom v Commission ECLI:EU:C:2018:284 – where
is was held that (i) state intervention is justified only when there is market failure, meaning that before a public
service obligation (PSO) is imposed, the market failure must be demonstrated with objective evidence, (ii) A PSO
must be clearly defined, (iii) one or more undertakings must be made responsible, by law or through contract, to
supply the service, and (iv) the selection of the supplier(s) and well as their compensation must be determined
according to the procedures laid down in the 2012 Services of General Economic Interest EU Framework; See
Also Giulio Napolitano,’Towards a European Legal Order for Services of General Economic Interest’ (2005) 11(4)
European. Public Law, 565
1539
Case C280/00, Altmark Trans GmbH and Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft
Altmark GmbH, and Oberbundesanwalt beim Bundesverwaltungsgericht ECLI:EC:C:2003:415
1540
Case T-385/12 Orange v Commission, ECLI:EU:T:2015:117, para 43
1541
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281, para 64
1542
Ibid para 68
1543
Case C-106/09 Commission & Spain v Gibraltar & UK, ECLI:EU:C:2011:732 para 146
1544
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281, para 68
1545
Case C-482/99, France v Commission, EU:C:2002:294 para 23
1546
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281, para 94
1547
Case C-206/06 Essent Netwerk Noord BV v Nederlands Elektriciteit Administratiekantoor BV and Saranne BV,
EU:C:2008:413 para 43 to 47
1548
Case T-251/11, Austria v Commission, ECLI:EU:T:2014:1060
1549
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281, para 128
1550
Case T-67/94, Ladbroke Racing v Commission, EU:T:1998:7, para 106 to 108
1551
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281, para 127
1552
M E Porter and C van der Lind, ’Toward a new conception of the Environmental-Competitiveness Relationship’
(1995) 9(4) The Journal of Economic Perspectives, 97
1553
Case C-5/94 R v Ministry of Agriculture Fisheries & Food ex parte Hedley Lomas ECLI:EU:C:1996:205, para
20
1554
Case C-288/96 Germany v Commission ECLI: EU:C:2000:537, para 88 to 91; Case C-156/98 Germany v
Commission ECLI: EU:C:2000:467, para 30; Case C-459/10P Freistaat Sachsen and Land Sachsen-Anhalt v
Commission ECLI:EU:C:2011:515, para 33 to 36
1555
Renewable Energy Sources Act 2014 (Erneuerbare Energien Gesetz – ‘EEG 2014’)
1556
European Commission, Decision of 19 December 2017 Reduced surcharge for self-generation under EEG
2017 SA.38632
1557
Commission Decision of 28 March 2018 relating to the offshore-surcharge reduction for railway undertakings in
Germany SA.50395; See also Commission Decision of 28 March 2018 relating to reductions in the offshore
surcharge for electro-intensive undertakings and reductions on the CHP surcharge for electricity produced from
waste gases in Germany SA.49416
1558
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851
1559
Case T-251/11 Austria v Commission ECLI:EU:T:2014:1060
1560
Case C-345/02 Pearle BV, Hans Prijs Optiek Franchise BV and Rinck Opticiëns BV v Hoofdbedrijfschap
Ambachten ECLI:EU:C:2004:448 para 33
1561
Case T-177/10, Alcoa Trasformazioni v Commission, ECLI:EU:T:2014:897
1562
Case C-280/00 Altmark Trans GmbH and Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft
Altmark GmbH, and Oberbundesanwalt beim Bundesverwaltungsgericht ECLI:EU:C:2003:415.
1563
‘support scheme’ means ‘any instrument, scheme or mechanism applied by a Member State or a group of
Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy,
increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or
otherwise, the volume of such energy purchased. This includes, but is not restricted to, investment aid, tax
exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green
certificates, and direct price support schemes including feed-in tariffs and premium payments’ – Definition from
Article 2 Renewable Energy Directive (2009/28/EC)
1564
European Commission, Decision of 19 December 2017 Reduced surcharge for self-generation under EEG
2017 SA.38632
3.5.13 State Aid Embedded Benefits & Network Access - Essent 21566
The Essent 2 case shows the difference in approach taken by the CJEU in relation
to network access1567 compared to access to the national support scheme from
renewable electricity. The judgement held that legislation of the Flemish Region in
Belgium, limiting distribution of renewable electricity to that produced by generators
connected to distribution systems in Belgium, was in breach of EU Treaty rules on
free movement, as well as the provisions of the 1996 and 2003 Electricity
Liberalisation Directives and the 2001 Renewable Energy Directive1568 (the version
of the Directive in force at the applicable time).The judgement contrasts with the
Court's judgements in Essent 11569 (Section 3.5.1) and Ålands Vindkraft1570 (Section
3.5.2) which held that limiting the national renewables support scheme to
domestically generated renewable electricity was not in breach of the free movement
of goods. This judgment sets out a wider principle that national transmission and
1565
Commission Decision of 28 March 2018 relating to the offshore-surcharge reduction for railway undertakings in
Germany SA.50395; See also Commission Decision of 28 March 2018 relating to reductions in the offshore
surcharge for electro-intensive undertakings and reductions on the CHP surcharge for electricity produced from
waste gases in Germany SA.49416
1566
Case C-492/14 Essent Belgium NV v Vlaams Gewest and Others ECLI:EU:C:2016:732
1567
Priority network access is the obligation placed on member states to establish transparent and proportionate
administrative procedures for the conclusion of network connection for renewable electricity facilities in
accordance with Article 13 and 16 of the Renewable Energy Directive
1568
EU Directive (2001/77/EC) 27 September 2001 ‘The promotion of electricity produced from renewable energy
sources in the internal electricity market’ OJ L 283/33
1569
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ELCI:EU:C:2014:2192
1570
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
1571
Third Party Access (TPA) is a legally enforceable right of independent undertakings to access and use, in
certain circumstances, various energy network facilities owned by other companies.
1572
Case C-492/14 Essent Belgium NV v Vlaams Gewest and Others ECLI:EU:C:2016:732, para 33
1573
Ibid, para 34
1574
Ibid, para 36
1575
Ibid, para 53
1576
Ibid, para 58 – referring to Recital 14 of 2001 renewable Energy Directive and Case C-66/13 Green Network
SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2014:2399, para 52 confirming the Recital was simply a
list and not a mandatory obligation to implement all features listed
1577
Ibid, para 60
1578
Ibid, para 61
1579
Ibid, para 65
1580
Ibid, para 68
1581
Directive 2003/54 concerning common rules for the internal market in electricity and repealing Directive 96/92
[2003] OJ L176/37
1582
Case C-492/14 Essent Belgium NV v Vlaams Gewest and Others ECLI:EU:C:2016:732, para 69
1583
Ibid, para 70 to 75
1584
Ibid, para 80 – confirming Case C-17/03 Vereniging voor Energie Milieu en Water v Directeur van de Dienst
Uitvoering en Toezicht Energie para 47
1585
Ibid, para 82 to 85
1586
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
1587
Ibid, para 83
1588
Ibid, para 84
1589
Ibid, para 87
1590
Ibid, para 96
1591
Ibid, para 98
1592
Ibid, para 92
1593
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
1594
Case C-492/14 Essent Belgium NV v Vlaams Gewest and Others ECLI:EU:C:2016:732, para 100
1595
Ibid, para 101
1596
Ibid, para 104
1597
Ibid, para 105
1598
Joined cases C-204–208/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en
Gasmarkt ECLI:EU:C:2014:2192
1599
Case C-492/14 Essent Belgium NV v Vlaams Gewest and Others ECLI:EU:C:2016:732, para 107
1600
Ibid, para 112
1601
Ibid, para 113
1602
Ibid, para 116
1603
Ibid, para 117
1604
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ELCI:EU:C:2014:2192
1605
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
1606
Case C-492/14 Essent Belgium NV v Vlaams Gewest and Others ECLI:EU:C:2016:732
1607
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
1608
Case 240/83 Procureur de la République v Association de Défense des Brûleurs d'Huiles Usagées
ECLI:EU:C:1985:59, para 13
1609
Case 302/86, Commission v Denmark ECLI:EU:C:1988:421, para 8 & 9
Free Movement
The three cases outlined (Essent 11612 Ålands Vindkraft1613 and Green Network1614)
show a progression from the simple application of the ADBHU 1615 and Danish
Bottle1616 justification for applying an exception to the requirement to enforce free
movement of goods, to a subtler application of a restriction to only access to the
renewable electricity support scheme rather than a free movement restriction, to
actual flows of renewable electricity in Essent 2.1617
. The Ålands Vindkraft1618case shows that the CJEU is willing to enforce a
member state by member state focussed renewable support scheme rather than
applying a wider interpretation of the need to support renewables. The case is a
missed opportunity to give equal weight to the network provisions (Article 170TFEU
and 194(1)(d)TFEU) and provide the widest support to renewables required by
Article 194(1)(c)TFEU.
The Green Network 1619 case brings out the competence issue related to
renewable electricity origin recognition agreements. The case confirms that the
Commission has exclusive competence to negotiate a renewable electricity original
recognition agreement with third countries.
1610
Case C-126/01 Ministère de l'Économie, des Finances et de l'Industrie v GEMO ECLI:EU:C:2003:622, para.
31 to 34. AG Jacobs had considered that ‘the provision free of charge of a collection and disposal service for
dangerous animal waste [was relieving the] … farmers and slaughterhouses of an economic burden which would
normally, in accordance with the polluter-pays principle, have to be borne by those undertakings’. See Opinion AG
Jacobs in Case C-126/01 Ministère de l'Économie, des Finances et de l'Industrie v GEMO ECLI:EU:C:2002:273,
para. 64
1611
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
1612
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ELCI:EU:C:2014:2192
1613
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
1614
Case C‑66/13 Green Network SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2014:2399
1615
Case 240/83 Procureur de la République v Association de Défense des Brûleurs d'Huiles Usagées
ECLI:EU:C:1985:59, para 13
1616
Case 302/86, Commission v Denmark ECLI:EU:C:1988:421, para 8 & 9
1617
Case C-492/14 Essent Belgium NV v Vlaams Gewest and Others ECLI:EU:C:2016:732
1618
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
1619
Case C‑66/13 Green Network SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2014:2399
The PreussenElektra1621 and the Essent 11622 judgements show that the CJEU is
prepared to apply an overriding objective criterion in the support of renewable
electricity in terms of price in conflict with the provisions of Article 107(1)TFEU which
restricts the fixing of prices or other trading conditions which would be distortive of
competition.
1620
EU Directive 2014/24/EU ‘Directive on Public Procurement’ OJ L 94
1621
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160
1622
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt
ELCI:EU:C:2014:2192
1623
Luis Avilés, ‘Sustainable development and environmental legal protection in the European Union: A model for
Mexican courts to follow?’ (2014) 6(2) Mexican Law Review, 251
1624
Luis Avilés, ‘Sustainable development and environmental legal protection in the European Union: A model for
Mexican courts to follow?’ (2014) 6(2) Mexican Law Review, 251 Ibid
1625
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160
1626
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851
1627
Case T-251/11 Austria v Commission ECLI:EU:T:2014:1060
1628
Commission Decision 2015/1585, Aid Scheme SA 33995 ‘implemented by Germany for the support of
renewable electricity and of energy-intensive users’, available at http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv%3AOJ.L_.2015.250.01.0122.01.ENG accessed 30 March 2018
1629
Case C‑349/17 Eesti Pagar v Ettevõtluse Arendamise Sihtasutus,ECLI:EU:C:2019:172
1630
EU Regulation No 1588/2015 on the application of Articles 107 and 108 of the Treaty on the Functioning of the
European Union to certain categories of horizontal State aid, OJ 2015 L 248/1, and European Commission,
Regulation (EU) No651/2014 declaring certain categories of aid compatible with the internal market in application
of Articles 107 and 108 of the Treaty,OJ 2014 L 187/1. General Block Exemption Regulations for State aid
('GBER')
1631
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy 2014
– 2020, 2014/C OJ 200/01
1632
Commission Decision 2015/1585, Aid Scheme SA 33995 –“ implemented by Germany for the support of
renewable electricity and of energy-intensive users”, available at http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv%3AOJ.L_.2015.250.01.0122.01.ENG accessed 30 March 2018
1633
Case C-313/90 Comité International de la Rayonne et des Fibres Synthétiques v Commission
ECLI:EU:C:1993:111, para. 36; See Also Case C-351/98 Spain v Commission ECLI:EU:C:2002:530, para 53
3.6 Emissions Trading Directive 1634 & Conflicts with EU Free trade Principles
The main features of the Emissions Trading Directive were outlined in Section
2.10.1. The Directive has facilitated the setting up of the EU emissions trading
scheme (EU-ETS). The EU-ETS is a cap and trade system which works by setting
limits on overall emissions in line with the emissions allowances available, with the
number of allowances reducing overtime. Within the limit of emissions, companies
may buy and sell allowances as needed to match their actual emissions. The market
mechanism provided by the EU-ETS as well as providing a market to trade
emissions allowances, has the overall aim of reducing emissions overtime.
This section sets out the basic conflicts between the Directive, the Treaty
and elements of the EU’s free trade principles. It should be recalled that the Directive
is market in style and falls within the competency1635 of the Commission, 1636 except
for the national emissions allowance allocation plans which are within the
competence of the member states. 1637
1634
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
1635
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
1636
Case T-370/11 Poland v Commission, ECLI:EU:T:2013:113
1637
Case C-505/09 Commission v Estonia ECLI:EU:C:2012:179
The Commission has the overall competence for the Emission Trading Directive1639
and the EU-ETS.1640 However, during the initial trading period the Directive required
the allocation of emission allowances in accordance with the national allocation
plans (NAP - Directive Article 11(2)). Following the development of an allocation plan
by Estonia, the Commission undertook a review of the plan in accordance with
Directive Article 9(3) and sought a reduction in the allocation of allowances by
47.8%.1641 The Commission then sought to substitute an allocation plan of its own
to manage what it saw as an over allocation of allowances.
The CJEU subsequently determined the limit of the competence of the
Commission and the member state in relation to the EU-ETS and the NAP. It was
held by the CJEU that the Commission was required to undertake a review of the
NAP in accordance with the provisions of Annex III of the Directive, essentially a
legal review, 1642 and that the review was to consider, firstly, if the volume of
allowances in the national plan were consistent with the actual and projected
emissions such as to allow the EU as a whole to meet its Kyoto commitments, and
secondly, if the plan had been made in such a manner that it did not discriminate
between undertakings so as to favour certain market participants and especially in
the context of Articles 87 and 88 TEC (now 107 and 108 TFEU – state aid).1643
The CJEU held that the Commission as part of its review, or as an outcome
of the review, does not have the competence to substitute its own allocation plan for
that of the member state.1644 The CJEU went on to say that the member state has
1638
Case C-505/09 Commission v Estonia ECLI:EU:C:2012:179
1639
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
1640
Case T-370/11 Poland v Commission, ECLI:EU:T:2013:113
1641
Case C-505/09 Commission v Estonia ECLI:EU:C:2012:179, para 8
1642
Ibid, para 49 and 82
1643
Ibid, para 7
1644
Ibid, para 63
1645
Ibid, para 66
1646
Ibid, para 121
1647
Case C-505/09 Commission v Estonia ECLI:EU:C:2012:179
1648
Annex III - Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading
allowance trading within the Community OJ L 275, 25.10.2003 the Directive was amended by Directive 2009/29
‘To improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
1649
Case C-239/01 Germany v Commission ECLI:EU:C:2003:514 para 37 and Case C-244/03 France v
Parliament & Council ECLI:EU:C:2005:299, para 14
The Borealis Polyolefine case can at one level be considered to be going over the
same ground as that analysed in Estonia,1651that being one of competence and over
allocation. However, this later case shows that the Commission’s Guidelines on
state aid from Emissions Allowances1652 had moved on from the Estonia period and
were now very much focussed on the EU-ETS as it was operating at the time
following considerable lobbying by member states and industry players.
From the commencement of the third EU-ETS trading period in 2013 the
Commission undertook the allocation of emissions allowances in a top down
process. The Borealis Polyolefine case concerns a preliminary ruling relating to the
validity of a Commission Decision 1653 determining the transitional EU-wide and
national rules for the harmonised free allocation of emission allowances pursuant to
Articles 9(3), 10(a) and 11(2) of the Emission Trading Directive.1654
Within the context of the EU-ETS, Borealis maintained it was eligible for a
free allocation of allowances for the period from 2013 to 2020 as the operator of a
cogeneration 1655 plant. Borealis maintained that the Commission should have
1650
Joined Cases C-191/14 and C-192/14 Borealis Polyolefine GmbH v Bundesminister für Land- und
Forstwirtschaft, Umwelt und Wasserwirtschaft ECLI:EU:C:2016:311
1651
Case C-505/09 Commission v Estonia ECLI:EU:C:2012:179
1652
Commission Communication 5 June 2012 ‘Guidelines on certain State aid measures in the context of the
greenhouse gas emission allowance trading scheme post-2012’ OJ 2012/C 158/04
1653
Commission Decision 2011/278/EU of 27 April 2011 determining transitional Union-wide rules for harmonised
free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC (Emissions Trading
Directive)
1654
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To improve
and extend the carbon emission trading scheme of the Community’ OJ L140/63
1655
Cogeneration is the production electricity and heat from the same facility
1656
Joined Cases C-191/14 and C-192/14 Borealis Polyolefine GmbH v Bundesminister für Land- und
Forstwirtschaft, Umwelt und Wasserwirtschaft ECLI:EU:C:2016:311, para 61
1657
Recital 19 to the Emission Trading Directive 2009/29/EC
1658
Ibid, para 82
1659
Ibid, para 76
1660
Ibid, para 83
1661
Ibid, para 92
1662
The allocation for free of EU-ETS allowance on the basis of historic emission patterns. With the view that prior
emissions increased entitlements to future emissions allowances - Carl Knight, ‘What is grandfathering?’ (2013)
22(3) Environmental Politics, 410 See Also Mehdy Abbas Khayli ‘The Roles Played by the Polluter Pays Principle
in state aid Law’ (2013) 6 Jean Monnet Working Paper Series available at www.tradevenvironment.eu accessed
28 October 2017
1663
Case C-482/99, France v Commission, ELCI:EU:C:2002:294, para 52
1664
Case T-387/04, EnBW Energie Baden-Württemberg v Commission ECLI:EU:T:2007:117, para 23
1665
Commission Communication 5 June 2012 ‘Guidelines on certain State aid measures in the context of the
greenhouse gas emission allowance trading scheme post-2012’ OJ 2012/C 158/04
1666
Guendalina Catti De Gasperi, ‘Making State Aid Control “Greener”: The EU Emissions Trading System and its
Compatibility with Article 107 TFEU’ (2010) 9(4) European State Aid Law Quarterly, 785,792-793
1667
Case T-459/93 Siemens v Commission ECLI:EU:T:1995:100, para 52
1668
Commission Communication 5 June 2012 ‘Guidelines on certain State aid measures in the context of the
greenhouse gas emission allowance trading scheme post-2012’ OJ 2012/C 158/04
1669
Soft-Law can be defined as any instrument other than a Treaty or a Statute, containing principles, norms,
standards or other statements of expected behaviour, it can also be market rules developed from an instrument –
See Dinah Shelton, ‘International Law and Relative Normativity’ in Malcom Evans (ed) International Law (4th
Edition Oxford University Press, 2014), 137, 159
1670
Case C-313/90 Comité International de la Rayonne et des Fibres Synthétiques v Commission
ECLI:EU:C:1993:111, para. 36; See Also Case C-351/98 Spain v Commission ECLI:EU:C:2002:530, para 53
1671
Sanja Bogojević EU Climate Change Litigation, the Role of the European Courts, and the Importance of Legal
Culture (Wiley, 2013), 50
1672
Internal Market is an area without internal frontiers in which the free movement of goods, persons, services
and capital is ensured - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 516
1673
Case 540/14 DK Recycling und Roheisen GmbH v Commission ECLI:EU:C:2016:469; para 49
The Borealis Polyolefine 1675 case outlined the issues surrounding the state aid
implications of a general position of free allocation of emissions allowances. The DK
Recycling case looks at the position due to the introduction of a hardship clause,
and the consequent ‘case-by-case’ approach that this would entail, which could be
argued to increase the diversity of state aid issues in relation to the EU-ETS rather
than progressing to a harmonised position.
Germany implemented Commission Decision 1676 2011/27843 on the
transitional EU rules for harmonised free allocation of emission allowances via a law
on carbon emissions trading (Treibhausgas-Emissionshandelsgesetz, ‘TEHG’) in
2011. Within TEHG, Article 9(5) allowed for the allocation of additional free emission
allowances to organisations for which the allocation based on Article 10 of the
Emission Trading Directive, without the additional free allowances, would result in
‘undue hardship’. Emissions Directive Article 11 requires member states to submit
to the Commission a list of organisations to which free allowances will be allocated
and the quantity of such. In accordance with this requirement, Germany submitted
its national allocation plan, which included DK Recycling on the basis of ‘undue
hardship’. The Commission rejected the allocation plan in Decision 2013/448.1677
The Commission stating that the Emissions Trading Directive was drafted to ensure
harmonisation of the rules relating to free allocation. This harmonised approach
would thus be undermined by an individual analysis of ‘hardship’. The Commission
going on to submit that assigning extra-allowances to certain installations would
distort, or threaten to distort, competition, hence would have an EU-wide effect on
trade, in violation of the principle of equal treatment1678 and be state aid due to the
conferral of this advantage by the state.
1674
Case 540/14 DK Recycling und Roheisen GmbH v Commission ECLI:EU:C:2016:469
1675
Joined Cases C-191/14 and C-192/14 Borealis Polyolefine GmbH v Bundesminister für Land- und
Forstwirtschaft, Umwelt und Wasserwirtschaft ECLI:EU:C:2016:311
1676
Commission Decision (2011/278/EU) of 27 April 2011 ‘determining transitional Union-wide rules for
harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC [Emissions
Trading Directive]’ OJ L 130/1
1677
Commission Decision 2013/448/EU of 5 September 2013 concerning national implementation measures for
the transitional free allocation of carbon emission allowances in accordance with Article 11(3) of Directive
2003/87/EC
1678
Recital 11 of Decision 2013/448
1679
Case T- 630/13 DK Recycling und Roheisen GmbH v Commission ECLI:EU:T:2014:833
1680
Case 540/14 DK Recycling und Roheisen GmbH v Commission ECLI:EU:C:2016:469
1681
Ibid, para 46-47
1682
Case C-505/09 Commission v Estonia ECLI:EU:C:2012:179, para 121
1683
Case 540/14 DK Recycling und Roheisen GmbH v Commission ECLI:EU:C:2016:469, para 48
1684
Ibid, para 49
1685
Ibid, para 50-53
This section outlines the conflicts between the Emissions Trading Directive1691 and
the ‘polluter pays’ principle as well as how relief from the principle can be regarded
as state aid.
The ‘polluter pays principle’ is one of the cornerstones of international as well
as EU environmental law.1692 The principle being articulated by the OECD in 1972
and 1974 as a means of allocating costs to encourage rational use of scarce
environmental resources such that the costs of pollution are internalised by the
1686
Ibid, para 55
1687
Case C-551/14 Arctic Paper Mochenwangen v Commission ECLI:EU:C:2016:684; Case C-564/14 Raffinerie
Heide GmbH v Commission ECLI:EU:C:2016:685; Case C-565/14 Romonta v Commission ECLI:EU:C:2016:698
1688
Case 540/14 DK Recycling und Roheisen GmbH v Commission ECLI:EU:C:2016:469
1689
Joined Cases C-191/14 and C-192/14 Borealis Polyolefine GmbH v Bundesminister für Land- und
Forstwirtschaft, Umwelt und Wasserwirtschaft ECLI:EU:C:2016:311
1690
Stefan Weishaar and Edwin Woerdman ‘Does Auctioning Emission Rights Avoid State Aid? Empirical
Evidence from Germany’ (2012) 6(2) Carbon & Climate Law Review, 114, 115
1691
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
1692
Kleoniki Pouikli ‘The Polluter Pays Principle and the EU State Aid Law for Environmental Protection’ (2016) 55
Journal of Law, Policy and Globalization, 19, 19
1693
Muhammad Munir, ‘History and Evolution of the Polluter Pays Principle: How an economic idea became a
legal principle?’ (2013) Social Science Research Network
1694
OECD ‘The Polluter Pays Principle: Definition, Analysis, Implementation’ [1975] OCED Publishing, 117, 12
1695
Kleoniki Pouikli ‘The Polluter Pays Principle and the EU State Aid Law for Environmental Protection’ (2016) 55
Journal of Law, Policy and Globalization, 19, 21
1696
Case C-254/08 Futura Immobiliare srl Hotel Futura v Comune di Casoria ECLI:EU:C:2009:479, para 45; See
Also Case C-378/08 Raffinerie Mediterranee (ERG) SpA, Polimeri Europa SpA and Syndial SpA v Ministero dello
Sviluppo economico ECLI:EU:C:2010:126, paras 57 and 67
1697
Case C-1/03 Ministère public v Paul van de Walle ECLI:EU:C:2004:67, para 60
1698
Case C-97/11 Amia SpA, in liquidation v Provincia Regionale di Palermo ECLI:EU:C:2012:306, paras 35 and
37
1699
Combustion (burning), is a high-temperature exothermic chemical reaction between a fuel and oxygen (usually
from air), that produces oxidised gaseous products and some particulates (soot), in a mixture termed as smoke -
Klaus Schmidt-Rohr, ‘Why Combustions Are Always Exothermic, Yielding About 418 kJ per Mole of O2’ (2015)
92(12) Journal of Chemical Education, 2094
1700
Timo Korpela, Tomas Björkqvist, Yrjö Majanne and Pentti Lautala ‘Online monitoring of flue gas emissions in
power plants having multiple fuels’ (2014) 47(3) International Federation of Automatic Control, 1355
1701
Case C-1/03 Ministère public v Paul van de Walle ECLI:EU:C:2004:67, para 42-53 ; See Also Case C-188/07
Commune de Mesquer v Total France SA and Total International Ltd ECLI:EU:C:2008:359 par 49-63 ; For an
introduction to the issue of energy waste management, see Raphael Heffron and Kim Talus. ‘The evolution of
energy law and energy jurisprudence: Insights for energy analysts and researchers’ (2016) 19 Energy Research &
Social Science 1
1702
Case C-254/08 Futura Immobiliare srl Hotel Futura v Comune di Casoria ECLI:EU:C:2009:479, para 64-67;
See also Case C-293/97 R v Secretary of State for the Environment and Ministry of Agriculture, Fisheries and
Food, exp Standley and Metson ECLI:EU:C:1999:215 para 51-52
1703
Case C-505/09 Commission v Estonia ECLI:EU:C:2012:179
1704
Joined Cases C-191/14 and C-192/14 Borealis Polyolefine GmbH v Bundesminister für Land- und
Forstwirtschaft, Umwelt und Wasserwirtschaft ECLI:EU:C:2016:311
1705
Case 540/14 DK Recycling und Roheisen GmbH v Commission ECLI:EU:C:2016:469
1706
Simon Caney and Cameron Hepburn, ‘Carbon trading: unethical, unjust and ineffective?’ [2011] Grantham
Research Institute on Climate Change and the Environment Working Paper No. 49
As set out above, the EU-ETS which is established in accordance with the Article
191(1) TFEU is in diagonal conflict (See Section 1.2) with the state aid and vertical
conflict with the ‘polluter pays’ principle. The findings in relation to these conflicts are
outlined below.
State Aid
The EU-ETS1712 as a market based instrument had the ability to form a harmonised,
EU-wide trading platform for emissions. However, during the EU-ETS’s initial two
trading periods the vast majority of the allowances were issued for free and also
1707
Opinion of Advocate General Jacobs Case C-126/01 Ministère de l'Économie, des Finances et de l'Industrie v
GEMO ECLI:EU:C:2002:273, para 69
1708
Case C-126/01 Ministère de l'Économie, des Finances et de l'Industrie v GEMO ECLI:EU:C:2003:622, para.
31. AG Jacobs had considered that ‘the provision free of charge of a collection and disposal service for dangerous
animal waste [was relieving the] … farmers and slaughterhouses of an economic burden which would normally, in
accordance with the polluter-pays principle, have to be borne by those undertakings’. See Opinion AG Jacobs in
Case C-126/01 Ministère de l'Économie, des Finances et de l'Industrie v GEMO ECLI:EU:C:2002:273, para. 64).
1709
Benjamin Sovacool, ‘Reviewing, Reforming, and Rethinking Global Energy Subsidies: Towards a Political
Economy Research Agenda’ (2017) 135 Ecological Economics, 150; Also on energy subsidies in general see
Angus Johnston, Raphael Heffron and Darren McCauley, ‘Rethinking the scope and necessity of energy subsidies
in the United Kingdom’ (2014) 3 Energy Research & Social Science, 1
1710
Jonathan Aldred ‘The Ethics of Emissions Trading’ (2012) 17(3) New Political Economy; See also Edward
Page ‘The hidden costs of carbon commodification: emissions trading, political legitimacy and procedural justice’
(2012) 19(5) Democratization, 932
1711
Edward Page Ethics of Emissions Trading (Wiley, 2013)
1712
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
Polluter Pays
It is argued that the ‘polluter pays’ principle is a mandatory requirement contained in
Article 191(2) TFEU. Therefore, any instrument of secondary EU legislation which
provides a means of not complying with the ‘polluter pays’ principle conflicts with the
Article 191(2) TFEU. The analysis undertaken above shows that the EU-ETS
conflicts with the ‘polluter pays’ principle and thus Article 191(2) TFEU. Additionally,
the EU-ETS has been shown to conflict with the previous judgements of the CJEU.
3.7 Conclusion
An individual analysis of the conflicts related to each of the two Directives has been
given in Sections 3.5.14 (Renewable Energy Directive)1713 and 3.6.5 (Emissions
Trading Directive) 1714 and as such will not be repeated here.
The use of the lex specialis approach seems to be consistently applied by
the CJEU, however, as we will see from the empirical findings, practitioners within
the sector are concerned with the longevity of this approach, given that the CJEU
once held1715 that any kind of measure put in place by the Commission must not be
contrary to the specific provisions of the Treaty, in particular free movement of goods
or state aid.
The CJEU could thus be seen to be following a Dworkin constructive
approach to interpretation looking at political or moral concerns, related to climate
change.1716
1713
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
1714
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
1715
Case C-225 Matra v Commission ECLI:EU:C:1993:239, para 41
1716
Ronald Dworkin Law's Empire (Harvard University Press, 1987), 191
1717
Norman Denzin and Yvonna Lincoln Handbook of Qualitative Research (5th edn, Sage, 2018)
1718
Gregor Kungl and Frank Geels, ‘The Destabilisation of the German Electricity Industry (1998-2015):
Application and Extension of a Multi-dimensional Framework’ [2016] SOI Discussion Paper 2016-02 – including
22 interviews, considering all industry sectors not just renewables
1719
Anna Bergek, Ingrid Mignon and Gunnel Sundberg, ‘Who invests in renewable electricity production?
Empirical evidence and suggestions for further research’ (2013) 56 Energy Policy, 568
1720
Andrea Masini and Emanuela Menichetti, ‘The impact of behavioural factors in the renewable energy
investment decision making process: Conceptual frame work and empirical findings’ (2012) 40 Energy Policy, 28
1721
Ingrid Mignon and Anna Bergek, ‘Investments in renewable electricity production: The importance of policy
revisited’ (2016) 88 Renewable Energy, 307
1722
Sotirios Sarantakos Social Research (Palgrave Macmillan, 2005)
1723
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80
1724
Geert van Calster,’ Climate Change and Renewable Energy as a Super Trump for EU Trade Law
However all Essent clear’ (2014) 1 2014 Renewable Energy Law & Policy Review, 60
1725
Catherine Barnard, The Substantive Law of the EU: The Four Freedoms, (Oxford University Press 2007)
1726
M Sandelowski, ‘Using qualitative research’ (2004) 14 Qualitative Health Research, 1366
1727
William Harvey, ‘Strategies for Conducting Elite Interviews’ (2011) 11(4) Qualitative Research, 431; See Also
Joseph Hair, Arthur Money, Phillip Samouel and Mike Page Research Methods for Business (Wiley, 2007), 295
1728
David Silverman Interpreting Qualitative Data (SAGE, 2014); See Also Lorelli Nowell, Jill Norris, Deborah
White and Nancy Moules, ‘Thematic Analysis: Striving to Meet the Trustworthiness Criteria’ (2017) 16(1)
International Journal of Qualitative Methods; See also Moira Maguire and Brid Delahunt, ‘Doing a Thematic
Analysis: A Practical, Step-by-Step Guide for Learning and Teaching Scholars’ (2017) 8(3) All Ireland Journal of
Teaching and Learning in Higher Education
1729
Dvora Yanow and Peregrine Schwartz-Shea Interpretation and Method: Empirical Research Methods and the
Interpretive Turn (Routledge, 2014); See also Alan Bryman Social Reseach Methods (Oxford Univeristy Press,
2012)
1730
Robert Yin Case study research: design and methods ( 2nd ed., Sage, 1994)
1731
A theme being defined as a coherent synthesis of the data that constitute a finding – M Sandelowski and J
Leeman, ‘Writing usable qualitative health research findings; (2012) 22 Qualitative Health Research, 1404
1732
Liam McHugh-Russell, ‘Qualitative Methods for Law and Society Research—An EUI Research Guide’ [2016]
University of Edinburgh Working Paper; See Also Liz Spencer, Jane Ritchie and William O’Connor, ‘Analysis:
Practices, principles and processes’ in Jane Ritchie and Jane Lewis (eds). Qualitative Research Practice: A Guide
for Social Sciences Students and Researchers (1st edn. Sage, 2003), 199; See Also Michael Bloor and Fiona
Wood , Keywords in Qualitative Methods: A Vocabulary of Research Concepts (1st edn, SAGE, 2006); See Also
Virginia Braun and Victoria Clarke, ‘Using thematic analysis in psychology’ (2006) 3(2) Qualitative Research in
Psychology, 77; David Silverman Interpreting Qualitative Data (SAGE, 2014)
1733
Martyn Hammersley and Paul Atkinson Ethnography: Principles in Practice (3rd ed, Routledge, 2007)
1734
Herbert Rubin and Irene Rubin Keeping on Target while Hanging Loose Designing Qualitative Interviews in
Herbert Rubin and Irene Rubin (eds) Qualitative Interviewings: the Art of Hearing Data (SAGE, 1995); See Also
Alan Bryman Social Research Methods (4th Ed, Oxford University Press, 2012), 471; See Also Reza Banakar, ‘On
the Paradox of Contextualisation’, in Reza Banakar (ed.), Normativity in Legal Sociology: Methodological
Reflections on Law and Regulation in Late Modernity (Springer, 2014), 91; Robin Leidner Fast Food, Fast Talk
Service Work and the Routinization of Everyday Life (University of California Press, 1993), 238
1735
Alan Beardsworth and Teresa Keil, ‘The vegetarian option: varieties, conversions, motives and careers’ (1992)
40(2) The Sociological Review, 253
1736
Christine Dearnley, ‘A reflection on the use of semi-structured interviews’ (2005) 13(1) Nurse Researcher, 19
1737
H Sommerland ‘Researching and Theorising the Processes of Professional Idenitity Formation’ (2007) 34(2)
Journal of Law of Society, 190; See also Owen Doody and Maria Noonan, ‘Preparing and conducting interviews to
collect data’ (2013) 20(5) Nurse Researcher 28
1738
William Harvey, ‘Strategies for conducting elite interviews’ (2011) 11(4) Qualitative Research, 431, 433; See
also Ursula Plesner, ‘Studying sideways: Displacing the problem of power in research interviews with sociologists
and journalists’ (2011) 17(6) Qualitative Inquiry, 471, 473
1739
Peter Burnham, Karin Gill Lutz, Wyn Grant and Zig Layton-Henry Elite Interviewing (Palgrave Macmillan,
2008); Jeffery Berry, 'Validity and Reliability Issues in Elite Interviewing' (2002) 35(4) Political Science and
Politics, 679; Catherine Marshall, 'Elites, Bureaucrats, Ostriches, and Pussycats: Managing Research in Policy
Settings' (1984) 15(3) Anthropology and Education Quarterly, 235; Linda McDowell, 'Elites in the City of London:
some methodological considerations' (1998) 30 Environment and Planning, 2133
1740
Karen Duke, ‘Getting beyond the ‘Official Line’: Reflections on dilemmas of access, knowledge and power in
researching policy networks’ (2002) 31(1) Journal of Social Policy, 39
1741
The researcher was at all times during the research a manager within EDF Renewables offshore wind
construction division
1742
William Harvey, ‘Strategies for conducting elite interviews’ (2011) 11(4) Qualitative Research, 431; See also
Catherine Welch, Rebecca Marschan-Piekkari, Heli Penttinen and Marja Tahvanainen, ‘Corporate Elites as
Informants in Qualitative International Business Research’ (2002) 11(5) International Business Review, 611;
Robert Thomas, ‘Interviewing Important People in Big Companies’ in Rosanna Hertz and Jonathan Imber (eds.)
Studying elites using qualitative methods (SAGE, 1995), 3-17
1743
Carla Willig Introducing Qualitative Research in Psychology Adventures in Theory and Method (Open
University Press, 2001)
1744
Catherine Welch, Rebecca Marschan-Piekkari, Heli Penttinen and Marja Tahvanainen ’Corporate elites as
informants in qualitative international business research’ (2002) 11(5) International Business Review, 611
1745
Michael Patton Qualitative Research and Evaluation Methods (3rd edn, Sage, 2002), 45
1746
Thomas Diefenbach,’ Are case studies more than sophisticated storytelling?: Methodological problems of
qualitative empirical research mainly based on semi-structured interviews’ (2009) 43(6) Quality and Quantity,
876, 879; See Also David Wainwright, ‘Can sociological research be qualitative, critical and valid?’ (1997) 3(2)
Qualitative Report; See Also Rosaline Barbour, ’The newfound credibility of qualitative research? Tales of
technical essentialism and co-option’ (2003) 13(7) Qualitative Health Research, 1019, 1021
1747
Global EPC Contract and Risk Management Conference (London / 12-13 OCT 2017)
1748
Robert Yin Case Study Research: Design and Methods (5th edn SAGE,2014), 59; See Also Bent Flyvbjerg,
‘Case study’, in Norman Denzin and Yvonna Lincoln (eds.) The Sage Handbook of Qualitative Research (SAGE,
2011), 301, 302; See Also John Gerring, ‘What is a case study and what is it good for?’, (2004) 98(2) The
American Political Science Review, 341
1749
Nigel King, ‘Using templates in the thematic analysis of text’, in Catherine Cassell and Gillian Symon (eds.),
Essential guide to qualitative methods in organizational research (SAGE, 2004) 427
1750
The questions followed the 9 question framework – introducting, probing, follow-up, specifying, direct, indirect,
structural, interpreting and silence – Sven Brinkmann and Steinar Kvale InterViews: An Introduction to Qualitative
Research Interviewing (3rd ed SAGE, 2015); as well as Kathy Charmaz ‘Constructionism and the Grounded
Theory Method’ in Jaber Gubrium, James Holstein (eds.) Handbook of Interview Research: Context and Method,
(Sage, 2002), 397
1751
Annukka Vainio, ‘Beyond research ethics: Anonymity as ‘ontology’, ‘analysis’ and ‘independence’’ (2013) 13(6)
Qualitative Research, 685
1752
Kari Lancaster, ‘Confidentiality, anonymity and power relations in elite interviewing: conducting qualitative
policy research in a politicised domain’ (2017) 20(1) International Journal of Social Research Methodology, 93
1753
Lorelli Nowell, Jill Norris, Deborah White and Nancy Moules, ‘Thematic Analysis: Striving to Meet the
Trustworthiness Criteria’ (2017) 16(1) International Journal of Qualitative Methods
1754
William Harvey, ‘Strategies for Conducting Elite Interviews’ (2011) 11(4) Qualitative Research, 431
1755
David Silverman Interpreting Qualitative Data (SAGE, 2014)
1756
D Richards, ‘Elite Interviewing: Approaches and Pitfalls’ (1996) 16(3) Politics, 199, 203
1757
Virginia Braun and Victoria Clarke, ‘Using thematic analysis in psychology’ (2006) 3(2) Qualitative Research
in Psychology, 77
1758
Lisa Webley, ‘Qualitative Approaches to Empirical Legal Research’ in Peter Cane and Herbert Kritzer (eds)
The Oxford Handbook of Empirical Legal Research (Oxford University Press, 2010), 926
1759
Virginia Braun and Victoria Clarke, ‘Using thematic analysis in psychology’ (2006) 3(2) Qualitative Research in
Psychology, 77
1760
Coding is an analysis process whereby the transcripts of the interviews are broken down by phrase, verb or
noun and by so doing labelling it (a ‘code’) and grouping these parts into a more meaningful expression which can
be developed into a theme or finding. Code is a tag or label to give meaningful expression to a parcel of text –
developed from Matthew Miles and Michael Huberman Qualitative Data Analysis (SAGE, 1994)
1761
Qualitative coding is a process of reflection on the data and is the first step in understanding what themes the
data brings out – J Savage, ‘One voice, different tunes: Issues raised by dual analysis of a segment of qualitative
data’ (2000) 31(6) Journal of Advanced Nursing, 1493
1762
N King, ‘Using templates in the thematic analysis of text’ in C Cassell and G Symon (eds) Essential guide to
qualitative methods in organizational research (SAGE, 2004), 257
1763
Greg Guest, Kathleen MacQueen and Emily Namey Applied Thematic Analysis (SAGE, 2012) 52
1764
Johnny Saldaña The Coding Manual for Qualitative Researchers (3rd ed SAGE, 2015); See Also John Creswell
Research design: Qualitative, quantitative, and mixed methods approaches (4th ed Sage, 2014); Also Jennifer
Attride-Stirling, ‘Thematic networks: An analytic tool for qualitative research’ (2001) 1(3) Qualitative Research, 385
1765
Virginia Braun and Victoria Clarke, ‘Using thematic analysis in psychology’ (2006) 3(2) Qualitative Research
in Psychology, 77
1766
Ibid
1767
Ibid; See Also N King, ‘Using templates in the thematic analysis of text’ in C Cassell and G Symon (eds)
Essential guide to qualitative methods in organizational research (SAGE, 2004), 257
In seeking to determine the appropriate sample size, the concept of ‘saturation’ was
relied upon, this being the point at which no new information or themes are observed
in the data.1773 Equally, care was taken to ensure the sample was not too large,
making analysis difficult.1774
As stated, the empirical research was conducted within a sample that can be
described as ‘elite’. It has also been demonstrated that for interview research
amongst ‘elite’ populations saturation can occur within a data set of only twelve
interviews, with basic elements of meta-themes being present with as few as six
interviews.1775 As such, by 12 interviews, 88% of all emergent themes had been
developed, and 97% of all important themes were developed; therefore, the
codebook structure had stabilised by 12 interviews with few changes or additions
thereafter the nature of the information provided and sample size allowed the
1768
Lorelli Nowell, Jill Norris, Deborah White and Nancy Moules, ‘Thematic Analysis: Striving to Meet the
Trustworthiness Criteria’ (2017) 16(1) International Journal of Qualitative Methods; See also N King, ‘Using
templates in the thematic analysis of text’ in C Cassell and G Symon (eds) Essential guide to qualitative methods
in organizational research (SAGE, 2004), 257; Also Virginia Braun and Victoria Clarke, ‘Using thematic analysis
in psychology’ (2006) 3(2) Qualitative Research in Psychology, 77
1769
David Snow, Leon Anderson, John Lofland and Lyn Lofland Analyzing Social Settings: A Guide to Qualitative
Observation and Analysis (4th End Wadsworth, 2005)
1770
Stephen Stehman and Raymond Czaplewski, ‘Design and Analysis for Thematic Map Accuracy Assessment:
Fundamental Principles’ (1998) 64(3) Remote Sensing of Environment, 331
1771
Liz Spencer, Jane Ritchie, Jane Lewis and Lucy Dillon, ‘Quality in Qualitative Evaluation: A framework for
assessing research evidence’ [2003] National Centre for Social Research
1772
Michael Patton Qualitative research and evaluation methods (SAGE, 2002)
1773
Sarah Baker and Rosalind Edwards, ‘How many qualitative interviews is enough’ (2012) Discussion Paper
NCRM; See Also Steward Oppong, ‘The problem of sampling in qualitative research’ (2013) 2(2) Asian Journal of
Management Science and Education, 202; See also P DePaulo, ‘How large should the sample size be in a
qualitative study?’ (2002) DePaulo Research Consulting
http://www.quirks.com/articles/a2000/20001202.aspx?searchID=383113850
1774
A Onweugbuzie and K Collins, ‘A Typology of Mixed Method Sampling Designs in Social Sciences Research’
(2007) 12 The Qualitative Report, 281
1775
Greg Guest, Arwen Bunce and Laura Johnson, ‘How Many Interviews Are Enough? An Experiment with Data
Saturation and Variability’ (2006) 18(1) Field Methods, 59
The table below presents the different respondents categorised by experience type.
The categorisation into experience types was undertaken post data collection and
is done to simply give a better understanding of the nature of the respondents’
experience and their function type. All respondents were either senior managers or
directors within their respective organisations. The organisations cover commercial
developers and operators of renewable electricity facilities, regulators, both internal
and external legal counsel to developer and operator organisations, as well as an
investment fund manager, an insurance provider and a climate scientist. The table
also outlines how this experience helps to elucidate the research issues.
To retain the anonymity of respondents they are simply referred to as
Developer Operator 1 or External Legal Counsel 1 as appropriate.
1776
Ibid
1777
Ray Galvin, ‘How many interviews are enough? Do qualitative interviews in building energy consumption
research produce reliable knowledge?’ (2015) 1 Journal of Building Engineering, 2,4
1778
Monique Hennink, Bonnie Kaiser and Vincent Marconi, ‘Code Saturation Versus Meaning Saturation: How
Many Interviews Are Enough?’ (2016) 27(4) Qualitative Health Research, 591
1779
Ray Galvin, ‘How many interviews are enough? Do qualitative interviews in building energy consumption
research produce reliable knowledge?’ (2015) 1 Journal of Building Engineering, 2,2
Examples of such
organisations are
Macquarie Renewables,
Greencoat Capital, or
Dalmore Capital who paid
£701m for 49% of EDF
Renewables UK wind farm
1780
https://www.edfenergy.com/media-centre/news-releases/edf-renewables-signs-new-partnership-twenty-four-
uk-wind-farms
1781
Staffan Jacobsson and Volkmar Lauber, ‘The politics and policy of energy system transformation: Explaining
the German diffusion of renewable energy technology’, (2006) 34 Energy Policy, 256
1782
Niels I Meyer, ‘Influence of government policy on the promotion of wind power’, (2006) 25 International Journal
of Global Energy Issues, 204; see also Paolo Agnolucci, ‘Wind electricity in Denmark: A survey of policies, their
effectiveness and factors motivating their introduction’, (2007) 11 Renewable and Sustainable Energy Reviews,
951
1783
Karin Ericsson, Suvi Huttunen, Lars J Nilsson and Per Svenningsson, ‘Bioenergy policy and market
development in Finland and Sweden’, (2004) 32 Energy Policy, 1707; See also Staffan Jacobsson, ‘The
emergence and troubled growth of a “bio-power” innovation system in Sweden’, (2008) 36 Energy Policy, 1491
1784
Joel Smith and Johannes Urpelainen, ‘Removing fuel subsidies: How can international organizations support
national policy reforms?’ (2017) 17(3) International Environmental Agreements: Politics, Law and Economics, 327;
Margaret Young, ‘Energy Transitions and Trade Law: Lessons from the Reform of Fisheries Subsidies’ (2017)
International Environmental Agreements: Politics, Law and Economics (Forthcoming); University of Melbourne
Legal Studies Research Paper No. 746. Available at https://ssrn.com/abstract=2930693; Ambrus Bárány and
Dalia Grigonytė, ‘Measuring Fossil Fuel Subsidies’, European Commission, available at
http://ec.europa.eu/economy_finance/publications/economic_briefs/2015/pdf/eb40_en.pdf, accessed 15
October 2016; David Victor, ‘The Politics of Fossil-Fuel Subsidies’ (2009) Available at
https://ssrn.com/abstract=1520984 accessed 20 October 2016; See Also Euroelectric, Ensuring investments in a
Liberalised Electricity Sector, (Euroelectric, 2004), 53; International Energy Agency, Power Generation Investment
in Electricity Markets (International Energy Agency, 2003),12
1785
The World Bank Group-Multilateral Investment Guarantee Agency, World Investment & Political Risk (The
World Bank Group, 2009) 28; See also Anatole Boute, ‘Regulatory Stability Under Russian and EU Energy Law’
(2015) 22 (4) Maastricht Journal of European & Comparative Law
1786
Eleanor Sharpston, ‘European Community Law and the Doctrine of Legitimate Expectations: How Legitimate,
and for Whom’ , (1990) Volume 11(1) Northwestern Journal of International Law & Business; see also Takis
Tridimas, The General Principles of EU Law (2nd edition, Oxford University Press, 2007), 242
1787
David Erkens, Mingyi Hung and Pedro Matos, ‘Corporate governance in the 2007–2008 financial crisis:
Evidence from financial institutions worldwide’ (2012) 18 Journal of Corporate Finance, 389
1788
Felix Creutzig, Peter Agoston, Jan-Christoph Goldschmidt, Gunnar Luderer, Gregory Nemet and Robert
Pietzcker, ‘The underestimated potential of solar energy to mitigate climate change’ (2017) 2 Nature Energy
1789
Public Employees for Environmental Responsibility v U.S. Environmental Protection Agency – 5 June 2018
Civil Action No. 17-652 available at https://cdn.arstechnica.net/wp-content/uploads/2018/06/epa.pdf accessed 16
July 2018
The respondents were asked about their perception of the diagonal conflicts outlined
in Chapters 3 and 4. It became clear, however, that many of the respondents
articulated their perception and concern related to the conflicts not as a legal risk but
as a regulatory1790 and economic risk, thus articulating their understanding of the
conflicts using that lexicon. As a result, the following themes emerged from the
responses.
In seeking to address directly the research question, the respondents were all asked
specifically about the economic, social and regulatory effect of regulatory
volatility1791 and why operating in a regulatory framework that is volatile, compared
to stable and forecastable, is important for the future of renewable electricity. As
such the respondents were asked to set out and discuss their perception of the
diagonal conflict between the renewables regulatory framework and the Treaty
1790
Regulatory Risk is defined in this thesis as changes in the regulatory framework that were not forecastable at
the time of the asset investment decision and therefore will include Regulatory Volatility, as well as regulatory
changes that only become forecastable after the asset investment decision is made. See Abbreviations section
above
1791
Regulatory Volatility is defined in this theis as regulatory change that is or has not been forecast by Developer
Operators as investors in the industry and as necessary by legislators and regulators
1792
A term in common usage to describe the process by which the UK will leave the EU, having issued a notice in
accordance with Article 50 TEC
1793
Case C-66/13 Green Network SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2014:2399, para 61; See
also CJEU Case Opinion 1/13 ECLI:EU:C:2014:2303, para 74; Opinion 1/03, ECLI:EU:C:2006:81, para 126, 128
and 133; Case C‑114/12 Commission v Council, ECLI:EU:C:2014:2151, para 74
1794
REMIT is the EU Regulation ‘On energy market integrity and transparency (No 1227/2011). It provides a
consistent EU-wide regulatory framework specific to wholesale energy markets that: (i) defines market abuse,
including market manipulation, attempted market manipulation or insider trading , (ii) explicitly prohibits market
abuse (iii) requires effective and timely public disclosure of inside information by market participants (for all
practical purposes this relates to generating plant outage information), and (iv) obliges firms professionally
arranging transactions to report suspicious transactions - Regulation (1348/2014/EC) on data reporting
implementing Article 8(2) and Article 8(6) of Regulation (EU) No 1227/2011 OJ L336
1795
MIFID is the Markets in Financial Instruments Directive (2014/65/EC). It has been applicable across the
European Union since November 2007, with a revised Directive in 2014, which became fully effective on 1
January 2018. It is a cornerstone of the EU's regulation of financial markets seeking to improve their
competitiveness. This includes trading on energy trading hubs / exchanges – EU Directive (2014/65/EU) on
markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU Text with EEA
relevance OJ L 173
1796
For example the Dispute Settlement and Sanctions Committee (CoRDiS) of French Energy Regulator fined
VITOL S.A. € 5 million for engaging in ‘market manipulation’ between 1 June 2013 and 31 March 2014 via the
REMIT Regulations, (9 October 2018) – available at https://www.cre.fr/en/News/The-Dispute-Settlement-and-
Sanctions-Committee-CoRDiS-imposes-a-penalty-for-market-manipulations-on-the-wholesale-energy-market
accessed 15 October 2018
1797
UK’s Hornsea 3 Project bidding an auction price of 57.5 £/MWh during the 2017 CfD auction – a price
comparable with thermal generation and the wholesale market – known as grid party pricing – See Daniel Radov,
Alon Carmel and Clemens Koenig, ‘Offshore Revolution? Decoding the UK Offshore Wind Auctions & What the
Results Means for a “Zero-Subsidy” Future’ (2017) NERA Economic Consulting
1798
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160
1799
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851
1800
Case T-251/11 Austria v Commission ECLI:EU:T:2014:1060
1801
Commission Decision 2015/1585, Aid Scheme SA 33995 –“ implemented by Germany for the support of
renewable electricity and of energy-intensive users”, available at http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv%3AOJ.L_.2015.250.01.0122.01.ENG accessed 30 March 2018
1802
Renewables Obligation Certificates (ROCs) ROCs are certificates issued to operators of accredited renewable
generating stations for the eligible renewable electricity they generate. Operators can trade ROCs with other
parties. ROCs are ultimately used by suppliers to demonstrate that they have met their obligation -
https://www.ofgem.gov.uk/environmental-programmes/ro/about-ro accessed 16 July 2018
1803
A Contract for Difference (CFD) is a private law contract between a low carbon electricity generator and the
Low Carbon Contracts Company (LCCC), a government-owned company. A generator party to a CFD is paid the
difference between the ‘strike price’ – a price for electricity reflecting the cost of investing in a particular low
carbon technology – and the ‘reference price’– a measure of the average market price for electricity in the GB
market. It gives greater certainty and stability of revenues to electricity generators by reducing their exposure to
volatile wholesale prices, whilst protecting consumers from paying for higher support costs when electricity prices
are high - https://www.gov.uk/government/collections/electricity-market-reform-contracts-for-difference accessed
16 July 2018
1804
Daniel Radov, Alon Carmel and Clemens Koenig, ’Offshore Revolution? Decoding the UK Offshore Wind
Auctions & What the Results Means for a “Zero-Subsidy” Future’ (2017) NERA Economic Consulting
1805
http://hornseaproject3.co.uk/en/About-the-Project#0 accessed 1 September 2018
1806
From 2016 renewable electricity projects are required to enter an auction process such that the lowest cost
projects would receive price support at the price the project has bid into the auction. The resulting renewables
support scheme instrument is a contract for difference in accordance with Renewable Energy Directive Article
3(2); See European Commission guidance for the design of renewables support schemes, SWD(2013) 439 final;
COM(2015)80 final; http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2015:80:FIN
1807
Case T-131/16 Belgium & Magnetrol International v Commission ECLI:EU:T:2019:91
1808
Commission Decision 2015/1585, Aid Scheme SA 33995 –“ implemented by Germany for the support of
renewable electricity and of energy-intensive users”, available at http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv%3AOJ.L_.2015.250.01.0122.01.ENG accessed 30 March 2018
1809
Commission Decision SA.45461 EEG 2017 - Reform of the Renewable Energy Law -
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_45461
1810
Arbitration 062/2012, Charanne B.V. & Construction Investments S.A.R.L v Kingdom of Spain (January 2016)
Available At http://www.italaw.com/sites/default/files/case-documents/italaw7097_0.pdf accessed 20 January
2017
1811
Decision 10/2015, Scat Punti Vendita Spa v Agenzia delle entrate - Direzione provinciale di Reggio Emilia,
(October 2015) http://www1.agenziaentrate.gov.it/english/
1812
Specific project reference redacted to preserve anonymity
1813
Specific project reference redacted to preserve anonymity
1814
OFTO – is an offshore transmission operator - OFTO assets link offshore generation to the onshore network.
OFTO assets will normally have ownership of offshore electricity transmission infrastructure (such as offshore
substation platforms, subsea export cabling and onshore cabling), an onshore substation, and the electrical
equipment relating to the operation thereof - https://www.ofgem.gov.uk/ofgem-
publications/85943/offshoretransmission-aninvestorperspective-updatereport.pdf accessed 25 June 2018
1815
Andy Cox, David Gascoigne, Matt Firla-Cuchra, Yoon Chong, Adrian Scholtz and Hylton Millar, ‘Offshore
Transmission: An Investor Perspective’ [2012] KPMG available at https://www.ofgem.gov.uk/ofgem-
publications/79347/ofto-aninvestorperspective.pdf accessed 25 June 2018
1816
Generating facilities (renewables or otherwise) are usually granted a Licence to operate by their national
regulatory body. The licecnes will contain a number of duties and obligations – For examples of current UK
licence conditions see https://www.ofgem.gov.uk/licences-industry-codes-and-standards/licences/licence-
conditions accessed 23 September 2018
The respondents overall saw the free movement of goods restriction, relating to
renewable electricity, in a spectrum from (i) a problem that was a factor relating to
ongoing legal ‘issues’ on which External Legal Counsel 1 and 2 were advising and
as such they could not offer a response due to professional ethics restrictions, (ii)
an issue of regulatory volatility (Internal Legal Counsel 1) and finally (iii) a factor
within the national renewables legislative framework that had to be complied with
and managed accordingly (Developer Operators 4 and 5). Three of the Developer
Operator respondents had not come across the issue in a business context and as
such were not able to offer a response on the issue.
External Legal Counsel 1 and 2 are senior partners at international law firms
(either being or being akin to magic circle firms)1818 and the fact that they reported
an inability to answer questions on the topic of the regulatory conflict with free
movement due to ongoing litigation or advice being given in contemplation of
litigation, shows the importance of this issue and that it is an issue currently in
contemplation of litigation.
Internal Legal Counsel 1 stated the conflict between the renewable energy
regulatory framework, be it at member state or at EU level, 1819 and EU primary law
was a ‘significant business risk’. Internal Legal Counsel 1 in response to the question
went straight to the nationally focussed renewable electricity support schemes which
are set up in accordance with the Renewable Energy Directive (Article 3(3)) which
1817
Case T-131/16 Belgium & Magnetrol International v Commission ECLI:EU:T:2019:91
1818
https://www.lawgazette.co.uk/news/its-a-kind-of-magic/42082.fullarticle
1819
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
Internal Legal Counsel 1 stating that the export restriction surrounding renewable
electricity is not simply an academic issue, or one related to the access to renewable
support schemes outside the renewable electricity facility’s host country, but an
operational issue in conflict with other parts of a member state’s energy policy, in
this case the closure of nuclear. 1820 It being noted by additional respondents
(Developer Operator 4, 5 and 7) that in other member states the closure of coal
generation, in accordance with the requirements of the Industrial Emissions
Directive,1821 will create the same issue such that a power gap may ensue as this
will not be filled with renewable electricity but potentially carbon emitting forms of
generation, effectively importing from other member states the same form of
electricity that had just been decommissioned in the host country.
External Legal Counsel 3 was able to discuss conflict issues related to the
free movement of renewable electricity and stated that the case law reconciling free
movement and the details of the member states’ renewable regulatory frameworks
is ‘not satisfactory in the long-term’. The respondent suggesting that the current
situation where member states can restrict the export of renewable electricity which
has received revenue support either (or both) by a feed-in tariff or a tradeable
renewable certificate, should not be viewed as creating regulatory stability. The
respondent suggested that the case law supporting this framework ((e.g.
PreussenElektra,1822 Essent 1,1823 and Ålands Vindkraft1824 as set out above) could
be removed.
1820
Vattenfall AB and others v Federal Republic of Germany, ICSID Case No. ARB/12/12; See Also Anatole
Boute, ‘Energy Trade & Investment Law: International Limits to EU Energy Law & Policy’ in Martha Roggenkamp,
Catherine Redgwell, Anita Ronne, and Inigo del Guayo (eds) Energy Law in Europe National, EU and
International Regulation (Oxford University Press, 2016)
1821
Council Directive (EC) 2010/75/EC 24 November 2010 – Industrial Emissions (integrated pollution prevention
and control) OJ L334/17 Available at http://ec.europa.eu/environment/industry/stationary/ied/faq.htm
1822
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160
1823
C-204/12 Essent Belgium NV v Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt ELCI:EU:
C:2014:2192
1824
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
1825
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
1826
Cost to serve in this context is the summation of the costs to produce electricity from the renewable generation
facility, based on actual business costs such as capital, maintenance, repair, operational overhead and other
costs incurred in operating the facility
1827
Details of the exact national regulator redacted to maintain anonymity
1828
Levelised Cost of Energy (LCOE), measures lifetime asset costs (Capex and Opex) divided by energy
production - International Renewable Energy Agency ‘Renewable Power Generation Costs in 2017’
https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2018/Jan/IRENA_2017_Power_Costs_2018.pdf
accessed 16 July 2018
1829
ACER - Agency for the Cooperation of Energy Regulators - https://www.acer.europa.eu/en/Pages/default.aspx
accessed 16 July 2018
Renewable electricity currently enjoys priority dispatch1830 within the EU, such that
when a renewable electricity facility can generate it is allowed to do so and if required
other forms of generation will be shut down – known in the industry as ‘curtailed’. 1831
Internal Legal Counsel 2 stated that potential changes to the practice of
priority dispatch1832 as proposed by ACER1833 and others in relation to renewable
electricity, would mean that competitors would change the way they operate and as
such this was unforecastable due to the lack of history in running a merit order
dispatch process1834 including renewable generation. These proposals leading to not
only regulatory uncertainty but also unforecastable changes in the operational
1830
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
1831
Curtailment is a forced reduction in the output of an electricity generation facility from what it could otherwise
produce given available resources, typically as a result of capacity constraints in the transmission system - Lori
Bird, Jaquelin Cochran, and Xi Wang, ‘Wind and Solar Energy Curtailment: Experience and Practices in the
United States’ [2014] National Renewable Energy Laboratory Working Paper; See Also Henrik Klinge Jacobsen
and Sascha Thorsten Schröder, ‘Curtailment of renewable generation: Economic optimality and incentives’ (2012)
49 Energy Policy, 663
1832
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
1833
https://acer.europa.eu/Media/News/Pages/Regulators-call-for-priority-dispatch-of-existing-Renewables-to-be-
removed.aspx; See also European Energy Regulators’ Overview Paper Initial Reactions to the European
Commission’s proposals on Clean Energy available from https://acer.europa.eu/Media/News/Pages/European-
Energy-Regulators_Overview-Paper-Initial-Reactions-to-the-European-Commission_s-proposals-on-Clean-
Energy.aspx
1834
Merrit Order Dispatch of generating facilities means ‘the short-term determination of the economically optimal
output of a series of electricity generation facilities connected to an electricity network to meet the electicity
demand on that network, at the lowest possible cost, subject to transmission capacity and operational constraints.’
- P Palermo ‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE
1835
In order to be dispatched conventional generation will bid a level of output and price into the applicable market
mechanism. The transmission system operator will then dispatch generating plant against a merit order – with
cheapest plant dispatched first and then plant in increasing price increments until demand is met. The
transmission system operator will also take account of any constraints in transmission capacity in making a
dispatch instruction. A transmission constraint is caused by the transmission system not having enough capacity
to allow free flow of electricity and as such electricity is routed differently than the route it would seek to take
naturally. See Juan Morales and Salvador Pineda, ‘On the inefficiency of the merit order in forward electricity
markets with uncertain supply’ (2017) 261(2) European Journal of Operational Research, 789; Pieter
Schavemaker and Lou van der Sluis Electrical Power System Essentials (Wiley, 2016) 261
1836
A technical term given to generators who are part of the merit order dispatch process such that they balance
the actual output at any time during the market dispatch period and what the generator stated it would dispatch at
the time it bid its output and price.; See Balancing & Settlement Code https://www.elexon.co.uk/wp-
content/uploads/2018/04/GB_BSC.pdf accessed 17 July 2018
1837
A technical term given to the price and ultimately the payment that is made by generators who have a miss-
match between the electricity actually dispatched and the volume of electricity the generator stated it would
dispatch at the time it bid its output and price.; See Balancing & Settlement Code https://www.elexon.co.uk/wp-
content/uploads/2018/04/GB_BSC.pdf accessed 17 July 2018
1838
Priority network access is the obligation placed on member states to establish transparent and proportionate
administrative procedures for the conclusion of network connection for renewable electricity facilities in
accordance with Article 13 and 16 of the Renewable Energy Directive
1839
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
1840
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
1841
Solar renewables being seen to reduce prices on the German energy exchange by 10% on average, and by
as much as 40% in the early afternoon in summer – See Frank Sensfusß, Mario Ragwitz and Massimo Genoese,
‘The Merit-order effect: A detailed analysis of the price effect of renewable electricity generation on spot market
prices in Germany’ [2007] Working Paper Sustainability and Innovation No. S 7/2007, Fraunhofer Institute for
Systems and Innovation Research
1842
Frank Sensfusß, Mario Ragwitz and Massimo Genoese, ‘The Merit-order effect: A detailed analysis of the
price effect of renewable electricity generation on spot market prices in Germany’ [2007] Working Paper
Sustainability and Innovation No. S 7/2007, Fraunhofer Institute for Systems and Innovation Research
1843
Curtailment is a forced reduction in the output of an electricity generation facility from what it could otherwise
produce given available resources, typically as a result of capacity constraints in the transmission system - Lori
Bird, Jaquelin Cochran, and Xi Wang, ‘Wind and Solar Energy Curtailment: Experience and Practices in the
United States’ [2014] National Renewable Energy Laboratory Working Paper; See Also Henrik Klinge Jacobsen
and Sascha Thorsten Schröder, ‘Curtailment of renewable generation: Economic optimality and incentives’ (2012)
49 Energy Policy, 663
1844
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE
1845
Underlying principle is that generators would acquire firm access rights from a particular date and be allowed
to generate or receive compensation from that date, subject to; local network upgrading being complete and the
renewable facility being commissioned and available -
https://www.ofgem.gov.uk/sites/default/files/docs/2007/11/connect-and-manage_phil_0.pdf accessed 23
September 2018
1846
Andy Pace, Jo Lord, Tom Edwards and Jonathan Davison, ‘A Review of the Embedded Benefits accruing to
Distribution Connected Generation in GB’ [2016] Cornwall Energy for De-centralised Energy Association
1847
Case C-492/14 Essent Belgium NV v Vlaams Gewest ECLI:EU:C:2016:732 - where it was determined by the
CJEU that renewable generation should not be exempted from the obligation to pay distribution and transmission
cost
1848
Case C-492/14 Essent Belgium NV v Vlaams Gewest ECLI:EU:C:2016:732 - where it was determined by the
CJEU that renewable generation should not be exempted from the obligation to pay distribution and transmission
cost
1849
Peak Gen Top Co Ltd & Ors, R (on the application of) v The Gas And Electricity Markets Authority & Anor,
Court of Appeal - Administrative Court, June 22, 2018, [2018] EWHC 1583 (Admin) - relating the process the
regulator had followed, where the UK administrative court found in Ofgem’s [UK Energy Markets Regulator] favour
1850
UK Power Networks, Scottish and Southern Electricity Networks, Western Power Distribution and National
Grid
1851
UK Power Network Announcement - https://www.ukpowernetworks.co.uk/internet/en/news-and-press/press-
releases/Electricity-networks-unite-to-boost-renewable-energy-and-save-customers-40million.html#art-top
accessed 5 September 2018
1852
Merlin Hyman, ‘The Future Revenue Stack Driving Value in an Uncertain Future’ [2019] Smartest Energy
available at https://www.smartestenergy.com/info-hub/reports-and-guides/the-future-revenue-stack/
As stated above, Article 191(2) TFEU states that as a priority environmental damage
should be rectified at source on the basis that the polluter should pay for the
remediation of any pollution or emissions. The drafting of Article 191(2) is an
absolute obligation on polluters, whereas the Industrial Emissions Directive1853 (a
C&C style directive within the environmental competence1854 of the Commission)
and the Emissions Trading Directive 1855 (a market style directive within the
environmental competence of the Commission) allow carbon (plus other gasses)
emissions, thus the Directives conflict with the Treaty. As the environmental and
energy articles of the TFEU (191 and 194 TFEU respectively) are so interrelated,
this conflict should really be regarded as vertical.
Also, the explicit ability for coal and gas generation plant to emit (within limits)
carbon-based gases 1856 contained in the Industrial Emissions Directive and the
Emissions Trading Directive, creates a direct discrimination against coal fuelled
generating plant. On a unit of output basis, coal is more carbon intensive and less
energy intensive that gas, therefore coal generation is required to have available a
larger number of emissions credits. Additionally, the burning of coal produces ash,
whereas gas has almost no solid residual waste. The Industrial Emission Directive
makes no allowance for the emission of ash and also sets limits on dust emissions
(mostly coal soot)1857 as part of the combustion process.
The respondents (Internal Legal Counsel 1, Developer Operators 5 & 6)
made the comment that emission allowances were issued for free in association with
the EU-ETS, whereas there was no free mechanism for ash. This creating a
discontinuity between gas and coal generation, with carbon emissions being
tradable at a price below the costs of rectification at source, whereas there is an
1853
Council Directive (EC) 2010/75/EC 24 November 2010 – Industrial Emissions (integrated pollution prevention
and control) OJ L334/17 Available at http://ec.europa.eu/environment/industry/stationary/ied/faq.htm
1854
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
1855
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
1856
Any carbon based fuel (coal, methane – commonly known as gas, or oil) combusted in an oxygen atmosphere
will result in carbon dioxide and other carbon based gases being produced post combustion
1857
Soot is a substance consisting largely of amorphous carbon, produced by the incomplete burning of organic
matter - coal
The respondents were asked what they considered the origins of regulatory
uncertainty or volatility and how this affects their business, the advice they give, or
regulations put in place.
A general definition and measurement of ‘uncertainty’, whether this relates
to a regulatory framework or other business risks is not straightforward since it is
ultimately an unobservable variable. 1858 However, it is known that uncertainty
increases the option value of waiting before committing to an investment,1859 and
additionally it is known that the hurdle rate1860 an investment must reach before an
investment commitment is made increases.1861 The perception of uncertainty in the
business environment can originate simply from rapid economic changes such as
the financial crisis of 2008.1862
The themes which emerged in relation to the origin of regulatory risk can be
summarised as (i) political, (ii) un-forecasted regulatory change and (iii) regulatory
inconsistencies, each set out below
As has been stated widely, investors require confidence that when investment
decisions are made, the regulatory authority (national regulators, the Commission
or other EU institutions) will not cancel commitments made or significantly alter the
rules governing the business case (An almost universal theme of respondents).1863
This is an effect which was also brought out with regards to the UK specifically
1858
Marko Melolinna, Helen Miller and Srdan Tatomir, ‘Business investment, cost of capital and
uncertainty in the United Kingdom - evidence from firm-level analysis’ (2018) 17 Bank of England Staff Working
Paper
1859
Knut Are Aastveit, Gisle James Natvik and Sergio Sola, ‘Economic uncertainty and the effectiveness of
monetary policy’ [2013] Norges Bank Working Paper No. 2013/17
1860
‘hurdle rate’ is the minimum rate that a company expects to earn when investing in a project. Hence the hurdle
rate is also referred to as the company's required rate of return or target rate. In order for a project to be accepted,
its internal rate of return must equal or exceed the hurdle rate - https://www.accountingcoach.com/blog/what-is-
hurdle-rate
1861
Nicholas Bloom, ‘Fluctuations in Uncertainty’ (2014) 28(2) Journal of Economic Perspectives, 153
1862
Patrick Bolton, Neng Wang and Jinqiang Yang, ‘Investment under Uncertainty and the Value of Real and
Financial Flexibility’ [2014] American Finance Association;See Also Avinash Dixit and Robert Pindyck Investment
under Uncertainty (Princeton University Press, 1994)
1863
Cameron Hepburn, ‘Regulation by Prices, Quantities, or Both: A Review of Instrument Choice’, (2006) 22 (2)
Oxford Review of Economic Policy, 225; See also Harri Kalimo, Filip Sedefov and Max Jansson, ‘Market definition
as value reconciliation: The case of renewable energy promotion under the WTO Agreement on Subsidies and
Countervailing Measures’, (2017) 17(3) International Environmental Agreements: Politics, Law and Economics;
Colin Kirkpatrick, David Parker and Yin-Fang Zhang, ‘Foreign Direct Investment in Infrastructure in Developing
Countries: Does Regulation Make a Difference?’, (2006) 15(1) Transnational Corporations; Dieter Helm, Cameron
Hepburn and Richard Mash, ‘Credible Carbon Policy’, (2003) 19(3) Oxford Review of Economic Policy, 438;
Henok Birhanu Asmelash, ‘Energy subsidies and WTO dispute settlement: Why only renewable energy subsidies
are challenged’, (2015) 18 (2) Journal of International Economic Law, 261;
1864
Malcolm Brinded, ‘Energy Barometer’ [2018] Energy Institute - listing the key issues as uncertainty around
Brexit and the diversion of attention it is causing away from domestic policy; and investment and cost concerns as
a result of political issues and oil price volatility
1865
Norbert Rottgen Environment Minister ‘The Federal Government's energy concept of 2010 and the
transformation of the energy system of 2011’
1866
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
All respondents, other than the Regulatory respondent who would not express a
view, reported unforecastable regulatory change at either the national or EU level
as a negative, and issues of most concern are those which occur rapidly without
giving utility companies time to mitigate the potential revenue impact. To this end
some respondents stated that they believed that regulatory change could be made
faster, based on the exclusive competence of the Commission. The respondents
stated as an example the development of the state aid guidelines by the
Commission, effectively driving the legal basis of the assessment of state aid
(Internal Legal Counsel 1, External Legal Counsel 3, Developer Operator 5 and 7).
As a further example of how fast things can change and that issues can come
from ‘nowhere’ to be a top environmental concern, the current concerns over plastic
was outlined (Developer Operator 4, 6 and 7 and Climate Change Scientist). The
issue of marine plastic as an environmental concern has been known from the early
2000’s,1867 but with little public perception of the issue. As a result of the issue being
given publicity by Sir David Attenborough 1868 and others, companies are now
shunning plastic across multiple business sectors to such an extent that the EU has
published a communication1869 on the subject to provide a framework within which
the Commission and the other institutions of the EU can work to reduce single use
plastic.1870
1867
S Sheavly and K Register , ‘Marine Debris & Plastics: Environmental Concerns, Sources, Impacts and
Solutions’ (2007) 15(4) Journal of Polymers and the Environment, 301; James Coe and Donald Rogers Marine
debris: sources, impacts, and solutions (Springer, 2012); Birgitta Gatersleben, Linda Steg and Charles Vlek,
‘Measurement and Determinants of Environmentally Significant Consumer Behavior’ (2002) 34(3) Environment
and Behavior, 335
1868
Binoy Kampmark, ‘From Plastic to Drastic’ (2018) available https://www.thenews.com.pk/print/271322-from-
plastic-to-drastic; Sir David Attenborough: 'I'm astonished' by Blue Planet plastic impact -
https://www.bbc.co.uk/newsround/44586290
1869
EU Communication Com(2018) 28 ‘A European Strategy for Plastics in a Circular Economy’
1870
On 28 May 2018, the Commission issued a proposal for a Directive banning or reducing
The finding of a general restriction related to the flows of renewable energy between
member states outlined in Essent 11874 and Ålands Vindkraft1875 clearly underlines a
concern that any shortfall is electricity will need to be made up from coal or gas
which is carbon emitting.
Additionally, the finding in Green Network1876the Commission’s competence
to negotiate renewable recognition agreements with third countries simply made
both the Internal Legal Counsel and Developer Operator respondents concerned
over the timescale and reactivity of the Commission in this regard (Internal Legal
Counsel 1 and 2, Developer Operators 4, 5 and 7).
This means that technological innovation is focussed down a single track. Also, with
only one type of generating facility being supported should the regulatory framework
change due to an internal or external policy paradigm shift, utility companies may
well find that a major part of their asset portfolio is economically or operationally
stranded. Developer Operator 7 stating that a mix of technologies spreads regulatory
risk and allows the generation function to better match demand both at peak and
demand shape which after all was its raison d’etre.
In looking at the development of generating technology Developer Operator
4 discussed the concept of ‘regulatory lag’, in that the regulatory framework seems
to lag technology or market practice. Meaning that industry regulation is responsive
1877
Case C-492/14 Essent Belgium NV v Vlaams Gewest and Others ECLI:EU:C:2016:732
1878
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
1879
Council Directive (EC) 2010/75/EC 24 November 2010 – Industrial Emissions (integrated pollution prevention
and control) OJ L334/17 Available at http://ec.europa.eu/environment/industry/stationary/ied/faq.htm
1880
A best available technique assessment is an assessment of appropriate emission levels from a generating
asset should that asset be using best available techniques to monitor and remediation emissions – Article 13
Industrial Emissions Directive
1881
Article 8 of EU Regulation 1225/2009 ‘on protection against dumped imports from countries not members of
the European Community’ OJ L 343/51, allows anti-dumping enquiries to be conducted by the Commission – tariff
barriers put in place for solar panels from China was equal 64.9%.
1882
EU Notice (2018/C 95/06) of the impending expiry of certain anti-dumping measures related to Crystalline
silicon photovoltaic modules and key component OJ C 95/6
1883
When used for commercial facilities photovoltaic cells are grouped into a component called a module -
https://www.jinkosolar.com/product_256.html?lan=en accessed 23 Spetember 2018
1884
Case T-251/11 Austria v Commission ECLI:EU:T:2014:1060
1885
Commission Decision 2015/1585, Aid Scheme SA 33995 –“ implemented by Germany for the support of
renewable electricity and of energy-intensive users”, available at http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv%3AOJ.L_.2015.250.01.0122.01.ENG accessed 30 March 2018
1886
European Commission, Decision of 19 December 2017 Reduced surcharge for self-generation under EEG
2017 SA.38632
1887
Commission Decision of 28 March 2018 relating to the offshore-surcharge reduction for railway undertakings in
Germany SA.50395; See also Commission Decision of 28 March 2018 relating to reductions in the offshore
surcharge for electro-intensive undertakings and reductions on the CHP surcharge for electricity produced from
waste gases in Germany SA.49416
It is clear from the research undertaken that the renewable electricity sector confronts
an evolving regulatory landscape.1890 Therefore market participants (e.g. developer
operators, regulators, investors) would generally be considered as having a
requirement to monitor and track this landscape.
As stated in responding to the evolving regulatory landscape the
respondents all described the phenomenon of regulatory change as ‘regulatory risk’
1888
patching, are policies and regulatory instruments enacted in order to correct flaws or allow the regulatory
framework toadapt to changing circumstances - Michael Howlett and Jeremy Rayner, ‘Patching v packaging in
policy formulation: assessing policy portfolio design’ (2013) 1(2) Politics & Governance, 170, 177
1889
The reserve account is a mechanism whereby the Commission places emissions allowances in an account
effectively outside the normal market mechanism – Described in Section 2.10.1
1890
Daniel Tulloch, Ivan Diaz-Rainey and I Premachandra, ‘The impact of regulatory change on EU energy utility
returns: the three liberalization packages’ (2018) 50(9) Applied Economics; See Also David Coen and Chris
Doyle, ‘Liberalisation of Utilities and Evolving European Regulation’ (2003) Economic Outlook
1891
Nicole Robins and Tridevi Chakma, ‘State Aid in Energy under the Spotlight: The Implications of the Hinkley
Point Decision’ (2016) 2 European State Aid Law Quarterly, 247
1892
A gain-share mechism is where the price within the generation support scheme, which is calculated on the basis
of projected construction and operating costs, including a reasonable profit, will be compared to the weighted
average of wholesale prices for electricity and monies received. Within the Hinkley Point C support scheme there
are two ‘gain-share’ mechanisms, the first of which concerns the costs of production, and the second, the rate of
return on equity. Therefore should actual monies received or costs incurred mean that the operator of the plant
receives returns above those envisaged at the point of investment it is required that monies are returned to the
support scheme management undertaking in the UK. - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439,
para 5
1893
Daniel Radov, Alon Carmel and Clemens Koenig, ’Offshore Revolution? Decoding the UK Offshore Wind
Auctions & What the Results Means for a “Zero-Subsidy” Future’ (2017) NERA Economic Consulting
The responses also indicated that the articulation of regulatory risk was done via the
development of a series of scenarios (Developer Operator 1, 3, 4, 5, 6 and 7;
Investment Fund Manager), with the scenarios taking account of the legal changes
to the regulatory framework at both EU and national level and then translating these
changes into economic outcomes for the assets involved. The Developer Operator
respondents also confirmed that the scenarios were effectively translated into a
series of ‘forward price curves and cash flows’ (Developer Operator 1, 3, 4, 5, 6 and
7; Investment Fund Manager). It was also made clear that the price curves allowed
generating facilities to be ‘economically assessed at any point in the life cycle of the
asset from pre-investment to late life closure’ (Developer Operator 5). Developer
Operator 5 went on to give a note of caution with regards to the development of
1894
Thematic Review on Risk Governance - http://www.fsb.org/wp-content/uploads/r_130212.pdf accessed 21
July 2018
1895
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
One of the clear outputs of the assessment, reporting and articulation of regulatory
risk is the management of that risk. The management is undertaken in several ways
from active lobbying of regulators and legislators (EU and national), to the
responding to industry consultation documents and participation in industry wide
consultative bodies at both the EU and national level.
Internal Legal Counsel 1 and 2 both reported that their respective
organisations have offices in both their national capitals and Brussels with the
specific purpose of ‘holding discussions’ 1896 with regulators and legislators, with
these activities being undertaken at EU and national level dependent on the issue or
risk at hand. A dual office structure was also reported by Developer Operator 1, 4, 5,
6 and 7, with the express purpose of influencing regulators and legislators -
‘lobbying’.
The three External Legal Counsel respondents disclosed having offices in
almost all national capitals across the EU (not surprising given their status as large
international law firms). However, importantly the three External Legal Counsel
respondents all indicated their office size in Brussels was larger than would be
justified by the volume of work generated by transactions purely focussed on the
Belgium market, and that the increased size of the office resulted from work
specifically associated with the EU legislators, the Commission, CJEU and
increasingly ACER.1897 Client instructions were received either directly from the EU,
and its various institutions, or from corporate clients, to either produce specialist
advice on the interpretation of EU law or assist in the drafting of materials submitted
by these clients to EU institutions. As an example of the types of response given in
this area External Legal Counsel 1 stated
we seek to stay close to all our clients and work for all
sides of the industry so that a rounded view can be
taken. In staying at the forefront of the regulatory
debate allows early warning of changes to be
understood by us as a business as early as possible.
The level of client instructions for the External Legal Counsel 1 and 3 via their
Brussels office was reported to be as a direct result of the complexity of the
1896
Both of the Internal Legal Counsel respondents were very careful not to use the word ‘lobbying’ and made it
clear that they regarded the use of such phraseology as holding a negative business connotation and could, with
regards to certain jurisdictions, be regarded as a legally prohibited activity (e.g. the UK’s ‘Transparency of
Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014’).
1897
ACER - Agency for the Cooperation of Energy Regulators -
https://www.acer.europa.eu/en/Pages/default.aspx accessed 16 July 2018
1898
http://www.ewea.org
1899
https://www.energy-uk.org.uk/
1900
Exact project type and location redacted to preserve anonymity
1901
Company name redacted to preserve anonymity
Lastly, [Respondent]1904 reported the considerable negotiations that took place with
the French government with regards to the renegotiation of the feed-in tariff level of
certain French offshore wind farm projects.1905 The negotiations reported as bringing
together legal, regulatory and economic arguments. In pursuing the discussions,
these were held at both national and local government levels in relation to the amount
of inward investment, the readiness of the developer operator to use the domestic
supply chain and job creation.
Irrespective of the ‘negotiations’ label, it is clear that one on one discussions
with the regulators (both EU and national), the Commission and governments are
taking place. The Developer Operators and Regulatory respondents have made it
clear that between written consultations and industry forums a considerable amount
of information flows and number of discussions are held relating to the future of
regulatory policy. It is also apparent that the Developer Operators see these
discussions and information flows as a tool for managing and mitigating regulatory
risk.
1902
Name of power plant redacted to preserve anonymity
1903
The exact nature of the regulator redacted to maintain anonymity
1904
Respondent redacted to preserve anonymity
1905
https://www.offshorewind.biz/2018/06/20/france-reduces-feed-in-tariffs-for-6-offshore-wind-projects/
1906
Command and Control Regulation being ‘the direct regulation of an activity by legislation that states what is
permitted’ - Phil McManus Environmental Regulation (Elsevier, 2009); See also Beatriz Junquera and Jesús
Ángel Del Brío ‘Preventive Command and Control Regulation: A Case Analysis’ (2016) 99(8) Journal of
Sustainability
1907
The operational life of generating assets can be over 40 years (55yrs assumed for financial planning
purposes) - [Sabrina Schulz and Julian Schwartzkopff, ‘G7 Coal Phase Out Germany’ [(2015] available
https://www.e3g.org/docs/Germany_G7_coal_analysis_September_2015.pdf accessed 2 October 2018] when the
forward price curve on traded markets is broadly 3 to 5 years.
https://www.energymarketprice.com/sitepage.asp?act=ps&pid=93&prid=12
1908
Sam Carmalt The Economics of Oil: A primer including, geology, economics, energy, politics (Springer, 2017)
1909
Aneta Michalak, ‘Expected Return on Capital in Mining Industry’ in Ali Al-Juboury (ed) Contributions to
Mineralization (InTeach, 2018)
1910
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
1911
A market is said to be in Contango if the price of a feed-in tariff is above the expected future wholesale market
price
1912
Arbitration 062/2012, Charanne B.V. & Construction Investments S.A.R.L v Kingdom of Spain (January 2016)
Available At http://www.italaw.com/sites/default/files/case-documents/italaw7097_0.pdf accessed 20 January
2017
1913
Decision 10/2015, Scat Punti Vendita Spa v Agenzia delle entrate - Direzione provinciale di Reggio Emilia,
(October 2015) http://www1.agenziaentrate.gov.it/english/
Across the respondents, comments were made relating to the future direction of the
renewables regulatory framework. These comments covered the following areas,
with each analysed in turn (i) focussing the regulatory framework on a market based
carbon trading system which also focusses the oversight on the competency of the
Commission (also discussed as Recommendation 1), (ii) increasing investment in
the transmission system to change the network topology facilitating greater
interconnection between member states, and (iii) development in how the industry is
regulated and who has the competence1916 of regulatory oversight via the institutions
of the EU and member states.
1914
Name of regulator redacted to preserve anonymity
1915
Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used
to account for declines in value over time. Businesses depreciate long-term assets for both tax and accounting
purposes. For tax purposes, businesses can deduct the cost of the tangible assets they purchase as business
expenses; however, businesses must depreciate these assets in accordance with tax law relating to how and
when the deduction deductions may be taken -
https://www.investopedia.com/terms/d/depreciation.asp#ixzz5MvOCjj5N
1916
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
Resulting from the need to increase renewable capacity to comply with the COP 21
Paris climate change agreement, several respondents proposed changing the focus
of the regulatory framework from command and control 1917 based regulatory
structures to market based structures. The suggestion being that this would increase
the cost efficiency of emission abatement solutions (Internal Legal Counsel 2,
External Legal Counsel, Developer Operator 1, 5, 6 and 7, Climate Scientist). This
proposal being made, as it is known that market operators will comply with C&C
regulation irrespective of costs, whereas market-based regulation allows those best
placed to make the largest changes for the least cost to do so and still derive
applicable returns on any investment. Therefore, acknowledging that a cost-efficient
renewable electricity facility in an EU country that can transport electricity across
borders reduces carbon emissions in a more cost-efficient manner, than a facility
built irrespective of cost to comply with a target. Hence, removing the free movement
diagonal conflict within the renewable energy regulatory framework allows a higher
level of carbon abatement for the same level of capital expenditure.
The suggestion is to strengthen the EU-ETS and the initiation of market
mechanisms for the gases currently regulated via the Effort Sharing Decision. 1918
This means that the EU-ETS is not simply carbon focussed, but is able to allow price
discovery for a basket of gaseous emissions that more accurately reflect the
emissions from thermal generation (Developer Operator 1, 5, 6 and 7, Climate
Scientist). In making this change the regulatory framework is not focussed on a
particular generation type but on a desired effect – carbon emission abatement. This
means that the most effective generation type to reduce carbon emissions can be
developed, based on the application of a market-based solution (Developer Operator
1, 4, 5, 6 and 7). Such a solution could potentially remove the need for feed-in tariff
revenue support for renewable assets, as coal and gas fuelled generation fail to
internalise the cost of carbon emission. Hence the regulatory framework’s conflict
with anti-state aid provisions (Article 107 TFEU) would be removed.
Using the EU-ETS as the primary focus of the regulatory framework is
believed to harmonise and simplify the framework with immediate effect (Developer
Operator 6 and 7). Additionally, a price for carbon emission allowances which is
1917
Command and Control Regulation being ‘the direct regulation of an activity by legislation that states what is
permitted’ - Phil McManus Environmental Regulation (Elsevier, 2009); See also Beatriz Junquera and Jesús
Ángel Del Brío ‘Preventive Command and Control Regulation: A Case Analysis’ (2016) 99(8) Journal of
Sustainability
1918
Council Decision No 406/2009/EC 23 April 2009 ‘Reduction in carbon emissions to meet the Community’s
carbon emission reduction commitments up to 2020’ (Effort Sharing Decision)
As an industry, the respondents recognised that the structure and location of the
transmission networks was built for the coal and nuclear generation of the last
century. Therefore, respondents stated that the industry will need to change the
topology of the transmission network in order to allow the free flow of renewable
electricity which is located very differently from coal and nuclear (Developer
Operator 4 and 6) and thus make the removal of the diagonal conflict with free
movement a reality.
Funding of the construction programme and the need to build acceptance of
power lines within the general public are issues of importance for the industry
(however, the detail of such is outside the scope of this research). It was
acknowledged that network assets are a focus of the latest amendments to the state
aid block exemption regulations (GBER) set out in Annex 4 (Internal Legal Counsel
2, Developer Operator 6) and therefore respondents stated that the design of the
funding arrangements is critical to ensure that they do not conflict with the anti-state
aid provisions in Article 107 TFEU.
In terms of financing the development of transmission assets, some
respondents proposed the socialisation1921 of grid construction costs (Internal Legal
Counsel 1, Developer Operator 1, 2, 5 and 7). Although the call for socialisation of
these costs was stated clearly by some, this request is not universally accepted
1919
Colin Nolden, ‘Governing community energy—Feed-in tariffs and the development of community wind energy
schemes in the United Kingdom and Germany’ (2013) 63 Energy Policy, 543; See Also David Toke and Aikaterini
Fragaki, ‘Do liberalised electricity markets help or hinder CHP and district heating? The case of the UK’ (2008)
36(4) Energy Policy, 1448
1920
Tim O’Riordan, ‘Cultures of Community Energy: A Policy Report’ [2016] The British Academy
1921
The term ‘socialisation’ within the electricity industry describes a process whereby costs of the function or
activity is spread across all consumers and as such is seen an activity of general economic interest - Michael
Rivier, Ignacio Pérez-Arriaga and Luis Almos ‘Electricity Transmission’ in Ignacio Pérez-Arriaga (ed) Regulation of
the Power Sector (Springer, 2014), 294
It is believed that regulators will need to rely heavily on industry experts to develop
these regulations because of the novel assets being deployed and the fast pace of
technology development.
The Regulatory respondent acknowledged that transmission networks will
have to evolve most noticeably because of the introduction of a 15% target for
interconnection levels1927 between EU countries. The increase in interconnection
capacity should have a direct correlation on the ability of transmission operators to
increase cross-border flows and as such allow the development of renewable
facilities in the most efficient locations in terms of wind and solar resources. The
1922
Sean Gammons, Richard Druce and Peter Davies, ‘Assessing the Cost Reflectivity of Alternative TNUoS
Methodologies’ [2014] NERA Report available at
http://www.nera.com/content/dam/nera/publications/2014/CostReflectivityReport.pdf
1923
These obligations include - managing system dispatch of generation assets, system balancing, network
switching and operations and facilitating competitive markets - https://www.nationalgrid.com/uk/about-grid/our-
role-industry/future-electricity-system-operator accessed 26 August 2018
1924
These obligations include – maintenance, repair and construction of new assets - Ibid
1925
PM0102: National Grid Legal Separation - consequential changes to STCPs to reference NGESO – April 2018
available at https://www.nationalgrid.com/sites/default/files/documents/PM0102-
%20STCP%20Mod%20Prop%20NGESO%20170418_0.pdf accessed 26 August 2018
1926
An example being EDF Energy’s 49 megawatt battery at West Burton, Nottinghamshire. This is part of a €8bn
storage investment programme by EDF across the EU – 27 March 2018 https://uk.reuters.com/article/uk-edf-
renewables-storage/edf-to-invest-8-billion-euros-in-power-storage-business-idUKKBN1H31CE accessed 10 July
2018
1927
Interconnection Levels of 15% by 2030 are set out in the EU’s ‘Communication on strengthening Europe's
energy networks’ – See Section 2.9.2 – available at
https://ec.europa.eu/energy/sites/ener/files/documents/communication_on_infrastructure_17.pdf accessed 10 July
2018
1928
Matthias Huber, Desislava Dimkova and Thomas Hamacher, ‘Integration of wind and solar power in Europe:
Assessment of flexibility requirements’ (2014) 69 Energy, 236; Paul Denholm and Maureen Hand, ‘Grid flexibility
and storage required to achieve very high penetration of variable renewable electricity ‘ (2011) 39(3) Energy
Policy, 1817
1929
Case C/09/456689 - Urgenda Foundation v Government of the Netherlands (June 2015), Available at
https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBDHA:2015:7196&keyword=urgenda (accessed 3
February 2017) – the Dutch Court took as a persuasive authority the Intergovernmental Panel on Climate Change
(IPCC) reports on climate change due the multi-national consensus on the subject
1930
In 1998 the largest US tobacco companies and 46 US states signed the Tobacco Master Settlement
Agreement, whereby manufacturers agreed to pay an estimated $206 billion over the first 25 years of the
In seeking to manage the returns from generating assets and track regulatory
change or regulatory risk, the responses from the Developer Operators can be seen
to reflect the composition of the sector, with different plant portfolios and different
business drivers owned by organisations with financial return expectations.
agreement: See State of California Department of Justice Office of the Attorney General,
https://oag.ca.gov/tobacco/msa (accessed 5 September 2016)
1931
See http://unfccc.int/parties and observers/items/2704.php.
1932
UNFCCC (2015), ‘Adoption of the Paris Agreement: Proposal by the President’, Draft Decision, 12 December
2015, https://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf (accessed 13 July 2016).
1933
Federated States of Micronesia v Czech Republic ; See Also Andrew Burke, ‘Federated States of Micronesia v
Czech Republic: greenhouse emissions as transboundary pollution’ (2011) 14(1-2). Asia Pacific Journal of
Environmental Law, 203 ; Paulo A Lopes, ‘FSM vs. Czech’: A New “Standing” for Climate Change?’ (2010) 10(2)
Sustainable Development Law & Policy 24
1934
Case T-251/11 Austria v Commission ECLI:EU:T:2014:1060
1935
Commission Decision 2015/1585, Aid Scheme SA 33995 –“ implemented by Germany for the support of
renewable electricity and of energy-intensive users”, available at http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv%3AOJ.L_.2015.250.01.0122.01.ENG accessed 30 March 2018
1936
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules’ -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
1937
Arbitration 062/2012, Charanne B.V. & Construction Investments S.A.R.L v Kingdom of Spain (January 2016)
Available At http://www.italaw.com/sites/default/files/case-documents/italaw7097_0.pdf accessed 20 January
2017
1938
Decision 10/2015, Scat Punti Vendita Spa v Agenzia delle entrate - Direzione provinciale di Reggio Emilia,
(October 2015) http://www1.agenziaentrate.gov.it/english/
1939
Command and Control Regulation being ‘the direct regulation of an activity by legislation that states what is
permitted’ - Phil McManus Environmental Regulation (Elsevier, 2009); See also Beatriz Junquera and Jesús
Ángel Del Brío ‘Preventive Command and Control Regulation: A Case Analysis’ (2016) 99(8) Journal of
Sustainability
5.1 Introduction
This chapter sets out the conclusions and recommendations arising out of the
research. This is done in the context of the two phases of the study, (i) doctrinal and
(ii) empirical. The recommendations made in this thesis are made based on the
views of the industry respondents and the practical findings these views represent.
The recommendations are thus made within the context of the analysis of the
conflicts analysed.
Following introductory sections relating to a thesis overview and key
contributions the chapter is divided into two parts. The first part details the
conclusions of the study and the second part is composed of recommendation for
regulatory change and refocus. There are also sections outlining limitations of the
research and recommendations related to further research to strengthen the
understanding of market participants and consumers.
This research focused on the diagonal conflicts between the renewable electricity
regulatory framework and wider EU free trade principles (e.g. free movement and
state aid). A conflict can be regarded as a diagonal conflict when different elements
of the regulatory framework are variously in conflict not with the Treaty Article from
which it is derived (which would be vertical conflict), but other Treaty Articles.
Chapter 2 initially considered the nature of legal conflicts and how they occur
and are resolved. The Chapter also set out how the increased specialism of
international law1940 has caused fragmentation and conflicts between differing legal
instruments. 1941 Chapter 2, in setting out the details of the various Treaty Articles
and Directives forming the renewable electricity regulatory framework showed the
framework to be complex, with several interlocking regulatory instruments. The
Chapter also showed that having nationally focused command and control style
Directives increased the areas of conflict with wider EU free trade principles. The
analysis showed that taken as a whole the Treaty Articles did resolve elements of
1940
International Law being considered as a body of law or a jurisdiction brought about by the collaboration of two
or more soverign states – Hans Kelsen Principles of International Law (Rinehart, 2003), 201
1941
H.E. Judge Gilbert Guillaume, President of the International Court of Justice, Speech to the General
Assembly of the United Nations (30 Oct. 2001), http://www.icj-cij.org/files/press-releases/5/2995.pdf accessed 10
March 2019; See Also Mario Prost and Paul Clark, ‘Unity, Diversity and the Fragmentation of International Law:
How Much Does the Multiplication of International Organizations Really Matter?’ (2006) 5(2) Chinese Journal of
International Law, 34
The five ways this research contributes to existing knowledge are outlined below.
Firstly, the research uses case law analysis to consider the interaction of EU
renewable electricity law1943 and free movement (Article 34 TFEU) 1944 and state aid
(Articles 107 TFEU). 1945 There is considerable academic literature surrounding both
vertical and horizontal conflict, 1946 however, there is little discussion of diagonal
1942
David Newbury ‘Questioning the EU Target Electricity Model – how should it be adapter to deliver the
Trilemma’ [2016] Cambridge University, Energy Policy Research Group Working Paper: See Also Raphael
Heffron Energy Law: An Introduction (Springer, 2014)
1943
Renewable Energy Directive, Emissions Trading Directive, Effort Sharing Decision, Industrial Emissions
Directive, Energy Efficiency Directive, Electricity Market Directive, Energy Taxation Directive and others
1944
Hans Vedder, Anita Rønne, Martha M Roggenkamp and Íñigo del Guayo, ‘EU Energy Law’ in Martha
Roggenkamp, Catherine Redgwell, Anita Ronne, and Inigo del Guayo (eds) Energy Law in Europe National, EU
and International Regulation (Oxford University Press, 2016)
1945
Kamiel Mortelmans, 'Towards Convergence in the Application of the Rules on Free Movement and on
Competition?' (2001) 38,3 Common Market Law Review, 613, 613.
1946
Sybe de Vries ‘The Protection of Fundamental Rights Within Europe’s Internal Market After Lisbon: An
endeviour for more harmony’ in Sybe de Vries, Ulf Bernitz and Stephen Weatherill (eds) The Protection of
Fundamental Rights in the EU After Lisbon (Hart, 2013); Philippe Sands and Paolo Galizzi Documents in
European Community Environmental Law (Cambridge University Press, 2006); Eva Heidbreder ‘Strategies in
multilevel policy implementation: moving beyond the limited focus on compliance’ (2017) 24(9) Journal of
European Public Policy, 1367;
1947
Rike Krämer, ‘The Notion of Diagonal Conflicts as a Key Concept of European Conflicts Law’ in Christian
Joerges (ed) After Globalisation, New Patterns of Conflict and their Sociological and Legal Reconstructions (ARENA
Report No 4/11, 2011), 145, 158
1948
Angus Johnson and Guy Block, EU Energy Law (Oxford University Press, 2012); Michael Faure and Marjan
Peeters (eds) Climate Change Liability (Elgar, 2011); Martha Roggenkamp, Catherine Redgwell, Anita Ronne,
and Inigo del Guayo (eds) Energy Law in Europe (Oxford University Press, 2016); Peter Cameron and Raphael
Heffron (eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016)
1949
Case C-573/12, Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:2037
1950
Marek Szydło, 'How to reconcile national support for renewable energy with internal market obligations? The
task for the EU legislature after Ålands Vindkraft and Essent' (2015) 52(2) Common Market Law Review, 489;
Anouk van Der Wansem, 'Judgment of the European Court of Justice, 1 July 2014: Case C-573/12, Ålands Vindkraft
AB v. Energimyndigheten' (2015) 42(4) Legal Issues of Economic Integration, 401; Armin Steinbach and Robert
Brückmann, ‘Renewable Energy and the Free Movement of Goods’ (2015) 27(1) Journal of Environmental Law, 1;
Eirini Tsifopoulou, ‘Renewable-Energy Support Schemes in the Case Law of the Court of Justice of the EU:
Tensions Between Trade and Climate Objectives’ (2016) 6(3-4) Climate Law, 264; Dorte Fouquet and Angela
Guarrata, ‘Judgment of 1 st July 2014 in Alands Vindkraft AB v Energimyndigheten Comments on Case C-573/12’
(2014) 1 Renewable Energy Law and Policy Review, 52; Étienne Durand and Malcolm Keay,’ National support for
renewable electricity and the single market in Europe: the Ålands Vindkraft case’ [2014] Oxford Institute for Energy
Studies; Geert van Calster, Climate change and renewable energy as a super trump for EU trade law’ (2014) 1
Renewable Energy Law and Policy Review; Dorte Fouquet and J Nysten, ‘Guarantees of Origin and Green
Electricity Certificates in Flanders and in Sweden national design weaknesses or violation of European rules?
(2013) 3(3) ,European Energy Journal, 72; Alex McLean,’ The ECJ / Ålands case – Implications for National
Renewables Support Systems’ [2014] Energy & Resources; A Sánchez Graells, ’CJEU protects discriminatory
green energy schemes and keeps inconsistency in EU free movement of goods law (C-573/12)’ (2014)
http://howtocrackanut.blogspot.no/2014/07/cjeu-protects-discriminatory-green.html (accessed 10 May 2016); C
Ryckman, “EU Court Allows Discriminatory Green Energy Support Schemes”, National Law Review (2014),
www.natlawreview.com/article/eu-court-allows-discriminatory-green-energy-support-schemes (accessed 1 April
2016); C Banet, ’The EU Court Of Justice rules in favour of Sweden in the Åland Vindkraft Case’ July 2014,
www.ecohz.com/facts-news/news/aaland-case (accessed 1 September 2016)
1951
Rike Krämer, ‘The Notion of Diagonal Conflicts as a Key Concept of European Conflicts Law’ in Christian
Joerges (ed) After Globalisation, New Patterns of Conflict and their Sociological and Legal Reconstructions (ARENA
Report No 4/11, 2011), 145, 158
1952
Renewable Energy Directive, Emissions Trading Directive, Effort Sharing Decision, Industrial Emissions
Directive, Energy Efficiency Directive, Electricity Market Directive, Energy Taxation Directive and others
1953
Aviel Verbruggen and Volkmar Lauber, ‘Basic Concepts for Designing Renewable Electricity Support Aiming
at a Full-scale Transition by 2050’ (2009) 37 Energy Policy 5732, 5734
1954
Sybe de Vries ‘The Protection of Fundamental Rights Within Europe’s Internal Market After Lisbon: An
endeviour for more harmony’ in Sybe de Vries, Ulf Bernitz and Stephen Weatherill (eds) The Protection of
Fundamental Rights in the EU After Lisbon (Hart, 2013); Philippe Sands and Paolo Galizzi Documents in
European Community Environmental Law (Cambridge University Press, 2006); Eva Heidbreder ‘Strategies in
multilevel policy implementation: moving beyond the limited focus on compliance’ (2017) 24(9) Journal of
European Public Policy, 1367
1955
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
1956
Command and Control Regulation being ‘the direct regulation of an activity by legislation that states what is
permitted’ - Phil McManus Environmental Regulation (Elsevier, 2009); See also Beatriz Junquera and Jesús
Ángel Del Brío ‘Preventive Command and Control Regulation: A Case Analysis’ (2016) 99(8) Journal of
Sustainability
1957
Case C-596/13 Commission v Moravia Gas Storage AS. (previously Globula AS.) ECLI:EU:C:2015:203,
para. 36; Ibid, para 46
1958
Case C-17/03 Vereniging voor Energie, Milieu en Water and Others (VEMW) v Directeur van de Dienst
uitvoering en toezicht energie,ECLI:EU:C:2005:362
1959
means ‘any instrument, scheme or mechanism applied by a Member State or a group of Member States, that
promotes the use of energy from renewable sources by reducing the cost of that energy, increasing the price at
which it can be sold, or increasing, by means of a renewable energy obligation or otherwise, the volume of such
energy purchased. This includes, but is not restricted to, investment aid, tax exemptions or reductions, tax
refunds, renewable energy obligation support schemes including those using green certificates, and direct price
support schemes including feed-in tariffs and premium payments’ – Definition from Article 2 Renewable Energy
Directive (2009/28/EC)
1960
Arbitration 062/2012, Charanne B.V. & Construction Investments S.A.R.L v Kingdom of Spain (January 2016)
Available At http://www.italaw.com/sites/default/files/case-documents/italaw7097_0.pdf
1961
Decision 10/2015, Scat Punti Vendita Spa v Agenzia delle entrate - Direzione provinciale di Reggio Emilia,
(October 2015) http://www1.agenziaentrate.gov.it/english/
1962
Case C-6/64, Flaminio Costa v Ente Nazionale Energia Elettrica (Enel) ECLI:EU:C:1964:66; See also Case C-
26/62, NV Algemene Transport-en Expeditie Onderneming Van Gend en Loos v Nederlandse Administratie der
Belastinger, ECLI:EU:C:1963:1 ; Case C-266/16 Western Sahara Campaign UK v Commissioners for Her
Majesty's Revenue and Customs and Secretary of State for Environment, Food and Rural Affairs
ECLI:EU:C:2018:118; Case C-284/16 Slowakische Republik v Achmea BV ECLI:EU:C:2018:158
1963
The Energy Charter Treaty 1994 – available at http://www.energycharter.org/process/energy-charter-Treaty-
1994/energy-charter-Treaty; For an introduction to the Energy Charter Treaty see Graham Coop and Bernhard
Maier, ‘External Relations of EU Energy Regulation’ in Peter Cameron and Raphael Heffron (eds) Legal Aspects
of EU Energy Regulation (Oxford University Press, 2016), 66
1964
Case C-92/11 RWE Vertrieb AG v Verbraucherzentrale Nordrhein-Westfalen eV.,ECLI:EU:C:2013:180
1965
Joined Cases C-359/11 and C-400/11 Alexandra Schulz v Technische Werke Schussental GmbH und Co. KG
and Josef Egbringhoff v Stadtwerke Ahaus GmbH, ECLI:EU:C:2014:2317
1966
Case C-347/06 ASM Brescia SpA v Comune di Rodengo Saiano, ECLI:EU:C:2008:416
1967
Case C-201/08 Plantanol GmbH & Co. KG v Hauptzollamt Darmstadt, ECLI:EU:C:2009:539
1968
Geert van Calster,’ Climate Change and Renewable Energy as a Super Trump for EU Trade Law
However all Essent clear’ (2014) 1 2014 Renewable Energy Law & Policy Review, 60
1969
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
1970
Catherine Barnard, The Substantive Law of the EU: The Four Freedoms, (Oxford University Press 2007)
1971
Financial close is a point in time when a project has reach a position where its forecast returns are such that
the equity providers are satisified with their returns and the financing agreements have been signed and any pre-
conditions contained in these agreements are satisfied. It enables funds (equity, loans, grants etc) to be made
available to the project.- See Scott Hoffman The Law and Business of International Project Finance: A Resource
for Governments, Sponsors, Lawyers, and Project Participants (Cambridge University Press, 2008); See Also Sue
Wright The Handbook of International Loan Documentation (Palgrave MacMillan, 2014)
1972
Ingmar Ritzenhofen and Stefan Spinler, ‘Optimal design of feed-in-tariffs to stimulate renewable energy
investments under regulatory uncertainty — A real options analysis’ (2016) 53 Energy Economics 76
1973
Joel Smith and Johannes Urpelainen, ‘Removing fuel subsidies: How can international organizations support
national policy reforms?’ (2017) 17(3) International Environmental Agreements: Politics, Law and Economics, 327;
Margaret Young, ‘Energy Transitions and Trade Law: Lessons from the Reform of Fisheries Subsidies’ (2017)
International Environmental Agreements: Politics, Law and Economics; University of Melbourne Legal Studies
Research Paper No. 746. Available at https://ssrn.com/abstract=2930693; Ambrus Bárány and Dalia Grigonytė,
‘Measuring Fossil Fuel Subsidies’, European Commission, available at
http://ec.europa.eu/economy_finance/publications/economic_briefs/2015/pdf/eb40_en.pdf, accessed 15
5.4 Conclusions
The theoretical framework and conflict analysis undertaken in Chapter 2 and case
law Chapter 3 shows that the renewables regulatory framework is in diagonal conflict
with EU free trade principles. Finding a conflict within a complex legal construct such
as the body of EU law is not unusual and therefore at its simplest this conclusion
could have almost been predicted, 1979 however, it is the number of conflicts and that
the conflicts are dependent on the nature of the legal instrument in question that was
not predictable.
Additionally, the CJEU is found to consistently apply a lex specialis approach to
resolving the resolving the legal conflict between the renewable’s regulatory
October 2016; David Victor, ‘The Politics of Fossil-Fuel Subsidies’ (2009) Available at
https://ssrn.com/abstract=1520984 accessed 20 October 2016; See Also Euroelectric, Ensuring investments in a
Liberalised Electricity Sector, (Euroelectric, 2004), 53; International Energy Agency, Power Generation Investment
in Electricity Markets (International Energy Agency, 2003),12
1974
Joanna Lewis, ‘The rise of renewable protectionism: Emerging trade conflicts and implications for low carbon
development’ (2014) 14(4) Global Environmental Politics, 10
1975
Case C-265/08 Federutility and others v Autorità per l’energia elettrica e il gas ECLI:EU:C:2010:205
1976
Case C-242/10 Enel Produzione SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2011:861
1977
Case C-264/09 Commission v Slovak Republic, ECLI;EU:C:2011:580
1978
Joined Cases C-105/12 to C-107/12 Staat der Nederlanden v Essent NV, Essent Nederland BV, Eneco
Holding NV and Delta NV, ECLI:EU:C:2013:677
1979
Gunnar Beck, ‘The Macro Level: The Structural Impact of General International Law on EU Law The Court of
Justice of the EU and the Vienna Convention on the Law of Treaties’ (2016) 35(1) Yearbook of European Law,
484
1980
Ronald Dworkin Law's Empire (Harvard University Press, 1987), 191
1981
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
1982
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules’ -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
1983
Ibid, Article 16(2)(b)
1984
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules’ -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
1985
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
1986
Green certificates are instruments certifying the production of electricity from renewable sources. Electricity
suppliers are expected to generate a given amount of electricity from renewable energy sources, an act which is
demonstrated by the possession of a green certificate which can be traded and thus revenues recovered -
Gestore Mercati Energetici, ‘About Green certificates’
<www.mercatoelettrico.org/en/mercati/cv/CosaSonoCv.aspx. accessed 25 January 2016
1987
‘Feed-in Tariff is a contract mechanism between the owner of the renewable electricity generating facility and
a purchasing organisation which provides a guaranteed price for generated output (usually providing an enhanced
price above wholesale market prices) to the owner. This is generally combined with a purchase obligation.
Typically the costs are borne either by consumers or by the public budget’ -See Bert Saveyn, Antonio Soria
Ramírez and Tobias Wiesentha ‘Renewable electricity policy: feed-in tariffs versus tradeable green certificates’
(2008) Institute for Prospective Technological Studies
1988
Means ‘a body, whatever its legal form, which has been made responsible, pursuant to a measure adopted by
the state, for providing a public service under the control of the state and has for that purpose special powers
beyond that which result from the normal rules applicable in relations between individuals.’ Case C-188/89 Foster
v British Gas plc ECLI:EU:C:1990:313
1989
Case C-379/98 PreussenElektra AG v Schleswag AG, in the presence of Windpark Reußenköge GmbH &
Land Schleswig-Holstein ECLI:EU:C:2001:160
1990
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851
1991
Case T-251/11 Austria v Commission ECLI:EU:T:2014:1060
1992
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281
The regulatory framework is composed of both C&C 1995 (e.g. Energy Efficiency
Directive) 1996 and market based (e.g. Emission Trading Directive) Directives, which
creates a complexity and in some cases inconsistencies. These inconsistencies
result from the layering1997 (new policy goals and instruments on top of what exists),
conversion (new instruments based on old goals) and drift1998 (new goals replacing
the old without change to the regulatory instruments) in the development of the
regulatory framework.
An example of the inconsistencies within the regulatory framework is the
Energy Efficiency Directive, a C&C style of directive, which reduces energy demand,
whilst the number of emissions certificates granted in accordance with the EU-ETS
remains the same. Although both Directives are within the operational
competency1999 of the Commission, the number of unused emissions allowances
simply grows as electricity demand is reduced. As the number of unused emission
allowances increases, the market price for the certificates falls and becomes a less
1993
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
1994
Council Decision No 406/2009/EC 23 April 2009 ‘Reduction in carbon emissions to meet the Community’s
carbon emission reduction commitments up to 2020’ (Effort Sharing Decision)
1995
Command and Control Regulation being ‘the direct regulation of an activity by legislation that states what is
permitted’ - Phil McManus Environmental Regulation (Elsevier, 2009); See also Beatriz Junquera and Jesús
Ángel Del Brío ‘Preventive Command and Control Regulation: A Case Analysis’ (2016) 99(8) Journal of
Sustainability
1996
Council Directive 2012/27/EU 25 October 2012 – Energy Efficiency Directive OJ L315/1 Available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:315:0001:0056:en:PDF
1997
Michael Howlett and Jeremy Rayner, ‘Patching v packaging in policy formulation: assessing policy portfolio
design’ (2013) 1(2) Politics & Governance, 170
1998
Florian Kern and Michael Howlett, ‘Implementing transition management as policy reforms:a case study of the
dutch energy sector’ (2009) 42(4) Policy Sciences, 391, 395
1999
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
Whilst conclusions 1 and 2 considers diagonal and vertical conflicts between the
renewable energy regulatory framework and EU primary law, conclusion 3 looks at
the regulatory risks that come from within the regulatory structure.
The renewable energy regulatory framework has reduced carbon emissions
by facilitating the construction of renewable electricity generating facilities such that
nearly 20% of EU electricity is derived from renewables. Furthermore, the regulatory
framework is on course to achieve its 20% target by 2020. On this basis, the
framework can be considered a success. The regulatory framework satisfies the
EU’s commitments to global carbon emissions reductions contained in the
UNFCCC2000 and the COP 21 Paris Climate Change Agreement.2001
The scale and number of Directives forming the renewables regulatory
framework is set out in Chapter 2. The number of and ‘interconnectedness’ of the
Directives can be seen. This complexity is increased by the implementation of these
Directives at member state level in a non-harmonised manner, with each member
state having a different regulatory support scheme.
Moreover, this complexity often leads to an unco-ordinated 2002 series of
instruments with overlapping policy aims, 2003 because of the variety and diversity of
end-users 2004 and the development of the instruments incrementally over many
years.2005
The complexity was stated, during the empirical phase, to be an issue and a
source of regulatory uncertainty and thus risk for Developer Operators. The
complexity means that something can be missed and thus can be considered a
2000
See http://unfccc.int/parties and observers/items/2704.php.
2001
UNFCCC (2015), ‘Adoption of the Paris Agreement: Proposal by the President’, Draft Decision, 12 December
2015, https://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf accessed 13 July 2016
2002
Peter Cameron, ‘The Internal Energy M arket – Redefining Object ives’ Peter Cameron and
Raphael Heffron (eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016), 16
2003
Lorraine Murphy, Frits Meijer and Henk Visscher, ‘A qualitative evaluation of policyinstruments used to
improve energy performance of existing privatedwellings in the Netherlands’ (2012) 45 Energy Policy, 459
2004
Måns Nilsson, ‘Energy governance in the European Union: enabling conditionsfor a low carbon transition?’ in
Geert Verbong and Derk Loorbach (eds), Governing the Energy Transition: Reality, Illusion, or Necessity?,
(Routledge, 2012), 296
2005
Florian Kern and Michael Howlett, ‘Implementing transition management as policy reforms:a case study of the
dutch energy sector’ (2009) 42(4) Policy Sciences, 391, 395
From the empirical research it can be concluded that the industry tracks the detailed
form and content of the regulatory framework both at the EU and national level and
regards any change in the regulatory framework as a regulatory risk. The Developer
Operators on a day to day basis seem to apply a legal positivist approach dealing
with the regulatory framework as it is, devoid of moral or other overriding objectives.
2006
2006
Herbert L A Hart, ‘Positivism and the Separation of Law and Morals’ (1958) 71 Harvard Law Review, in H L A
Hart (ed) Essays in Jurisprudence and Philosophy ( Clarendon Press, 1983)
2007
‘Dispatch of generating facilities means the short-term determination of the economically optimal output of a
series of electricity generation facilities connected to an electricity network to meet the electicity demand on that
network, at the lowest possible cost, subject to transmission capacity and operational constraints.’ - P Palermo
‘Approaches to Generation Dispatch in Transmission Planning’ (2009) 135 CIGRE; therefore ‘Priority Dispatch’ is
the practice by transmission system operators when dispatching electricity installations they shall give priority to
renewable electricity generating installations, thus placing such installations outside the normal dispatch rules’ -
Article 16(2) (c) Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable
sources OJ L140/16 (Renewable Energy Directive)
2008
Case C-492/14 Essent Belgium NV v Vlaams Gewest and Others ECLI:EU:C:2016:732
2009
Peak Gen Top Co Ltd & Ors, R (on the application of) v The Gas And Electricity Markets Authority & Anor,
Court of Appeal - Administrative Court, June 22, 2018, [2018] EWHC 1583 (Admin) - relating the process the
regulator had followed, where the UK administrative court found in Ofgem’s [UK Energy Markets Regulator] favour
2010
Ronald Dworkin Law's Empire (Harvard University Press, 1987), 191
The C&C Directives (such as the Renewable Energy Directive, 2012 Energy Efficiency
Directive 2013 and the Effort Sharing Decision) 2014
have been very efficient at
achieving the stated emissions reduction and renewable energy targets. However,
these Directives fail to take account of the costs of achieving the targets by different
organisations and therefore fail to bring the cost efficiencies that a market-based
Directives would seek to apply. The differing potential for member states to achieve
these targets is recognised to a certain extent by the differential renewable electricity
targets placed in the Renewable Energy Directive. 2015
However, this differing potential is static as it is set out within Annex I of the
Directive. As a result of this formulation within the Directive, no allowance is made
for the development of technology and pricing of solutions that might emerge over
the duration of the Directive making the targets for certain member states highly
economic to achieve, whilst causing other member states considerable hardship in
striving to meet the targets.
As has been shown the elements of the regulatory framework do not resolve
trilemma2016 on an individual basis, however, as a whole, they come closer, with, for
example, the Renewable Energy Directive increasing renewable generating
capacity and the Emissions Trading Directive reducing carbon emissions. The
renewables support schemes of the member states have, however, increased costs
for electricity consumers (German Green Levy2017 litigation being an example of the
issues).
However, if the COP 21 Paris Climate Change Agreement targets are to be
achieved, bringing cost efficiency and market forces to bear will be important, with
2011
David Newbury ‘Questioning the EU Target Electricity Model – how should it be adapter to deliver the
Trilemma’ [2016] Cambridge University, Energy Policy Research Group Working Paper: See Also Raphael
Heffron Energy Law: An Introduction (Springer, 2014)
2012
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
2013
Council Directive 2012/27/EU 25 October 2012 – Energy Efficiency Directive OJ L315/1 Available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:315:0001:0056:en:PDF
2014
Council Decision No 406/2009/EC 23 April 2009 ‘Reduction in carbon emissions to meet the Community’s
carbon emission reduction commitments up to 2020’ (Effort Sharing Decision)
2015
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
2016
David Newbury ‘Questioning the EU Target Electricity Model – how should it be adapter to deliver the
Trilemma’ [2016] Cambridge University, Energy Policy Research Group Working Paper: See Also Raphael
Heffron Energy Law: An Introduction (Springer, 2014) – Trilemma being reliability, sustainability and affordability
2017
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281
Energy efficiency measures have reduced electricity demand across the EU, energy
not produced has no carbon emissions. Therefore, regulations that enhance energy
efficiency should be strengthened, provided they enhance efficiency at a lower cost
than the societal cost (including all capital, operating, pollution, and implementation
costs) for delivering the energy, thus representing a ‘public good’.2019
2018
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
2019
Mark Levine, Jonathan Koomey, James Mcmahon, Alan Sanstad and Eric Hirst, ‘Energy Efficiency Policy and
Market Failures’ (2003) 20(1) Annual Review of Energy and the Environment, 535
The major conflicts outlined of free movement, distortions of competition and other
forms of state aid and the failure to implement the ‘polluter pays’ principle seem to
stem from (i) the payment by the renewable generating facility’s host country, of a
feed-in tariff or the granting of a tradeable certificate and (ii) the reluctance of the
host country to allow others to benefit from renewable electricity that has received
these benefits (See Section 2.9.3 and 2.10.7).
2020
SWD(2014) 15 final, “A policy framework for climate and energy in the period from 2020 up to 2030”, Section
2.11.1
2021
COM (2011) 112: A Roadmap for moving to a competitive low carbon economy in 2050 (08 Mar 2011) see
www.ec.europa.eu/clima/policies/strategies/2050_en#tab-0-1
2022
patching, are policies and regulatory instruments enacted in order to correct flaws or allow the regulatory
framework toadapt to changing circumstances - Michael Howlett and Jeremy Rayner, ‘Patching v packaging in
policy formulation: assessing policy portfolio design’ (2013) 1(2) Politics & Governance, 170, 177
2023
Layering refers to the process of adding new policy goals andinstruments to existing policy mixes without
discarding previousmeasures - Michael Howlett and Jeremy Rayner, ‘Patching v packaging in policy formulation:
assessing policy portfolio design’ (2013) 1(2) Politics & Governance, 170
2024
Michael Howlett and Jeremy Rayner, ‘Design principles for policy mixes: cohesion andcoherence in “New
governance arrangements”’, (2007) 26(4) Policy & Society, 1
2025
Conversion is where new instrument mixes evolve while holding old goals constant. If the old goals lack
coherence, then changes in policy instruments may either reduce levels of implementation conflicts or enhance
them, but are unlikely to succeed in matching means and ends of policy - Florian Kern and Michael Howlett,
‘Implementing transition management as policy reforms:a case study of the dutch energy sector’ (2009) 42(4)
Policy Sciences 391, 395
2026
drift occurs when new goals replace old ones without chang-ing the instruments used to implement them.
These instruments thencan become inconsistent with the new goals and most likely ineffec-tive in achieving them
- Ibid
2027
Florian Kern and Michael Howlett, ‘Implementing transition management as policy reforms:a case study of the
dutch energy sector’ Policy Sciences (2009) 42(4) 391; See Also Michael Howlett and Jeremy Rayner, ‘Design
principles for policy mixes: cohesion andcoherence in “New governance arrangements”’ (2007) 26(4) Policy &
Society 1
2028
Peter Cameron, ‘The Internal Energy Market – Redefining Objectives’ Peter Cameron and Raphael Heffron
(eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016), 5
2029
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN
2030
Ibid,
2031
Case T-370/11 Poland v Commission, ECLI:EU:T:2013:113
2032
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
2033
Command and Control Regulation being ‘the direct regulation of an activity by legislation that states what is
permitted’ - Phil McManus Environmental Regulation (Elsevier, 2009); See also Beatriz Junquera and Jesús
Ángel Del Brío ‘Preventive Command and Control Regulation: A Case Analysis’ (2016) 99(8) Journal of
Sustainability
2034
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851
2035
Case T-251/11 Austria v Commission, ECLI:EU:T:2014:1060
2036
Case T-47/15 Germany v Commission, ECLI:EU:T:2016:281
The use of electricity has undergone significant change since the need for climate
change abatement was recognised in the early 1990s and will most likely change in
the future. At the same time, governments are asked to steer electricity production
and consumption to solve the ‘trilemma’ of reliability, sustainability and
2040
affordability, as well as reducing climate change and achieving market
liberalisation.2041
Therefore, in seeking to address these high-level goals as well as some very
specific external targets contained in the UNFCCC’s2042 the Kyoto Protocol2043 and
the COP 21 2044 global climate change agreement, as set out in Chapter 2 and
2037
Price discovery is the overall process, whether explicit or inferred, of setting the spot price of an asset or
service but most commonly the proper price of a security, commodity, or currency based on many factors. These
include supply and demand, intangible factors such as investor risk attitudes and the overall economic and
geopolitical environment. Simply put, it is where a buyer and a seller agree on a price and a transaction occurs.
Definition from https://www.investopedia.com/terms/p/pricediscovery.asp#ixzz5BR9NKHyG accessed 30 March
2018
2038
Nils Meyer-Ohlendorf, Benjamin Görlach and Ennid Roberts, ‘EU Effort Sharing Decision after 2020:
Auctioning of AEAs’ (19 January 2016) Ecological Institute, Berlin
2039
Council Directive 2012/27/EU 25 October 2012 – Energy Efficiency Directive OJ L315/1 Available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:315:0001:0056:en:PDF
2040
David Newbury ‘Questioning the EU Target Electricity Model – how should it be adapter to deliver the
Trilemma’ [2016] Cambridge University, Energy Policy Research Group Working Paper See Also Raphael Heffron
Energy Law: An Introduction (Springer, 2014)
2041
Christian Egenhofer, Integrating Security of Supply, Market Liberalization and Climate Change Appearing in
Michael Emerson, Readings in European Security, (Vol 4 Centre for European Policy Studies, 2007); See also
Hazel Nash, ‘The European Commission’s Sustainable Consumption and Production and Sustainable Industrial
Policy Action Plan’ (2009) 17 Journal of Cleaner Production 496
2042
See http://unfccc.int/parties and observers/items/2704.php.
2043
See http://unfccc.int/kyoto-protocol/status of ratification/items/2613.php.
2044
UNFCCC (2015), ‘Adoption of the Paris Agreement: Proposal by the President’, Draft Decision, 12 December
2015, https://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf (accessed 13 July 2016).
2045
Bruno Simma, ‘Bliateralism and Community Interest in the Law of State Responsibility’ in Yoram Dinstein (ed),
International Law at a Time of Perplexity: Essays in Honour of Shabtai Rosenne (Martinus Nijhoff 1989) 822-23
2046
Raphael Heffron and Peter Cameron, ‘The Future of EU Energy Law’ in Peter Cameron and Raphael Heffron
(eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016)
2047
Council Directive (EC) 2010/75/EC 24 November 2010 – Industrial Emissions (integrated pollution prevention
and control) OJ L334/17 Available at http://ec.europa.eu/environment/industry/stationary/ied/faq.htm
2048
Karen Turner and Antonios Katris, ‘A “Carbon Saving Multiplier” as an alternative to rebound in considering
reduced energy supply chain requirements from energy efficiency?’ (2017) 103 Energy Policy 249
2049
Council Decision No 406/2009/EC 23 April 2009 ‘Reduction in carbon emissions to meet the Community’s
carbon emission reduction commitments up to 2020’ (Effort Sharing Decision)
2050
David Newbury ‘Questioning the EU Target Electricity Model – how should it be adapter to deliver the
Trilemma’ [2016] Cambridge University, Energy Policy Research Group Working Paper: See Also Raphael
Heffron Energy Law: An Introduction (Springer, 2014) – Trilemma being reliability, sustainability and affordability
2051
Jenny Winkler, Alberto Gaio, Benjamin Pfluger and Mario Ragwitz, ‘Impact of renewables on electricity
markets – Do support schemes matter?’ (2016) 93 Energy Economics 157
2052
Benjamin Görlacha ‘Emissions Trading in the Climate Policy Instrument Mix: understanding and Managing
Interactions with other Policy Instruments’, (2014) 25(34) Energy & Environment 733
2053
Frank Maarten and Jan Venman, ’The effect of allocation above emissions and price uncertainty on
abatement investments under the EU ETS’ (2016) 125 Journal of Cleaner Production, 595
2054
The ‘Coal Renaissance’ is a term given to an increased use of coal generation due to pricing and the
restriction of other generation capacity types - Michael Le Page, ‘Coal renaissance means switching to plan B on
climate change’ (2015) 3030 New Scientist; See Also Vanessa Mock, ‘Coal Renaissance Risks Tarnishing the
EU’s Green-Energy Credentials’ 2 Sept 2014 The Wall Street Journal
2055
Glenn Harrison ‘Stocks and Flows’ in Steven Durlauf and Lawrence Blume (eds) The New Palgrave Dictionary
of Economics (Palgrave Macmillan, 2008); See Also Daniel Bodansky, Jutta Brunnée and Lavanya Rajamani
International Climate Change Law (Oxford University Press, 2017)
2056
Council Directive 2009/31/EC 23 April 2009 on the geological storage of carbon dioxide OJ L140/114 (Carbon
Capture & Storage Directive)
2057
Matthias Kalkuhl, Ottmar Edenhofer and Kai Lessmann, ‘Renewable energy subsidies: Second-best policy or
fatal aberration for mitigation?’ (2013) 35(3) Resource and Energy Economics, 217
2058
Ibid
2059
EU Decision 2015/1814 of 6 October 2015 ‘the establishment and operation of a market stability reserve for
the Union carbon emission trading scheme and amending Directive 2003/87/EC’ OJ L 264/1
2060
EU Communication 2801 15 May 2018 ‘Publication of the total number of allowances in circulation in 2017 for
the purposes of the Market Stability Reserve under the EU Emissions Trading System established by Directive
2003/87/EC’
2061
Daniel Radov, Alon Carmel and Clemens Koenig, ’Offshore Revolution? Decoding the UK Offshore Wind
Auctions & What the Results Means for a “Zero-Subsidy” Future’ (2017) NERA Economic Consulting
2062
Samuela Bassi, Maria Carvalho, Baran Doda and Sam Fankhauser, ‘Credible, effective and publicly
acceptable policies to decarbonise the European Union’ [2017] The Grantham Research Institute on Climate
Change and the Environment, London School of Economics and Political Science Working Paper -
http://www.lse.ac.uk/GranthamInstitute/wp-content/uploads/2017/12/Credible-effective-and-publicly-acceptable-
policies-to-decarbonise-the-European-Union-Final-report-2.pdf accessed 12 July 2018
2063
YingFan, Jun-Jun Jia, XinWang and Jin-HuaXu, ‘What policy adjustments in the EU ETS truly affected the
carbon prices?’ (2017) 103 Energy Polict, 145
2064
Anne Schopp, William Acworth, Daniel Huppmann and Karsten Neuhoff, ‘Modelling a Market Stability Reserve
in Carbon Markets’ [2015] DIW Berlin Discussion Paper No. 1483; See also Raphael Heffron and Peter Cameron,
‘The Future of EU Energy Law’ in Peter Cameron and Raphael Heffron (eds) Legal Aspects of EU Energy
Regulation (Oxford University Press, 2016)
To remove the transmission constraints that bring about the requirement for a series
of nationally focussed electricity markets across the EU and thus the diagonal
conflicts outlined in Conclusion 1, it is recommended that the level of transmission
interconnection between member states is increased. Increasing the level of
transmission interconnection capacity across the EU will reduce the level of
transmission curtailment 2067 and allow renewable energy to flow from source to
consumer. This recommendation would allow renewable facilities to be developed
in locations with the best wind and solar resources and in so doing produce the
lowest cost output.
This would help to fulfil the Commission’s stated aim of allowing energy to
flow ‘freely in Europe so that the electricity produced by a windmill in one country
can reach the consumers in another.’2068
It is recognised that moving to an integrated and interconnected transmission
system will require significant structural changes in the existing assets of the
transmission system operators. 2069 These changes may well only occur at the
instigation of EU and member state legislators and upon the changed perception of
EU citizens to transmission assets. 2070
2065
https://ec.europa.eu/clima/policies/ets/revision_en#tab-0-0
2066
Ottmar Edenhofer, Christian Flachsland, Christoph Wolff, Lisa Katharina Schmid, Anna Leipprand, Nicolas
Koch, Ulrike Kornek and Michael Pahle, ‘Decarbonisation and EU ETS Reform: Introducing a price floor to drive
low-carbon investments’ [2017] Mercator Research Institute on Global Commons and Climate Change Working
Paper
2067
Curtailment is a forced reduction in the output of an electricity generation facility from what it could otherwise
produce given available resources, typically as a result of capacity constraints in the transmission system - Lori
Bird, Jaquelin Cochran, and Xi Wang, ‘Wind and Solar Energy Curtailment: Experience and Practices in the
United States’ [2014] National Renewable Energy Laboratory Working Paper; See Also Henrik Klinge Jacobsen
and Sascha Thorsten Schröder, ‘Curtailment of renewable generation: Economic optimality and incentives’ (2012)
49 Energy Policy, 663
2068
P/18/2122 Commission Investigation TenneT TSO GmbH's – 19 March 2018 available at
http://europa.eu/rapid/press-release_IP-18-2122_en.htm accessed 4 April 2018
2069
Raphael Heffron and Peter Cameron, ‘The Future of EU Energy Law’ in Peter Cameron and Raphael Heffron
(eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016)
2070
Frank Geels, Florian Kern, Gerhard Fuchs, Nele Hinderer, Gregor Kungl, Josephine Mylan, Mario Neukirch,
and Sandra Wassermann, ‘The enactment of socio-technical transition pathways: A reformulated typology and a
comparative multi-level analysis of the German and UK low-carbon electricity transitions (1990–2014)’ (2016)
45(4) Research Policy, 896
2071
David Jacobs Renewable Energy Policy Convergence in the EU The Evolution of Feed-in Tariffs in Germany,
Spain and France (Taylor & Frances, 2012)
2072
Fred Schweppe, Michael Caramanis, Richard Tabors and Roger Bohn Spot Pricing of Electricity (Springer,
1988); See Also Ignacio Perez-Arriaga, Luis Olmos, and Michel Rivier,’Transmission Pricing’ in Juan Rosellón
and Tarjei Kristiansen (eds.), Financial Transmission Rights, Lecture Notes in Energy (Springer, 2013)
2073
Curtailment is a forced reduction in the output of an electricity generation facility from what it could otherwise
produce given available resources, typically as a result of capacity constraints in the transmission system - Lori
Bird, Jaquelin Cochran, and Xi Wang, ‘Wind and Solar Energy Curtailment: Experience and Practices in the
United States’ [2014] National Renewable Energy Laboratory Working Paper; See Also Henrik Klinge Jacobsen
and Sascha Thorsten Schröder, ‘Curtailment of renewable generation: Economic optimality and incentives’ (2012)
49 Energy Policy, 663
2074
Jean-Thomas Bernard and Chantal Guertin, ‘Nodal Pricing and Transmission Losses: An Application to a
Hydroelectric Power System’ [2002] Université Laval, Sainte-Foy, Québec, Canada Working Paper
2075
Longterm marginal cost is the increase in costs for meeting consumers’ future demand
2076
Yan Qing-you, Sun Yi-xin, Qin Chao and Tan Zhong-fu, ‘The Pricing model for Transmission and Distribution
Tariff Under Different Voltage Levels Based on the Long-run Marginal Cost Method’ (2015) 9 Electrical &
Electronic Engineering Journal, 347
2077
Consistency being seen as the ability of multiple policy tools to reinforce rather than undermine each other in
the pursuit of policy goals - Michael Howlett and Jeremy Rayner, ‘Patching v packaging in policy formulation:
assessing policy portfolio design’ (2013) 1(2) Politics & Governance, 170
The main strength of the study is the combination of the doctrinal research which
has identified several conflicts between EU free trade principles and the renewables
regulatory framework and the empirical research which showed the importance of
managing these conflicts to market operators.
The findings of this research should however, be seen in light of some
limitations, these being divided into the categories of ‘methodology’ and ‘researcher’.
The focus on renewable electricity makes a theoretical choice in the
development of the diagonal conflicts. Thus, other forms of renewable energy could
be considered as part of any future research.
The study has been able to set out and analyse a detailed description of the
methods used by developer operators to overcome the conflicts outlined. However,
in terms of methodology, additional empirical participants would increase the validity
of the study. In seeking additional participants these should be prioritised from
consumer organisations to give additional insights.
The theoretical sections focus on conflict resolution within judicial processes,
whereas the recommendations focus on conflict resolution by legislators. Thus,
further research could address the socio-political aspects of legal conflict resolution.
The ‘researcher’ limitations include, the time available to complete the
research means that the empirical research is essentially a snapshot in time and
thus the research contains limited longitudinal based data. This is a feature
discussed further in the further research section below.
Additionally, despite the industry knowledge of the researcher and thus clear
attempts to guard against such an outcome the interview technique used during the
empirical phase may have induced conservatism in the answers given by the
respondents as they wish to deal with the operational regulatory framework and
cannot discuss ongoing litigation. Therefore, this might underestimate the
importance to market participants of the conflicts outlined.2078
Lastly, whilst all empirical respondents had a high level of fluency in English,
this was not the native language of all respondents. Also, with respondents working
2078
Stéphane Brutus, Herman Aguinis and Ulrich Wassmer, ‘Self-Reported Limitations and Future Directions in
Scholarly Reports: Analysis and Recommendations’ (2013) 39(1) Journal of Management, 48
In any future developments of the renewables regulatory framework the EU and the
member states need to consider how the framework should or ought to regulate the
sector to provide a fair structure for society and not just the economic operators.
If this is achieved with true engagement of all stakeholders, to develop a
better and more stable regulatory framework, rather than engagement to achieve
acceptance, the developer operators with obtain the stable regulatory framework
they desire.2079
Any future research should seek to include additional empirical participants
from organisations associated with the consumption of renewable electricity to give
additional insights. Furthermore, any additional research should plan to include
follow up interviews to check the views of empirical respondents with regards to
issues that are important and if these issues have changed over time.
Based on the conclusion that the renewables regulatory framework conflicts
with several elements of EU free trade principles and the recommendation to simplify
the regulatory framework to remove these conflicts future work should detail this
simplified framework. In seeking to implement the streamlined regulatory framework
future research output should provide key drafting principles of the regulatory
framework, developing into elements of the future Directives.
Future research could diverge into an electro-technical stream which looks
at the potential for increased interconnection of electricity networks, considering
funding and state aid, as well as issues such as network capacity trading and
consent planning, to allow a single market to emerge. The second research path
could be to consider the future of the simplified and focused regulatory framework
and how this could be implemented.
2079
Frances Bowen, Aloysius Newenham-Kahindi and Irene Herremans, ‘When Suits Meet Roots: The
Antecedents and Consequences of Community Engagement Strategy’ (2010) 95(2) Journal of Business Ethics
297
2080
Trilemma of reliability, sustainability and affordability – See David Newbury ‘Questioning the EU Target
Electricity Model – how should it be adapter to deliver the Trilemma’ [2016] Cambridge University, Energy Policy
Research Group Working Paper See Also Raphael Heffron Energy Law: An Introduction (Springer, 2014)
2081
EU COM 482/2016 ‘on binding annual carbon emission reductions by Member States from 2021 to 2030 for a
resilient Energy Union and to meet commitments under the Paris Agreement’ available at http://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016PC0482 accessed 1 May 2018, Recital 1
2082
European Council & Presidency Conclusions 29 & 30 October 2009, available at
www.consilium.europa.eu/doc/srv?l=en&f=st%2015265%202009%20INIT accessed 15 September 2015
2083
COM (2011) 112: A Roadmap for moving to a competitive low carbon economy in 2050 (08 Mar 2011) see
www.ec.europa.eu/clima/policies/strategies/2050_en#tab-0-1
Secondary Legislation
EU COM (2014/C 200/01)’Guidelines on State aid for environmental protection and energy 2014-2020’
Austrain Law – The Green Electricity Act (Ökostromgesetz 2009; Federal Gazette No 114/2008)
Finland Law No 1473/94 Excise Duty Act
Finland Law No 1396/2010 Electricity Produced from Renewable Energy Sources Act
German Law - The Gesetz zur Sicherung des Einsatzes von Steinkohle in der Verstromung und zur Änderung des
Atomgesetzes und des Stromeinspeisungsgesetzes (Law ensuring the supply of coal to power stations and
amending the Law on Nuclear Energy and the Stromeinspeisungsgesetz) of 19 July 1994 (BGBl. 19941, p. 1618;
('the 1994 Coal Law')
German Law, Erneuerbare Energien Gesetz (2000) - Renewable Energy Sources Act
German Law - Renewable Energy Sources Act 2012 (Erneuerbare Energien Gesetz – ‘EEG 2012’)
German Law - Renewable Energy Sources Act 2014 (Erneuerbare Energien Gesetz – ‘EEG 2014’)
German Law - Renewable Energy Sources Act 2017 (Erneuerbare Energien Gesetz – ‘EEG 2017’)
Swedish Law - Electricity Certificates Act (2003)
Swedish Law – Electricity Certificates Act (2011)
The Energy Charter Treaty 1994 – available at http://www.energycharter.org/process/energy-charter-Treaty-
1994/energy-charter-Treaty
UN Framework Convention on Climate Change - http://unfccc.int/parties and observers/items/2704.php
Kyoto Protocol - http://unfccc.int/kyoto-protocol/status of ratification/items/2613.php
EU Cases
Opinion C-2/13 ‘Accession of the European Union to the European Convention for the Protection of Human Rights
and Fundamental Freedoms - Compatibility of the Draft Agreement With the EU and FEU Treaties’
ECLI:EU:C:2014:2454
Opinion 1/91 Agreement between EEC & European Economic Area ECLI:EU:C:1991:490
Case T-358/94 Air France v Commission, ECLI:EU:T:1996:194
Case C-389/96 Aher-Waggon GmbH ν Germany ECLI:EU:C:1998:357Cases C-128/03 and C-129/03 AEM and
AEM Torino v Autorità per l'energia elettrica e per il gas ECLI:EU:C:2005:224Case C-366/10 Air Transport
Association of America v Secretary of State for Energy and Climate Change ECLI:EU:C:2011:864
Case C-142/05, Åklagaren v Mickelsson and Roos ECLI:EU:C:2009:336
Case T-177/10 Alcoa Trasformazioni v Commission ECLI:EU:T:2014:897Case C-573/12 Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037
Case C-573/12 Ålands Vindkraft AB v Energimyndigheten ECLI:EU:C:2014:37 - Opinion of AG Bot
Case C-275/13, Elcogas SA v Adminstracion del Estado & Iberdrola SA, ECLI:EU:C:2014:2314
Joined Cases C-359/11 and C-400/11 Alexandra Schulz v Technische Werke Schussental GmbH und Co. KG
and Josef Egbringhoff v Stadtwerke Ahaus GmbH, ECLI:EU:C:2014:2317
Case C-158-159/04 Alfa Vita Vassilopoulos ECLI:EU:C:2006:212 (opinion of AG Maduro)
Case C-57/65 Alfons Lütticke GmbH v Hauptzollamt Sarrelouis ECLI:EU:C:1966:34
Case 26/62, NV Algemene Transport-en Expeditie Onderneming Van Gend en Loos v Nederlandse Administratie
der Belastinger ECLI:EU:C:1963:1
Cases T-298/97, T-312/97, T-313/97, T-315/97, T-600/97 to 607/97, T-1/98, T-3/98 to T-6/98 and T-23/98 Alzetta
v Commission ECLI:EU:T:2000:151, para 141-147;Case C-280/00 Altmark Trans GmbH and
Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft Altmark GmbH, and Oberbundesanwalt beim
Bundesverwaltungsgericht ECLI:EU:C:2003:415
Case C-97/11 Amia SpA, in liquidation v Provincia Regionale di Palermo ECLI:EU:C:2012:306
Case T-419/03 Altsoff Recycling Austria v Commission ECLI:EU:T:2011:102
Case T-141/00, Artegodan v Commission ECLI:EU:T:2002:283
Case C-551/14 Arctic Paper Mochenwangen v Commission ECLI:EU:C:2016:684
Cases C-264/01, C-306/01, C-354/01 and C-355/01 AOK Bundesverband v Ichthyol-Gesellschaft Cordes Hermani
ECLI:EU:C:2004:150
Case C-127/07 Arcelor Atlantique and Lorraine ECLI:EU:C:2008:728
Case C-59/11 Association Kokopelli v Graines Baumaux SAS ECLI:EU:C:2012:447
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie
ECLI:EU:C:2013:851
Case C-347/06 ASM Brescia SpA v Comune di Rodengo Saiano, ECLI:EU:C:2008:416
Case T-251/11 Austria v Commission ECLI:EU:T:2014:1060Case T-356/15 Austria v Commission
ECLI:EU:T:2018:439
C-176/90, Aragonesa de Publicidad Exterior SA v Departmento de Sanidad y Seguridad Social de la Generalitat
de Cataluna ECLI:EU:C:1991:327
Case T-356/15 Austria v Commission ECLI:EU:T:2018:439
Case C-2/10 Azienda Agro-Zootecnica Franchini Sari, Eolica di Atlamura Srl v Regione Puglia
ECLI:EU:C:2011:502
Case T-347/03 Branco v Commission ECLI:EU:T:2005:265
Joined Cases C-191/14 and C-192/14 Borealis Polyolefine GmbH v Bundesminister für Land- und Forstwirtschaft,
Umwelt und Wasserwirtschaft ECLI:EU:C:2016:311
Case 30/77 R v Bouchereau ECLI:EU:C:1977:172
Case T-131/16 Belgium & Magnetrol International v Commission ECLI:EU:T:2019:91
Case C-487/06 British Aggregates Association v Commission and UK ECLI:EU:C:2008:757
Case 72/83 Campus Oil Ltd v Minister for Industry and Energy ECLI:EU:C:1984:256
Case C‑66/13 Green Network SpA v Autorità per l’energia elettrica e il gas ECLI:EU:C:2014:2399
Case C-90/94 Haahr Petroleum v Åbenrå Havn, Ålborg Havn, Horsens Havn, Kastrup Havn NKE A/S, Næstved
Havn, Odense Havn, Struer Havn and Vejle Havn, and Trafikministeriet. ECLI:EU:C:1997:368
Case C-181/73 Haegeman v Belgium ECLI:EU:C:1974:41
Joined Cases C-43/13 and C-44/13 Hauptzollamt Köln v Kronos Titan GmbH and Hauptzollamt Krefeld v Rhein-
Ruhr Beschichtungs-Service GmbH, ECLI:EU:C:2014:216
Case C-172/03, Heiser, ECLI:EU:C:2005:130
Case 34/79 R v Henn and Darby ECLI:EU:C:1979:295
Case C-53/96 Hermès International v FHT Marketing Choice BV ECLI:EU:C:1998:292
Case C-53/92 Hilti v Commission ECLI:EU:C:1994:77
Case C-292/92 Hunermund v Landesapothekerkammer Baden-Wurttenberg ECLI:EU:C:1993:932
Case C-465/15 Hüttenwerke Krupp Mannesmann GmbH v Hauptzollamt Duisburg , ECLI:EU:C:2017:640
Opinion of Advocate General Kokott delivered on 21 March 2013, Joined cases C-566/11, C-567/11, C-580/11, C-
591/11, C-620/11 and C-640/11, Iberdrola, SA and Others v Administración del Estado ECLI:EU:C:2013:191
Case C-195/12 IBV & Cie ECLI:EU:C:2013:598
Case C-41/11 Inter-Environnement Wallonie and Terre wallonne ECLI:EU:C:2012:103
Cases C-51/71 to C-54/71 International Fruit Company NV v Produktschap voor groenten en fruit
ECLI:EU:C:1971:128
Case C-323/82, Intermills SA v Commission ECLI:EU:C:1984:345
Case C-438/05 International Transport Workers’ Federation and Finnish Seamen’s Union v Viking Line ABP and
OÜ Viking Line Eest ECLI:EU:C:2007:772
Case C-11/70 Internationale Handelsgesellschaft mbH v Einfuhr- und Vorratsstelle fu¨r Getreide und Futtermittel;
ECLI:EU:C:1970:114
Joined Cases C-402 & C-415/05 Yassin Abdullah Kadi and Al Barakaat International Foundation v Council and
Commission ECLI:EU:C:2008:461 Case C-108/09, Ker-Optika bt v ÀNTSZ Dél-dunántúli Regionális Intézete
ECLI:EU:C:2010:725
Cases C-267/91 & C-268/91 Keck and Mithouard ECLI:EU:C:1993:905
Case C-5/14 Kernkraftwerke Lippe-Ems GmbH v Hauptzollamt Osnabrück ECLI:EU:C:2015:354
Case C-3/76 Kramer ECLI:EU:C:1976:114
Case 104/81 Kupferberg v Hauptzollamt Mainz ECLI:EU:C:1982:362, para 13
Case T-67/94, Ladbroke Racing v Commission ECLI:EU:T:1998:7
Case C- 209/09 Lahti Energia Oy ECLI:EU:C:2010:98
Case C-342/05 Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet ECLI:EU:C:2007:809Case C-412/93
Leclerc-Siplec ECLI:EU:C:1994:393
Case C-294/83 Les Verts v Parliament ECLI:EU:C:1986:166, para
Case C-225 Matra v Commission ECLI:EU:C:1993:239
Case T-177/07 Mediaset v Commission ECLI:EU:T:2010:233
Case C-292/82 Merck v Hauptzollamt Hamburg-Jonas ECLI:EU:C:1983:335, para 12
Case C-9/56 Meroni v High Authority ECLI:EU:C:1958:7
Case T-670/14 Milchindustrie-Verband v Commission ECLI:EU:T:2015 :906
Case C-157/96 R v Ministry of Agriculture Fisheries & Food ex parte NFU ECLI:EU:C:1998:191
Case C-293/97 R v Secretary of State for the Environment and Ministry of Agriculture, Fisheries and Food, exp
Standley and Metson ECLI:EU:C:1999:215
Miscellaneous Cases
R (on the application of ClientEarth) (Appellant) v Secretary of State for the Environment, Food and Rural Affairs
(Respondent) [2015] UKSC 28 – following a preliminary reference to the CJEU Case C-404/13 R (on the
application of ClientEarth) v The Secretary of State for the Environment, Food and Rural Affairs
ECLI:EU:C:2013:805
Arbitration 062/2012, Charanne B.V. & Construction Investments S.A.R.L v Kingdom of Spain (January 2016)
Available At http://www.italaw.com/sites/default/files/case-documents/italaw7097_0.pdf
Decision 10/2015, Scat Punti Vendita Spa v Agenzia delle entrate - Direzione provinciale di Reggio Emilia,
(October 2015) http://www1.agenziaentrate.gov.it/english/
Department of Energy & Climate Change v Breyer Group PLC & Others, [2015] EWCA Civ 408
Dispute Settlement and Sanctions Committee (CoRDiS) of French Energy Regulator fined VITOL S.A. € 5 million
for engaging in ‘market manipulation’ between 1 June 2013 and 31 March 2014 via the REMIT Regulations, (9
October 2018) – available at https://www.cre.fr/en/News/The-Dispute-Settlement-and-Sanctions-Committee-
CoRDiS-imposes-a-penalty-for-market-manipulations-on-the-wholesale-energy-market accessed 15 October 2018
EDE International v Hungary UNCITRAL, PCA, Award of 4 December 2014 available at
http://www.iareporter.com/articles/investigation-in-recent-briefs-europeancommission-casts-doubt-on-application-
of-energy-charter-treaty-to-any-intra-eudispute/ accessed 10 March 2019
Eiser Infrastructure Limited and Energía Solar Luxembourg SARL v Kingdom of Spain, ICSID Case No.
ARB/13/36
Electrabel SA v Republic of Hungary International Center for Settlement of Investment Disputes Case No.
ARB/07/19, Decision on Jurisdiction, Applicable Law and Liability, 30 November 2012, paras 27-34
Ioan Micula v Romania, International Center for Settlement of Investment Disputes Case No. ARB/05/20
LCW Europe Investments Limited v Czech Republic, PCA Case No. 2014-22, registered 8 May 2013
EU Commission Decisions
ACER/CEER - Annual Report on the Results of Monitoring the Internal Electricity and Gas Markets in 2016
Barón-Escámez S, Sylvia Ferretti, Juliana Frendo, Octavien Ginalski, Maciej Górka, Hans Ingels,Christos
Kyriatzis, Florian Schmidt, Carolina Stege, Laura Stočkutė and Yiannos Tolias ‘Free movement of goods: Guide to
the application of Treaty provisions governing the free movement of goods’ [2010] EU Directorate General for
Enterprise and Industry . http://ec.europa.eu/enterprise/policies/single-market-goods/files/goods/docs/art34-
36/new_guide_en.pdf accessed 29 August 2016, 29-30
COCL 5 17271/1/08 ‘Presidency Conclusions of the Brussels European Council (11 and 12 December 2008)’
EU COM (1973) ‘Programme of Action of the European Communities on the Environment’, OJ 112
EU COM (1994) 659 'Green Paper for a European Union energy policy’
EU COM (2000) 1 ‘on the precautionary principle’
EU COM (2000) 769 ‘Towards a European Strategy for the Security of Energy Supply’ defines energy security as
‘The uninterrupted physical availability of energy products on the market, at a price which is affordable for all
consumers (private and industrial), while respecting environmental concerns and looking towards sustainable
development’
EU COM (2001), 'Commission gives Green light to "stranded costs" compensation by Spain, Austria and The
Netherlands', Press Release, Brussels, 25 July 2001, IP/01/1 079
EU Com (2005) 627, ‘The Support of Electricity from Renewable Energy Sources’
EU COM (2006) ‘The Energy community Legal Framework 2018’ 4th Edition OJ L198
EU COM (2007) 2 ‘Limiting Global Climate Change to 2 degrees Celsius The way ahead for 2020 and beyond’
EU COM (2007) 35 – ‘Package on the internal market of goods’
EU COM (2008) 30, ‘2020 by 2020 Europe’s Climate Change Opportunity’
EU COM (2009) 519 ‘Investing in the Development of Low Carbon Technologies’
EU COM (2010) 639, ‘Energy 2020 - A strategy for competitive, sustainable and secure energy’
EU COM (2011) 112: ‘A Roadmap for moving to a competitive low carbon economy in 2050’
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Bloor M and Fiona Wood , Keywords in Qualitative Methods: A Vocabulary of Research Concepts (1st edn,
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Bogojević S EU Climate Change Litigation, the Role of the European Courts, and the Importance of Legal Culture
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von Bogdandy A and J Bast, Principles of European Constitutional Law (Hart Publishing, 2nd Edition, 2009)
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Dannecker L Energy Time Series Forecasting Efficient and Accurate Forecasting of Evolving Time Series from
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A1.1 Sustainability
Building on the goal of carbon emissions reduction from electricity generation the
EU uses the concept of ‘sustainability’ as one of the principles upon which the
renewables regulatory framework is built.
Initially, the EU took inspiration from the definition of sustainability in the
Brundtland Report,2084 which sought to reconcile the energy needs of present and
future generations to find intergenerational equity 2085 in energy usage. The
Brundtland report suggests a reduction in current energy usage to leave a legacy of
energy sources for future generations rather than a change to energy technology.
This could reflect the date of the report (1987) in that coal was still readily available
in many countries2086 and renewable electricity generation technology was in its
infancy.2087
Although not defined in the TFEU, sustainable development is an umbrella
concept2088 with no hierarchy of objectives within this umbrella.2089 It has been stated
that ‘sustainability’ needs supporting principles 2090 such as the precautionary
principle, ‘polluter pays’ and the principle of integration.2091
The EU seems to use the concept of sustainability in the renewable electricity
context to mean the environmental impact of the energy source, rather than the need
2084
World Commission on Environment & Development, ‘Our Common Future’, 4 August 1987, UN, GA res,
A/42/427 (1987), Chapter 2, para 1
2085
Erling Holden, Kristin Linnerud, David Banister, Valeria Jana Schwanitz and August Wierling The Imperatives
of Sustainable Development: Needs, Justice, Limits (Routledge, 2017); See Also Edith Brown Weiss,
‘Intergenerational equity: a legal framework for global environmental change’ in Edith Brown Weiss (ed)
Environmental change and international law: New challenges and dimensions (United Nations University Press,
1992)
2086
John Gillingham, Coal, Steel, and the Rebirth of Europe 1945-1955 (Cambridge University Press, 1991); see
also Richard Gordon, The Evolution of Energy Policy in Western Europe: the Reluctant Retreat From Coal
(Praeger Publishers, 1970); Ernst Haas The Uniting of Europe: Political, Economic and Social Forces 1950-1957
(Stanford University Press, 1958)
2087
Sergey Mityakov and Margarita Portnykh, ‘The Infant Industry Argument and Renewable Energy Production’
(2012) Marshall Institute Working Paper; The maturing nature of the technology can be illustrated by the number
of patent applications in 1994 were a few tens per year, rising to broadly 12,200 in 2011 and as the technology
matures decreasing to 6,500 in 2015 - http://www.ren21.net/spotlight/topical-reports/REN21_10yr.pdf accessed 5
October 2018
2088
Jaye Ellis, ‘Sustainable Development as a Legal Principle: A Rhetorical Analysis’ (2008) available at
www.scribd.com/doc/51448971/Sustainable-Development-as-a-Legal-Principle-A-Rhetorical-Analysis, accessed 1
June 2017
2089
Ibid, 13; See also David Hodas, ‘The Role of Law in Defining Sustainable Development: NEPA Reconsidered’
(1998) 3 Widener Law Symposium, 1, 6
2090
John Danaher, ‘Protecting the Future or Compromising the Present? Sustainable Development and the Law’
(2006) 14 IS Law Review, 117, 119-120
2091
J Verschuuren, ‘Sustainable Development and the Nature of Environmental Legal Principles’ (2006) (1) 9
Potschefstroom Electricity Law Journal, 17
The precautionary principle2095 is core to the management of risk from events and
actions and again is within the sustainability limb of the EU’s energy and
environmental policy in so far as it seeks to reduce carbon emissions.
Within EU law the precautionary principle is subsidiary to sustainability. The
EU defined the ‘precautionary principle’ in its communication on the subject2096 as
the ‘reasonable grounds that an event or process was potentially dangerous to the
environment’. The precautionary principle therefore considers the long-run effects
of a decision and the well-being of future generations, similar to the Brundtland
Report. 2097 The EU states that the precautionary principle seeks to balance the
dilemma of freedoms and rights with the need to reduce the risk of adverse effects
on the environment of energy use, and as such in its application it should be
proportionate, non-discriminatory, transparent and coherent, with a structured
decision-making process based on scientific and other objective information.2098
The precautionary principle is mentioned only once within the Treaty in
Article 191(2) TFEU, although it can be considered a legally binding principle.2099
2092
World Commission on Environment & Development, ‘Our Common Future’, 4 August 1987, UN, GA res,
A/42/427 (1987)
2093
Council Directive 2012/27/EU 25 October 2012 – Energy Efficiency Directive OJ L315/1
2094
Ricardo Barcelona Energy Investments: An Adaptive Approach to Profiting from Uncertainties (Palgrave
Macmillan, 2017)
2095
Miriam Haritz ‘Liability with and liability from the precautionary principle in climate change cases’ in Michael
Faure and Marjan Peeters (eds) Climate Change Liability (Elgar, 2011)
2096
Commission Communication COM(2000) on the Precautionary Principle available at https://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=celex:52000DC0001 accessed
2097
World Commission on Environment & Development, ‘Our Common Future’, 4 August 1987, UN, GA res,
A/42/427 (1987), Chapter 2, para 1
2098
Ibid, para 1
2099
Peter-Tobias Stoll, Wybe Douma, Nicolas de Sadeleer and Patrick Abel,’CETA, TTIP and the EU
precautionary principle. Legal analysis of selected parts of the draft CETA agreement and the EU TTIP proposals’
(2016) 4 Jean Monnet Working Paper Series
Another key supporting principle of sustainability is that the ‘polluter should pay’ and
therefore it is included within the first limb of the EU’s environmental and energy
objectives. Article 191(2) TFEU states ‘environmental damage should as a priority
be rectified at source and that the polluter should pay’.
The ‘polluter pays’ principle relates to the allocation of costs and
responsibilities for environmental pollution, implying the costs of environmental
protection should be borne by the polluter; potentially, its interpretation can be
extended to include the costs of measures to rectify or compensate for
environmental damage.2101
The ‘polluter pays’ principle has two origins. The first is the so called ‘no-
harm rule’ such that the right of a sovereign state to use its resources is curtailed by
the need to prevent environmental harm to its neighbours (based on the Trail
Smelter Arbitration). 2102 The second is stems from the economic theory of the
‘internalisation of externalities’, imposing on polluters the costs of inspecting,
monitoring and controlling pollution, rather than such costs being borne by the
2100
Case C-157/96 R v Ministry of Agriculture Fisheries & Food (MAFF) Exp NFU ECLI:EU:C:1998:191, para 63
2101
For an analysis of the principle see Nicolas de Sadeleer Environmental Principles. From Political Slogans to
Legal Rules (Oxford University Press, 2002)
2102
Trail Smelter Arbitration (United States v Canada) Arbitral Tribunal 3 UN Report of International Arbitration
Awards 1905 (1941)); See also Rebecca Bratspies and Russell Miller Transboundary Harm in International Law:
Lessons from the Trail Smelter Arbitration (Cambridge University Press, 2009)
2103
Kleoniki Pouikli, ‘The Polluter Pays Principle and the EU State Aid Law for Environmental Protection’ (2016)
55 Journal of Law, Policy and Globalisation, 19, 20
2104
Organisation for Economic Co-operation and Development ‘The polluter-pays principle: OECD analyses and
recommendations’ (1992) Doc. OCDE/GD (92) 81; See Also Pulp Mills on the River Uruguay, Argentina v
Uruguay,International Court of Justice (2006) Rep 113 – See Also Plato on the principle ‘If anyone intentionally
spoils the water of another . . . let him not only pay damages, but purify the stream or cistern which contains the
water’ - B Jowett The Dialogues of Plato: The Laws, (vol. 4 Clarendon Press, 1953), 485
2105
Commission Decision 1999/227/ECSC Georgsmarienhütte OJ L83/72, part VI
2106
Ian Bailey New Environmental Policy Instruments in the European Union Politics, Economics, and the
Implementation of the Packaging Waste Directive (Taylor & Francis, 2003)
2107
Council Directive 2003/87 13 October 2003 Establishing a scheme for carbon emission trading allowance
trading within the Community OJ L L 275, 25.10.2003 the Directive was amended by Directive 2009/29 ‘To
improve and extend the carbon emission trading scheme of the Community’ OJ L140/63
2108
Council Directive (EC) 2010/75/EC 24 November 2010 – Industrial Emissions (integrated pollution prevention
and control) OJ L334/17 (Industrial Emission Directive)
2109
G Winter, ‘The legal nature of environmental principles in international, EC and German law’
in R Macrory (ed.) Principles of European Environmental Law (Europa Law Publishing, 2004), 19
2110
Case C-378/08 Raffinerie Mediterranee (ERG) SpA, Polimeri Europa SpA and Syndial SpA v Ministero dello
Sviluppo economico and Others ECLI:EU:C:2010:126, para 46
This Annex sets out an introduction to the debate and difference between legal
positivism 2111 and the view of law as a branch of political morality 2112 or natural
law.2113
According to positivism, law is a normative set of rules2114 and is a matter of
what has been posited (ordered, decided, practiced, tolerated, etc.); in other words,
a social construction. Human society has a social order, a means of regulating
behaviour, deterring anti-social behaviour, and resolving disputes. The theory is
also reductivist, 2115 maintaining that normative language used in describing and
stating the law (authority, rights, obligations, liabilities and so on) can be analysed
without the need for non-normative and concatenations of terms regarding power
and obedience. Positivism is considered to stem from a political system2116 with a
sovereign leader or ‘juridical power’.2117 It is stated that the authority of law is held in
the fact that it is a social rule that it is practiced, with primary and secondary rules.2118
The positivist theory separates the existence of law as a normative set of rules from
moral ideals. 2119
The countervailing view is that legal positivism fails to give law its moral
basis. Accordingly, positivism's opponents state that the driving feature of law is not
as a source-based system, but in its capacity to advance the common good.2120
Furthermore, the counterbalancing view to positivism would submit that there cannot
be any general theory of the existence and content of law; it being denied that local
theories of particular legal systems can identify law without recourse to its merits,
deciding legal issues as they ought to be decided. 2121
Inclusivists, however, would claim that moral considerations are part of the
law because legal instruments make it so, and thus Dworkin is right that the
existence and content of law turns on its merits, and wrong only in his explanation
2111
Herbert L A Hart, ‘Positivism and the Separation of Law and Morals’ (1958) 71 Harvard Law Review, in H L A
Hart (ed) Essays in Jurisprudence and Philosophy ( Clarendon Press, 1983)
2112
Lon Fuller, ‘Positivism and Fidelity to Law: a Reply to Professor Hart’ (1958) 71 Harvard Law Review, 630;
See also Lon Fuller The Morality of Law (Yale University Press, 1969)
2113
Ronald Dworkin Taking Rights Seriously (Harvard University Press, 1978)
2114
Hans Kelsen General Theory of Law and State (Russell and Russell, 1945)
21152115
Jean d'Aspremont, ‘Reductionist Legal Positivism in International Law’ [2012] Proceedings of the 106th
Annual Meeting of the American Society of International Law
2116
Hans Morgenthau, ‘Positivism, Functionalism, and International Law’ in Gerry Simpson (ed) The Nature of
International Law (Routledge, 2017)
2117
Nick Fox, ‘Foucault, Foucauldians and Sociology’ (1998) 49(3) The British Journal of Sociology, 415
2118
Herbert L A Hart The Concept of Law (ed) Penelope Bulloch and Joseph Raz (Clarendon Press, 1994)
2119
Herbert L A Hart, ‘Positivism and the Separation of Law and Morals’ (1958) 71 Harvard Law Review, in H L A
Hart (ed) Essays in Jurisprudence and Philosophy ( Clarendon Press, 1983)
2120
Lon Fuller, ‘Positivism and Fidelity to Law: a Reply to Professor Hart’ (1958) 71 Harvard Law Review, 630;
See also Lon Fuller The Morality of Law (Yale University Press, 1969)
2121
Ronald Dworkin Taking Rights Seriously (Harvard University Press, 1978)
2122
Matthew Kramer, ‘How Moral Principles Can Enter Into The Law’ (2000) 6(1) Legal Theory, 83
2123
Joseph Raz Practical Reason and Norms (Princeton University Press, 1975), 152-154
2124
Herbert L A Hart, ‘Positivism and the Separation of Law and Morals’ (1958) 71 Harvard Law Review, in H L A
Hart (ed) Essays in Jurisprudence and Philosophy ( Clarendon Press, 1983), 72
A3.1 Introduction
2125
Lars Dannecker Energy Time Series Forecasting Efficient and Accurate Forecasting of Evolving Time Series
from the Energy Domain (Springer, 2015) 11
2126
Simon Pezzutto, Gianluca Grilli, Stefano Zambotti and Stefan Dunjic, ‘Forecasting Electricity Market Price for
End Users in EU28 until 2020—Main Factors of Influence’ (2018) 11 Energies; See also Friedemann Polzin,
Michael Migendt, Florian Täube, Paschen von Flotow, ‘Public policy influence on renewable energy investments—
A panel data study across OECD countries’ (2015) 80 Energy Policy 98
2127
Competence is the ability to act in a certain field. The Commission, as the executive of the EU, only acts to the
extent allowed by the Treaty. Energy and the environment are shared competences between the EU and member
states (Article 4 TFEU). The exercise of competences is subject to two principles (Article 5 of the Treaty on EU) –
proportionality (the content and scope of actions may not go beyond what is necessary to achieve the objectives
of the Treaties) and subsidiarity (in the area of its non-exclusive competences, the EU may act only if, and in so
far as, the objective of an action cannot be sufficiently achieved by the EU countries, hence better achieved at EU
level) available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Aai0020 accessed 1 March
2018; See Also Kim Talus and Pami Aalto, ‘Competences in EU energy policy’ in Rafael Leal-Arcas and Jan
Wouters (eds) Research Handbook on EU Energy Law and Policy (Elgar, 2017)
2128
Case C393/92 Gemeente Almelo v NV Energiebedriif Ijsselmij ECLI:EU:C:1994:171, para 28 also Case
157/94 Commission v Netherlands ECLI:EU:C:1997:499
2129
A network of electricity cables, overhead lines and other apparatus and plant operating at a voltage above
132kV. It is the network most readily associated with the bulk transport of electricity
2130
A network of electricity cables, overhead lines and other apparatus and plant operating at a voltage of 132kV
and below. It is the network most readily associated with the supply of electricity to consumers
2131
Alternating Current (AC) is a type of electrical current, in which the direction of the flow of electrons switches
back and forth at regular intervals or cycles. Current flowing in power lines and normal household electricity that
comes from a wall outlet is alternating current - https://www.greenfacts.org/glossary/abc/alternating-current.htm
accessed 20 September 2018
2132
Power being the amount of energy transferred per unit of time. Rather than an informal use of the word to
mean electricity
2133
Transport losses are caused by the electrical resistance of the network, even although this is minimised due to
the design of the network and the material used within the plant forming the network, however, it is not practical to
reduce this to zero, and is directly correlated to the square of the current, thus reducing the current by increasing
the voltage further reduced losses.
The electricity market operates as a series of separate but linked trading operations,
where the separation is both (i) in time and (ii) by member state. The markets in
most member states are composed of five trading periods (i) forward and futures
market, (ii) day ahead market, (iii) intra-day market (trading on the day of delivery)
(iv) balancing market and (v) imbalance settlement. The mechanisms associated
with each of these timescales are outlined and illustrated in the diagram below.
2134
Over-the-counter (OTC) or off-exchange trading - A deal that is a customised derivative contract, usually
arranged with an intermediary such as a major bank or the trading wing of an energy major, as opposed to a
standardised derivative contract traded on an exchange. – Price Waterhouse Coopers , ‘Glossary of of terms used
in the trading of oil and gas, utilities and mining commodities’
2135
Hans-Martin Koopmann and René Vanhaesendonck, ‘Standard Agreements in European Energy Trade’ in
Martha Roggenkamp, Catherine Redgwell, Anita Ronne, and Inigo del Guayo (eds) Energy Law in Europe
National, EU and International Regulation (Oxford University Press, 2016)
2136
The JAO is a joint service company of twenty transmission system operators (TSOs) from seventeen countries
(The TSOs involved in the initiative are Germany's TenneT, 50Hertz, Amprion, and TransnetBW, Greece's Admie,
Austria's APG, Czech CEPS, Luxembourg's CREOS, Slovenia's ELES, Belgium's ELIA, Denmark's EnerginetDK,
Croatia's HOPS, Hungary's MAVIR, Poland's PSE, France's RTE, Slovakia's SEPS, Norway's Statnett, Swissgrid,
Dutch TenneT, and Italy's Terna) - See more at: https://seenews.com/news/casceu-cao-to-launch-joint-allocation-
office-for-cross-border-electricity-trading-482444#sthash.eQf9HJyG.dpuf
2137
EU Regulation 2016/1719 of 26 September 2016 ‘establishing a guideline on forward capacity allocation’ OJ L
259/42
2138
Gate Closure is the deadline for the participation to a given market or mechanism by providing technical and
price data regarding a generating facility to either the transmission system operator or market operator, as the
case may be. For a particular market trading period usually within the balancing market. In the majority of cases
this is 60 minutes ahead of ‘real-time’ operations – Mott Macdonald ‘Impact Assessment on European Electricity
Balancing Market’ [2013] EC DG ENER/B2/524/2011
2139
A dispatch instruction is an instrunction given by the transmissions system operator to a generation facility to
produce a certain level of generated output. Such instructions are usually consistent with the volume and price
nominations submitted at gate closure
2140
Peter Cameron, ‘The Internal Energy Market – Redefining Objectives’ Peter Cameron and Raphael Heffron
(eds) Legal Aspects of EU Energy Regulation (Oxford University Press, 2016), 25
Since the separation of functions within the electricity market across the EU because
of the First2141 and Second2142 Energy Packages into generation, transmission and
supply, the role of the transmission system operator has been as owner and operator
of the transmission system, which is usually undertaken for the whole of a member
state (in Germany, however, the function is undertaken regionally). This has meant
that the transmission system operator would develop and maintain the transmission
system and, in most instances, operate the electricity market, as well as dispatching
generation facilities to meet demand.2143
However, since the implementation of the Transmission System Operation
Regulation2144 in 2017 the obligations around ownership (development of the assets,
maintenance and charging for the transport of electricity across the network) and
operation of the transmission system have been split. The system operator role
therefore is responsible for the operational security of the network, dispatching of
generating facilities (merit order dispatch), managing network constraints via
dispatch curtailment, 2145 operational reserve2146 and other ancillary services.
Merit order dispatch has been a core principle of electricity markets almost from their
foundation at the start of the twentieth century.2147 Merit order dispatch is a system
in which generating facilities with the lowest short-run marginal costs are used first
2141
Council Directives 96/92/EC concerning common rules for the internal market in electricity and 98/30/EC on
common rules for the internal market in natural gas
2142
http://ec.europa.eu/competition/sectors/energy/overview_en.html
2143
Articles 2 and 12 of Directive (2009/72/EC), ‘concerning common rules for the internal market in electricity’
(the Electricity Markets Directive)
2144
EU Regulation ( 2017/1485) of 2 August 2017 ‘establishing a guideline on electricity transmission system
operation’ (Network Code on System Operation)
2145
Curtailment is a forced reduction in the output of an electricity generation facility from what it could otherwise
produce given available resources, typically as a result of capacity constraints in the transmission system - Lori
Bird, Jaquelin Cochran, and Xi Wang, ‘Wind and Solar Energy Curtailment: Experience and Practices in the
United States’ [2014] National Renewable Energy Laboratory Working Paper; See Also Henrik Klinge Jacobsen
and Sascha Thorsten Schröder, ‘Curtailment of renewable generation: Economic optimality and incentives’ (2012)
49 Energy Policy, 663
2146
In order to ensure that the flow of electricity is maintained the transmissions system operator will ensure that a
certain quantity of generating plant is kept in reserve such that it can be brought into operation and dispatch
electricity to the transmission system quickly. The transmission system operator will organise this resever into
different categories dependent upon the time within which the facility can be dispatched. Such categoties are
usually called (i) primary reserve; which would be operational almost immediately and (ii) secondary reserve
which would become operational in a few minutes if needed. Further information on operational reserve can be
obtained from https://www.nationalgrid.com/sites/default/files/documents/STOR%20v1.1.pdf accessed 24
September 2018; See Also Eirik Amundsen and Lars Bergmancle, ‘Provision of Operating Reserve Capacity:
Principles and Practices on the Nordic Electricity Market, (2007) 2(1) Competition and Regulation in Network
Industries
2147
Monopolies and Mergers Commission, ‘Central Electricity Generating Board: A Report on the Operation by the
Board of its System for the Generation and Supply of Electricity in Bulk’ (1981) HC 315, HMSO
2148
Gate Closure is the deadline for the participation to a given market or mechanism by providing technical and
price data regarding a generating facility to either the transmission system operator or market operator, as the
case may be. For a particular market trading period usually within the balancing market. In the majority of cases
this is 60 minutes ahead of ‘real-time’ operations – Mott Macdonald ‘Impact Assessment on European Electricity
Balancing Market’ [2013] EC DG ENER/B2/524/2011
2149
For an introduction to the econmic principles of merit order dispatch see Arthus Mazer Electric Power Planning
for Regulated and Deregulated Markets (Wiley, 2006); Alexander Eydeland and Krzysztof Wolyniec Energy and
Power Risk Management: New Developments in Modeling, Pricing, and Hedging (Wiley, 2002)
2150
Curtailment is a reduction in the output of a generator from what it could otherwise produce given available
resources, typically on an involuntary basis. Curtailment of generation has been a normal occurrence since the
beginning of the electricity industry - https://www.nrel.gov/docs/fy14osti/60983.pdf accessed 22 September 2018
2151
CIGRE Working Group C6.11, 2011. Development and Operation of Active Distribution Networks CIGRE
2152
Hans Schermeyer, Claudio Vergara and Wolf Fichtner, ‘Renewable energy curtailment: A case study on
today's and tomorrow's congestion management’ (2018) 112 Energy Policy, 427; Michael Joos and Iain Staffell,
‘Short-term integration costs of variable renewable energy: Wind curtailment and balancing in Britain and
Germany’ (2018) 86 Renewable and Sustainable Energy Reviews, 45; Jing Hu, Robert Harmsen, Wina Crijns-
Graus, Ernst Worrell and Machteld van den Broek, ‘Identifying barriers to large-scale integration of variable
renewable electricity into the electricity market: A literature review of market design’ (2018) 81 Renewable and
Sustainable Energy Reviews, 2181; Laura Kane and Graham Ault, ‘A review and analysis of renewable energy
curtailment schemes and Principles of Access: Transitioning towards business as usual’ (2014) 72 Energy Policy,
67
2153
‘overriding objective of environmental protection’ from C-524/07 Commission v Austria ECLI:EU:C:2008:717,
para 57 or ‘overriding requirement of environmental protection’ from Case C-573/12, Ålands Vindkraft AB v
Energimyndigheten ECLI:EU:C:2014:2037, para 76 and 80 - Case C-164/17 Edel Grace and Peter Sweetman v
An Bord Pleanala ECLI:EU:C:2018:593, para 55 – projects may be undertaken for imperative reasons of
overriding public interest, including those of a social or economic nature
2154
EU Commission SWD(2013) 439 ‘Delivering the internal market in electricity and making the most of public
intervention’ available at
https://ec.europa.eu/energy/sites/ener/files/documents/com_2013_public_intervention_swd04_en.pdf accessed
12 September 2017
For renewables the ability to predict generated output is limited due to its
reliance on the availability of wind and solar resources, hence renewable electricity
generation has hitherto been exempted (derogation) from merit order dispatch and
imbalance settlement to facilitate the development of this type of generation
capacity, rather than ‘punish’ it for issues that are out with its control.2155 Priority
dispatch for renewable electricity was introduced, at the EU level, within the first
Renewable Energy Directive2156 in 2001 and was further refined in Article 16(2)(c) of
the 2009 Renewable Energy Directive 2157 (See Section 2.10.7). Member states are
required to minimise the curtailment of electricity produced from renewable
sources.2158 Thus priority dispatch is a policy and legal choice driven by EU law.
The continuation of these derogations is now being questioned across the
EU.2159
The potential removal of priority dispatch by reform to market mechanisms,
initiated at both EU and member state level is an issue seen to be a significant
regulatory risk by the Developer Operator respondents to the empirical phase of the
research set out in Section 4.5 – Theme 1.3.
The final feature of the electricity market set out in this chapter is what is known as
embedded benefits. This is an issue of high significance for renewable electricity
facilities as they derive revenue from a share in the reduced costs imposed on the
electricity network. Thus, during the empirical research, any change to the
mechanisms surrounding the sharing of embedded benefits was seen by the
developer operators to be a regulatory risk, whereas the regulator respondent saw
the termination of the practice as simply restoring the equitable balance of cost-
sharing across the industry.
2155
Reinier van der Veen, Rudi Hakvoort, ‘The electricity balancing market: Exploring the design challenge’ (2016)
43(B) Utilities Policy 186
2156
EU Directive (2001/77/EC) 27 September 2001 ‘The promotion of electricity produced from renewable energy
sources in the internal electricity market’ OJ L 283/33
2157
Council Directive 2009/28/EC 23 April 2009 Promotion of the use of energy from renewable sources OJ
L140/16 (Renewable Energy Directive) available at http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32009L0028&from=EN – ‘Member States shall ensure that when dispatching
electricity generating installations, transmission system operators shall give priority to generating installations
using renewable energy sources in so far as the secure operation of the national electricity system permits and
based on transparent and non-discriminatory criteria.’
2158
Article 16(2)(c)(7) of 2009 Renewable Energy Directive (2009/28/EC)
2159
Michael Joss and Iain Staffell ‘Short-term integration costs of variable renewable energy: Wind curtailment and
balancing in Britain and Germany’ (2018) 86 Renewable and Sustainable Energy Reviews 45; See Also Hans
Schermeyer, Claudio Vergara and Wolf Fichtner, ‘Renewable energy curtailment: A case study on today's and
tomorrow's congestion management’ (2018) 112 Energy Policy 427
2160
Transmission losses occur when electricity is transported across the transmission network. Therefore reducing
the flows across the transmission network reduces these losses and thus the cost savings can be shared with
embedded generation facilities.
2161
Balancing Costs is the cost imposed on generators and suppliers as a result of a miss-match between the
amount of electricity forecast to be made available at the time of physical delivery or the demand to be placed on
the transmission system.
2162
Transmission network charges are the largest of the embedded benefits as net flows reduce the electricity
flows on the transmission system, hence as a result of the embedded generation the savings can be shared with
the facility’s owners
2163
Case C-492/14 Essent Belgium NV v Vlaams Gewest and Others ECLI:EU:C:2016:732
The electricity market model outlined above, in the most part, assumes that each
member state will have its own electricity market and the market will cover all
generating facilities and demand points in the member state. A single market price
is derived and used in the financial settlement of the flows of electricity. Issues such
as transmission constraints and curtailment are managed as a separate process
within the imbalance settlement mechanism.
Nodal pricing 2164 would take each point where a generation facility or a
demand source was connected to the network as a separate point at which to derive
a price for electricity.2165 Thus instead of one price for the whole market or member
state, there would be a multiplicity of prices.2166 The use of nodal pricing makes
dealing with transmission constraints and curtailment easier and more
2167
transparent, as the price paid to generating facilities curtailed is the price at that
point in the electricity network (or node).2168 Also where electricity is being sent a
considerable distance from a generating facility to a demand point, the costs of the
transmission network flows can be calculated using a similar nodal method. 2169
Considerations such as ‘marginal nodal pricing’ or ‘pricing as bid’,2170 as well
as the various pricing algorithms to derive a nodal price are outside the scope of this
research.2171
2164
The technical implementation of nodal pricing is outside the scope of this research however, an introduction to
the subject can be obtained from Martin Weibelzahl, ‘Nodal, zonal, or uniform electricity pricing: how to deal with
network congestion’ (2017) 11(2) Frontiers in Energy 210
2165
Richard Green, ‘Nodal pricing of electricity: how much does it cost to get it wrong?’ (2007) 31 Journal of
Regulatory Economics 125
2166
Fred Schweppe, Michael Caramanis, Richard Tabors and Roger Bohn Spot Pricing of Electricity (Springer,
1988)
2167
Roger Bohn, Michael Caramanis and Fred Schweppe, ‘Optimal pricing in electrical networks over space and
time’ (1984) 15(3) Rand Journal of Economics 360; Martin Weibelzahl, ‘Nodal, zonal, or uniform electricity pricing:
how to deal with network congestion’ (2017) 11(2) Frontiers in Energy 220
2168
Endre Bjørndal, Mette Bjørndal and Victoria Gribkovskaia, ‘A Nodal Pricing Model for the Nordic Electricity
Market’ [2014] Norwegian School of Economics Working Paper
2169
R Kovacs and A Leverett, ‘A load flow based method for calculating embedded, incremental and marginal cost
of transmission capacity’ (1994) 9(1) IEEE Transactions on Power Systems
2170
Marginal nodal pricing is where all accepted offers in the same node are paid the same nodal price. The nodal
price is determined by the node's marginal offer. In a pay-as-bid nodal pricing model, all accepted offers are paid
according to their offer price - Pär Holmberg and Ewa Lazarczyk, ‘Congestion management in electricity networks:
Nodal, zonal and discriminatory pricing’ [2012] Electricity Policy Research Group- Working Paper 1209
2171
Karsten Neuhoff and Rodney Boyd ‘Technical Aspects of Nodal Pricing’ [2011] Climate Policy Initiative
Working Paper
The structure and main features of the electricity market relating to renewable
electricity set out in this chapter show that the market does not simply operate in the
moment but is a process that starts several years before, with traded markets seeing
market operators undertaking initial trading activity some three to four years before
the actual dispatch of the asset.2172
Additionally, the advantages of priority dispatch and embedded benefits
enjoyed by renewable electricity are themes which will be returned to during the
empirical phase of this research. These practices must also be understood as they
are seen to be in diagonal conflict with various aspects of the requirements of Article
107 TFEU prohibiting state aid (See Section 2.10.7 and 3.5.13).
2172
https://business.nasdaq.com/trade/commodities/products/power-derivatives/UK-power.html
There are areas which the TFEU has defined as allowable state aid. These are set
out in Article 107(2) TFEU as - aid having a social character, granted to individual
consumers (granted without discrimination related to the origin of products); aid
following natural disasters; aid granted following reunification of Germany.
Additionally, Article 107(3) TFEU, sets out activities which may be justified –
promoting economic development of depressed areas; promoting the execution of
an important project of common European interest; facilitating the development of
certain economic activities relating to the common interest;2173 promoting culture and
heritage conservation; other categories of aid specified by the Council on a proposal
from the Commission.
Therefore, payments which can be shown to be for a purpose of general
economic interest can be regarded as allowable forms of aid – Orange v
Commission.2174 Services of general economic interest are economic activities that
public authorities identify as being of particular importance to citizens and that would
not be supplied (or would be supplied under different conditions) if there were no
public intervention - examples being transport networks, postal services and social
services.2175
State aid control comes into play when these services are provided by a
company and financed through public resources, in particular because overly
generous compensation could enable the service providers to cross-subsidise their
other commercial activities, and thereby distort competition. 2176 In Wallon &
Glaverbel v Commission 2177 the court held that general economic interest, in
accordance with Article 107(3)(b), would include areas of cross-EU co-operation in
environmental protection or other projects:-
2173
State aid granted for objectives of the common interest is compatible with Article 107(3)(c) Case T-177/07
Mediaset v Commission ECLI:EU:T:2010:233 para 125
2174
Case T-385/12, Orange v Commission, ECLI:EU:T:2015:117, para 43
2175
EU Communication 2012/C 8/02, ‘State aid rules to compensation granted for the provision of services of
general economic interest’OJ C8/4; See Also EU Communication ‘Services of General Interest In Europe’ OJ
2001 C17 – this was confirmed in April 2018 via Case C-91/17 Cellnex Telecom v Commission
ECLI:EU:C:2018:284 – where is was held that (i) state intervention is justified only when there is market failure,
meaning that before a public service obligation (PSO) is imposed, the market failure must be demonstrated with
objective evidence, (ii) A PSO must be clearly defined, (iii) one or more undertakings must be made responsible,
by law or through contract, to supply the service, and (iv) the selection of the supplier(s) and well as their
compensation must be determined according to the procedures laid down in the 2012 Services of General
Economic Interest EU Framework
2176
http://ec.europa.eu/competition/state_aid/overview/public_services_en.html
2177
Case C-62/87 Executif Regional Wallon & Glaverbel v Comission, ECLI:EU:C:1988:132, para 22
State funding meeting the criteria in Article 107(1) TFEU constitutes state aid and
requires notification to the Commission in accordance with Article 108(3) TFEU.
However, according to Article 109 TFEU, the Council may determine categories of
aid that are exempted from this notification requirement. In accordance with Article
108(4) TFEU the Commission may adopt regulations to this effect, these regulations
being the General Block Exemption Regulation (GBER). With this regulation, the
Commission can declare specific categories of state aid compatible with the Treaty
if they fulfil certain conditions, thus exempting them from the requirement of prior
notification and Commission approval. As reported in the June 2018 report on
competition policy, more than 97% of all new aid measures are implemented based
on the GBER.2179
The GBER allows member states to provide aid up to a threshold (known as
‘aid intensity’)2180 in a series of categories without the need to notify the Commission
that the aid has been granted. The GBER frees categories of state aid from reporting
requirements where the benefits of such aid are deemed to outweigh the possible
distortions of competition in the single market triggered by the public funding.2181 The
GBER empowers the Commission to declare, in accordance with Article 109 TFEU,
that certain categories of aid may, under certain conditions, be exempted from the
notification requirement, including aid in favour of environmental protection.2182
The GBER contains provisions to help member states meet their EU 2020
climate targets,2183 to gradually move to market based support for renewable energy,
2178
EU Regulation No 1588/2015 on the application of Articles 107 and 108 of the Treaty on the Functioning of the
European Union to certain categories of horizontal State aid, OJ 2015 L 248/1, and European Commission,
Regulation (EU) No651/2014 declaring certain categories of aid compatible with the internal market in application
of Articles 107 and 108 of the Treaty,OJ 2014 L 187/1. General Block Exemption Regulations for State aid
('GBER')
2179
EU COM(2018) 482 final 18 June 2018 ‘Annual Report on Competition Policy 2017’ - The Annual Report and
the Staff Working Paper can be accessed at:
http://ec.europa.eu/competition/publications/annual_report/index.html.
2180
‘aid intensity’ means the aid amount expressed as a percentage of the eligible costs – it is the means of
calculating the maximum amount of state aid that can be granted to a particular organisation operating in a
particular sector – The GBER specifies aid intensities for different sectors below which the notification of state aid
is not required. available at http://ec.europa.eu/competition/state_aid/studies_reports/sme_handbook.pdf access
10 April 2018
2181
European Commission Memo 14/369 21 May 2014 ‘State aid: Commission adopts new General Block
Exemption Regulation (GBER)’ available at www.europa.eu/rapid/press-release_MEMO-14-369_en.doc accessed
10 April 2018
2182
Ibid
2183
EU Regulation No 1588/2015 on the application of Articles 107 and 108 of the Treaty on the Functioning of the
European Union to certain categories of horizontal State aid, OJ 2015 L 248/1, and European Commission,
Regulation (EU) No651/2014 declaring certain categories of aid compatible with the internal market in application
of Articles 107 and 108 of the Treaty,OJ 2014 L 187/1. General Block Exemption Regulations for State aid
('GBER'), para 41
2184
Ibid, para 36(1)
2185
Ibid, para 45
2186
Ibid, para 42
2187
Ibid, para 43
2188
ibid, para 49
2189
Ibid, para 39
2190
Ibid, para 47
2191
Commission Decision SA 48327 - February 2018, available at
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_48327 accesed 19 June 2018
2192
State aid granted for objectives of the common interest is compatible with Article 107(3)(c) Case T-177/07
Mediaset v Commission ECLI:EU:T:2010:233 para 125
2193
Edwardo Cadette, ‘European Commission approves State aid scheme for solar panels in rented residential
buildings in Germany’ May 2018 Morais Leitão, Galvão Teles, Soares da Silva & Associados Newsletter available
at
https://www.mlgts.pt/xms/files/Publicacoes/Newsletters_Boletins/2018/Newsletter_Europeu_e_Concorrencia_28_
EN.PDF accessed 19 June 2018
2194
Internal Market is an area without internal frontiers in which the free movement of goods, persons, services
and capital is ensured - Case T-356/15 Austria v Commission ECLI:EU:T:2018:439, para 516
2195
EU COM(2018) 398/2 2018/0222 ‘amending Council Regulation (EU) 2015/1588 of 13 July 2015 on the
application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to certain categories of
horizontal State aid’
2196
Ibid, explanitory memorandum
Due to the feed-in tariff payments made to renewable energy generating facilities or
the granting of green certificate that can be traded to recover additional revenue,
there is potential for market distortion – examples of such cases being Vent De
Colère, 2198 Austrian Green Levy 2199 and German Green Levy 2200 (see Sections
3.5.10 to 3.5.12). As outlined above, the European Commission published
Guidelines2201 on public support for projects in the field of environmental protection
and renewable energy on 9 April 2014. These 2014 Guidelines allow the payment
of operating aid to renewable generating facilities to cover the difference between
production costs and wholesale market prices.2202 The 2014 Guidelines outline that
state aid is allowed ‘which does not adversely affect trading conditions to an extent
contrary to the common interest’.2203 The 2014 Guidelines were challenged in two
annulment cases, both of which were dismissed.2204
The 2014 Guidelines are stated to provide guidance on how member states
can reach their 2020 renewable energy and climate targets, while addressing the
market distortions that may result from subsidies granted to renewable energy
sources. To this end, the Guidelines promote a transition to market-based support
for renewable energy.2205 They also provide criteria on how member states can
relieve energy intensive companies that are particularly exposed to international
competition from charges levied for the support of renewables.2206 Furthermore, the
2014 Guidelines include new provisions on aid to energy infrastructure and
generation capacity to strengthen the internal energy market and ensure security of
supply.2207 The 2014 Guidelines have brought about the need for economic and
financial analysis in assessing the appropriateness of any state aid in the energy
2197
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy
2014 – 2020, 2014/C OJ 200/01.
2198
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie, ECLI, 2013
2199
Case T-251/11 Austria v Commission, ECLI:EU:T:2014:1060
2200
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281
2201
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy 2014
– 2020, 2014/C OJ 200/01
2202
Ibid, Article 3(23) provided the assessment criteria in Article 3(1) are satisfied
2203
Ibid, Article 2
2204
Case T-694/14 European Renewable Energies Federation v Commission ECLI:EU:T:2015:915 and Case T-
670/14 Milchindustrie-Verband v Commission ECLI:EU:T:2015 :906
2205
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy
2014 – 2020, 2014/C OJ 200/01, Article 50 and 51; See also Pablo Del Rio and Pere Mir-Artigues, ‘Combinations
of Support Instruments for Renewable Electricity in Europe: A Review’ (2014) 40 Renewable and Sustainable
Energy Reviews, 287, 293; E Szyszczak, 'Time for Renewables to Join the Market: the New Guidelines on state
aid for Environmental Protection and Energy' (2014) 5(9) Journal of European Competition Law and Practice, 616
and 622.
2206
Ibid, Section 3(7), Articles 167-172
2207
Ibid, Section 3(8)
The 2014 Guidelines state that the objective in relation to energy is to develop ‘a
competitive, sustainable and secure energy system in a well-functioning Union
energy market’, 2210 where member states have effectively defined the pursuit of
renewable energy facilities and carbon emission reductions as the objectives of
common interest2211 in line with the decisions of the Commission in this area.2212
The need for state intervention is considered accepted where a market failure exists
(positive or negative), such as the failure to internalise the costs of carbon
emissions, where the failure is not corrected by other elements of the renewables
energy regulatory framework (such as the emission trading scheme). 2213 An
example of such a market failure is the UK Contract for Difference for Renewables,
where the Commission accepted the residual carbon externality, as the carbon price
was not high enough to overcome the externality.2214
2208
A contract for difference (CFD) is essentially a contract between two parties, whereby the parties exchange
the difference between the market prices for electriity and the reference price in the CFD – in the context of
renewables in the UK a CfD is a private law contract between a low carbon electricity generator and the Low
Carbon Contracts Company (LCCC), a government-owned company – available at
https://www.gov.uk/government/collections/electricity-market-reform-contracts-for-difference accessed 9 July 2018
2209
December 2015, the Commission approved the CfD as compatible aid; See European Commission, Decision
of 10 April 2015 concerning State aid SA.38762 (201 5/C) (2014/N)-United Kingdom, Investment Contract for
Lynemouth Power Station Biomass Conversion, C/i 16/2015, 52
2210
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy 2014
– 2020, 2014/C OJ 200/01, Article 30
2211
State aid granted for objectives of the common interest is compatible with Article 107(3)(c) Case T-177/07
Mediaset v Commission ECLI:EU:T:2010:233 para 125
2212
for example European Commission, Decision of 23 July 2014 concerning Electricity Market Reform, Contract
for Difference for Renewables in the United Kingdom, SA.36196, para 52-53; European Commission, Decision of
23 July 2014 concerning Support for five offshore wind farms: Walney, Dudgeon, Hornsea, Burbo Bank and
Beatrice in the United Kingdom, SA.38758, SA38759, SA.38761, SA.38763 & SA.388121, para 56-57; European
Commission, Decision of 28 October 2014 concerning aid to household wind turbines and offshore wind turbines
with an experimental aspect in Denmark, SA.37122, para 42
2213
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy 2014
– 2020, 2014/C OJ 200/01, Article 34-39
2214
European Commission, Decision of 23 July 2014 concerning Electricity Market Reform, Contract for Difference
for Renewables in the United Kingdom, SA.36196
In assessing the appropriateness of the aid, a two-step approach is set out (i) other
policy instruments must be considered, such as regulation, market-based
instruments or soft instruments like labelling and education campaigns2215 and (ii) if
aid is necessary, the aid mechanism implemented should be such that it generates
the minimal distortions to trade or competition.2216
4 Incentive Effect
The 2014 Guidelines state that the aid must incentivise ‘the beneficiary to change
its behaviour to increase the level of environmental protection or to improve the
2217
functioning of a secure, affordable and sustainable energy market’.
Demonstrating the incentive effect is straight forward and uncontroversial in relation
to renewable energies, whose generation costs tend to be higher than market
prices.2218
There is a general presumption that any aid must be proportionate2219 and as such
limited to the amount required to achieve the defined objective.2220 When reviewing
an individual case the reasonable rate of return (10% being considered applicable
for electricity generation)2221 will be considered as compared to the rates of return
found for similar projects.2222 It is generally accepted by the Commission2223 that the
2215
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy 2014
– 2020, 2014/C OJ 200/01, Article 40-44
2216
Ibid, Article 45-48
2217
Ibid, Article 49
2218
European Commission, Decision of 23 July 2014 concerning Electricity Market Reform, Contract for Difference
for Renewables in the United Kingdom, SA.36196, para 60-62
2219
Meaning that ‘measures should not exceed the limits of what is appropriate and necessary for attaining the
objective pursued, and that where is a choice between several appropriate measures must be had to the least
onerous’ Case T-419/03 Altsoff Recycling Austria v Commission ECLI:EU:T:2011:102, para 134; Also
‘proportionality’ or ‘being proportionate’ can be considered an ideal or a goal rather than being a principle with the
same status as ‘polluter pays’ or the ‘precautionary’ principle. – see Jonathon Verschuuren, ‘Sustainable
Development and the Nature of Environmental Legal Principles’ (2006) (1)9 Potschefstroom Electricity Law
Journal, 17; See Also Jurian Langer and Wolf Sauter ‘The Consistency Requirement in EU Law’ (2017) 39 Journal
of European Law
2220
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy 2014
– 2020, 2014/C OJ 200/01, Article 69
2221
European Commission, Decision of 24 October 2014 concerning aid to photovoltaic installations and other
renewable energy installations in Denmark, SA.36204 para 41; European Commission, Decision of 14 January
2013 concerning aid for all forms of biogas use in Denmark, SA.35485, para 36 – However, the Commission has
gone as high as 12% (European Commission Decision of 28 October 2014 concerning support scheme for
electricity produced from renewable sources and efficient cogeneration in Estonia, SA.36023, para 111) and as
low as 6% (As part of the implementation of the German Support scheme, see also European Commission
decisions: state aid SA.39723, SA.39724, SA.39725, SA.39726, SA.39731, SA.39732, SA.39733, SA.39735,
SA.39738, SA.39739, SA.39741, SA.39742 (2014/N); SA.39722, SA.39727, SA.39728, SA.39729, SA.39730,
SA.39734, SA.39736, SA.39740 (2015/NN) -Germany, Support to 20 large offshore wind farms under the EEG
Act 2014, Brussels, 16.04.2015, C(201 5)2580 final.
2222
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy
2014 – 2020, 2014/C OJ 200/01, Article 84
2223
Comission Decision of 23 July 2014 concerning Support for five offshore wind farms: Walney, Dudgeon,
This criterion requires that the negative effects of the aid on competition and the
market must be outweighed by the effects of achieving the common interest
objective,2228 being aware of locational effects2229 and the position of competitors.2230
7 Transparency
Hornsea, Burbo Bank and Beatrice in the United Kingdom, SA.38758, SA38759, SA.38761, SA.38763 &
SA.388121
2224
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy 2014
– 2020, 2014/C OJ 200/01, Article 109
2225
Ibid, Article 124
2226
Ibid, Article 126
2227
Daniel Radov, Alon Carmel and Clemens Koenig, ‘Offshore Revolution? Decoding the UK Offshore Wind
Auctions & What the Results Means for a “Zero-Subsidy” Future’ (2017) NERA Economic Consulting
2228
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy 2014
– 2020, 2014/C OJ 200/01, Article 88 - State aid granted for objectives of the common interest is compatible with
Article 107(3)(c) Case T-177/07 Mediaset v Commission ECLI:EU:T:2010:233 para 125
2229
Ibid, Article 89
2230
Ibid, Article 90
2231
Ibid, article 104
2232
Ibid, Article 219
2233
Pradyumna Bhagwat, Kaveri Lychettira, Jorn Richstein, Emile Chappin and Laurens De Vries, ‘The
effectiveness of capacity markets in the presence of a high portfolio share of renewable energy sources’ (2017) 48
Utilities Policy, 76; See Also Nicole Robins and Tridevi Chakma,’ state aid in Energy under the Spotlight:
The Implications of the Hinkley Point Decision’ (2016) 2 European state aid Quarterly, 247, 257
2234
reserve margin or capacity margin is defined as ‘the excess of installed generation capacity over demand’.
The de-rated capacity margin is defined as ‘the expected excess of available generation capacity over demand’ -
Socrates Mokkas and Karen Mayor,’ Electricity Capacity Assessment: Measuring and modelling the risk of supply
shortfalls’ (2011) Office of gas and electricity markets (Ofgem) https://www.ofgem.gov.uk/ofgem-
publications/40421/capacityassessmentconsultationdocument.pdf accessed 29 April 2018
2235
Cynthia Bothwell and Benjamin Hobbs, ‘Crediting wind and solar renewables in electricity capacity markets:
the effects of alternative definitions upon market efficiency’ (2017) Energy Journal, 38; The mechanism was
challenged by two cases Case T-788/14 to 793/14 MPF Holdings v Commission, application lodged on 28
November 2014 (withdrawn on 28 February 2017) and Case T-793/14 Tempus Energy and Tempus Energy
Technology v Commission, application lodged on 4 December 2014
2236
Case C-262/12, Association Vent De Colère Fédération nationale v Ministre de l’Écologie, du Développement
durable, des Transports et du Logement, Ministre de l’Économie, des Finances et de l’Industrie, ECLI, 2013
2237
Case T-251/11 Austria v Commission, ECLI:EU:T:2014:1060
2238
Case T-47/15 Germany v Commission ECLI:EU:T:2016:281
2239
Case T-793/14 Tempus Energy v Commission ECLI:EU:T:2018:790
2240
EU COM (2015) 80 'A Framework for a Resilient Energy Union with a Forward-Looking Climate Change
Policy'
2241
European Commission Communication ‘Guidelines on state aid for Environmental Protection and Energy 2014
– 2020, 2014/C OJ 200/01, Section 3(7), Article 167-172
2242
Commission Decision of 28 March 2018 relating to the offshore-surcharge reduction for railway undertakings in
Germany SA.50395; See also Commission Decision of 28 March 2018 relating to reductions in the offshore
surcharge for electro-intensive undertakings and reductions on the CHP surcharge for electricity produced from
waste gases in Germany SA.49416
2243
Guidelines on state aid for Environmental Protection and Energy 2014 – 2020, 2014/C 200/01, Article 2
5 Internal Rate of A discount rate that makes the net present value
Return (NPV) of all cash flows from a project equal to zero
21 Wind and solar The level of wind and solar energy at a location
resource availability
Net w ork
Scenario
Interco nnect ion
Modelling
Netw ork Uo S
Net w ork
Topo logy
RoR
IRR
Information
Net w ork Topo lo gy Rgulat ory
Arbetrage
Uncert ainty
Annex 8 - Thematic Map
Long-View
Ret rospective
Change
The numerical method to determine sample size is derived from the paper by Ray
Galvin, ‘How many interviews are enough? Do qualitative interviews in building
energy consumption research produce reliable knowledge?’ (2015) 1 Journal of
Building Engineering.
If these n people are interviewed one by one in such a way that this theme, if person
has it, will emerge, the probability of it emerging in the first interview is R, and the
probability of it not emerging in this interview is 1-R.
Should the theme not emerge, and a second person is interviewed. The probability
that it does not emerge in this second interview is also 1–R. Therefore, the
probability that it will not have emerged after these first two interviews is
U2 = (1-R)(1-R)
The probability that it does not emerge on the third interview is also (1–R). Therefore,
the probability of it not emerging after three interviews is
U3 = (1-R)(1-R)(1-R)
Un = (1-R)n
The above formula can be used to find the number of interviews required to have a
stated level of confidence (P) that all the relevant themes which are held by
proportion R of the population will occur within the interview sample
(1 − )
=
(1 − )
The table below shows the confidence that views (themes) will emerge during the
interviews should they be held by a certain percentage of the population. For
example, for 16 interviews there is 81.47% confidence that views will emerge only if
they were held by less than 1 in 10 (10%) of the population. As some of the
respondents were interviewed again to follow up on points raised by others, this
means that 22 interviews were actually undertaken, giving broadly 90% confidence
views will emerge only if they were held by less than 1 in 10 (10%) of the population.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
100% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
95% 95.00% 99.75% 99.99% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
90% 90.00% 99.00% 99.90% 99.99% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
85% 85.00% 97.75% 99.66% 99.95% 99.99% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
80% 80.00% 96.00% 99.20% 99.84% 99.97% 99.99% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
75% 75.00% 93.75% 98.44% 99.61% 99.90% 99.98% 99.99% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
70% 70.00% 91.00% 97.30% 99.19% 99.76% 99.93% 99.98% 99.99% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
65% 65.00% 87.75% 95.71% 98.50% 99.47% 99.82% 99.94% 99.98% 99.99% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
60% 60.00% 84.00% 93.60% 97.44% 98.98% 99.59% 99.84% 99.93% 99.97% 99.99% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
55% 55.00% 79.75% 90.89% 95.90% 98.15% 99.17% 99.63% 99.83% 99.92% 99.97% 99.98% 99.99% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
50% 50.00% 75.00% 87.50% 93.75% 96.88% 98.44% 99.22% 99.61% 99.80% 99.90% 99.95% 99.98% 99.99% 99.99% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
45% 45.00% 69.75% 83.36% 90.85% 94.97% 97.23% 98.48% 99.16% 99.54% 99.75% 99.86% 99.92% 99.96% 99.98% 99.99% 99.99% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
40% 40.00% 64.00% 78.40% 87.04% 92.22% 95.33% 97.20% 98.32% 98.99% 99.40% 99.64% 99.78% 99.87% 99.92% 99.95% 99.97% 99.98% 99.99% 99.99% 100.00% 100.00% 100.00%
35% 35.00% 57.75% 72.54% 82.15% 88.40% 92.46% 95.10% 96.81% 97.93% 98.65% 99.12% 99.43% 99.63% 99.76% 99.84% 99.90% 99.93% 99.96% 99.97% 99.98% 99.99% 99.99%
30% 30.00% 51.00% 65.70% 75.99% 83.19% 88.24% 91.76% 94.24% 95.96% 97.18% 98.02% 98.62% 99.03% 99.32% 99.53% 99.67% 99.77% 99.84% 99.89% 99.92% 99.94% 99.96%
25% 25.00% 43.75% 57.81% 68.36% 76.27% 82.20% 86.65% 89.99% 92.49% 94.37% 95.78% 96.83% 97.62% 98.22% 98.66% 99.00% 99.25% 99.44% 99.58% 99.68% 99.76% 99.82%
20% 20.00% 36.00% 48.80% 59.04% 67.23% 73.79% 79.03% 83.22% 86.58% 89.26% 91.41% 93.13% 94.50% 95.60% 96.48% 97.19% 97.75% 98.20% 98.56% 98.85% 99.08% 99.26%
15% 15.00% 27.75% 38.59% 47.80% 55.63% 62.29% 67.94% 72.75% 76.84% 80.31% 83.27% 85.78% 87.91% 89.72% 91.26% 92.57% 93.69% 94.64% 95.44% 96.12% 96.71% 97.20%
14% 14.00% 26.04% 36.39% 45.30% 52.96% 59.54% 65.21% 70.08% 74.27% 77.87% 80.97% 83.63% 85.92% 87.89% 89.59% 91.05% 92.30% 93.38% 94.31% 95.10% 95.79% 96.38%
13% 13.00% 24.31% 34.15% 42.71% 50.16% 56.64% 62.27% 67.18% 71.45% 75.16% 78.39% 81.20% 83.64% 85.77% 87.62% 89.23% 90.63% 91.85% 92.91% 93.83% 94.63% 95.33%
12% 12.00% 22.56% 31.85% 40.03% 47.23% 53.56% 59.13% 64.04% 68.35% 72.15% 75.49% 78.43% 81.02% 83.30% 85.30% 87.07% 88.62% 89.98% 91.19% 92.24% 93.17% 93.99%
11% 11.00% 20.79% 29.50% 37.26% 44.16% 50.30% 55.77% 60.63% 64.96% 68.82% 72.25% 75.30% 78.02% 80.44% 82.59% 84.50% 86.21% 87.73% 89.08% 90.28% 91.35% 92.30%
10% 10.00% 19.00% 27.10% 34.39% 40.95% 46.86% 52.17% 56.95% 61.26% 65.13% 68.62% 71.76% 74.58% 77.12% 79.41% 81.47% 83.32% 84.99% 86.49% 87.84% 89.06% 90.15%
5% 5.00% 9.75% 14.26% 18.55% 22.62% 26.49% 30.17% 33.66% 36.98% 40.13% 43.12% 45.96% 48.67% 51.23% 53.67% 55.99% 58.19% 60.28% 62.26% 64.15% 65.94% 67.65%
0% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%