State aid: Commission approves support for production of electricity from renewable sources in Ireland

The European Commission has approved, under EU State aid rules, a scheme to support electricity production from renewable sources in Ireland. Ireland intends to introduce a new aid measure, called the Renewable Electricity Support Scheme (“RESS”), to support electricity production from renewable sources, including solar photovoltaic and wind. The RESS, with an estimated total budget of between €7.2 billion and €12.5 billion, will run until 2025. During this time, aid for the production of electricity from renewable sources granted under the RESS will be allocated through auctions. All eligible technologies will compete for subsidies in these auctions, which should ensure the cost-effective achievement of renewable electricity targets by encouraging competition. However, Ireland has justified preferential treatment for a small quantity of energy from solar, as well as from offshore wind on the basis of the longer term potential of these technologies for the country. Successful applicants of the RESS will receive support over 15 years in the form of a premium on top of the market price. The communities hosting projects supported by the RESS will benefit from a fund to which all RESS beneficiaries will contribute to and that will invest in certain technologies and ‘sustainable goals’ including education, energy efficiency, sustainable energy and climate action initiatives in the area surrounding the RESS projects. The Commission assessed the scheme under EU State aid rules, in particular under the 2014 Guidelines on State aid for environmental protection and energy. The Commission concluded that the Irish RESS is in line with EU State aid rules, as it promotes the generation of electricity from renewable sources, in line with the European Green Deal, without unduly distorting competition. Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This Renewable Electricity Support Scheme will contribute to Ireland’s transition to a low carbon and environmentally sustainable economy, in line with the European Green Deal and our State aid rules.”