State aid: Commission approves six electricity capacity mechanisms to ensure security of supply in Belgium, France, Germany, Greece, Italy and Poland

The European Commission has approved under EU State aid rules electricity capacity mechanisms in Belgium, France, Germany, Greece, Italy and Poland. The Commission found that the measures will contribute to ensuring security of supply whilst preserving competition in the Single Market. Commissioner Margrethe Vestager, in charge of competition policy, said: "Capacity mechanisms can help to safeguard security of electricity supply, but they must be designed so as to avoid distortions of competition in energy markets. I am glad that our close cooperation with national authorities has enabled us to today approve well-designed capacity mechanisms in six EU countries. They will foster competition among all potential capacity providers to the benefit of consumers and our European energy market." Capacity mechanisms have the important objective of ensuring security of electricity supply. But if they are not well-designed they may cause higher electricity prices for consumers, give undue advantages to certain energy operators or hinder electricity flows across EU borders. That is why the Commission has, in close cooperation with the relevant national authorities, assessed six mechanisms in Belgium, France, Germany, Greece, Italy and Poland to ensure they meet strict criteria under EU State aid rules, in particular the Commission's 2014 Guidelines on State Aid for Environmental Protection and Energy. In this context, the Commission has also taken into account insights from its 2016 State aid sector inquiry on capacity mechanisms. The six capacity mechanisms approved today concern more than half of the EU population. They cover a range of different types of mechanism that address the specific need in each Member State. In the cases of Belgium and Germany, the Commission has authorised strategic reserves. Strategic reserves keep certain generation capacities outside the electricity market for operation only in emergencies. In the cases of Italy and Poland, the Commission has authorised market-wide capacity mechanisms. These can be necessary where electricity markets face structural security of supply problems. In the cases of France and Greece, the Commission has authorised capacity mechanisms specifically promoting demand response. Demand response schemes pay customers to reduce their electricity consumption in hours when electricity is scarce. The advantage of such schemes is that demand response operators may be able to react more quickly than electricity generators and are generally more environmentally friendly. Today's decisions complement the Commission's Energy Union Strategy to deliver secure, sustainable and competitive energy in Europe. For more information please see the full press release and factsheet.

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