This article considers the difficulties that member states can face in satisfying the requirements of the EU state aid rules when looking to incentivise investment in energy generation projects.
- The UK Government’s efforts to incentivise urgent investments in new low carbon generating capacity are facing difficulties because of the EU state aid rules.
- The twin requirements of “market failure” and “proportionality” are difficult to satisfy when granting long-term subsidies or income guarantees with a view to de‑risking individual energy infrastructure projects.
- A fresh approach may be needed for evaluating EU member states’ interventions in the energy field.
This article was first published by Butterworths Journal of International Banking and Financial Law (JIBFL)