The European Commission has found that German plans to support the building of 20 offshore wind farms are in line with EU state aid rules. Seventeen wind farms will be located in the North Sea and three in the Baltic Sea. The Commission concluded that the project would further EU energy and environmental objectives without unduly distorting competition in the Single Market.
In October 2014 Germany notified plans to support the construction and operation of several offshore wind farms. Aid would be granted to operators in the form of a premium paid on top of the market price for electricity.
The size of each wind farm ranges from 252 megawatt (MW) to 688 MW and, in total, the projects will make available up to 7 gigawatt (GW) of renewable energy generation capacity. The total investment costs amount to € 29.3 billion. All wind farms are planned to start producing electricity by the end of 2019 at the latest. In total, they are expected to generate 28 terawatt-hours (TWh) of renewable electricity per year amounting to almost 13% of Germany’s 2020 scenario for renewable energy given in the National Renewable Energy Action Plan (NREAP).
The Commission assessed the projects under its Guidelines on State aid for environmental protection and energy that entered into force in July 2014 The Commission found that the projects contribute to reaching Germany’s 2020 targets for renewable energy without unduly distorting competition in the single market. In particular, the Commission verified that the state aid is limited to what is necessary to realising the investment.
The rates of return that investors would achieve thanks to the premium were limited to what is necessary to implement each project and in line with rates previously approved by the Commission for similar projects. The Commission also took into consideration that these projects will enable new electricity providers to enter the German generation market. This will have a positive effect on competition.
The projects are carried out under the German support scheme for renewable energy Erneuerbare Energien Gesetz (EEG Act) 2014, which the Commission approved in July 2014.
The 20 projects were notified individually to the Commission and assessed separately from the general scheme as they exceed the 250 MW threshold set out in Guidelines on State aid for environmental protection and energy. Due to their size, the financial compensation and the competitive effect of the projects needed to be investigated on a case-by-case basis. The projects, however, differ only in certain technical aspects and engineering design so they were assessed together in one single decision.
The non-confidential version of the decision will be published in the State aid register on the competition website under the case numbers SA.39722 to SA.39736 and SA.39738 to SA.39742 once eventual confidentiality issues have been resolved. The State Aid Weekly e-News lists new publications of state aid decisions on the internet and in the EU Official Journal.