Coal-biomass co-firing plants under serious risk of returning aid due to imprecise clues.
European Commission Consultation on Community Guidelines on Environmental and Energy State Aid for 2014-2020 proposes that operating aid for the production of renewable energy and/or combined production of renewable heat is notifiable if the resulting renewable energy capacity exceeds 125MW.
In the case of coal-biomass co-firing plants there are serious doubts how to calculate the notifiable capacity - the full capacity of the plant or the RES share multiplied by the full capacity.
The issue have been noticed by European energy regulators (see: CEER Response to European Commission Consultation on Community Guidelines on Environmental and Energy State Aid for 2014-2020 (Ref: HT 359) of 14 February 2014 (Register number: 65470797015-89), which fact indicates the problem really exists..
Considering the effects of granting aid, which - legally - was due to be notified but, by reason of interpretation mismatch, finally has not been (in brief: obligation to return any unlawfully received surplus plus interest rate), there should be no place in Environmental and Energy State Aid Guidelines for 2014-2020 for such uncertainties.
The draft Guidelines on Environmental and Energy State Aid for 2014-2020 also suggest that costs not directly linked to the achievement of the environmental or energy objective shall not be eligible for support.
This creates another grey area in the case of coal-biomass co-firing, as typically investment costs are partially related to renewable production and some to fossil fuel based production.
CEER gives an example of the installation or refurbishment of the plant furnace, which serves both biomass and coal firing purposes - in effect raising the prospect that at least some costs should be considered eligible (e.g. according to the ratio of renewable sources in total fuel usage).
CEER concludes the issue with the point as above.
However, the wording of the draft Guidelines on Environmental and Energy State Aid for 2014-2020 raises threats that entire above-mentioned investment, considered, hypothetically, by European Commission Competition DG as not directly linked to the achievement of the environmental or energy objective, will be questioned.
The rational expectation towards the document called: "Guidelines" is that it will be easing existing uncertainties, but not creating new by its own. Unless, the intention is to extinguish coal-biomass co-firing plants in a smooth and elegant way...