New State Aid Guidelines will restrict FIT schemes
On 9 April 2014, the European Commission adopted, in principle, the State Aid Guidelines that foresee the gradual introduction of competitive bidding processes for allocating public support and the gradual replacement of feed-in tariffs by feed-in premiums.
From 1 January 2016, aid is granted as a premium in addition to the market price and from 1 January 2017, competitive and technology-neutral bidding processes will need to be place unless Member States can demonstrate reasons for why such bidding processes could not work (underbidding / strategic bidding).
All biogas installations with more than 500 kW will be excluded from FiT schemes while projects bigger than 1 MW will need to go successfully through a bidding process in order to receive aid. This is clearly in contradiction with other EU policies requiring an active and financially healthy biogas sector in the European Union. The management of organic wastes from the meat industry and municipal sources requires a more expensive anaerobic digestion facility with pre-treatment processes and more elaborate odour control equipment. The type of facility that can process this material on an economic basis is normally larger than 1 MW. By using the 1 MW size as a cut-off, the proposal will discourage the construction of precisely the type of biogas plants called for by other EU Directives and policies. So far, where countries have tried to launch auctions for biogas, the results have been universally negative.
The European Renewable Energies Federation (EREF) has proposed to Member States and also to the renewable energy industry to go for annulment procedure before the European Court of Justice.