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03-07-2014

Ålands case judgment – EU Member States are not required to support the production of renewable energy in other Member States

In Ålands Vindkraft AB v Energimyndigheten (Case C-573/12) the Court of Justice of the European Union (CJEU) has concluded that the Renewables Directive remains valid and will not have to change. The Court also concluded Sweden’s support scheme for green energy is compatible with the Renewable Energy Directive.

The case began with a rift between a windfarm operator and Sweden’s energy regulator. Swedish law allows the provision of green certificates to producers of electricity from renewable sources. Ålands Vindkraft, the operator of a windfarm on a Finnish island that’s physically connected to the Swedish electricity network, applied for green certificates under Swedish law. However, citing that green certificates could only be issued to electricity produced in Sweden and Norway (who have an agreement), the Swedish regulator refused to issue certificates to Ålands Vindkraft.
 
Josh Roberts, ClientEarth lawyer, said: “The Court found Sweden’s scheme is capable of restricting the free movement of goods, especially green electricity, from other Member States. Nonetheless, they concluded this is justified in order to promote renewable energy on grounds of environmental protection, in particular combating climate change.
 
“The Renewable Energy Directive will not have to change today. The opinion promotes the status quo until 2020, after which binding EU energy targets will most likely nullify some of the legal justifications that exist in this case.”
 
“The opinion is a setback to the trading of green certificates and the concept of ‘guarantees of origin’, which would have us believe that imported energy is just as green as locally produced energy. The Court has said guarantees of origin are not capable of determining the green origins of energy once it has entered the grid. This could create setbacks for the acceptance of inter-EU trading of green certificates.
 
“The Court also confirmed that renewable energy production costs are still quite high compared to the costs of electricity produced from non-renewable energy sources. It acknowledges market barriers that exist for renewable sources of energy, particularly at a local level. Therefore, green energy support schemes are still needed to promote a long-term investment in new installations and to give producers certain guarantees about the future marketing of their green electricity.”

Source: ENDS Europe

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