Energy: Government Assistance

Department for Business, Energy and Industrial Strategy written question – answered on 4th December 2018.

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Photo of Ian Murray Ian Murray Labour, Edinburgh South

To ask the Secretary of State for Business, Energy and Industrial Strategy, with reference to the recent decision by the European Court of Justice on state aid clearance for the capacity market, whether energy company payments arising from arrangements made and to be made within the five-year period previously approved by the European Commission will be stopped.

Photo of Claire Perry Claire Perry The Minister of State, Department for Business, Energy and Industrial Strategy, Minister of State (Business, Energy and Industrial Strategy) (Energy and Clean Growth)

The recent State aid judgment by the ECJ against the European Commission in the Tempus case was decided on procedural grounds, holding that the Commission should have consulted more fully before granting State aid approval in 2014. It did not challenge the nature of the Capacity Market mechanism itself. The judgment removed State aid approval for the Capacity Market, preventing the UK Government from making any further capacity payments under existing agreements until re-approval.

We are already working closely with the Commission to aid their investigation and seek timely State aid approval for the Capacity Market as soon as possible.

The Government and National Grid will ensure that market participants are kept updated.

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