Brussels, 12 June 2012
State aid: Commission approves UK renewable heat incentive scheme for Northern Ireland
The European Commission has found a UK scheme in support of renewable energy sources used to generate heat in Northern Ireland to be in line with EU state aid rules, because it furthers environmental protection and the limitation of carbon emissions, in line with the Europe 2020 strategy for sustainable growth, without unduly distorting competition in the internal market.
In the context of reaching its objectives of 12% renewable heat and 30% renewable electricity by 2020, the UK intends to incentivise the use of renewable energy sources for the production of heat and hot water, and in particular biomass, ground source, biogas and solar energy sources in Northern Ireland. The incentive will come as a series of tariffs per unit of heat produced and divided into bands according to the technology used. In the scheme notified by the UK authorities, the tariffs would be paid to the commercial users of those energy sources, as they are the most energy-intensive players.
The scheme, which will be managed by the Northern Ireland Executive, will operate for maximum 20 years and will be worth an estimated £184 million (approximately €227 million), of which £25 million have already been allocated for the first five years. Its target is to reach a level of 10% of renewable heat by 2020. This implies an increase of 1.3 TWh over and above the 0.3 TWh of renewable heat currently produced in the territory.
The Commission found the scheme to be in line with the provisions of the EU Environmental Aid Guidelines, which allow Member States to grant aid to support renewable energy provided that certain conditions on the type and the intensity of the aid are respected. The Commission's investigation found that the measure is in line with the Guidelines, in particular since it does not lead to overcompensating the beneficiaries of the aid. This ensures that distortions of market conditions are kept at a minimum, while allowing the UK to support technologies which are going to be crucial to limit carbon emissions, thus ensuring that the objectives of the Europe 2020 strategy for sustainable growth can be met.
The UK is already operating a similar scheme in the mainland UK that the Commission approved in 2011 (see case SA.32125).
The non-confidential version of the decision will be made available under the case number SA.32174 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.