The «Green Deal» for the energy-efficiencyFebruary 5, 2013
Funding Scheme: 2013-02-05
European Commission has recently concluded the financial support for the British “Green Deal”on energy-efficiency and climate change in order to encourage the companies and citizens to invest in this area.
Commission Vice President Joaquín Almunia, in charge of competition policy, said: “The UK Green Deal allows consumers and businesses to improve the energy efficiency of their buildings without making huge upfront investments. This is another example of how our policy of state aid control can support private investment in energy saving and enhance competition at the same time.”
Under the “Green Deal”, private companies may offer upfront energy efficiency investments to citizens and then recoup payments through energy bills. Clients would face no upfront costs as they would only pay a monthly charge added to their electricity bill. Thereby, they would only pay for such an investment as long as they remain in the building concerned. When they move out, the new occupant would continue the down-payment. The scheme was designed in compliance with the “Golden Rule” of the Green Deal that specifies that any charge created by an investment must be less than the expected savings. Different State bodies and the UK Green Investment Bank (GIB) would provide financial support via a special financing vehicle.
The Commission has found that the scheme is aimed at an objective of common interest, namely improving energy efficiency, and that it is well-designed, making a significant contribution towards delivering this objective. Moreover, since most of the advantages derived from the scheme are passed on to end-consumers, the potential distortions of competition are limited as compared to the environmental benefits. Finally, the UK authorities have addressed initial concerns raised by the Commission about GIB’s involvement in the Green Deal by committing to ensure that GIB will withdraw from this market to the extent that private investors step in, thereby preserving competition.
As a result, the positive effects of the measure in terms of promoting and increasing energy efficiency clearly outweigh any potential distortions of competition brought about by the state support.
The Commission assessed the scheme under Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU), which allows state aid to further certain economic activities provided that such aid does not adversely affect trading conditions to an extent contrary to the common interest.
The non-confidential version of the decision will be made available under the case number SA.34611 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.
Url description: EUROPA