Court Says UK Plan for Power Plant Aid Warranted Scrutiny

(CN) – Plans by the United Kingdom to compensate power plants that reduce their consumption during high-stress points should have triggered an investigation by EU regulators, the European General Court ruled Thursday.

Siding with a challenge by Tempus Energy, the ruling says that the European Commission was wrong to shelve its objections in 2014 when the U.K. announced that it was creating an aid scheme establishing a capacity market.

Though the commission deemed the scheme compatible with EU rules on state aid, the General Court says it should have better assessed that compatibility by initiating a formal investigation.

The U.K. considered creation of a capacity market necessary because it was on the verge of having insufficient energy in the near future if confronted with high-demand periods.

Feeding into the potential crisis, the U.K. said its oldest generating plants would soon be closing, and that the electricity market as it was offered little incentive for consumers to reduce their electricity demands.

But Tempus complained that the U.K.’s planned aid scheme gave more was biased toward generation over demand-side response operators, which offer a service whereby consumption is rescheduled or reduced.

Thursday’s ruling emphasizes that the U.K.’s planned scheme also included significant aid: between GBP 0.9 billion and GBP 2.6 billion per year for 10 years.

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