Investment State Aid for Ocean Energy Projects in the EU: A Lack of Integration with the Renewable Energy Directive?

Abstract

Ocean energy techniques (including tidal energy, wave energy, and salinity gradient energy) can play an important role with respect to the achievement of the Member States’ specific renewable energy targets set by the Renewable Energy Directive. In 2016, the EU's Ocean Energy Forum reported that EU State aid guidelines remain ‘burdensome and restrictive.’ This article argues that the State aid framework would indeed be too restrictive if it were to prevent those renewable (ocean) energy projects which are important for achieving a Member State’s renewable energy targets from sourcing sufficient funding. This would imply a lack of integration between State aid and renewable energy policy. It is concluded that while most conditions of the General Block Exemption Regulation and the Commission Guidelines on State aid for environmental protection and energy hardly seem to be burdensome, the State aid framework’s proportionality criteria may form a restriction to pre-commercial ocean energy projects. This article’s main suggestion is to solve this possible lack of integration by making the balancing test under the Guidelines more flexible for those situations where the State aid framework prevents important renewable (ocean) energy projects from sourcing sufficient funding. Also, two alternative solutions are discussed: improving access to finance for SMEs in the field of ocean energy, and providing for sufficient investment aid on the EU level.