EC Clears Capacity Mechs in Six EU States

The European Commission has approved, under EU state aid rules, electricity capacity mechanisms to bring on demand or supply-side responses in Belgium, France, Germany, Greece, Italy and Poland.

It said the subsidy schemes, approved February 7, will safeguard security of electricity supplies to more than half of the EU population, whilst not compromising competition. Gas as one of the most demand-responsive generation types is expected to benefit.

In Germany and Belgium, the mechanisms will take the form of strategic reserves, procured through regular competitive tenders open to all generation capacity providers.

In France and Greece, the EC has authorised capacity mechanisms specifically promoting demand response schemes, which reward customers for cutting peak-time consumption. 

In Italy and Poland, the EC has approved market-wide capacity mechanisms, whereby providers can obtain a payment for being available to generate electricity or, in the case of demand response operators, for being available to reduce their consumption. It has previously approved such market-wide capacity mechanisms in Great Britain, France and for the Irish 'all-island' market on the same criteria.

A fuller statement on the six schemes approved February 7 is available here.

Graphic credit: EC