Energy subsidies: To be or not to be

The debate over the new 2030 EU climate and energy targets has again turned the spotlight on the trade-off between competitiveness and climate change. A growing number of voices warn that EU climate policies, particularly renewable energy subsidies, are pushing up energy bills and distorting the internal energy market. Those in favour of green energy are equally adamant that further support for renewables is crucial to decarbonise the European economy and to improve security of supply, and that investment in clean technologies can become a driver of economic competitiveness. On the other hand, while there are no official figures on the levels of energy state aid in Europe, some estimates suggest that fossil fuels and nuclear power plant construction benefit or have benefited from public support in addition to renewables. Are calls to end green subsidies justified? The need for incentives that would end Europe’s present investment standstill in new power stations and secure energy supplies in light of the Ukraine crisis is clear, but what sort of political breakthrough does that demand?  Are all forms of energy state aid harmful and which public support should have been scrapped long ago? What is the real impact of energy subsidies on energy costs, competitiveness and climate objectives? Should Brussels be holding some EU governments to public account for pursuing “beggar thy neighbor” subsidisation policies? How can we review national support schemes to make them more efficient, smart and harmonised? And are the European Commission’s new Guidelines on State aid a move in the right direction or a setback for the expansion of clean energy technologies?