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EU probes state aid to power companies

Apr 29 2015 15:04

Brussels - The EU launched an investigation on Wednesday into government subsidies used to help power companies avoid electricity blackouts, in the latest major probe unveiled by the bloc's combative new competition watchdog.

The inquiry comes shortly after EU Competition Commissioner Margarethe Vestager opened high-profile anti-trust cases against US Internet firm Google and Russian gas giant Gazprom.

The electricity case looks at whether European Union state aid rules are breached by so-called capacity mechanisms used or under consideration in Belgium, Croatia, Denmark, France, Germany, Ireland, Italy, Poland, Portugal, Spain and Sweden.

Capacity mechanisms ensure that sufficient electricity supplies are available to meet demand during peak times.

"This sector inquiry sends a clear signal to member states to respect EU state aid rules when implementing capacity mechanisms, and contributes to the (European) Commission's goal to build a true energy union in Europe," Vestager said in a statement.

She said that while EU governments had to protect against blackouts, investments should "not unduly favour particular producers or technologies, or create obstacles to trade across national borders."

It might be more efficient in some cases to invest in improving electricity connections between EU countries instead of building more power generating capacity, she suggested.

The European Commission, the executive arm of the 28-nation EU, recently launched an "energy union" plan to increase such links and secure the continent's energy supply in the face of variable oil prices and threats from gas supplier Russia.

Denmark's Vestager took over the competition role in Commission chief Jean-Claude Juncker's new team in November and has since taken a harder line than her Spanish predecessor Joaquin Almunia.

Under Vestager, the EU charged Google earlier this month with abusing its search engine dominance and launched a probe into its omnipresent Android mobile phone operating system.

A week later it charged Gazprom with abusing its dominant market position in Europe, risking a new battle with Moscow amid tensions over Ukraine.

gazprom  |  eu  |  economy  |  energy


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