EU Court Backs Swedish Refusal to Subsidize Finnish Wind Farm

Jul 01, 2014 4:10 am ET

July 1 (Bloomberg) -- The European Union’s top court backed Sweden’s refusal to subsidize a Finnish wind farm in a ruling that supports the EU’s current system where a government usually pays for power projects only in its own country.

Sweden’s Energy Agency was justified to refuse aid to Finnish power producer Aalands Vindkraft AB because there’s no requirement for governments to aid renewable-power generation in other EU states, the EU Court of Justice ruled today. Sweden’s refusal didn’t break EU rules that outlaw curbs on the free movement of goods, it said.

“The court finds that the restriction is justified by the public interest objective of promoting the use of renewable energy sources in order to protect the environment and combat climate change,” the Luxembourg-based tribunal said in a statement. Government measures to reach that objective “justifiably target” power generation on its own territory.

The ruling doesn’t allow power firms to shop around for subsidies, which vary widely across the EU. Governments in the 28-nation bloc spent 34.6 billion euros ($47.4 billion) to stoke renewable-power generation in 2012, more than double the support offered in 2009, according to a European Commission study. Runaway costs have already forced Spain to rein in support. Germany is also planning to curb subsidies. Worldwide subsidies cost $101 billion in 2012, according to the International Energy Agency.

Norway Accord

The EU is aiming to increase the amount of energy it gets from renewable sources to 20 percent in 2020, up from 14 percent in 2014. Sweden currently gets half of the energy it uses from renewables, including energy used for transport and heat.

Sweden justified its refusal by saying it only gave green certificates, which subsidize renewable-electricity production, to power installations in Sweden and Norway. Sweden has an accord with Norway to link their systems

The EU court rules on points of EU law and final decisions in the wind farm’s legal challenge to the Swedish refusal will be taken by a court in Linkoping, Sweden. The EU ruling can’t be appealed.

The court is also weighing a similar case taken by RWE AG’s Belgian unit Essent, which was denied Belgian green certificates for imported wind power.

The case is: C-573/12 Aalands Vindkraft AB

--With assistance from Jesper Starn in Stockholm and Ewa Krukowska in Brussels.