Commissie aanvaardt Vlaamse groenestroomcertificaten

Zijne Excellentie de heer Didier REYNDERS
Minister van Buitenlandse Zaken
Karmelietenstraat 15
B – 1000 Brussel
Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111
EUROPEAN COMMISSION
Brussels, 16.2.2018
C(2018) 1003 final
PUBLIC VERSION
This document is made available
for information purposes only.
Subject: State Aid SA.46013 (2017/N) – Belgium
Green electricity certificates and CHP certificates in Flanders
Sir,
The European Commission wishes to inform Belgium that, having examined the
information supplied by your authorities on the matter referred to above, it has decided
not to raise objections to the notified aid measures.
1. PROCEDURE
(1) Following pre-notification contacts, on 27 October 2017, Belgium notified the
Commission, in accordance with Article 108(3) of the Treaty on the Functioning
of the European Union (TFEU) two schemes supporting renewable energy (RES)
and cogeneration in Flanders. At the request of the Commission, Belgium
provided additional information by letter on 18 December 2017.
(2) The notification concerns two certificates schemes originally declared as not
constituting State aid within the meaning of Article 107(1) TFEU by the
Commission in a Decision of 25 July 2001 in case N 550/20001
for the "green
electricity certificates ("GECs") scheme" and a Decision of 13 May 2005 in case
N 608/20042
for the "Combined Heat and Power ("CHP") certificates scheme".
1
Commission decision of 25 July 2001 in State aid case N 550/2000 – België –
Groenestroomcertificaten, OJ C 330, 24.11.2001, p.2.
2
Commission decision of 3 May 2005 in State aid case N 608/2004 – België –
Warmtekrachtcertificaten, OJ C 240, 30.09.2005, p.20.

2
Belgium notified both schemes for legal certainty as it considers that the schemes
do not involve State aid within the meaning of Article 107(1) TFEU.
(3) On 9 January 2018, Belgium waived its right under Article 342 TFEU in
conjunction with Article 3 of the EC Regulation No 1/19583
to have the decision
adopted and notified in Dutch and French and agreed that the decision be adopted
and notified in English.
2. DESCRIPTION OF THE MEASURE
2.1. Background
2.1.1. The 2001 Commission decision on the GECs scheme
(4) In 2000, Belgium notified to the Commission the GECs scheme to support
electricity produced from renewable energy sources. The Commission concluded
in 2001 that the GECs scheme did not, in principle, constitute State aid and that,
even if, contrary to this conclusion, it should constitute State aid, it would be
compatible with the internal market.
(5) The characteristics of the GECs scheme were as follows: one green certificate is
granted to electricity producers from renewable energy sources ("RES
producers") for each 1 MWh of green electricity produced. At the end of each
year, all Flemish electricity suppliers ("access holders") must possess a certain
quota of GECs. The minimum number of GECs corresponds to a percentage of
the total electricity supplied by access holders to electricity consumers (based on
deliveries in the previous year). This percentage is set by the Flemish authorities.
(6) A fine is to be paid by the access holder in case it does not fulfil its quota
obligation. Fines would go to an energy fund financing projects in line with the
Flemish policy of sustainable energy.
(7) The scheme was notified for a period of ten years.
(8) In 2006, Belgium notified to the Commission a new separate measure aimed at
incentivising electricity production in photovoltaic ("PV") installations through a
purchase obligation and a guaranteed minimum price. This notified measure
concerns an obligation for the Flemish distribution system operators (DSOs) to
purchase the GECs when offered to them, at a certain minimum price. The
determined minimum price for a "PV" green certificate was EUR 450 at the time
of the notification. This measure did not replace the quota obligation imposed on
access holders which remained in place.
(9) The DSOs sell the obtained GECs on the market for green certificates with the
objective to recover the costs incurred by buying these certificates. If the revenues
of the sale are not sufficient to recover the costs there is also a possibility for the
DSOs to increase the tariffs for the connection and the use of the grid for the end
3
Regulation No 1 determining the languages to be used by the European Economic Community, OJ 17,
6.10.1958, p.385.

3
consumers with the objective to recuperate the expenditure for the purchase of the
GECs.
(10) The GECs eligible for DSO purchase at a minimum guaranteed price are those
granted for PV installations operational after 1 January 2006. The green
certificates can be granted for the expected economic life time of the installation
which is until 20 years after it became operational.
(11) The Commission concluded in 20064
that this new measure on the purchase
obligation and the minimum price guaranteed for GECs issued for each 1 MWh
of electricity produced from PV installations did not constitute State aid within
the meaning of Article 87(1) EC Treaty5
.
2.1.2. The 2005 Commission decision on the CHP certificates scheme
(12) In 2004, Belgium notified to the Commission a combined heat and power
certificates scheme to support energy efficiency. The Commission concluded in
20056
that the CHP certificates scheme did not constitute State aid within the
meaning of Article 87(1) EC Treaty7
.
(13) The characteristics of the CHP certificates scheme were as follows: a CHP
certificate is defined as a transferable intangible good which proves that the
related CHP installation, in the mentioned year, achieved 1 MWh of primary
energy saving realised. At the end of each year, access holders must possess a
certain quota of CHP certificates. This quota obligation is sanctioned by a fine if
it is not met.
(14) The scheme was notified for a period of ten years.
2.2. Legal basis of the notified GECs and CHP certificates schemes
(15) The legal basis of the GECs and CHP certificates schemes is the so-called Energy
Decree of 8 May 20098
, modified by the Decree of 27 November 2015 on various
energy provisions9
and the Decision of the Flemish government laying down
general provisions on energy policy (the "Energy Decision") of 19 November
201010
.
4
Commission decision of 24 October 2006 in State aid case N 254/2006 – België – Fotovoltaïsche
panelen , OJ C 314, 21.12.2006, p.80
5
Article 107(1) TFEU.
6
See footnote 2.
7
8
"Decreet houdende algemene bepalingen betreffende het energiebeleid" of 8 May 2009 – hereafter "the
Energy Decree".
9
"Decreet van 27 november 2015 houdende diverse bepalingen inzake energie" published in the
Belgisch Staatsblad/Moniteur belge on 10 December 2015.
10
"Besluit van de Vlaamse Regering houdende algemene bepalingen over het energiebeleid" of 19
November 2010 – hereafter "the Energy Decision".

4
2.3. The notified GECs and CHP certificates schemes
(16) The two notified schemes are the result of numerous amendments of the initial
schemes notified to the Commission in 2000 and 2004. Their current features are
described below.
2.3.1. The green electricity certificates scheme
(17) The main objective of the GECs scheme is to promote the production of
electricity from renewable energy sources, in order to contribute to reaching the
Belgian target laid down in the RES Directive11
of at least 13% share of
renewable energy from gross final consumption by 2020. By means of an internal
agreement, the target of 13% has been divided between the three regions of
Belgium (Flanders, Wallonia and Brussels) and the federal level. At Flemish
level, the target was fixed at 25.074 GWh of final energy from renewable sources
by 2020.
(18) Under the current GECs scheme, RES producers operating an installation with a
starting date as of 1 January 2013 receive, for 1 MWh of electricity generated
from renewable energy sources, a number of GECs equal to 1 multiplied by a so-
called "banding factor". RES producers receive GECs only during the
amortisation period of their installations (see "lifecycle" row in the Tables below).
(19) Belgium presented the banding factor as the factor determining the number of
certificates the RES producer receives in relation to the amount of electricity
produced, i.e. if the banding factor is equal to 1, the RES producer receives 1
GEC per 1 MWh of electricity produced and if the banding factor is lower than 1,
the RES producer will need to produce more than 1MWh of electricity to receive
1 GEC. The banding factor is adjusted by the Energy Agency to reflect changes in
the investment costs, fuel prices, the electricity price, etc.
(20) The Table below presents the various parameters, including costs and revenues,
used by Belgium to determine the level of support to be granted to RES producers
per type of technology eligible under the GECs scheme. Belgium indicated that
the calculation is mainly based on data from market research and is regularly
updated by the Flemish Energy Agency. Belgium explained that, for some type of
installations, there is a substantial gap between the LCOE12
and the total revenues
mainly due to the fact that i) the banding factor is capped to 1 and thus, some
projects receive less support than needed to reach the predefined internal rate of
return (IRR)13
, and ii) the energy costs savings that companies can realise by
avoiding costs in their electricity and heat consumption can be higher than the
market prices used for the calculations.
11
Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 in the
promotion of the use of energy from renewable sources and amending and subsequently repealing
Directives 2001/77/EC and 2003/30/EC (OJ L 140, 5.6.2009, p.16).
12
Levelised Cost of Energy
13
Predefined IRR to be used for the LCOE's calculations are set in the Energy Decision.

5
Table 1 – Typical parameters for PV and onshore wind installations
Supported technology PV 10-250kW14
PV 250-750kW
onshore wind
turbines 10kW-
4MW
Technical input parameters
operating hours per year 899 899 2250
gross electric power (kWe) 139 444 2500
lifecycle (years)15
15 15 15
Costs
investment costs 161,111.00 462,222.00 3,275,000.00
total operational costs 51,945.00 163,920.00 1,759,519.00
Income
Market prices:
 electricity (€/MWh)16
27.28 27.28 30.82
Green certificates (GEC):
 minimum price GEC (€/GEC) 93 93 93
 banding factor 0.481 0.441 0.629
 total revenues GEC (€/GEC) 44.733 41.013 58.497
Total revenues 72.01 68.29 89.32
IRR 5% 5% 8%17
LCOE (€/MWh) 141 127 90.10
Source: Flemish authorities
(21) At the end of each year, all Flemish access holders must possess a minimum
number of GECs, which they can obtain by producing renewable electricity
themselves or have to purchase GECs from RES producers. Each access holder
has the statutory obligation to transfer an amount of certificates corresponding to
its quota obligation to the Flemish electricity market regulator, the VREG18
, at the
end of each year (Article 7.1.10 of the Energy Decree).
(22) The quota obligation of an access holder corresponds to a percentage of the
electricity consumption by its customers. Article 7.1.10 of the Energy Decree set
the formula used to establish the minimum number of GECs per access holders:
14
Belgium indicates that the category of PV installations between 10 and 250 kW does not include PV
for households. The “household PV” category (below 10 kW) is not eligible anymore for support due
to a decision of the Flemish Government of 29 May 2015 (in force since 14 June 2015).
15
On 15 December 2017, the Flemish authorities adopted a Government Decision (not yet published in
the Belgian Official Journal) stipulating that for PV projects with a starting date as of 1 April 2018, the
depreciation period would be 10 years, and for onshore wind projects with a starting date as of 1
January 2019, the depreciation period would be 20 years (Articles 18, 6° jo. 25).
16
Belgium indicated that the reference electricity price used in the calculation takes into account the
value of the electricity produced from PV and wind installations in comparison with the general
market price. It explains why the reference electricity price is different for PV and wind installations
compared to other types of installations.
17
On 15 December 2017, the Flemish authorities adopted a Government Decision (not yet published in
the Belgian Official Journal) stipulating that for projects with a starting date as of 1 January 2019 there
will be a reduction of the IRR for onshore wind from 8% to 7.5 % (Articles 18, 6° jo. 25).
18
Vlaamse Regulator van de Elektriciteits- en Gasmarkt.

6
C = Gr x Ev
Where:
C is equal to the number of GECs to be transferred to the VREG in the year by a
specific access holder;
Ev is equal to the total quantity of electricity, expressed in MWh, drawn from
year n-1 from offtake points in the Flemish Region at which the access holder
concerned was registered as access holder in the access register of the electricity
distribution system operator, operator of a closed distribution system, operator of
the local electricity transport system or operator of the transmission system. In
this respect, the quantity drawn per offtake point is limited to the quantity drawn
during the period in which the person concerned was registered as access holder;
Gr is equal to:
0.205 in 2018;
0.215 in 2019 and beyond.
(23) Belgium indicated that the VREG is an independent body which establishes the
number of GECs per Flemish access holder each year by means of the formula set
out above. It also verifies the authenticity of the GECs and registers all GECs in a
central database. The following data are recorded for each certificate: details of
the owner, production year and place, technology used, rated power, date of
commissioning of the renewable energy technology, registration number and aid
received for the production installation (Article 6.1.14 of the Energy Decision).
(24) Normally, GECs are transferred to the VREG at the end of the obligation year (31
March). By being transferred to the VREG, they are removed from the market.
However, access holders can keep the GECs and choose to transfer them to the
VREG at a later date. The GECs are valid for a period of ten years (Article 7.1.5
of the Energy Decree).
(25) Access holders failing to achieve their annual quota must pay an administrative
fine to the VREG (Article 13.3.5 of the Energy Decree). The revenue of these
fines is transferred to the so-called Energy Fund which is used by the Flemish
government for the purpose of implementing its energy policy and, in particular,
financing the VREG, public service obligations in the energy field, its social
energy policy, its rational energy use policy, its cogeneration policy, its policy on
renewable energy sources and financing the energy-related costs of the Flemish
government (Article 3.2.1 of the Energy Decree).
(26) Belgium indicated that the objective of the fine system is two-fold: it creates an
incentive for access holders to buy GECs while at the same time it sets a cap to
the GEC price, such that there can be no overcompensation even if GECs become
too scarce. Belgium considers that the fine can therefore not be regarded as a
penalty.
(27) The price of the fine is set in Article 13.3.5 of the Energy Decree at EUR 100 for
each missing GEC.

7
(28) The quota obligation for access holders is reduced when part of the electricity
drawn from their offtake points is consumed by energy-intensive undertakings.
These reductions are not part of the present decision and will be notified
separately.
(29) According to Articles 7.1.6 and 7.1.7 of the Energy Decree, the DSOs also have
the obligation to purchase at a minimum price the GECs offered to them by
producers of renewable electricity. They can sell them on the GECs market in
order to recover their costs. The costs incurred by the obligation to purchase
GECs at a minimum price are divided between DSOs pro rata the volume of
electricity distributed by each DSO during the year concerned.
(30) The minimum price of one GEC is set at EUR 93 for all installations starting
operation as of 1 January 2013 (Article 7.1.6 of the Energy Decree).
2.3.2. The CHP certificates scheme
(31) The main objective of the CHP certificates scheme is to support energy efficient
CHP production with the objective to reduce greenhouse gas emissions.
(32) Tables below present the various parameters, including costs and revenues, used
by Belgium to determine the level of support to be granted to CHP installations
per type of technology eligible under the CHP certificates scheme. Belgium
indicated that the calculation is mainly based on data from market research and is
regularly updated by the Flemish Energy Agency. Belgium explained that, for
some type of installations, there is a substantial gap between the LCOE and the
total revenues mainly due to the fact that i) the banding factor is capped to 1 and
thus, some projects receive less support than needed to reach the predefined IRR,
and ii) the energy costs savings that companies can realise by avoiding costs in
their electricity and heat consumption can be higher than the market prices used
for the calculations.

8
Table 2 – Typical parameters for biogas and biomass CHP installations
Supported technology
agricultural-
industrial biogas
CHP 10kW-5MW
biogas GFT19
-waste
CHP
10kW-5MW
agricultural-
industrial biogas
CHP 5MW-20MW
solid biomass CHP
10kW-20MW
liquid biomass CHP
10kW-20MW
waste biomass CHP
10kW-20MW
operating hours per year 7770 7200 7770 6800 3000 7600
gross electric power (kWe) 2800 1300 7000 10000 800 10000
lifecycle (years)20
10 10 10 10 10 10
Costs
investment costs 10,640,000.00 16,250,000.00 25,690,000.00 46,000,000.00 1,248,000.00 43,000,000.00
total operational costs 22,300,813.00 37,055,459.00 59,118,384.00 87,188,912.00 5,354,998.00 42,491,676.00
Income
Market prices:
 electricity (€/MWh) 34.1 34.1 34.1 34.1 34.1 34.1
 heat (€/MWh)21
n/a22
30.2 n/a 11.6 31.05 11.6
Green certificates (GEC):
 minimum price GEC (€/GEC) 93 93 93 93 93 93
 banding factor 1 1 1 1 1 1
 total revenues GEC (€/GEC) 93 93 93 93 93 93
CHP certificates (CHP Cs):
19
GFT: bio-waste from households.
20
On 15 December 2017, the Flemish authorities adopted a Government Decision (not yet published in the Belgian Official Journal) stipulating that for projects with starting dates as
of 1 April 2018 the support and depreciation period for biogas and biomass installations will be 15 years. The reason for this change is because the important components of these
installations have a lifespan of at least 15 years (instead of 10 years). The depreciation period of the CHP-categories was not adjusted. (Articles 18, 6° jo. 25).
21
Belgium indicated that the reference heat price differs between the categories of installations because the heat price is linked to the purchase price for natural gas: the market value
for heat is decided on the basis of the avoidance of costs for purchasing gas to fulfil the demand of the heat consumer. Given that the costs for purchasing gas differ for different
categories of consumers, the market value for heat differs as well. Belgium used the gas prices from Eurostat data to determine the market value for heat. Belgium also uses a
"factor to convert heat price" so as to convert the caloric value of the heat (€/MWhcal) into an electric value (€/MWhe). This factor varies from one type of installation from
another because of the ratio of the thermal efficiency compared to the electrical efficiency. As an example, Belgium indicated that a CHP steam turbine (see Table 4 below) has a
very high thermal efficiency and quite low electrical efficiency, therefore, the factor to convert heat price for this type of installation is very high.
22
There is no heat price for agricultural and industrial biogas installations because the heat produced by these installations is fully used by them.

9
agricultural-
industrial biogas
CHP 10kW-5MW
biogas GFT19
-waste
CHP
10kW-5MW
agricultural-
industrial biogas
CHP 5MW-20MW
solid biomass CHP
10kW-20MW
liquid biomass CHP
10kW-20MW
waste biomass CHP
10kW-20MW
 minimum price CHP Cs (€/CHP C) 31 31 31 31
 banding factor 1 1 1 1
 primary energy saving 168.0% 202.5% 168.0% 102%
 total revenues CHP Cs (€/CHP C) 52.1 62.8 52.1 n/a23
31.7 n/a
Total revenues 179.1 220.0 179.1 138.7 189.8 138.7
IRR 12% 12% 12% 12% 12% 12%
LCOE 187.40 344 186 268 332 148
23
Solid biomass and waste biomass CHP installations do not qualify as high-efficiency CHP and therefore are not eligible to CHP certificates.

10
Table 3 – Typical parameters for natural gas CHP installations
natural gas CHP
10-200kW
natural gas CHP
0,2-1MW
natural gas CHP
1-5MW
natural gas CHP
5-10MW
operating hours per year 4000 3930 4940 5170
gross electric power (kWe) 70 500 2000 6400
lifecycle (years) 10 10 10 10
Costs
investment costs 152,600.00 560,000.00 1,546,000.00 4,864,000.00
total operational costs 448,520.00 2,188,601.00 9,479,154.00 25,760,863.00
Income
Market prices energy:
 electricity (€/MWh) 34.1 34.1 34.1 34.1
 heat (€/MWh) 59.9 44.1 42.8 27.4
 minimum price CHP Cs (€/CHP C) 31 31 31 31
 banding factor 1 1 1 0.731
 primary energy saving 79.7% 96.6% 118.5% 122.0%
 total revenues CHP Cs (€/CHP C) 24.7 29.9 36.7 27.6
Total revenues 118.7 108.1 113.6 89.1
IRR 12% 12% 12% 12%
LCOE 251.85 160.36 129.17 104.43

11
Table 4 – Typical parameters for other types of CHP installations
CHP biogas
landfill gas
10 kW - 5MW
CHP gas turbine
1-20MW
CHP steam
turbine
1-20MW
CHP CCGT24
1-20MW
CHP gas turbine
20-50MW
CHP steam
turbine
20-50MW
CHP CCGT
20-50MW
operating hours per year 4600 7470 5700 7330 7470 5700 7470
gross electric power (kWe) 500 7000 5000 9000 30000 30000 37000
lifecycle (years) 10 10 10 10 10 10 10
Costs
investment costs 765,000.00 13,860,000.00 5,800,000.00 19,260,000.00 40,800,000.00 31,200,000.00 78,440,000.00
total operational costs 1,049,859.00 64,150,884.00 80,226,847.00 75,734,587.00 186,201,721.00 462,128,952.00 244,447,489.00
Income
Market prices energy:
 electricity (€/MWh) 34.1 34.1 34.1 34.1 34.1 34.1 34.1
 heat (€/MWh) 12.1 60.2 193.6 48.2 30.6 193.6 30.6
 minimum price CHP Cs
(€/CHP C)
31 31 31 31 31 31 31
 banding factor 1 1 0.697 1 1 0.92 1
 primary energy saving 13.9% 93.4% 135.0% 70.1% 54.8% 116.8% 54.8%
 total revenues CHP Cs
(€/CHP C)
4.30 28.95 29.16 21.73 16.98 33.31 16.98
Total revenues 50.5 123.2 256.9 104.0 81.6 261.0 81.6
IRR 12% 12% 12% 12% 12% 12% 12%
LCOE 97.86 163.45 314.55 162.63 116.72 302.51 140.29
24
Combined Cycle Gas Turbine

12
(33) Belgium presented the CHP certificate scheme as similar to the green certificates
scheme. The following specificities can however be noted regarding the CHP
certificates scheme:
i. The minimum price of one CHP certificate amounts to EUR 31, as set
out in Article 7.1.7 of the Energy Decree;
ii. The CHP certificates do not have a limit of their period of validity;
iii. The price of the fine for each missing CHP certificate is set at EUR 38
(Article 13.3.5 of the Energy Decree).
iv. According to Article 7.1.11 of the Energy Decree, the following formula
is used to establish the quota obligation of CHP certificates per access
holders:
Cw = W x Ev
Where:
Cw is equal to the number of CHP certificates to be transferred to the
VREG in the year by a specific access holder;
Ev is equal to the total quantity of electricity, expressed in MWh, drawn
from year n-1 from offtake points in the Flemish Region at which the
access holder concerned was registered as access holder in the access
register of the electricity distribution system operator, operator of a
closed distribution system, operator of the local electricity transport
system or operator of the transmission system. In this respect, the
quantity drawn per offtake point is limited to the quantity drawn during
the period in which the person concerned was registered as access
holder;
W is equal to:
0.112 in 2018;
0.112 in 2019 and beyond.
2.4. Financing of the schemes
2.4.1. Financing of the quota obligation for access holders
(34) Access holders can pass on the costs of the quota obligation to the end consumers.
Belgium explained that the Flemish Region on the one hand has sole competence
for the policies on renewable energy and rational energy; on the other hand it has
no competence regarding end tariffs which is a federal responsibility. As a result,
the Flemish authorities cannot implement any ban on passing on the costs of the
quota obligation to the end consumers.
2.4.2. Financing of the purchase and transfer obligation for DSOs
(35) Belgium indicated that DSOs receive a compensation for the obligation to
purchase surplus of GECs issued for renewable electricity or CHP certificates

13
issued for energy savings from high-efficiency CHP installations connected to
their network and to closed distribution networks.
(36) Belgium described the situation on the certificates market as characterised by a
surplus of certificates as, since 2006, there are more certificates available than the
number of certificates to be collected by access holders under their quota
obligation. This surplus situation leads to a frequent recourse to the purchase
obligation imposed on DSOs.
(37) Belgium explained that the surplus situation greatly impacts the certificates
market and on the price at which the certificates are traded. On the spot market
(the "Belpex Green Certificate Exchange") price formation has not been possible
for a long time because the demand for certificates has been met mainly through
bilateral transactions between producers and DSOs when producers request DSOs
to buy their certificates at the minimum guaranteed price. When the DSOs place
the purchased certificates back on the market – as they are required to do in line
with Article 7.1.7 paragraph 2 of the Energy Decree – they find that there is no
demand and this threatens to push the price down faster and further.
(38) Belgium considers that unless a measure is put in place to remove the structural
surplus of certificates from the market, there is no prospect of balance in the
market. To remedy this surplus situation, Belgium established a transfer
obligation of certificates by the DSOs to the VREG. The DSOs then receive a
compensation provided by the Flemish government.
(39) This compensation for the certificates that DSOs have in their portfolio will be
the lower of (i) the purchase price paid for the certificate, or (ii) the accounting
value of the certificate in question, and may not exceed EUR 93 per certificate
issued for renewable electricity and EUR 31 per certificate issued for CHP energy
savings.
(40) The budget for the compensation of DSOs amounts to EUR 325 million in 2017:
EUR 226 million to serve as a one-off compensation for CHP certificates and
EUR 99 million to serve as a compensation for GECs. In 2018, EUR 152 million
is envisaged to serve as a compensation for certificates in the portfolios of the
DSOs. As of 2019 until 2021 an amount of EUR 93 million is envisaged.
2.5. Beneficiaries
(41) The beneficiaries of the GECs scheme are the electricity producers from
renewable energy sources (including CHP installations using renewable energy
sources).
(42) The beneficiaries of the CHP certificates scheme are the high-efficiency CHP
installations satisfying the definition of high-efficiency cogeneration as set out in
Article 2(34) of Directive 2012/27/EU25
.
25
Directive 2012/27/EU of the European Parliament and the Council of 25 October 2012 on energy-
efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC
and 2006/32/EC (OJ L 315, 14.11.2012, p.1).

14
2.6. Budget and duration
(43) Over the recent years, the exchanges between access holders and RES producers
amounted to around EUR 700 million per year and the exchanges between access
holders or DSOs and high-efficient CHP amounted to around EUR 200 million
per year.
(44) The schemes are notified for a period of ten years.
2.7. Cumulation
(45) Belgium indicated that the aid measures cannot be cumulated with other aid
measures for the same eligible costs.
(46) Belgium also indicated that a high-efficient CHP using renewable energy sources
can receive both types of certificates (for the RES electricity produced and for the
energy savings – see Table 2 above). To avoid double support for this type of
installation, the revenues from the CHP certificates are taken into account in the
calculation determining the amount of GECs the producer receives.
2.8. Transparency
(47) Belgium has confirmed that the transparency requirements set out in section 3.2.7
of the Guidelines on State aid for environmental protection and energy 2014-
202026
(EEAG) will be complied with.
3. ASSESSMENT OF THE MEASURE
3.1. Existence of aid
(48) Article 107(1) TFEU provides that "[s]ave as otherwise provided in th[e] Treaty,
any aid granted by a Member State or through State resources in any form
whatsoever which distorts or threatens to distort competition by favouring certain
undertakings or the production of certain goods shall, in so far as it affects trade
between Member States, be incompatible with the internal market".
(49) In determining whether a measure constitutes State aid within the meaning of
Article 107(1) TFEU, the Commission has to apply the following criteria: the
measure must be imputable to the State and involve State resources, it must
confer an advantage on certain undertakings or certain sectors which distorts or
threatens to distort competition and is liable to affect trade between Member
States. The application of these cumulative conditions is examined below.
(50) Belgium considers that the GECs and CHP certificates schemes do not involve
State aid and notified them for legal certainty.
(51) Belgium considers that the two certificates schemes do not entail a transfer of
State resources as they represent a resources exchange between private parties
and are therefore in line with the PreussenElektra case law.
26
OJ C 249, 31.7.2014, p. 1-28.

15
(52) Firstly, Belgium refers to the previous Commission decisions (N 550/2000, N
608/2004 and N 254/2006) and contests the approach taken by the Commission
regarding the application of the judgment in case C-279/08 P – Commission v
Netherlands regarding the NOx emission allowances27
to certificates scheme (see
paragraphs (59) to (62) below). It considers that the granting by the VREG of
green certificates free of charge to RES producers is merely a proof the green
energy was actually produced and that in that situation there is no loss of revenue
for the Flemish government. Belgium considers that it is necessary to draw a
distinction between systems for tradable emission or pollution allowances (like in
the NOx case), in which governments have reason to sell or auction these
allowances since the negotiable allowances grant the party concerned the right to
emit or pollute and, on the other hand, certificate systems in which the certificate
has no value for its recipient with respect to the State, and will serve only as
recognised proof of a certain production and for which governments have no
reason to sell or auction those certificates to the producers.
(53) Secondly, Belgium refers to the judgment of the General Court of 10 May 201628
about State aid decision SA.33995 appealed by Germany. In this judgment, the
Court confirmed the PreussenElektra judgment and that "it is apparent, […] from
the analysis of the factual background of the case giving rise to the judgment of
13 March 2001 in PreussenElektra that, unlike the German measure forming the
subject matter of the present proceedings, the mechanism laid down by the
previous German law provided neither for the additional costs to be expressly
passed on to final consumers nor for the intervention of intermediaries entrusted
with the collection or administration of the sums constituting aid and, therefore,
did not provide for entities comparable, in their structure or their role, to the
TSOs taken together." Belgium considers that this is also the case for the GECs
and CHP certificates schemes where there is no guarantee for access holders that
the costs which they bear for the purchase obligation will be covered in full by
end consumers. As well, under the two certificates schemes, access holders are
bound to purchase certificates with their own financial resources and there is no
mechanism compensating extra costs arising from the purchase obligation and
with which the State acts as surety for access holders that those extra costs will be
covered in full. In Flanders, neither the TSO, DSOs, nor any other public or
private entity play the part of settlement centre or intermediary for the collection
and administration of revenues contrary to other certificates mechanisms
implemented in the Netherlands, France, Germany, Austria and Romania.
Belgium adds that there are no separate accounts for the revenue originating from
the support mechanism imposed on access holders.
(54) The Commission considers that the support to electricity produced from
renewable energy sources and to primary energy savings granted by way of
certificates can constitute State aid within the meaning of Article 107(1) TFEU. It
is why it has introduced a special section in its Guidelines setting out the
conditions for the compatibility of such support mechanisms, based on
certificates, with the Internal Market (see paragraph (109) and Section 3.3.2.4 of
the EEAG).
27
Judgment of 8 September 2011, Commission v Netherlands, C-279/08 P, EU:C:2011:551.
28
Judgment of 10 May 2016, Germany v Commission, T-47/15, EU:T:2016:281, paragraph 99.

16
3.1.1. Existence of State resources
(55) Under the GECs and CHP certificates schemes, Belgium is granting certificates
for free to RES producers and high-efficiency CHP. At the same time, it creates a
market for the certificates by imposing on access holders to purchase a quota of
those certificates and thus creates a demand for the GECs and CHP certificates.
(56) Contrary to the position expressed by Belgium that the two certificates schemes
do not involve a transfer of State resources, the Commission will demonstrate
below that the opposite is true for two reasons. First, by granting certificates for
free to the RES producers and to high-efficiency CHP while setting up a quota
obligation for access holders, Belgium foregoes State resources (see section
3.1.1.1 below). Secondly, the control exercised by the State over the financial
flows between RES producers or high-efficiency CHP and access holders proves
that the support comes from State resources (see section 3.1.1.2 below). Both
lines of reasoning elements lead independently from each other the Commission
to the conclusion that State resources are involved.
3.1.1.1. The granting for free of green certificates
(57) The GECs and CHP certificates schemes are based on the principle that the
Flemish government grants the certificates to the RES producers and high-
efficiency CHP (beneficiaries) for free. The State has also created an artificial
market (i.e. a market that would not exist without intervention by the Flemish
government) for these certificates by imposing a quota obligation on access
holders. The quota obligation has been set up pursuant to Articles 7.1.6 (for green
certificates) and 7.1.7 (for energy savings certificates) of the Energy Decree.
(58) Firstly, by giving certificates for free to RES producers and high-efficiency CHP,
the State is actually providing them, for free, with intangible assets. Secondly, the
certificates can be traded on a specific market and by selling them the RES
producers and high-efficiency CHP obtain revenues.
(59) In a judgment29
from 8 September 2011, the Court of Justice observed that NOx
emission allowances were tradable30
, as (i) the State authorises the sale of these
allowances and (ii) it allows those undertakings which have emitted a surplus of
NOx to acquire from other undertakings the missing emission allowances. This
creates a market for the allowances. By making allowances tradable, the State
conferred on them a market value.
(60) In the case of the GECs and CHP certificates schemes in Flanders, the market is
created by the principles of the support system itself, i.e. the State imposes
through legally binding provisions an obligation on access holders to submit
annually a certain number of certificates (quota obligation). Similar as in the NOx
case, here the legal framework creates, without real consideration supplied to the
State, certificates, which, because of the demand created by the State and their
tradable character, have an economic value.
29
Judgment of 8 September 2011, Commission v Netherlands, C-279/08 P, EU:C:2011:551 (the NOx
case).
30
Judgment of 8 September 2011, Commission v Netherlands, C-279/08 P, EU:C:2011:551, paragraph
88.

17
(61) In the NOx case, the Court of Justice also found31
that the emission allowances
had the character of intangible assets provided by the State free of charge to
selected undertakings. By conferring on the emission allowances the character of
tradable intangible assets and by making them available to the undertakings
concerned free of charge the State foregoes public resources.
(62) The Commission considers that the same reasoning can be applied to the GECs
and CHP certificates schemes. The State has created tradable assets in form of
certificates and made them available to RES producers and high-efficiency CHP.
Further, the State has conferred an economic value on them by creating a genuine
market for the certificates with a demand stemming from the quota obligation
imposed on access holders and determining the compensation fee. Instead of
selling the certificates or putting them up for auction, the State allocates the
certificates for free and thus it foregoes public resources.
(63) In case of non-compliance with the quota obligation, under Article 13.3.5 of the
Energy Decree, access holders are liable for a fine. The fine is established at EUR
100 per missing GEC and EUR 38 per missing CHP certificate and functions as a
cap for the transaction prices on the certificates market. The fine also constitutes
an incentive for access holders to purchase certificates and ensures therefore that
there is a demand for those certificates.
(64) In this respect, Belgium argues that the green certificates simply ascertain the
nature of RES electricity and the CHP certificates are the proof of primary energy
savings and could not be sold or put for auction. However, the Commission notes
that GECs and CHP certificates are commodities with a value largely determined
by the State. In particular, the Flemish government has fixed the minimum and
maximum value of the certificates, as explained at recitals (26), (30) and (33)
above. Thus, they do not only certify the nature of a certain type of electricity as
guarantees of origin pursuant to Directives 2001/77/EC and 2009/28/EC. By
contrast to guarantees of origin, the State has created here a quota obligation for
GECs and CHP certificates whose non-fulfilment is sanctioned by a fine.
Therefore, in line with the conclusions of the Court of Justice in the NOx case,
the Commission notes that Belgium could have designed the system differently so
that certificates are sold or auctioned.
(65) The Commission considers that the above element alone suffices to conclude that
the GECs and CHP certificates schemes involve State aid, and Belgium has been
aware of this circumstance at least since 8 September 2011 when the judgment in
the case C-279/08 P – Commission v Netherlands was rendered.
3.1.1.2. The financing of the GECs and CHP certificates schemes
and the general control of the State over the financial flow
between the parties
(66) The concept of "intervention through State resources" is intended to cover not
only advantages which are granted directly by the State but also "those granted
through a public or private body appointed or established by that State to
31
Judgment of 8 September 2011, Commission v Netherlands, C-279/08 P, EU:C:2011:551, paragraph
107.

18
administer the aid"32
. In this sense, Article 107(1) TFEU covers all the financial
means by which the public authorities may actually support undertakings,
irrespective of whether or not those means are permanent assets of the public
sector33
.
(67) For the measure at hand, the State establishes in detail throughout legally binding
rules how the demand and supply of GECs and CHP certificates is formed, how
the market for certificates is organised, who can participate in it and how the
financial flows are organised. The costs from the acquisition of GECs and CHP
certificates by access holders can be passed on to end consumers within the price
of electricity sold (see recital (34) above).
(68) Therefore, the Commission considers that, even if there is no mandatory
obligation for access holders to pass on costs to end consumers, in practice this is
the case, as it is not forbidden to do so.
(69) Although the certificates and, thus, the revenues obtained by the RES producers
and high-efficiency CHP are ultimately financed by end consumers, the mere fact
that the advantage is not financed directly from the State budget is not sufficient
to exclude that State resources are involved34
. It results from the case-law of the
Court that it is not necessary to establish in every case that there has been a
transfer of money from the budget or from a public entity35
.
(70) The relevant criterion in order to assess whether the resources are public,
whatever their initial origin, is that of the degree of intervention of the public
authority in the definition of the measures in question and their methods of
financing36
. Hence, the mere fact that a subsidy scheme benefitting certain
economic operators in a given sector is wholly or partially financed by
contributions imposed by the public authority and levied on certain undertakings
is not sufficient to take away from that scheme its status of aid granted by the
State37
. Equally, the fact that the resources would at no moment be the property of
the State does not prevent that the resources might constitute State resources, if
32
Judgment of 22 March 1977, Steinike & Weinlig v Germany, C-78/76, EU:C:1977:52, paragraph 21;
Judgment of 13 March 2001, PreussenElektra, C-379/98, EU:C:2001:160, paragraph 58; Judgment of
30 May 2013, Doux Elevage and Coopérative agricole UKL-ARREE, C-677/11, EU:C:2013:348,
paragraph 26; Judgment of 19 December 2013, Vent de Colère and others, C-262/12, EU:C:2013:851,
paragraph 20; Judgment of 17 March 1993, Sloman Neptun, joined cases C-72/91 and C-73/91,
EU:C:1993:97, paragraph 19.
33
Judgment of 30 May 2013, Doux Elevage and Coopérative agricole UKL-ARREE, C-677/11,
EU:C:2013:348, paragraph 34; Judgment of 27 September 2012, France v Commission, T-139/09,
EU:T:2012:496, paragraph 36; Judgment of 19 December 2013, Vent de Colère and others, C-262/12,
34
Judgment of 12 December 1996, Air France v Commission, T-358/94, EU:T:1996:194, paragraphs 63
to 65.
35
EU:C:2013:348, paragraph 34; Judgment of 27 September 2012, France v Commission, T-139/09,
EU:T:2012:496, paragraph 36; Judgment of 19 March 2013, Bouygues Telecom v Commission, joined
cases C-399/10 P and C-401/10 P, EU:C:2013:175, paragraph 100; Judgment of 19 December 2013,
Vent de Colère and others, C-262/12, EU:C:2013:851, paragraph 19.
36
Judgment of 27 September 2012, France v Commission, T-139/09, EU:T:2012:496, paragraphs 63 and
64.
37
Judgment of 27 September 2012, France v Commission, T-139/09, EU:T:2012:496, paragraph 61.

19
they are under the control of the State38
.The Court found State resources in case
of funds financed through compulsory contributions imposed by State legislation
and they were managed and apportioned in accordance with the provisions of that
legislation39
.
(71) This has been confirmed by the Court in the Vent de Colère case40
where the
Court has also ruled that a mechanism for offsetting in full the additional costs
imposed on undertakings because of an obligation to purchase wind-generated
electricity at a price higher than the market price that is financed by all final
consumers of electricity in the national territory, constitutes an intervention
through State resources.
(72) In the light of those principles, the Commission has examined whether the
financing of GECs and CHP certificates and the revenues of the RES producers
and high-efficiency CHP stemming from their sales, involves State resources.
(73) In the case of the GECs and CHP certificates schemes although the financial
flows take place between private parties (access holders and RES producers or
high-efficiency CHP) they have to be considered as involving State resources
because the State controls and manages them.
(74) Moreover, the VREG is entrusted with the legal task to collect the fines of access
holders that fail to provide, at the end of a given year, an amount of certificates
corresponding to their quota obligation (see recital (25) above).
(75) The DSOs are by law entrusted with the task to act as a “buyer of last resort”, in
that they have to buy any amount of certificates offered to them by market parties
at a legally set minimum price. They can subsequently either try to sell these
certificates again on the market if there would be an upsurge in demand for
certificates, or simply pass on the costs incurred in the purchase to consumers in
the grid tariffs. Ultimately, the Flemish government does intervene, as explained
at recital (38), and oblige them to transfer a certain amount of certificates to the
VREG in exchange for compensation. All of the above attest to the fact that the
DSOs act as agents of the State in managing the flows of money within the GECs
and CHP certificates schemes.
(76) As described in paragraphs (17) to (33) above, every part of the GECs scheme
and the CHP certificates scheme is designed by the State through the Energy
Decree and the Energy Decision.
(77) It follows from the above that the GECs and CHP certificates schemes and their
financing involve State resources. The Commission observes in particular that the
State can control, direct and influence the administration of GECs and CHP
certificates and their financing. The State has defined to whom the advantage is to
38
Judgment of 12 December 1996, Air France v Commission, T-358/94, EU:T:1996:194, paragraphs 65
to 67; Judgment of 16 May 2002, France v Commission, C-482/99, EU:C:2002:294, paragraph 37;
39
Judgment of 2 July 1974, Italy v Commission, C-173/73, EU:C:1974:71, paragraph 16; Judgment of
17 July 2008, Essent Netwerk Noord and Others, C-206/06, EU:C:2008:413, point 66.
40
Judgment of 19 December 2013, Vent de Colère and others, C-262/12, EU:C:2013:851.

20
be granted, the eligibility criteria and the level of support, but it has also
influenced the financial resources to cover the costs of the support.
3.1.2. Imputability
(78) The GECs and CHP certificates schemes have been established and are regulated
by way of legislative acts (see recital (15) above); they are therefore imputable to
the State.
3.1.3. Advantage favouring certain undertakings or the production of
certain goods
(79) Under the GECs and CHP certificates schemes, the Flemish authorities are
granting for free GECs to RES producers and CHP certificates to high-efficiency
CHP. At the same time, the Flemish authorities create a market for such
producers to sell the certificates. The RES producers and the high-efficiency CHP
receive an advantage, as they get certificates for free and are able to sell them on
the certificates market obtaining additional revenues. The support is aimed to
favour the production of electricity from renewable energy sources as compared
to electricity produced from other sources and to reduce primary energy
consumption through the use of high-efficiency CHP installations.
(80) The GECs and CHP certificates schemes therefore grant an advantage favouring
only certain undertakings producing electricity.
3.1.4. Distortion of competition and effect on trade between Member States
(81) The GECs and CHP certificates schemes provide a selective advantage to
producers of renewable electricity and to high-efficiency CHP. These producers
have to sell their electricity in the market which is a liberalised electricity market
where cross-border trade takes place.
(82) The GECs and CHP certificates schemes therefore provide a selective advantage
to producers of renewable electricity and to high-efficiency CHP that threatens to
distort competition and is likely to affect trade between Member States.
3.1.5. Conclusion on the presence of State aid
(83) Taking the above into consideration, the Commission concludes that the GECs
and CHP certificates schemes involves State aid within the meaning of Article
107(1) TFEU.
3.2. Compatibility of the aid
(84) The Commission notes that the notified GECs and CHP certificates schemes aim
at promoting the generation of electricity from renewable energy sources and
primary energy savings. Consequently, the notified schemes fall within the scope
of the Guidelines on State aid for environmental protection and energy 2014-
2020. The Commission has therefore assessed the GECs scheme on the basis of
the general compatibility provisions of the EEAG (set out in its section 3.2) and
the specific compatibility criteria for operating aid granted by way of certificates
for energy from renewable sources (section 3.3.2.4 of the EEAG). The CHP
certificates scheme is assessed on the basis of the general compatibility provisions

21
of the EEAG (set out in its section 3.2) and the specific compatibility criteria for
energy efficiency measures (section 3.4 of the EEAG).
3.2.1. Compatibility of the GECs scheme
3.2.1.1. Objective of common interest
(85) The aim of the aid measure is to help Belgium to achieve the binding target of
13% share of renewable energy in gross final consumption of energy by 2020 set
by the Directive 2009/28/EC (see also recital (17) above). The Commission
therefore considers that, in line with paragraph (31) of the EEAG, the notified
scheme is clearly aimed at an objective of common interest in accordance with
3.2.1.2. Need for State aid and appropriate instrument
(86) In paragraph (107) of the EEAG, the Commission acknowledges that "under
certain conditions State aid can be an appropriate instrument to contribute to the
achievement of the EU objectives and related national targets". For this aid
scheme, Belgium showed that the system is necessary to ensure the viability of
the RES producers, given that the costs of generating electricity from RES are
higher than the electricity market price. Belgium refers in particular to the last
"OT-report"41
from June 2017 of the Flemish Energy Agency showing that
generation costs for producing electricity from RES exceed the market price of
electricity. Given the current electricity prices, RES installations would not
generate enough revenues to cover their costs (see Tables 1 and 2 above). The
green certificates are therefore a necessary incentive for beneficiaries to produce
electricity from renewable energy sources.
(87) According to paragraph (116) of the EEAG, in order to allow Member States to
achieve their national energy target, the Commission presumes aid to energy from
renewable sources to be appropriate and have limited distortive effects provided
all other compatibility conditions are met.
(88) Consequently, given the assessment of the other compatibility conditions (see
sub-sections 3.2.1.3; 3.2.1.4; 3.2.1.5 and 3.2.3 below) the Commission considers
that the GECs scheme is necessary and that it is an appropriate instrument to
address the objective of common interest.
3.2.1.3. Incentive effect
(89) In line with paragraph (49) of the EEAG, the incentive effect occurs if the aid
induces the beneficiary to change his behaviour towards reaching the objective of
common interest which it would not do without the aid. The Commission notes on
the basis of the calculations submitted by Belgium that in the absence of aid
electricity produced from renewable energy technologies will probably not be
generated, as without the aid such installations would not be financially viable.
41
http://www2.vlaanderen.be/economie/energiesparen/milieuvriendelijke/monitoring_evaluatie/2017/20170
901Rapport_VEA_2017-Deel1-Berekeningen_OT_Bf_SD2018_Def-vs2.pdf.

22
(90) Belgium confirmed that any party wishing to receive aid in relation to an eligible
project has to submit a prior application to the Flemish Energy Agency. No aid
can be paid prior to this application process being successfully completed. The
Commission therefore considers that the GECs scheme complies with the
obligation to use an application form for obtaining aid, set out in paragraph (51)
of the EEAG.
3.2.1.4. Proportionality
(91) According to paragraph (69) of the EEAG, environmental aid is considered to be
proportionate if the aid amount per beneficiary is limited to the minimum needed
to achieve the environmental protection or energy objective aimed for.
(92) In line with paragraph (135) of the EEAG, the price of GECs is not fixed in
advance but depends on market supply and demand. The notified GECs scheme is
a State aid with market-based system elements. The beneficiaries sell their
electricity on the market in the normal market way, subject to competitive
pressure from other market participants. They receive GECs that they can sell in
order to obtain additional revenues. The price of the GECs is not fixed in advance
but is capped by the law which establishes a minimum price of GECs per
technology and a maximum price (being the established price of the fine, see
recitals (26) and (27) above).
(93) As indicated in recital (86) above, Belgium provided evidence that the GECs
scheme is necessary to ensure the viability of the renewable energy sources
concerned. Belgium also explained that the GECs scheme does not dissuade RES
producers from becoming more competitive as it is a market based mechanism
which do not protect the beneficiaries from market risks. The incentive for
investors to develop more efficient projects is therefore preserved. The
Commission notes that the reforms introduced by the Flemish authorities (transfer
obligation from DSOs to VREG, banding factor and Gr factor) aim at improving
the functioning of the GECs market.
(94) Belgium also demonstrated that the beneficiaries would not receive
overcompensation. As shown in Tables 1 and 2 above, the current prices of the
certificates, added to the revenues from electricity sales on the market, do not
exceed the LCOE for each type of supported installations. As explained in recital
(19) above, the Flemish authorities can modulate the level of support through the
adjustment of the banding factor in order to take into account the evolution of
prices and costs and therefore ensure the absence of overcompensation over time.
(95) Given the above, the Commission considers that conditions set out in paragraph
(136) of the EEAG are fulfilled.
(96) Belgium indicated that all technologies supported under the GECs scheme would
receive one GEC per one MWh of electricity produced from renewable energy
sources at a guaranteed minimum price of EUR 93. The number of GECs is then
modulated via the application of the banding factor, depending on the technology
supported. Belgium indicated that this differentiation is aimed at achieving
diversification that is necessary to attain the EU 2020 target as, given dense urban
development and poor climatic conditions; the Flemish region offers only limited
potential for renewable energy large-scale projects. It is therefore also important

23
for small-scale projects to be carried out as well and to allow support to various
types of renewable technologies. The differentiation implemented through the
banding factor is made so as to ensure that there will be no overcompensation as
explained in recital (94) above.
(97) On the basis of the explanations provided by Belgium, the Commission considers
that the differentiated level of support between technologies is in line with the
requirements of paragraph (126) of the EEAG as it is justified by the need to
achieve diversification and therefore the differentiation is justified in compliance
with paragraph (137) of the EEAG.
(98) Paragraph (137) of the EEAG further states that for certificates aid systems, the
conditions set out in paragraph (124) and (125) should apply when technically
possible, and that any investment aid previously received must be deducted from
the operating aid.
(99) The RES producers sell their electricity on the electricity market and the price
they receive for the GECs comes in addition to the market electricity price. The
support received by RES producers through the GECs certificates scheme can
therefore be considered as a premium in addition to the market price within the
meaning of paragraph (124(a)) of the EEAG.
(100) Belgium indicated that RES producers can only sell their electricity to suppliers
who possess a supply permit. Those suppliers are all subject to balancing
responsibilities, as required under paragraph (124(b)) of the EEAG.
(101) Belgium will also put into force the following mechanism to avoid creating
incentives to produce when electricity prices are negative: no support is granted
during (i) each quarter hour with positive imbalance prices below -20 EUR/MWh
(the negative imbalance event) or (ii) periods where the Belpex day-ahead prices
are negative (i.e. below 0 EUR/MWh) for at least 6 consecutive hours (the
negative day ahead event) provided that periods without support caused solely by
negative imbalance events shall be limited to 288 quarters hours per calendar
year, reduced by the total duration of the negative day ahead event in the same
calendar year (the negative price commitment). Periods without support caused
by negative day-ahead events are not capped. The Energy Decree is currently
going through the legislative process of being amended aimed at implementing
the negative price commitment.
(102) As Belgium already indicated for the federal regime governing renewable energy
certificates (Commission decision SA.45867 (2016/N)42
), the measure will
provide an incentive to RES producers to actively participate in the balancing
market. Further to the explanations provided by Belgium (see recitals (89) to (92)
of the SA.45867 decision), the Commission considered that the combination of
the imbalance and day-ahead market mechanisms are able to ensure that there is
no incentive for the beneficiaries of the aid measure to produce during negative
42
Commission decision of 8 December 2016 in State aid case SA.45867 (2016/N) – Belgium – The
Belgian federal regime governing renewable energy certificates and aid to the Rentel and Norther wind
farm projects, OJ C 36, 03.02.2017, p.1.

24
pricing events. Therefore, the conditions of paragraph (124(c)) of the EEAG are
met (see recital (93) of the SA.45867 decision).
(103) Belgium indicated that it would apply the conditions set out in paragraph (124) of
the EEAG also to installations with an installed electricity capacity of less than
500 kW and to wind energy installations with an installed electricity capacity of
less than 3 MW or three generation units. Therefore, provisions set out in
paragraph (125) of the EEAG are not applicable to the GECs scheme.
(104) In line with the requirement set out in paragraph (137) of the EEAG, Belgium
confirmed that any investment aid previously received is deducted from the
operating aid received by beneficiaries.
(105) Based on the above, the Commission considers that paragraph (137) of the EEAG
is complied with.
3.2.1.5. Distortion of competition and balancing test
(106) According to paragraph (90) of the EEAG, the Commission considers that aid for
environmental purposes will by its very nature tend to favour environmentally
friendly products and technologies at the expense of other, more polluting ones.
Moreover, the effect of the aid will in principle not be viewed as an undue
distortion of competition since it is inherently linked to its very objective.
(107) According to paragraph (116) of the EEAG, the Commission presumes aid to
energy from renewable sources to have limited distortive effects provided all
other compatibility conditions are met. The Commission considers that the aid to
RES producers under assessment does not have undue distortive effects on
competition and trade because the applicable conditions laid out in Sections 3.2
and 3.3.2.4 of the EEAG are fulfilled, as discussed above.
(108) Consequently, the Commission concludes that the distortion of competition
caused by the GECs scheme under assessment is limited.
3.2.2. Compatibility of the CHP certificates scheme
3.2.2.1. Objective of common interest
(109) The aim of the aid measure is to help achieving the Union target to reduce its
primary energy consumption, and to reduce greenhouse gas emissions as
indicated in recital (31) above. The Commission therefore considers that, in line
with paragraph (31) of the EEAG, the notified scheme is clearly aimed at an
objective of common interest in accordance with Article 107(3) TFEU.
(110) As indicated in recital (42) above, Belgium confirmed that beneficiaries of the
notified scheme are high-efficiency CHP installations, in line with paragraph
(139) of the EEAG.

25
(111) In line with paragraph (140) of the EEAG, Belgium confirmed that the waste
hierarchy principles set out in Directive 2008/98/EC43
on waste are not
circumvented by support granted to high-efficiency CHP installations incinerating
waste.
3.2.2.2. Need for State aid and appropriate instrument
(112) Pursuant to paragraph (142) of the EEAG, energy-efficiency measures target
negative externalities as referred in paragraph (35) of the EEAG by creating
individual incentives to attain environmental targets for energy-efficiency and for
the reduction of greenhouse gas emissions.
(113) For this aid scheme, Belgium showed that the system is necessary to ensure the
viability of the high-efficiency CHP, given the costs of generating electricity and
heat from cogeneration installations and the market prices. Belgium refers in
particular to the last "OT-report"44
from June 2017 of the Flemish Energy Agency
showing that costs incurred by cogeneration installations are still higher than the
revenues that can be expected from the electricity and heat markets. Given the
current electricity and heat prices, high-efficiency cogeneration installations
would not generate enough revenues to cover their costs (see Tables 2, 3 and 4
above).
(114) Pursuant to paragraph (40) of the EEAG, the proposed aid measure must be an
appropriate instrument to address the policy objective concerned. Paragraph (145)
of the EEAG states that State aid may be considered an appropriate instrument to
finance energy efficiency measures independently of the form in which it is
granted.
(115) Therefore, the measure can be considered to be appropriate.
3.2.2.3. Incentive effect, proportionality, distortion of competition
and balancing test
(116) Given the similarities between the GECs scheme and the CHP certificates scheme
and given that the criteria set out in the EEAG for operating aid granted to energy
from renewable energy sources also apply to aid to high-efficiency CHP (as
paragraph (151) of the EEAG refers to conditions set out in sections 3.3.2.1 and
3.3.2.4 of the EEAG), the elements developed in sub-sections 3.3.1.3 (incentive
effect), 3.3.1.4 (proportionality) and 3.3.1.5 (distortion of competition and
balancing test) are also valid for the CHP certificates scheme.
(117) The Commission therefore considers that the CHP certificates scheme has an
incentive effect, is proportionate and that its potential distortion of competition is
limited.
43
Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste
and repealing certain Directives (OJ L 312, 22.11.2008, p.3).
44
See footnote 41.

26
3.2.3. Transparency
(118) According to paragraph (104) of the EEAG, Member States have the obligation to
ensure the transparency of the aid granted, by publishing certain information on a
comprehensive State aid website. Belgium declared that the transparency
requirements set out in paragraphs (104)-(106) of the EEAG will be complied
with.
3.3. Authentic language
(119) As set out in recital (3) above, Belgium has waived its right to have the decision
adopted and notified in Dutch and French. The authentic language of this decision
will therefore be English.
4. CONCLUSION
The Commission has accordingly decided not to raise objections to the aid granted to the
green energy certificates and combined heat and power certificates schemes on the
grounds that the aid is compatible with the internal market pursuant to Article 107(3)(c)
of the Treaty on the Functioning of the European Union.
If this letter contains confidential information which should not be disclosed to third
parties, please inform the Commission within fifteen working days of the date of receipt.
If the Commission does not receive a reasoned request by that deadline, you will be
deemed to agree to the disclosure to third parties and to the publication of the full text of
the letter in the authentic language on the Internet site:
http://ec.europa.eu/competition/elojade/isef/index.cfm.
Your request should be sent electronically to the following address:
European Commission,
Directorate-General Competition
State Aid Greffe
B-1049 Brussels
Stateaidgreffe@ec.europa.eu
Yours faithfully
For the Commission
Margrethe VESTAGER
Member of the Commission

Commissie aanvaardt Vlaamse groenestroomcertificaten

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Commissie aanvaardt Vlaamse groenestroomcertificaten

Similar to Commissie aanvaardt Vlaamse groenestroomcertificaten (20)

More from Thierry Debels

More from Thierry Debels (20)

Recently uploaded

Recently uploaded (20)

Commissie aanvaardt Vlaamse groenestroomcertificaten