Germany's Renewable Energy Law, State Aid and the Internal Market

Germany's Renewable Energy Law (eeg) has come under pressure. The European Commission announced in December 2013 that it would perform an investigation for violation of state aid rules. The eeg subsidizes the production of renewable energy and requires electricity consumers to pay an "EEG surcharge". The Commission is concerned that energy-intensive industries are largely exempt from paying the eeg surcharge and considers the privileges as illegal state aid. Germany disagrees arguing that they are a necessary means to balance the interest of the environment and those of industry burdened with high energy costs. Compromise is feasible, however, and negotiations are ongoing. Arguably more threatening is the legal prospect from Alands Vindkraft, a case in which the Court will judge whether the restriction of feed-in-tariffs to domestic sources violates Article 34 TFEU. If the Court follows the opinion of General Advocate Bot, Germany may have to open the eeg subsidy scheme to renewable sources outside the country, surely leading German voters to question the legitimacy of the eeg altogether.