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Of Markets and Subsidies: Counter-intuitive Trends for Clean Energy Policy in the European Union and the United States

Published online by Cambridge University Press:  07 January 2021

Felix Mormann Open the ORCID record for Felix Mormann [Opens in a new window]
Felix Mormann*
Affiliation:
Texas A&M University School of Law, Texas A&M University College of Engineering, Fort Worth, TX (US).Email: mormann@law.tamu.edu.
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Abstract

The United States (US) is frequently portrayed as a nation with a deep distrust of big government and a strong commitment to markets and competition. In contrast, the prevailing image of the European Union (EU) is that of a highly bureaucratized polity favouring interventionist economic governance over free market capitalism. In the context of clean energy, however, these roles appear to be somewhat reversed. A top-level survey of the US clean energy policy landscape reveals a surprisingly pervasive reliance on government subsidies with few, if any, competitive elements. EU clean energy policy, meanwhile, reflects an unexpected commitment to market-based instruments and competition. This article suggests that these counter-intuitive policy trends can be explained by critical differences in the black-letter law of both jurisdictions and its enforcement in the courts, among other factors. Unlike their American counterparts, EU judges prioritize the timely transition to a low-carbon energy economy over unrestricted competition among Member States. As the EU pushes for greater intrastate competition in clean energy policy, the US focuses instead on defending the Founding Fathers’ ideal of unfettered interstate competition.

Keywords

Energy policyFederalismCommerce clauseState aidComparative lawClimate change
Type
Symposium Article
Information
Transnational Environmental Law , Volume 10 , Issue 2 , July 2021 , pp. 321 - 337
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press.

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Footnotes

This contribution is part of a collection of articles growing out of the workshop ‘The Law of Energy Transition in Federal Systems’, held by the University of Tübingen, Faculty of Law, and the University of North Carolina at Chapel Hill, School of Law, in Tübingen (Germany), 27 June 2019.

I would like to thank Lora Naismith and Natalie Irwin for their excellent research assistance as well as two anonymous TEL reviewers for their thoughtful comments and suggestions.

References

1 See, e.g., J. Cost, ‘The Politics of Distrust’, Wall Street Journal, 16 Oct. 2015, available at: https://www.wsj.com/articles/the-politics-of-distrust-1445015969 (describing bipartisan US neoliberalism's view of free market capitalism as the main engine of prosperity to be encouraged, but only lightly regulated, by government).

2 See, e.g., Philippon, T., The Great Reversal: How America Gave Up on Free Markets (Belknap Press, 2019), p. 127CrossRefGoogle Scholar (describing the EU as an ‘overreaching bureaucratic beast’ that favours state intervention over private competition).

3 See, e.g., Davies, L., ‘Power Forward: The Argument for a National RPS’ (2010) 42(5) Connecticut Law Review, pp. 1340–403, at 1364–5Google Scholar (describing the Congressional deadlock over a nationwide US clean energy mandate, often referred to as a ‘renewable portfolio standard’ or ‘clean energy standard’).

4 See, e.g., Mormann, F., ‘Beyond Tax Credits: Smarter Tax Policy for a Cleaner, More Democratic Energy Future’ (2014) 31(2) Yale Journal on Regulation, pp. 303–61, at 313–7Google Scholar (tracing the history of US federal tax support for renewable energy).

5 See N.C. Clean Energy Technology Center, ‘Renewable & Clean Energy Standards’, June 2019, available at: https://s3.amazonaws.com/ncsolarcen-prod/wp-content/uploads/2019/07/RPS-CES-June2019.pdf.

6 See, e.g., Illinois Commerce Commission v. Federal Energy Regulation Commission (FERC), 721 F.3d 764 (7th Cir. 2013), at 776 (noting that a state cannot craft its RPS programme to prohibit counting out-of-state resources towards the state's sourcing requirement without violating the US Constitution's dormant Commerce Clause).

7 See, e.g., West Lynn Creamery, Inc. v. Healy, 512 U.S. 186 (1994), at 199 (‘A pure subsidy funded out of general revenue ordinarily imposes no burden on interstate commerce, but merely assists local business’); New Energy Company of Indiana v. Limbach, 486 U.S. 269 (1988), at 278 (‘The Commerce Clause does not prohibit all state action designed to give its residents an advantage in the marketplace, but only action of that description in connection with the State's regulation of interstate commerce. Direct subsidization of domestic industry does not ordinarily run afoul of that prohibition’) (emphasis added).

8 See Directive 2001/77/EC on the Promotion of Electricity Produced from Renewable Energy Sources in the Internal Electricity Market [2001] OJ L 283/33; Directive 2009/28/EC on the Promotion of the Use of Energy from Renewable Sources, amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC [2009] OJ L 140/16 (Renewable Energy Directive 2009); Directive 2018/2001/EU on the Promotion of the Use of Energy from Renewable Sources [2018] OJ L 328/82 (Renewable Energy Directive 2018).

9 See, e.g., the United Kingdom's (UK) Renewables Obligation, closed to new generators from Apr. 2017: Ofgem, ‘About the RO’, available at: https://www.ofgem.gov.uk/environmental-programmes/ro/about-ro; Belgium's Green Certificate Scheme, details available at: https://www.iea.org/policies/21626-green-certificate-scheme-federal?country=Belgium&q=belgium. See IEA, n. 94 below, and accompanying text.

10 Lisbon (Portugal), 13 Dec. 2007, in force 1 Dec. 2009 [2012] OJ C 326/47, available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2012:326:FULL:EN:PDF.

11 See N. Lalwani, ‘When Americans Get Good Government Service, They Mistakenly Give the Credit to the Private Sector’, Washington Post, 29 Aug. 2019, available at: https://www.washingtonpost.com/politics/2019/08/29/when-americans-get-good-government-service-they-mistakenly-give-credit-private-sector.

12 ‘Public Trust in Government: 1958–2019’, Pew Research Center, 11 Apr. 2019, available at: https://www.people-press.org/2019/04/11/public-trust-in-government-1958-2019.

13 Cost, n. 1 above.

14 See ‘Global Competitiveness Index 4.0’, World Economic Forum, 2018, available at: http://reports.weforum.org/global-competitiveness-report-2018/competitiveness-rankings.

15 The theory of American exceptionalism is generally traced back to Alexis de Toqueville; see de Toqueville, A., Democracy in America Part 2 (Langley, 1840), pp. 36–7Google Scholar.

16 See Ralls, M.A., ‘Congress Got it Right: There's No Need to Mandate Renewable Portfolio Standards’ (2008) 27(2) Energy Law Journal, pp. 451–72, at 452–3; Davies, n. 3 above, pp. 1364–5Google Scholar.

17 See American Clean Energy and Security Act, H.R. 2454, 111th Cong. § 101(a) (2009) (proposing to add § 610, a provision for a ‘Combined Efficiency and Renewable Electricity Standard’ to the Public Utilities Regulatory Policy Act (PURPA)).

18 Available at: https://www.congress.gov/bill/111th-congress/house-bill/2454/all-actions?q=%7B%22search%22%3A%5B%22H.R.+2454%22%5D%7D&r=1&overview=closed&s=9#tabs.

19 See Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, (2015) 80 Federal Register, pp. 64662–964, 23 Oct. 2015 (to be codified at 40 C.F.R. pt. 60); implementation stayed until resolution of pending challenges per West Virginia v. EPA, 136 S. Ct. 1000 (2016); repealed by the Affordable Clean Energy Rule, (2019) 84 Federal Register, pp. 32520–84, 8 July 2019 (to be codified at 40 C.F.R. pt. 60).

20 For a representative snapshot of the rich scholarly discussion of the Clean Power Plan, see, e.g., Hammond, E. & Pierce, R., ‘The Clean Power Plan: Testing the Limits of Administrative Law and the Electric Grid’ (2016) 1(1) George Washington Journal of Energy & Environment Law, pp. 1–17Google Scholar; Wiseman, H. & Osofsky, H., ‘Regional Energy Governance and U.S. Carbon Emissions’ (2016) 43(1) Ecology Law Quarterly, pp. 143–235Google Scholar; Carbonell, T., ‘EPA's Proposed Clean Power Plan: Protecting Climate and Public Health by Reducing Carbon Pollution from the U.S. Power Sector’ (2015) 33(2) Yale Law & Policy Review, pp. 403–26Google Scholar.

21 See sources at n. 19 above.

22 26 U.S.C. § 45.

23 26 U.S.C. § 25D, § 48.

24 26 U.S.C. § 168.

25 For another prominent example of federal policy support for clean energy, consider the Department of Energy's Loan Guarantee Program, as authorized under sections 1703 and 1705 of the Energy Policy Act of 2005 (Public Law No. 109-58, 119 Stat. 594), as amended by the American Recovery and Reinvestment Act of 2009 (Public Law No. 111-5, 123 Stat. 115).

26 See, e.g., Mormann, F., ‘Fading into the Sunset: Solar and Wind Get Five More Years of Tax Credits with a Phase-Down’ (2016) 47(5) ABA Trends, pp. 9–14Google Scholar.

27 See Joint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2018–2022 (U.S. Government Printing Office, 2018), pp. 21–2.

28 See N.C. Clean Energy Technology Center, n. 5 above.

29 Internationally, renewable energy credits are also referred to as ‘tradable green certificates’ or ‘renewable energy guarantees of origin’; see, e.g., Toke, D., ‘Are Green Electricity Certificates the Way Forward for Renewable Energy? An Evaluation of the United Kingdom's Renewables Obligation in the Context of International Comparisons’ (2005) 23(3) Environment and Planning C: Government and Policy, pp. 361–75CrossRefGoogle Scholar.

30 But see Davies, n. 3 above, pp. 1359, 1378 (noting that some jurisdictions award RECs for every kilowatt hour of renewably generated electricity).

31 See Fershee, J., ‘Moving Power Forward: Creating a Forward-Looking Energy Policy Based on a National RPS’ (2010) 42(5) Connecticut Law Review, pp. 1405–22, at 1410Google Scholar.

32 For a thoughtful discussion of the dynamics of REC trading, see Berendt, C., ‘A State-Based Approach to Building a Liquid National Market for Renewable Energy Certificates: The REC-EX Model’ (2006) 19(5) The Electriciy Journal, pp. 54–68CrossRefGoogle Scholar.

33 See, e.g., N. Rader & S. Hempling, The Renewables Portfolio Standard: A Practical Guide (National Association of Regulatory Utility Commissioners, 2001), p. 57 (enumerating the various efficiency benefits of competitive RPS policies and REC trading).

34 For an overview of the various location-based tweaks made to state-level RPS programmes in order to prevent spillover of the attendant economic benefits, see Mormann, F., ‘Market Segmentation vs. Subsidization: Clean Energy Credits and the Commerce Clause's Economic Wisdom’ (2018) 93(4) Washington Law Review, pp. 1853–901, at 1867Google Scholar.

35 More recently, India has successfully challenged the local content requirements and preferences in the RPS programmes of Delaware and Michigan before the World Trade Organization (WTO); see United States – Certain Measures Relating to the Renewable Energy Sector, Panel Report, WTO Doc. WT/DS510/R, adopted 27 June 2019.

36 See Nichols v. Markell, No. CV 12-777-CJB, 2014 WL 1509780, District of Delaware (17 Apr. 2014), reported at Westlaw, pp. 1–30, at 22–5 (challenging Delaware's RPS); American Tradition Institute v. Colorado, 876 F.Supp.2d 1222 (D. Colo. 2012), at 1227–8 (challenging Colorado's RPS); North Dakota v. Swanson, No. 11-3232 SRN/SER, 2012 WL 4479246, District of Minnesota (20 Sept. 2012) (challenging Minnesota's Next Generation Energy Act); Application of Public Utility District No. 1 of Cowlitz County for Rehearing of Decision 11-12-052 (20 Jan. 2012) (challenging California's RPS); Complaint at 3-17, TransCanada Power Marketing Ltd v. Bowles, No. 4:10cv-40070-FDS, District of Massachusetts (16 Apr. 2010) (challenging Massachusetts’ RPS); Missouri ex rel. Missouri Energy Development Association v. Public Service Commission, Nos. 10AC-CC00511, 10AC-CC00512, 10AC-CC00513, 10AC-CC00528, 10AC-CC536, Doc. No. SL01DOCS\3510904.2, Missouri Court of Appeals (29 June 2011) (challenging Missouri's RPS).

37 U.S. Constitution, Art. I, § 8, cl. 3.

38 Oregon Waste Systems, Inc. v. Department of Environmental Quality, 511 U.S. 93 (1994), at 98 (citing Wyoming v. Oklahoma, 502 U.S. 437 (1992), at 454; Welton v. Missouri, 91 U.S. 275 (1876).

39 West Lynn Creamery, Inc. v. Healy, n. 7 above, pp. 192–3 (citing New Energy Co. of Indiana v. Limbach, n. 7 above, pp. 273–4).

40 Interested readers are encouraged to consult the following sources: Kalen, S., ‘Dormancy versus Innovation’ (2013) 65(3) Oklahoma Law Review, pp. 381–426Google Scholar; Lee, D. & Duane, T., ‘Putting the Dormant Commerce Clause Back to Sleep: Adapting the Doctrine to Support State Renewable Portfolio Standards’ (2013) 43(2) Environmental Law, pp. 295–364Google Scholar; Mormann, F., ‘Constitutional Challenges and Regulatory Opportunities for State Climate Policy Innovation’ (2017) 41(1) Harvard Environmental Law Review, pp. 189–242Google Scholar.

41 See, e.g., Kalen, n. 40 above; Lee & Duane, n. 40 above; Barsa, M. & Dana, D., ‘A Climate Change Lens on the Dormant Commerce Clause, Lifecycle GHG Taxes, and In-State RPSS Requirements’ (2014) 5 San Diego Journal Climate & Energy Law, pp. 69–93, at 71–2Google Scholar; Englese, D., ‘Tilting at Windmills: Finding an Alternative Dormant Commerce Clause Framework to Preserve Renewable Portfolio Standard Generator Location Requirements’ (2015) 47(3) Arizonia State Law Journal, pp. 983–1015, at 1002Google Scholar; but see Griffin, W., ‘Renewable Portfolio Standards and the Dormant Commerce Clause: The Case for In-Region Location Requirements’ (2014) 41(1) Boston College Environmental Affairs Law Review, pp. 133–65, at 161Google Scholar (arguing that in-region requirements in Massachusetts’ state RPS could be deemed constitutional under existing dormant Commerce Clause doctrine). See also Engel, K., ‘The Dormant Commerce Clause Threat to Market-Based Environmental Regulation: The Case of Electricity Deregulation’ (1999) 26(2) Ecology Law Quarterly, pp. 243–349, at 324Google Scholar (showing true prescience in calling for reform of dormant Commerce Clause doctrine to legitimize state favouritism more than a decade before the first challenges to state RPS policies).

42 See, e.g., Nichols v. Markell, No. CV 12-777-CJB, District of Delaware (20 Oct. 2015), slip opinion, reported at Westlaw, pp. 1–13, at 2–3 (Delaware's settlement with FuelCell Energy); State, ex rel. Missouri Energy Development Association v. Public Service Commission, Missouri Court of Appeals, 386 S.W.3d 165 (2012), at 176; 2013 Colorado Legislation Service, Ch. 414 (S.B. 13-252) (2013) (eliminating Colorado's in-state generator requirements); Massachusetts Department of Public Utilities, Order Adopting Emergency Regulations, Decision No. DPU 10-58, 9 June 2010 (suspending Massachusetts's in-state generator requirements and striking the words ‘within the Commonwealth of Massachusetts, its waters, or adjacent federal waters’ from its regulations at 220 Mass. Code Regs 17.01(1) (2009) and ‘in the Commonwealth of Massachusetts’ from 220 Mass. Code Regs 17.05(1)I(4) (2009)); ‘TransCanada Renewable Lawsuit Scores a Win in MA’, Climate Lawyers Blog, 11 June 2010, available at: http://climatelawyers.com/post/2010/06/11/TransCanada-renewable-lawsuit-scores-a-win-in-MA.aspx (Massachusetts’ settlement with TransCanada).

43 See, e.g., West Lynn Creamery, Inc. v. Healy, n. 7 above, p. 199 (‘A pure subsidy funded out of general revenue ordinarily imposes no burden on interstate commerce, but merely assists local business’); New Energy Company of Indiana v. Limbach, n. 7 above, p. 278 (‘The Commerce Clause does not prohibit all state action designed to give its residents an advantage in the marketplace, but only action of that description in connection with the State's regulation of interstate commerce. Direct subsidization of domestic industry does not ordinarily run afoul of that prohibition’ (emphasis added)). The Supreme Court's endorsement of state-level subsidies that discriminate against out-of-state competitors, from a Commerce Clause angle, does not, however, protect state clean energy subsidy programmes from challenges under international trade law; see United States – Certain Measures Relating to the Renewable Energy Sector, n. 35 above (finding that the in-state content requirements and preferences in clean energy subsidy programmes adopted by California, Connecticut, Minnesota, Montana, and Washington are inconsistent with US obligations under Art. III:4 of the 1994 General Agreement on Tariffs and Trade).

44 See Revesz, R. & Unel, B., ‘Managing the Future of the Electric Grid: Distributed Generation and Net Metering’ (2017) 41(1) Harvard Environmental Law Review, pp. 43–108, at 47, 59Google Scholar; N.C. Clean Energy Technology Center, ‘Net Metering’, Oct. 2019, available at: https://s3.amazonaws.com/ncsolarcen-prod/wp-content/uploads/2019/10/DSIRE_Net_Metering_Oct2019.pdf.

45 See, e.g., Edison Electric Institute, ‘Solar Energy and Net Metering’, Jan. 2016, pp. 1–2, available at: https://www.eei.org/issuesandpolicy/generation/NetMetering/Documents/Straight%20Talk%20About%20Net%20Metering.pdf.

46 For a thoughtful summary of feed-in tariff design and implementation features, see Mendonça, M., Jacobs, D. & Sovacool, B., Powering the Green Economy: The Feed-In Tariff Handbook (Earthscan, 2009), pp. 15–6CrossRefGoogle Scholar; Rickerson, W., Sawin, J.L. & Grace, R.C., ‘If the Shoe FITs: Using Feed-in Tariffs to Meet U.S. Renewable Electricity Targets’ (2007) 20(4) The Electricity Journal, pp. 73–86CrossRefGoogle Scholar.

47 See S.B. 32, 2007–2008 Sess. (California 2008).

48 See Decisions and Orders, Docket 2008-0273, Hawaii Public Utility Commission (2008).

49 See S.P. 367, 126th Legislation (Maine 2013), An Act to Establish the Renewable Energy Feed-in Tariff.

50 See H.B. 3039 (Oregon 2009), H.B. 3690 (Oregon 2009), and implementing Orders 10-198, 10-200, 11-339 by the Oregon Public Utilities Commission.

51 See H.B. 6104 (Rhode Island 2011).

52 See Public Act No. 45 (2009 Vermont, Bien. Sess.); Public Act No. 170 (2012 Vermont. Adj. Sess.).

53 See S.B. 5101 (Washington 2005); S.B. 6170 (Washington 2009); S.B. 6658 (Washington 2010).

54 Others, however, have recently made such bold claims; see Philippon, n. 2 above.

55 Ibid., p. 125.

56 D. Kinkade, ‘The Limits of Big Government: Northern Europe Inches Toward Free Market’, US Chamber of Commerce, 13 Mar. 2014, available at: https://www.uschamber.com/above-the-fold/the-limits-big-government-northern-europe-inches-toward-free-market.

57 Philippon, n. 2, p. 127.

58 See J. Pethokoukis, ‘Why Europe Failed to Match America's Tech Boom’, The Week, 9 Sept. 2016, available at: https://theweek.com/articles/647136/why-europe-failed-match-americas-tech-boom.

59 See D. Meegan, ‘Big Government in America Part One: Egalitarian Europeans and Humanitarian Americans’, NewStatesmanAmerica, 19 June 2019, available at: https://www.newstatesman.com/world/north-america/2019/06/big-government-america-part-one-egalitarian-europeans-and-humanitarian.

60 See, e.g., ‘A French Habit is Spreading’, The Economist, 7 Mar. 2019, available at: https://www.economist.com/leaders/2019/03/07/a-french-habit-is-spreading.

61 See Titles II and IV TFEU (establishing the free movement of goods, the free movement of capital, the freedom to establish and provide services, and the free movement of persons within the EU's common market).

62 See Directive 2001/77/EC, n. 8 above, amended by Directive 2003/30/EC on the Promotion of the Use of Biofuels or other Renewable Fuels for Transport [2003] OJ L 123/42.

63 See Renewable Energy Directive 2009, n. 8 above (setting a union-wide requirement that 20% of the energy consumed within the EU comes from renewable sources).

64 Paris (France), 12 Dec. 2015, in force 4 Nov. 2016, available at: http://unfccc.int/paris_agreement/items/9485.php.

65 See Renewable Energy Directive 2018, n. 8 above (recasting and set to repeal the Renewable Energy Directive 2009 by 1 July 2021).

66 See European Commission, ‘Clean Energy for All Europeans’, 30 Nov. 2016, COM(2016) 860 final.

67 See European Commission, ‘2030 Framework for Climate & Energy: Outcome of the October 2014 European Council’, Oct. 2014, available at: https://ec.europa.eu/clima/sites/clima/files/strategies/2030/docs/2030_euco_conclusions_en.pdf.

68 See European Commission, ‘European Green Deal’, 11 Dec. 2019, COM(2019) 640 final.

69 See Art. 5(3) TFEU and Protocol (No. 2) on the Application of the Principles of Subsidiarity and Proportionality [2008] OJ C 115/206.

70 See Renewable Energy Directive 2009, n. 8 above, Art. 2(k); Renewable Energy Directive 2018, n. 8 above, Art. 2(5).

71 Ibid.

72 See, e.g., Case C-379/98, PreussenElektra, ECLI:EU:C:2001:160 (upholding Germany's feed-in tariffs for renewables); Case C-206/06, Essent Network Noord and Others, ECLI:EU:C:2008:413 (European Court of Justice finding that a Dutch electricity surcharge to recover stranded costs constituted illegal state aid); Case C-262/12, Vent De Colère and Others, ECLI:EU:C:2013:851 (finding that France's cost-recovery mechanism for utility payments for wind power at above-market rates violated the general prohibition of state aid in Art. 107(1) TFEU); Case T-251/11, Austria v. Commission, ECLI:EU:T:2014:1060 (holding that parts of Austria's Green Electricity Law afford state aid in violation of Art. 107(1) TFEU); Case C-515/16, Enedis SA, ECLI:EU:C:2017:217 (finding that France's 2006 and 2010 solar feed-in tariffs constituted state aid in violation of Art. 107(1) TFEU).

73 See generally Vasbeck, D., ‘State Aid, the Criterion of State Resources and Renewable Energy Support Mechanisms: Fresh Wind from Luxembourg in EEG 2012’ (2019) 4(2) European Papers online articles, pp. 629–40Google Scholar, available at: https://www.europeanpapers.eu/en/europeanforum/state-aid-the-criterion-of-state-resources-and-renewable-energy-support-mechanisms.

74 Interested readers are encouraged to consult Lopez, J.J. Piernas, The Concept of State Aid under EU Law: From Internal Market to Competition and Beyond (Oxford University Press, 2015)CrossRefGoogle Scholar; Bacon, K., European Union Law of State Aid (Oxford University Press, 2017)Google Scholar; Stuart, E. & Roginska-Green, I., Sixty Years of E.U. State Aid Law and Policy: Analysis and Assessment (Wolters Kluwer, 2018)Google Scholar; Kassim, H. & Lyons, B., ‘The New Political Economy of E.U. State Aid Policy’ (2013) 13 Journal of Industry, Competition and Trade, pp. 1–21CrossRefGoogle Scholar; Cini, M., ‘The Soft Law Approach: Commission Rule-Making in the E.U.'s State Aid Regime’ (2001) 8(2) Journal of European Public Policy, pp. 192–207CrossRefGoogle Scholar.

75 N. 10 above.

76 See sources at n. 43 above and accompanying text.

77 Art. 258 TFEU.

78 See, e.g., Blauberger, M., Of “Good” and “Bad” Subsidies: European State Aid Control through Soft and Hard Law’ (2009) 32(4) West European Politics, pp. 719–37, at 721CrossRefGoogle Scholar.

79 See Commission Regulation (EU) No. 651/2014 Declaring Certain Categories of Aid Compatible with the Internal Market in Application of Articles 107 and 108 of the Treaty [2014] OJ L 187/1 (General Block Exemption Regulation).

80 See Commission Communication, ‘Guidelines on State Aid for Environmental Protection and Energy 2014-2020’ [2014] OJ C 200/1.

81 General Block Exemption Regulation, n. 79 above, Art. 42(2). For exceptions to the competitive-bidding requirement for smaller-scale generators, see Art. 42(8).

82 Ibid., Art. 41(7)–(10).

83 ‘Guidelines on State Aid for Environmental Protection and Energy’, n. 80 above, para. 41.

84 Ibid., paras 34, 36.

85 Ibid., para. 109. See also para. 126, requiring the use of competitive-bidding processes for subsidy allocation, effective 1 Jan. 2017.

86 Ibid., para. 124. For an introduction to the functioning of wholesale power markets and the importance of participants’ forecasting and balancing responsibilities, as well as associated challenges for renewable power generators, see Klessmann, C., Nabe, C. & Burges, K., ‘Pros and Cons of Exposing Renewables to Electricity Market Risks: A Comparison of the Market Integration Approaches in Germany, Spain, and the UK’ (2008) 36(10) Energy Policy, pp. 3646–61CrossRefGoogle Scholar.

87 See, e.g., Friedman, M., Capitalism and Freedom (University of Chicago Press, 1962)Google Scholar.

88 See Mendonça, Jacobs & Sovacool, n. 46 above, p. 77 (also noting the US influence on the feed-in tariffs first adopted by Portugal, Germany, and Denmark).

89 See Renewable Energy Policy Network for the 21st Century (REN21), Renewables 2016 Global Status Report (REN21, 2016), p. 112.

90 Ibid., p. 113.

91 Vasbeck, n. 73 above.

92 See Case C-206/06, Essent Netwerk Noord and Others, 17 July 2008; Case C-262/12, Vent De Colère and Others, ECLI:EU:C:2013:851; Case T-251/11, Austria v. Commission, ECLI:EU:T:2014:1060; Case C-515/16, Enedis SA, ECLI:EU:C:2017:217.

93 See Case C-405/16, Germany v. Commission, ECLI:EU:C:2019:268. For a primer on Germany's Erneuerbare Energien Gesetz 2012, see Davies, L. & Allen, K., ‘Feed-in Tariffs in Turmoil’ (2014) 116(3) West Virginia Law Review, pp. 937–1005, at 958Google Scholar.

94 See International Energy Agency (IEA), Deploying Renewables: Best and Future Policy Practice (IEA, 2011), pp. 147–8.

95 See F. Simon, ‘Calls Grow for E.U.-Wide Certificates to Boost Market for “Green Gas”’, EURACTIV, 3 Oct. 2019, available at: https://www.euractiv.com/section/energy/news/calls-grow-for-eu-wide-certificates-to-boost-market-for-green-gas.

96 See T. Wang, ‘Total Electricity End Use in the U.S. from 1975 to 2019’, Statista, available at: https://www.statista.com/statistics/201794/us-electricity-consumption-since-1975.

97 For a comprehensive account of the tensions between EU energy policy and the free movement of goods, see Penttinen, S.-L., Free Movement and the Energy Sector in the European Union: The Role of the European Court of Justice (Routledge, 2020)CrossRefGoogle Scholar.

98 See Renewables Obligation Order 2015, SI 2015/1947, Art. 21(2)(b). See also H. van der Linden, Review of International Experience with Renewable Energy Obligation Support Mechanisms (Energieonderzoek Centrum Nederland, 2005), p. 22, available at: http://eta-publications.lbl.gov/sites/default/files/report-lbnl-57666.pdf.

99 See Jansson, M.S., ‘Free Movement of Electricity and the Revival of System Stability Justifications’ (2017) 18(3) German Law Journal, pp. 595–616, at 597CrossRefGoogle Scholar.

100 Ibid.

101 See, e.g., Szydlo, M., ‘How to Reconcile National Support for Renewable Energy with Internal Market Obligations: The Task for the EU Legislature after Ålands Vindkraft and Essent’ (2015) 52(2) Common Market Law Review, pp. 489–510, at 490Google Scholar (referring to state-aid cases and the 2014 Guidelines on State Aid for Environmental Protection and Energy (n. 80 above) as evidence of the Commission's campaign against discriminatory support schemes for renewable energy).

102 The heterogeneity among EU institutions at the intersection of clean energy policy and fundamental freedoms is perhaps best illustrated by Attorney General Bot, who sided with the Commission in suggesting that the discriminatory support schemes in question be struck down; see Opinion of AG Bot in Joined Cases C-204–208/12, Essent Belgium, ECLI: EU:C:2013:294; Opinion of AG Bot in Case C-573/12, Ålands Vindkraft, ECLI:EU:C:2014:37.

103 See Case C-573/12, Ålands Vindkraft AB v. Energimyndigheten, ECLI:EU:C:2014:2037.

104 Ibid., paras 65–82.

105 Authority over energy regulation in Belgium is allocated among the Flemish region, the Walloon region, and the Brussels-Capital region; see ‘The Powers of the Regions’, available at: http://www.belgium.be/en/about_belgium/government/regions/competence.

106 See Joined Cases C-204 to 208/12, Essent Belgium NV v. Vlaamse Regulierungsinstantie voor de Elektriciteits- en Gasmarkt, ECLI:EU:C:2014:2192.

107 Ibid., paras 77–95.

108 See Case C-492/14, Essent Belgium v. Vlaams Gewest, ECLI:EU:C:2016:732.

109 Ibid., para. 101.

110 Ibid., paras 111–6.

111 See Maine v. Taylor, 477 U.S. 131 (1986) (upholding a Maine statute banning the import of live baitfish from out-of-state in the interest of protecting the domestic lobster population).

112 See sources at n. 41 above.

113 See, e.g., Penttinen, S.-L., ‘The Next Chapter in the Saga of Renewable Energy Support Schemes: Still “a Certain Degree of Mystery” after Essent Belgium II’ (2018) 43(1) European Law Review, pp. 106–19, at 114Google Scholar (‘the Court has been seen to respect the policy choices adopted by the legislature in particular as regards the [renewable energy] support schemes despite the restrictive effects the schemes entail with regards to cross-border movement’); Fouquet, D. & Guarrata, A., ‘Judgment of 1st July 2014 in Ålands Vindkraft AB v Energimyndigheten: Comments on Case C-573/12’ (2014) 5(1) Renewable Energy Law & Policy Review, pp. 52–9, at 59Google Scholar (‘the Court concluded that, as EU law currently stands, Member States are able to consider that, for those purposes [of promoting the transition to green energy] the national support scheme should be reserved to the national production of green electricity’); Szydlo, n. 101 above, p. 507 (‘one comes to the conclusion that the ECJ relied entirely … on the political decisions taken by the E.U. legislature, and respected these decisions with great reference’); Davies, G., ‘Legislative Control of the European Court of Justice’ (2014) 51(6) Common Market Law Review, pp. 1579–607, at 1606Google Scholar (‘The Court is not deaf to politics or policy’).

114 See Renewable Energy Directive 2018, n. 8 above, Art. 5(1). The same provision, however, does call on the EU Commission to assess the need for a mandate that Member States open their support schemes to producers located in other Member States, albeit at the exceedingly modest quotas of 5% by 2025 and 10% by 2030: ibid., Art. 5(5).

115 See, e.g., Lazard, ‘Levelized Cost of Energy Analysis: Verson 13.0’, 7 Nov. 2019, available at: https://www.lazard.com/media/451086/lazards-levelized-cost-of-energy-version-130-vf.pdf.

116 For a detailed exploration of the interplay among technology, market, and other risks from an investor perspective, see Mormann, F., ‘Enhancing the Investor Appeal of Renewable Energy’ (2012) 42(3) Environmental Law, pp. 681–734Google Scholar.

117 See, e.g., Renewable Energy Policy Network for the 21st Century, Renewables 2018 Global Status Report (REN21, 2018), p. 59 (noting the global trend toward more competitive, market-based clean energy policies).

118 ‘Guidelines on State Aid for Environmental Protection and Energy’, n. 80 above.