The European Commission’s state aid decision on the Belgian capacity mechanism

FSR

This podcast focuses on the Commission’s state aid decision on the Belgian capacity mechanism from August 2021 and highlights the key legal aspects of the case. This case is a recent one in a long line of Commission’s state aid decisions on capacity mechanisms but it contains several novel features. It involves an assessment of whether the capacity mechanism complies with the 2019 Electricity Regulation and illustrates how the European Commission conducts the balancing of the positive and negative assessments of a proposed measure in anticipation of the new state aid guidelines for climate, energy and environment (CEEAG) which came into force in January 2022. It is also the only case so far where the Commission deals with the complexities of avoiding so-called carbon lock-in effects.