The European Commission has announced it will open an investigation process in order to determine whether the German project to constitute a strategic reserve of electrical capacity ("Kapazitätsreserve") is in conformity with the European Union rules on state aid. The scheme was set to enter into force by the end of 2018 for an initial period of two years.
Under the reserve capacity scheme, German network operators will be required to supply a capacity of 2 GW, which would be kept in reserve outside the market which would be used only when the local electricity market does not manage to deliver enough power to meet the country's demand. Germany recognizes that it does not expect structural capacity shortages in the future, but rather wishes to protect itself against unforeseen future issues, in order to be able to implement rightfully the energy transition process towards a low-carbon and sustainable energy supply.
The Commission is worried that the measure distorts competition and favors operators of power plants. At this stage, the Commission has doubts regarding the evaluation of Germany's need to implement the "Kapazitätsreserve".
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