Challenging An EU State Aid Approval: Update On Recent UK And Pending Irish Cases

Author:Ms Kate McKenna

A successful court challenge of an EU Commission State aid approval decision addressed to the UK has caused the suspension of the UK electricity market's capacity mechanism. In this article, we examine what outcome this could mean for (i) the similar pending court challenge of the EU Commission State aid approval of Ireland's capacity mechanism, and (ii) clients adversely affected by any State aid measure approved by the EU Commission who are considering their legal options.

In November 2018, the General Court of the European Union found that the EU Commission had breached procedural fairness rules in approving the UK electricity market's capacity mechanism under State aid law rules because it had failed to consider fully a complaint it had received and in particular it had failed to initiate a 'formal investigation' on foot of it. This successful challenge was taken by the complainant, an energy provider who had expressed concerns to the EU Commission about discrimination against clean energy products. The Court's decision has resulted in the suspension of the operation of the UK electricity market's capacity mechanism.

In 2019, we will await updates on the progress of a similar pending court challenge against the EU Commission's approval of Ireland's capacity mechanism. Like the UK challenge, this claimant alleges that the EU Commission decision should...

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