Case T-793/14 | Tempus Energy Ltd and Tempus Energy Technology Ltd v European Commission

Author (Corporate)
Publication Date 2015-2018
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Case brought forward to the General Court of the Court of Justice of the European Union (CJEU) on the European Commission's decision not to raise objections to the aid scheme establishing a capacity market in the United Kingdom (UK).

Further information:

The Capacity Market scheme aims to ensure security of electricity supplies in view of the projected increases in electricity demand and the upcoming closure of a significant share of generation capacity. In return for a steady payment for the duration of the capacity agreement (ranging between 1 and 15 years), successful bidders in the auctions are required to provide capacity at times of stress events on the electricity system or face financial penalties.

The European Commission decided in July 2014 not to raise objections to the aid scheme establishing a capacity market in the UK, on the ground that the scheme was compatible with the EU rules on State aid. However, Tempus - a group of companies with an interest in the capacity market - took the view that the Commission could not conclude, follwing nothing more than  a preliminary examination and in the light of the information available at the time of the decision, that the planned aid scheme did not raise doubts as to its compatibility with the internal market.

On 15 November 2018, the General Court decided to annul the Commission's decision on the compatibility of the capacity market, on procedural grounds. The Court considered that the Commission should have concluded that there were doubts which should have led it to initiate the formal investigation procedure in order to allow interested parties to submit their observations and to put at its disposal the relevant information in order better to assess the compatibility of the planned capacity market.

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Commentary and Analysis
University of Reading: Redpeak & Deepred Blog, 18/11/2018: The Capacity Market is dead. Long live flexibility!
White & Case: Alert, 21/11/2018: UK Capacity Market suspended after European General Court ruling – A Detailed Analysis & What Next?
University of Bath: IPR Blog, 14/12/2018: Opportunity or Disaster – UK Capacity Market Deemed Unlawful by the European Court of Justice

The Guardian, 15/11/2018: UK's backup power subsidies are illegal, European court rules
Utility Week, 15/11/2018: Capacity market suspended after EU court overturns state aid clearance
Reuters, 15/11/2018: UK must halt back-up power scheme after EU court ruling

CJEU: Press Release, 15/11/2018: Judgment of the General Court in case T-793/14 [Tempus Energy and Tempus Energy Technology v Commission]

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