The objectives of deepening the EU single energy market and protecting the climate can conflict. Where they do, the European Commission should give priority to decarbonisation. Its 2014 guidelines on state aid and energy strike the right balance. Low-carbon energy is still more expensive than high-carbon coal. So subsidy is necessary, not only to support new technologies like carbon capture and storage or tidal power, but also to expand nuclear power. The Commission has done well on the UK’s application for nuclear state aid. But its clearance of new subsidies to coal power stations was wrong and should be reversed.
CER has now published my policy brief on ‘State aid and energy: climate action is more important than the single market’. http://www.cer.org.uk/publications/archive/policy-brief/2015/state-aid-energy-climate-action-more-important-single-market.