Energy Principles

Question 1

A

Answer 1

Aim of subsidies in relation to energy and environment

Subsidies in relation to energy and environment shall be aimed at and incentivise the

beneficiary in—
(a) delivering a secure, affordable and sustainable energy system and a wellfunctioning and competitive energy market, or

(b) increasing the level of environmental protection compared to the level that
would be achieved in the absence of the subsidy.

Question 2

B

Answer 2

Subsidies for electricity generation adequacy, renewable energy or cogeneration

Subsidies for electricity generation adequacy, renewable energy or cogeneration—

(a) shall not undermine the ability of the United Kingdom to meet its obligations
under Article 304 of the Trade and Cooperation Agreement (provisions
relating to wholesale electricity and gas markets),

(b) shall not unnecessarily affect the efficient use of electricity interconnectors
provided for under Article 311 of the Trade and Cooperation Agreement
(efficient use of electricity interconnectors), and

(c) shall be determined by means of a transparent, non-discriminatory and
effective competitive process.

(2) But a non-competitive process may be used to determine a subsidy for renewable energy or cogeneration if appropriate measures are put in place to prevent
overcompensation and—

(a) the potential market supply is insufficient to ensure a competitive process,

(b) the eligible capacity is unlikely to have a material effect on any of the
following—

(i) competition or investment within the United Kingdom,

(ii) trade between the United Kingdom and any country or territory
outside the United Kingdom, and

(iii) investment as between the United Kingdom and any country or
territory outside the United Kingdom, or

(c) the subsidy is given for a demonstration project.

Question 3

D

Answer 3

Subsidies for electricity generation adequacy may be limited to installations not
exceeding specified CO2 emission limits.

Question 4

E

Answer 4

Subsidies for renewable energy or cogeneration shall not affect beneficiaries’
obligations or opportunities to participate in electricity markets.

Question 5

F

Answer 5

(1) Subsidies in the form of partial exemptions from energy-related taxes and levies in
favour of energy-intensive users shall not exceed the total amount of the tax or levy
concerned.

(2) “Levy” does not include network charges.

Question 6

G

Answer 6

Subsidies in the form of compensation for electricity-intensive users given in the
event of an increase in electricity costs resulting from climate policy instruments
shall be restricted to sectors at significant risk of carbon leakage due to the cost
increase.

Question 7

H

Answer 7

Subsidies for the decarbonisation of emissions linked to industrial activities in the
United Kingdom shall—

(a) achieve an overall reduction in greenhouse gas emissions, and

(b) reduce the emissions directly resulting from the industrial activitie

Question 8

I

Answer 8

Subsidies for improvements of the energy efficiency of industrial activities

Subsidies for improvements of the energy efficiency of industrial activities in the United Kingdom shall improve energy efficiency by reducing energy consumption,
either directly or per unit of production