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Fair competition must be ensured for heat services in the EU, so geothermal sector

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Alexander Richter 22 Sep 2020

EGEC is asking the European Union for a full review of the impact of the competitive distortion of the Internal Market for Gas legal base, in order to guarantee a fair competition for heat services in a green energy future of the EU.

In a letter to Executive Vice President Margrethe Vestager, the European Geothermal Energy Council (EGEC) asks for a full review of the impact of the competitive distortion of the Internal Market for Gas legal base.

The geothermal industry is concerned by the significant competitive distortion caused by the Internal Market for Gas, which gives it a dominant market position at the expense of renewable heating and cooling services.

Heat accounts for half of the EU’s total energy consumption. About 80% of this heat consumption comes from fossil fuels which is locked in by EU and government subsidies.

In a letter to the European Commission’s Executive Vice-President Margrethe Vestager, EGEC Secretary General Philippe Dumas said “Heat, like electricity, is a service with multiple providers. Fossil gas does not represent the entire EU’s heating sector. It is a service provider which must be exposed to full and fair competition with renewable heating technologies.”

Article 176 of the Treaty calls for an internal energy market that ensures security of supply, interconnectivity as well as the promotion of energy efficiency and renewable energies. However, the Internal Market for Gas regulatory base puts renewable heating technologies at a significant competitive disadvantage through:

  • The exclusion of geothermal energy from support investment in energy infrastructure
  • Long-term gas supply and consumption contracts
  • The distortions caused by the 2007 Energy Sector Competition Inquiry (SEC(2006) 1724)
  • The absence of a uniform carbon price on gas and other fossil fuel heating and cooling services for buildings

Philippe Dumas concluded “It is vital to end the dominant position of fossil gas if the Commission is serious about its Green Deal. We recommend a full review of the impact of the competitive distortion of the Internal Market for Gas legal base as well as its associated direct and indirect fossil fuel subsidies on the provision of renewable heating and cooling services.

Source: EGEC press release