Goliath Strikes Back: Explaining Renewable Energy Europeanization and Market Steering

This paper aims to explain the shift towards stronger EU market steering over renewables development in EU member states. This longitudinal case study sheds light on three under-researched areas in the European Integration literature: EU state aid politics, the relationship between the two supranational EU organizations; the European Commission and the Court of Justice of the EU (CJEU) and business influence on EU policy development. Support schemes for renewable energy was included in the EU state aid guidelines for environmental protection in 2001. Back then, member states got ample leeway to design support schemes as they pleased. The 2014 version of the guidelines do however present far more detailed design requirements. Not only does this contrasts to former versions of the guidelines, it is also in conflict with the EU renewables directive from 2009. This paper applies an organizational field approach drawing on neo-institutional sociology, and examine potential judicialization of EU policy development by the CJEU. The European organizational field of electricity comprises traditional electricity utilities, renewable energy corporations, national energy ministries and regulators in EU member states as well as various DGs within the European Commission. The paper shows that the CJEU contributed to delay, rather than promote European integration in this area. A CJEU court case in 2001 hindered DG Competition to apply state aid regulations to steer renewables support schemes for over a decade. The shift in 2014 was enabled by incremental changes in CJEU case law as well as in the European organizational field of electricity.