Section Summary

The examination of the six State aid criteria has shown that grandfathering systems can be liable to constitute State aid within the meaning of Article 87(1) EC Treaty. Whether this is indeed the case depends on the particular allocation made to each installation under an NAP and the characteristics of the particular market the entity is operating on. It cannot be answered on any level of generality. PSR systems should not constitute State aid within the meaning of Article 87(1) EC Treaty. In principle, State aid rules should work towards the selection of the least distortive allocation system. The ECJ reached the conclusion that a particular PSR system would amount to State aid if it did not pass the selectivity test. Aid could, however, still be compatible with the common market if one of the derogations discussed below were applicable. The following section therefore considers whether State aid provisions guide Member States towards the selection of the least distortive allocation format even in those cases where it selects among mechanisms that fall within the ambit of the Article.

95 See Weishaar (2006).

96 It should be noticed that a grandfathering system with equal rules applying in all Member States would also give rise to less concern. It would, however, still lead to potential distortions regarding the choice of historical standards and create distortions between market share winners and losers. A PSR system could give rise to distortions of the general market equilibrium if the benchmarks were not set on appropriate levels.

97 See Article 10 (a) COM(2008)16 final of 23.01.2008.

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