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Legal challenge over power subsidy

04/12/2014

A scheme to pay power companies to ensure there is enough back-up to meet peaks in electricity demand is facing a legal challenge over concerns it is an unlawful subsidy. The “capacity market” will see energy generators bidding for payments to bring power plants online to meet peak demand or to companies to reduce power use. But an independent company, Tempus Energy, is submitting a challenge to the European General Court on the grounds the scheme violates State Aid rules by prioritising fossil fuel energy generation over cheaper and cleaner efforts to reduce demand.