Published in La Tribune on February 16, 2026
Since electricity is ubiquitous in developed economies, it is difficult to ask electricity producers to guarantee its supply without encroaching on related policies, including industrial, environmental, or social, not to mention competition policy. State aid granted in Spain for the installation of combustion turbines provides a good illustration of this.
State aid
If it is true that "Politics is the art of making the necessary possible" (Cardinal Richelieu), the Spanish government has shown that it has mastered this art by obtaining the green light from the European Commission to pay €3.1 billion in subsidies to an investment program in gas (and other fuel) power plants for electricity generation (see press release of January 28, 2026).
It is worth remembering that, within the European Union, state aid is closely monitored because of the risks of national preference against fair competition in the internal market. The principle is simple: state aid (financial or otherwise) is incompatible with the internal market insofar as it affects trade between European Union countries, which is obviously the case here since the electricity systems are interconnected. However, there are exemptions, either obtained upon notification to the European Commission or because they are included in the list of the General Block Exemption Regulation. This is particularly the case for "aid for environmental protection." However, as this term is very general, the Commission felt compelled to publish "guidelines" in 2022 explaining how it assesses the circumstances in which national aid for environmental and climate protection may be compatible with European Union rules on state aid.
Energy efficiency
We know that the European authorities' goal is to reduce net greenhouse gas emissions to zero by 2050, with an interim target of reducing net emissions by at least 55% by 2030 compared to 1990 levels (Regulation (EU) 2021/1119). One might think that this is the motivation highlighted in the press release of January 28, 2026. This is not the case. The stated objective is energy efficiency. Admittedly, for the same volume produced, high-efficiency combined heat and power plants are cleaner than previous generations. They emit less CO2, but since combustion is involved, they still emit some, thereby contributing to global warming and setting the EU further back from its goals.
Power plant fuel
The European Commission's authorization stipulates that subsidized power plants will generate electricity using fossil natural gas, but also "green" gas such as bioliquids, biogas, and solid biomass. In addition, projects using natural gas must be able to use at least 10% renewable hydrogen in volume, " to avoid the lock-in of natural gas”. This use of biofuels and hydrogen, which is consistent with decarbonization targets, is commendable but not very binding. Care must be taken to ensure that operators do not favor natural gas, which is less expensive and for which Spain has good sources of supply, via gas pipelines from North Africa and its LNG ports.
Network security
Because of the major power outage that hit the Iberian Peninsula on April 28, 2025, one would expect to hear arguments in favor of reliability of electricity supply. Gas turbines have the advantage of being controllable and flexible enough to respond quickly to fluctuations in demand and in wind and solar power generation. Even though the enquiry report by ENTSOE on the April 28 blackout has not been published yet, given the scale of the blackout, the lack of resilience of the Iberian electricity system cannot have a single cause. It would have been less surprising to find arguments in terms of network security rather than energy efficiency.
Competitive effects
Regarding possible negative consequences for competition in the electricity sector, the European Commission is comforted by the aid allocation scheme planned by the Spanish government: compensation for investments set by auction, and compensation for operations, calculated and updated each quarter based on market variables (the updating formula is not explained). It considers that "the positive effects of the aid outweigh any potential negative effects on competition and trade between Member States”, without providing further details.
The press release states that "the guidelines create a flexible, fit-for-purpose enabling framework to help Member States provide the necessary support to reach the Green Deal objectives" When we consider public aid for Spanish combustion turbines, we see that flexibility and adaptation can be invoked in a singular way. Our interpretation would be that, under the guise of a policy promoting climate and environmental protection, the European Commission will use its discretionary power to authorize or refuse state aid promised for another purpose, namely securing electricity supply, without worrying too much about the possible negative effects on competition.
