Renewable energy – Wind turbines – Territorial restrictions - Location of wind turbines – Services Directive – Prohibited restrictions – Concept of services – Production of energy
In the context of a Polish law regarding wind turbines, which imposes minimum distances between wind turbines and residential buildings, the European Court of Justice was requested to provide a preliminary ruling regarding the question whether this law was compliant with Article 15, 2, a) of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36 – the Services Directive).
As a reminder, article 15.2.a) of the Services Directive provides the following: “Member States shall examine whether their legal system makes access to a service activity or the exercise of it subject to compliance with any of the following non-discriminatory requirements:
(a) quantitative or territorial restrictions, in particular in the form of limits fixed according to population or of a minimum geographical distance between providers;"
If such restrictions exist, Member States must notify them to the European Commission who can then adopt a decision requesting the Member State in question to refrain from adopting them or to abolish them.
In the case at hand ECO-Wind challenged an administrative decision in which the permission for the development of a wind farm project was refused, due to the failure to respect the minimal distances between the projected wind turbines and the existing residential buildings.
Following legal proceedings, the case was referred to the European Court of Justice for preliminary ruling. In its decision of 28 May 2020 the European Court of Justice ruled that the regulation imposing this minimum distance cannot be categorised as a rule which make access to, or exercise of, a service activity subject to a territorial limit in the sense of the aforementioned article 15, 2, a) of the Services Directive.
The European Court of Justice came to that conclusion by considering that article 15 of the Services Directive applies to services described as “any self-employed economic activity, normally provided for remuneration, as referred to in Article 57 TFEU”.
The European Court of Justice further established that the provision imposing a territorial limit with regard to the installation of wind turbines, concerns “the activity of producing a product, namely electricity”.
It then referred to its settled case-law (judgments of 7 May 1985, Commission v France, 18/84, EU:C:1985:175, par. 12, and of 11 July 1985, Cinethèque and Others, 60/84 and 61/84, EU:C:1985:329, par. 10) according to which the activity of producing a product cannot be regarded, in itself, as a service.
Hence, the European Court of Justice concluded that the concerned law provision does not fall within the scope of the Services Directive.
ECO-WIND argued that the activity of producing electricity was accompanied by the provision of network regulation services and energy price security services. For the European Court of Justice the existence of such a supply of services could not change its conclusion, since it considered those services as ancillary to the principal activity of generating electricity.
Note that the European Court of Justice also ruled that Article 3(1) and the first subparagraph of Article 13(1) of Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (OJ 2009 L 140, p. 16), as amended by Directive (EU) 2015/1513 of the European Parliament and of the Council of 9 September 2015 (OJ 2015 L 239, p. 1) do not preclude legislation which makes the installation of a wind turbine subject to compliance with the condition of a minimum distance between that wind turbine and buildings with a residential function, provided that that legislation is necessary and proportionate in the light of the mandatory national overall target of the Member State concerned. The later was for the referring court to determine.
Contact us if you have questions on the topic or need assistance in the field of energy law.