Small-scale hydro plant and machinery review: report

State Aid

45. A recurring issue in the discussions of the group was the impact of the State Aid regulations which apply to forms of public assistance given on a discretionary basis and which have the potential to distort competition and affect trade.

46. The current relief granted under The Non-Domestic Rates (Renewable Energy Generation Relief) (Scotland) Regulations 2010, as amended, is subject to State Aid considerations. Many of the avenues explored by the group were also identified as likely to be subject to the same restrictions given the selective nature of any intervention.

47. On 23 August 2018, the UK Government published guidance^[17] confirming that, irrespective of the future relationship with the European Union, "The EU state aid rules will be transposed into UK domestic legislation under the European Union (Withdrawal) Act. This will apply to all sectors; and will mirror existing block exemptions as allowed under the current rules, including the Agricultural Block Exemption Regulation, and the Fisheries Block Exemption Regulation." Recent announcements by the UK Government have been less clear on the future of State Aid but they have not been considered as part of this Review process.