The European Renewable Energies Federation (EREF) has called for a legal challenge to European Commission state aid guidelines published yesterday that critics fear could undermine smaller renewable energy generators.

The EREF, an umbrella body representing national associations, said the proposals should be challenged and annulled in the European Court of Justice.

The guidelines as they stand would see all renewable energy projects over 1MW go head to head with other generation technologies in a competitive bidding process.

Industry representatives said yesterday the 1MW threshold would force smaller providers into competing in a market they were unsuited to.

The European Photovoltaic Industry Association said the additional bureaucracy involved in bidding in this way would also put smaller players at a competitive disadvantage to larger players.

Adding its voice to the dissent over the commission’s guidance, the EREF said the guidelines were in “open contradiction” to the EU directive on the promotion of renewable energies.

The body’s president Rainer Hinrichs-Rahlwes said the proposals went against European member states’ “sovereign right” to define their energy mix and market design.

“In parallel, the commission erects new barriers against decentralised renewable energy programmes and is trying to terminate feed-in mechanisms, which are from experience a very efficient and cost-effective support for renewable energy,” Hinrichs-Rahlwes said.

"By favouring allegedly technology neutral bidding processes, a state dominated and regulating mechanism without substantial proof of effecitiveness and efficiency, the European Commission goes against the majority of renewable energy producers, against the interests of regional and decentralised energy system change. This might lead to low public acceptance and cost increase."

The EREF said member states and the renewable energy industry should seek to have the guidelines annulled in the European Court of Justice.