{"id":141667,"date":"2026-09-08T13:44:07","date_gmt":"2026-09-08T11:44:07","guid":{"rendered":"https:\/\/www.lcalex.it\/?p=141667"},"modified":"2026-09-08T13:42:31","modified_gmt":"2026-09-08T11:42:31","slug":"small-hydroelectric-diversions-the-cjeu-excludes-the-application-of-the-bolkestein-directive","status":"publish","type":"post","link":"https:\/\/www.lcalex.it\/en\/small-hydroelectric-diversions-the-cjeu-excludes-the-application-of-the-bolkestein-directive\/","title":{"rendered":"Small hydroelectric diversions: the CJEU excludes the application of the Bolkestein Directive"},"content":{"rendered":"

Following the \u2060judgment of 3 September 2026 in Case C-653\/24, the Court of Justice of the European Union (CJEU) clarified that Directive 2006\/123\/EC of the European Parliament and of the Council of 12 December 2006 (the \u201cBolkestein Directive<\/strong>\u201d) does not apply to plants whose sole or main activity is the generation of electricity, such as, in particular, small hydroelectric diversion plants.<\/p>\n

    \n
  1. Regulatory framework: the Bolkestein Directive and water diversion concessions<\/strong><\/li>\n<\/ol>\n

    The CJEU\u2019s judgment concerns the highly topical issue of the compatibility of national law with the Bolkestein Directive, which relates to services in the internal market.<\/p>\n

    In particular, the Bolkestein Directive provides (see Article 12) that, where the number of authorisations available for a given service is limited on account of the scarcity of natural resources or usable technical capacity, Member States must award them by way of a public tender procedure. Moreover, such authorisations must be granted for an appropriate, limited duration and, above all, are not subject to automatic renewal<\/u>.<\/p>\n

    At national level, the rules governing hydroelectric water diversion concessions are set out in Royal Decree No. 1775 of 11 December 1933, which, depending on the output of the plant supplied, distinguishes between \u201clarge\u201d diversions (average annual rated output exceeding 3,000 kW) and \u201csmall\u201d diversions (output equal to or below 3,000 kW).<\/p>\n

    Royal Decree No. 1775\/1933 provides that the concessions in question are temporary, with a duration not exceeding 30 years; furthermore, small diversion concessions may be renewed where, on expiry, the purposes of the diversion persist and no overriding reasons of public interest preclude renewal (see Articles 28 and 30 of Royal Decree No. 1775\/1933).<\/p>\n

      \n
    1. \n

      Emilia-Romagna Regional Law No. 17\/2023 and the request for a preliminary ruling<\/strong><\/h4>\n<\/li>\n<\/ol>\n

      Within the framework of the national and EU rules referred to above, Emilia-Romagna Regional Law No. 17 of 28 December 2023 falls to be considered. Article 3 of that Law provides that, where the holder of a small hydroelectric diversion concession has obtained incentives for the generation of electricity connected with the diversion, the duration of the concession, on request, is aligned with the incentive period during which the incentives are granted, without prejudice in any event to the maximum 30-year duration laid down by Royal Decree No. 1775\/1933. This is, therefore, an extension ex lege<\/em>, granted to the concession holder where specific conditions are met, and in any event not exceeding the 30 years laid down by national legislation.<\/p>\n

      The President of the Council of Ministers accordingly brought proceedings challenging the constitutionality of that provision, considering it to conflict both with the fundamental principles governing the national generation, transmission and distribution of energy \u2013 matters reserved to State legislative competence and governed by Royal Decree No. 1775\/1933 \u2013 and with EU law (including, most notably, the Bolkestein Directive).<\/p>\n

      With specific reference to that second ground of challenge, the State Legal Service (Avvocatura Generale dello Stato) argued that the regional provision effectively amounted to an automatic renewal, expressly prohibited by the Directive.<\/p>\n

      The Constitutional Court therefore referred to the CJEU, by way of a preliminary ruling, a series of questions aimed at assessing the compatibility of national law with the Bolkestein Directive.<\/p>\n

        \n
      1. \n

        The principle established by the Court of Justice<\/strong><\/h4>\n<\/li>\n<\/ol>\n

        In the judgment under discussion, the CJEU clarified that the Bolkestein Directive does not apply to small hydroelectric diversions.<\/p>\n

        The Court\u2019s reasoning is based on the finding that small hydroelectric diversion plants carry out, as their sole or main activity, the generation of electricity intended for sale and\/or self-consumption. On that basis, the CJEU relies on its settled case-law, according to which electricity constitutes \u201ca commodity, an asset, a product and [therefore] the activity of producing a product cannot, as such, be regarded as a service. It follows that the generation of electricity, being an activity involving the production of a good, does not constitute the provision of services<\/strong><\/em><\/u>\u201d (emphasis added).<\/p>\n

        The fact that the plant operator is required to carry out a range of activities relating to its management (or to safeguarding the public interest connected with water resources) is not, in the view of the Court of Justice, capable of transforming the production of the good in question into the provision of services. This is because such activities are merely ancillary and inseparable from the generation of electricity, which for small hydroelectric diversions represents \u201cthe specific and principal objective<\/em>\u201d.<\/p>\n

        Furthermore, the management of the plant and the generation of electricity constitute distinct activities, whose legal regimes do not necessarily coincide. Moreover, the Court of Justice states, any entrustment of the plant\u2019s management to a third party would not deprive the holder of its status as producer, nor would it amount to a genuine service concession or the award of a public service contract.<\/p>\n

        Nor is the State-owned nature of the asset under concession capable of calling the foregoing conclusions into question. Indeed, the application of the Bolkestein Directive depends, in particular, on whether the activity carried out through the use of the State-owned asset can be classified as a \u201cservice\u201d.<\/p>\n

        Indeed, whereas a concession for the management of a State-owned area for tourism and recreational purposes (CJEU, judgment of 14 July 2016, Joined Cases C-458\/14 and C-67\/15) can be classified as a \u201cservice\u201d within the meaning of the aforementioned Article 4, the same cannot be said of small diversions, which involve carrying out an activity for the production of a good and, only for purposes ancillary to electricity generation, the supply of services.<\/p>\n

          \n
        1. \n

          Conclusions<\/strong><\/h4>\n<\/li>\n<\/ol>\n

          The question of the compatibility of national law with the Bolkestein Directive remains highly topical. Following its rulings on the award of coastal State-owned concessions, the Court of Justice has once again ruled on the arrangements for exploiting national natural resources. The judgment marks a clear change of direction from previous opinions of the Italian Competition Authority (Autorit\u00e0 Garante della Concorrenza e del Mercato) (see notice AS1722 of 3 March 2021) and rulings of the Higher Tribunal for Public Waters (Tribunale Superiore delle Acque Pubbliche) (see judgment No. 58 of 23 May 2024), which had found in favour of the applicability of the Bolkestein Directive to small hydroelectric diversions.<\/p>\n

          The exclusion of small hydroelectric diversions from the scope of the Bolkestein Directive has a significant impact on the regulatory framework applicable to them, helping to provide greater operational certainty. This does not, however, entail recognition of automatic renewal, and the procedures and limits laid down under national law, as outlined above, remain applicable.<\/p>\n","protected":false},"excerpt":{"rendered":"

          Following the \u2060judgment of 3 September 2026 in Case C-653\/24, the Court of Justice of the European Union (CJEU) clarified that Directive 2006\/123\/EC of the European Parliament and of the Council of 12 December 2006 (the \u201cBolkestein Directive\u201d) does not apply to plants whose sole or main activity is the generation of electricity, such as, […]<\/p>\n","protected":false},"author":39,"featured_media":141665,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[2882],"tags":[],"industry":[],"desk":[],"tipologia":[],"persone":[3510],"practice":[2901],"your_legal_counsel":[],"class_list":["post-141667","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-en","persone-orsola-torrani-2","practice-administrative-law"],"acf":[],"yoast_head":"\nSmall hydroelectric diversions: the CJEU excludes 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