Dear X,
On 12 December 1997 (1152/97/OV), 30 January 1998 (142/98/OV) and 27 January 1998 (149/98/OV) respectively, you made complaints to the European Ombudsman concerning the conditions under which the Commission awarded an EC Thermie grant to the Windfarm Project at Mynydd Gorddu, Ceredigion, Wales. Given that your complaints raised the same points, I decided to investigate the complaints together. By letter of 30 April 1998, you informed me also that Y who made no formal complaint, but had made before a petition to the European Parliament, wished to be joined to the complainants in the present case. A copy of this decision is therefore also sent to Y.
Other complaints on the same subject had already been lodged before by other local residents, but were considered inadmissible. This was the case for complaints n° 1100/97/OV, 1133/97/XD, 1134/97/XD and 1154/97/OV.
One of the allegations raised in your complaints concerned the fact that no environmental impact assessment had been carried out for the project. However, this allegation had already been dealt with in the framework of petitions to the European Parliament. On the basis of the common position of the Commission on those petitions, the Committee on Petitions of the European Parliament decided to conclude its examination of the petitions. For this reason, I informed you on 26 March 1998 that there were no grounds for the Ombudsman to conduct inquiries into this part of the complaints.
As regards the other allegations raised in your complaints, I forwarded the complaints to the President of the European Commission on 26 March 1998. The Commission sent its opinion on 3 July 1998 and I forwarded it to you with an invitation to make observations, if you so wished. No observations have been received from you.
I am writing now to let you know the results of the inquiries that have been made.
To avoid misunderstanding, it is important to recall that the EC Treaty empowers the European Ombudsman to inquire into possible instances of maladministration only in the activities of Community institutions and bodies. The Statute of the European Ombudsman specifically provides that no action by any other authority or person, such as the local UK authorities in the present case, may be the subject of a complaint to the Ombudsman.
The Ombudsman's inquiries into your complaint have therefore been directed towards examining whether there has been maladministration in the activities of the European Commission only.

THE COMPLAINT

According to the complainants, the relevant facts were as follows:
The complaints concern the circumstances under which the Commission awarded a grant under the Thermie Programme (1) to the Windfarm Project at Mynydd Gorddu, Ceredigion, Wales. According to the complainants, the applicants for this grant were National Power plc., Nordtank Energy Group, and 'A'. On 13 August 1991, the Commission accepted the proposal and notified the award of a grant of approximate £ 1.3 million to the applicants.
The main allegation of the complainants consists in the fact that the Mynydd Gorddu Windfarm Project was promoted as an "innovative, farmer led and locally orientated" scheme, the reason why it qualified for a grant under the Thermie Programme, but in fact was led by multinational commercial interests. The company Mynydd Gorddu Windfarm Ltd was set up in June 1991 by the already existing National Power plc. and National Wind Power Ltd, in order to run the project as a commercial enterprise. Two of the directors were each directors of some 50 other windfarm companies, which would not appear to correspond with the "innovative" description of the project. For those reasons, the project had, contrary to its presentation, no link with the local community, which would not receive any benefit from it.
Moreover, the local community would suffer from a variety of negative environmental effects of the project. This was due to the fact that the promoters of the project avoided the carrying out of an environmental impact assessment, by putting pressure on the planning committee in order to obtain the planning permission. The complainants further allege that the Ceredigion County Council made a serious mistake in granting the permission without requiring an environmental statement.
Under those circumstances, the complainants allege that the European Commission seemed to have accepted too easily the project of the applicants without any attempt, before awarding the grant, to make an on the spot investigation or to verify thoroughly the information contained in the proposal.
In 1996 several complaints concerning the absence of an environmental impact assessment were lodged with the European Commission, one of which was signed together by X, by Y, and by other residents. Similarly, since May 1996 several petitions were also made to the European Parliament by Z and X. Furthermore, all the complainants in the present case, as well as other residents, wrote letters to Directorate F (UCLAF) of the Secretariat General of the Commission and to DG XVII (Energy) in November and December 1997.
In its answer to the complaints, the Commission stated that the UK authorities had informed the Commission that, although the developer of the windfarm was not required to submit an environmental statement, the local planning authority had consulted widely about the proposal. More particularly, the views of consultees, the public and the consultant landscape architect were all taken into account in reaching the decision to grant development consent. The Commission also indicated that, since the introduction in April 1994 of new UK legislation, competent authorities may require wind farm proposals to be subject to an environmental impact assessment prior to the granting of development consent. The Commission however added that under the terms of Directive 85/337/EEC(2), wind farms might require an environmental impact assessment where Member States consider that their characteristics so require. The Commission therefore stated that Member States have a great margin of discretion to decide whether projects shall be subject to an environmental impact assessment. For those reasons, the Commission considered that there was no breach of Community environmental law in this case.
This answer equally constituted the Commission's common position on the petitions, on the basis of which the Committee on Petitions concluded its examination of the petitions in January 1998.
Not satisfied with this answer, the complainants wrote to the Ombudsman. Next to their complaint alleging the absence of an environmental impact assessment, which had been dealt with by the Committee on Petitions, they put forward two other complaints:
1) Firstly, they maintained their complaint that the Commission had awarded a Thermie grant to the Mynydd Gorddu Windfarm Project without enquiring it properly, for example by an on the spot investigation. This had as result that a grant had been awarded to a project which was promoted as an innovative, farmer led and locally orientated scheme, but which was in fact led by multinational commercial interests.
2) Secondly, the complainants alleged that the several letters they had sent to DG XVII and to Directorate F (Task force for co-ordination of fraud prevention - UCLAF) of the Secretariat General had not been answered by the Commission. The complainants enclosed numerous annexes to their complaints, amongst which the paper "Mynydd Gorddu: a Summary", which describes in detail the whole background of how the Windfarm Project got approved.

THE INQUIRY

The Commision's opinion
In its opinion, the Commission stated that the grant to the Mynydd Gorddu Windfarm Project was awarded in the framework of the Thermie Programme (Council Regulation (EEC) n° 2008/90). Article 2 of the Regulation provides that Community financial support may be granted to two kinds of projects, namely a) innovatory projects, and b) dissemination projects. It is the Commission, assisted by a Committee (the "Thermie Committee") composed by representatives of the Member States, which is responsible for the selection of the projects (Articles 9 and 10).
In the framework of the 1991 call for proposals, the Commission received the proposal for the wind energy project, submitted by National Power Plc. (Power utility-UK), Nordtank AF 1998 A/S (wind turbine manufacturer-Denmark, later renamed to Nordtank Energy Group A/S) and 'A' (land owner-UK). The proposal concerned the installation of a 6 MW wind farm at Mynydd Gorddu, Wales, consisting of twenty 300kW wind turbines. The total cost of the project was ECU 8.2 million.
The project was evaluated as a "dissemination project" since it concerned the transfer of an already proven technology under different geographical conditions. Although the proposal mentioned that locally based skills would be used if possible, the project was not described as farmer led and locally oriented scheme. The selection process, in which two independent experts and an expert of the Commission participated, examined whether, on the basis of the information submitted, the proposal met the eligibility criteria for support, including those directly related to the status of the promoting companies and their capacity (letters e and f of Article 6 of the Regulation). Following the favourable opinion of the Thermie Committee, the Commission took the decision to grant support to the project for a maximum amount of ECU 1.830.924.
After the Commission's decision, National Power Plc. joined with British Aerospace Plc. and Taylor Woodraw Construction Holding Ltd., to form the company National Wind Power Ltd., in order to continue National Power Plc. wind farm developments and related research work. The promoters of the project requested the Commission to consider replacement of National Power Plc. by National Wind Power Ltd. The Commission accepted the replacement. On 15 January 1992 contract n° WE/225/91 was then signed between the Community and National Wind Power Ltd., Nordtank Energy Group A/S, and 'A'.
The basic requirements to install and operate a wind energy plant, in all European countries, is to obtain a building permit, an operating permit as well as an agreement with the electricity utility for the connection of the installation to the electricity grid. In the UK a power purchase contract has also to be awarded. The contractors of the project WE/225/91 obtained the building permit immediately, but obtained the power purchase contract only in December 1994.
On 24 April 1996 the promoters submitted to the Commission a request for the change of the type of wind turbine (the newly developed 500 kW model of Nordtank). This was accepted by the Commission after consideration of the progress of the technology and the proposed wind turbine units. An amendment to the technical annex was signed on 30 July 1996. A new amendment to the contract was signed by the Commission on 23 December 1996 when the co-ordinator National Wind Power Ltd. requested to withdraw from the contract and was replaced by Nordtank Energy Group.
The case was examined by UCLAF, which did not consider it necessary to initiate an investigation. The main allegations made related more to matters of environment, nuisance of safety than to suspicions of improper use of Community funds. The information received from the authorising officer who looked into the matter confirmed that there was nothing to suggest that the Community's financial interests might have been harmed.
As regards the first allegation raised by the complainants, the Commission observed that it took the decision to support the project, which was a dissemination one, because all the Thermie requirements, eligibility criteria and conditions for selection were fully met. The project was not described in the submitted proposal as a farmer led and locally oriented scheme, nor would it have been necessary or relevant under the terms of the Regulation. Although small and medium sized undertakings benefit from preference in the selection process (Article 6.3), the Regulation does not contain specific criteria or limits with regard to the size of the promoters.
With regard to the alleged failure to reply by DG XVII, the Commission observed that DG XVII was informed in November 1997 by Z that, for the project n° WE/225/91, the Commission had been misled. In late November 1997 X submitted supporting evidence and was informed by the Commission that a written answer would be forwarded in due course. Following a finalisation of the in depth analysis which revealed no evidence that the Commission had been misled, DG XVII replied to X on 28 April 1998.
UCLAF also received several letters from the complainants and other citizens. After the final analysis of all the data, UCLAF informed on 19 May 1998 all the complainants that it had not initiated investigations.
The complainants' observations
No observations were received from the complainants. However, in their common letter of 30 April 1998, the complainants stated that, with regard to the absence of an environmental impact assessment for the project, which had been the subject of the petitions, they did not agree with the way their petitions had been dealt with by the Committee on petitions. They alleged that the facts stated in their petitions had manifestly been misunderstood and incorrectly stated.
The complainants insisted once again on the fact that an environmental impact assessment should have been carried out for this project, but that the Ceredigion County Council ignored the advice received from different bodies to do so. The complainants further provided details showing the commercial interests involved in the Mynydd Gorddu Windfarm Project.

THE DECISION

1 The allegation concerning the way in which the Committee on Petitions dealt with the petitions
1.1 The first allegation of the complainants was that no environmental impact assessment was carried out for the Mynydd Gorddu Windfarm Project. The complainants therefore criticised the way in which the Committee on Petitions of the European Parliament had dealt with and concluded its examination of the petitions. In those petitions, the complainants had alleged the absence of an environmental impact assessment.
1.2 In a letter of 18 January 1999 the complainant however informed the Ombudsman that since the acknowledgement receipt of June 1998, no further communication was received from the Commission services with regard to the outcome of the complaint. The complainant drew the attention on the fact that in its comments the Commission had stated that the complaint would be processed according to the usual procedure.
2 The alleged awarding of a Thermie grant to the Mynydd Gorddu Windfarm Project
2.1 The complainants alleged that the Commission awarded a Thermie grant to the Mynydd Gorddu Windfarm Project without making proper inquiries, for example by an on the spot investigation. This had as a result that a grant had been awarded to a project which was promoted as an innovative, farmer led and locally orientated scheme, but which was in fact led by multinational commercial interests. The Commission observed that it took the decision to support the project, which was a dissemination one, because all the Thermie requirements, eligibility criteria and conditions for selection were fully met. The project was not described in the submitted proposal as a farmer led and locally oriented scheme, nor would it have been necessary or relevant under the terms of Regulation n° 2008/90.
2.2 The Ombudsman notes that the conditions for receiving financial support from the Thermie programme were set out in Article 6 of the Regulation, as well as in point 4 of both the Call for proposals(3) and the Thermie information brochure and application form. As regards more particularly the status of the beneficiaries of the funding, Article 6(f) of the Regulation provides that, in the case of a project of a total cost of ECU 6 million or more, it must be submitted by at least two independent promoters established in different Member States. In the case of the Mynydd Gorddu Windfarm Project where the total cost was ECU 8.2 million, the proposal has indeed been submitted by promoters established in different Member States, namely in the UK (National Power Plc. and 'A') and Denmark (Nordtank Energy Group A/S) respectively. This condition of the Regulation has thus been respected for the Windfarm Project.
2.3 As regards the size of the promoters, the Ombudsman notes that the Regulation contains no specific criteria or limits which exclude large companies from funding under the Thermie Programme. It is true that Article 6.3(b) of the Regulation provides that, when selecting projects, the Commission shall, as an adjunct to the other criteria, take account of a preference to be given to projects proposed by small and medium-sized undertakings (SMEs) or by an association of such undertakings. However, this provision which leaves a large margin of discretion to the Commission, cannot be interpreted in a sense that it would exclude companies which are not SMEs from being selected. Moreover, point 5 of the Call for proposals refers to this preference to be given as a subsidiary selection criterion.
2.4 The Ombudsman finally notes that UCLAF examined the matter but did not feel it necessary to initiate an investigation. The information received from the authorising officer confirmed that there was nothing to suggest that the Community's financial interests might have been harmed. For the above reasons, no instance of maladministration was found with regard to the awarding of a Thermie grant to the Mynydd Gorddu Windfarm Project.
3 The alleged failure to reply by DG XVII and DG F (UCLAF) of the Secretariat General of the Commission
3.1 The complainants alleged that several letters sent to DG XVII as well as to DG F (UCLAF) of the Secretariat General in November and December 1997 had not received a reply from the Commission. In its opinion, the Commission observed that, after the final analysis of the points raised, both DG XVII and UCLAF replied to the complainants respectively on 28 April 1998 and 19 May 1998. The Commission annexed copies of those replies.
3.2 As regards the failure to reply to the letters sent to DG XVII on 18 and 21 November 1997 by the complainant in case 1152/97/OV, the Ombudsman notes that a reply was sent by the Commission on 28 April 1998. In this letter, the Commission first apologised for the late reply. The Commission then answered the different questions raised by the complainant. It explained the reasons why the Windfarm Project had received Community funding, namely that it had been considered as a dissemination project, and that the Regulation foresees no specific criteria regarding the size of the beneficiaries of the grant. The Commission also indicated the names and addresses of the promoters of the project to which the payments of the grant were made. With regard to the request for a copy of the application form submitted by the promoters, the Commission drew the complainant's attention to the provisions of the model contract which limit the Commission's right to pass confidential information on to third parties.
3.3 UCLAF sent replies to all the complainants on 19 May 1998. It apologised for the delay and informed the complainants that, according to the documentation available to the Commission, there were no reasons for UCLAF to intervene. It drew the complainants' attention to the possibility to have the case examined under the relevant UK legislation. Given thus that both DG XVII and UCLAF have replied and apologised for the delay, no maladministration was found by the Ombudsman with regard to this aspect of the case.
4 Conclusion
On the basis of the European Ombudsman's inquiries into this complaint, there appears to have been no maladministration by the European Commission. The Ombudsman has therefore decided to close the case.

FURTHER REMARKS

The Ombudsman notes that, alongside the allegations of maladministration by the European Commission, the present complaints contained various other allegations of maladministration in the way the local UK authorities (Ceredigion County Council) granted a planning permission to the Windfarm Project, without an environmental impact assessment having been carried out. For the reasons explained above, those allegations could not be dealt with in the framework of the present inquiry.
However, the Ombudsman would like to draw the attention of the complainants on the possibility to bring those allegations in a complaint to the Commissioner for Local Administration in Wales (Derwen House, Court Road, Bridgend, Mid Glamorgan, UK-Wales CF31 1BN, tel: 165 666 1325, fax: 165 665 8317).
The President of the European Commission will also be informed of this decision.
Yours sincerely,
Jacob SÖDERMAN

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(1) See Council Regulation (EEC) n° 2008/90 of 29 June 1990 concerning the promotion of energy technology in Europe (Thermie Programme), OJ 1990 L 185/1.

(2) Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment, OJ 1985 L 175/40.

(3) OJ 1990 C 215/11.