State aid: Commission clears 420 million Czech support scheme for combined heat and power
The European Commission has approved a Czech support scheme for electricity generation from high-efficiency combined heat and power plants under EU state aid rules. The Commission concluded the measure would support EU energy and climate change goals without unduly distorting competition.
The Czech Republic notified the support scheme to the Commission in November 2016. The scheme supports electricity produced from high-efficiency combined heat and power plants commissioned from January 2016 until December 2020. The scheme has a total budget of 420 million, which is financed by a combination of a surcharge levied on electricity consumers and contributions from the Czech State budget.
Under the scheme, operators of combined heat and power plants will receive a fixed premium on top of the market price of electricity. The premium will be updated on annual basis in relation to the main cost components to ensure costs to the State are kept to a minimum.
High-efficiency co-generation of electricity and heat helps to increase energy efficiency and reduce CO2 emissions, and leads to higher levels of environmental protection.
The Commission recognised that the measure helps the Czech Republic to achieve its 2020 environmental and climate change objectives, in line with EU objectives, while at the same time avoiding undue distortions of competition as the scheme will benefit a range of different market players.
The Commission's 2014 Guidelines on state aid for environmental protection and energy allow Member States to support the production of electricity from combined heat and power installations under certain conditions.
The Commission has recently adopted a series of other Czech energy support schemes aimed at increasing environmental protection, in particular support to renewable generation (SA.40171), support to hydropower installations (SA.43182) and support to small biogas installations (SA.43451).
The non-confidential version of this decision will be made available under the case number SA.45768 in the State Aid Register on the competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.