The European Commission has approved a €420 million (£364m) Czech support scheme for electricity generation from high-efficiency combined heat and power (CHP) 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 from CHP plants commissioned from January 2016 until December 2020, and is financed by a combination of a surcharge levied on electricity consumers and contributions from the Czech State budget.
Under the scheme, CHP plant operators 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 public costs are kept to a minimum.
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 CHP installations under certain conditions.
The Commission has recently adopted a series of other Czech energy support schemes aimed at increasing environmental protection, including support to small biogas installations.