European Commission clears €420M Czech CHP scheme

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.

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.