EU Commission approves €3.2 billion Czech State aid scheme to support high-efficiency combined heat and power generation

The European Commission has approved, under EU State aid rules, a €3.2 billion (CZK 75 billion) Czech scheme to support the production of electricity from new and modernized high-efficiency combined heat and power (‘CHP') plants. The measure will contribute to the implementation of Czechia's National Energy and Climate Plan, the European Green Deal and the EU's energy efficiency targets.

Czechia notified to the Commission its intention to support the production of electricity in high-efficiency CHP plants. The scheme will run until 31 December 2025 and the beneficiaries are operators of new or modernized CHP installations in Czechia that meet the definition of high-efficiency cogeneration as set out in the Energy Efficiency Directive.

All technologies and projects that enable the production of electricity from high-efficiency CHP installations are eligible, except for those powered by solid fossil fuels, diesel and oil. Projects involving natural gas will be required to either close the aided installations or enable switch to renewable and low-carbon gases by 2050, to avoid lock-in of natural gas.

Under the scheme, the aid will take the form of a feed-in premium (bonus) for each MWh of produced electricity for a duration of 15 years. The amount of bonus is set through tenders, except for small installations (up to 1 MWe) where the amount is set administratively by the Czech Energy Regulatory Office on an annual basis and limited to the funding gap.

The scheme is expected to bring around 9.3 million tonnes of CO2 savings per year.

Learn more about the scheme and the Commission’s assessment here: €3.2 billion Czech State aid (europa.eu)