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European Commission - Press release

State aid: Commission clears Czech support scheme for renewable energy

Brussels, 28 November 2016

The European Commission has approved a support scheme for installations producing renewable energy built in the Czech Republic between 2006 and 2012 under EU state aid rules. The Commission concluded the measure would further EU energy and climate goals without unduly distorting competition.

In December 2014, the Czech Republic notified to the Commission a support scheme in favour of all types of installations generating energy from renewable sources built in the period 1 January 2006 – 31 December 2012. The scheme will have a total budget of CZK 836.5 billion over its lifetime (around €30.95 billion).

The applicable 2001 and 2008 Commission environmental guidelines allow Member States to support energy generation from renewable sources under certain conditions. The Commission found that, in line with the Guidelines, the support takes the form of a preferential prices (feed-in tariffs) and premiums on top of the market price (green bonuses). The measure also incorporates a review mechanism which ensures that installations are not overcompensated and aid is limited to the minimum necessary to achieve the scheme's objectives.

The support scheme is financed by a combination of a surcharge levied on electricity consumers and contributions from the State budget. In order to remedy any past discrimination against foreign green electricity stemming from the financing of the support scheme, the Czech Republic has committed to investing around €20 million in interconnection projects. The amount reflects the total surcharge levied on the estimated imports of green electricity in the Czech Republic in the period 2006 – 2015. These concerns were removed as of 2016, when the Czech Republic modified the financing system to ensure there was no discrimination of imported green electricity going forward.

The Commission concluded that, in line with EU objectives, the measure helps the Czech Republic to achieve its 2020 renewable energy targets. The review mechanism and interconnector investments ensure that potential distortions of competition brought about by the public financing are limited.

 

Background

Under the Renewable Energy Directive, the Czech Republic has a renewables target of 14% of gross electricity consumed in the Czech Republic by 2020. The scheme introduced by the Czech Republic in 2006 was aimed at reaching this target.

Member States are obliged to notify state aid measures to the Commission for approval ahead of implementation. Only after a Commission's approval decision investors can rely on the compliance of a measure with EU state aid rules. The Czech Republic decided to notify the measure in 2014 in order to give investors legal certainty. The Commission has now assessed and approved the measure under its 2001 and 2008 Commission environmental guidelines, which were applicable at the time when aid was being granted under the measure.

The non-confidential version of the decision will be made available under the case number SA.40171 in the State Aid Register on the DG 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.

IP/16/4083

Press contacts:

General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email


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