EC approves Czech aid support for hydropower and biogas projects

The European Commission has found that two Czech schemes to support electricity and heat production from hydropower and biogas are in line with EU state aid rules.

The schemes will increase energy produced from renewable sources, in line with EU objectives, without unduly distorting competition.

In September 2015, the Czech Republic notified plans to provide support to operators of hydropower installations with a capacity of up to 10 MW. The total budget of the measure will be CZK 218 million (around €8 million).

In October 2015, the Czech Republic notified plans to provide support to biogas installations with a capacity of up to 0.5 MW. These installations will produce heat by burning biogas that is at least 70% derived from animal by-products, barnyard manure or biodegradable waste. The total budget for this measure will be CZK 522 million (around €19 million).

The two measures will encourage the deployment of renewable energy installations and help the Czech Republic achieve its 2020 renewable energy targets.

The Commission assessed the measures under its 2014 Guidelines on state aid for environmental protection and energy (‘the Guidelines’), which allow Member States to support the production of energy from renewable sources under certain conditions.

In line with the Guidelines, hydropower installations with a capacity above 0.5 MW will receive their support in the form of a market premium paid on top of the market price, while for those below this threshold a feed-in tariff is payable. All biogas installations will receive a fixed premium for the heat they produce.

Both schemes minimise the potential distortion of competition brought about by the public financing by ensuring that these payments do not exceed the minimum level necessary to achieve the schemes’ objectives.