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Brussels/Prague – The European Commission (EC) has approved a state aid program for the Czech Republic worth 3.2 billion euros (75 billion CZK) to support electricity production from new and modernized power plants that enable combined heat and power (CHP) generation. The Commission announced this today in a press release. The Ministry of Industry and Trade (MIT) stated that the money will mainly go towards modernizing domestic heating plants. The measure is intended to contribute to the implementation of the Czech National Energy and Climate Plan, the Green Deal for Europe, and the achievement of the EU’s energy efficiency target.
The Czech Republic had previously informed the European Commission of its intention to support electricity production in highly efficient combined power plants. The state aid program should be in effect until December 31, 2025. The estimated budget of the program is the aforementioned 3.2 billion euros. According to MIT, the approval of state aid will significantly help modernize Czech energy infrastructure. “At the same time, it will contribute to our efforts to ensure that households and businesses have sufficient supplies of electricity and heat at affordable prices, and to green the energy sector,” said Minister of Industry and Trade Jozef Síkela. The operational support for combined heat and power production, according to the ministry, will allow the replacement of emission-intensive, mainly coal-based, sources with highly efficient facilities that will produce electricity and continue to utilize the generated heat. It is expected that by 2030, the capacity in these facilities will be around three gigawatts.
“The beneficiaries of the aid can be operators of new or modernized combined heat and power plants in the Czech Republic who meet the definition of highly efficient combined heat and power production according to the energy efficiency directive,” stated the European Commission. All technologies and projects, except those based on solid fossil fuels, diesel, and oil, are eligible. This support regime is expected to result in annual savings of approximately 93 million tonnes of CO2.
According to information from ČTK, the Czech Republic has been intensively addressing the issue of transforming the heating sector and moving away from coal use to low-emission fuel-based heating since 2020. There is pressure to end coal use sooner. “This support is intended to help meet environmental goals through the efficient use of energy resources, help increase energy efficiency, and reduce the amount of CO2,” stated a diplomatic source.
According to the EC’s announcement, the state aid is proportionate and will be provided through verified and transparent selection procedures. “The positive effects of the aid outweigh any potential negative impacts on competition and trade between Member States,” the Commission added. On this basis, the Czech regime was also approved according to the EU state aid rules.