Tuesday 16 April 2019

EU approves €5bn Polish energy scheme, probes surcharge reductions

The European Commission has approved a €5 billion (£4.3bn) Polish support scheme for co-generated electricity with surcharge reductions for large energy users.

The scheme, with an annual budget of €500 million (£431m), will support combined heat and power (CHP) installations connected to the district heating networks in Poland and run until December 2028.

The support will be granted to new and refurbished as well as existing CHP plants and will be open to generators in other member states.

The scheme is financed through a surcharge levied on final electricity consumers, based on their power usage but the government wants to lower the financial burden on certain energy intensive users, which would benefit from a reduced CHP surcharge.

The Commission has launched an in-depth investigation into the capacity mechanism surcharges for energy intensive users, to assess if the proposed reductions are in line with EU state aid rules.

It will consider whether reductions from the surcharge are necessary to secure the financing of the capacity mechanism.

Commissioner Margrethe Vestager, in charge of competition policy said: “The Polish support scheme approved today will provide an important contribution to EU environmental and climate goals without unduly distorting competition.

“We have also approved Polish plans to preserve the competitiveness of energy-intensive companies in Poland by reducing their contributions to the financing of the electricity co-generation support. But we still need to assess if the reductions for certain users on the surcharge that finances the Polish capacity mechanism are in line with our state aid rules.”