State aid: Commission clears Czech support scheme for renewable energy

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.