BRUSSELS - The European Commission said on Thursday it had approved the Slovakian government's 1-billion-euro ($1.2 billion) scheme to support heat and power installations connected to district heating networks.
The Commission, which monitors to ensure that governments do not unfairly help companies for competitive advantage, said in a statement the Slovak scheme was "necessary" and "proportionate", and adhered to a requirement that aid contributes to a higher level of environmental protection.
The scheme would support combined heat and power installations, with the aim of increasing their efficiency, stimulating investments in new high-efficiency facilities, or incentivising a switch from coal-fuelled facilities to those run on natural gas or renewable energy.
Slovakia had proved that the scheme is necessary since investments in highly-efficient cogeneration are "not viable" under current market conditions, the Commission said.
The aid comprises a top-up payment to the market power price, for electricity produced by installations with a capacity of more than 250KW, or a fixed price for power produced by those smaller than 250KW.
Coal-fuelled installations cannot receive support.
The European Union’s antitrust chief, Margrethe Vestager, said the measure "will provide an important contribution to EU energy and climate objectives, without unduly distorting competition." ($1 = 0.8306 euros)
(Reporting by Kate Abnett; editing by Philip Blenkinsop) ((Kate.Abnett@thomsonreuters.com;))