EU approves Slovakian state aid for heat and power production

Scheme would support combined heat and power installations, with the aim of increasing their efficiency, stimulating investments in new high-efficiency facilities

  
The cooling towers of the Slovak nuclear power plant are seen at Jaslovske Bohunice in western Slovakia, about 70 km (43 miles) north of the Slovak capital Bratislava, May 10, 2011.

The cooling towers of the Slovak nuclear power plant are seen at Jaslovske Bohunice in western Slovakia, about 70 km (43 miles) north of the Slovak capital Bratislava, May 10, 2011.

Reuters/Petr Josek

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;))

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