The European Commission has approved a Czech scheme worth € 3.2 billion (CZK 75 billion) to support the production of electricity from new and upgraded high-efficiency cogeneration plants, in line with EU State aid rules. The measure will contribute to the implementation of the Czech National Energy and Climate Plan and supports the objectives of the European Green Deal and the EU’s energy efficiency goals.
Modernisation of the Czech energy sector
The Ministry of Industry and Trade (MIT) of the Czech Republic stated that the funds will mainly be used for the modernisation of domestic combined heat and power plants. This measure aims to ensure the country’s energy security by promoting energy efficiency and the use of renewable energy. According to Jozef Síkela, Minister of Industry and Trade, the approval of this state aid will significantly help the modernisation of the Czech energy sector, while at the same time ensuring sufficient supplies of electricity and heat at affordable prices for households and businesses, thus contributing to the greening of the energy sector. These plants are expected to have a capacity of around three giga watts by 2030.
The Czech Republic has informed the European Commission of its intention to support the production of electricity in high-efficiency combined heat and power plants, with the state aid programme scheduled to run until 31 December 2025. The measure is designed to be proportionate and transparent, with aid granted through verified tenders. In addition, the European Commission statement also confirms that the Czech state aid is well designed to support the energy transition, while ensuring transparency and strengthening cohesion and cooperation between the member states, proportionality and compliance with European standards. According to a diplomatic source quoted by the Czech news agency CTK, the Czech Republic is intensively addressing the issue of the transformation of the heating sector from coal to low-emission fuels as early as 2020 as there is pressure to end the use of coal.
Possible effect of state support
According to René Neděla, director of the MIT Energy Section, a further effect of state support could be to strengthen the willingness of banks to finance the construction of such plants. These high-efficiency cogeneration plants will mainly be used during the winter months, when energy demand is highest. The European Commission has indicated that the beneficiaries of the aid may be operators of new or upgraded cogeneration plants in the Czech Republic that meet the definition of high-efficiency cogeneration under the Energy Efficiency Directive. All technologies and projects are eligible, with the exception of those using solid fossil fuels, diesel and oil. The scheme is expected to result in annual savings of around 93 million tonnes of CO2.
According to Martin Václavek, President of COGEN Czech, the approval of the aid represents an important impulse for the modernisation of the heating sector. However, he emphasises the urgency of starting the notification process for the support of new energy sources for the period 2026-2030. As mentioned above, the association believes that operational support for CHP units is crucial for banks and other investors, given the uncertainty of commodity prices and the legislative environment.
In conclusion, the Czech Republic is taking significant steps towards the energy transition by supporting the modernization of high-efficiency cogeneration plants. This approach will not only improve energy efficiency and reduce CO2 emissions but also ensure stable and affordable energy supplies. Additionally, it will strengthen cohesion and collaboration among EU member states.
Sources: https://ec.europa.eu/commission/presscorner/detail/cs/IP_24_2849 https://www.ceskenoviny.cz/zpravy/ek-cesku-schvalila-podporu-za-32-miliardy-eur-na-vyrobu-elektriny/2524113
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