The European Commission has approved, under EU state aid rules, a €3.1 billion Spanish scheme to support the production of electricity from new or substantially refurbished highly efficient combined heat and power (‘CHP’) plants. The measure will contribute to the implementation of Spain’s National Energy and Climate Plan, the Clean Industrial Deal and the EU’s energy efficiency targets.
Under the scheme, the aid will take the form of a remuneration premium that consists of two components: (i) compensation for investments and (ii) compensation for operations.
The Commission assessed the scheme under EU state aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the EU, which enables member states to support the development of certain economic activities subject to certain conditions, as well as under the 2022 Guidelines on state aid for climate, environmental protection and energy. Under the Guidelines, member states can support energy efficiency through production of electricity in high-efficiency cogeneration, subject to certain conditions.
The Commission found that the scheme facilitates the development of certain economic activities, has an ‘incentive effect’, is necessary and appropriate and that its positive effects outweigh any potential negative effects.
On this basis, the Commission approved the Spanish scheme.
The non-confidential version of the decision will be made available under the case number SA.114058 in the state aid register on the Commission’s competition website once any confidentiality issues have been resolved.
A press release is available online.
