European Commission: Commission approves modification of Romanian aid scheme to support high efficient cogeneration

The European Commission has approved, under EU State aid rules, the modification of a Romanian scheme supporting high efficient cogeneration. The original scheme was approved by the Commission in 2009 and subsequently amended in 2016.

Under the existing scheme, new high efficient combined heat and power (CHP) plants could receive aid for up to 11 years in the form of a bonus on top of the electricity market price. The Romanian authorities provided evidence that the duration of support was insufficient to ensure the long-term viability of these plants. In order to allow CHP production, district heating and hot water supply to citizens to continue, Romania notified to the Commission the following modifications to the existing scheme: (i) an increase in the support period from up to 11 years to up to 21 years (until 2033 at the latest); and (ii) an increase in the budget of scheme, from approximately €2.2 billion (approximately (RON 10.735 billion) to approximately €4.4 billion (RON 21.883 billion) to cover the additional period during which a plant can receive support.

The Commission assessed the measure under EU State aid rules, in particular the 2014 Guidelines on State aid for environmental protection and energy. The Commission found that the modification of the scheme is necessary and appropriate for stimulating the production of high efficient cogeneration, reduce emissions and realise energy savings. Furthermore, it found that the aid is proportionate, as the scheme includes appropriate safeguards to avoid overcompensation and a price adjustment mechanism that will be applied in accordance with the methodology set by the Romanian National Energy Regulator ANRE. On this basis, the Commission concluded that the measure is in line with EU State aid rules, as it will support the production of electricity from high-efficiency cogeneration and reduce greenhouse gas emissions, in line with the European Green Deal, without unduly distorting competition in the Single Market. More information will be available on the Commission’s competition website, in the State Aid Register under the case number SA.57969.