Incentives for green energy, CHP systems get OK in Brussels

The European Commission said it approved changes to a Slovenian support scheme for renewable energy and high-efficiency cogeneration under the European Union’s state aid rules. The amended scheme will increase renewable energy production in line with the bloc’s energy objectives and without unduly distorting competition, according to a press release published last week.

In May 2015, Slovenia announced plans to amend rules for incentives for green energy and advanced combined heat and power (CHP) systems to make it more cost-effective and improve the integration of renewable electricity into the market, the statement adds. One of the most significant amendments is the introduction of a tender process to select who will receive support and determine the appropriate level. In particular, Slovenia has introduced a two-round tender process designed to increase competition between potential beneficiaries and ensure support goes to the best value projects, EU’s executive arm noted. This is in line with the European Commission’s Guidelines on state aid for environmental protection and energy 2014-2020, which require that from January 2017 such aid is granted on the basis of a clear, transparent, non-discriminatory competitive bidding process open to all producers of renewable electricity, the press release said.

Furthermore, in regulators’ opinion, the amended scheme introduces a market premium for operators above 500 kW. In line with the guidelines, operators of installations above this threshold will have to offer their electricity on the market and will receive their support in the form of a premium paid on top of the market price. Operators below the threshold can continue to receive a feed-in tariff.

The support scheme is financed by a surcharge levied on electricity consumers. Slovenia has also said it plans to lower the financial burden on undertakings in certain energy-intensive sectors. The European Commission said it has found that these reductions are in line with the guidelines, which allow member states to provide reductions to undertakings in certain sectors that are particularly energy-intensive and exposed to international competition, in order to ensure their competitiveness.

Under the Renewable Energy Directive, Slovenia has a renewables target of 25% of gross electricity consumed by 2020. The operation of the existing scheme achieved approximately 21% of renewable energy by the end of 2014 and it is expected that the amended version will allow the 25% target to be reached, the statement said. The non-confidential version of the decisions will be published in the State aid register on the competition website under the case number SA.41998 once any confidentiality issues have been resolved. The State Aid Weekly e-News lists new publications of state aid decisions on the internet and in the EU Official Journal.