The EU has approved a €420 million (£364.3m) Czech scheme to support combined heat and power (CHP) plants.
Under the plan, operators of high efficiency CHP plants commissioned between January 2016 and December 2020 will receive a fixed premium on top of the market price of electricity.
The initiative aims to support the co-generation of electricity and heat, which offers increased energy efficiency, reduced Carbon Dioxide emissions and higher levels of environmental protection.
The EU concluded the state aid would support EU energy and climate change goals without unduly distorting competition.
The premium will be updated on an annual basis depending on a number of market factors to ensure costs to are kept to a minimum.
It will be financed by a combination of a surcharge levied on electricity consumers and contributions from the Czech Republic’s budget.
The EU also allowed state aid for two green energy schemes in the country last year.