The European Commission has approved Danish state aid worth DKK57 million (£6.74m) to convert a cogeneration plant from coal to biomass.
DONG Energy Thermal Power’s new unit in Kalundborg will supply renewable electricity to the grid, district heating to Kalundborg Forsyning and steam to the industry.
The project is expected to contribute to the long term goal of a fossil fuel-free Denmark by 2050.
The Commission’s investigation found the state funding will help further EU environmental and energy targets and the support is limited to what is needed.
It stated: “In particular, the aid amounts to 33% of the eligible costs, which is below the 45% allowed under the 2014 Guidelines on State Aid for Environmental Protection and Energy.
“The Commission found that the project concerns the replacement of an existing unit and that it will not lead to undue distortions of competition in the electricity market. On the basis of this analysis, the Commission concluded that the investment aid is in line with EU satte aid rules.”
DONG Energy recently sold its oil and gas business to petrochemicals giant INEOS.