The European Commission has approved Slovakia’s plans to provide more than €1 billion (£0.86bn) of financial support for high-efficient cogeneration of electricity and heat.

Slovakia notified the Commission of its plans to support combined heat and power (CHP) installations connected to district heating networks in the country, with all selected installations above 250kW to receive aid in the form of a feed-in premium, i.e. the installation selling its output on the market and receiving a top-up payment over the market price.

Installations below 250kW are to receive a fixed feed-in tariff, i.e. a guaranteed price for the electricity produced.

The scheme aims to increase or maintain high efficiency of existing high-efficient cogeneration installations, incentivise their switch from coal to natural gas or renewable sources and stimulate investments in new high-efficient cogeneration facilities.

Slovakia will select the winners based on a multi-technology tender procedure for new installations with a capacity of 1MW or higher and an administrative procedure for small installations and existing installations, with the aid based on the costs of producing electricity from those installations.

Coal-fired installations are not eligible to receive the support under the scheme.

Margrethe Vestager, Executive Vice President in charge of competition policy said: “This over €1 billion Slovak measure will provide an important contribution to EU energy and climate objectives, without unduly distorting competition.”