According to the press release, the European Commission has found the Polish scheme to support combined heat and power ("CHP") in high-efficiency cogeneration and reduced surcharges concerning financing of the scheme for energy-intensive users in line with EU State aid rules.

The new scheme replaces the certificate-based support scheme for Polish CHP installations, which expired at the end of 2018. The Commission also started an investigation into decreased surcharges regarding the financing of Poland's capacity mechanism.

Support for high-efficiency cogeneration

The scheme will support CHP installations introducing heat to Polish district heating networks. It will have an annual budget of €500 million and last until 31 December 2028. New and modernised high-efficiency CHP installations, as well as existing gas-fired high-efficiency CHP installations will be eligible for support. The support scheme will be open to generators in other Member States.

The installations participating in the scheme may receive support through a premium on top of the market price. The level of the premium will be determined in a competitive, pay-as-bid, bidding process or, in explicitly indicated cases, set by the authorities at a level covering the difference between the generation costs and the market electricity price. The cogeneration premium will be available for a maximum period of 15 years until the full deprecation of the supported installations.

Cogeneration surcharge reductions for energy-intensive users

The cogeneration support scheme introduced in Poland will be financed through a surcharge levied on final electricity consumers (depending on their electricity consumption). Poland has also notified the intention to reduce charges on certain energy-intensive users, benefiting from a reduced CHP surcharge under the introduced scheme.The Commission approved the scheme as compatible with the EU State Aid rules.

In-depth investigation into capacity mechanism surcharge reductions for energy-intensive users

The Commission approved the Polish electricity capacity mechanism in February 2018. However, the Polish government currently plans (and has notified its plan to the Commission) to grant reductions to certain energy-intensive users on a surcharge levied on electricity consumers financing the Polish capacity mechanism. The Commission has started an in-depth investigation to determine if these planned reductions are in line with EU State aid rules. It will assess if these reductions are necessary to ensure the financing of the capacity mechanism.

The respective decisions of the Commission have not been made available yet. The Commission will disclose non-confidential versions once all confidentiality issues have been resolved.