Commission approves €385 million support for production of electricity from renewable sources in Lithuania

The European Commission has approved, under EU State aid rules, a scheme to support electricity production from renewable energy sources in Lithuania. The measure, open to all types of renewable generation, will contribute to the EU environmental objectives without unduly distorting competition.

Commissioner Margrethe Vestager, in charge of competition policy, said: “The scheme will contribute to Lithuania’s transition to low carbon and environmentally sustainable energy supply, in line with the EU environmental objectives and our state aid rules.”

On 1 May 2019, Lithuania will introduce a new aid scheme to support installations generating electricity from renewable sources such as wind, solar or hydropower. The scheme will help Lithuania reach its national target share of renewable energy sources in gross final energy consumption, which has been set at 38% by 2025. The renewable energy scheme will be applicable until 1 July 2025 or, alternatively, until the 38% target is reached.

The scheme, with an overall budget of €385 million, will be open to all renewable installations.

The installations benefitting from the scheme will receive support in the form of a premium, which will be set through a competitive bidding process for all types of installations, irrespective of the size of the installation and the renewable technology used.

The Commission assessed the scheme under EU State aid rules, in particular under the 2014 Guidelines on State aid for environmental protection and energy.

The Commission found that the aid has an incentive effect, as the market price does not fully cover the costs of generating electricity from renewable energy sources and the beneficiaries will have to apply for the aid before the generating installations start operating. The aid is also proportionate and limited to the minimum necessary, as it only covers the difference between the production costs and the market price of electricity.

Therefore, the Commission concluded that the Lithuanian measure is in line with EU State aid rules, as it promotes the generation of electricity from renewable sources, in line with the environmental objectives of the EU, without unduly distorting competition.

Original source: European Commission
Published on 23 April 2019