The Czech Republic has received approval from the European Commission for $850.9 million (CZK 19 billion) in state aid for gas and electricity companies, aimed at easing the high costs caused by the war between Russia and Ukraine
“The scheme was approved under the temporary state aid crisis and transition framework, adopted by the Commission on 9 March 2023 to support measures in sectors that are key to accelerating the green transition and reducing dependence of fuels,” the commission said in a statement. week
The aid “will be made in the form of direct subsidies to cover the additional costs due to exceptional increases in the price of natural gas and electricity recorded in the eligible period, specifically from January 1, 2023 to December 31, 2023 , with respect to the period between January 1, 2021 and December 31, 2021,” the commission said.
“The measure will be open to large companies in all sectors,” he said. But eligibility is only triggered when market prices for natural gas and electricity exceed the maximum set by the scheme at $224. [CZK 5,000] per megawatt hour (mWh) for gas and $112 [CZK 2,500] per MWh of power.
“The aid amount will correspond to the difference between the maximum prices set by the regime and market prices during the year 2023, subject to the application of the maximum aid amounts established in the Crisis Temporal Framework and Transition,” the commission said.
The new framework allows the 27 EU countries to use the flexibility allowed by the bloc’s state aid rules to cushion the economic impacts of the war, including by providing assistance to the agriculture, aquaculture, fisheries sectors and energy
The energy-related support in the framework makes it possible to partially compensate companies, “in particular energy-intensive users, for additional costs due to the exceptional increase in gas and electricity prices”, the commission noted .
“Furthermore, Member States can provide support in a flexible manner, including for particularly affected sectors with intensive energy consumption, subject to safeguards to avoid overcompensation and to incentivize the reduction of the carbon footprint in case of amounts of aid exceeding 50 million euros. [$54.1 million]”, added.
According to the Czech package, the aid will go to energy suppliers, “who will have to sell natural gas and electricity at the maximum price set in the scheme and will subsequently be fully compensated by the Czech Republic,” the commission said.
“The Commission verified that the Czech scheme conforms to the conditions set out in the crisis and transition time frame. In particular, the global aid per beneficiary will not exceed 50 percent of the eligible costs, up to a maximum of 4 millions of euros. [$4.3 million]”, he said.
“Beneficiaries will be able to receive additional aid, which does not exceed 40 percent of eligible costs and up to a maximum of 100 million euros. [$108.1 million]. Energy-consuming companies can receive aid up to 65 percent of subsidized costs up to a maximum aid limit of 50 million euros. In addition, energy-intensive companies that operate in particularly affected sectors will be entitled to receive aid up to 80 percent of eligible costs up to a maximum aid limit of 150 million euros. [$162.2 million].”
The disbursement to the recipients will be made by December 31, the commission said.
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