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European Commission approves Estonian scheme to support electricity production from renewables

The European Commission has approved, under EU State aid rules, an amendment to an Estonian scheme to support electricity production from renewable energy sources (RES) and efficient co-generation.

The scheme was originally approved by the Commission in October 2014 and amended in December 2017. Renewables and efficient cogeneration installations benefitting from the scheme receive support in the form of a fixed feed-in premium to the market price. The premium on top of the market price is set at 53.7 euros per megawatt-hours (MWh) for electricity produced from RES, including electricity produced in combined heat and power systems using RES; and 32 euros per MWh for electricity produced in highly efficient combined heat and power systems using natural gas, retort gas, peat and municipal waste.

Estonia notified the Commission of its intention to amend the scheme, by increasing its budget by 650 million euros, bringing the total budget to 1.37 billion euros (from 720 million. euros).

The Commission assessed the amended scheme under EU State aid rules, in particular the 2014 Guidelines on State aid for environmental protection and energy. The Commission found that the Estonian scheme, as amended, remains necessary, appropriate and proportionate to help Estonia reach its renewable energy targets and contribute to the EU’s objective of achieving climate neutrality by 2050, without unduly distorting competition. On this basis, the Commission approved the amendment under EU State aid rules.

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