EU approves Danish scheme to support biomass power production

By European Commission | May 26, 2020

The European Commission has approved a DKK 4,150 million (approximately €550 million) state aid scheme to support the production of electricity in existing and depreciated biomass installations in Denmark.

The installations benefitting from the scheme will receive support in the form of a premium covering the additional operating costs of producing electricity from biomass compared to producing electricity from a coal plant. The premium will be calculated on an annual basis and it will be capped at DKK 0.11/kWh (approximately 0.015 €/kWh). The scheme will be in place until Dec. 31, 2029.

The Commission assessed the Danish measure under the 2014 Guidelines on State aid for environmental protection and energy 2014-2020. It found that the scheme is necessary to prevent the switch of the supported installations to fossil fuels. The Commission also found that the scheme will help Denmark reaching its target of 55 percent of electricity production from renewable energy by 2030 and its objective of phasing out coal from its electricity production in the same year. The Commission concluded that the scheme will contribute to the EU's energy and environmental objectives and the goals set by European Green Deal, without unduly distorting competition. On this basis, the Commission approved the measure under EU State aid rules.

More information will be available on the Commission's competition website, in the public case register under the case number SA.55891 once confidentiality issues have been resolved