Commissie keurt hulp voor 400 mw warmtekrachtcentrale in Letland goed (en)
Brussels, 28 th January 2010
The European Commission has authorised, under EU state aid rules, aid that Latvia intends to grant by way of tender for the construction and operation of a 400 MW thermal power plant between 2015 and 2025. The measure is aimed to ensure that the future electricity demands will be met by available supplies and to reduce the dependency on gas as the dominant fuel source. The Commission found the measure to be compatible with Article 107.3.c of the Treaty on the Functioning of the European Union (TFEU) that allows, under certain conditions, aid for the development of economic activities or regions. In particular, the aid is proportionate and contains safeguards minimising potential distortions of competition.
Competition Commissioner Neelie Kroes said: “The EU has repeatedly recognised the exceptional circumstances of the electricity market in Latvia. I am satisfied that the new thermal power plant will contribute to the security of electricity supply in the Baltic region without unduly distorting competition."
On 2 December 2009, Latvia notified its project to subsidise the construction and operation of a new power plant. In order to diversify Latvia's energy mix, the plant should feed on either LNG regasified in Latvia or on solid fuel such as coal, lignite or peat mixed with at least 10% biomass. The aid would be granted in form of a direct grant through a competitive tender, the winner of which would be obliged to operate the plant at least 6000h a year.
Although in principle market forces should provide the incentives for the construction of conventional plants, the Commission found that, in view of the effective isolation of the Latvian energy market, the security of electricity supply could constitute an objective of common interest, in accordance with Article 107(3)(c) of the TFEU. The Commission also took into account Latvia's increasing dependence on gas as a dominant fuel source after the closure of the Lithuanian Ignalina nuclear power plant at the end of 2009. Moreover, the Commission's investigation found that the competitive selection process would minimise the aid and limit distortions of competition. The Commission therefore concluded that in the specific circumstances of the Latvian electricity market the aid for the construction and operation of a conventional power plant is an appropriate and proportionate step towards ensuring the security of electricity supply in Latvia for the coming years.
The non-confidential version of the decision will be made available under the case number N675/2009 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News .