The European Commission has approved a €1.2 billion Polish scheme to support investments in electricity storage facilities to foster the transition to a net-zero economy. The scheme was approved under the State aid Temporary Crisis and Transition Framework ('TCTF'), adopted by the Commission on 9 March 2023 and amended on 20 November 2023 and on 2 May 2024.
The Polish measure
Poland notified to the Commission, under the TCTF, a €1.2 billion scheme to support the installation of at least 5.4 GWh of new electricity storage facilities to foster the transition to a net-zero economy. The scheme will be financed (i) partly by the Modernisation Fund, and (ii) partly by the Recovery and Resilience Facility ('RRF') following the Commission's positive assessment of Poland's Recovery and Resilience Plan and its adoption by the Council.
The scheme aims at reducing the reliance of the Polish electricity system on fossil fuels and at facilitating the smooth integration of variable renewable energy sources in the national electricity system, by supporting the construction of electricity storage facilities. The scheme will support only newly installed storage facilities with a capacity of at least 4 MWh. The supported facilities will be connected to the distribution or transmission networks at all voltage levels. The projects will be selected by the Member State through a call for proposals.
Under the scheme, the aid will take the form of two cumulative support forms: direct grants and loans. The total aid amount of grant and loans combined shall not exceed 45% of the investment costs of the supported project, and may be increased to 65% for aid to small companies and to 55% for aid to medium-sized companies.
The Commission found that the Polish scheme is in line with the conditions set out in the TCTF. In particular, (i) the aid will be granted on the basis of a scheme with an estimated volume and budget; (ii) the aid is administratively set by the Member State on the basis of data on the investment cost of each supported project; and (iii) the aid will be granted before 31 December 2025.
The Commission concluded that the Polish scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the REPowerEU Plan and the Green Deal Industrial Plan, in line with Article 107(3)(c) Treaty on the Functioning of the European Union and the conditions set out in the TCTF.
On this basis, the Commission approved the aid measure under EU State aid rules.
Background
On 9 March 2023, the Commission adopted the TCTF to foster support measures in sectors which are key for the transition to a net-zero economy, in line with the Green Deal Industrial Plan.
The TCTF provides for the following types of aid, which can be granted by Member States until 31 December 2025 in order to accelerate the green transition:
- Measures accelerating the rollout of renewable energy (section 2.5). Member States can set up schemes for investments in all renewable energy sources, with simplified tender procedures.
- Measures facilitating the decarbonisation of industrial processes (section 2.6). Member States can support investments in the decarbonisation of industrial activities with a view to reduce dependency on imported fossil fuels, in particular through electrification, energy efficiency and the switch to the use of renewable and electricity-based hydrogen which complies with certain conditions, with expanded possibilities to support the decarbonisation of industrial processes switching to hydrogen-derived fuels.
- Measures to further accelerate investments in key sectors for the transition towards a net-zero economy (section 2.8). Member States can grant investment support for the manufacturing of strategic equipment (namely batteries, solar panels, wind turbines, heat-pumps, electrolysers and carbon capture usage and storage), as well as for production of key components and for production and recycling of related critical raw materials. Support is capped at a certain percentage of the investment costs up to specific amounts, depending on the location of the investment and the size of the beneficiary. Higher support is possible for small and medium-sized companies, as well as companies located in disadvantaged regions to ensure that cohesion objectives are duly taken into account. Furthermore, in exceptional cases, Member States may provide higher support to individual companies, where there is a real risk of investments being diverted away from Europe, subject to a number of safeguards.
