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European Commission authorises support for Lithuanian biomass CHP plant

The European Commission (EC) has approved support for a combined heat and power (CHP) plant in Vilnius, Lithuania, under EU state aid rules.

The project will be financed by the European Investment Bank through the European Fund for Strategic Investments (EFSI), along with state aid granted by Lithuania.

"The Lithuanian project to build a CHP plant in Vilnius is a good example of the Juncker Investment Plan mobilising investment. It is in line with our state aid rules and it benefits Lithuanian citizens and the environment," commissioner for competition Margrethe Vestager said.

Lithuania has notified plans to the Commission to grant €150 million in state aid to build a new highly efficient CHP plant in Vilnius.

The plant will generate electricity for the Lithuanian power grid and heat for the district heating system of Vilnius, and it consists of two units, one fuelled by non-recyclable municipal waste and the other by biomass.

The municipal waste incineration unit will be able to produce 18MW of electrical power and 53MW of thermal power, while the biomass unit will have a capacity of 70MW of electrical and 174MW of thermal power.

The Commission assessed the project under its 2014 Guidelines on State Aid for Environmental Protection and Energy.

Under these rules, member states can grant state aid for high efficiency co-generation of heat and power subject to certain conditions.

The Commission found that the project promotes energy efficiency with expected energy savings of around 40%.

The state aid granted to the project respects the maximum aid intensity allowed for such investments under the guidelines.

In addition, Lithuania has demonstrated that the project would not have been sufficiently profitable to go ahead without the aid.

On this basis, the EC concluded that the state aid would not lead to undue competition distortions and is in line with EU rules.