A Romanian scheme to support the construction and/or upgrade of district heating systems, based exclusively on Renewable Energy Sources in Romania has been given the green light by the European Commission.
“This €150 million Romanian scheme will support investments to support the construction or upgrade of district heating systems,” Commission Executive Vice-President for Competition Policy Margrethe Vestager said, noting that it will foster the switch from fossil fuel energy production to heat generation based on renewable resources, in line with the objectives of the Green Deal. “This measure has been made possible also thanks to the European Green Deal’s Investment Plan. In order to unlock the potential of district heating to contribute to the transition to a climate neutral economy, the Plan has given Member States more flexibility when it comes to granting support for district heating generation, in line with EU State aid rules,” Vestager added.
According to the Commission, Romania notified the EU of its plans to provide public support of up to RON 750 million (approximately €150 million) for the construction and/or modernisation of a series of district heating generation installations and distribution networks (for the latter up to a maximum of 20% of the overall investment). The planned support would take the form of direct grants financed by EU Structural Funds managed by Romania.
Existing district heating systems generate heat predominantly from gas or coal-fired boilers. The measure aims at supporting investments in the district heating generation installations up to a total 60 MW of heat equivalent, enabling a fuel switch from fossil fuel energy production (coal, natural gas) to heat production from renewable energy sources (such as biogas, biomass and geothermal heat production) exclusively.
This is expected to lead to an overall decrease in greenhouse gas emissions by up to 48,000 metric tonnes of CO2, as well as other polluting substances while the scheme is in place (i.e. until 2023), the Commission said, adding that the use of biogas and biomass under scheme would be in line with requirements on sustainability of the Renewable Energy Directive II and with the Waste Framework Directive.
EU State aid rules allow Member States to support district heating generation installations and distribution networks, subject to certain conditions set out in Commission’s 2014 Guidelines on State aid for environmental protection and energy. In particular, the Guidelines provide that the projects must meet the criteria of “efficient district heating” set out in the Energy Efficiency Directive (EED) in order to be considered compatible under EU State aid rules.