The European Commission has approved a Polish subsidy scheme that supports high-efficiency combined heat and power (CHP) plants. It said September 27 the scheme will run until 2018 with an annual budget of over zloty 1bn (€232mn). Poland generates 85% of its power from coal.

The first such scheme in Poland was introduced in 2007. For the present scheme, there are three categories eligible for different types of certificate. Certificates are colour coded (yellow, purple or red) depending on the type of fuel used and the CHP plant's capacity.

Poland considered that its CHP certificates system did not constitute a state subsidy scheme but notified the measure to obtain legal certainty. The EC decided it was a subsidy scheme but cleared it anyway as, according to EU competition commissioner Margrethe Vestager, it supports EU energy and climate goals and meets state aid rules. "Europe needs increasingly efficient energy production to help us meet our environmental goals,” she said.

Polish regulator URE defines 'yellow certificates' as for highly-efficient CHP plant using high-methane natural gas, including LNG, or propane, butane or bio-gas if supplied via the gas network of any size, and mini power-plants smaller than 1 MW that use such fuels. 'Purple' certificates are for power plants that burn coalbed methane (CBM) or gases from biomass. 'Red' certificates are for highly-efficient CHPs larger than 1 MW that run on all other fuels.

Some 85% of Poland's power was generated from coal and lignite in 2015, with much of the installed capacity now over 30 years old. Pressure group Bankwatch says Poland continues to build coal-fired plants and criticises the European Investment Bank's "shameful" funding of coal CHPs.

Mark Smedley