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Policy & Regulation

Lithuania state aid case casts doubt over power subsidies

The European Commission’s investigation into Lithuania’s strategic reserve may indicate that EU member states will find it harder to subsidise their power sectors in future The European Commission’s investigation into Lithuania’s strategic reserve may indicate that EU member states will find it harder to subsidise their power sectors in future.
By Andreas Walstad 3 June 2019 Europe & Russia / Policy & Regulation 0 34271
Power lines near Klaipeda in Lithuania (Flickr/Andrius Baranauskas)

The European Commission opened an in-depth investigation on Monday into state aid in Lithuania’s power sector, a move that may signal a tightening-up of how the rules around subsidising power plants are enforced.  

The commission is investigating whether Lithuania’s strategic reserve – which was in place between 2013 and 2018 – was compatible with EU state aid rules. Under the scheme, the Lithuanian Power Plant (LPP) – a mainly gas-fired power facility owned by state-owned Lithuanian incumbent Lietuvos Energija – received payments...