State aid: Commission approves €19.8 million Croatian aid measure in favour of IE-Energy

The   European   Commission   has   approved, under EU State aid rules, a €19.8 million Croatian aid measure in favour of energy storage operator IE-Energy d.o.o. (‘IE-Energy'). The measure is aimed at helping IE-Energy to partially finance the procurement and the installation of grid-scale batteries to provide transmission system operators (‘TSOs') with balancing services. TSOs use grid-scale batteries to maintain a continuous balance between electricity supply from power stations and demand from consumers, and to store electricity when needed.

The aid will take the form of a direct grant and will cover approximately 30% of capital expenditures. The Commission assessed the measure under Article 107(3)(c) of the Treaty on the Functioning of the European Union, and in particular its Guidelines on State aid for climate, environmental protection and energy. The Commission concluded that the aid is necessary and appropriate to address an existing market failure, as there is a lack of incentives to provide balancing services to TSOs through grid-scale energy storage facilities.

Furthermore, the measure contributes to the modernisation of Croatia's energy network, as well as to increasing the country's and the EU's energy security of supply. In addition, it will accelerate the decarbonisation of the Croatian energy sector. The Commission also found that the aid is proportionate as it is limited to the minimum necessary, and that it will not have undue negative effects on competition and trade between Member States. On  this  basis,  the Commission  approved  the  Croatian measure  under  EU  State  aid  rules. The non-confidential version of the decision will  be  made  available  under  the  number  SA.64374  in  the State  aid register  on  the  Commission's  competition website  once  any  confidentiality  issues  have been resolved.