Finance
Brussels greenlights $3.4 billion Spanish state aid for highly efficient power
Published by Global Banking and Finance Review
Posted on January 28, 2026
2 min readLast updated: January 28, 2026
Quick Summary
The EU has approved a €3.1 billion aid scheme for Spanish power plants to enhance efficiency and reduce emissions, supporting CHP projects using renewable energy.
European Commission Approves €3.1 Billion Aid for Spanish Power Plants
Overview of the Spanish State Aid Scheme
MADRID, Jan 28 (Reuters) - The European Commission has approved a 3.1 billion euro ($3.4 billion) Spanish state aid scheme to support electricity output from highly efficient power plants, it said on Wednesday, amid an EU push to cut greenhouse gas emissions.
Details of the Aid Scheme
Support will cover new or substantially refurbished combined heat and power (CHP) plant projects using natural gas, bioliquids, biogas and solid biomass.
Environmental Goals and Compliance
Natural gas projects must include equipment enabling the use of at least 10% renewable hydrogen by volume to avoid perpetuating reliance on the fossil fuel.
Duration and Eligibility of the Scheme
The European Union has current targets to cut net greenhouse gas emissions by at least 55% by 2030 and achieve climate neutrality by 2050, and is pushing more broadly to reduce final energy consumption to mitigate the effects of climate change.
The Spanish scheme will run for 10 years and be open to operators of CHP installations that meet the definition of high-efficiency cogeneration under the EU's Energy Efficiency Directive, the Commission said in a statement.
Aid will be granted as a remuneration premium to compensate for investments in bringing CHPs onstream and for operating costs calculated and updated quarterly, the Commission said.
(Reporting by David Latona; Editing by Andrei Khalip and Jan Harvey)
Key Takeaways
- •The EU approved a €3.1 billion aid for Spanish power plants.
- •The scheme supports efficient CHP plant projects.
- •Natural gas projects must use 10% renewable hydrogen.
- •The scheme aligns with EU's 2030 and 2050 climate goals.
- •Aid is provided as a remuneration premium.
Frequently Asked Questions about Brussels greenlights $3.4 billion Spanish state aid for highly efficient power
1What is combined heat and power (CHP)?
Combined heat and power (CHP) is a technology that generates electricity and useful heat simultaneously from the same energy source, improving overall efficiency.
2What are renewable hydrogen projects?
Renewable hydrogen projects involve producing hydrogen fuel using renewable energy sources, such as wind or solar, to reduce reliance on fossil fuels.
3What is the EU's Energy Efficiency Directive?
The EU's Energy Efficiency Directive aims to promote energy efficiency across member states, setting targets and measures to reduce energy consumption and greenhouse gas emissions.
