The European Commission approved Czechia's market-wide capacity mechanism under EU State aid rules, clearing the way for Czechia to pay generators, storage operators, cross-border capacity holders and consumers who cut demand for keeping power available when supply runs short. It is the first capacity mechanism approved under the Clean Industrial Deal State Aid Framework (CISAF), which the Commission adopted on 25 June 2025.
How the mechanism works
The mechanism runs for 10 years starting in July 2026, with individual contracts running for up to 15 years. It compensates parties that make capacity available during periods of scarcity, including existing and new generation assets, storage and cross-border capacity. Consumers can also take part through demand-side response, getting paid to lower consumption when electricity supply is reduced. Every participating unit must comply with the CO2 emission limits set out in EU legislation.
Aid is granted through competitive bidding, and capacity providers are selected on clear, objective and non-discriminatory criteria. The mechanism sets eligibility conditions and technical prequalification requirements so that only reliable and available capacity can take part. It stays technologically open, so different types of capacity compete against each other rather than being assigned fixed shares.
The money and the timeline
| Term | Detail |
|---|---|
| Duration | 10 years, starting July 2026 |
| Contract length | Up to 15 years |
| Estimated budget | €3.1 billion to €6.2 billion |
| Financing | Consumer charges |
| First delivery window | November 2030 to October 2031 |
| Case number | SA.120741 |
The mechanism will be financed through consumer charges, with an estimated overall budget of €3.1 billion to €6.2 billion. The exact amount depends on auction outcomes and system needs over time. The first period for which capacity agreements will be allocated runs from November 2030 to October 2031, and Czech authorities will run the preparatory steps and auctions ahead of that delivery window under the approved tender design.
The legal basis
The Commission assessed the measure under Article 107(3)(c) of the Treaty on the Functioning of the EU, which allows member states to support the development of certain economic activities under set conditions, together with the CISAF. The Commission found the Czech mechanism meets all the requirements in Annex I of the CISAF and approved it on that basis.
The Commission adopted the CISAF on 25 June 2025 to support measures in sectors central to the transition to a net-zero economy, as part of the Clean Industrial Deal. The non-confidential version of the decision will be published under case number SA.120741 in the Commission's State aid register once confidentiality issues are resolved.
