The European Commission has approved Czechia’s market-wide capacity mechanism — a system designed to pay electricity providers and others to make power available during shortages — under EU State aid rules.
The scheme is intended to ensure Czechia has enough capacity to produce or store electricity, or to cut consumption, so supply can meet demand over the long term, the Commission informed on Thursday.
It will run for 10 years from July 2026, with individual contracts lasting up to 15 years.
The mechanism will be open to existing and new power generation, electricity storage, cross-border capacity and demand-side response — where consumers are paid to lower their electricity use when supply is tight.
Participants must comply with CO2 emission limits set in EU law.
Support will be awarded through competitive bidding processes, with providers selected using “clear, objective and non-discriminatory criteria.”
The mechanism will be financed through consumer charges, with an overall budget estimated at between €3.1 billion and €6.2 billion depending on auction results and system needs over time.
First auctions linked to 2030 — 31 delivery period
The first period covered by capacity agreements will run from November 2030 to October 2031, and Czech authorities will organise preparatory steps and auctions ahead of that delivery window, the Commission said.
The Commission assessed the measure under Article 107(3)(c) of the Treaty on the Functioning of the European Union and the Clean Industrial Deal State Aid Framework, known as CISAF.
The need for the mechanism is supported by the latest European Resource Adequacy Assessment, which forecasts emerging risks to security of supply for Czechia from 2028 onwards.
Czechia is the first EU member state to use the “target model” for capacity mechanisms under CISAF, Executive Vice-President Teresa Ribera pointed out.
