The regulator said that the country’s support scheme will help meet its 2020 targets for renewable energy, energy efficiency and greenhouse gas emissions without affecting competition.

EC concluded that the state aid would also help European Union (EU) meet its energy and climate change goals without distorting competition.

The Commission stated: "High-efficiency co-generation of electricity and heat helps to increase energy efficiency and reduce CO2 emissions, and leads to higher levels of environmental protection."

Under the support scheme, which was notified by Czech to the EC in November 2016, the operators of the high-efficiency combined heat and power plants will receive fixed premium in addition to the market price.

The scheme supports the power plants commissioned between January 2016 and December 2020.

Additionally, the premium will be updated each year based on a number of factors in a bid to ensure costs are maintained to a minimum for the State.

Czech Republic plans to finance the support scheme through a combination of a surcharge levied on electricity consumers and contributions from its budget.

Recently, the EC adopted a series of Czech energy support schemes to help increase environmental protection.

The schemes provide support for renewable generation, hydropower installations and support to small biogas installations.