18 – APPLICABLE STATE AID REGIME

1. The financing approach for investments benefiting from aid will adhere to the revised General Block Exemption Regulation of the Commission (EC Regulation (EU) 2023/1315).
2. Under this procedure, applicants shall comply with the state aid regime defined in Article 41 and more specifically in paragraph 1a of Regulation (EU) No. 651/2014 of the Commission declaring certain categories of aid compatible with the internal market pursuant to Articles 107 and 108 of the Treaty (“Regulation (EU) No 651/2014”, as last amended by Regulation (EU) 2023/1315 of 23 June 2023), at compliance with the conditions of chapter I7.
3. Investment aid for only new storage facilities is granted that are built as part of combined renewable energy projects and for local storage (behind-the-meter) when both elements are components of the same investment. Investment aid will only be granted for new equipment. No investment aid will be provided for the reconstruction, repair and renovation of an existing renewable energy facility.
4. The GBER’s Article 41(5) applies the 75% rule universally, regardless of an RES installation’s capacity, ensuring flexibility for storage connected to renewable energy sources in supporting grid services. To prevent overcompensation and windfall profits from unexpectedly high revenues, the CfD approach will serve as a recovery mechanism to reclaim any surplus from market revenues. The CfD will be subject to regular monitoring, review, and adjustment after the contract period.
5. In order to avoid undersubscribed tenders, the selection procedure will be organised in more than one tender round subject to budget availability.
6. The projects eligible for support under the Scheme will be chosen using a criterion that prioritizes the lowest cost per category/sub-category. For Investment aid, selection will be based on the bid costs per kW of the proposed power storage capacity.
7. When the budget is depleted, a new call may be announced that will include Operating aid for future opportunities based on available budget.
8. The operating aid scheme, which will be based on a two-way CfDs as explained in Section 4.
9. This reference price for Renewable Energy projects is defined with a fixed price during the whole duration of the scheme, based on the commercial operation day of each project. The reference price will shift to a daily valuation based on the wholesale market once it becomes operational or once Cyprus will be interconnected with Greece, after the 10-year contract for new projects or after the end of the contract for FiT projects.
10. Projects will be selected in an ascending order, i.e., starting from the minimum bid (either Euro/kW or Euro/kWh) and then moving upwards to select the next lowest bid, until the tendered capacity or budget is exhausted per category (see Paragraph 11).

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