The European Commission has approved a €22.5bn ($27.48bn) Polish support scheme for offshore wind, saying it is in accordance with EU state aid rules and doesn’t distort competition.

Poland by 2030 targets to install 5.9GW of wind capacity in its part of the Baltic Sea, to be followed by another 5GW in the next decade.

The Polish energy regulator last month had awarded contract for difference (CfD) support for the first batch of projects, which are exempt from the need to take part in an auction as they are pre-developed. The country will hold competitive CfD auctions for the second batch.

“This Polish scheme is a very good example of how competition policy can enable member states to support green energy projects, such as offshore wind farms,” said the EU’s executive vice-president Margrethe Vestager, who is in charge of competition policy.

“It gives the incentive to companies to invest in such green projects where they would otherwise not have invested.”

CfD aid in the eastern European country will be granted as two-way CfD premium for 25 years, but only up to 100,000 full load hours per installed megawatt.

When the wholesale power market price is below the CfD reference price, beneficiaries will be entitled to receive payments equal to the difference between the two prices. When the market price is above the reference price, operators will have to pay the difference between the two prices to the state.

Poland has set a maximum CfD price of 319.60 Polish zloty ($86.82) for the first phase of offshore developments.

Developers after obtaining an environmental permit have to submit an individual notification with a business plan to the EU Commission, which then will assess the specific level of aid individually.