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EU expected to announce ruling on energy state aid

The UK government is preparing for a ruling from Brussels today that will influence the fate of billions of pounds in investment in low-carbon energy policies, Sky News has reported.

The European Commission is expected to announce its ruling after several months examining a form of subsidy guaranteeing long-term prices to companies for supplying renewable energy sources.

Known as contracts for difference (CFDs), these instruments are designed to reassure investors about the returns that such projects will generate.

The government has developed a series of policies under the umbrella of Electricity Market Reform, which are intended to meet legally binding targets to reduce carbon emissions.

The EU has previously signalled that projects which involve significant subsidies could be deemed to constitute unfair state support.

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