The European Commission said Wednesday it has opened an in-depth investigation into Italian state aid for a project to build a coal-based power plant on the island of Sardinia.
Under the planned aid, Italy would purchase electricity from the plant at above market price, and the plant would have to sell the rest of its electricity to local energy-intensive industries at a lower price than the market's, the commission said in a statement.
The commission is concerned that the "project, if completed, would penalize existing electricity suppliers, who would lose their largest customers to the new subsidized power plant and be forced to downscale production in the absence of other outlets," it said in the statement.
The commission has asked Italy to stop implementing the project until it concludes its investigation. It could not quantify the financial amount of the aid for the time being.