Climate change – Commission launches major investment programme for innovative low-carbon technologies

The European Commission launches today the first call for proposals for the world’s largest programme of investment in low carbon and renewable energy demonstration projects. The initiative, known as NER300, will provide substantial financial support for at least eight projects involving carbon capture and storage (CCS) technologies and at least 34 projects involving innovative renewable energy technologies. The aim is to drive low carbon economic development in Europe, creating new ‘green’ jobs and contributing to the achievement of the EU’s ambitious climate change goals. The European Investment Bank (EIB) is collaborating with the Commission in the implementation of the programme. Companies interested in making proposals have 3 months to submit bids at national level.

Sponsors

Sponsors

Sponsors

Climate Action Commissioner Connie Hedegaard said: “The NER300 is a good example that together, EU 27 can do more than we can individually. Through using revenues from selling of CO2 allowances, around EUR 4.5 billion will be available for innovative renewable energy technologies and CCS. With project sponsors and Member States contributions this will sum up to EUR 9 billion. This can give a needed boost for keeping EU in the frontrunner position when it comes to climate friendly technologies. Europe has the know-how, the ability and the ambition to lead the world in developing the technologies required to tackle climate change. The NER300 initiative will act as a catalyst for the demonstration of new low carbon technologies on a commercial scale. These and other green technologies are an increasingly important source of future economic growth and jobs. They will also help us meet our ambitious climate targets for 2020 and beyond”

EIB President Philippe Maystadt added: “The EIB is fully committed to helping European Union Member States meet their 2020 climate and energy objectives. We are therefore offering our financial and technical expertise in support of implementation of the NER300 initiative.”

Today’s first call for proposals signals the start of implementation of the NER300 initiative. The initiative is so named because it will be funded from the sale of 300 million emission allowances in the New Entrants Reserve (NER) of the EU Emissions Trading System (ETS). At current market prices for emission allowances, the initiative is worth around EUR 4.5 billion, making it the biggest such programme in the world.

Funding is targeted to demonstration projects involving CCS and innovative renewable energy technologies. At least one project, and a maximum of three, will be funded per Member State. Further details of the types of technologies to be funded are given in the Annex.

The programme will leverage investments of more than EUR 9 billion as the NER300 initiative will fund up to 50% of the construction and operation costs of the CCS and renewables projects. Project sponsors and Member States will provide the rest of the funding. NER300 funding can be combined with financing from other EU instruments, including the Structural and Cohesion Funds and the European Energy Programme for Recovery (EEPR).

Under the NER300 decision (1), the EIB is responsible for selling the 300 million allowances and managing and disbursing the proceeds. While details, including the starting date of the sales, are not fixed yet, it is expected that all NER300 allowances will be sold before the start of the third trading period of the EU ETS in January 2013.

The EIB will also undertake detailed financial and technical due diligence of project proposals before making recommendations in the form of a ranking of project proposals to the Commission. The Commission will take the final decision on which projects to co-finance after consulting Member States.

Further information

Questions and answers on NER300: see MEMO/10/549

NER300 website: http://ec.europa.eu/clima/funding/ner300/index_en.htm

Annex

CCS demonstration project categories

Eight CCS projects will receive financing:

• a minimum of one and maximum of three in the following categories: pre-combustion, post-combustion, oxy-fuel and industrial applications.
• Minimum of three projects using saline aquifers for CO2storage and minimum of three using depleted hydrocarbon reservoirs.
• Power stations taking part in CCS projects must have a generation capacity of at least 250 MW, and be designed to capture at least 85% of their CO2emissions.

Innovative renewable energy technology project categories

The 34 renewable energy projects to be financed comprise the following:

• Bio-energy 9
• Concentrated solar power 5
• Solar photovoltaic 3
• Wind 6
• Geothermal 4
• Ocean (wave and tidal power, ocean thermal energy conversion) 3
• Hydro-electric 1
• Distributed renewables management (Smart Grids) 3

Application procedure for funding

The first call for proposals includes detailed information on the application procedure. A seminar for potential project sponsors will be hosted by the Commission and the date will be confirmed shortly.

Project proposals, sponsored either by a single operator or a consortium, must be submitted to the Member State where the project is to take place. An initial eligibility assessment will be undertaken by Member States within three months of the call for proposals. Member States must pre-select and submit eligible applications to the EIB within six months of the call.