The European Commission proposed yesterday a 500 million euro (£460m) financial package to support offshore wind energy efforts over the next two years

And, as part of a five billion euro European Economic Recovery Plan, the Commission also said 1.250 billion euros (£1.15bn) should go towards supporting development of carbon capture and storage projects.

The Recovery Plan came as the Commission laid out its thoughts on an international climate change agreement to be discussed in Copenhagen this December.

As well as offshore wind and CCS, it also earmarked 1.75 billion euros (£1.62bn) for work on gas and electricity networks, including 100 million euros (£93m) for a link between the Republic of Ireland and Wales to help renewables generators in Ireland access the UK energy market.

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And, around 150 million euros (£139m) would go towards early work on a possible North Sea grid, which would also help offshore wind.

The proposed funding comes from unspent portion of the EU agriculture budget. However, the plan will require the approval of Member States, who are expected to discuss it at an EU Council meeting next month, under the Czech Presidency.

“The EU’s Recovery Plan is all about ‘smart investment’ – a short-term stimulus targeted on long-term goals,” Commission President José Manuel Barroso said as he announced the Recovery Plan.

“We need to learn the lessons of the recent gas crisis and invest heavily in energy,” he went on, adding: “The Commission is committed to working together with Member States, all of whom will benefit from our proposed measures, in revitalising the EU economy through investment in these key areas.”

Offshore wind

European financial assistance is needed for offshore wind farms because they are so technologically and logistically complex, the Commission said.

The proposed offshore wind programme would focus on providing support to large-scale offshore demonstration projects in different Member States as well as expanding existing offshore wind farms.

Support would be given to projects in a “reasonable state of development”, the Commission said, in order to “bring real added value to them”.

Funding within the Recovery Plan includes 150 million euros (£139m) for work to help integrate more offshore wind energy through a North Sea grid between the UK, the Netherlands, Germany, Ireland and Denmark.

And, among other EU projects some 40 million euros (£37m) will go towards the ongoing development of a European testing centre for multi-megawatt turbines in Aberdeen, the Scottish European Green Energy Centre.

The European wind industry said today that the EU Recovery Plan should allow “even larger volumes of wind-generated electricity to be integrated quickly into the existing grid”. The European Wind Energy Association said it should provide new research and development opportunities to make the power sector “more efficient and less expensive, improve operations and maintenance, and speed up market deployment”.

Committing EU funds to promote offshore wind energy represents wise long-term thinking,” said Christian Kjaer, EWEA Chief Executive. “Investing public money to help unlock the largest European indigenous energy resource during the current economic uncertainty is equally strategic.”

CCS

Regarding carbon capture and storage (CCS), the Commission made a slightly curious claim that the technology would “achieve sustainable power generation from fossil fuels”.

However, in laying out the CCS support package, it pointed to potential for the technology to drive a global drive to “halve greenhouse gas emissions by 2050”.

The Commission said its proposed Recovery Plan would support five demonstration projects for CCS, which involves carbon content of fossil fuels like coal, oil or gas being removed either before or after combustion in order to cut emission levels by up to 90%.

Each of the five projects would need a 250 million euro (£231m) investment to ensure their launch, the Commission said.

The UK is designated as one of the five projects, which could see funding going towards E.ON’s Kingsnorth project, ScottishPower’s Longannet project, Powerfuel Power’s Hatfield project, or RWE npower’s Tilbury project.

In the UK today, the business sector welcomed the Commission’s announcements as a “helpful step on the road to a low carbon economy”.

The CBI said the funding should push the UK to take a lead in the development of CCS technology.

Its director of environment policy, Neil Bentley, said: “The British Government must now show real urgency and vision to ensure UK CCS demonstration plants can be up and running as soon as possible.

“Given the recognised potential of offshore wind, the new EU funding to help support UK offshore renewable connections is also a positive move,” Mr Bentley added.

Greens

Environmental campaigners did not welcome the Commission’s package as warmly, with Greenpeace stating its belief that the CCS support “would perpetuate Europe’s outdated energy system and its dependence on fossil fuels”.

Frauke Thies, Greenpeace EU renewables policy campaigner, said: “Today’s money for clean energy pales in comparison to the hundreds of billions of euros that have been made available by EU countries to confront the economic recession.”

Green MEP Claude Turmes, a key figure behind last year’s Renewable Energy Directive, saying the Recovery Plan was “inadequate and unbalanced”. He complained at a “bloated” amount offered for coal and gas projects and a “meagre” amount for offshore wind.

The Luxembourg MEP said the money would have been better spent going to the European Investment Bank, where it would have been an investment with the prospect of a return, rather than a grant.

He said: “It is less a shot in the arm for the EU recovery plan than a handout to outdated energy sources and the companies that profit from them.”