NER300.com is an unofficial, independent portal dedicated to renewable energy and grid integration projects wishing to access this instrument, providing
UPDATE 13-05-2013: FAQ 1 answers are published on DG CLIMA website.
More than month after the call for proposals, and a few days before the 15 May deadline for the Member States to notify the EC of the number and (sub-)category of the proposals they intend to submit (and whether or not they are re-applications from the first call), the EC looks set finally to release its first official set of FAQ answers on the second call.
The draft FAQ answers have already been circulated to at least some Member State contact points.
Soon after midday the EC posted details of the second call for proposals on its website. ‘Procedures manual’ for second call not published.
A week later (10 April 2013) DG CLIMA will hold an info session in Brussels,
10:00-13:00 (probably webstreamed)(*) 14:30-17:30 (webstreamed). Registration is open.
(*) This is the time announced on the EC’s NER300 webpage in the context of a meeting for Member States on implementation and administration of the first call.
Three messages to take away from the NER300 press conference given by Commissioner Hedegaard today:
EC documentation is available on this DG CLIMA webpage.
One CCS project is mentioned in the Decision but only because it announced its withdrawal after the Award Decision had gone on interservice consultation in the EC and after it had been sent to Member States. It will not be funded in the first call.
The text of the CCC’s opinion is as outlined in this document.
Further analysis to follow.
Disregarding a plea from the CCS Association to delay the announcement of first call NER300 winners, by “just a few months“, the EC will invite Member States to vote on its proposal for a portfolio of projects to fund on 13 December. The agenda for the Climate Change Committee’s meeting was published on the EC’s website late yesterday:
UK CCS projects will not be among them. On 29 November, the UK’s most senior energy minister, Ed Davey, told his Parliament: “It is true that we did not get in the first round of the New Entrants Reserve 300 funding from the EU.” He added, “But we are wholly able to get into the second round and get the same amount of money. I have spoken to the European Commissioner about that. I see no problem in ensuring that we use the money put aside to get the best value for money for the best CCS projects.”
Not everyone is as sanguine as Mr Davey about the prospects of funding UK CCS in the second call. MEP Chris Davies told Bloomberg on 30 November that the funds available would be “tiny” by comparison to those in the first call.
The CCS Association claimed that delaying the vote would allow Member States to provide sufficient assurances to the EC that they would cofund NER300 projects.
In a further blow to CCS, the Industry, Research and Energy committee of the European Parliament voted on 28 November to broaden significantly the scope of fossil energy research under the EU’s Horizon 2020 programme, while constraining the budget available to at most 10% of the total for non-nuclear energy technology. This amount would originally have gone solely to CCS. Mr Davies co-signed amendments that led to the inclusion of conventional power generation and ‘carbon capture and usage’ (quite distinct from CCS).
With the last of the first tranche of NER300 allowances now sold, Jos Delbeke, Director General of DG Climate Action, was in a position to disclose at the 7th General Assembly of the Zero Emissions Platform that the sum raised is 1500 M EUR (net of the fees of the EIB and its carbon market intermediaries). [UPDATE 12 Nov 2012: the EIB confirms the size of the pot is roughly 1500 M EUR, but adds that this is at the "conservative" end of an implied range.] The 2009 Emissions Trading Directive constrains the funding requests to 15% of the total projected value of the net NER300 pot over both calls, allowing projects to request “a maximum of 337 M EUR each from NER300″ (Delbeke).
The EC made this limit clear in letters it sent yesterday to Member States having projects in the RES Group or CCS Group. It expects a reply to its letters on or before 15 October, where Member States will confirm, with no room for negotiation, the project(s) they are each keeping in the competition. For these projects, they will confirm that they will be built according to the specifications in the Application Forms and will receive the national funding set out in the Submission Forms. Chris Davies, an MEP with a proven interest in CCS, took the floor to say the 15 October deadline would be extended to four weeks (“i.e. 27 days from now”) “in exceptional circumstances”. [UPDATE: on 10 Oct the FT reported that 6 MS would use this deadline extension.]
At the Climate Change Committee’s monthly meeting on 15 November, a yes/no vote will be held on the portfolio of confirmed projects to fund in the first call. The EC will issue Award Decisions before the end of the year enabling the project to receive funding as soon as it signs a ‘Legally Binding Instrument‘ committing it to certain knowledge-sharing and possibly performance obligations.
Delbeke said, “As soon as the first call is out of the way then we go as speedily as possible into the second call because we are all aware of the deadline of end-2015 [to commit funding to projects].” More information on the second call is available here.
Marie Donnelly, Director for Renewables, Research and Innovation and Energy Efficiency in DG Energy said it would be “unconscionable for projects funded by EEPR, NER300 and the British government not to report data on their performance using the same template”, which in practice means the template used by the EEPR projects as those started first (more info: Knowledge sharing). She expected “two to three CCS projects to be funded in the first NER300 call”.
Many Member States and project sponsors have been forced to accept changes to the calculation of their projects’ relevant costs, it has emerged, often with a knock-on effect on the projects’ NER300 subsidy requests and CPUP. The changes were imposed by DG CLIMA and explained to Member States in bilateral phone or video conferences during September.
Typically the changes relate to the manner in which forecast cashflows are discounted. Sometimes DG CLIMA has changed the discount rate for NPV calculations, sometimes it has challenged the ‘year 0′ to which costs should be discounted. One project sponsor said, “Our first year of operation is 2015, making our ‘year 0′ 2014. The NER300 guidance says all investments should be assumed to take place in year 0. Now DG CLIMA has told our Member State that in all its projects, 2010 should be taken as the year 0 and has, apparently (though we have not seen the details of the calculation) adjusted our relevant costs to reflect this. We would like to know where in the NER300 documentation it says that this approach – which is not consistent with normal financial planning – is correct.” In another case – a correction to the calculation of ‘additional benefits’ – the Member State had not subtracted the value of the electricity from the reference plant from income predicted for the demo plant.
The mystery is why these mistakes, some of them elementary, were not noticed and corrected a year ago as each project underwent technical and financial due diligence scrutiny. A spokesman for the EIB said it “continues to provide support to DG CLIMA to assist determination of adjustments to cost data within NER300 requests. The EIB receives requests for technical analysis and provides feedback on an ongoing basis, as part of its technical and financial due diligence assessment for the NER300 programme carried out on behalf of DG CLIMA.”
The EC has not commented.