The EC has published the Rejection Decision (Part I: legal text, Part II: lists of projects), showing how the 32 projects sent by Member States to the EIB for Technical and Financial Due Diligence were filtered down to the 19 awarded. Five projects failed TFDD. Of the projects that passed, a further four were deemed ineligible (for example, for not being innovative enough). Thus 23 projects made it onto the long-list for funding. The rule of “maximum three projects per Member State over both NER300 awarding Rounds” meant three Member States (France, Sweden, Portugal) with four or more projects that had passed the TFDD and eligibility-check stages had to move projects to a waiting list for funding (Annex 2 of the Rejection Decision) to bring their totals down to three.

The EC is not clear about the circumstances under which these projects may be awarded, saying only it will happen “if funds become available” and if Member States confirm them as per Article 8 of the NER300 Decision. As paragraph 91 of the Call text shows, the EC has not entirely excluded the possibility of awarding more than three projects to a Member State.

The success rate (projects awarded / projects entered to the EIB for evaluation) is high both compared to the First Round…

…and compared to early indications from the EC’s other funding instrument for energy technology development, Horizon 2020. 420 ‘stage-1’ proposals were submitted the two-stage LCE-01-2014 and LCE-02-2014 calls that closed in April 2014. Of these, 106 have been invited to submit proposals for ‘stage-2’. The grand total of the budget request of the 106 projects is still six times the budget available.

1. NER300.com’s comment: Coincidence

   The NER300 pot happens to be just big enough to award every single project that passed both TFDD and the eligibility check except those that would have implied funding a fourth project in a Member State. If you don’t believe in coincidences, you might prefer to think that the EC would already like to award funding to those projects, but is checking the legal position before committing itself. This interpretation is given credence by the fact that the EC has not released information on the volumes of each of the components that make up the Second Round pot (see this post).

   With the success rate (and magnitude of some of the awards) eye-wateringly high, Member States (especially those who have ended up with less than three projects) might be kicking themselves for not having entered more projects into the Second Round.

Undisclosed failed First Round RES projects boost funding pot for Second Round

The composition of the 1.0 bn EUR funding pot for the Second Round is as follows.

First, there was left over money from the First Round:

The second component is the proceeds from monetisation of 100 million Second Round allowances. The sales commission charged by the EIB and its carbon market intermediaries needs to be deducted from the gross value of the sales. From the first call, it is known that gross sales of 1 609 125 460 resulted in an NER300 pot of 1 500 000 000 EUR, thus the rate of commission was roughly 6.78%. Applying that to the gross Second Round proceeds yields the following:

Ireland, Sweden and Spain formally notified the EC that one of each of their First-Round projects would not begin, allowing the EC to return their awards to the pot for the Second Round:

Therefore the collapse of one or more additional First Round project(s) with Award(s) of at least 80 M EUR, as indicated by the row(s) of question marks in the table above, must have formally been notified to the EC since 31 Jan 2014 or it would not have been possible for the EC to award funding to the 19 projects in the Second Round Award Decision.

3 M EUR of unawarded money remains in the NER300 pot at present (statement by Kerstin Lichtenvort on June 26).

Little information provided on the reasons for 14 projects being denied funding

On 3 July 2013 there were 32 RES projects in the NER300 Second Round competition compared to 18 awarded today. It would be interesting to know whether a) the EIB’s Technical and Financial Due Diligence and the EC’s eligibility check coupled with the requirement for no more than three projects per Member State account for the entirety of this difference or whether b) some viable projects were not awarded because of lack of funds. The language of Recital 8 of the Award Decision, though convoluted, suggests that the answer is a).

8. […] The Commission checked, if the available funds were greater than the total funding request. As some excess funds were available, all confirmed projects by Member States could be added to the final list of projects in the CCS and RES groups.

… which should be understood as

The grand total of NER300 funding requests of the confirmed projects was less than the funds available, so all were awarded.

To know for sure, however, one would need to see the Rejection Decision, which was adopted by the Climate Change Committee on 4 June. NER300.com has requested it under freedom of information rules.

Announcing the results of the Second Call in a brief press conference (1 bn EUR to 19 projects in 12 countries, half of which went to just two projects), Commissioner Hedegaard again played down the idea of a third NER300 call (or something like it) before 2020: “A third call might be a tool to include in the Framework for Climate and Energy 2020-2030 – something for the next decade. Between 2014-2020, there is Horizon 2020. For a new call, we would need a new Decision.” [To recall, a European Commission Decision is the legal basis for the current NER300 programme.]

The European Commission has not published the Rejection Decision setting out which projects have been kicked out of the competition.

UPDATE 9 July 2014: Ocean Energy Europe has hailed NER300 as an programme that “helps address a funding gap for large scale demonstration of pre-commercial renewable energy projects”. The association’s press release refers to a “joint letter with Europe’s renewable energy associations to the Commissioner Connie Hedegaard” that calls for a “new EU funding programme for technology demonstration following the NER300 programme”.

Commissioner Hedegaard will give a press conference. The press conference can be viewed via webstream here.