Oct 20 2014

Notes from NER300 meeting 20 Oct 2014 – afternoon MS, PS + 6

Hot news

EC (Kerstin) is willing to allow projects flexibility on the requirement to generate at least 75% of the energy they bid to generate in their first five (10 for CCS) years of operation in order to get 100% of their Award.

She said, “If a majority of projects find that, 2-3 years after their entry into operation, they are not on track to generate 75% of the amount they bid for technical reasons, the EC might be prepared to look again at the rule.”

Oct 20 2014

Notes from NER300 meeting 20 Oct 2014 – morning MS and PS only

Annual conference

EC proposes an annual NER300 conference in Brussels every autumn to showcase funded projects. Also (Andreas): EC presentations at “conference like EWEA or the biomass conference” and “this year there will be presentations at the SET Plan conference in Rome (10-11 December).”

Best questions so far

What if, in the case of upfront funding, the MS can’t recover Award money from the PS and the PS is not entitled under NER300 rules to keep money it has already been paid?

EC confirms (Kerstin): “The MS is still liable towards the EIB to repay the money.”

Relevant costs: how will the EC check the relevant costs at FID?

If the RC are less than the ones quoted in the application, the EC may need to reduce the award. EC (Lorenzo): “We are confident that the relevant costs as identified at the time of the selection process [i.e. quoted in the application] are the ones that will apply at FID.”

Best new info

Disaster averted

EC (Kerstin): “Up to half of projects in the first call would have not been able to reach FID and therefore would have lost entitlement to their Award if we had not extended the deadlines“.

Reporting MWh production

The EC is prepared to be flexible in the reporting deadlines as these are “not laid down in the Award Decision”. The questioner used the example of a national grid operator that fails, by the start of Year N+1, to report the electricity fed into the grid in year N. This info is necessary to calculate the NER300 award disbursement to the project.

Award Decision amendments

Amendments to Award Decisions collected throughout the year by EC, EC bundles them into one leglislative procedure done once a year. Suggestion that a deadline might be March for the procedure completed by June.

Oct 16 2014

EC hosts invitation-only meeting on NER300 20 October

DG CLIMA will hold a ‘Second NER300 Information Event’ on NER300 on 20 October. The invitation and programme sent to the Member States is here.

The morning session will be taken up with a series of presentations similar to those given to First Call awardees and their host Member States on 10 April 2012. One difference will be that the thinking on ‘Knowledge Sharing’ obligations is now much more advanced than it was in 2012, with DG CLIMA having published (here) the templates of Knowledge Sharing collection forms and preliminary details of the techniques it will use to obfuscate the knowledge shared. Also key deadlines have been extended.

Five representatives from associations linked to CCS, wind, ocean energy and biomass and one NGO have been invited to join in the afternoon for ‘Session II: Exchange of experiences and views on NER 300’. DG CLIMA took the position that only renewable energy associations representing particular technologies are eligible to attend, as opposed to associations having a more general view. No webstream will be available.

The renewable energy associations will push for another NER300-type programme, beginning before 2020 if possible.

  1. NER300.com’s comment

    Bellona, the invited NGO, has interests in a number of the technology areas funded by NER300, so why should it have a seat but not an association like Eurelectric or EREF?

    Two of the three renewable energy associations admitted to the meeting were chosen because they were the first to take the initiative to request a seat when they saw the invitation.

    Dissenting voices seem to be absent (specifically Project Sponsors whose proposals were rejected in either the First or Second Call or who withdrew or suspended their projects), so are those of the sectors that NER300 might include in future: heavy industry at risk of delocalisation.

Oct 06 2014

Extensions to NER300 deadlines

***UPDATE 19 November 2014: The amendment extending the deadlines***

***UPDATE 20 October 2014: adopted unanimously***

***UPDATE 15 October 2014: Reuters reports the Climate Change Committee approved DG CLIMA’s proposal***

DG CLIMA — pending a vote in the Climate Change Committee on 15 October — is to push back NER300’s deadlines by two years.

For a project awarded in the First Round (i.e. selected for award in Dec 2012), the deadlines applicable to

  • Dec 2014 (final investment decision, receiving all permits, State Aid clearance) will be extended to 31 December 2016.
  • Dec 2016 (date of entry into operation) will be pushed to 31 December 2018, with an obligation to generate at least some renewable energy in the year that follows. For this extension, notification of the EC by the Member State hosting the project is required.

The EC says, “The extension of time-limits would apply to any project under the first and second calls,” implying that two-year extensions will be available to second call projects, too.

  1. NER300.com’s comment

    The EC finally gave in to pressure to extend NER300’s deadlines after seven Member States (France, UK, Germany, Italy, The Netherlands, Sweden and Finland) co-signed a letter pressing for extensions. Its refusal to countenance this in 2013 had meant that the Westwave project (OCNa, Ireland) felt it necessary to hand back its First Round award and reapply in the Second Round, which was a big and (it turns out) unnecessary risk. Since then, there have been changes to State Aid rules around renewable energy, a debate on the ‘2030 Framework for climate and energy’ has got underway and the ILUC Directive has hit an inter-institutional blockage. This made pressure to extend irresistible.

    Many of the countries signing the letter were awarded colossal sums for bioenergy projects. There is no sign of a target for renewable energy in transport in the ‘2030 Framework for climate and energy’, let alone one involving advanced biofuels. It may turn out that extensions by themselves are not what projects need in order to survive, but rather supportive regulatory frameworks.

    Instead of a day of reckoning coming two months from now, the viability of awarded projects will not be known for two years at the earliest. To recall, NER300 rules give Member States no incentive to reveal the viability of their projects (or the true intentions of their Project Sponsors) at any point before the Final Investment Decision/permits/State Aid clearance deadline. Projects need to report their progress annually before their entry into operation, but there is no sanction attached to slow progress.

    The consequences of the deadline extension are

    1. while it was already unlikely that waiting-list NER300 projects (See Annex II here) would be funded, it is now extremely unlikely that they will. The 2009 Emissions Trading Directive stipulates that all awards must be made by 31 December 2015 (See page 18), which is one year before the new 2016 deadline.
    2. With no new NER300 awards now seeming possible, money for failed projects will have to be returned to the Member States or, better, channeled to first-of-a-kind demonstration energy demonstration projects via Horizon 2020 (another EU funding programme).
    3. The innovative quality of these projects may be quite out-of-date by the time they become operational. Benchmarks for innovation that were determined in 2009 became the basis for the NER300 calls for proposals in 2010 and 2013 and may now only be realised in installations that enter into operation in 2019 — fully a decade later. The purpose of the awards, which was to reward first movers, may be redundant by the time they come to be paid out.

    The decision to grant the extension appears to have been made in the last month. On 4 September, in documentation circulated to the contractors that the EC outsources some of its NER300 tasks to, the EC requested that they review the progress reports of Project Sponsors only in 2014 and 2015. Under the deadline extension, progress reports would need to be monitored in 2016 and 2017, too.