New information

In Q2 2017, the European Commission published one-page factsheets on many NER300 projects (see article). They revealed for the first time the name of the Project Sponsor (the company behind the project) and the date, or expected date, of the Final Investment Decision on the project by the Project Sponsor. Often they contained a line or two on the status of the project. The factsheets stick closely to the text supplied by Project Sponsors as part of their 2016 reporting obligation to the EC.

Click inside the table below to see a sortable table summarising the essential points from those factsheets.

Flexible FIDs?

All projects from Call 1 (with five exceptions) claim to have reached Final Investment Decision by the EC’s deadline of December 2016. The EC understands Final Investment Decision as “the ultimate financial close on the proposed investment program, including a life cycle program baseline that establishes cost, schedule, performance, benefits, and risk-management boundaries for program execution” (FAQ 250). But the factsheets show that three CSP (concentrating solar power) projects spread over Greece and Cyprus intend to “complete financing”, “sign power purchase agreements” or reach “financing closure” only in 2017. Two wind projects also have work to do. One reports, “Financial close is expected for the middle of 2017;” the other that “definition of the detailed contractual framework and financing” is planned for this year. Confusing statements have been made concerning the FID of the Finnish Ajos BTL project.

All but two projects from Call 2 expect to reach FID on the last allowable date, June 2018.

Probability

NER300.com has included a column called “Probability” in the table. This contains a score from 1-5 (1 low; 5 high) for the likelihood that a project will enter into operation. The score is based in part on the info in the factsheet.

Missing data

Projects that are in operation are obliged to put certain specific datasets related to their operation into the public domain. This has not happened. Two of the three projects in this position also have no factsheet.

1. NER300.com’s comment

   The EC has not imposed its definition of “Final Investment Decision” too rigidly, relying mainly on the host Member State’s word that it has been reached. A Project Sponsor that claimed to have reached Final Investment Decision in December in 2016 has even used an EC-hosted and -chaired conference to say, “Our objective is to reach financial close by the end of September 2017” (see Windfloat in the table below). Although in a paper circulated to NER300 NCPs on 3 Feb 2017 the Commission wrote, “The full scale of NER300 undisbursed funds” was “expected to be known by the end of February 2017”, only in July did the Commission put pressure on companies to confirm whether they had complied with the Dec 2016 deadlines.

   Member States individually have little incentive to be strict on FID for their projects, although it might be in their common interest if they were. A stricter approach would likely allow more money to be recycled to more mature projects.

   Project Sponsors from Call 2 will take note of the EC’s leniency. They have an interest in making a premature declaration of Final Investment Decision if it allows them to present higher “relevant cost” than if they waited. “Relevant cost” has little meaning in real life, although it is derived from some of the quantities used in a project’s financial model. An NER300 award is capped at 50% of relevant cost. It may be revised down (but never up) if the relevant cost changes, but only up to the point that the FID is taken.

   Concerning the timing of the release of these factsheets, it is rather remarkable that it has taken 3-5 years, depending on the call, for the names of the companies behind the projects to be officially communicated. In other EU programmes for energy technology demonstration, such as FP7 or Horizon 2020, the names of beneficiaries are published as soon as grants are awarded.