NER300 money will be paid out to renewable energy installations as they produce energy, supplementing whatever other support they might benefit from, like green certificates or feed-in tariffs. The justification for the additional subsidy is that it will hasten the deployment of new technology and that it will ensure that knowledge about the functioning of this new technology is put in the public domain.
An innovative technology project, however, carries risk: the project might fail to meet its production schedule, therefore meaning that it does not receive all the NER300 subsidy it had expected. NER300 allows for some underperformance. This is reflected in the rate of disbursement of the subsidy. Renewable energy installations need only achieve 75% of the total energy production that they bid for the first five years of operation in order to receive their subsidy in full. This effectively means that if the installation bids a production of 100h over 5 years for a subsidy of 200E then the subsidy is paid to it at (200E/100h)/0.75 = 2.667E/h. If the project proceeds as planned then it is fully paid out after 45 months. But if the project produces only 50h, this means it collects 50*2.667 E = 133.33E.
To be able to use NER300 to cover a project’s investment costs, a body would need to be prepared to lend to the project against the future income from NER300. This body could be a bank. It could also be a Member State: NER300 allows the host Member State to make available all the NER300 grant at the investment stage providing it agrees to refund the EIB if the project underperforms excessively.
Calculating the maximum subsidy that NER300 can provide to a particular project is not easy.