Choice of reference plant

The maximum value of an NER300 subsidy cannot be calculated without first knowing the operating cost (OPEX) and operating benefit (turnover) over the first five years of operation of a reference plant and this plant’s capital cost (CAPEX). The characteristics of this hypothetical reference plant are for each Member State to decide, although the EC has provided guidance (ppt slides, ppt worked examples, FAQ collection 5).

The Call text tells Member States to “ensure when defining the Reference Plant that for all projects within a given subcategory the technology type is the same.” FAQ 118, however, relaxes this condition: “it could be envisaged to use different reference plants for the same subcategory, if this was justified on the basis of specific differences between Projects.” Scaling the hypothetical reference plant until its energy output matches the energy output of the demonstration project in question will be allowed. “For example,” says FAQ 116, “to determine the relevant costs on the basis of a CCGT, downscaling could be done by adjusting the capacity and costs of the CCGT to the RES project through appropriate factoring in of the load factor.”

The Guidelines on State Aid for Environmental Protection, on which NER300’s rules are based, require the “reference investment, from a business point of view, to be a credible alternative investment” to the demonstration plant (see news story).

Data on some Member States’ choices of reference plant are contained in the following State Aid rulings made by the European Commission:

  • N 442 / 2009 – NL: Guarantee facility for geothermal energy (EN) (NL)
  • N 6 / 2009 – IT: Investments in solar energy on decommissioned landfills (EN) (IT)
  • N 265 / 2005 – NL: Nearshore Windpark (EN) (NL)
  • N 175a / 2005 – DE: Support of demonstration projects for use of energy from renewable sources (EN) (DE)
  • N 76 / 2005 – AT: Support of generators of green electricity from solid biomass (EN) (DE)
  • N 266 / 2003 – NL: Q7 Offshore Windpark (NL)
  • N 447 / 2003 – IE: Tax relief for corporate equity investment in renewable energy projects (EN)

For the benefit of Project Sponsors, the Swedish government has distilled from these State Aid cases guidance on the reference plant.

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