Annexes to COM(2016)743 - Implementation of the European Energy Programme for Recovery and the European Energy Efficiency Fund - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2016)743 - Implementation of the European Energy Programme for Recovery and the European Energy Efficiency Fund. |
|---|---|
| document | COM(2016)743  |
| date | November 28, 2016 |
For Cobra Cable, the Final Investment Decision was taken in December 2015, 6 months ahead of schedule. The contracts for converters and DC cables were also awarded earlier than foreseen. All permits for the routing have been obtained. In these conditions, the cable should be operational in the beginning of 2019.
3. Carbon Capture and Storage
The EEPR sub-programme consisted of 6 projects and € 1 billion of support to aim at demonstrating the full carbon capture, transport and storage process.
One project has been finished providing operational pilot plants for capture, transport and storage. Three projects have been terminated prematurely and one project ended without completion. One project is ongoing. € 432,227,825 has been paid to these projects.
Progress with CCS projects
In case of the Don Valley project (UK), the Commission saw no reasonable prospect for the project to take a positive Final Investment Decision in a timely manner since the project has not managed so far to secure the additional funding needed for constructing the CCS installation and the critical delay in project implementation. The EEPR Action expired therefore end of 2015 without completion.
In contrast, the Commission is in the final phase of negotiating with the ROAD project an extension of the grant agreement until 31 December 2019, following progress in discussions on additional sources of funding, restructuring of the project and change to a less costly storage site. After completing the necessary updating of previous technical, costing and permitting work, the Final Investment Decision is planned for early 2017 for the installations to be operational in 2020. ROAD would be the first project in Europe demonstrating the application of post-combustion CCS technology to a commercial scale coal power plant. This would also mean the successful demonstration of technology capable of retrofitting existing coal power plants.
III EUROPEAN ENERGY EFFICIENCY FUND (EEEF)
In December 2010, € 146.3 million from the European Energy Programme for Recovery (EEPR) were allocated to a financial facility for sustainable energy projects 4 . € 125 million were used as the EU contribution to the European Energy Efficiency Fund (EEEF), created in July 2011 and which has reached a total volume of € 265 million 5 , supported by a Technical Assistance grant facility with a budget of € 20 million and € 1.3 million for awareness-raising activities.
The EEEF provides tailored financing (both debt and equity instruments) for energy efficiency, renewable energy and clean urban transport projects. Beneficiaries are local or regional public authorities or private entities acting on their behalf.
progress to date
In 2015, the EEEF provided financial support to energy efficiency upgrades of 32 buildings at the Universidad Politécnica de Madrid in Spain, via an energy service company (ESCO) acting on behalf of the University. The project involves the replacement of existing oil boilers providing hot water and heating. The retrofit of new gas boilers, thermal valves and thermal PV solutions will be completed in 32 buildings of the university. The project will unlock 27% of Primary Energy Savings and 45% CO2e savings annually compared to baseline.
From its creation to 31st December 2015, the EEEF has signed contracts with ten projects for €117 million, which have generated €219 million of final investments.
Based on the EEEF's project assessment and reporting framework on CO2 equivalent and primary energy savings, as of the end of 2015, its investments have achieved savings of close to 223 300 tons of CO2 and Primary Energy Savings of 102 790 MWh.
Technical Assistance facility
In 2015, no additional funds were allocated to finance their project development activities.
In total, the Technical Assistance facility funded by the Commission will have supported the structuring of 16 projects for a total amount of € 16 million. Several factors can explain the reasons for the unallocated funds. First, the projects identified in the ramp-up phase of the Fund had a higher advancement stage/maturity level and therefore did not need technical assistance. Moreover, the experience of the Technical assistance facility has shown that financing energy efficiency projects faces many challenges, such as a lower level of preparation of requests than initially estimated at the inception of the EEEF (few of the technical assistance requests received were ready for submission), changes in projects following political changes in governments, or necessary adaptations after the first set of feasibility studies.
Main Conclusions & outlook
By now, the EEEF has progressively established a solid track record of profitable investments and will actively look for additional senior investors to leverage the EU contribution further.
For 2016, the project pipeline contains 9 projects with a total volume of EUR 253 million for which the envisaged EEEF share is EUR 92 million. The EEEF will continue to seek to broaden its geographical coverage, where project and market conditions permit.
IV overall conclusions
The EEPR has delivered good results. The majority of projects have been completed, particularly regarding gas and electricity infrastructures. The strict control exercised by the European Commission in project implementation and monitoring has helped to increase the efficiency of the instrument.
Despite the fact that Off-Shore Wind projects appeared to be more complex than expected, the promoters and the constructors have managed to find solutions and the technological knowledge has been gained over the five years.
The Commission remains committed to demonstrating CCS despite the challenges in finding the necessary complementary funding which has led to the termination of some EEPR projects.
The EEEF has also been successful: a commercial fund was established that will continue to grow, providing financing solutions and generating profits covering administrative expenses, shareholders’ dividend and repayment of establishment costs. The EEEF also serves as a role model for innovative financial instruments investing in cost-effective and mature sustainable energy projects (with payback periods of up to 18 years) that can attract private capital while demonstrating the business case behind these investments and creating a credible track record.
(1)
REPORT 2015 adopted on 8 October 2015, COM (2015)484 final
(2)
Regulation (EU) No 347/2013 of the European Parliament and of the Council of 17 April 2013 on guidelines for trans-European energy infrastructure , OJ L115 of 25.04.2013, p.39.
(3)
Regulation (EU) No 1316/2013 of the European Parliament and of the Council of 11 December 2013 establishing the Connecting Europe Facility, OJ L 348 of 20.12.2013, p. 129.
(4)
Regulation (EU) No 1233/2010 of the European Parliament and of the Council of 15 December 2010 amending Regulation (EC) NO 663/2009 establishing a programme to aid economic recovery by granting Community financial assistance to projects in the field of energy.
(5)
Additional investments to those of the European Commission have been made by: the European Investment Bank EUR 75 million, Cassa Depositi e Prestiti SpA (CDP) EUR 60 million and the Investment Manager Deutsche Bank (DB) EUR 5 million.