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EC awards €1.2B from NER300 “Robin Hood” mechanism for 23 renewable energy projects; 5 advanced biofuel projects targeted for €516.8M
20 December 2012
The European Commission awarded more than €1.2 billion (US$1.6 billion) funding to 23 highly renewable energy demonstration projects—including five advanced biofuels projects with maximum combined funding of €516.8 million (US$687 million), or 43% of the total—under the first call for proposals for the NER300 program.
Funding for the program comes from the sale of 300 million emission allowances from the New Entrants Reserve (NER) (hence the name) set up for the third phase of the EU Emissions Trading System (ETS). The funds from the sales are to be distributed to projects selected through two rounds of calls for proposals, covering 200 and 100 million allowances respectively.
This year Christmas has come early—today’s decision is a major milestone in EU climate policy. The NER300 program is in effect a “Robin Hood” mechanism that makes polluters pay for large-scale demonstration of new low-carbon technologies. The €1.2 billion of grants—paid by the polluters—will leverage a further €2 billion [US$2.66 billion] of private investment in the 23 selected low-carbon demonstration projects.—Climate Action Commissioner Connie Hedegaard
The projects cover a wide range of renewable technologies:
8 bioenergy projects (including 5 advanced biofuels projects with combined maximum funding of €516.8 million, or US$687 million) for maximum funding of €629.3 million (US$836.5 million);
6 wind projects (€273.2 million, US$363 million);
4 concentrated solar power projects (€203.3 million, US$270 million);
3 ocean energy projects (€58.9 million, US$78 million); and
1 geothermal power project (€39.3 million, US$52 million);
1 distributed renewable management (smart grids), with €8.2 million funding (US$11 million).
Once up and running, these projects will collectively increase annual renewable energy production in Europe by some 10 TWh, an energy amount corresponding to the annual fuel consumption of more than a million passenger cars, according to the EC. The aim is to successfully demonstrate technologies that will subsequently help scale-up production from renewable sources across the EU substantially.
NER300 funding will provide up to 50% of the relevant costs of the project—i.e., the additional costs compared to existing, proven technologies; the rest will be covered by private investment and/or additional national funding. NER300 funding will be made available on an annual basis, based on proven performance (the amount of green energy produced) and the meeting of knowledge-sharing requirements.
No carbon capture and storage (CCS) project was awarded funding under the decision. Member States were unable to confirm the majority of CCS projects put forward for various reasons: in some cases there were funding gaps, while in others the projects were not sufficiently advanced, the EC said. The €275 million (US$366 million) envisaged for CCS projects in the first call remains available to fund projects under the second phase of the NER300 program.
Advanced biofuels. The largest biofuels award (and the single largest award of the first call) was for a maximum of €199 million (US$265 million) to the Woodspirit project in The Netherlands. Wood chips will be the feedstock for producing 516 million liters/year (136 million gallons US) of bio-methanol, equivalent to 413,000 t/y, in Farmsum. The bio-methanol will be produced using biomass torrefaction and entrained flow gasification as new core technologies to deliver a petrol additive for partial replacement of mineral fuel.
The second largest maximum award of €170 million (US$226 million) goes to the UPM Stracel Biomass-to-Liquids (BTL) project in France. A second generation biomass-to-liquid plant in Strasbourg will use about 1 million tonnes of woody biomass to deliver an annual output of 105,000 tonnes of biofuel. The plant is designed to be integrated into the paper & pulp production line of the existing paper mill, enabling exchanges of energy and products. The novel gasification technology will convert the biomass into gas before a gas-to-liquid conversion renders it fit for biofuels production.
In Finland, the Ajos BTL project will receive up to €88.5 million (US$118 million) to produce renewable diesel and bio-naphta in the Baltic Sea area for sale to a market primarily of diesel and gasoline retailers. The plant will use some 950,000 tonnes/year (t/y) of woody feedstock and 31,000 t/y of tall oil to deliver an annual output of 115,000 t/y of biofuel. The project will include biomass pre-treatment, a gasification island and gas-to-liquid conversion.
The CEG Plant Goświnowice project in Poland will receive a maximum of €30.9 million (US$41 million) to use agricultural residues such as wheat straw and corn stover as the basis for producing 60 million liters/year (15.9 million gallons US) of second-generation bioethanol. The new plant in Goświnowice will be partially integrated with an existing first-generation ethanol plant. Lignin and biogas by-products will provide fuel to the existing plant which in turn will provide steam for both plants.
The BEST project will receive a maximum of €28.4 million (US$38 million) to convert selected energy crops into second-generation biofuels at a demonstration plant in Crescentino, near Turin in Italy. The integrated biofuels plant will use giant cane, a new fast growing and drought-resistant energy crop, as well as wheat straw to produce ethanol. The plant will have an annual production capacity of 51 million liters (13.5 million gallons US) per year.
Second call. The Commission will proceed with the implementation of the second call for proposals, covering unused funds from the first call as well as the revenues of the remaining 100 million allowances in the new entrants’ reserve.
The NER300 funding program is implemented by the European Commission with the collaboration of the European Investment Bank (EIB) both in the project selection, the sale of 300 million carbon allowances from the EU Emissions Trading System, and the management of revenues.
(A hat-tip to Anders!)
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