NER300 second round funding preview

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20 June 2013, Gas, Electricity

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The NER300 funding model will not meet its original objective of a game-changing boost to carbon capture and storage (CCS) and other innovative renewable and low carbon technologies, due in part to the collapse in the price of the carbon permits upon which the funding is based.

The projects supported in the first round will aid the commercialization of necessary and useful technologies, for example the SLim project in the Lommel region in Belgium, which will implement innovative approaches to the management of distributed renewables. However, with the lower funding levels and the lack of alignment between member states and the European Commission (EC) over large-scale CCS projects in round one, the impact of supported technologies can at best be evolutionary rather than revolutionary.

The South Hungarian Enhanced Geothermal System shows that while the NER300 funding process may be rather complicated, the rules somewhat ambiguous, and the paperwork a chore to complete, for potential participants in the second round the funding available is undoubtedly attractive. If a project developer has the resources to undertake the significant administrative workload, a grant potentially worth hundreds of millions of euros is available to support innovative pre-commercial scale projects.

NER300 is a financing instrument managed jointly by the EC, the European Investment Bank, and the member states. The instrument is named after the 2009 revisions to the Emissions Trading Directive, which contained provisions to set aside 300 million EU Allowance Units (EUAs) in the New Entrants' Reserve of the EU Emissions Trading Scheme. The NER300 scheme monetizes EUAs to create a funding mechanism to support a suite of carbon capture and storage and renewable energy system demonstration projects. The call for the second round of funding under NER300 was announced in April 2013, and closes in July.

Datamonitor's "NER300 Second Round Funding Preview" (June 2013, EN00037-081) is available now. / / @DatamonitorEN

Source: MarketLine

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