ZEP and EUREC call for NER 300 funds to reward ambition and technological innovation

The NER 300 is a budget of 300 million EU emission unit allowances (EUAs) allocated in December 2008 to finance demonstration projects of innovative renewable energy technology and CO2 capture and storage (CCS) under the New Entrants’ Reserve for the period 2013-2020 of the EU emission trading scheme.

ZEP Vice President Graeme Sweeney,who is also the CEO of Shell Renewables and president of Shell Hydrogen, spoke at the ZEP General Assembly on October 20th in Brussels. Sweeney highlighted the need for an efficient and effective allocation of the NER 300. He explained that the value of the NER 300 funds would be maximised if dedicated to projects that invested in the most innovative and ambitious CO2 capture and storage (CCS) technologies. To do so, it is important to give the Commission sufficient discretion in selecting the appropriate portfolio of projects.

In addition, Sweeney called for closer Member States involvement in offering project support in the form of economic backing and the creation of research and development incentives.

This view was echoed in an open letter from the European Renewable Energy Research Centres Agency (EUREC) to the European Commission on NER300 concerning the support of renewable energy projects.

The open letter outlined two possible scenarios for the allocation of NER 300. In the first scenario, the Commission has the final say and funds are awarded to those projects which verify an “avoidance of CO2 emissions,” a loose term which simplifies the task of proposal-writing and attracts a large number of viable renewable energy projects. The process is speedy and efficient and the most effective and innovative projects can lay claim to the funds. The second scenario describes the allocation of NER 300 based on cost avoidance and thus poses more of a risk for industry, thus acting as a disincentive and a means by which to lengthen the entire process.
Clearly, the former scenario is championed. The letter opens with a position statement that is strongly endorsed by Bellona and reads thus:

“The renewable energy community gives three cheers to the Commission for recognising, at the eleventh hour, that the prime purpose of NER300 is to bring to market new technology that, in the absence of NER300, would have taken longer to appear at full commercial scale.”