On 12 July the European Commission released a long awaited ranking list of NER300 projects. The published staff working document takes stock of the state of play of the first call for proposals under the EU´s NER300 funding programme and ranks candidate projects.

NER300 is one of the world´s largest funding programmes for innovative low carbon energy commercial demonstration projects and one of EU’s key tools to achieve commission reduction targets.

It is now clear that under the ongoing first call, some three carbon dioxide capture and storage (CCS) demonstration projects and up to 16 innovative renewable energy sources (RES) demonstration projects could be co-funded. UK’s pre-combustion Don Valley Power Project and Polish post-combustion Bełchatow Project are the two CCS projects most likely to be funded, followed by the Green Hydrogen Project in Rozenburg in the Netherlands. This could be a significant impulse for especially for Poland, which has lately been acting as an opponent of EU climate policy, basing its arguments on the country’s reliance on domestic coal. The ranking may reflect the status of the proposed projects at the time when they were submitted – at the beginning of 2011. If governments are unable to confirm their commitment to the projects, lower ranked projects will move up.

The ranking of CCS projects is as follows:

Bellona is also pleased to note that the top-ranked projects for renewable energy include highly ambitious projects, not least those connected to conversion of biomass to fuels and energy. One of the major challenges in the fight against climate change in the coming decades will be to ensure an efficient and sustainable use of available biomass, mirrored by all top three RES projects being bioenergy related.

The GoBiGas project in Gothenburg, Sweden is one such example, using gasification as a way to enable the use of biomass feedstocks that do not compete with food production, such as forestry waste.

The versatility of the produced synthetic gas (syngas) moreover opens for refining to e.g. synthetic diesel or aviation fuel, as is already planned in the Finnish project Ajos BTL and in UPM’s Stracel project in France.

During the production of such synthetic fuels, more than 50 % of the feedstock carbon is released as near-pure CO2, opening for low-cost CO2 capture and storage (CCS) and fuels with a significant carbon-negative footprint, as described in the recent EBTP/ZEP report on Bio-CCS. While no projects with such synergies have been submitted for this call, Bellona hopes the Commission will facilitate and encourage Bio-CCS in the next round, in accordance with the recommendations of the report. Also for the bioethanol production projects in the list, low-cost CO2 capture and storage will be an interesting option to further improve their footprint by going carbon-negative.

Other ambitious projects include offshore and onshore wind, advanced concentrated solar power, smart grids and wave power, all in line with EU energy and climate policy and with what Bellona views as crucial pieces in the broad portfolio we need to halt disastrous climate change.

The total amount of funding from the new entrants’ reserve is still uncertain as it dependent on the sales of allowances under the Emission Trading Scheme. The sale by the European Investment Bank is progressing well, with an average price per allowance until now being €8.05 and an estimated total revenue of €1.3 to 1.5 billion for the first round. The most financial support a project can get is 50% of relevant costs, but no more than 15% of the available allowances over the two rounds of calls for proposals (estimated at €292-337mn). This leaves space for significant additional funding, which the projects will have to prove to have secured upfront.

The final list of successful applicants will be known by the end of 2012.

Read Derek Taylor’s blog on NER300 ranking.