Andreas Boschen
Andreas has been leading the Department for the Connecting Europe Facility at the Innovation and Networks Executive Agency in Brussels since July 2014. His teams manage EU financial support to infrastructure projects in the areas of transport, energy and telecommunications. After beginning his professional career as a diplomat, he has been an official of the European Commission since 1998.
Energy is one of the three target sectors of the Connecting Europe Facility (CEF). What funding opportunities are available for energy projects under the CEF and what do projects need to do to access this funding?
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The Connecting Europe Facility in the field of energy (CEF Energy) provides funding to infrastructure projects in electricity, natural gas and smart grids with the aim to better interconnect energy networks towards a single energy market in Europe. The programme supports the key objectives of the Energy Union by promoting further integration of the internal energy market, enhancing security of energy supply and integrating energy from renewable sources into the network. To support these objectives, the EU has made available a total budget of EUR 5.35 billion for energy projects for the period 2014-2020, of which EUR 4.7 billion is to be allocated through grants managed by the Innovation and Networks Executive Agency (INEA).
The CEF Energy programme co-funds actions that are either studies or works. The CEF funding cannot exceed 50 % of the total cost of the action. This funding rate may be increased up to 75 % in cases where the action provides a high degree of regional or Union-wide security of supply, strengthens the solidarity of the Union, or comprises highly innovative solutions.
To be eligible for financial support under CEF, actions must be identified as projects of common interest (PCIs). PCIs are key energy infrastructure projects that are essential for completing the European internal energy market and for reaching the EU’s energy objectives of affordable, secure and sustainable energy. The first Union-wide list of PCIs in the energy sector was adopted in 2013, and since then it has been updated every two years.
Some examples of studies that can be funded through CEF include: feasibility studies, cost-benefit analysis related to a PCI, FEED (Front- End Engineering Design) of a project, onshore or offshore (subsea) routing surveys, environmental impact assessment (EIA), detailed engineering studies, preparation of documents necessary for the issuing of permits and other preparatory activities. On the other hand, works that can be funded by CEF are defined as all activities related to the physical construction of the PCI, e.g. laying of a gas pipeline or constructing of a substation.
How does CEF Energy funding differ from other funding mechanisms? Are there specific funding gaps that you aim to address?
Upgrading and developing energy transmission infrastructures in Europe requires investments of about EUR 140 billion in electricity and at least EUR 70 billion in gas. The vast majority of these investments are meant to be financed by the market, mainly through the regulated transmission tariffs. However, some energy projects are not commercially viable and would therefore not be implemented despite the fact that they provide important socio-economic benefits at regional level. This is typically the case for certain interconnectors. CEF is engineered to address the gap between the socio-economic value at regional/European level (including security supply) and the commercial viability for single promoters. The energy regulators play an important role in this calculation and in the apportionment of costs of cross-border projects.
What has been the focus of previous CEF Energy calls for proposals and how will these projects contribute to Europe’s low-carbon objectives?
Previous calls supported projects focusing on the following objectives: security of supply, ending energy isolation, eliminating energy bottlenecks and completing the internal energy market.
In the electricity sector, actions funded through CEF also aim to better integrate renewables in the energy market. By supporting the development of major interconnectors, the CEF will contribute to better dispatch and complementarity possibilities for the production and consumption of electricity produced from renewable intermittent sources. This is particularly important in the North-Sea region (interconnections Norway-UK, UK-France, Ireland-France…). The CEF also provided means to help EU Member States end their energy isolation, e.g. CEF co-funded electricity lines between Lithuania and Poland, Latvia and Estonia. Finally, CEF Energy is contributing to the completion of the internal energy market, e.g. the interconnection between Spain and France.
In the field of natural gas, the main focus was on projects relating to security of supply in the Baltic region and in Central and South-East Europe. The most important grants were awarded to the Poland-Lithuania gas interconnector (GIPL), to the Estonia-Finland gas interconnector and to the Romanian part of the Bulgaria-Romania- Hungary-Austria interconnection. Other CEF-funded actions contribute to projects that enhance the interconnections between EU Member States (e.g. Poland-Slovakia, Estonia-Latvia), open up new gas supply routes and sources (e.g. the Trans-Anatolian Natural Gas Pipeline (TANAP) and the Trans Adriatic Pipeline (TAP) or end the energy isolation of Member States and regions (e.g. Malta, Cyprus).
In addition, last year INEA launched a EUR 40 million call for proposals to support synergies between the transport and energy sectors. The selected synergy actions will contribute to the following specific objectives: increasing competitiveness by promoting further integration of the internal energy market and the interoperability of electricity and gas networks across borders, supporting projects promoting the interconnection of networks in the EU Member States; removing internal constraints; decreasing energy isolation; increasing the interconnectivity in electricity and achieving price convergence between the energy markets; and finally ensuring sustainable and efficient transport systems, by supporting a transition to innovative low-carbon and energy-efficient transport technologies and systems, while optimising safety.
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What calls or funding opportunities related to low-carbon technologies are foreseen for the future?
It is expected that there will be at least one CEF Energy call for proposals every year during the rest of the financing period until 2020. The next one is expected to be published in April 2017 with deadline for submission in October this year. All information will be made available on INEA’s website.
In addition to CEF funding, there have been a number of recent Horizon 2020 ‘Secure, Clean and Efficient Energy’ calls related to ‘Competitive Low-Carbon Energy’. How does the focus of these calls differ from the CEF and what type of projects may potentially be funded?
Horizon 2020 (H2020) is the European programme that supports research and innovation. In the energy field, the programme makes funding available to projects covering all the lifecycle of technology development except deployment. In practice, H2020 supports projects across basic research, applied research, prototyping, piloting and finally demonstration. Projects that can be funded under H2020 develop, for instance, improved renewable energy generation methods, smart electric grids or new technologies for CO2 capture and storage.
An example of synergies between H2020 research actions and CEF deployment efforts can be found, for example, in the field of energy storage. Underground compressed air energy storage technology has been demonstrated (reaching TRL7) at Megawatt scale (MW) project under H2020. This technology is now being deployed in a much larger scale (several hundreds of MW) in Europe with the support of the CEF programme.
Further low-carbon energy calls can be anticipated under the Secure Clean and Efficient Energy calls in the Work Programme 2018 – 2020. Details will be given on the EC Participant Portal.