EU energy infrastructure budget halved by austerity drive

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When pv magazine spoke to the European Council a month ago about the effects of all-night negotiations over the bloc’s 2014-2020 budget on the funds available for energy upgrades, a spokesman was unable to confirm how much had been shaved off the initial target figure.

Now documentation relating to a streamlined permitting process approved by the European parliament, and dating back to October 2011, shows the EU was planning to devote €9.1 billion (US$11.9 billion) to energy projects through its Connecting Europe Facility.

But the austerity-driven arguments of EU leaders like Britain’s David Cameron eventually saw that figure almost halved to €5.1 billion for the six-year period, although the Council spokesman was quick to point out this was a 20% rise on the figure allocated in the EU budget which ends this year.

Details of the budget cut emerged as the parliament announced the adoption of a streamlined permitting process that, if approved by the Council to come into force in summer 2013, will unlock funding for cross border grid upgrades.

Under the regulation on guidelines for trans European energy infrastructure, cross border grids, energy storage systems and gas pipelines will have their permitting process more than halved and will potentially qualify for EU funding.

The current 10-year approvals process for electricity lines will be cut to no more than four years and, in most cases, three-and-a-half years, reducing costs by 30%. The original aim, also outlined in the October 2011 papers, was to reduce waiting times to no more than three years.

To qualify for the streamlined process, schemes must be deemed ‘projects of common interest’ by the Commission with the first list set to be drawn up by the end of this year.

Projects of common interest must be cross border or benefit at least two EU member states.

Those projects which can prove they are not commercially viable may be eligible to up to half of their project costs – 80% in ‘exceptional cases’ – from the much-reduced €5.1 billion Connecting Europe Facility budget.

The EU estimates €200 billion of investment is needed to upgrade the bloc’s energy infrastructure by 2020 with €140 billion of that needed for new electricity lines, smart grid upgrades and energy storage projects.