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NER300s project selection process 27/07/2010 NER300.com.

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Presentation on theme: "NER300s project selection process 27/07/2010 NER300.com."— Presentation transcript:

1 NER300s project selection process 27/07/2010 NER300.com

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3 Illustrative Annex I A CCS - CCS1 - CCS2 Innovative RES -Bioenergy - Topic B1 - Topic B2 -Geothermal - G1 - G2 -Photovoltaic - P NER300.com

4 Projects submitted to government of country Red: TopicAll public subsidy*/ performance Request from NER300 B145/MWh 35 M B235/MWh45 M B250/MWh45 M G170/MWh40 M P100/MWh50 M By end December 2010 NER300.com * See Ranking cost in final slide

5 Projects submitted to government of country Red: TopicAll public subsidy/ performance Request from NER300 B145/MWh 35 M B235/MWh45 M B250/MWh45 M G170/MWh40 M P100/MWh50 M By Q2 2011 Red chooses which applications to submit to the EIB. There are two B2 proposals. This one, with the higher subsidy/MWh is effectively out of the competition at this stage. NER300.com

6 TopicAll public subsidy / performance Request from NER300 B145/MWh 35 M B235/MWh45 M B250/MWh45 M G170/MWh40 M P100/MWh50 M TopicAll public subsidy / performance Request from NER300 CCS245/tonne500 M P115/MWh 80 M By Q2 2011 TopicAll public subsidy / performance Request from NER300 CCS165/tonne600 M B140/MWh 300 M G165/MWh55 M G160/MWh45 M P90/MWh100 M TopicAll public subsidy / performance Request from NER300 CCS175/MWh450 M CCS170/tonne400 M CCS2100/tonne500 M B150/MWh 30 M B155/MWh60 M G145/MWh (below threshold) 25 M NER300.com

7 EC/EIB receives all MSs proposals /perf.M M M CCS165/t60070/t400 CCS2100/t50045/t500 B145/MWh3540/MWh30050/MWh30 B235/MWh45 G170/MWh4060/MWh45 G2 P100/MWh5090/MWh100115/MWh80 NER300.com

8 Total cost of CCS Group and RES Group is now calculated /perf.M CCS165/t600 CCS245/t500 1100 B140/MWh300 B235/MWh45 G160/MWh45 P90/MWh100 G2- No proposal - 490 The CCS Group The CCS Groups total cost to NER300 The RES Group The RES Groups total cost to NER300 Total NER300 requirement of 1590 M. But – tragedy! – value of 200 M carbon allowances is only 1000 M. Deselection is now needed to match proposals demands to the available funding. NER300.com

9 Deselection CCS limit1000 M* (1100/1590)= 691 M RES limit1000 M* (490/1590)= 308 M 1) Apply a proportional cut to CCS Group and RES Group budgets to get limits 2) Arrive at a revised CCS Group and RES Group by deselecting projects from the Groups in order of decreasing /perf. /perf.M CCS165/t600 CCS245/t500 B140/MWh300 B235/MWh45 G160/MWh45 P90/MWh100 G2- No proposal - Rigid application of the rule leads to a CCS Group of only CCS2 and a RES Group of B2, with 455 M unused and two countries without a project The rule probably wont be applied rigidly. NER300.com

10 Selection procedure flexibility – anticipating contingencies Yellow gets no project (s1/3) /perf.M M M CCS165/t60070/t400 CCS2100/t50045/t500 B145/MWh3540/MWh30050/MWh30 B235/MWh45 G170/MWh4060/MWh45 G2 P100/MWh5090/MWh100115/MWh80 NER300.com

11 Selection procedure flexibility – anticipating contingencies Yellow gets no project (s2/3) /perf.M CCS170/t400 CCS245/t500 900 B140/MWh300 B235/MWh45 G160/MWh45 P90/MWh100 G2- No proposal - 490 CCS Group limit: 647 M RES Group limit: 353 M /perf.M CCS170/t400 CCS245/t500 900 B140/MWh300 B235/MWh45 G160/MWh45 P90/MWh100 G2- No proposal - 490 Cutting the most expensive CCS eliminates Yellow again. Use Yellows below-threshold project? Recalculate… NER300.com

12 Selection procedure flexibility – anticipating contingencies Yellow gets no project (s3/3) /perf.M CCS165/t600 CCS245/t500 1100 B150/MWh30 B235/MWh45 G160/MWh45 P90/MWh100 G2- No proposal - 220 /perf.M CCS165/t600 CCS245/t500 1100 B150/MWh30 B235/MWh45 G160/MWh45 P90/MWh100 G2- No proposal - 220 CCS Group limit: 833 M RES Group limit: 167 M 380 M of NER300 left over. Negotiation on the size of CCS1 and fund it, too? NER300.com

13 Selection procedure flexibility – anticipating contingencies Insufficient competition in B2, combined with need to give Yellow a project /perf.M M M CCS165/t60070/t400 CCS2100/t50045/t500 B145/MWh3540/MWh30050/MWh30 B235/MWh45 G170/MWh4060/MWh45 G2 P100/MWh5090/MWh100115/MWh80 How do you now create CCS and RES Groups to give Red and Yellow a project? NER300.com

14 Some conclusions 1 – Three levels of competition 1.Within your country within your subcategory 2.Within EU-27 within your subcategory 3.Within EU-27 against all other subcategories 2 – This simplified model shows that different solutions are possible depending on the relative importance of: rolling over as little budget as possible from the first to the second Call /perf. the min. 1 project per Member State rule rule In real-life, with 27 Member States and 34 + 8 project openings, the solution to the puzzle of selecting an acceptable portfolio of projects will be found in politics rather than in the rigid application of the /perf. criterion. 3 – It will be very difficult for the Commission to distinguish between projects selected purely on the basis of /perf. and other projects.Commission to distinguish between projects selected purely on the basis of /perf. and other projects There are some other interesting features of NER300s selection procedure. Contact NER300.com for details.Contact NER300.com

15 Relevant cost and ranking cost Relevant cost is a term used in the NER300 legislation to determine the sum that NER300 can refund, up to 50% Ranking cost is not a term used in NER300, but means the basis for calculating cost as it is defined for the ranking of proposals. NER300.com Operating Benefit 5 yrs CAPEX OPEX 5 yrs Value of market support schemes 5 yrs DEMO REFRELEVANT COSTS Developer contribution Investment aid from MS (from 0 to any %age of relevant costs allowable by State Aid) NER300 grant (from 0 to 50% of relevant costs) RANKING COSTS


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