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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 Q 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 Q 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/t B140/MWh300 B235/MWh45 G160/MWh45 P90/MWh100 G2- No proposal 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/t B140/MWh300 B235/MWh45 G160/MWh45 P90/MWh100 G2- No proposal CCS Group limit: 647 M RES Group limit: 353 M /perf.M CCS170/t400 CCS245/t B140/MWh300 B235/MWh45 G160/MWh45 P90/MWh100 G2- No proposal 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/t B150/MWh30 B235/MWh45 G160/MWh45 P90/MWh100 G2- No proposal /perf.M CCS165/t600 CCS245/t B150/MWh30 B235/MWh45 G160/MWh45 P90/MWh100 G2- No proposal 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 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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