EU plans big boost to major networks

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Posted on: 21 Oct 2011

The European Commission has tabled a plan to fund EUR50 billion worth of investment to improve Europe's transport, energy and digital networks.

20 October 2011 EU plans big boost to major networks © Carolecastelli The European Commission Wednesday tabled a plan which will fund EUR50 billion worth of investment to improve Europe's transport, energy and digital networks. Targeted investments in key infrastructures will help to create jobs and boost Europe's competitiveness at a time when Europe needs this most The "Connecting Europe Facility" will finance projects that fill the missing links in these networks. It will also make Europe's economy greener by facilitating the use of renewable energy, promoting cleaner transport modes and high speed broadband connections in line with the Europe 2020 Strategy. The pilot phase will start next year. To assist with the financing of the Facility, the Commission has also adopted the terms for the Europe 2020 project bond initiative which will be one of a number of risk-sharing instruments upon which the facility may draw in order to attract private finance in projects. The energy sector can look forward to EUR9.1 billion being invested in trans-European infrastructure, helping to meet the EU 2020 energy and climate objectives. Examples of projects that the EU could finance are an offshore grid in the Northern Seas and innovative projects to store electricity. Other investments include the EUR31.7 billion to upgrade Europe's transport infrastructure, build missing links and remove bottlenecks, and almost EUR9.2 billion to support investment in fast and very fast broadband networks and pan-European digital services. "We are closing the missing links in Europe's infrastructure networks that otherwise would not be built," said Jose Manuel Barroso, President of the European Commission. This is the very first time that the EU is co-financing the construction of large energy infrastructure from its regular budget. Investment levels need to increase To increase the share of renewable energy to 20 percent of final energy consumption by 2020, the EU needs to bring the energy generated by wind parks and solar power stations to the consumers. For this, a more integrated and powerful network is required than exists today. To save 20 percent of our estimated energy consumption in 2020 via technology, the EU needs smart meters and smart grids, which allow consumers to control exactly their power consumption and to save money and energy by changing their habits. To secure gas supply also in the event of a crisis, the bloc needs to diversify its sources and new pipelines which bring the gas from new regions directly to Europe. To have a functioning internal market with competition and fair and competitive prizes, the interconnections between member states allow companies to offer their energy in all member states. In the next ten years, around EUR200 billion are needed for the construction of gas pipelines and electricity grids: EUR140 billion for high-voltage electricity transmission systems, storage and smart grid applications, EUR70 billion for gas pipelines, storage, liquefied natural gas terminals and to allow gas to flow in both directions, and EUR2.5 billion for carbon dioxide transport infrastructure. This means that current investment levels have to be increased considerably. Compared to the period 2000 to 2010, this would result in a 100 percent increase in the electricity sector compared to the same period before. Climate projects of "common interest" The Commission proposes to select a number of projects of "common interest" which are important to reach EU climate and energy goals. Projects having obtained this label have two advantages. They should display economic, social and environmental viability and involve at least two Member States. Additional sector-specific criteria will ensure that projects notably strengthen security of supply, enable market integration, foster competition, ensure system flexibility, and allow transmission of renewable generation to consumption centers and storage sites. It is estimated that the investments needed to achieve the 2020 goals will not be made or not be made on time, mainly because of building permits take too long to obtain. Environmental standards, in particular standards set by the Natura 2000 directive, will be fully respected, and in particular the need to carry out appropriate impact assessments and to minimize the impact on protected habitats. In addition, the new system will contribute to improve the quality of these assessments, as environmental concerns will, through better public and stakeholder involvement, be identified and taken into account at an earlier stage of the process. New, faster permitting procedure Currently, the completion of energy infrastructure projects, particularly in the electricity sector, can take more than ten years. This is mainly due to long and complex permit granting procedures which take up about 2/3 of this time. Projects of European interest will benefit from faster permit procedure which will not exceed 3 years. The proposed procedure will cut administrative costs for a given project throughout Europe by on average about 30 percent on the promoters' side and about 45 percent on the authorities' side. The procedure will also be easier and more transparent than normal procedures. Each member state will designate a single competent authority responsible - "a one stop shop" - for the completion of the entire permit granting process. At the regional level, the project promoter will submit its proposal to the relevant regional group. These groups bringing together member states, regulators, transmission system operators and project promoters draw up their proposed list. First list of "interest" projects in 2013 The regulation should be adopted by the European Parliament and the Council by the end of 2012 for an entry into force at the beginning of 2013. This will leave enough time for the establishment of the first Union-wide list of projects of common interest, in view of their possible financing under the Connecting Europe Facility, which will enter into force in 2014. At the EU level, the final decision on the EU-wide list of projects of "common interest" will be taken by the Commission. The first list will be adopted by 31 July 2013. They are eligible for EU funding, be it grants, project bonds or guarantees. In the period 2014 - 2020 EUR9.1 billion is earmarked for energy infrastructure under the "Connecting Europe Facility". The EU will co-finance up to 50 percent of the costs for studies and works and in exceptional circumstances up to 80 percent for projects that are crucial for regional or EU-wide security of supply or solidarity, require innovative solutions or have cross-sector synergies. Sources: EU News Related: EU draft roadmap sees big shift to renewables EU to enforce single energy market rules EU to launch 'project bonds' to fund infrastructure Time to act for European energy infrastructure
Posted: 21 October 2011

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