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
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
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
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.
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