Energy Infrastructure13 August 2009
by Ina Dimireva -- last modified 02 February 2012
The European Union finances electricity and gas transmission infrastructure projects of European interest. A yearly budget of about EUR 25 million is spent mainly for supporting feasibility studies. Most of the projects cross national borders or have an influence on several EU Member States.
On 19 October 2011, the European Commission unveiled its proposal for a Regulation on "Guidelines for trans-European energy infrastructure". This proposal aims at ensuring that strategic energy networks and storage facilities are completed by 2020. To this end, the Commission has identified 12 priority corridors and areas covering electricity, gas, oil and carbon dioxide transport networks. It proposes a regime of "common interest" for projects contributing to implementing these priorities and having obtained this label
Trans-European energy networks (TEN-E)
The guidelines on Trans European Energy Networks specify which projects are eligible for funding. The financial rules specify the financial procedures involved.
The call for applications for funding is open in the first quarter of each year. Applications are made by promoters of eligible projects, like electricity and gas transmission companies, investors in LNG facilities and gas storages. Projects need to be supported by the Member States involved.
The Trans European Energy Networks are integral to the European Union’s overall energy policy objectives, increasing competitiveness in the electricity and gas markets, reinforcing security of supply, and protecting the environment.
New guidelines for TEN-E list and rank, according to the objectives and priorities laid down, projects eligible for Community assistance, and introduce the concept of 'project of European interest'. They also strengthen project coordination and now fully incorporate the new Member States.
Community financial aid to trans-European networks
Trans-European network policy depends on financial instruments being available to support projects with the highest trans-European added value.
THE TEN BUDGET LINE
The European Regional Development Fund (ERDF) contributes to the financing of the Trans-European Energy Networks because of their role in the development of eligible regions. Funds have been allocated from the Community Support Frameworks (CSF I and II) and the Community initiatives (REGEN, INTERREG II).
Other EU financial instruments
There are several European Community financial instruments which may come into play for financing Energy infrastructure.
COOPERATION PROGRAMMES WITH THIRD COUNTRIES
External policy programmes (PHARE, TACIS, MEDA and SYNERGY) have financed several East-West and regional interconnection studies relating to energy networks in or linked to eligible third countries.
EUROPEAN INVESTMENT BANK (EIB) LOANS
The EIB finances, through loans up to 50% of the total cost, many TEN Energy projects with the aim of contributing to the Community's TEN policy.
EUROPEAN INVESTMENT FUND (EIF) LOAN GUARANTEES
The main purpose of the EIF (funded 40% by the EIB, 30% by the Commission and the remaining 30% by banks and other financial institutions) is to make available, subject to fees, guarantees for loans concerning TEN projects.
TEN Financial Regulation [OJ L162 of 22.6.2007, p.1] - REGULATION (EC) No 680/2007 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 20 June 2007 laying down general rules for the granting of Community financial aid in the field of the trans-European transport and energy networks
TEN-E Guidelines [OJ L262 of 22.9.2006, p.1] - Decision No 1364/2006/EC of the European Parliament and of the Council of 6 September 2006 laying down guidelines for trans-European energy networks and repealing Decision 96/391/EC and Decision No 1229/2003/EC
Source: European Commission