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Investing in new energy infrastructure: Green light for EU grants worth nearly €1 billion

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EU Member States agreed yesterday on a Commission proposal to invest €998 million in key European energy infrastructure projects under the Connecting Europe Facility (CEF). Yesterday’s positive vote provides financial aid for works and studies for ten projects.

The largest amount of funding goes to the Baltic Synchronisation Project (€720 million), to better integrate the electricity markets of Estonia, Latvia, Lithuania and Poland. Other projects include a smart electricity grid linking Hungary and Slovakia (€102 million), and the first-ever CEF grant for works on a CO2 transport project for Belgian and Dutch ports. 

Kadri Simson, Commissioner for Energy, said: “These ten projects will contribute to a more modern, secure and smart energy infrastructure system, which is crucial for delivering the European Green Deal and meeting our ambitious 2030 climate targets. Yesterday’s decision marks a decisive step in the Baltic Synchronisation process in particular, a project of European strategic interest. These investments will help sustain the EU’s economic recovery and create jobs.”

The allocation of funds is in line with the objectives of the European Green Deal, with 84% of funds going to electricity or smart grid projects. Yesterday’s vote grants financial aid for ten projects: two for electricity transmission, one for smart electricity grids, six for CO2 transport (including five studies), and one for gas. The projects greenlighted yesterday include:

Baltic Synchronisation Project, Phase II (€720 million): Following a previous investment, this new funding will go to the construction of Harmony Link – an electricity cable connecting Poland and Lithuania through the Baltic Sea. The cable will become a building block for the future offshore grid in the Baltic Sea. This funding will also cover investments such as synchronous condensers in Estonia, Latvia and Lithuania.

Danube Ingrid (€102 million): This smart electricity grid project in Hungary and the Slovak Republic will improve network management and increase the quality and security of supply for all market participants. It will also support the efficient integration of renewables.

The Porthos CO2 transport network project (€102 million): This project between the Netherlands and Belgium will develop an open access CO2 transport network in three of Europe’s main ports (Rotterdam, Antwerp and North Sea Port) leading to an offshore storage site in the North Sea.

The Bulgaria – Serbia Interconnector (€28 million): This priority project agreed under the CESEC High-Level Group will improve security of supply and diversification of gas imports in Southeast Europe.

North Sea Wind Power Hub (€14 million): A study to support the development of an important project for the roll-out of offshore wind in the North Sea.

Background

For Europe to transition to a clean and modern economy, it is necessary to adapt European infrastructure to the future needs of the energy system. Interconnections form the backbone of an integrated EU energy market, which will improve Europe’s security of supply, reduce the dependence on single suppliers and give consumers more choice. It is also essential for renewable energy sources to thrive and for the EU to deliver on its Paris Agreement commitments and its ambition to become climate neutral by mid-century.

Only Projects of Common interest (PCIs) on the Union list adopted by the Commission are eligible for a CEF grant. The latest PCI list was published in October 2019 and the next PCI list – the 5th – is expected to enter into force in early 2021. CEF-Energy has already awarded almost €4 billion in grants since 2014 with 65% allocated to electricity projects, including smart grids.

Future CEF–Energy funding is subject to a final agreement by the EU institutions on the Mulitannual Financial Framework for 2021-2027. Future awards will be in line with the planned revision of the Trans-European Networks for Energy (TEN-E) Regulation. The Commission is due to table its TEN-E proposal before the end of 2020, to ensure a future-proof framework to allow the EU to fund the infrastructure needed for delivering the European Green Deal.

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Policy Measures to Advance Jordan’s Transition to Renewables

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A new report published today by the International Renewable Energy Agency (IRENA) has identified a series of policy measures that can help advance the energy transition towards renewable energy in Jordan.

The “Renewables Readiness Assessment: The Hashemite Kingdom of Jordan” – developed in co-operation with Jordan’s Ministry of Energy and Mineral Resources, suggests opportunities exist to deepen private sector engagement in national efforts to reach a 31 per cent share of renewables in total power by 2030.

“The recommendations of this report comply with the newly issued Energy strategy 2020-2030 and its action plan,” said H.E. Engineer Hala Zawati, Minister of Energy and Mineral Resources in Jordan. “We are fully aware that to achieve all these ambitious targets, a strong partnership between the public and private sectors is needed. We are also eager to work with international friends and partners to make renewable energy a main pillar of the Jordan energy sector.”

The report presents policy action areas to increase energy security and boost supply diversity through the accelerated uptake of renewables and includes ideas to boost end-use electrification and increase the availability of energy transition investments from domestic institutions.

Jordan’s share of electricity from renewables grew from almost zero in 2014 to around 20 per cent in 2020 thanks to enabling frameworks and policies that have supported the deployment of renewable energy technologies, including solar photovoltaic (PV) and onshore wind.

“Jordan boasts significant renewable energy resource potential that if realised will reduce consumer energy costs, improve national energy security, create jobs and stimulate sustainable growth – boosting post COVID-19 economic recovery efforts,” said IRENA Director-General Francesco La Camera. “This report highlights a series of policy and regulatory measures that will allow Jordan to build on its energy transition progress to date and align it with 2030 national decarbonisation goals.”

Capacity building in local financing institutions and project developers can drive their engagement in the energy transition, the report says, while helping the country to meet its needs in important areas such as the build-out of electric charging infrastructure for the transport system.

Challenges associated with integrating higher shares of renewables in Jordan can be addressed by building and upgrading transmission and distribution infrastructure, deploying storage, promoting demand-side management and incentivising electrification of heating, cooling and transportation.

Renewables Readiness Assessment: Jordan lists concrete recommendations around the following seven action areas:

  • Provide the conditions for renewables to grow in the power sector
  • Foster continued growth of renewable power generation
  • Plan for the integration of higher shares of renewable power
  • Incentivise the use of renewables for heating and cooling
  • Support renewable options for transport and mobility
  • Catalyse renewable energy investment
  • Strengthen local industries and create jobs in renewables

Read the full report

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World Bank Supports Angolan’s Electrification with $250 Million

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The World Bank approved $250 million to improve the operational performance of the electricity sector utilities and increase electricity access in selected cities of Angola.

The  Electricity Sector Improvement and Access Project will finance electrification investments in the provinces of Luanda, Benguela, Huila, and Huambo, delivering 196,500 new electricity connections that will benefit close to one million people and 93,857 public lights.

The project will focus on electricity access expansion and improvement of revenue collection, electricity service improvement, capacity improvement of the public electricity producer (PRODEL, Empresa Pública de Produção de Electricidade), and strengthening sustainable management of generation plants. The project also aims to increase the commercial performance of the national electricity distribution company (Empresa Nacional de Distribuição de Electricidade, ENDE) as well as provide financing to the national transport network Rede Nacional de Transporte, RNT) for targeted interventions to improve and optimize the dispatch of electricity supply and the overall management of the national transmission network. Furthermore, the Project will also finance immediate measures to raise the operational, commercial and technical capacity  of  the three national power utilities, leading to significant electricity service improvement.

“Investment in infrastructure, especially in energy, is key to  economic development ”, said Jean-Christophe Carret, World Bank Country Director to Angola “Quality access to electricity services will have a spillover effect in many other sectors, including agribusiness, health, education, just to name a few.”

Angola’s power generation capacity, largely based on hydropower, has developed at a fast pace with the national installed generation capacity quadrupling in just one decade, but transport, distribution and cost recovery remain very challenging. Less than 40 percent of Angolans have access to electricity, with inadequate electricity services impacting poverty, productivity and regional disparities. Therefore, the project aims to deliver the most critical actions needed to help expand electricity access, improve the operational and commercial performance of utilities, and ultimately boost their creditworthiness. This, in turn, will contribute to reducing extreme poverty, improving the resilience of communities to impacts arising from COVID-19, and increasing shared prosperity.

The total project cost is $417 million, financed with a $250 million loan from the World Bank and a credit of $167 million from Agence Française de Développement.

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IEA and SICA to collaborate on clean energy transitions in Central America

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The International Energy Agency (IEA) and the Central American Integration System (SICA) have signed a Memorandum of Understanding (MoU) to promote clean energy transitions in Central America. Under the MoU, the two organisations will expand their cooperation on energy data and statistics, energy efficiency and climate resilience of electricity systems. These have all been identified as key areas for energy transitions and climate change mitigation in the region under SICA’s Central American 2030 Sustainable Energy Strategy.

“The IEA is pleased to team up with SICA to expand our work in Central America, a dynamic region that is home to over 55 million people and has excellent clean energy potential with distinctive transition opportunities and challenges,” said IEA Deputy Executive Director David Turk. 

Under its Clean Energy Transitions Programme, the IEA has been expanding its collaboration in Latin America. This is taking place both bilaterally with key partner countries – including the two largest economies, Brazil and Mexico – and on a regional level through cooperation with leading regional organisations, including the Latin American Energy Organisation (OLADE) and the Inter-American Development Bank. The signing of the IEA-SICA Memorandum of Understanding is a new milestone for the IEA’s engagement with the region. 

“Today’s signing ceremony marks an important step for SICA’s work on clean energy transitions – an important priority for our member countries, which can now benefit from the IEA’s leading analysis and expertise,” said Vinicio Cerezo, SICA Secretary General.

The Central American Integration System (Sistema de Integración Centroamericana, or SICA) is an economic and political organisation composed of Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panamá and the Dominican Republic, that works to foster closer ties and integration across Central America and the Dominican Republic to promote peace, liberty, democracy and development in the region.

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