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The Commission proposes € 5 billion new investment in energy and Internet broadband infrastructure in 2009-2010, in support of the EU recovery plan

Commission Européenne - IP/09/142   28/01/2009

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IP/09/142

Brussels, 28 January 2009

The Commission proposes € 5 billion new investment in energy and Internet broadband infrastructure in 2009-2010, in support of the EU recovery plan

As part of the ongoing implementation of the EU recovery plan endorsed by the European Council in December 2008, the European Commission has today presented proposals to invest in key energy and Internet broadband infrastructure projects. These will deliver a much needed stimulus to the EU economy in the short term, while at the same time targeting strategic goals such as energy security. All Member States will benefit from the package of measures.

Commission President José Manuel Barroso said: "The EU's Recovery Plan is all about 'smart investment' – a short-term stimulus targeted on long-term goals. That is exactly what the Commission has adopted today: a list of specific projects to direct € 5 billion of unspent money from the EU budget to build a stronger Europe for the long term. We need to learn the lessons of the recent gas crisis and invest heavily in energy. We also need to stimulate the European economy by providing information highways in rural communities. The Commission is committed to working together with Member States, all of whom will benefit from our proposed measures, in revitalising the EU economy through investment in these key areas."

The package presented today contains:

  • a short Communication outlining the background to and the objectives of the initiative;
  • for energy projects: a proposal for a Regulation to grant Community support to strategic energy projects. A total of € 3.5 billion is proposed for investment in carbon capture and storage (financial envelope: €1,250 million), offshore wind projects (€500 million), and gas and electricity interconnection projects (€1,750 million).
  • for broadband:, the Commission proposes to target € 1 bn to extend and upgrade high-speed internet in rural communities. This money will be targeted via the existing EU's Rural Development Fund to cover the "white spots" on Europe's broadband map (30% of the population in rural areas who do not have broadband access).
  • and tackling new challenges identified in the "health check" of the Common Agricultural Policy (CAP): using the existing rural development mechanisms, this would direct € 0.5 billion to launch the work of tackling the "new challenges" agreed in the health check. These new challenges are: climate change, renewable energy, water management, biodiversity and dairy restructuring.

Energy and broadband networks are both crucial to the future of the EU economy.

The challenge of energy security was highlighted in Commission's second strategic energy review of November 2008. Its significance was underlined still further by the recent gas crisis. In the current economic and financial climate, projects are finding it particularly difficult to access investment. The EU support will put these projects back on track: they will help to plug the gaps in EU energy interconnections, and keep up the momentum to use the EU's domestic energy sources to best effect. The projects focus on cross-border needs and on the development of new technologies essential for Europe's future energy needs.

The extension and upgrading of high-speed internet infrastructure is an economic and social imperative. The European Economic Recovery Plan set out a goal of developing broadband networks to achieve a full 100% high-speed internet coverage by 2010. However, rural areas will always face additional difficulties in linking up to broadband. As investment slows to a trickle, this risk is redoubled. This has direct social and economic consequences. That is why it is right to concentrate this action on rural areas – and using the rural development instruments will allow for action on the ground to start quickly.

A full list of the projects put forward by the Commission for energy infrastructures can be found in annex.

Background

In November 2008, as part of its European economic recovery plan, the Commission suggested the mobilisation in 2009 and 2010 of an additional € 5 billion of unspent money from the EU budget for investment in energy and broadband projects. The idea was to speed up necessary investment, cushion the blow of the economic downturn on the construction sector and enhance the EU's longer term sustainable growth potential through a targeted stimulus into the EU economy. This is an important contribution to the agreed figure of an economic stimulus to the tune of 1.5% of GDP, which was made up of both national and EU action.

The proposal has been presented today by President Barroso in agreement with Commissioners Piebalgs, Fischer-Boel and Reding. With these proposals, the Commission is implementing the mandate given to it by the European Council in December 2008 to come forward speedily with a list of specific projects, taking into account a suitable geographical balance. In order to maximise the effects on the general economy quickly, particular emphasis has been given to the need to start the spending in 2009 and 2010.

In order to ensure that the proposals can have an impact as quickly as possible, the Commission hopes that the Council and the European Parliament can make swift progress on the discussion and adoption of the legislative measures. The Commission therefore hopes that normal procedures in the other institutions can be accelerated in order to deliver the package.

Further information can be found in MEMO/09/36 on the proposed energy projects and in MEMO/09/35 on internet broadband infrastructure.

ANNEX
Eligible projects

A. INTERCONNECTORS

1. Gas interconnectors

Project
Location of projects supported
Envisaged Community contribution
(€ million)
Southern Gas Corridor

NABUCCO[1]

ITGI – Poseidon


Austria, Hungary, Bulgaria, Germany, Romania
Italy, Greece


250

100
Baltic interconnection

Skanled


Poland, Denmark, Sweden


150
LNG network

Liquefied Natural Gas terminal at Polish coast at port of Świnoujście


Poland


80
Central and South East Europe

Slovakia-Hungary Interconnector
(Velky Krtis – Balassaqyarmat)
Gas transmission system in Slovenia between the Austrian Border to Ljubljana (excluding the section Rogatec-Kidričevo)
Interconnection Bulgaria-Greece
(Haskovo-Komotini)
Romania-Hungary gas interconnector
Expansion of Gas Storage Capacity in the Czech hub
Infrastructure and equipment to permit west-east gas flow in the event of short term supply disruption


Slovakia-Hungary

Slovenia

Bulgaria, Greece

Romania, Hungary
Czech Republic

All Member States


25

40


20

30
25

20
Mediterreanean
Reinforcement of FR gas network on the Africa-Spain-France axis

France

150
North Sea area
Germany-Belgium-United Kingdom pipeline
France-Belgium connection

Belgium
France, Belgium

35
100
TOTAL

1025

2. Electricity interconnectors

Project
Location of projects supported
Envisaged Community contribution
(EUR million)
Baltic interconnection

Estlink-2
Interconnection Sweden- Baltic States, and strengthening of the grid in Baltic States


Estonia, Finland
Sweden, Latvia, Lithuania


100
175
Central and South East Europe

Halle/Saale – Schweinfurt


Germany


50
Mediterreanean

Portugal-Spain interconnection reinforcement
Interconnection France-Spain (Baixas – Sta Llogaia)
New 380 kV AC submarine cable between Sicily- Continental Italy (Sorgente – Rizziconi)


Portugal
France, Spain
Italy


30
150
100
North Sea area

Interconnection Republic of Ireland – Wales


Ireland, UK


100
TOTAL

705


3. Small island projects

Small isolated island initiatives
Cyprus, Malta
20


B. OFFSHORE WIND PROJECTS

Project
Capacity
Location of projects supported
Envisaged
Community
contribution
(EUR million)
1) Grid integration of offshore wind energy
1.1.Baltic I and II - Kriegers Flak I, II, III
Building on projects under development. Financing aimed at ensuring extra cost for securing a joint interconnection solution.
1.5 GW
Denmark, Sweden, Germany, Poland
150
1.2. North sea grid
Modular development of offshore grid, demonstration of virtual offshore power plant
1 GW
United Kingdom, The Netherlands, Germany, Ireland, Denmark,
150
2) New turbines, structures and components, optimisation of manufacturing capacities
2.1 Alpha Ventus/Bard Offshore 1
Building on projects presently under development. New generation of 6-7 MW size turbines and innovative structures, situated far from shore (up to 100km) in deeper waters (up to 40 m).
0.5 GW
Germany, Poland
150
2.2 Aberdeen offshore wind farm (European testing centre)
Building on project presently under development -Testing of multi-MW turbines. Development of innovative structures and substructures including optimisation of manufacturing capacities of offshore wind energy production equipment. An increase in size of 100MW can be envisaged.
0.25 GW
UK
40
2.3 Thornton Bank
Building on project presently under development. Learning from the Downvind project (co financed through FP6); Upscaling the Downvind installations turbines (5 MW size) in deep waters ( up to 30 m) with low visual impact (up to 30 km).
90MW
Belgium
10
TOTAL


500

C. CARBON CAPTURE AND STORAGE PROJECTS

Project Name/
Location
Envisaged
Community
contribution
(EUR million)
Fuel
Capacity
Capture Technique
Storage Concept







Huerth
Germany
250
Coal
450 MW
IGCC
Saline Aquifer
Jaenschwalde
Coal
500 MW
Oxyfuel
Oil/Gas fields
Eemshaven
Netherlands
250
Coal
1200 MW
IGCC
Oil/Gas fields
Rotterdam
Coal
1080 MW
PC
Oil/Gas fields
Rotterdam
Coal
800 MW
PC
Oil/Gas fields
Belchatow
Poland
250
Coal
858 MW
PC
Saline Aquifer
Compostella
Spain (with {Portugal)
250
Coal
500 MW
Oxyfuel
Saline Aquifer
Kingsnorth
UK
250
Coal
800 MW
PC
Oil/Gas fields
Longannet
Coal
3390 MW
PC
Saline Aquifer
Tilbury
Coal
1600 MW
PC
Oil/Gas fields
Hatfield
(Yorkshire)
Coal
900 MW
IGCC
Oil/Gas fields
TOTAL 1 250


[1] This support may be channelled alongside European Investment Bank support


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