26 Nov (NucNet): The European Union today announced a €315 billion investment plan which will help “remove the fear factor” from high-risk and high-capital investments including those in energy and energy networks, the European Commission’s vice-president for jobs, growth, investment and competitiveness Jyrki Katainen said.
The plan consists of three pillars: the creation of a new European Fund for Strategic Investments (EFSI); the establishment of a “project pipeline and assistance programme” to identify projects that will benefit from investment; and the development of plans for removing regulatory and non-regulatory barriers, the EC said.
The EFSI will be built on a guarantee of €16 billion from the EU budget and €5 billion from the European Investment Bank (EIB). According to the EC’s estimates, for every euro that is mobilised through the fund, €15 of total investment will be generated, leading to a total mobilisation of around €315 billion.
The project pipeline and assistance programme will compose of a dedicated investment committee and joint EC-EIB task force to identify projects which will benefit from EFSI. The focus will be on strategic investments in infrastructure, notably energy networks, renewable energy and energy efficiency, the EC said.
The third pillar – the development of plans for removing regulatory and non-regulatory barriers – aims to remove barriers to investment to help create a single market in the energy, digital and transport sectors, the EC said. “A single EU regulation can replace 28 sets of laws. This is the best simplification machine,” EC president Jean-Claude Juncker said.
The plans announced today do not refer to nuclear energy, but Mr Juncker identified energy as a priority sector. “Our energy sector needs to interconnect networks and markets, integrate renewable sources of energy and diversify our sources of supply,” he said.
Under the plan the EC will identify the categories of energy networks, renewable energy and energy efficiency projects which will receive additional investment. The EC said a more detailed list of projects to be prioritised is expected in the coming weeks when Mr Juncker will present the EC’s priorities for the next five years.
In addition to the investment plan, member states should double the use of financial instruments such as loans and guarantees, Mr Katainen said. In July 2014, the EC adopted guidelines for the approval of energy and environmental projects benefitting from such instruments, which are considered state aid. Nuclear energy was excluded from the guidelines.
However, the EFSI will effectively act as a guarantee fund that could be used by developers of major infrastructure projects – theoretically including nuclear power stations – as a way of guaranteeing their investment. The aim is to create a “clear, predictable and stable” environment, especially for long-term investment projects, the EC said.
In October 2014, the EC opened the way for state aid in nuclear energy by approving state aid measures for the construction of a new nuclear power station at Hinkley Point in the UK. The measures included an investment contract in the form of a “contract for difference” (CfD), also known as a “strike price”, and a guarantee from the UK Treasury.
The Brussels-based nuclear industry association Foratom said the EU’s electricity market fails to provide sufficient market signals to investors in favour of low-carbon energy alternatives to coal and gas. “The CfD investment model that underpins the Hinkley Point C deal provides an effective market mechanism that addresses this failure,” Foratom said.
Westinghouse Electric Company said the Hinkley Point case was a model for all other EU nuclear projects which require state aid. The company said the model would allow nuclear energy to compete “on a level playing field” with other low-carbon energy technologies with high upfront capital costs.
