Renewable energy projects in line for €115m windfall

Energy efficiency projects expected to get funds left over from the recovery package.

Projects to promote renewable energy or energy efficiency are in line for a windfall of at least €115 million, as the European Commission looks to reassign unspent money from the European recovery package.

The Commission is expected to announce this month that renewable energy or energy efficiency projects will get funds left over from the recovery package – though the projects will need to find matching funding from national governments.

EU leaders agreed a €3.98 billion recovery package of stimulus measures in 2009 at the gloomiest point of the economic downturn, in a bid to aid depressed economies.

Strategic energy needs

The money was split three ways: €2.37bn for gas and electricity interconnectors and pipelines, €0.57bn for offshore wind farms and €1.05bn for carbon capture and storage – with the aim of helping the EU meet strategic energy needs for security of supply and combating climate change.

Nearly all the funds (97%) have been allocated, but €115m remains unspent after plans to co-fund a Polish-Slovak interconnector with EU money fell through.

Two sources following the issue said that Günther Oettinger, the European commissioner for energy, had decided to allocate the leftover money to renewable energy and energy efficiency projects. Around €115m-€130m is on the table, but even more could be available. Oettinger’s spokeswoman did not confirm the timing: “I cannot tell you when this decision will be taken. The deadline for allocating this money is the end of the year.”

As part of the recovery package, it was agreed that if the Commission failed to allocate money before the end of 2010, it would be obliged to make proposals to fund energy efficiency and renewable energy projects.

The Commission spokeswoman said that the EU’s goal of improving security of energy supplies in central Europe would still be achieved, even though the Polish-Slovak interconnector is not going ahead. A Polish-Czech interconnector being built with recovery funds would also allow more gas to flow between Poland and Slovakia, she said.