Electricity, Gas, Smart Grids, Hydrogen and CO₂ networks - Works

Expected Impact:

As indicated in section 1 the Multi-annual Work Programme, it is expected that the financial assistance contributes to the further development and implementation of PCIs and PMIs helping to achieve the broader TEN-E policy objectives and the CEF energy policy objectives of:

• further integration of an efficient and competitive internal energy market,
• interoperability of networks across borders and sectors,
• facilitating decarbonisation of the economy, promoting energy efficiency and ensuring security of supply.

In accordance with Recital 5 of the CEF Regulation (EU) 2021/1153 and in line with the Multi-annual Work Programme, this call for proposals aims at financing projects contributing to the goals and objectives of the European Green Deal, as well as the Paris Agreement and the 2030 climate and energy targets and the EU's mid-term and long-term objectives in terms of decarbonisation.

Expected Outcome:

This topic aims to enable Projects of Common Interest (PCIs) and Projects of Mutual Interest (PMIs) to be implemented within the framework of the deployment of trans-European networks in the energy sector. In particular, the call shall contribute to supporting energy infrastructure PCIs and PMIs that have significant socio-economic benefits and ensure greater solidarity among Member States, but which do not receive adequate financing from the market.

Projects supported by this call pursue the goals and objectives of the European Green Deal, as well as the Paris Agreement and the 2030 climate and energy targets and long-term decarbonisation objectives. Therefore, financial assistance provided under this call for proposals should maximise its added value towards decarbonisation of the energy sector. The European Grids Package underlines the critical importance of energy infrastructure in the energy transition.

Objective:

The objective of this topic is to support and contribute to the implementation of PCIs and PMIs.

Scope:

This topic refers to projects for works contributing to the implementation of a PCI or a PMI. Works in the meaning of CEF Energy include the purchase, supply and deployment of components, systems and services including software, the development, construction and installation activities relating to the eligible infrastructure items of a given PCI or PMI, the acceptance of installations and the launching of a project.

Only projects contributing to PCIs and PMIs as identified in the Second Union list of PCIs and PMIs shall be eligible for support through EU financial aid in the form of grants.

Pursuant to Article 18(2) and (3) of the TEN-E Regulation, PCIs/PMIs falling under the categories set out in Article 24 (derogation for gas interconnections in Cyprus and Malta) and in Annex II, point (1)(a), (b), (c), (d) and (f) (electricity projects, except smart electricity grids and electricity storage projects that are not regulated) and point (3) (hydrogen projects), are also eligible for Union financial assistance in the form of grants for works if they fulfil all of the following criteria:

1. the project specific cost-benefit analysis drawn up pursuant to Article 16(4), point (a), of the TEN-E Regulation provides evidence concerning the existence of significant positive externalities, such as security of supply, system flexibility, solidarity or innovation;
2. the project has received a cross-border cost allocation decision pursuant to Article 16 of the TEN-E Regulation or, as regards projects of common interest falling under the energy infrastructure category set out in point (3) of Annex II (hydrogen projects), where they do not fall under the competence of national regulatory authorities and therefore they do not receive a cross-border cost allocation decision, the project aims to provide services across borders, brings technological innovation and ensures the safety of cross-border grid operation;
3. the project cannot be financed by the market or through the regulatory framework in accordance with the business plan and other assessments, in particular those carried out by possible investors, creditors or the national regulatory authority, taking into account any decision on incentives and reasons referred to in Article 17(2) of the TEN-E Regulation when assessing the project’s need for Union financial assistance.

Pursuant to Article 18(4) of the TEN-E Regulation, PCIs/PMIs falling under the energy infrastructure categories set out in Annex II, point (1)(e) (smart electricity grids) and points (2) (smart gas grids) and (5) (carbon dioxide projects), are also eligible for Union financial assistance in the form of grants for works, where the concerned project promoters, in an evaluation carried out by the relevant national authority or, where applicable, the national regulatory authority, can clearly demonstrate significant positive externalities generated by the projects, such as security of supply, system flexibility, solidarity or innovation, and provide clear evidence of their lack of commercial viability, in accordance with the cost-benefit analysis, the business plan and assessments carried out, in particular by possible investors or creditors or, where applicable, a national regulatory authority. Electricity storage projects that are not regulated need to meet, by analogy, the requirements of Article 18(4), as it should not be possible for them to request a CBCA decision.

For projects of common interest falling under Article 24 of the TEN-E Regulation (Cyprus and Malta derogation), in addition to the specific criteria set out in Article 19 for Union financial assistance, the interconnections referred in paragraph 1 of the Article shall be designed in view of ensuring access to future energy markets, including hydrogen, shall not lead to a prolongation of the lifetime of natural gas assets and shall ensure the interoperability of neighbouring networks across borders. Any request for Union financial assistance for works shall clearly demonstrate the aim to convert the asset into a dedicated hydrogen asset by 2036 if market conditions allow, by means of a roadmap with a precise timeline. The derogation set out in paragraph 1 of the Article shall apply until Cyprus or Malta, respectively, is directly interconnected to the trans-European gas network or until 31 December 2029, whichever is the earlier.

The contents of the supporting documents and whether the proposed project demonstrates evidence concerning the existence of significant positive externalities, namely security of supply, solidarity, system flexibility, or innovation; provides services across borders, brings technological innovation and ensures the safety of cross-border grid operation, or is commercially not viable, will be assessed during the evaluation under the applicable award criteria.

The proposals requesting grants for works which fail to provide the relevant supporting documents or that provide supporting documents that are not legally valid at the time of their submission or which fail to comply with any of the eligibility criteria indicated above may not be eligible.