Innovation Fund Info Day in Estonia

16.07.2020

Ms Maria Velkova

Production and use of

Renewable energyincluding manufacturing plants for

components

Carbon Capture Use and Storage

Energy-intensive industries

including substitute products

Energy storageincluding manufacturing plants

for components

Driving low-carbon technologies to the market

What and who?

Annex C, Methodology for calculation of GHG emission avoidance, Appendix C1 Classification of projects into sectors

Category Sector Product

Energy storage, incl. manufacturing plants for components

Intra-day electricity storage electricity

Other energy storage electricity, heating/cooling, e-fuels, hydrogen

Renewable energy, incl. manufacturing plants for components

Wind energy electricitySolar energy electricityHydro/Ocean energy electricityGeothermal energy electricity, CHP

Bio-electricity electricity, CHP

Renewable Heating/Cooling heating/cooling

Energy Intensive Industries,incl. CCU,incl. substitute products,incl. CCS (CO2 capture and full scale)

Refineries fuels (incl. e-fuels)Biofuels and bio-refineries biofuel, bio-based productsIron & steel coke, iron ore, iron, steel, cast ferrous metals products, other

Non-ferrous metals aluminium, precious metals, copper, cast non-ferrous metal products, other

Cement & lime cement, lime, dolime, sintered dolime, other

Glass, ceramics & construction material

flat & container glass, glass fibres, tiles, plates, refractory products, bricks, houseware, sanitary ware, mineral wool, gypsum, other

Pulp & paperchemical pulp, mechanical pulp, paper and paperboard, sanitary and tissue paper, other

Chemicalsorganic basic chemicals, inorganic basic chemicals, nitrogen compounds, plastics in primary forms, synthetic rubber, other

Hydrogen hydrogenOther electricity, heat, other

CCS (CO2 transport and/or storage) CO2 transport and/or storage CO2 transport and/or storage

1. Do those energy intensive industry projects fit in Innovation Fund that are not listed in EC tables (refineries, iron&steel, pulp&paper; wind energy, intra-day electricity storage jne) and products underthose sectors?

Kui on energiaintensiivne projekt, kuid mille sektorit pole nimetatud tabelis, kas siis sellised taotlused on ikkaoodatud?

There is category ‘other’ which may cover EU ETS installations which don’t fall in the listed sectors but have more than 20 MW thermal fossil fuel input.

2. Or if a sector is listed but not a product (e.g. not a chemical pulp but another type or not a cement product but another type of lime product)? Can the products not listed apply for funding?

Või kui sektor on nimetatud, kuid pole nimetatud toodet(nt mitte chemical pulp, vaid muud tüüpi pulp või nt mittecement, vaid teist tüüpi lime toode), siis kas need projektid on oodatud innovatsioonifondi?

The list of sectors is exclusive but not the list of products. So, there can be other products than those listed.

3. Do solutions for Information and Communication technologies qualify to Innovation Fund (IF)?

Kas ja millised IKT lahendused kvalifitseeruvad fondi?

Yes: the innovation may be delivered by ICT, like in smart grid projects.

4. Are costs for prototyping and prototype testing eligible?

Prototüübi valmistamise ja katsetamise kulude katmisevõimalused?

The relevant (eligible) costs are the additional costs borne by the applicant as a result of the application of the innovative technology related to the reduction or avoidance of the GHG emissions. See also

6. Which Research and Development actions and infrastructures can be financed from IF?

Milliseid TA tegevusi ja taristuid saab täpsemalt finantseerida?

So long as the biodegrdabale polyester fibers would be substituting chemicals that are currently produced in installations covered by the EU ETS they will be eligible.

5. Are the technologies to produce biodegradable polyester fibers eligible? Or does IF fund target mostly energy sector?

7. Can producers' association submit a proposal?Kas taotlusi võivad esitada ka tootjate ühistud?

Eligible applicants: legal persons, that are private entities, public entities, or international organisations and are directly responsible for the implementation and management of the project where relevant jointly with other applicants, i.e. not acting as an intermediary.

8. Do you see spin-off companies to apply for funding?Millised on teadusmahukate spin-offide võimalused Innovatstioonifondis?

Very much so, possibly the small-scale call will be more appropriate.

Selection process

(a) GHG emissions avoidance

(b) Degree of innovation

(c) Project maturity

Award of Project

Development Assistance

(PDA)

Award of project grants

(a) GHG emissions avoidance

(b) Degree of innovation

(c) Project maturity

(d) Scalability(e) Cost efficiency

Expression of interest

Full application

List of pre-

selected projects

to be consulted with MS

Criteria (a), (b), (c) are met

Criteria (a) and (b) are met

9. What is the award criteria?

Mis on toetuste kriteeriumid?

Award criteria

• Quantitative indicators for absolute and relative avoidance

GHG emission avoidance

• Beyond incremental innovation and impact on EU policy objectives

Degree of innovation

• Ready to reach financial close within 4 years?

Project maturity

• Market potential for widespread application

Scalability

• Requested support per ton of CO2

Cost efficiency

GHG emission

avoidancecalculations

Reference scenario GHG emissionavoidance in

projectscenario

calculatedbased on

GHG emissionsin reference

scenario basedon

Expectedquantity during10 years after

entry in operation

ETS benchmark(s)

Quantity ofproduct Changes in

❖ inputs

❖ processes

❖ outputs (e.g. waste)

compared toreferencescenario

Expected 2030 electricity mix

Quantity ofelectricityproduced

Natural gas (NG)

boiler

Quantity ofheat produced

Fossil fuel comparators from RED2

Quantity of fuel produced

Single-cycle NG turbine

peaking power

Quantity of energy stored

Emission factors for grid electricity

Project and reference scenarios

Grid Electricity substituted by export

from the project

Discharging for energy storage

Grid Electricity Consumed

Charging for energy storage

Energy intensive industry

CCS

Fully decarbonised electricity mix

Fully decarbonisedelectricity mix

Renewable electricity and heat

Expected 2030 electricity mix for net

export

Fully decarbonised electricity mix for net

import

Energy storageSingle-cycle NG turbine

peaking powerFully decarbonised

electricity mix

Assessment criteriaMandatory documents

Technical maturity

Technical feasibility, including project design and technical risks

Feasibility study

Financial maturity

Financial viability, including profitability and financing

structureBusiness plan

Operational maturity

Progress in planning and implementation, including

permitting procedures, contracts with customers and suppliers

Project implementation plan

Project maturity – ready to reach financial close within 4 years?

Degree of innovation

• (First-of-a-kind) commercialisation at large-scale

• Proposed technology or productgoes beyond minor changes

Project goes beyond

incremental innovation

• Energy efficiency and circularity

• Use of electricity from renewableorigin

• Net carbon removals

… considering additional criteria

(second stage)

10. What is the requirement for TRL (technical readiness level)?

See Annex D: Technologies that are not yet commercially available but represent breakthrough solutions or are sufficiently mature to be ready for demonstration at pre-commercial scale.

- a first-of-a-kind commercialisation or large-scale commercial size demonstration;

- second or more of a kind commercialisation if relevant costs remain a significant share of total costs;

- Smaller demonstrations or pilot plants are also eligible for support so long as this is the appropriate scale

Application Form B: Project maturity

Scalability – market potential for widespread application

• Further expansion at project site, including sector coupling

• Cooperation with regional economy

• Strategy on knowledge sharing

Project and regional level

• Potential GHG emission avoidance for sector, # installations

• Taking account of supply and demand conditions, such as expected cost reductions and resource constraints

Sector

• Potential GHG emission avoidance across economy, taking into account size of the sector and potential of GHG emission avoidance in other sectors

• Impact on competitiveness and supply chains within EU

Economy-wide

Cost efficiency =

Relevant costs less contributionby project applicant

Max 60% of relevant costs

Absolute GHG emission avoidance

during 10 years after entry intooperation (first criterion)

=

Contributions from private resources or public support

Calculating relevant costs

• Comparison of levelised project costs to the market price

• Also for substitute products

• Default methodology

Levelisedcosts

• Comparison of project costs to costs of reference plant

• Fall-back option

Reference plant

• In case no comparable product or conventional technology exists

No-reference plant

11. The payments are granted at the staged of "financial close", "entry intro operation" etc. How is it in case of project where "financial close" is reached in 1-2 years after the submission of proposal but "construction" and "entry into operation" takes 7-10 years? Do those projects fit to IF? Especially considering that final reporting is expected within 10 years.

Toetuse välja maksmisel jälgitakse etappe „financial close“, „entry intro operation“ jne. Kui on projekt, kus„finanical close“ saavutatakse 1-2 aastaga peale taotluseesitamist, kuid „construction“ ja „entry into operation“ võtab 7-10 aastat, siis kas sellise kestusega projektidüldse saavad IF-st toetust?

Entry into Operation

Financial Close

Up to 40%

independent of achieved emissions

avoidance

depending on achieved emissions avoidance

(min 75% for full grant)

Possible to agree payments at add’lmilestones during

construction phase

(subject to recovery in case that emission avoidance will not be

achieved)

Annual payments for achieved GHG emissions avoidance after

entry in operation

At least 60%

Possible to agree payments at additional milestones

(e.g. drilling with geothermal project)

Payments upon milestones

Max 4 years 3 to 10 years

End of project for IF

12. What is the limit period for non profit making?

Kui pikalt kasumi teenimise piirang kehtib?

Relevant cost are checked at second stage application and at entry into operation.Monitoring period for the programme is 3 to 10 years after entry into operation.

13. Has Breakthrough Energy Ventures (BEV-E) launched in 1Q 2020 as was on December 2019 slides?

Yes, in February 2020

Some specific questions more

All call documents available on the Funding and Tenders Portal

Further guidance:✓Frequently asked questions

Still to be published:

✓Guidance for evaluators

Further questions:Applicants are kindly invited to submit further questions via

the Funding and Tenders Portal

Good luck!