The money will be available under the proposed EU budget for 2014-2020 in the form of newly-minted project bonds, grants and loan guarantees, according to the plan, unveiled on 19 October.
The grants will be awareded to a select group of "common interest" projects which will benefit from a fast-track permit granting procedure.
Projects eligible for EU funding – such as the Southern Gas Corridor to bring gas from the Caspian basin to Europe – could then receive between 50-80% of their funding from the EU. Other examples of projects that the Commission said could be eligible include:
- An offshore grid in the North Sea to transport electricity produced by offshore wind parks.
- Innovative projects to store electricity.
- Gas pipeline projects enabling gas to flow in both directions.
"This is the very first time that the EU is co-financing the construction of large energy infrastructure from its regular budget," the Commission said in an explanatory statement.
But it is not clear how the funds will be divided between renewable and fossil fuel projects, and the majority of the 12 earmarked priority infrastructure projects are for gas and oil pipelines.
To be eligible for EU grants, projects "will have to prove that they are commercially not viable," the Commission said. The list should be finalised by end 2013.
Large electricity firms and the wind energy industry welcomed the proposal but Claude Turmes, the energy spokesman of the Green Party called the proposals “regrettable” and “seriously skewed”.
“The distortion in favour of gas is particularly evident in the proposed priority corridors, with four related to gas and only one entirely devoted to renewable energy transmission,” he said.
Commissioner for Energy Günther Oettinger declined to answer a question from EurActiv about what percentage of the €9.1 billion he wanted to see spent on renewable projects.
“Expanding a European electricity grid is going to fundamentally serve renewables,” he said. “Renewables will need flexible [grid] expansion for a long time, depending on the quantities needed, and this is the best basis [for that], which doesn’t endanger security of supply.”
The proposal will see €45 million spent to create “European co-ordinators” with the power to help push through infrastructure projects that meet “significant delays or implementation difficulties”.
“Projects of common importance should be implemented as quickly as possible,” the proposal says. It foresees a two-phase permit granting process that “shall not exceed a period of three years,” in comparison to the lengthy procedures that apply today.
“It is not necessary for authorisation to build new electricity grids to take over ten years, and this proposal will help to reduce these delays,” said Christian Kjaer, the CEO of the European Wind Energy Association.
But he also warned that the new investment should not be used to fund the €2.5 billion promised to the Carbon Capture and Storage (CCS) industry.
“A clear priority should be given to financial support for electricity infrastructure,” he said. “This will bring clear benefits for Europe's energy security, the internal electricity market and integrating very large amounts of renewable energy.”
The €9.1 billion which will now be allocated from the EU’s 2014-2020 budget, will only make up a small part of its planned €200 billion infrastructure investment over the next ten years.