SuperNode has responded to a European Commission survey on its flagship innovation vehicle, the EU ETS Innovation Fund, prior to a planned revision of the regulation governing its functioning.
This decade, the Innovation Fund will provide some €40 billion for commercial demonstration of innovative technologies, aiming to bring to the market industrial solutions to decarbonise Europe and support its transition to climate neutrality.
SuperNode expressed concern that the current evaluation criteria make it extremely difficult for small companies and companies developing enabling technologies, such as grid technologies, to gain access to the fund, and has called for adjustments to be made to better support innovation in electricity transmission technology.
“SuperNode applauds the European Commission for its commitment to supporting clean energy innovation,” said Christian Kjaer, Chief Public Affairs Officer of SuperNode. “The Commission’s intention to revise the regulation and the legal basis governing the Innovation Fund, including its complex eligibility criteria, is urgently needed . Many enabling technologies that are vital for delivering on Europe’s carbon mitigation and energy independence efforts do not fit the current criteria for funding, because these are biased towards the carbon intensive industries listed in the ETS Directive”.
SuperNode’s response to the survey emphasises the need for more flexibility in the evaluation criteria, which mandate detailed avoidance of greenhouse gas emissions (GHG). This is almost impossible to asses in the case of enabling technologies such as innovative grid technology based on superconductors. The result is a sometimes arbitrary project and technology selection process that ignores the long term benefits and carbon reduction potential of many enabling technologies.
Electricity grids is not currently included in the technologies covered by the EU Emissions Trading Scheme, which forms the legal basis of the Innovation fund. However, on 8 February the Council, European Parliament and the European Commission agreed on a compromise text to revise the ETS Directive that for the first time adds “grids for electricity transmission” to the activities that ETS revenue can be used for.
“The recent agreement by the three EU institutions to include electricity grids in the scope of the ETS comes at a critical time. There is a need to increase the Innovation Fund’s technology scope and adjust its evaluation criteria. While grid technologies do not directly avoid greenhouse gas emissions, they are no less in desperate need of innovation and are critical to the energy transition, as already recognised in the Commission’s Offshore Renewable Energy Strategy”, Kjaer continues.
The European Commission’s EU Strategy on offshore renewable energy (COM72020/741) states that “it will be important to facilitate the testing of new technologies for future offshore grids,” and that “the increasing amount of energy generated offshore by these offshore technologies must also be supported by further development of innovative infrastructure and grid technologies.”
“I believe that the EU ETS Innovation Fund has an important role to play in accelerating the transition to a low-carbon economy,” said Kjaer. “By adjusting the evaluation criteria, extending its scope and providing more targeted support for specific technology areas, we believe that the fund can help unlock the potential of small, innovative companies and breakthrough technology to drive real change.”
The Innovation Fund is financed by revenues from auctioning greenhouse gas emission allowances under the European Emissions Trading Scheme.
The existing framework (Commission Delegated Regulation 2019/856) on the Operation of the Innovation Fund establishes that “the major part of the Innovation Fund support should depend on verified avoidance of greenhouse gas emissions”. It also establishes (Article 11) the five selection criteria of the Innovation Fund, of which two out of five criteria for funding relates to avoidance of GHG, which is difficult to assess for enabling technologies such as electricity transmission. Therefore, there is a great need to introduce new evaluation criteria for those innovative electricity transmission projects which are now included in the revised ETS Directive framework and all future Innovation Fund calls should reflect this.
You can find SuperNode’s full response here: Testing of Market needs in relation to the EU ETS Innovation Fund and the Revision of its legal basis