EUROPEAN COMMISSION Brussels, 3.9.2020 COM(2020) 476 final REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL On the implementation of the European Energy Programme for Recovery and the European Energy Efficiency Fund {SWD(2020) 169 final}



REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL On the implementation of the European Energy Programme for Recovery

and the European Energy Efficiency Fund A resilient infrastructure is the backbone of the Energy Union. Last year, in 2019, important interconnection projects were put in operation and regional cooperation was considerably strengthened. In that context the EEPR played a key role in the financial support to major infrastructures of common interest for the integration of the electricity and gas markets and the reinforcement of the security of supply. I. PROGRESS IN PROGRAMME IMPLEMENTATION Energy infrastructure and innovation, the driving forces behind the European Energy Programme for Recovery (EEPR), remain as important now as they were in 2009 when the EEPR was set up. This report sets out, for each part of the EEPR, the progress made in implementing the projects and the European Energy Efficiency Fund (EEEF). It follows the report adopted in 2020 . It covers the implementation of the projects between 1st January 2019 and 31 December 2019 and the payments made during that period. II. OVERALL PROJECT IMPLEMENTATION By the end of December 2019, 45 (+2 compared to 2018) projects out of 59 have been completed and a total amount of € 2,546,249,263 (after deduction of the recovery orders for an amount of € 198,823,897) has been paid to the beneficiaries (see Annex). The situation for the gas and electricty infrastructures is as follows: most of the projects are completed and two projects are on going. Substantial progress was made by the promoters for the Offshore Wind Energy (OWE) integration in the grid whilst the project promoters of the last remaining Carbon Capture and Storage (CCS) project decided to stop their financial support to the project. The Commission has opted for maintaining its financial support to the investors as long as it remains clear that a Final Investment Decision (FID) is possible and the project continues to provide substantial value for society. 1. gas and electricity infrastructure The EEPR infrastructure sub-programme has supported 44 projects in three major areas of activities (Gas interconnectors, Gas reverse flow and Electricity). A total amount of € 2,267,574,462 has been committed, of which € 1,669.370.233 has been disbursed to the beneficiaries by 31 December 2019. Payments are subject to the beneficiaries' firm commitment to implement the project through a Final Investment Decision.

1.1.progress to date To date, 38 (no change compare to 2018 as no project ended in 2019) out of the 44 infrastructure projects have been completed, four were terminated and two projects are on-going. In the electricity sector, all the 12 projects have been completed. In the gas interconnectors area, 13 out of 18 projects have been completed; two are progressing according to new rescheduling, and three have been terminated. In the area of reverse flow and interconnection projects in Central and Eastern Europe, 13 projects have been completed, and one project in Romania was terminated by the Commission in September 2014. Since the last EEPR implementation report, the following progress can be highlighted in particular : -The Interconnector Greece-Bulgaria (IGB) is a key route to carry gas from TAP and Greek LNG to the north and is an important project for the diversification of gas supply in the South-East European region. It is a project of common interest (PCI 6.8.1) and a Central and South Eastern Europe energy connectivity (CESEC) priority project. The Commission has provided political and financial support to the project since the beginning. The project has received €45 million from the European Energy Programme for Recovery and €39 million from the European Regional Development Fund. In 2018, the project made further progress. Project construction started at the end of October 2019 and is set to last for 18 months. Commercial operation is currently estimated to start in Q2 2021. -In the Republic of Cyprus, the Ministry of Energy, Commerce and Industry is preparing the implementation of a natural gas receiving terminal, which will contribute to the diversification of the Cypriot energy mix and contribute to ending the energy isolation of the island, as well as facilitate competition in gas fueled power generation from independent producers. Natural gas is expected to enter the Cyprus market by 2022. To date, it is foreseen that these two on-going projects should be completed respectively by end 2021 and end 2022. 2. Offshore Wind Energy (OWE) Projects 2.1 Progress to date The Offshore Wind sub-programme consisted of 9 projects receiving € 565 million of support split between two main types of activities: - Large-scale testing, manufacturing and deployment of innovative turbines and offshore foundation structures (6 projects); and - Development of module-based solutions for the grid integration of large amounts of wind electricity transmission (3 projects). 6 of 9 projects have been completed and 2 were terminated prematurely. € 376,188,345 (after deduction of recovery orders) were paid to the projects. One remaining project is on-going (Kriegers Flak). 2.2 Progress to date by sector 2.2.1 Progress with Innovative Turbines and Offshore Structures

For the Aberdeen Offshore Wind Farm, the eleven wind turbines with the world's largest capacity (8,8 MW per turbine at that time, today there are turbines with a power rating of 12 MW) started operations at Vattenfall's offshore wind farm 'Aberdeen Bay' on 1 July 2018. In September 2018 the official opening of the European Offshore Wind Deployment Centre (Aberdeen Offshore Wind Farm) took place. Last reporting for the project and final payment are expected in Quarter II 2020. 2.2.2 Progress with Wind-Grid Integration In general, the execution of the two remaining projects, Kriegers Flak and COBRAcable, progressed as expected. In September 2019, the interconnector COBRAcable between Denmark and the Netherlands was commissioned. The project COBRAcable ended in December 2019. The final report is due within 3 months following the closing date of the action, i.e. by end of March 2020. Kriegers Flak - the Combined Grid Solution - is scheduled to become operational at the end of the second quarter of 2020, which is also the project end date. The final report will be due by end of September 2020. 3. Carbon Capture and Storage The EEPR sub-programme consisted of 6 projects and € 1 billion of support aiming at demonstrating the full carbon capture, transport and storage process. One project (Compostilla in Spain) was finished providing operational pilot plants for capture, transport and storage. Four projects have been terminated prematurely due to the decision of the project promoters not to invest, one project ended without being completed. € 387,099,179 (after deduction of recovery orders for a total amount of € 145,294,400) were paid to these projects. III. EUROPEAN ENERGY EFFICIENCY FUND (EEEF) In December 2010, € 146.3 million from the European Energy Programme for Recovery (EEPR) were allocated to a financial facility for sustainable energy projects. € 125 million were used as the EU contribution to the European Energy Efficiency Fund (EEEF). The EEEF was created in July 2011 and reached a total volume of € 265 million , supported by a Technical Assistance Grant Facility with a budget of € 20 million and € 1.3 million for awareness-raising activities. The EEEF provides tailored financing (both debt and equity instruments) for energy efficiency, renewable energy and clean urban transport projects. Beneficiaries are local or regional public authorities or private entities acting on their behalf. 1.progress to date In 2019, one new transaction was added to the Fund’s portfolio : - The Catfoss project in UK consists of financing for a new combined heat and power (CHP) plant of a combined installed capacity of 28MW. The CHP plant will be constructed at the same site as an existing waste processing facility at Derwenthaugh Eco Parc, Gateshead, UK. The project will provide sustainable heat to a local district heating network as well as private heat and power connections. Once implemented, it is estimated that the project will realise 52,500 tonnes CO2e savings per year compared to baseline. This is equivalent to 97%. Furthermore, once the plant is in full operation, primary energy savings should exceed 315,000 MWh per year, the equivalent of 100% savings compared to baseline given the organic fuel currently is sent to landfill (EEEF investment of EUR 25 million, total project size of EUR 48 million). From its creation and until 31 December 2019, the EEEF signed contracts with 17 projects worth €195 million, it generated an estimated €349.5 million of final investment. Based on the EEEF's project assessment and reporting framework on CO2 equivalent and primary energy savings, as of the end of 2016, its investments have achieved savings of close to 388 478 tons of CO2 and Primary Energy Savings of 794 124 MWh.