allocates 300 million ETS allowances to support innovative projects that reduce GHG emissions. Several geothermal projects have benefited from this facility. For the Phase VI of the European Trading Scheme, the facility is replaced by the Innovation Fund, which would be larger and work differently.
Geothermal projects have benefited from the NER300, and technologies such as EGS are well suited to be eligible under the Innovation fund. Some challenges may however arrive depending on how innovation is defined.
The Innovation Fund is a European Financing programme that stems from the EU ETS, which aims to invest part of the revenues from the European carbon trading scheme to the development of innovative clean energy technologies. The Innovation Fund replaces the NER300. It has a wider scope than its predecessor (with notably a greater focus on energy intensive industries and energy storage) and a larger budget. The Innovation Fund does not restrict any innovative first-of-a-kind technology, provided its demonstration leads to material avoidance of GHG emissions, it has the potential for widespread application or to significantly lower the costs of transitioning towards a low-carbon economy in the covered sectors.
The Innovation Fund and Geothermal Energy:
• Key prospect for commercial scale projects of innovative geothermal energy technologies
• Primarily for deep geothermal projects until now, but large scale shallow geothermal projects may benefit (e.g. UTES)
• Development of new market area for deep geothermal energy
• Funding mechanisms is crucial to define whether the mechanisms if relevant for geothermal projects