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PERTE ERHA

Renewable energy PERTE: The renewable "manna" of European funding.

Category
Experts and knowledge
Content type
Interviews
Reading time
10 minutes
Published
24 Feb 2023

The PERTE for Renewable Energies, Renewable Hydrogen and Storage, known as PERTE ERHA, will mobilise €16,370 million between European funds and private investment.

Emma Montserrat, European Union Fund Manager and Deputy Assistant Managing Director at Bankinter, talks in this interview with Daniel Ramos, Grant Manager at FI Group, about the PERTE ERHA. Bankinter offers advice and financing to its customers to access the Next Generation grants in collaboration with FI Group, a consultancy dedicated to the management of European funds, which employes 720 consultants specialising in this type of funding.

PERTE ERHA Interview
Emma Montserrat, European Union Fund Manager and Deputy Assistant Managing Director at Bankinter and Daniel Ramos, Grant Manager at FI Group.

Emma Montserrat: Hi Daniel. What is the PERTE ERHA?

Daniel Ramos: is the response given by the Government of Spain, through the transformation and recovery mechanism, to the decarbonisation objective the European Commission has for 2050. In the end, the PERTE ERHA supports compliance with the milestones set out in the National Integrated Energy and Climate Plan (PNIEC) 2021-2030; Spain's contribution to the Green Deal.

Emma Montserrat: who can participate in the PERTE ERHA?

Daniel Ramos: all types of companies are accommodated. In fact, it is configured through transformative and facilitating measures. The facilitating ones pull the entire PERTE downwards, focusing on the final consumer. AND the transformative ones would be the real projects to be driven at the business level.

Emma Montserrat: What should companies that want to offer themselves take into account?

Daniel Ramos: it has a different configuration from the rest of the PERTE; it is not one big fund as such, but is divided into a number of funds, each with a different theme. Biogas, wind, photovoltaic, hydrogen, storage and flexibility of the electrical system. All these areas have different requirements. They are very technical and require highly developed projects: the more focused the requests are, the better. But it is true that there are areas in different phases of implementation. Some are in the R&D phase, with very innovative technologies; others are in the implementation phase; while others are in the total investment phase, where we develop large projects that can attract quite significant funding.

“The PERTE is divided into many funds, each with a different theme: biogas, wind, photovoltaic, hydrogen, storage and flexibility of the electrical system”

Emma Montserrat: how can a company with a project eligible for European funding apply for a PERTE ERHA?

Daniel Ramos: first: advise you correctly. The funding requirements, in terms of endorsements, guarantees, technical documentation, repercussions, as well as the formation of consortia, require legal and financial support and technological and technical development.

“In the end, all these areas have a technological risk. We're talking about many technologies that are not sufficiently proven. The support of consulting companies is advisable”

Emma Montserrat: What benefits can a company offering itself for this type of PERTE receive?

Daniel Ramos: In the end, all these areas have a technological risk. We are talking about many technologies that are not sufficiently proven. These grants can mitigate that risk when making an investment. There are funds, for example, where there is a commitment to renewable hydrogen projects which have technology risk and which require users behind them to consume that hydrogen. These consumers will also need to modify their facilities to be able to consume it; also with the consequent risks.

Emma Montserrat: now we have the experience of operating other PERTE, such as the VEC. But this PERTE ERHA is not a typical PERTE. In these circumstances, it is vital to have specialist advice to be able to take advantage of the different funds. Is that right?

Daniel Ramos: correct, the first round for renewable hydrogen was a very clear example of pioneering and singular projects, which required that both the production of hydrogen through renewable energies was assured - via necessary initial investment to feed the electrolysers - and the consumption of that hydrogen. This required certain memorandums of understanding, preliminary consumer agreements, etc. where many things had to be taken into consideration; such as the possible price of hydrogen, transportation, the existence of PPA contracts and self-consumption systems. These all had some technical requirements with certain risks. With very technical issues, the support of consulting companies and the management of financial guarantees to develop the projects correctly and greatly mitigate the risks are highly advisable.

“The same project can be considered for different funding. The key is to have a good roadmap to see which is the most suitable fund with the best return on investment”

Emma Montserrat: what opportunities are there for the industrial sectors in the current PERTE?

Daniel Ramos: we have different PERTE open. The decarbonisation one is linked to the energy one. And other opportunities from the IDAE (Institute for Energy Diversification and Saving), such as energy efficiency projects in industry, as well as others that have been open for some time and may be equally attractive for certain projects. The difference we have now, compared to other years, is that the same project can be considered for different funds. The key is to have a good roadmap to see which is the most suitable fund with the best return on investment.

Emma Montserrat: quite a few months have passed since we started talking about European funds. In all that time, have there been any changes in the regulations? In that case, where have they been seen?

Daniel Ramos: every day, there are between 5 and 7 publications related to energy regulations in the BOE. There are still regulations from the European Commission that we have to implement in Spain, to continue to give companies security when developing these projects.

Emma Montserrat: earlier, you referred to the fact that there are various European funding alternatives. Is the PERTE ERHA the only possibility for large projects?

Daniel Ramos: we have other possibilities. For example, funding taken directly from the European Commission, outside the scope of the states, with their own evaluation bodies. But with much lower success rates. This is the case with the Innovation Funds or the ERDF, which can also finance powerful energy projects.

“The use of a consortium has long been associated with European funding. In R&D and in projects that cover the entire value chain”

Emma Montserrat: much has been said recently about the formation of consortiums. Is it always necessary to join with other companies and entities to cover the entire value chain, or can companies offer themselves individually for this PERTE?

Daniel Ramos: it is another of the differences between this PERTE and other funds, which did require all that chain to be covered. This is the case, for example, with the first renewable hydrogen projects, but there are others underway where this won't be necessary. There will be times when a consortium is necessary, but others can be applied for by individual companies and still be equally attractive for the projects.

Emma Montserrat: do you think these figures will last over time or will they disappear after this extraordinary period we are experiencing?

Daniel Ramos: The consortium is an entity which has been associated with European funding for a long time. Programmes like Horizon Europe specifically consider a maximum of 3 companies from 3 different countries. It can be maintained. This is common in R&D funds, with the participation of universities and research centres, but also when the value chain needs to be covered, ranging from who produces a good to who consumes it.

Emma Montserrat: in other words, it's best to become familiar with the concept of a consortium...

Daniel Ramos: Yes, I think this will be quite common.

“Some funds have yet to be allocated, such as those for the hydrogen valleys, where the aid ceilings are also expected to be raised”

Emma Montserrat: what differences does this PERTE have with other PERTE? We have the experience of other executed plans, such as the electric vehicle, agri-food and naval ones.

Daniel Ramos: in this case, two well-differentiated areas open: facilitating and transformative measures. And for transformative, in particular, there is a wide range of different funds: 25 instead of just one. Some funds have yet to be allocated, such as those for the hydrogen valleys, where the aid ceilings are also expected to be raised The main thing about PERTE ERHA is that there are many technologies available with the commitment to develop them. With significant amounts, well, we're talking about €150 million, for example, in a single fund.

Emma Montserrat: what are the main technologies you want to support with this PERTE?

Daniel Ramos: We could divide PERTE into 3 large blocks: support for renewable energy, renewable hydrogen, which has been the main player this past year, and storage and flexibility of the electrical system. In the latter case, with funding for the battery industry and new electricity supply and demand management systems, promoting new agents such as local energy communities. We currently have funding open for biogas and offshore wind.

“In green hydrogen, we have worked with technology centres and universities, as well as in more advanced phases, with the use of hydrogen in vehicles, plant production with new electrolysers and final consumption by heavy industry”

Emma Montserrat: What is the degree of technological maturity required in the projects?

Daniel Ramos: here, there are a lot of differences in the funds. Some support projects in the very early phases, such as pure R&D, up to technology deployment projects and those in the final implementation phase of the works, at the investment level. For example, for hydrogen, we have been working with technology centres and universities as well as in more advanced phases, such as the use of hydrogen in vehicles, plant production with new electrolysers and final consumption by heavy industry, which are pure investment projects.

Emma Montserrat: we're almost finished, Daniel. How does this PERTE fit into national and European energy policies?

Daniel Ramos: clearly our goal is carbon neutrality by 2050, which can be achieved in two ways: by the decarbonisation of industry and transport and by the contribution of renewable energies. We are developing certain capabilities in technologies that are included in the PNIEC. We have a responsibility and a commitment to the EU to create these renewable parks, with a certain level of installed power, in addition to other mechanisms, such as renewable auctions. It is a way to clearly guard against uncertainty when investing in innovative technologies.

Emma Montserrat, Responsable de Fondos Europeos y Directora de Banca Corporativa en Bankinter

At Bankinter we are prepared to join companies on this journey, hand in hand with the FI Group.


We are strongly committed to offering Spanish companies information, support, advice and financing regarding European funds. Talk to your nearest Bankinter advisor and we will get started!

Emma Montserrat