BRUSSELS (Commodity Online): The European Commission has decided to fund 43 energy projects across Europe -- mainly natural gas pipelines and power grids -- with more than $3 billion.

The commission Thursday cleared $3.12 billion from the European Union's $5.5 energy stimulus package to help finance 43 pipeline and power transmission projects. Around $2 billion was already allocated for offshore wind power and clean coal projects late last year.

The new Energy Commissioner Guenther Oettinger called the funding a "milestone in the history of EU energy policy."

"We have selected key projects that will help create a more integrated energy network in Europe ensuring flexible energy flows across member states' borders," he said.

He added: "Europe's energy and climate objectives require large and risky infrastructure investments with long pay-back times. The problem is that, in today's economic climate, such projects risk to be delayed. This is a moment where Europe can play an important role in keeping these projects on track."

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Brussels in March 2009 decided to increase spending in energy infrastructure, offshore wind power and clean coal projects to stimulate the economy, safeguard jobs and help meet the 27-nation body's ambitious climate protection targets.

The 43 selected projects include gas pipelines, reserve flow projects to increase European energy security in times of supply crises, liquid natural gas projects and interconnectors to increase cross-country power flow -- a key prerequisite to better integrate fluctuating renewable energy sources.

The biggest chunk of cash, more than $270 million, goes to the Nabucco pipeline, an EU-supported project intended to diversify Europe's energy import sources.

The 2,000-mile Nabucco is due to move 31 billion cubic meters of natural gas per year from the Caspian Sea to Austria via Turkey, Bulgaria, Romania and Hungary.

The project remains controversial, however, as it has not yet secured gas supplies. That might render it illegible for EU funding but Brussels has until the end of this year to commit the money or allocate it elsewhere. The EU is optimistic that talks on Nabucco will make further progress during the next months.

Wind industry officials are particularly pleased about a decision to support several interconnection projects, including a link between Sweden and the Baltic States, the Nordbalt line, as well as to reinforce an interconnection between Finland and Estonia, Estlink-2.

The largest amount goes to the France-Spain power interconnection, which has been slow to materialize during the past years and will now be fund with an extra $306 million.

Paul Wilczek, regulatory affairs adviser for the European Wind Energy Association, said the funding boosts interconnectivity between continental Europe and the Iberian peninsula.

"This funding is a great boost for the integration of wind power in Europe and will improve the operation of Europe's electricity markets and benefit consumers," he said. (Officialwire)

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