Horizon 2020 Energy Calls Project Types and Funding Levels. 1. Types of Funding Actions why do I need to know this?

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1 Horizon 2020 Energy Calls Project Types and Funding Levels This document sets out the types of activity that will be funded under Horizon In the Energy Work Programme there are five types of projects, the correct Commission terminology is Funding Actions : Research and Innovation Actions, Innovation Actions, Coordination and Support Actions, the SME Instrument and ERANET Cofund. This factsheet sets out the type of activity, eligibility requirements and funding level for each Funding Action. The document has been put together by the EU Energy Focus team, drawing upon information from Commission guidance documents. Please note that at the time of drafting not all Commission guidance documents were finalised. Our responses have not been reviewed by Commission officials. This document is not intended to replace the need to refer to Commission guidance documents but provides answers to the questions that have arisen frequently since the launch of the Calls. Please contact us if you have any queries on the answers provided below or if you have any additional questions. EU Energy Focus Tel Types of Funding Actions why do I need to know this? What are the different Funding Actions? The Work Programme specifies which Funding Action must be used for each Call area, it is not the choice of the proposer. Each topic identifies the type of Funding Action sought i.e. the type of action to be funded. Understanding the different terms helps identify the type of activity to be funded, e.g. predominantly research or demonstration, understand the level of funding for activities and gives a steer on the type of partners needed to carry out the activity. You need to be sure your idea fits with the type of action sought and the Technology Readiness Level 1 specified in the Call topic. A Funding Action type indicates what type of activity the majority of the work should be e.g. research for a RIA. However, it is recognised that a range of types of activities may be necessary within a project e.g. research, demonstration, management, dissemination etc. Note that within a Funding Action all types of activity are funded at the same rate. 2. Overview of Funding Actions 2.1 What is a Research and Innovation Action (RIA)? Type of Activity Research and Innovation Actions (RIAs) include actions primarily consisting of activities aiming to establish new knowledge and/or to explore the feasibility of a new or improved technology, product, process, service or solution. They may include basic and applied research, technology development and integration, testing and validation on a small scale prototype in a laboratory or simulated environment. Projects may contain closely connected but limited demonstration or pilot activities aiming to show technical feasibility in a near to operational environment. 1 Please see Horizon 2020 Work Programme, 18. General Annexes, Part G (page 27) for a further explanation of technology readiness levels. 1

2 Eligibility RIAs must have a minimum of three independent legal entities, each of the three established in a different Member State or Associated Country (see section 3 for details). All three legal entities must be independent of each other. Once the standard eligibility requirements have been met you can include additional partners from the same or different Member States or Associated Countries, so you can have more than one partner from any country. Funding Level The Commission will fund a maximum of 100% of eligible direct costs and will fund indirect costs at a flat rate of 25% (see section 3 for details). 2.2 What is an Innovation Action (IA)? Type of Action Innovation Actions (IAs) include actions primarily consisting of activities directly aimed at producing plans and arrangements or designs for new, altered or improved products, processes or services. For this purpose they may include prototyping, testing, demonstrating, piloting, large-scale product validation and market replication. A demonstration or pilot aims to validate technical and economic viability of a new or improved technology, product, process, service or solution in an operational (or near to operational) environment, whether industrial or otherwise, involving where appropriate a larger scale prototype or demonstrator. IAs can also fund Market replication which aims to support the first application or deployment in the market of an already demonstrated innovation which has not yet been applied or deployed in the market due to market failure or barriers to uptake. Projects may include limited research and development activities. Eligibility IAs must have a minimum of three independent legal entities, each of the three established in a different Member State or Associated Country. All three legal entities must be independent of each other. Once the standard eligibility requirements have been met you can include additional partners from the same or different Member States or Associated Countries, so you can have more than one partner from any country. Funding Level The general principle is that the Commission will fund 70% of total eligible direct costs. However, a maximum of 100% of total eligible costs is available for non-profit legal entities. This is a legal entity which by its legal form is non-profit-making or which has a legal or statutory obligation not to distribute profits to its shareholders or individual members. The Commission will also fund indirect costs at a flat rate of 25% (see section 3 for details). 2.3 What is a Coordination and Support Action (CSA)? Type of Action CSAs include actions to improve market conditions and aid market transformation. These consist primarily of accompanying measures which could include standardisation, dissemination, awareness-raising and communication, networking, coordination or support services, policy dialogue and mutual learning exercises and studies, including design studies for new infrastructure and may also include complementary activities of strategic planning, 2

3 networking and coordination between programmes in different countries (similar to Framework Programme 7 CSA and Intelligent Energy Europe activities). Eligibility CSAs require one legal entity established in a Member State or Associated Country. However, in the Energy Challenge Work Programme there are additional eligibility requirements for the following topics EE 4, 5, 7, 8, 9, 10, 14, 15, 16, 17, 19 and 21. For some aspects of these topics at least three legal entities are required, each to be established in a different Member State or Associated Country, with all three legal entities being independent of each other. Please see page 38 of the Energy Challenge Work Programme wp1415-energy_en.pdf for details. EU collaboration may also be favoured for some other topics. Once the standard eligibility requirements have been met you can include additional partners from the same or different Member States or Associated Countries, so you can have more than one partner from any country. Funding Level The Commission will fund a maximum of 100% of eligible direct costs and will fund indirect costs at a flat rate of 25% (see section 3 for details). 2.4 What is the SME Instrument? The SME Instrument is a new funding opportunity in Horizon 2020 specifically addressing the needs of SMEs. Eligibility A single for profit SME from a Member State or Associated Country can submit a proposal, although applications from consortia are welcome. SMEs are micro, small and medium-sized enterprises within the meaning of Recommendation 2003/361/EC in the version of 6 th May The full definition and a guidance booklet can be found at To find out if your organisation corresponds to the definition of an SME you can use the online tool at For profit SMEs are those that are not non-profit legal entities i.e. a legal entity which by its legal form is non-profit-making or which has a legal or statutory obligation not to distribute profits to its shareholders or individual members eg most charities. Type of Action The SME instrument consists of three separate phases and a coaching and mentoring service for beneficiaries. Participants can apply to phase 1 with a view to applying to phase 2 at a later date, or directly to phase 2. Phase 1 will fund a feasibility study to verify the technological/practical as well as economic viability of an innovation idea/concept with considerable novelty to the industry sector in which it is presented (new products, processes, design, services and technologies or new market applications of existing technologies). The activities could, for example, comprise risk assessment, market study, user involvement, Intellectual Property (IP) management, innovation strategy development, partner search, feasibility of concept and the like to establish a solid high-potential innovation project aligned to the enterprise strategy and with a European dimension. Bottlenecks in the ability to increase profitability of the enterprise through innovation should be detected and analysed during phase 1 and addressed during phase 2 to increase the return in investment in innovation activities. The proposal is shorter 3

4 than for other types of Horizon 2020 actions, about 10 pages. The proposal should contain an initial business plan based on the proposed idea/concept. It should also give the specifications of the elaborated business plan, which is to be the outcome of the project and the criteria for success. Funding will be provided in the form of a lump sum of 50,000 with projects lasting around 6 months. In phase 2, innovation projects will be supported that address the specific challange 2 of the relevant Work Programme and that demonstrate high potential in terms of company competitiveness and growth underpinned by a strategic business plan. The activities should focus on innovation activities such as demonstration, testing, prototyping, piloting, scalingup, miniaturisation, design, market replication and the like aiming to bring an innovation idea (product, process, service etc) to industrial readiness and maturity for market introduction, but may also include some research. For technological innovation a Technology Readiness Level (TRL) 3 of 6 or above (or similar for non-technological innovations) is envisaged. Proposals should be based on an elaborated business plan either developed through phase 1 or another means. Particular attention must be paid to IP protection and ownership; applicants will have to present convincing measures to ensure the possibility of commercial exploitation ('freedom to operate'). Proposals should contain a specification for the outcome of the project, including a first commercialisation plan, and criteria for success. The Commission considers that proposals requesting a contribution from the EU between 0.5M and 2.5M would allow phase 2 to be addressed appropriately. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts. Projects should last between 12 and 24 months. In addition, in phase 3, SMEs can benefit from indirect support measures and services as well as access to the financial facilities supported under the Access to Risk Finance. Successful beneficiaries will be offered coaching and mentoring support during phase 1 and phase 2. This service will be accessible via the Enterprise Europe Network and delivered by a dedicated coach through consultation and signposting to the beneficiaries. The coaches will be recruited from a central database managed by the Commission and have all fulfilled stringent criteria with regards to business experience and competencies. Throughout the three phases of the instrument, the Network will complement the coaching support by providing access to its innovation and internationalisation service offering. This could include, for example, depending on the need of the SME, support in identifying growth potential, developing a growth plan and maximising it through internationalisation; strengthening the leadership and management skills of individuals in the senior management team and developing in-house coaching capacity; developing a marketing strategy or raising external finance. The Importance of Impact The SME instrument is likely to be very competitive and it will be important to highlight the impact you hope to achieve. The Commission has outlined that projects would be expected to have the following impact: Enhancing profitability and growth performance of SMEs by combining and 2 Please see Horizon 2020 Work Programme , 10. Secure, clean and efficient energy, H SEI /15 (page 93) 3 Please see Horizon 2020 Work Programme , 18. General Annexes, Part G (page 27) for a further explanation of technology readiness levels. 4

5 transferring new and existing knowledge into innovative, disruptive and competitive solutions seizing European and global business opportunities. Market uptake and distribution of innovations tackling the commercial uptake of nanotechnologies, advanced materials and advanced production technologies in a sustainable way. Increase of private investment in innovation, notably leverage of private co-investor and/or follow-up investments. The expected impact should be clearly described in qualitative and quantitative terms (e.g. on turnover, employment, market size, IP management, sales, return on investment and profit). 2.5 What is the ERANET Cofund Action? Programme Cofund Actions are funded through a grant, the main purpose of which is to supplement individual calls or programmes funded by other entities. As such the ERANET Cofund supports Public-public partnerships, including joint programming initiatives between Member States which may subsequently lead to calls for proposals with a particular sector. There is a requirement for three legal entities, each of the three established in a different Member State or Associated Country, with all three legal entities being independent of each other. 3. Background on Costing and Eligibility What are direct and indirect costs? The Horizon 2020 Regulation is still in draft form but the principles of eligibility of direct costs are likely to follow the principles set out for Framework Programme 7 (FP7). Under FP7 eligible direct costs are those which are actually incurred by the beneficiary during the period of the project, are identifiable and verifiable, used for the sole purpose of achieving the objectives of the project, recorded in the accounts of the beneficiary and were indicated in the project s budget estimate. Indirect costs are those costs which cannot be identified by the beneficiary as being directly attributed to the project but are incurred in relation to the project, often referred to as overheads. For example, depreciation of buildings and plant, water/gas/electricity, insurance, training, office equipment, consumables, etc. In order to simplify the costs system Horizon 2020 introduces a new method for calculating indirect eligible costs. They are determined by applying a flat rate of 25% of total direct eligible costs, excluding direct eligible costs for subcontracting and the costs of resources made available to third parties which are not used on the premises of the beneficiary, as well as financial support to third parties. Country Eligibility What are the Member States and Associated Countries? The Member States of the EU, including their overseas departments, and the Overseas Countries and Territories linked to the Member States, are eligible to receive funding under Horizon A list of the European Union Member States can be found at Please note that the nations making up the United Kingdom are not separate Member States. The Associated Countries are non-eu countries which are party to an international agreement with the Community, under the terms or on the basis of which they make a financial contribution to the Commission funding programme. With regard to proposal 5

6 consortia, organisations from these countries are treated in the same way as Member States, and count towards meeting the minimum partnership requirements. They also are treated in the same way with regard to funding from the European Community. In order to facilitate the implementation of Horizon 2020 in 2014, and with the exception of Liechtenstein which does not intend to associate from the start of Horizon 2020, it will be assumed that countries associated to the Seventh Framework Programme for Research and Technological Development (FP7) will conclude association agreements for Horizon The countries associated to FP7 were Albania, Bosnia and Herzegovina, the Faroe Islands, Former Yugoslav Republic of Macedonia, Iceland, Israel, Moldova, Montenegro, Norway, Serbia, Switzerland and Turkey. Other countries may become associated during Horizon 2020 so check for updates 4. Which other countries can participate and can they receive funding? Applicants from non-eu countries (third countries) are always free to take part in H2020 programmes even if the Call for Proposals or topic text do not state this explicitly. They are not always automatically entitled to funding. In addition all applications must meet the minimum partnership requirements for an eligible consortium in the Rules for Participation. Applicants from non-eu countries fall into 2 categories: those automatically eligible for funding those not automatically eligible for funding (though they may still be funded in exceptional cases) A list of automatically eligible non-eu applicants can be found at hi-3cpart_en.pdf This list is in addition to the Associated Countries which can also receive funding (see above). Applicants from other non-eu countries may be granted funding if: Funding is provided for in a bilateral scientific/technological agreement or similar arrangement between the EU and the country where the applicant is based. The Call for Proposals clearly states that applicants based in such countries are eligible for funding. Their participation is deemed essential for carrying out the action by the Commission or the relevant funding body because it provides: outstanding competence/expertise, access to research infrastructure, access to particular geographical environments, access to data. 4 A document on the Associated Countries can be downloaded at 3cpart_en.pdf 6

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