Demonstration Project for the Industrial Sector
Published 13 Sep 2019
A Demonstration Project is to strengthen companies’ own efforts to demonstrate new technology for applications with major socio-economic benefits. Projects are to ensure expertise, job creation, value creation and a competitive industrial sector in Norway.
About the call for proposals
The Research Council’s call for proposals for Demonstration Projects in 2020 covers only the thematic areas of “Petroleum”.
The call aims to promote collaboration within the petroleum industry in order to ensure the development and application of new technology that can reduce the cost of activities on the Norwegian continental shelf, increase recovery rates, reduce greenhouse gas emissions and contribute to improved conditions relating to health, safety and the environment.
The call is targeted towards Norwegian supplier companies and sub-contractors that, together with end-users, have a need for pilot testing and demonstration of new technology for use on the Norwegian continental shelf or to sell in international markets.
Most of the work relating to the technology must be performed in Norway and is to safeguard Norwegian value creation and jobs. Demonstration and qualification activities are to be carried out under realistic conditions offshore or in suitable facilities on land. Pilot testing activities themselves may be conducted abroad.
This call is open-ended and grant applications will be accepted on an ongoing basis. Applications will be processed in groups. For more information, see “Anticipated notification of funding decisions” (under “Administrative procedures”).
The Norwegian-language call for proposals is the legally binding version.
This call for proposals constitutes a funding scheme that is notified to the EFTA Surveillance Authority. More information about what this entails is presented in the section below, “Conditions for funding”.
Funding awarded under this scheme is granted in accordance with Article 25 of the General Block Exemption Regulation for state aid (Commission Regulation (EU) No 651/2014 of 17 June 2014). In addition, the common provisions set out in Chapter 1 of the regulation must also be applied. See the regulation here.
This funding scheme is to be practised in compliance with the EEA state aid rules. This means that conditions and concepts are to be interpreted in keeping with corresponding conditions and concepts in the state aid rules. In the event of conflict between the text of the call and the state aid rules, the latter will have precedence. The text of the call may be adjusted for this same reason.
State aid may not be given to an undertaking which is subject to an outstanding recovery order following a formal decision by the EFTA Surveillance Authority or the European Commission that state aid received is illegal and incompatible with the internal market. Nor may support be granted to an enterprise that is defined as an “undertaking in difficulty” under the state aid rules.
The call for proposals has been approved as an aid scheme by The EFTA Surveillance Authority (ESA) with the reference: GBER14/2020/R&D&I.
Who is eligible to apply?
The formal applicant must be a supplier company for the petroleum sector that has been issued an enterprise number under the Norwegian Register of Business Enterprises and carries out economic activity in Norway.
The company is required to carry out the project in collaboration with end-users of the technology.
Sole proprietorships and research organisations are not eligible to apply.
Who can participate in the project?
Requirements relating to the Project Owner
- The Project Owner must be a supplier company for the petroleum sector that carries out activities of an industrial or business nature and has been issued an enterprise number under the Norwegian Register of Business Enterprises.
- The Project Owner must secure project funding (in addition to any Research Council funding) and implement other measures needed to utilise the project results in connection with its own activities.
Requirements relating to collaboration and roles in the project
- The Project Owner is required to carry out the project in effective collaboration with companies that are end-users of the technology. End-users are normally oil companies, but shipowners, suppliers or others operating within the petroleum industry may also be relevant. End-users must provide binding financial and/or professional contributions to the project. Letters of Intent/Interest from the end-users describing their commitments must be attached to the grant application.
- The Project Owner may carry out the project in binding cooperation with other supplier companies in Norway. These companies will have a portion of their project costs covered through the Research Council’s support for the project, which means they will become recipients of state aid.
- Norwegian and international specialist groups and research organisations, or companies that are suppliers of R&D services, may take part in the project as sub-contractors responsible for carrying out specific R&D activities commissioned by companies involved in the project. Suppliers of R&D services to the project may not claim any rights to project results.
- A project participant may only be assigned a single role in the project. This means that the Project Owner and any partners (company partners) must not serve as a supplier of R&D services in the same project, and vice versa.
- Companies taking part in the project may be not in a dependent relationship with any of the R&D suppliers in the project, for example as part of the same business concern. They must operate according to the arm’s length principle.
- Companies (Project Owner, company partners and end-users) participating in the project that are in a mutually dependent relationship with one another will be considered to be one and the same recipient in accordance with the state aid rules.
- Other international stakeholders may take part in the project, but their costs will not be eligible for support from the Research Council.
About Demonstration Projects
- Demonstration Projects build on a specific innovation produced by the companies participating in the project. The innovation can be in the form of a new product, service or production process, or a new means of delivering products and services. The innovation may also entail significant improvements in or new characteristics of existing products, processes or services.
- Companies need to demonstrate and verify technology/innovations before market launch and moving forward with commercialisation. It is this need for development (“experimental development”) that the project is to cover.
- The scope and risk profile of the project must be such that the companies would not be able to carry out the project without public funding. The support from the Research Council must be essential to reducing risk sufficiently for the participants to implement the R&D activities. Project funding should also be crucial to obtaining private investment in the company in order to realise the innovation.
- The Demonstration Project must incorporate clear targets and a concrete plan for carrying out the R&D activities under the project and for utilising the results. Grant proposals must provide a description of the users to be involved in the specific project. Both short- and long-term impacts and outcomes are to be described in the grant application.
- Demonstration and qualification activities are to be carried out under genuine conditions offshore or in suitable facilities on land. The project description must include a clear plan for these activities.
What can you seek funding for?
The state aid rules regulate the types of activities and costs that the Research Council can help to cover, while also setting limits for the aid intensity allowed. The following conditions apply at a general level:
- Support is only available for project costs related to the performance of R&D activities. The Research Council can not cover costs for other types of activities and measures to exploit R&D results, such as protection of intellectual rights, market surveys and marketing. Such costs are not to be included in the project budget tables provided in the grant application. Commercial rig rates or equipment/datasets provided free of charge will not be approved as project costs.
- Applicants may seek funding to cover actual costs that are necessary for the execution of the project. Please see the Research Council webpage on What to enter in the project budget for details and important information.
- It is possible to seek funding to cover part of the costs of company partners for R&D activities performed under the project. This encompasses both a company’s own expenses for performing R&D activities itself and costs for procurement of R&D services from qualified suppliers.
- Costs to be incurred by company partners must be entered into the budget tables along the same lines as costs to be incurred by the Project Owner.
Scope of funding
Projects are to have a duration of 1–3 years. The minimum amount of support available from the Research Council per project is NOK 1 million. The maximum amount available is NOK 20 million.
The level of support (as a proportion of the company’s project costs) will depend on the project’s content and the type of R&D activities as defined in Article 25 of the General Block Exemption Regulation, including the size of the company. Companies will normally be granted a level of support of up to 25 per cent of their budgeted project costs. It may be possible to increase the level of support to higher than 25 per cent depending on the size of the company, the project’s research activities and collaborative constellations. The final grant amount for applications awarded funding will be determined within the framework of the state aid rules in connection with the signing of the contract.
Conditions for funding
This call for proposals constitutes a funding scheme that is notified to the EFTA Surveillance Authority. Funding awarded under this scheme is granted in accordance with Article 25 of the General Block Exemption Regulation for state aid (Commission Regulation (EU) No 651/2014 of 17 June 2014).
- According to the state aid rules, support to an undertaking constitutes state aid. An “undertaking” in this context is defined as any actor that carries out an economic activity consisting of offering products or services on a given market.
- If the project is awarded funding, the participating companies must submit a declaration confirming that they are qualified to receive state aid.
- Other public funding to the project, or to activities under the project, will affect the amount of funding that the Research Council can provide.
- Allocated state aid of EUR 500 000 or more will be announced in a public register.
- If the project is awarded funding, the Project Owner must submit a revised grant application in accordance with the conditions of the allocation decision. The revised grant application will incorporate updated and supplementary information about the project and participating partners.
- The latest permitted project start date for projects is six months after notification of the funding award. Projects approved for funding that have not started by this date may lose their allocation.
- The Research Council’s conditions for allocation are set out in the General Terms and Conditions for R&D Projects. For projects awarded funding under this call, this entails, among other things, a requirement to submit an annual project account report documenting incurred project costs and their financing.
Archiving of research data
The Project Owner (company) is responsible for selecting the archiving solution(s) to use for storing research data generated during the project. The Project Owner must specify the planned solution(s) in connection with the revised grant proposal.
Relevant thematic areas for this call
This call is targeted towards the petroleum industry in connection with upstream oil and gas activities.
This call is relevant for all the topics below. Special requirements and guidelines may be indicated in some of the thematic areas (use the arrow to expand the thematic area)
Reducing greenhouse gases, energy efficiency and the environment, Subsurface knowledge, Drilling, completion and intervention, Production, processing and transport
This call covers four priority areas:
- Priority area 1: Reducing greenhouse gases, energy efficiency and the environment;
- Priority area 2: Subsurface understanding;
- Priority area 3: Drilling, completion and intervention;
- Priority area 4: Production, processing and transport.
The DEMO2000 work programme provides a more detailed description and specification of the priority areas listed above.
Grant applications addressing topics not encompassed by these four priority areas will be rejected.
Please remember to select the topics most relevant to your project proposal in the grant application form.
Cross-cutting priority areas
In addition to the four priority areas outlined above, there are three cross-cutting priority areas:
- The Arctic areas
- Reducing greenhouse gas emissions and improving energy efficiency
Funding is not available for generic projects focusing solely on these cross-cutting priorities. Applicants seeking to address the cross-cutting priority areas must link these specifically to one or more of the priority areas.
Priority will also be given to projects that are ready for early start-up and implementation and that safeguard job creation, expertise and value creation in Norway’s petroleum industry.
At least NOK 10 million is to go towards testing and demonstration of technology for projects targeted towards reducing greenhouse gas emissions and improving energy efficiency.
Examples of areas where there is a need for research, technology development and pilot testing include:
- Heat and power production with higher efficiency and lower greenhouse gas emissions compared to current solutions, such as:
- gas turbines with higher efficiency;
- further development of combined-cycle gas turbines;
- alternative fuels for gas turbines and diesel-operated cranes and generators;
- hybrid solutions for power supply (e.g. wind turbines combined with energy storage systems, etc.);
- electrification using power from shore;
- Offshore energy systems and management, such as:
- increased degree of joint operation and remote control;
- digital solutions that promote optimal utilisation of energy;
- subsea solutions that reduce energy needs beyond current best practices;
- optimised production strategies in connection with greenhouse gas emissions;technology and process management that reduces the need for flaring;
- technology and processes that reduce non-ETS emissions (which are primarily emissions of methane and NMVOC from cold venting of natural gas, from point sources of emissions at onshore facilities, and from loading of crude oil and petroleum products, as well as emissions of CO2 from mobile solutions used for exploration drilling).
- New concepts, ideas and technology that can facilitate integrated energy systems promoting low emissions, including solutions that incorporate new midstream energy value chains.
Applicants must give an account of the estimated total emissions reduction for the technology/technologies the proposed project has targeted for development.
Plugging and abandonment of wells
Assuming all factors relating to project quality are essentially equal, priority will be given to projects addressing the cost-efficient closure of wells. No funding has been earmarked specifically for this. The number and quality of the proposals received will determine how many projects are awarded funding.
Research cooperation with Canada
The Research Council is seeking to expand cooperation with Canada within the priority areas under this call. Projects involving cooperation with Canadian companies that will be of benefit to both countries are particularly encouraged. No funding has been earmarked for this cooperation. The number and quality of the proposals received will determine how many projects can be awarded funding.
Requirements for this application type
The grant application form must be created and submitted via “My RCN Web”. The grant application, including all attachments, may be submitted in Norwegian or English. This call has an open-ended deadline. A grant application may therefore only be submitted once, and the grant application that is submitted is the one that will be processed.
- All mandatory attachments must be included.
- All attachments must be in PDF format and uploaded as an attachment to the grant application form. The designated templates are found at the end of the call for proposals.
- The project description must be written using the designated template. All items must be completed.
- Requirements relating to the project owner must be satisfied.
- Applicants must enter at least one project partner that is an end-user of the technology in the application form.
Grant applications that do not satisfy the above requirements will be rejected.
- A project description of maximum 10 pages, using the designated template;
- Information about partners for the company submitting the grant application (Project Owner) and each of the participating companies (company partners), using the designated template;
- A CV for the project manager;
- Letters of Intent/Interest from the end-users describing their financial and/or professional commitments to the project.
Links to websites and documents, as well as other attachments than those specified above, will not be included in the application review process. There is no technical validation of the content of the attachments you upload, so please make sure that you upload the correct file for the selected type of attachment.
Applications will be assessed on the basis of the following criteria:
• To what extent does the innovation represent something new?
• To what extent is the innovation targeted towards clear needs or new market opportunities for the company partners in the project?
• To what extent does the project build on relevant and updated knowledge?
• To what extent does the project employ relevant and recognised R&D methods?
• To what extent are the R&D activities essential for the success of the innovation?
• To what extent will the project entail a potential for sustainable value creation in Norway with significant economic benefits for the company partners?
• To what extent can the project have positive external impacts, such as:
– helping to disseminate knowledge through networks and publications;
– producing results that can be used by other industries, the public sector or in society at large;
– leading to an innovation that can address UN Sustainable Development Goals or solve other important societal challenges.
• To what extent are the potential impacts of the project clearly formulated and highly plausible?
• To what extent does the R&D project work plan incorporate appropriate and effective objectives, work packages, milestones, resources and relevant risk assessments?
• To what extent will the project have access to the necessary R&D expertise and adequate capacity to carry out the R&D tasks?
• To what extent does the project reflect the strategic priorities of the company partners and have a project organisation appropriate to the task?
• To what extent does the project manager have appropriate expertise and experience to lead an R&D project targeted towards innovation and sustainable value creation for companies?
• To what extent is the plan for implementation of R&D results and realisation of benefits relevant and appropriate, for instance with regard to:
– IPR issues,
– assessment of the competitive framework and market risks,
– investment needs and plans,
– needs and plans regarding partnerships for commercialisation or industrialisation,
– need to develop business models.
Relevance to the call for proposals
• To what extent do the company partners in the project meet the requirements and expectations set out in the call for proposals with regard to the Project Owner and project partners?
• To what extent have the conditions set out in the call for proposals with regard to collaboration and specification of roles been met?
• To what extent can support from the Research Council be expected to trigger increased R&D investment among the company partners in the project and provide added value to the project beyond the financial support?
• To what extent is the project in keeping with thematic or budgetary guidelines in the call for proposals, where this is relevant in light of the project’s content?
Grant applications will be assessed based on the content in the application form, the project description and mandatory attachments. Links to websites and documents, as well as other attachments than those specified above, will not be included in the application review process.
Grant applications and mandatory attachments will be made available to external referees via a digital portal. These referees will assess Excellence, Impact and Implementation. Each application will be assessed by an expert panel comprised of at least three referees. The panel submits an assessment of the grant application for each of these three criteria based on consensus.
Following the panel review, grant applications will be assessed by the Research Council in relation to the criterion, “Relevance to the call for proposals”. The assessment of all four criteria will be consolidated into a single, overall mark that indicates the merit of the project proposal. This overall mark will play a decisive role in determining which projects are to be allocated funding.
The Research Council administration will present the project proposals to the portfolio board for petroleum activities. The portfolio board will attach importance to achieving a balanced project portfolio in the areas under its purview. Consideration will therefore also be given to the distribution of proposed projects under all of this year’s calls for proposals across the priority areas and actors under the petroleum portfolio. The portfolio board must also take into consideration any budgetary aims outside of those set out in the call for proposals. During this process, the portfolio board will also act in accordance with the Research Council’s general policy for allocation of funding, including a focus on:
- research ethics perspectives;
- prioritisation of projects led by women project managers, assuming all other quality-related factors are essentially equal.
Anticipated notification of funding decisions Applications will be processed in groups. Grant application processing is expected to take a minimum of 6–8 weeks. Applications submitted by mid-May will normally be notified of the funding decision by the end of June. Applications submitted by mid-August will normally be notified of the funding decision by the end of September, and applications submitted by mid-October will normally be notified of the funding decision at the latest by mid-December. Applications submitted between mid-October and 15 December will be notified of the funding decision by mid-February 2021.
Please note that a previously rejected application that is re-submitted without significant changes made to the project or the grant application will retain the original scientific assessment in the recommendation to the portfolio board. If a previously rejected application is re-submitted with significant changes to the project and the grant application itself, this application may be assessed wholly or in part by the same panel that assessed the previous version.
Projects recommended for funding will be required to provide additional information about the project and project partners.