EU Renewable Energy Financing Mechanism
The EU Commission has established a new EU financing mechanism to support renewable energy projects, as foreseen under Article 33 of the Governance Regulation (EU) 2018/1999 of the Clean Energy for all European Package. It becomes operational from January 2021. The main objective is to enable Member States to work more closely together to achieve their individual and collective renewable energy targets, covering gaps that may have been identified. As a result, it is expected to facilitate a more cost-effective deployment of renewables across the EU, in areas that are better suited for it in terms of geography and natural resources.The financing mechanism aims to make it easier for regions to get projects off the ground at a time when their local economy is under pressure.EU countries are already committed in meeting binding targets for the share of their energy coming from renewables – with the cumulative EU target of 20% by 2020. Through their national energy and climate plans (NECPs) for 2021 to 2030, they outline their intended pathway for meeting a 32% share of renewable energy by 2030, and, between 2020 and 2030, follow a national trajectory leading up to that point. Currently, they primarily meet this figure based on the amount of renewables generated on their territory through national measures. However, there is second option for using cooperation mechanisms with others, such as statistical transfers or joint projects. The new financing mechanism opens a third possibility: Member States can collectively benefit from renewables projects funded in a different EU country through tenders using this EU-wide financing mechanism.
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