On Wednesday 6 May, the European Commission launched a public consultation on its draft implementing act for a ‘Renewable Energy Financing Mechanism’.
This initiative is part of the European Regulation on the Governance of the Energy Union (2018/1999) adopted in December 2018 (see EUROPE 12151/14), which, under Article 33, provides that the Commission shall set up a financing mechanism for renewable energy by 1 January 2021 at the latest.
According to the related draft of the implementing act, this mechanism will aim to strengthen the deployment of renewable energy in the Union by providing support for new renewable energy projects.
Actions under the mechanism may be financed by payments from Member States, EU funds, or private sector contributions.
With regard to funding from Member States, the Commission will invite Member States, at least every two years, “to express their interest in participating as a contributing and/or host Member State in the grant award procedures organised by the mechanism”, the draft text specifies.
States wishing to participate in the calls for proposals as contributors will then have to provide certain information to the Commission, such as: (1) the volume of renewable energy they intend to support through the mechanism; (2) a maximum indicative budget per kWh/kW they are willing to spend; (3) their preference for proposals that are technology-neutral - multi-technology - specific to a technology or a project.
On the basis of this information and that provided by the host Member States, the Commission will design the calls for proposals, defining in particular: their objectives, the form of the grants, the eligible technologies, the implementation period, and the statistical distribution - between the contributing States and the host States - of the renewable energy generated by the installations financed by the mechanism.
On the latter point, the draft text provides that 80% of the energy produced should be allocated to contributors, with 20% going to hosts. Nevertheless, the Commission reserves the right to propose deviations from this distribution, while remaining within a range of 50-100% for the contributing State and 0-50% for the host State.
Finally, the draft text indicates that subsidies will take the form of: (1) investment aid to “increase the capacity for renewable energy production”; (2) “incentivise the operation of renewable energy installations by providing premiums”.
The public consultation is open until 3 June. Since it is an implementing act, the draft text will need only to be validated by a committee representing all the Member States before it can be adopted.
Link to the consultation: https://bit.ly/35C5Rmx
For the draft implementing act: https://bit.ly/3c9NYxZ (Original version in French by Damien Genicot)