EC Launches New Financing Mechanism to Boost Renewable Energy
Date: September 22nd 2020
Author: Tanja Srnovršnik
The European Commission published rules last Thursday for a new EU renewable energy financing mechanism, which will apply from the start of 2021. According to the Commission, this mechanism “will make it easier for member states to work together to finance and deploy renewable energy projects – either as a host or as a contributing country.”“The energy generated will count towards the renewable energy targets of all participating countries and feed into the European Green Deal ambition of reaching carbon neutrality by 2050,” noted the Commission.
“To reduce Europe’s greenhouse gas emissions by at least by 55% by 2030, we need to significantly increase the share of renewable energy. This mechanism provides an additional tool to facilitate investment in clean energy projects. It will encourage cooperation between member states and provide a practical boost to our green recovery efforts in the coming years. It can help stimulate Europe’s economies by getting large-scale projects off the ground and by supporting local SMEs and creating jobs,” commented the European Commissioner for Energy, Kadri Simson.
As foreseen under the Energy Union Governance Regulation, this mechanism will be managed by the Commission and will bring together investors and project developers through regular public tenders. It enables “contributing member states” to pay voluntary financial contributions into the scheme, which will be used for renewable energy projects in interested member states (“host member states”).
According to the Commission, “contributing” member states “invest in renewable energy projects in another country. This allows them to support projects that are more cost-efficient than deploying the same technology domestically, and invest in technologies that are not practically possible at home, for example, offshore wind parks for land-locked member states, or solar energy for countries with less hours of sun.”
“For ‘host’ member states, the collectively-financed renewable energy projects are then deployed on their territory. This benefits them in terms of national energy supply, modernisation of the energy system, local investment and jobs, and improved air quality and energy security,” noted the Commission.
This article is available also in Slovene.