The EU provides funding programmes to help finance European energy projects.

EU funding possibilities in the energy sector

Cohesion Fund

The EU’s Cohesion Fund aims to reduce economic and social disparity between EU countries and promote sustainable development.

The Fund supports energy-related projects that benefit the environment for example by reducing greenhouse gas emissions, increasing the use of renewable energy or improving energy efficiency.

Part of the Cohesion Fund is udes to implement the energy union with the help of the Energy and Managing Authorities Network.

Another part of the Cohesion Fund supports the Connecting Europe Facility.

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Connecting Europe Facility (CEF)

The Connecting Europe Facility is the EU's €33 billion plan for boosting energy, transport, and digital infrastructure between 2014 and 2020. Under the CEF, €5.85 billion is available for trans-European energy infrastructure projects such as gas pipelines, transmission grids, Liquefied Natural Gas (LNG) terminals, gas storage, and smart grids.

Every two years the European Commission draws up a list of EU projects of common interest (PCIs) which may apply for CEF funding.

The latest proposal (6 June 2018) is to renew the Connecting Europe Facility for 2021-2027 with a budget of €42.3 billion to support investments in the infrastructure networks for energy (€8.7 billion), transport (€30.6 billion) and digital (€3 billion). This represents a 47% increase compared to 2014-2020, see “EU Budget for the future” CEF factsheet for further information.

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Horizon 2020 and Horizon Europe

Around €5.9 billion goes towards energy projects in the EU's Research and Innovation Programme Horizon 2020. These projects aid the creation and improvement of clean energy technologies, such as smart energy networks, tidal power, and energy storage.

In November 2017 the European Commission published a report entitled ‘Building a low-carbon, climate-resilient future’ on the areas where Horizon 2020 is funding research into clean energy solutions.

Previously, energy projects were funded by the 7th Framework Programme for Research and Technological Development (FP7), which ran from 2007 to 2013. ​FP7 Energy mid-term evaluation (July, 2010) and the Intelligent Energy - Europe II performance report 2007-2012

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European Regional Development Fund (ERDF)

The European Regional Development Fund (ERDF) aims to reduce economic and social disparity between the EU's regions.

One of the ERDF's four priority areas for 2014-2020 is 'the low carbon economy'. A minimum percentage of ERDF funding must be channelled towards low carbon projects in regions:20% for more developed regions,15% for transition regions and 12% for less developed regions.

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European Investment Bank (EIB) and EFSI

The European Investment Bank helps finance energy projects by providing companies with loans and other financial instruments. The EIB also provides advice and expertise on administration and project development.

EIB financed energy projects include renewable generation, infrastructure, and new technologies.

In 2018, EIB loans helped to construct some 26 000 km of power lines and generate 15 228 MW of electricity, out of which more than 86% came from renewables.

The European Fund for Strategic Investments (EFSI) is a joint initiative between the EIB Group and the Commission. It aims to mobilise private investment in projects which are strategically important for the EU. including the areas of energy efficiency, renewable energy, power grids and intereconnectors – all essential to speed up the decarbonisation of the EU economy. EFSI is also the central pillar of the "Investment Plan for Europe".

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Financing Energy Efficiency

Around €100 billion per year is needed to meet the EU's 2020 energy efficiency objectives.

The EU therefore has support schemes and initiatives to accelerate energy efficiency investments, but private investments are also needed.

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Annual work programmes and pilot projects in the field of energy

NER 300

The NER 300 programme uses money from the sale of carbon allowances to fund demonstration projects for carbon capture and storage (CCS) and renewable energy in Europe.

These projects are designed to demonstrate the commercial viability of technologies such as concentrated solar power, smart grids, bioenergy, and post-combustion CCS.

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European Energy Programme for Recovery (EEPR) and EEE-F

Launched in 2009 in order to support key investments in the context of the economic crisis and in order to promote energy transition, the  €3.98 billion European Energy Programme for Recovery (EEPR) finance aimed to fund 44 gas and electricity infrastructure projects, 9 offshore wind projects and 6 carbon capture and storage projects.

After 7 years of implementation, EEPR achieved good results in 2018. 35 projects out of 44 in gas and electricity infrastructure projects are completed; 4 out of 9 in the Offshore wind projects are operational, but only 1 in the carbon capture and storage projects.

The Commission continues to monitor closely the on-going remaining projects. Lessons learned from EEPR were used in the preparation and the implementation of the projects of common interest (PCI).

Under the EEPR, the Commission also launched the European Energy Efficiency Fund (EEE-F) which aims at promoting a sustainable energy market and climate protection.

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