Brussels,

Financing renewables

For every euro invested in fossil fuels globally in 2024, almost €2 was invested in clean energy technologies and infrastructure—a clear signal that capital markets are increasingly backing the energy transition as the dominant growth story in the global energy system. (IEA)

For the European Union, this shift is not just climate policy; it is industrial strategy. Clean-energy investment underpins competitiveness by lowering exposure to imported fossil-fuel price shocks, cutting operating costs over time through electrification and efficiency, and strengthening Europe’s position in strategic value chains (renewables manufacturing, grids, storage, hydrogen, heat pumps). The EU is also one of the regions with the highest clean-energy-to-fossil investment ratio (IEA notes the EU spends well over $10 on clean energy for every $1 in fossil fuels), reflecting both policy direction and the economic logic of reducing dependency on imported fuels. (iea.blob.core.windows.net)

This is why investing in clean energy is central to delivering clean, secure and affordable energy: scaling renewables, grids and storage directly supports price stability and security of supply, while enabling decarbonisation to become a driver of industrial resilience and growth—an approach echoed in EU competitiveness and affordable-energy policy framing. 

EU Renewable Energy Financing Mechanism

The EU Renewable Energy Financing Mechanism enables EU Member States to cooperate on renewables by letting some countries contribute financially while others host new renewable projects, with the renewable “statistical benefits” shared towards national targets.

Legal basis and purpose

• Established by Regulation (EU) 2020/1294 (in force since September 2020), based on Article 33 of the Governance Regulation (EU) 2018/1999.
  • Regulation (EU) 2020/1294
  • Governance Regulation (EU) 2018/1999
• It complements other cooperation options under the Renewable Energy framework (e.g., statistical transfers and joint projects).

How it works

• Contributing countries voluntarily pay into the mechanism; hosting countries accept projects on their territory.
• There is no direct bilateral negotiation required between contributors and hosts; the process and conditions are facilitated centrally.
• Participating countries share the statistical benefits of renewable energy produced by supported projects towards their national targets.

Funding and project selection

• Funding is allocated through competitive tenders awarding grants.
• Support can cover either:
  • Investment support (building the renewable facility), or
  • Operating support (support linked to renewable energy production).
• The mechanism can support renewable technologies covered by the Renewable Energy Directive (RED) (EU) 2023/2413 and applies across electricity, heating & cooling, and transport.

Concrete cross-border tender examples

• First cross-border tender concluded (27 September 2023): solar PV in Finland; awards followed in late 2023 (projects supported and grant agreements prepared/signed).
• Second tender: €52 million allocated to 9 projects in Finland and Estonia, adding 445.65 MW, expected commissioning 2027–2028; Luxembourg acted as contributor.
• Programme implementation and calls

Role of the private sector

Companies can participate by:

• Competing in tenders as project developers (grant agreement for project delivery), and/or
• Making a voluntary payment as a private contributor (primarily a sustainability/decarbonisation action; under certain conditions, contributors may request guarantees of origin linked to their contribution).

Useful documents and entry points

• Mechanism factsheet:
• How the mechanism works (overview)
• Calls / opportunities page 
  
  

Support schemes for renewable energy

Support schemes are policy tools EU countries use to accelerate renewable deployment, achieve specific objectives (e.g., system integration, regional diversification), and provide predictability for investors—while avoiding unnecessary market distortion and higher costs for households and businesses.

Why support schemes still matter (even as renewables become competitive)

Renewables have become increasingly competitive thanks to falling costs and evolving markets, meaning markets alone can deliver much of the additional capacity needed. Still, with higher ambition under the Green Deal/REPowerEU, well-designed national support remains important to mobilise investment without undermining market functioning.

Support for renewable electricity: key design requirements

Under Article 4 of the Renewable Energy Directive, Member States must allocate support openly, transparently, competitively, non-discriminatorily and cost-effectively, with exemptions for small-scale installations, demonstration projects, and specific territories (e.g., small islands/peripheral regions).

Support should also:

• encourage market-based and market-responsive integration of renewable electricity;
• consider mechanisms for regional diversification to enable cost-efficient system integration;
• include a long-term schedule (timing, frequency, expected capacity, budget, eligible technologies).

Tenders (auctions): the dominant allocation model

Across the EU, operating support for utility-scale projects (e.g., Contracts for Difference, certificates, tariffs/premiums) is commonly allocated via competitive tenders/auctions.

To improve auction design, the Commission published in May 2024:

• Recommendation C/2024/2650
• Guidance (SWD/2024/300)

These were announced under the European Wind Power Action Plan (Oct 2023) and informed by a 2024 Call for Evidence:

Background evidence base (Nov 2022):

• Study on tendering procedures:
• Commission Report on tendered support performance:

Net-Zero Industry Act (NZIA): mandatory non-price criteria in auctions

Under the Net-Zero Industry Act (NZIA) the EU adopted rules requiring specific non-price criteria in renewable auctions (e.g., responsible business conduct, cybersecurity, sustainability/resilience). From 30 December 2025, these rules must apply to 30% of auction volumes or 6 GW/year per Member State.

Guidance on two-way Contracts for Difference (CfDs) (Dec 2025)

In December 2025, guidance was published on two-way CfDs:  (link as provided on the page).
Two-way CfDs aim to provide minimum revenue protection while limiting excess remuneration. Better design can:

• reduce investment costs (revenue certainty),
• improve system efficiency,
• reduce curtailment via better incentives,
• lower energy costs by bringing more low-cost clean generation into the market.

Related links

• Press release (13 May 2024)
• State aid guidelines (CEEAG, 2022)
  
  

Financing cross-border cooperation

Cross-border renewable energy projects (CB RES) are a dedicated category under the Connecting Europe Facility (CEF) Energy Programme 2021–2027, designed to support cross-border cooperation that helps EU countries reach the 2030 renewable energy targets more cost-effectively.


With an overall budget of ~€875 million (2021–2027), this CEF Energy window complements other EU renewables funding, but focuses specifically on cooperation arrangements between countries and projects with demonstrable cross-border benefits.


Eligibility (including non-EU countries)

Projects in non-EU countries may also be eligible if they comply with Article 11 of the Renewable Energy Directive. Renewable Energy Directive link


How a project qualifies as “CB RES” (status)

To become a CB RES project (and thus access CEF Energy funding), projects must meet the criteria in the CEF Regulation (EU) 2021/1153, notably:

• the existence of a cooperation arrangement between countries, and
• evidence of cost savings and overall net benefits.
  CEF Regulation (EU) 2021/1153

Further details are set out in

• Delegated Regulation (EU) 2022/342
• Staff Working Document SWD(2021) 429

Calls to apply for CB RES status (latest)

• The 5th call opened 5 September 2025, with a deadline 5 February 2026 (closed)

What the “CB RES project lists” look like (examples)

Following the 4th call (3 Sep 2024–7 Jan 2025), the Commission adopted the fourth list of CB RES projects (September 2025), including (among others):

• ELWIND (Estonia–Latvia hybrid offshore wind, up to 1 GW)
• Goerlitz–Zgorzelec cross-border district heating (Germany–Poland)
• CICERONE cross-border green hydrogen value chain (Italy/Spain/Germany; supply towards Netherlands/Germany)
• SLOWP (Estonia–Luxembourg hybrid offshore wind, 1.2 GW)
• TMNHSA Danube run-of-river hydropower (Bulgaria–Romania, 840 MW)
  …plus additional offshore wind, onshore wind, district heating, and hydrogen-related initiatives listed on the page.

Calls for funding (technical studies and works) once CB RES status is granted

Once a project has CB RES status, it becomes eligible for CEF Energy funding for studies and works (and gains visibility, investor certainty, and stronger country backing). Calls are organised by CINEA.

Upcoming

• Fourth call for works and studies (budget €150 million) published 4 Nov 2025; opens 5 Feb 2026; deadline 12 Mar 2026

Key documents 

• Delegated Regulation establishing a list of selected CB RES projects (EU/2023/2639):
• Delegated Regulation on selection process (EU/2022/342):
• Staff Working Document (SWD/2021/0429 final)
• CEF Regulation (EU/2021/1153)
  

EU funding for offshore renewables

The EU’s offshore renewables strategy highlights major investment needs for offshore wind and ocean energy and the associated grid infrastructure. Offshore wind is a core pillar of delivering the European Green Deal, and the Commission’s Communication on achieving the EU’s offshore renewables ambitions (COM/2023/668) (Oct 2023) takes stock of progress and reiterates the targets.


A wide set of EU funding programmes can finance offshore projects; check this page 

Important: when combining EU instruments, State aid rules apply and double funding of the same project elements is not allowed.

Funds and programmes most relevant for offshore renewables (wind and ocean)

1) Research, innovation and scale-up (grants / early deployment support)

• Horizon Europe (Cluster 5 – Climate, Energy & Mobility) supports R&I (grants, 2021–2027) with calls that can cover offshore renewables topics (energy systems, grids, storage, etc.).
• European Innovation Council (EIC) (incl. EIC Accelerator) supports breakthrough innovation and scale-up for startups/SMEs (grants + possible equity), including offshore technologies.
• LIFE – Clean Energy Transition (CET) funds coordination/support actions that remove market barriers and build capacity (and can support local offshore-related investment readiness, including energy communities and project development assistance).
• European Maritime, Fisheries and Aquaculture Fund (EMFAF) can fund innovation and enabling actions linked to offshore renewables (ancillary/logistic/supporting activities and enabling technologies/policy tools, not the core capex of generation/grids).

2) Demonstration and first-of-a-kind clean tech (EU ETS-based grants)

• Innovation Fund finances demonstration and scale-up of highly innovative net-zero technologies (grants; budget depends on EU ETS revenues). It can support innovative offshore renewables (generation/use), with selection based on GHG avoidance, innovation, maturity, scalability and cost-efficiency.

3) Infrastructure, grids and cross-border enabling investments (CEF Energy)

• Connecting Europe Facility (CEF) – Energy supports sustainable energy infrastructure and cross-border cooperation. Eligibility typically requires PCI/PMI status or cross-border renewables project status, within the TEN-E policy framework.

4) Blended / risk-sharing finance for capital-intensive projects (InvestEU + EIB/EIF)

• InvestEU provides EU budgetary guarantee-backed financing (loans/equity via implementing partners like EIB/EIF) to crowd in investment for EU priorities, including renewables generation, grids and storage, and offshore-specific needs (e.g., floating wind, ports as offshore hubs, offshore cabling, wave/tidal devices).

5) National plan-driven investment (RRF) and targeted transition support (Modernisation Fund)

• Recovery and Resilience Facility (RRF) (NextGenerationEU) finances reforms and investments via national plans (until end-2026), and can support offshore-related projects; the page cites Princess Elisabeth Island receiving a €100 million loan as an example.
  
  
• Modernisation Fund supports energy-system modernisation and efficiency in 10 lower-income EU Member States (ETS-funded), and can be combined with cohesion tools and RRF depending on national programming. Check this page
  

6) EU-country and region programming (Cohesion policy funds)

• ERDF / Cohesion Fund / Just Transition Fund can support offshore energy across the value chain depending on priorities set in national/regional programmes; there is no pre-allocated offshore budget—allocation depends on programming choices and managing authorities.

Practical takeaways (how to navigate funding)

• Use Horizon Europe / EIC / LIFE / EMFAF for R&I, enabling actions, pilots, market uptake support and ecosystem building. 
• Use Innovation Fund for first-of-a-kind / highly innovative commercial-scale demonstrations. 
• Use CEF Energy for cross-border infrastructure / enabling grid projects (often via PCI/PMI or CB renewables status). 
• Use InvestEU (with EIB/EIF partners) for capital-intensive deployment, ports/industrial hubs, and grid/connection-related investments where risk-sharing finance is needed. 
• Check state aid / no double funding constraints early when combining grants + financial instruments.