In January 2021, the European Commission’s Renewable Energy Financing Mechanism (“the
Mechanism”) will come into effect. The Commission has established the Mechanism, which is a new means of financing renewable energy projects in EU Member States, as part of the Clean Energy Package.
The Mechanism has two objectives:
to support Member States in achieving their renewable energy generation targets in a cost-effective way. In this respect, the Mechanism could provide a further boost to the deployment of renewable technologies – in particular offshore wind and solar – in Member States where their deployment is most cost-effective.
to reduce cost of capital where this is a barrier to investment in renewable energy investment by having grants awarded under the Mechanism be allocated in accordance with an “enabling” objective. This could support projects involving innovative technologies.