The European Union’s inaugural renewable energy financing mechanism tender has attracted bids well above its target capacity. The tender was realized through Luxembourg and Finland’s collaborative efforts within the renewable energy financing framework.

Luxembourg has committed €40 million (~$44 million) as a voluntary contribution, while Finland provided the platform for projects ranging from 5 MW to 100 MW to compete for financial support.

The tender, floated in April 2023, was the first-ever cross-border tender between EU member states.

The Commission noted that the tender primarily featured proposals for constructing solar power projects. With a total capacity of 516 MW across all project submissions, the demand for the available budget was exceptionally high, surpassing expectations and indicating robust competition.

Next, the European Climate, Infrastructure, and Environment Executive Agency will assess project eligibility and allocate awards based on pricing. The most cost-effective proposals will be prioritized, followed by those with slightly higher bids until the budget is exhausted.

Following the evaluation, selected project developers will be invited to finalize grant agreements by January 2024, with a requirement to commence their solar photovoltaic projects within 24 months after signing.

Established by the Commission in 2020, the EU’s financing mechanism aims to enhance support for renewable energy initiatives and promote increased adoption of renewables throughout the European Union. Its primary goal is to foster closer collaboration among EU member states in advancing renewable energy adoption.

Recently, the European Parliament and the Council provisionally agreed to raise the European Union’s binding renewable target to a minimum of 42.5% by 2030, up from 32%. It would mean doubling the existing share of renewables in the EU.

Earlier, the EU Parliament adopted the revised Energy Performance of Buildings Directive, mandating solar rooftop systems for all new buildings by 2028 and renovating residential buildings by 2032.