EU Offers $915MM Grants for Cross-Border Energy Infra Projects

The European Commission is offering up to EUR 850 million ($914.8 million) in funding for cross-border energy infrastructure projects such as carbon capture facilities, energy storage facilities, gas pipelines, hydrogen market hubs and power grid interconnections.

This is the first grant offer under the revised Trans-European Networks for Energy (TEN-E) Regulation, which took effect June 2022 aligning with the European Union’s goal of turning into a net-zero emissions economy by 2050, the Commission said in a press release.

Projects eligible for the inaugural rollout must be among the preapproved list of so-called projects of common interest (PCIs) and projects of mutual interest (PMIs), formulated under the TEN-E Regulation and published November 28, 2023, as Regulation 2022/869. For the first time, offshore electricity grids and hydrogen projects can qualify for TEN-E support.

TEN-E projects receive EU assistance through the 2021–27 Connecting Europe Facility (CEF) for Energy, which has a budget of nearly EUR 6 billion ($64.6 billion).

“While fossil fuel projects have been excluded in principle from eligibility to PCI/PMI status and CEF Energy, new types of projects such as offshore electricity grids and hydrogen projects have become eligible”, the Commission noted.

Accepted proposals for CEF Energy funding under the revised TEN-E Regulation are for project studies and construction works. In the inaugural offer, developers have until October 22, 2024, to make submissions. Results are planned to be made known next year, the Commission said.

The pre-approved list aims to scale up cleaner energy in the 27-member region, as well as help member states whose grid is still linked to Russia to migrate their power distribution system to continental Europe.

The pre-approved projects include north-south power interconnections in the Baltics, Central Eastern Europe, Southeastern Europe and Western Europe; offshore grids in the Atlantic, North Sea, Eastern Europe, Southern Europe and Western Europe; hydrogen production-distribution networks in the Baltics, Central Eastern, Southeastern and Western Europe; and carbon capture and storage networks in the Baltics, the Mediterranean, the North Sea and between Croatia and Hungary.

As a PCI, the migration of the grids of the three remaining EU countries connected to the Russian grid is targeted to be completed by February 2025. Last year the Commission and the three nations—the Baltic Sea neighborhood of Estonia, Latvia and Lithuania—signed a declaration to fast-track the integration by nearly a year compared to what was agreed under a political declaration in 2018.

The new declaration also involves Poland. The grid migration plan for the Baltic states will use a new project linking the power supply systems of Lithuania and Poland, called the Harmony Link Interconnector.

“The three Baltic States are the last remaining EU Member States with electricity networks that are still synchronized with Russia and Belarus”, the Commission said in a statement December 24, 2023, announcing the signing of the new declaration. “Their synchronization is a strategic project of common interest.

“Over the past 12 years, it has received significant political, technical, and financial EU support exceeding EUR 1.2 bn [$1.3 billion] worth of grants”.

The statement added, “Under the political declaration, the Member States concerned also committed to speeding up the development of the ‘Harmony Link Interconnector’, one of the most significant energy infrastructure projects between Lithuania and Poland”.

Harmony Link is a submarine line about 330 kilometers long (205.1 miles) using a high-voltage direct current cable that would connect Poland’s Zarnoviec substation and Ltihuania’s Darbėnai substation. The second power interconnection between Lithuania and Poland after the LitPol project (operational since 2016), Harmony Link is expected to be completed 2028.

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