Subject matter
Article 1
This Regulation sets out provisions necessary for the implementation and functioning of the Union renewable energy financing mechanism (the ‘mechanism’).
Commission Implementing Regulation (EU) 2020/1294 CHAPTER I — GENERAL PROVISIONS
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Objectives
Article 2
1. The mechanism supports renewable energy deployment across the Union. 2. To that end, the mechanism shall fulfil the following two functions: (a) provide support for new renewable energy projects in the Union with the aim of covering a gap in the indicative Union trajectory pursuant to Article 33 (1) of Regulation (EU) 2018/1999 (the ‘gap filling function’); (b) contribute to the enabling framework pursuant to Article 33(2) of Regulation (EU) 2018/1999 thereby supporting renewable energy deployment across the Union irrespective of a gap to the indicative Union trajectory (the ‘enabling function’). 3. Unless otherwise provided for in this Regulation, the mechanism shall allocate its resources to support renewable energy deployment across the Union in accordance with the rules set out in this Regulation without distinction between the two functions referred to in paragraph 2 of this Article.
Definitions
Article 3
For the purposes of this Regulation, the following definitions apply: (1) ‘mechanism’ means the Union renewable energy financing mechanism referred to in Article 33 of Regulation (EU) 2018/1999; (2) ‘functions of the mechanism’ means both the gap filling function and the enabling function of the Union renewable energy financing mechanism; (3) ‘contributing Member State’ means a Member State that makes a direct payment into the mechanism pursuant to Article 33(1) or (2) of Regulation (EU) 2018/1999; (4) ‘host Member State’ means a Member State that allows physical installations for the production of renewable energy financed by the mechanism to be installed on its territory; (5) ‘participating Member States’ means both contributing Member States and host Member States; (6) ‘project promoter’ means person or entity which develops a renewable energy project; (7) ‘Union funds’ means any form of Union financial support, including Union investment support instruments and funds or programmes providing for financial instruments, whether or not it is part of the budget of the European Union; (8) ‘voluntary financial payment’ means a payment made by Member States to the gap filling function in accordance with Article 33(1) of Regulation (EU) 2018/1999; (9) ‘additional payments’ means payments made directly by Member States to the enabling function in accordance with point (a) of Article 33(2) of Regulation (EU) 2018/1999; (10) ‘payment’ means both additional payment and voluntary financial payment; (11) ‘coordination’ means coordination between the financing mechanism and any other Union or national funding instrument in accordance with Article 24; (12) ‘blending operation’ means operation supported by the Union budget combining either non-repayable and repayable forms of support or repayable forms of support from the Union budget with repayable forms of support from development or other public finance institutions, as well as from commercial finance institutions and investors; (13) ‘ceiling price’ means the maximum price per kWh or kW that can be awarded within a specific call and above which applications are excluded from the grant award procedure; (14) ‘energy from renewable sources’ or ‘renewable energy’ has the same meaning attributed to by Article 2(1) of Directive (EU) 2018/2001; (15) ‘additional unit’ means a defined amount of generating capacity (kW) or energy generated (kWh) in accordance with Article 7 of Directive (EU) 2018/2001 that can be attributed to the sole implementation of support provided by the mechanism; (16) ‘pay-as-bid’ means a grant award procedure where applicants are awarded grant support corresponding to the price per additional unit offered in their application; (17) ‘pay-as-clear’ means a grant award procedure where applicants are awarded grant support corresponding to the price per additional unit determined at the point of clearing of the award procedure; (18) ‘floating premium’ means an operating support in the form of a premium per kWh calculated as the difference between an average wholesale price in the price zone where the installation is located and the price determined by the grant award procedure; (19) ‘fixed premium’ means an operating support in the form of a premium per kWh additional to the market price, the amount of which is determined by the grant award procedure; (20) ‘investment support’ means payments by the mechanism relating to the installation of capacity for additional units per kW; (21) ‘operating support’ means contributions by the mechanism which relate to the continuous operation of an undertaking and which are disbursed per additional unit of kWh generated.
Sources of funding
Article 4
1. Pursuant to Article 33 of Regulation (EU) 2018/1999, the actions under the mechanism may be financed from payments by Member States, Union funds, or private sector contributions. 2. The mechanism may receive voluntary payments from Member States pursuant to Article 32(3)(d) of Regulation (EU) 2018/1999 or additional payments by Member States pursuant to Article 33(2)(a) of Regulation (EU) 2018/1999. 3. The mechanism may receive budget contributions from other Union programmes in accordance with the applicable basic acts. Where these applicable basic acts so provide, these contributions shall be used in accordance with the provisions of this Regulation, notably in order to contribute to the enabling framework pursuant to Article 3(5) of Directive (EU) 2018/2001. The Commission shall decide for which calls these contributions are used. 4. The mechanism may receive private sector contributions from any private entity, whether a natural or a legal person. Before making its contribution to the mechanism, the private entity may indicate a preference for the call for proposals to which its payment is intended, or a type of technology or end-use that it is willing to support, without distorting market competition, and may request to receive the guarantees of origin that could be issued for the renewable energy production. The Commission may take that preference into account, which is not binding on the Commission. Within three months from receiving information on the final elements of the call for proposals, the private entity shall make its contribution to the mechanism.
Implementation and forms of funding
Article 5
1. The mechanism shall be implemented in direct management in accordance with the Financial Regulation or in indirect management with bodies referred to in Article 62(1)(c) of the Financial Regulation. 2. In line with Article 33 of Regulation (EU) 2018/1999, the mechanism shall fulfil the objectives set out in Article 2 by providing funding in any of the forms laid down in Regulation (EU, Euratom) 2018/1046, including grants. It may also provide financing in the form of financial instruments within blending operations. 3. The mechanism may fulfil its objectives set out in Article 2 also by allocating the financial support in coordination with other instruments and Union programmes as provided for under Chapter III.
Contribution of the mechanism to the enabling framework
Article 6
1. The mechanism shall contribute to the enabling framework pursuant to Article 33(2) of Regulation (EU) 2018/1999, inter alia for the purpose of reducing the cost of capital for renewable energy projects and enhancing regional cooperation between Member States and between Member States and third countries. To this end: (a) the Commission may allocate Union funds received according to Article 4(3); (b) the support allocated by the mechanism may be coordinated with funding from other national or Union programmes and/or instruments according to the provisions of this Regulation. 2. When the mechanism provides support as part of the contribution to the enabling framework, the principles of the grant award procedure pursuant to Article 15(4) and any other relevant provisions of this Regulation shall be applied accordingly.
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