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EU launches €4 billion in funding for clean energy projects, including energy storage

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The EU has today (23 November) launched a grant funding opportunity worth €4 billion (US$4.4 billion) for upstream and downstream clean energy projects, including energy storage.

The grant funding will come from the EU’s Innovation Fund, which is funded by revenues from the bloc’s Emissions Trading System (ETS), a scheme which aims to make polluters pay for their greenhouse gas emissions.

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It comes a few days after the EU’s European Parliament approved the bloc’s Net Zero Industry Act (NZIA), which seeks to ensure Europe can meet 40% of its clean energy deployment needs with domestically-manufactured products, as reported by our sister site PV Tech.

The new funding opportunity is split into five categories. The bulk, accounting for €2.4 billion, will go to ‘general decarbonisation’ projects, which are either large-scale (with a capex of over €100 million), medium scale (€20-100 million) or small-scale (€2.5-20 million).

Some €1.4 billion will go to cleantech manufacturing projects focused on manufacturing components for renewable energy, energy storage, heat pumps and hydrogen production, with a minimum capex of €2.5 million).

Another €200 million will go to ‘pilot’ projects with a capex over €2.5 million focusing on ‘deep decarbonisation’.

The Innovation Fund can cover up to 60% of a project’s relevant costs, with information days coming up on 30 November and 7 December before the application deadline of 9 April 2024.

A separate €800 million scheme, in the form of an auction, will seek to scale up renewable hydrogen production. A deadline of early February has been set by the EU for that initiative.

Battery investment challenges

The news comes as Europe’s battery manufacturing ecosystem appears to be suffering from outflows of investment following the US’ generous tax credit subsidies for clean energy manufacturing, while its solar industry is at threat for different reasons, covered extensively by PV Tech).

Recently, Norway-based lithium-ion gigafactory firm Freyr Battery announced it would be pausing any further investment in its European projects to focus on scaling in the US until Europe came up with an adequate policy response to the US’ Inflation Reduction Act. Energy-Storage.news interviewed CEO Birger Steen about this last week for a Premium article.

The firm’s Giga Arctic project was a winner in the last round of Innovation Fund grants with €100 million awarded, announced in July 2023, as was an energy storage system (ESS) assembly plant in Poland from Freyr’s Sweden-based peer Northvolt receiving €75 million. An ESS assembly plant mainly using second life EV batteries by Fenecon in Germany also received a smaller amount.

In a related move, on 13 November the EU European Parliament also signed a political agreement on the Critical Raw Materials Act. The act sets out a series of measures to ensure the bloc has access to a ‘secure, diversified, affordable and sustainable’ supply of critical raw materials, with green energy, digital, defence and aerospace noted as benefitting industries.

For a look at how the Innovation Fund has helped solar PV projects in the past head over to our sister site PV Tech’s coverage of the announcement.

See more information about the €4 billion funding opportunity on the EU website here.

Energy-Storage.news’ publisher Solar Media will host the 9th annual Energy Storage Summit EU in London, 21-22 February 2024. This year it is moving to a larger venue, bringing together Europe’s leading investors, policymakers, developers, utilities, energy buyers and service providers all in one place. Visit the official site for more info.

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