The role of the CEF Energy programme in Europe’s energy transformation

The European Green Deal is based on three key principles to accelerate the clean energy transition: securing and affordable energy supply, creating a fully integrated, interconnected and digitalized EU energy market, and prioritizing energy efficiency.

Therefore, decarbonizing the EU’s energy system is essential to achieve carbon neutrality by 2050 and reaching the 2030 climate targets, as energy production and use account for more than 75% of the EU’s greenhouse gas emissions. These efforts will not only help reduce greenhouse gas emissions but also enhance the quality of life for European citizens.

What is the CEF Energy programme?

Achieving the EU’s climate and energy goals requires a profound transformation of the energy sector. This involves decarbonization, energy security, and market integration, supported by modern and sustainable energy infrastructure.

A key aspect of this transition is the creation of a modern and sustainable energy infrastructure that facilitates the adoption of renewable energy, strengthens cross-border connections, and promotes smart sector integration. In this sense, the Connecting Europe Facility Energy (CEF Energy) is an EU funding programme designed to support the linking of energy infrastructures of EU countries, that are essential for Europe´s energy and climate goals.

Through this programme, the EU provides financial support for:

• Projects of Common Interest (PCI) – Infrastructure projects that connect or significantly impact the energy systems of at least two EU countries.
• Projects of Mutual Interest (PMI) – Initiatives that connect the EU with non-EU countries.
• Cross-border projects in the field of renewable energy.

Both PCI and PMI projects will contribute to achieve the EU energy and climate objectives, playing an important and crucial role in reducing Europe´s dependence on fossil fuels, strengthening the resilience of the energy supply. The expansion and modernization of cross-border energy infrastructures will result in more efficient and interconnected European energy market.

How PCI & PMI projects contribute to the energy transition

One of the key contributions of these projects to reach decarbonization of the economy is enabling the integration of renewable energy into the grid. In this sense, the consumption of biogas, renewable and low-carbon hydrogen and synthetic gaseous fuels and offshore electricity grids are considered priorities of the TEN-E Regulation.

In terms of energy security, these projects address critical challenges such as energy isolation and electricity interconnections bottlenecks. The European Commission prioritizes PCIs that improve electricity interconnections, aiming to meet the interconnection targets of 15% by 2030. Enhancing these cross-border links ensures a more stable and diversified energy supply, reducing reliance on single energy sources and enhancing market flexibility. Additionally, projects contributing to synchronization of electricity systems with the EU network will also contribute to a more resilient and integrated energy network.

The impact of PCI & PMI projects

One of the key impacts for the society is the potential for lower energy prices. The expansion of cross-border interconnections will enhance energy security by reducing the dependency on fossil fuels and, therefore, protecting consumers from market fluctuation. Also, a more resilient and efficient energy network will improve the grid stability, decrease the risk of backouts and improve the energy security across the EU.

The deployment of these projects reduces industrial vulnerability to energy crises by the increased interconnections between EU countries. In addition, smart grids and energy storage solutions improve grid efficiency, contributing to a more reliable and flexible energy system (crucial for industrial operations). The transition to cleaner and efficient energy sources will help industries with lower operational costs and enhance the global competitiveness.

These projects are key in the greenhouse gas emissions reduction by leveraging the transition to renewable solutions. Also, these projects eliminate electricity interconnection bottlenecks, and therefore, will contribute to reach the climate neutrality by 2050.

Challenges and opportunities

Although CEF Energy PCI presents several challenges such as regulatory risks, financial uncertainty, technological integration challenges and the social acceptance, it presents relevant benefits for the applicants. The opportunities of CEF Energy PCI are extensive, including access to funding, competitiveness improvement, alignment with climate goals, better integration into the market and positioning in the global market.

As a conclusion, EU needs modern, sustainable, and interconnected energy infrastructure to decarbonise the energy sector and ensure the security of energy supply across Europe. To achieve these objectives, PCI/PMI play a pivotal role. These projects are critical in creating the necessary infrastructure to integrate renewable energy, reduce dependency on fossil fuels, and improve cross-border energy connectivity.

The CEF Energy programme offers funding support to help turn these projects into reality, enabling stakeholders in the energy sector to contribute to this ongoing transformation. But how can businesses and citizens benefit from these initiatives? Now is the time to explore opportunities, invest in innovation, and contribute to Europe’s energy transformation.