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News 27 February 2023

REPowerEU: new energy chapters added to national recovery plans

Following an initial vote in the European Parliament, on 21 February the European Council formally adopted an amendment for which REPowerEU chapters will be included in the Recovery and Resilience Facility. In practical terms, that means that Member States will be able to add REPowerEU mechanisms to their respective national recovery and resilience plans (RRPs) under NextGenerationEU’s €800 billion fund. The decision’s purpose is mainly related with strengthening the EU’s strategic autonomy through the diversification of its energy supplies. That will be fostered through key investments and reforms at national level, in which the uptake of renewables, such as through new provisions to make solar rooftops mandatory in new buildings or measures to boost energy efficiency and energy storage capacity, are the main focus as established in the REPowerEU Plan.

In order to have access to the funding mechanisms stipulated by this regulation, EU countries will have to provide their respective national recovery plans updated with REPowerEU chapters before the 31st of April so that the plans can be put into action by summer 2023. Thus, Member States, will have to attribute 37% of their spending to “green expenditure”, and cross-border projects on renewables and energy efficiency, for instance, must be included in those national plans, as stated by a Commission official. National plans should also include boosting energy efficiency in buildings and critical energy infrastructure, decarbonising industry and addressing energy poverty.

Moreover, to provide more support to these endeavours, additional grants worth €20 billion will be made available, an amount that will be taken from the EU carbon market – 60% from the Innovation Fund and 40% from frontloading carbon allowances. Furthermore, €5.4 billion is being redirected from the EU’s Brexit adjustment reserve to finance the REPowerEU objectives. Additional financial support for the aforementioned objectives can be requested from programmes such as the European Regional Development Fund, the European Social Fund Plus and the Cohesion Fund.

In alignment with the original regulation, the amendment also recognises that several administrative procedures are often obstacles to deploying renewable energy. These include the complexity of applicable rules for site selection and administrative authorisation for projects, the complexity of assessing the environmental impact of projects, grid connection issues and constraints in the permit-granting authorities or grid operators. Thus, it highlights the need not only to simplify, but also speed up the administrative permit-granting processes for renewables and related power grid infrastructure, a central necessity in the energy transition.