Guide on EU Financing and Funding Instruments for DSO projects

Executive summary

This report presents the set of European funds that can benefit DSOs and assesses the use made of these funds in recent years. Thanks to the feedback from numerous companies, Eurelectric could make several qualified observations and recommendations: 

• The key role of DSOs to enable a cost-efficient energy transition should be fully taken into account in national development and recovery plans to enable needed investments in the power sector. The attribution of regional funds is conditioned by these plans and available European funds should fully benefit all European DSOs. 

• European funds are used for punctual and specific investments by DSOs. Their purpose and character usually differs from the bulk of investments remunerated by tariffs. Consequently, national regulation should recognise European funds as tools for such punctual investments and should not deduct the funds from the DSOs RAB or impose any artificial caps. 

• The TEN-E revision should significantly increase opportunities for the deployment of smart grids at all voltage levels to enable the integration of renewables, support the development of e-mobility and electrification of heating & cooling. 

• Some European Funds fail to support DSOs investment in small countries or countries with low GDP levels when they should be fully included to allow an efficient energy transition across Europe. Thus, eligibility criteria should be more tailor-made to fit with the needs of every Member States. This includes the size of the projects and the level of innovation. 

• For most funds, the application and evaluation processes are too long and resource-intensive, preventing DSOs from considering their use. Thus, the process before the signature of the funds should be streamlined with a two stage procedure allowing promoters to test their ideas without devoting too many resources. 

• Access to information about the opportunities offered by each fund is a first barrier to the optimal use of European funds by distribution system companies. A first step to remove this barrier should be the creation of an information tool with a list gathering all grid projects which have already benefitted from European support instruments.