CEF Energy allocates €600 million between works and studies

The Connecting Europe Facility (CEF) has opened, under its energy section, a €600 million call distinguishing between two funding routes, works and studies, for energy projects with significant European impact that are already included in the second European list of Projects of Common Interest (PCIs) and Projects of Mutual Interest (PMIs). The CEF Energy initiative closes on 30th September 2026, and for promoters the question is not only how much funding is available, but also what stage their project has reached and whether, due to the type of infrastructure involved, it has first had to go through the Ten-Year Network Development Plan (TYNDP).

CEF Energy funds infrastructure that helps connect networks, markets and energy systems between — or within — European countries, as well as between the EU and third countries. In this call, the sectors covered are electricity (electricity grids, including offshore grids and storage for electricity grids), smart electricity grids, smart gas grids, CO₂ networks, hydrogen (hydrogen networks), electrolysers (sometimes referred to as hydrogen valleys), and certain natural gas interconnections covered by Article 24 of the TEN-E Regulation (Cyprus and Malta).

CEF Energy has €5.84 billion for the 2021-2027 period, within the Connecting Europe Facility’s total budget of €33.71 billion. Projects may receive co-funding of up to 50% of eligible costs, with higher rates if the project provides a high degree of security of supply at regional or EU level, strengthens EU solidarity or includes highly innovative solutions. For the 2028-2034 framework, the European Commission has proposed increasing the total budget to €81.428 billion, with €29.912 billion allocated to energy.

The two CEF Energy 2026 topics

Works

The first topic, CEF-E-2026-PCI-PMI-WORKS, funds works linked to the implementation of a PCI or PMI. These are projects that are no longer merely at the analysis or design stage, but require support to deploy infrastructure. This may include the purchase, supply and installation of components, systems and services, including software, as well as construction, development, acceptance of installations and commissioning.

This topic targets electricity, smart electricity grid, smart gas grid, hydrogen and CO₂ network projects, as well as gas interconnections covered by the Cyprus and Malta derogation. The support is intended to back infrastructure with clear socio-economic benefits and significant European impact, but which cannot secure sufficient financing from the market.

“For works, the key is not to present a good idea, but to prove that the infrastructure brings value to the European system and needs public support in order to materialise,” says Carolina Simón, European Projects consultant at Zattia and energy expert. “Projects must also demonstrate significant positive externalities, such as security of supply, system flexibility, innovation or greater solidarity between Member States,” she adds.

Requirements vary by category. For certain electricity projects — excluding smart electricity grids and storage projects — hydrogen projects and gas interconnections covered by the Cyprus and Malta derogation, the promoter must submit a cost-benefit analysis demonstrating the relevant positive effects mentioned above. A cross-border cost allocation decision may also be required. For hydrogen projects that do not fall under the competence of national regulatory authorities, it will be sufficient to justify that the project provides cross-border services, brings technological innovation and ensures the security of cross-border operation. The proposal must also justify that the investment cannot be financed by the market or through the ordinary regulatory framework.

For other electricity projects, as well as smart electricity grid, smart gas grid and CO₂ projects, the call requires applicants to demonstrate significant positive benefits and a lack of commercial viability. This demonstration may be supported by the cost-benefit analysis, the business plan and assessments by investors, creditors or competent authorities. Proposals that fail to provide valid documents at the time of application may be excluded.

Studies

The second topic, CEF-E-2026-PCI-PMI-STUDIES, funds studies needed to prepare the implementation of a PCI or PMI. The main difference compared with works is the project stage, as this topic covers prior activities such as preparatory, mapping, feasibility, evaluation, testing and validation studies, including in the form of software, and any other technical support measure. This includes prior action to define and develop a PCI/PMI and decide on its financing, such as reconnaissance and preparation of the sites concerned and preparation of the financial package.

This topic covers electricity, smart electricity grids, smart gas grids, hydrogen, CO₂ networks, gas interconnections covered by the Cyprus and Malta derogation and — unlike the Works topic — electrolysers. Its purpose is to enable priority infrastructure to advance to a stage where its financing and implementation can be decided. “For many promoters, studies are the stage where a European priority becomes a fundable project, with technical data, planning and a defensible economic structure,” says Simón.

The underlying logic is the same as for works: CEF Energy supports projects that contribute to integrating the internal energy market, connecting networks between countries and sectors, advancing decarbonisation, promoting energy efficiency and strengthening security of supply. The call is also linked to the European Green Deal, the Paris Agreement and the 2030 climate and energy targets.

The TYNDP question

The TYNDP is a preliminary element for many projects seeking to become PCIs or PMIs and subsequently apply for CEF Energy funding. It is the study carried out every two years by the European associations ENTSO-E and ENTSOG on the needs and expected functioning of the European Union’s electricity and gas transmission networks over a ten-year horizon, based on the current state of the networks and the expansion and modification projects planned by their owners and operators. Not all projects are required to go through it, but for several types of infrastructure it is a necessary step before reaching the European list.

See in detail

In electricity, high and very high voltage overhead or underground transmission lines, submarine cables between Member States or with third countries, infrastructure enabling the transmission of renewable electricity from offshore sites, storage connected to high-voltage grids and equipment combining interconnection and connection to offshore grids must be included in the TYNDP. Smart electricity grids are not required to be included, although their inclusion may facilitate future assessments.

In hydrogen, the requirement applies to pipelines or high-pressure transmission infrastructure, networks repurposed from natural gas, storage directly connected to transmission networks, facilities for receiving or decompressing liquefied hydrogen or derivatives intended for injection into the network, essential safety and efficiency equipment, and facilities linked to the use of hydrogen or derived transport fuels on the TEN-T network. Electrolysers, however, do not need to be included in the TYNDP study to be eligible as PCIs or PMIs.

CO₂ networks and smart gas grids are different cases. They are not directly subject to the mandatory TYNDP inclusion requirement, although providing technical information may help their assessment. “The TYNDP is not a formality for everyone, but it does shape the strategic timetable of many projects: those who arrive late to that planning may also arrive late to the funding,” concludes Juan Sanciñena, senior consultant at Zattia.