The European Commission has selected 65 projects to receive €400 million ($649.56 million) in funding to avoid more than 6.6 million tonnes of CO2 emissions over a decade, by replacing natural gas-fuelled heat production systems.
Together these projects are expected to produce around 16.3 terawatt-hours of decarbonised heat over the first five years of operation, based on a thermal capacity of 766 megawatts (MW). This is equivalent to replacing more than 1.5 billion cubic metres of natural gas over five years, roughly comparable to the annual consumption of four million EU households.
Decarbonising heat production involves the transition from fossil fuels to low- and zero-carbon sources for space heating, hot water, and industrial processes. It primarily relies on renewable electrification, district energy networks, and increased energy efficiency to eliminate global emissions generated by heating.
Heating accounts for roughly half of Europe’s energy consumption and currently relies on fossil fuels for around 75% of its total demand, as reported by the European Commission.
Under the Innovation Fund Heat Auction, the projects will receive funding to support the EU’s clean transition, energy independence and security, and industrial competitiveness.
Five projects are invited under the high-temperature heat topic, amounting to €62.1 million in support, while 44 projects are invited under the medium-temperature heat topic above 5MW of capacity, with a total budget of €286.5 million.
Further, 16 projects are invited under the medium-temperature heat topic with between 3–5MW of capacity, with a total budget of €47.9 million.
What’s to come
The European Climate, Infrastructure and Environment Executive Agency (CINEA) will begin formal preparations of grant agreements with the selected projects. The agreements are expected to be signed in H2 2026.
Selected projects will have to reach financial close within two years of grant signature and enter into operation within four years.
CINEA will continue to monitor progress throughout implementation to ensure projects are delivered as planned and support is used in line with the agreed terms.
Innovation Fund
The Innovation Fund Heat Auction is the first EU-wide auction to tap the large potential for decarbonising heat production in industries. The auction covers technologies such as heat pumps, electric boilers, and furnaces, as well as solar thermal, geothermal, and thermal energy storage.
Projects have a wide range of technology and sector portfolios. Most projects generally rely on direct resistance heating or indirect resistance heating.
In terms of industrial offtake sectors, projects cover pulp and paper, as well as glass, ceramics, and construction materials, alongside iron and steel.
Write to Aaliyah Rogan at Mining.com.au
Images: Unsplash
