The European Commission has awarded over $1.6bn to 23 renewable energy projects in 16 member states as part of the NER300 funding programme.
There was however disappointment after the first round of a contest to fund CCS projects failed to find a winner, after $365m had been set aside for the purpose.
These projects will be co-financed from the revenue generated by the sale of 200 million emission allowances from the new entrants' reserve (NER) of the EU Emissions Trading System.
Sixteen EU member states will host the demonstration projects, which aim to showcase technologies that would help substantially increase renewable energy production across the EU.
Together, the 23 projects could increase annual energy production from renewables in Europe by nearly 10TWh, equivalent to the annual fuel consumption of over a million passenger cars.
Climate Action Commissioner Connie Hedegaard said: "The NER300 programme is in effect a 'Robin Hood' mechanism that makes polluters pay for large-scale demonstration of new low-carbon technologies."
In the second call for proposals, the EC will make use of unused funds from the first call and the revenues of the remaining 100 million allowances in the new entrants' reserve.
There has been criticism of the scheme after the contest to fund carbon capture and storage (CCS) projects failed to find a winner, deepening concerns that the technology will not be emerging soon to help cut emissions.
For more European power generation news