Every time the topic of engine regs comes up, I feel like banging my head against the wall, because I think the best solution is to open the regulations up and allow teams to find their own way towards efficiency.
All you need to do is set limits on power, fuel consumption and emissions. The first limit could be accomplished by placing a restrictor plate over the air intake to limit power…it worked in Group C back in the day. That way all teams will have roughly the same power. The limit on fuel consumption is more of a benchmark than anything. The teams will look to carry as little fuel as possibly anyway, and a more efficient engine will let them do that. As for emissions, while it doesn’t really have much of an impact on how the cars will perform, if the FIA is going to continue with the whole Make Cars Green campaign, surely setting targets for reduced emissions would make sense.
If you leave the teams to decide configuration, capacity, RPMs and all the other parameters of engine design, eventually an optimal solution will be found. Or teams will be able to run engines which are congruous with the brand of manufacturer that sponsors/owns them, that would encourage more manufacturers to enter the sport. As for costs, lower budget teams won’t have to change their engines if they don’t have to, because the regs are open enough for them to still run them. Power would be capped, so they won’t be at a disadvantage if they don’t continually update their engine. Meanwhile, larger teams can spend all the money they like developing greener technologies as a way to gain on the racetrack.