Renewable Energy & Environment

Energy and Environment – New and Renewable Energies and Technologies

Continuous growth in global energy demand coupled with growing concerns about energy security and the environment, have challenged the sustainability of the current energy system. Considering that 80% of greenhouse gases emissions are related to energy production and consumption, the development and deployment of innovative energy technologies are needed to reduce emissions, but also create new markets for EU industry and to secure adequate level of supply. To complement its emission trading policy, a coherent EU framework for the promotion of energy policy promoting energy efficiency (EE), renewable energy (RE) and R&D in energy innovation is needed if the EU wants to meet its emission targets and make the best of its competitive advantages in this field.

Renewable Energy Sources and Technologies

Renewable sources of energy – wind power, solar power (thermal, photovoltaic and concentrated), hydro-electric power, tidal power, geothermal energy and biomass – are alternatives to fossil fuels that help reduce greenhouse gasses emissions, diversify energy supply and reduce dependence on volatile fossil fuel markets.The growth of renewable energy sources may also stimulates employment in Europe and the creation of new technologies. Policies that support renewable energy sources (RES) can give a significant boost to the economy and the number of jobs in the EU. Studies suggest that improving current policies to reach the 20% RES in final energy consumption by 2020 will provide a net effect of about 410,000 additional jobs and 0.24% additional GDP.[1]

Several of the RE technologies available today, especially wind energy, but also small-scale hydro power, energy from biomass, and solar thermal applications, are economically viable and competitive but their potential has not yet been fully realised.[2] In addition, offshore wind, ocean power and geothermal energy allow tapping additional potentials for which existing commercial technologies are not suitable. Advanced photovoltaics, concentrating solar power and new bioenergy technologies have technical advantages over similar available technologies (more efficient, and/or promise to allow for lower energy costs).[3]

Technology ripeness of some new renewable energy technologies is summarised in the table below.[4]

Table 1 Research Development Pilot Demo /
Pre-commercial
Commercial
Offshore wind foundations turbines
PV/Silicon mSi aSi, multi-Si
PV/Thinfilm CdTe
PV/Thin (3G) dye ink organic
CSP tower fresnel trough
Ocean power
Biogas upgr.
Bio/BtL
Bio/Lign.EtOH
Geo/Power
Geo/Heat
Commercial technologies readily available from technology suppliers’ order books are silicon-based and CdTe thin film photovoltaics, parabolic trough concentrating solar power plants, biogas upgrading to natural gas quality, certain geothermal power as well as geothermal heat technologies.Offshore wind, several thin film photovoltaics technologies, linear fresnel concentrating solar power and certain geothermal power technologies are in the demonstration or pre-commercial phase. This implies the technological readiness, but lack of certain commercial attributes in the market.

The other technologies are in earlier stages of innovation. All technologies not yet commercially available need further research and development as well as market introduction and deployment support in order to ensure commercialisation.

Cross-cutting barriers for those technologies include: R&D and project financing issues such as insufficient start-up and early-stage financing, acceptance and approval, a diversity of support instruments with varying effectiveness and general mind set issues such as an overestimation of bioenergies and underestimation of electricity-based renewables. Infrastructure and planning are another major area of barriers. A major barrier notably to the large-scale development of offshore wind and concentrating solar power are capacity limitations of the electricity grid.

Public and private R&D investment in renewable technologies are almost exclusively concentrated on a very limited number of Member States, mainly Germany, France, Italy, UK, Denmark, Spain, the Netherlands, Belgium, Sweden, Finland and Austria. In Europe, public and private R&D spending is largely insufficient.

EU RES promotion policy

In 1997 the EU-15 set itself the target of generating 12% of gross domestic energy consumption from renewable sources by 2010 of which electricity would represent 22.1% (becoming an overall 21% after the accession treaties in 2004). The Directive on the promotion of electricity from renewable energy sources[5] adopted in 2001 requires Member States to adopt national targets for the proportion of electricity consumption from renewable energy source. It constituted an essential part of the package of measures needed to comply with the commitments made by the EU under the Kyoto Protocol on the reduction of greenhouse gas emissions.

The 2007 Renewable Energy Progress Report [6] highlighted that whilst good progress had been made in recent years, the EU was expected to reach a renewable electricity share of 19% by 2010 rather than the 21% target. It found that so far the bulk of growth had come from wind power in a limited number of Member States. Moreover it noted that it had been necessary to initiate infringement proceedings against some Member States. The 2009 report[7] showed that growth rates of green electricity have increased (to 15.7% in 2006, up from 14.5% in 2004) however analysis still suggest that the 21% target would not be reached without significant additional effort.

Figure 1: 2007 share in RES electricity consumption (%) and 2010 target


Source: EEA

Figure 2: Range of technologies contribution to growth of RES.


Source: “Promotion and growth of renewable energy sources and systems” Final Report, Ecofys et al. (hydropower excluded)

The Renewable Energy Roadmap and the New RES Directive

To further enhance the promotion and use of renewable energy, the “Renewable Energy Road Map”[8] proposed in 2007 a long-term strategy for RE including setting a mandatory target of 20% for renewable energy’s share of energy consumption in the EU by 2020 and 10% in the transport sector.  In spring 2007 the EU Council agreed to the target and a revision of the Renewable Directive[9] was adopted by co-decision in spring 2009.

The new RES Directive establishes these overall mandatory targets as well as a mandatory national target for the overall share of energy from renewable sources in gross final consumption of energy, taking account of countries’ different starting points. It is to be the main driver for new renewable technologies for crossing the so-called “valley of death”. It also includes an obligation to adopt National Renewable Energy Action Plans by June 2010.

The Directive establishes requirements on the mechanisms that Member States can apply to achieve their targets: supports schemes, guarantees of origin, joint projects, measures of cooperation between Member States and third countries as well as sustainability criteria for biofuels and bio-liquids.

Currently, Member States operate 27 different support schemes using various policy tools, including: feed-in tariffs; premium systems; green certificates; tax exemptions; obligations on fuel suppliers; public procurement policy; and research and development. The support schemes differ partly because support has traditionally been linked to other national priorities and also because national electricity markets still have very different characteristics and remain nationally segmented.[10] The most common systems appear to be feed-in-tariffs (FIT) and tradable green certificates (TGCs). Both systems have advantages and disadvantages. The question of harmonisation throughout the EU has been often posed, particularly in terms of measure cost-efficiency.

According to the forecast documents, ten Member States expect to exceed their national targets (table 2 below) for renewable energy, and five expect to use the Directive’s cooperation mechanisms and reach their target by developing some renewable energy in another Member State or a third country, for only a small amount of energy (around 2-3 mtoe). The forecast total production of renewable energy would actually exceed the 20% target and reach 20.3%.[11]

The issue of interconnector needs and the general need to reinforce the capacity of the grid is pointed out by many Members States as a necessary precursor for achieving the targets. For the EU overall, the share of electricity from renewable energy sources is expected to reach 33%- 35%5, accentuating the need to improve the electricity grid’s ability to manage and balance electricity flows and to improve the interconnections of the European grid to improve stability. [12]

Table 2 National overall share and target for the share of energy from renewable sources in gross final consumption of energy in 2020.


Biomass and biofuels sustainability criteria:[13]

The RES Directive sets up sustainability criteria for biofuels and bioliquids. In the absence of harmonized rules at EU level, Member States are free to put in place their own national schemes for solid and gaseous biomass used in electricity, heating and cooling.

The Directive provides that the Commission should report on requirements for a sustainability scheme for biomass other than biofuels and bioliquids. The biomass sustainability report released by the Commission in February 2010 provides recommendations for Member States to follow similar patterns and most importantly to be guided by the sustainability criteria explained in the report. The recommended criteria relate to:

(a) a general prohibition on the use of biomass from land converted from forest, other high carbon stock areas and highly biodiverse areas;

(b) a common greenhouse gas calculation methodology which could be used to ensure that minimum greenhouse gas savings from biomass are at least 35% (rising to 50% in 2017 and 60% in 2018 for new installations) compared to the EU’s fossil energy mix;

(c) the differentiation of national support schemes in favour of installations that achieve high energy conversion efficiencies; and

(d) monitoring of the origin of biomass.

The National Renewable Energy Action Plans to be issued in June 2010 will be a key tool for identifying the EU’s ambitions for exploiting its biomass potentials, whether in electricity, heating or transport. Following the submission of these plans and analysis of emerging national schemes, the Commission will consider in 2011 whether additional measures such as common sustainability criteria at EU level would be appropriate.

Offshore wind

In the context of the Second Strategic Energy Review, the Commissions intends to develop the Southern Mediterranean solar and wind energy potential, as well as offshore wind in the North Sea. This is in line with its strategy to develop indigenous energy production to decrease dependence on imported fossil fuels. The Commission Communication on ‘Offshore Wind Energy[14]: of November 2008 aimed at promoting the development of maritime and offshore wind energy in the EU. Benefits include: larger production units; stronger and more stable winds, and less concern among neighbouring citizens. By 2020, its utilisation is estimated could be 30 to 40 times greater than the current installed capacity of offshore wind farms.

Technical barriers for offshore wind still to be addressed by research include:[15] integration into the European electricity grid, technologies for the installation of offshore wind turbines (e.g. dedicated ships for the construction of offshore installations), material issues (corrosion resistant coating, corrosion resistant design to protect electronics inside the turbines, etc.), foundations, development of floating structures as foundations for offshore wind turbines[16]. Connecting and disconnecting HVDC lines via a DC switch is still an open issue. Today, HVDC connection/ disconnection is accomplished using DC/AC/DC converters.

Energy Efficiency and Energy Conservation

In 2005, the Green Paper on Energy Efficiency[17] pointed to the fact that the EU could save at least 20% of its present energy consumption in a cost-effective manner, equivalent to €60bn per year. In 2006, the EP promoted a target of at least 20% improvements in EE by 2020[18] while the Council in 2007 only proposed it as an objective to reach by 2020.[19]

The EU Energy Efficiency Action Plan (EEAP) adopted in October 2007[20] proposed priority actions to be introduced over a six-year period, in order to save 20% of annual consumption of primary energy by 2020 (compared to the energy consumption forecasts for 2020) This objective corresponds to achieving approximately a 1.5% saving per year up to 2020.

Actions include: labelling standards, building performance requirements, improving efficiency of power generation and distribution, cars fuel efficiency, facilitating financing of EE investments for SMEs and Energy Service Companies and a coherent use of taxation. A review of the EEAP has been foreseen by the Commission since end of 2009 but regularly postponed and currently planned for 2011.

The Energy Services Directive[21], requires Member States to adopt an overall national indicative energy savings target of 9% by 2016, to be reached by way of energy services and other EE improvement measures. In June 2007, 17 Member States submitted their first National Energy Efficiency Action Plans, showing how they intend to reach the 9% target. A review of the submitted NEEAP[22] indicated:

  • a considerable gap in several Member States between the political commitment to energy efficiency and the measures adopted or planned and the resources allocated.
  • Some Member States adopted savings targets going beyond the minimum indicative target[23], other Member States have indicated that they expect savings from measures to go beyond 9% without committing to or formally adopting a higher target.[24]
  • Several Member States have set out comprehensive action plans for demonstrating the exemplary role of the public sector and numerous financial and fiscal incentives (e.g. in the housing and construction sector, for purchase or production of energy efficient equipment).
  • On the other hand is difficult to assess whether certain Member States will be able to deliver in accordance with their strategies and targets given the brief descriptions of measures and the absence of saving estimates.
  • NEEAPs include numerous measures target the buildings sector, especially residential buildings, and refurbishment of existing buildings. Some Member States declare ambitious strengthening of building codes and support passive or low-energy house buildings. Almost all NEEAPs include measures in the tertiary, transport and industrial sectors while only four include measures specific to the agriculture sector.[25]
  • Some NEEAPs have included measures that fall outside the scope of the Directive including fuel switching and power generation, large Combined Heat and Power installations, biomass district heating, network loss reductions, biofuels, measures in international transport, and measures that have some impact on the EU ETS.
  • A recast of the Directive could be presented as part of the revision of EU’s EEAP in 2011.

Buildings sector

Existing technological developments could contribute to the widespread construction of buildings that far exceed the EE requirements set by policy-makers today. Housing developments that are best-practices not only from an energy savings point of view, but also from an urban planning and social organisation perspective have been developed in the EU.[26] These projects have achieved greater sustainability by using a combination of local public policy, planning, design and technology, whereby the use of “traditional” energy saving measures such as better insulation is only part of the solution. Large companies have also been taking interest in the sector and have developed materials, systems and other technologies to increase EE.[27] Advances in RE technologies, such as a “solar dye” for example, can further contribute to the “greening” of buildings.

The Energy Performance of Buildings Directive[28] (EBPD) which came into effect in 2006 provides a common methodology for calculating the energy performance of buildings and for creating minimum standards of energy performance in individual Member States. The implementation of the directive encountered problems due to the lack of qualified experts to issue certificates and carry out inspections. Moreover, the directive excluded a great proportion of existing building stock – 72% – from having to comply with energy performance standards by imposing a 1,000m² threshold.[29]

On 19 November 2009, the European Parliament and the Council reached first reading agreement on a recast Directive. The new directive clarifies, strengthens and extends the scope of the current EPBD’s provisions by:

  • introducing clarification of the wording of certain provisions and extending the scope of the provision requiring Member States to set up minimum energy performance requirements when a major renovation is to be carried out;
  • reinforcing the provisions on energy performance certificates, inspections of heating and air-conditioning systems, energy performance requirements, information, and independent experts;
  • providing Member States and interested parties with a benchmarking calculation instrument, which allows the nationally/regionally determined minimum energy performance requirements ambition to cost-optimal levels to be compared;
  • stimulating Member States to develop frameworks for higher market uptake of low or zero energy and carbon buildings;
  • encouraging a more active involvement of the public sector to provide a leading example.

The main achievements of the EP and Council negotiation include: a separate article on financing issues (Art.10); ambitious, fixed targets and national action plans comprising support measures (Art 9) for nearly zero energy buildings; minimum energy performance requirements for technical building systems and to the building elements which have a significant impact on the energy performance of the building envelope whenever they are retrofitted or replaced (Art 7 and 8); new provisions on certificates, more information and transparency on experts’ accreditation, training, financial instruments, information to owners and tenants, and on certificates; Less administrative burden with regards to inspections; a new article on consultation of the stakeholders, including local and regional authorities (Art 21); more renewable elements shall take into consideration for new buildings (Art 6); introduction of intelligent metering systems and of active control systems such as automation, control and monitoring systems that aim to save energy (Art 8).

Industry and Transport sectors

Apart from the user’s behaviour, there are two complementary ways of reducing the energy consumed by products: a) labelling to raise awareness of consumers on the energy use in order to influence their buying decisions; b) EE requirements imposed to products from the early stage on the design phase.

Framework Directive on Labelling

  • First reading agreement was reached with the Council on the recast[30] of the Energy Labelling Directive[31] announced as a priority of the EEAP. The recast aims at extending its scope, currently restricted to household appliances, to allow for the labelling of all energy-related products including the household, commercial and industrial sectors and some non-energy using products such as windows which have a significant potential to save energy once in use or installed.
  • The possibility to implement the framework through regulations or decisions instead of directives, and the possibility to set classes of efficiency under which Member States should not provide incentives or procure should, increase effectiveness of the ELD. Provisions on market surveillance as already introduced under the Eco-design Directive have been added.
  • The basis of labelling will continue to be the scale A–G, from dark green (the most energy efficient) to red, which is well understood by consumers. For products that are already subject to labelling requirements and where a majority of the products on the market are in the highest energy classes, up to three more energy classes can be added to the label ( A+, A++ and A+++). Advertising should also indicate, as appropriate, the energy class, where energy-related or price information is disclosed.

The Eco-Design directive

  • The Eco-Design Directive[32] establishes a framework for setting eco-design requirements, such as EE requirements, for all energy-using products in the residential, tertiary and industrial sectors. In October 2009 a revision[33] of the Eco-design Directive was adopted by the Council following a first reading agreement and proposes to extend the scope to cover other energy related products than energy-using products (excluding means of transport for persons or goods).
  • Requirements of manufacturers: the directive provides for the establishment of standards to which energy-related products will have to conform in order to be able to benefit from free movement within the Community. These standards will have to be defined by the Commission in the framework of the comitology procedure, following an impact assessment. The new rules require that manufacturers of energy-related products take into consideration, from the design stage, the environmental impact that these products will have throughout their life cycle, thus facilitating cost-effective environmental improvements.
  • The resulting directive is seen as the essential building block for an integrated sustainable environmental product policy, complemented by the initiatives on labelling[34] and other incentives such as greening public procurement[35] and reducing taxation for green products.[36]

Transport sector

  1. Several measures have been adopted in the transport sector, mainly as part of the climate change and energy policy to reduce emissions from passenger cars and light commercial vehicles. These include:
  • setting emission performance standards for new passenger cars.[37]
  • measures to promote clean and energy efficient road transport vehicles, by introducing energy consumption, CO2 and pollutant emissions as mandatory award criteria into public procurement of vehicles.[38]
  • labelling of tyres with respect to fuel efficiency and other essential parameters[39]

However, the current focus on vehicle and fuel technologies alone will be insufficient to offset the steady increase in passenger volumes and growth in freight transport. Further measure to develop a transport system capable of shifting the balance between modes of transport will be needed[40] as well as in urban transport[41] and freight transport[42][43].

Energy Technology and Innovation

Public and private under-investment in energy research capacities and infrastructures has been endemic since the 1980s. If EU governments invested today at the same rate as in 1980, the total EU public expenditure for the development of energy technologies would be four times the current level of investment of around €2.5bn per year.[44] This declining trend can be observed also in the US[45] although the US’s annual allocations are substantially higher than those of the EU. Generally, data on public R&D budgets are very difficult to find: there is a lack of information reporting and coordination between Member States. However, low R&D investment in Europe is structural and not specific to the energy sector.

The Strategic Energy Technology Plan (SET-Plan) and industrial initiatives

A European Strategic Energy Technology Plan (SET-Plan) was presented in November 2007[46], identifying key EU technological challenges for the next 10 years and proposing to deliver: (i) a new joint strategic planning, (ii) a more effective implementation, through the launch of new European Industrial Initiatives (EII), (iii) an increase in resources, (iv) a new and reinforced approach to international cooperation.

The EP welcomed the SET-plan[47] and stressed that adequate financial support to EU’s energy technology policy is fundamental to achieving the EU’s objectives. It pointed out that the plan should not be financed through the reallocation of funds made available for energy under Seventh Framework Programmes (FP7) for Research and Development (2007-2013)[48] and the energy and innovation Programmes under the Competitiveness and Innovation Framework Programme (CIP)[49], and pledged for an additional €2bn per year to be allocated as of 2009 independently from FP7 and CIP.

The 2009 EC Communication on Financing the SET Plan “Investing in the Development of Low Carbon Technologies”[50] proposed to implement the plan on the basis of “the need for rapid action, a coordinated approach across the EU and the desire to reduce overall costs by optimising the portfolio of funded projects”. Together with stakeholders, the Commission has drawn Technology Roadmaps 2010-2020[51], including their estimated costs, for the implementation of the six first European Industrial Initiatives, an Initiative on Smart Cities and the European Energy Research Alliance during the next 10 years.

Figure 3: Technology Roadmaps SEC (2009)1295


European Industrial Initiatives

  • Since 2002, European Technology Platforms (ETP) have been set up[52], to bring together industrial and academic research communities in specific technology fields with a significant economic and societal impact. In 2007, wind energy, electricity networks of the future, hydrogen and fuel cells, photovoltaics, zero emission fossil fuel power plants and for biofuels, were among the 34 existing ETPs:[53] The aim is to coordinate their research agenda and tailor a common long-term strategic plan for R&D (so called SRA’s) so as to mobilise a critical mass of national, public and private resources and to overcome barriers to the development, deployment and use of new technologies.
  • Building on the hydrogen and fuel cells ETP, the Joint Technology Initiative (JTI) on fuel cells and hydrogen (FCH), was established in May 2008.[54] to drive the technology towards commercialisation in the next decade. Between 2008 and 2017, the JTI will have a budget of €1bn with investment shared by its two founding members, the EU (via FP7) and Industry Grouping (IG).
  • The EEI to be launched in June this year, are proposed as public-private partnerships with similar set up as the JTIs. However the existing FP7 evaluations and bureaucratic regulations and structures which govern the financial mechanisms and the functioning of the European institutions are a matter of raising concern in the current debates on FP7 mid-term review, the revision of the financial regulation and the discussions over the future FP8.
  • From the side of industry, one of the major barriers for their participation in projects are the rules on patents and licensing. A complaint from the research and the industry side is the bureaucratic interference by the European Commission on the objectives and processes of the European Technology Platforms, which may well be repeated in the European Industrial Initiatives, public private partnerships involving governments, the academic sector and the business sector.[55]

European Energy Research Alliance

  • On 27 October 2008, a European Energy Research Alliance (EERA)[56] was established as one of the outcomes of the SET-Plan. Ten leading research institutes have committed to use their combined annual R&D budget (>€1.3bn) to strengthen and optimise EU energy research capabilities. Key research areas promoted include wind, solar energy, second-generation biofuels, smart grids and carbon capture and storage. Cooperation is due to expand and intensify, as other research organisations are welcome to join once the project is properly up and running.
  • Joint Programmes are to be launched for several areas such as wind, PV, CSP, CCS, materials for nuclear energy, geothermal, smart grids, marine energy, biofuels etc. in line with the selected SET-Plan technologies and comprise the majority of the Alliance’s current activities portfolio. Initially, the activities of EERA will be based on the alignment of its own resources to meet a critical mass for a substantial programme undertaking. Over time, alignment with EU programmes can be achieved and the Joint Programmes expanded with additional sources, including from Community programmes.
  • The EERA aims to accelerate the development of new energy technologies by building upon the results of fundamental research and maturing technology development to a stage where it can be embedded in industry driven research. Therefore, close links with both industry driven research as well as fundamental research are key elements in the success of the EERA.
  • The first EERA Joint Programmes of Research on Winds, Photovoltaic, Smart Grids and Geothermal will be officially launched at the SET-PLAN conference the 3- 4 of June 2010 in Madrid under the EU Spanish Presidency. The conference will report the progress of the SET-Plan since the conference held in Stockholm in October 2009 and will constitute the formal launching of the first European Industry Initiatives and EERA Joint Programs.

1.1.2       Financing infrastructure and demonstration projects

European Energy Recovery Programme (EERP)

  • In March 2009 the EU set aside €3.98 billion to assist European economic recovery. On 4 March 2010, the European Commission selected further 43 major cross-border energy infrastructure projects, granting € 2.3 billion to 31 gas pipeline projects and 12 electricity interconnection projects. It is the largest amount the EU has ever spent on energy infrastructure. By co-financing parts of these projects up to 50% the EU contribution will help to lever up to 22 billion euros of private sector investment. With the Carbon Capture and Offshore Wind Projects which the Commission agreed to support on 9 December 2009, the budget for energy projects in the EERP is 97 % committed. [57]

Covenant of Mayors[58]

  • In January 2008, nearly 100 mayors from across Europe signed up to the Commission-backed Covenant of Mayors, a commitment by city leaders to go beyond EU’s CO2 emissions reduction target of 20% by 2020. Since then some 1300 local authorities in the EU have signed up. The initiative has received consistent praise from EU leaders since being set up, but has thus far being operating on a relatively modest budget of some €15 million per year.
  • The money was administered as a grant fund, managed by the European Investment Bank (EIB) to support the development of energy efficiency and sustainable energy projects in European cities and regions. In May this year the Commission has pledged[59] to significantly increase the amount of funding available for such projects, using unused money from the EU recovery package. EU Energy Commissioner Oettinger indicated that at least €115 million in unused funds will be available, and he would push for a significant percentage to support local and urban energy projects.
  • Mayors and their representatives welcomed the proposal as recognition of the role of cities and local authorities in pushing energy reform and funds are expected to make a difference.

NER 300[60]

  • “NER300″ is a financing instrument managed jointly by the European Commission, European Investment Bank and Member States.
  • Article 10(a) 8 of the revised Emissions Trading Directive[61] contains the provision to set aside 300 million CO2 allowances in the New Entrants’ Reserve of the ETS for subsidising installations of innovative renewable energy technology and carbon capture and storage (CCS). The allowances will be sold on the carbon market and the money raised – which could be as much as 4.5 bn EUR if each allowance is sold for 15 EUR – will be made available to projects as they operate.
  • According to this draft schedule, the second half of 2011 would be available for Member States to negotiate with Commission on the particular projects each wants to fund. They will, as a group, need to agree on a portfolio of winning proposals before the Commission can commit NER300 funding to any project.

Structural Funds

  • Incorporating the necessary tools into the European Union Cohesion Policy to devise integrated strategies, allowing the deployment of new technologies at regional level with the structural funds providing assistance for the necessary infrastructure.
  • This would allow regions under the EU’s convergence programme to develop into low carbon economies and be a showcase for new technologies.

Private capital investments

  • Recent studies show that there is still room for substantial growth in private capital investments in European clean energy[62]. The financial sector, including private equity and venture capital, needs to adapt their risk profiles to invest more in potentially high-growth SMEs and spin-offs active in the field of low carbon technologies.
  • The EIB is increasingly dedicating resources to energy projects (€7bn/year for 2009 and 2010) and has reinforced its contribution in the areas of RE and EE. It aims to develop less mature markets in and outside the EU and to favour the deployment of less-developed RE sources (such as solar power, biomass or biofuels)[63]. Initial results from the Risk Sharing Finance Facility established in 2007[64] for financing research and innovation, confirm that the EIB is opening up wider financing opportunities for research and demonstration projects in the RE and EE sectors.

Future discussions

Reducing greenhouse gas emissions by 20% compared to 1990 levels; increasing the share of renewables in final energy consumption to 20%; and moving towards a 20% increase in energy efficiency; is one of the 5 EU’s 2020 strategy headline targets. To achieve this, a new industrial revolution – reorienting our economy towards a low-carbon economy. – is needed thanks to massive R&D into new low carbon/carbon-free technologies is needed. However, there is a lack of substantial financing or any legal obligations to make incentives available for the financing of the SET Plan. [65]

  • Experts advocate increasing R&D budget in line with the respective Strategic Research Agenda (SRA) of each technological segment (when available). The role of public money should be to support mid-to long-term research projects that are not going to be immediately exploitable by the private sector in terms of commercialization.[66]
  • Regarding the EU R&D&I financing instruments: the setting priority areas and introduction of appropriate governance of instruments will raise discussions in the establishment of the proposed European Industrial Initiatives and future FP8 in particular in light of the experience with FP7 on simplification and management;
  • The European approach to large-scale renewable energy sources requires a pan-European smart grid (i.e. “super grid”), which can bring electricity from Renewables to where it is needed over long distances and which can balance the natural variability of Renewables on a European scale. This needs to be a priority for Europe and the European Economic Recovery Plan shows that EU spending on infrastructure projects is possible.[67]
  • Most importantly, there needs to be legal certainty for investments in electricity generation from renewable energy sources. This also needs to address regulatory frameworks for interconnectors and offshore transmission, which vary greatly from country to country. Putting in place proper incentives for investments in the grid, including in interconnections, will also require shortened and streamlined permitting processes.[68]
  • With sufficient interconnections and infrastructure in place, it will be time for EU member states to reconsider their national approach to renewables’ support schemes. Policy harmonisation will be beneficial for reasons of productivity, cost effectiveness, cross-border externalities or economies of scale. Many aspects will remain the responsibility of the Member States, such as permitting and more generally the administration. Different elements of such a framework can be developed within different timeframes.[69]
  • In the context of the next financial perspectives (2014), reform of EU own resources in order to generate additional revenue for investment in energy innovation (for example linking the ETS to R&D expenditures); the difficult question of Energy taxation policy will also be on the table with the foreseen revision of the Energy Taxation Directive;

–       Appropriate funding and coordination is needed for example between the TEN-E programmes with other major EU programmes having an impact on infrastructural development, to be able to realize cross border initiatives, promoting new technologies or energy diversity

–       Question of local versus large scale or centralised production of energy, and the division of decision-making competences will continue to arise as well as ensuring access to market to producers of RES in the current energy market structures.

Citations –  The overview text and information in this overview is sourced from the following documents prepared by the European Parliament in preparation for the Joint Parliamentary Meeting:

  1. Press Release of the European Parliament of 31st May 2010, REF 20100531IPR75273
  2. European Parliament prepared background notes on working group topics:
    1. ITRE_JPM_WG I
    2. ITRE_JPM_WG II
    3. ITRE_JPM_WG III
    4. Joint Parliamentary Meeting Draft Programme, Towards a European Energy Community for the 21st Century?

[1] EmployRES – The impact of renewable energy policy on economic growth and employment in the EU.

[2] COM(2006) 848 EC Communication “Renewable Energy Roadmap”.

[3] EP study Assessment of Potential and Promotion of New Generation of Renewable Technologies, DRAFT 11 May 2010.

[4] Idem.

[5] Directive 2001/77/EC on the promotion of electricity from renewable energy sources in the internal electricity market.

[6] RES progress report 2007.

[7] The Renewable Energy Progress Report COM (2009) 192.

[8] (COM(2006) 848).

[9] Directive 2009/28/EC and repealing Directives 2001/77/EC and 2003/30/EC.

[10] Accompanying document to the EC Communication “The Renewable Energy Progress Report” SEC(2009) 503 final.

[11] http://ec.europa.eu/energy/renewables/transparency_platform/forecast_documents_en.htm.

[12] http://ec.europa.eu/energy/renewables/transparency_platform/forecast_documents_en.htm.

[13] Commission adopts biomass sustainability report Reference:  IP/10/192    Date:  25/02/2010.

[14] Offshore Wind Energy: Action needed to deliver on the Energy Policy Objectives for 2020 and beyond (COM(2008) 768 final).

[15] EP study Assessment of Potential and Promotion of New Generation of Renewable Technologies, DRAFT 11 May 2010.

[16] Floating structures are required for wind farms at water depths of 60 m and more.

[17] “Doing More with Less” (COM(2005) 265 final of 22 June 2005).

[18] EP resolution on Energy efficiency or doing more with less – Green Paper, June 2006, P6_TA(2006)0243.

[19] European Council Conclusions March 2007 (7224/1/07).

[20] ”Action Plan for Energy Efficiency: Realising the Potential” COM(2006)545 final.

[21] Directive 2006/32/EC on energy end-use efficiency and energy services.

[22] Synthesis of the complete assessment of all 27 National Energy Efficiency Action Plans SEC(2009)889 final.

[23] Italy 9.6%, Cyprus 10%, Lithuania 11%, and Romania 13.5%.

[24] Luxembourg 10.4%, Ireland 12.5% and the United Kingdom 18%.

[25] Latvia, the Netherlands, Spain and Sweden

[26] Vaubanexternal development in Freiburg, Germany, and the BedZED development in the south of London.

[27] https://buildingsolutions.honeywell.com/Cultures/en-US/.

[28] Directive 2002/91/EC on the energy performance of buildings.

[29] http://www.euractiv.com/en/energy-efficiency/energy-performance-buildings-directive/article-187130, 14 Dec 2009.

[30] COM (2008)0778 Proposal for a Directive of the European Parliament and of the Council on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products

[31] Council Directive 92/75/

[32] Directive 2005/32/EC establishing a framework for the setting of ecodesign requirements for energy-using products.

[33] Directive 2009/125/EC establishing a framework for the setting of ecodesign requirements for energy-related products.

[34] Regulation (EC) No 106/2008 on a Community energy-efficiency labelling programme for office equipment (recast version), Community Ecolabel scheme COM(2008)0401.

[35] COM(2008) 400/2 EC Communication on Public procurement for a better environment.

[36] Council Conclusions 14 March 2008 – 7652/08.

[37] Regulation (EC) No 443/2009 of the European Parliament and of the Council of 23 April 2009

[38] T6-0509/2008 EP Resolution on the proposal for a directive to promote clean and energy efficient vehicles.

[39] Regulation (EC) No 1222/2009 on the labelling of tyres with respect to fuel efficiency and other essential parameters.

[40] “European transport policy for 2010: time to decide” COM(2001) 370 final.

[41] COM(2005) 718 EC Communication “Thematic Strategy on the Urban Environment”.

[42] COM(2006) 336 final, Freight Transport Logistics in Europe – the key to sustainable mobility.

[43] COM(2007) 607 final Freight Transport Logistics Action Plan.

[44] COM(2007)723 SET-Plan EC Communication “Towards a low carbon future”.

[45] US energy research and development: Declining investment, increasing need, and the feasibility of expansion Gregory F. Nemet, D M. Kammen, University of California, Berkeley 2007.

[46] COM(2007)723 SET-Plan EC Communication “Towards a low carbon future”.

[47] EP resolution of 9 July 2008 on the European Strategic Energy Technology Plan (2008/2005(INI)).

[48] Decision No 1982/2006/EC of the European Parliament and of the Council of 18 December 2006 concerning the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007-13).

[49] Decision 1639/2006/EC of the European Parliament and of the Council of 24 October 2006 establishing a Competitiveness and Innovation Framework Programme(2007-2013).

[50] Communication.”Investing in the Development of Low Carbon Technologies (SET-Plan)” COM(2009)519

[51] Staff Working Paper accompanying COM(2009)519, A Technology Roadmap SEC (2009)1295

[52] COM (2002)714 “Industrial Policy in an enlarged Europe”.

[53] “Evaluation of the European Technology Platforms” – Final Report for DG Budget (EC) by Idea Consult (December 2007).

[54] Council Regulation setting up the Fuel Cells and Hydrogen Joint Undertaking (8541/08).

[55] EP study Assessment of Potential and Promotion of New Generation of Renewable Technologies, DRAFT 11 May 2010.

[56] http://www.eera-set.eu/index.html.

[57] http://ec.europa.eu/energy/eepr/doc/i10_231_en.pdf

[58] “Mayors to receive extra EU cash for energy projects” 05 May 2010 http://www.euractiv.com

[59] Barroso pledged on 4 May to divert unused EU stimulus cash into a fund to help regions and cities become more energy efficient.

[60] http://www.ner300.com

[61] 2009/29/EC

[62] ‘Global Trends in Sustainable Energy Investment 2007′, UNEP and New Energy Finance Ltd.

[63] EIB Corporate Operational Plan 2008-2010 http://www.eib.org/about/publications/corporate-operational-plan.htm.

[64]http://www.eib.org/about/press/2007/2007-050-european-commission-and-eib-launch-new-instrument-to-finance-research-

and-innovation.htm.

[65] Towards a European Energy Community – Notre-Europe 2010

[66] EP study Assessment of Potential and Promotion of New Generation of Renewable Technologies, DRAFT 11 May 2010.

[67] EP study Assessment of Potential and Promotion of New Generation of Renewable Technologies, DRAFT 11 May 2010.

[68] Idem.

[69] Idem

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