EUROPEAN COMMISSION
Communication from the Commission
ENERGY FOR THE FUTURE:
RENEWABLE SOURCES OF ENERGY
White Paper for a Community Strategy
and Action Plan
COM(97)599 final (26/11/1997)
1
TABLE OF CONTENTS
1 Setting the Scene p.4
1.1 The General Framework p.4
1.1.1 Introduction p.4
1.1.2 The Current Situation p.4
1.1.3 The Need for a Community Strategy p.6
1.2 The Debate on the Green Paper p.8
1.3 Strategic Goals p.9
1.3.1 An Ambitious Target for the Union p.9
1.3.2 Member States Targets and Strategies p.10
1.3.3 Possible Growth of RES by Sector p.10
1.4 Preliminary Assessment of some of the costs and benefits p.11
2 Main Features of the Action Plan p.14
2.1 Introduction p.14
2.2 Internal Market Measures p.14
2.2.1 Fair Access for Renewable to the Electricity Market p.14
2.2.2 Fiscal and Finance Measures p.15
2.2.3 New Bioenergy Initiative for Transport, Heat and Electricity p.16
2.2.4 Improving building regulations : its impact on town and country
planning p.18
2.3 Reinforcing Community Policies p.18
2.3.1 Environment p.19
2.3.2 Growth, Competitiveness and Employment p.19
2.3.3 Competition and State Aid p.19
2.3.4 Research, Technology, Development and Demonstration p.20
2.3.5 Regional Policy p.20
2
2.3.6 Common Agricultural Policy and Rural Development Policy p.21
2.3.7 External Relations p.23
2.4 Strengthening co-operation between Member States p.24
2.5 Support Measures p.25
2.5.1 Targeted promotion p.24
2.5.2 Market Acceptability and Consumer Protection p.25
2.5.3 Better positioning for RES on the institutional banks and
commercial finance market p.25
2.5.4 Renewable Energy Networking p.26
3 Campaign for take-off p.27
3.1 Introduction p.27
3.2 Key Actions p.27
3.2.1 1.000.000 photovoltaic systems p.27
3.2.2 10.000 MW of large wind farms p.29
3.2.3 10.000 Mw
th
of biomass installations p.29
3.2.4 Integration of Renewable Energies in 100 Communities p.30
3.3 Estimates of some of the costs and benefits p.30
4 Follow-up and Implementation p.32
4.1 Implementation and Monitoring of Progress p.32
4.2 Internal Co-ordination of E.U. Policies and Programmes p.32
4.3 Implementation by Member States and Co-operation at
EU level p.32
4.4 Implementation of Action Plan - Next Steps p.33
3
ANNEXES
I Preliminary Indicative Action Plan for RES 1998-2010 p.34
II Estimated Contributions by Sector - A scenario for 2010 p.37
II.1 Biomass p.37
II.2 Hydro Power p.39
II.3 Wind Energy p.40
II.4 Solar Thermal p.40
II.5 Photovoltaics p.41
II.6 Passive Solar p.42
II.7 Geothermal and Heat Pumps p.42
II.8 Other Renewable Technologies p.43
II.9 Achieving the Overall Community Objective for RES p.43
II.10 Estimated RES contributions in Electricity and Heat
generation p.43
II.11 Assessment of some of the costs and benefits p.43
III Member States plans and actions for RES development p.45
TABLES
1. Share of Renewable Energy Sources in Gross Inland Energy
Consumption p.47
1A Estimated contributions by Sector in the 2010 scenario p.48
2. Current and Projected Future Gross Renewable Energy
Consumption (Mtoe) for 2010 p.49
3. Current and Projected Electricity Production by RES for 2010 p.50
4. Current and Projected Heat Production (Mtoe) for 2010 p.51
5. Estimated Investment costs and benefits of the overall
Strategy in the 2010 scenario p.52
6. Estimated Investment costs and benefits by sector p.53
4
Chapter 1 Setting the Scene
1.1 The General Framework
1.1.1 Introduction
Renewable sources of energy are currently unevenly and insufficiently exploited in
the European Union. Although many of them are abundantly available, and the real
economic potential considerable, renewable sources of energy make a
disappointingly small contribution of less than 6% to the Union’s overall gross inland
energy consumption, which is predicted to grow steadily in the future. A joint effort
both at the Community and Members States’ level is needed to meet this challenge.
Unless the Community succeeds in supplying a significantly higher share of its
energy demand from renewables over the next decade, an important development
opportunity will be missed and at the same time, it will become increasingly difficult
to comply with its commitments both at European and international level as regards
environmental protection.
Renewable energy sources are indigenous, and can therefore contribute to reducing
dependency on energy imports and increasing security of supply. Development of
renewable energy sources can actively contribute to job creation, predominantly
among the small and medium sized enterprises which are so central to the
Community economic fabric, and indeed themselves form the majority in the various
renewable energy sectors. Deployment of renewables can be a key feature in
regional development with the aim of achieving greater social and economic
cohesion within the Community.
The expected growth in energy consumption in many third countries, in Asia, Latin
America and Africa, which to a large extent can be satisfied using renewable
energies, offers promising business opportunities for European Union industries,
which in many areas are world leaders as regards renewable energy technologies.
The modular character of most renewable technologies allows gradual
implementation, which is easier to finance and allows rapid scale-up where required.
Finally, the general public favours development of renewables more than any other
source of energy, very largely for environmental reasons.
1.1.2 The Current Situation
Five years after the Rio Conference, Climate Change is again at the centre of
international debate in view of the upcoming “Third Conference of the Parties to the
United Nations Framework Convention on Climate Change” to be held in Kyoto in
December 1997. The European Union has recognised the urgent need to tackle the
climate change issue. It has also adopted a negotiating position of 15% greenhouse
gas emissions reduction target for industrialised countries by the year 2010 from the
1990 level. To facilitate the Member States achieving this objective, the
Commission, in its communication on the Energy Dimension of Climate Change
1
identified a series of energy actions - including a prominent role for renewables.
The Council of Ministers endorsed this when inviting the Commission to prepare an
action programme and present a strategy for renewable energy. In preparation for
the international climate change conference in Kyoto, the Commission confirmed
1
COM (97) 196 final, 14 May 1997, “The Energy Dimension of Climate Change
5
the technical feasibility and economic manageability of the Union’s negotiating
mandate. In a recent Communication
2
, the Commission analysed the
consequences of reducing CO2 emissions significantly, including the implications for
the energy sector. In order to achieve such a reduction, the Union will require major
energy policy decisions, focusing on reducing energy and carbon intensity.
Accelerating the penetration of renewable energy sources isvery important for
reducing carbon intensity and hence CO2 emissions, whatever the precise outcome
of the Kyoto Conference.
The EU’s dependence on energy imports is already 50% and is expected to rise
over the coming years if no action is taken, reaching 70% by 2020. This is
especially true for oil and gas which will increasingly come from sources at greater
distances from the Union, often with certain geopolitical risks attached. Attention
will therefore increasingly focus on security of supply. Renewable energies as
indigenous sources of energy will have an important role to play in reducing the
level of energy imports with positive implications for balance of trade and security of
supply.
Much progress has been achieved towards completion of the Internal Energy
Market. Agreement has been reached in the Council of Ministers on the first phase
of liberalisation of the electricity sector and negotiations in the gas sector are well
under way. Opening the markets for the network-bound energies will bring market
forces into play in sectors which until recently were for the most part dominated by
monopolies. This will provide a challenging new environment for renewable
energies, providing more opportunities but also posing the challenge of a very cost-
competitive environment. Suitable accompanying measures are needed in order to
foster the development of renewables.
Renewable energy sources still make an unacceptably modest contribution to the
Community’s energy balance as compared with the available technical potential.
There are signs, however, that this is changing, albeit slowly. The resource base is
better understood, the technologies are improving steadily, attitudes towards their
uses are changing, and the renewable energy manufacturing and service industries
are maturing. But renewables still have difficulties in “taking off”, in marketing terms.
In fact many renewable technologies need little effort to become competitive.
Moreover, biomass, including energy crops, wind and solar energy all offer a large
unexploited technical potential.
Current trends show that considerable technological progress related to renewable
energy technologies has been achieved over recent years. Costs are rapidly
dropping and many renewables, under the right conditions, have reached or are
approaching economic viability. The first signs of large-scale implementation are
also appearing as regards wind energy and solar thermal collectors. Some
technologies, in particular biomass, small hydro and wind, are currently competitive
and economically viable in particular compared to other decentralised applications.
Solar photovoltaics, although characterised by rapidly declining costs, remain more
dependent on favourable conditions. Solar water heaters are currently competitive
in many regions of the Union.
Under prevailing economic conditions, a serious obstacle to greater use of certain
renewables has been higher initial investment costs. Although comparative costs for
2
COM (97) 481 final, 1 October 1997, “Climate Change - The EU Approach to Kyoto”
6
many renewables are becoming less disadvantageous, in certain cases quite
markedly, their use is still hampered in many situations by higher initial investment
costs as compared with conventional fuel cycles (although operational fuel costs are
non-existent for renewables with the exception of biomass). This is particularly the
case due to the fact that energy prices for conventional fuel cycles do not currently
reflect the objective full cost, including the external cost to society of environmental
damage caused by their use. A further obstacle is that renewable energy
technologies, as is the case for many other innovative technologies, suffer from
initial lack of confidence on the part of investors, governments and users, caused by
lack of familiarity with their technical and economic potential and a general
resistance to change and new ideas.
Globally, Europe is at the forefront for several renewable energy technologies.
Significant employment is associated with the industries concerned in the European
Union, involving several hundred companies, mainly small and medium-sized
enterprises, in primary assembling/manufacturing alone, without taking into account
other service and supply needs. For the new renewable energy technologies (i.e.
not including large hydro-electric power stations and the traditional use of biomass)
the world-wide annual turnover of the industry is estimated to be higher than ECU 5
billion, of which Europe has more than a one third share.
1.1.3 The Need for a Community Strategy
Development of renewable energy has for some time been a central aim of
Community energy policy, and as early as 1986 the Council
3
listed the promotion of
renewable energy sources among its energy objectives. Significant technological
progress has been achieved since then thanks to the various Community RTD and
demonstration programmes such as JOULE- THERMIE, INCO and FAIR which not
only helped in creating a European renewable energy industry in all sectors of
renewables but also in achieving a world-wide leading position. This technological
leadership will be maintained by the contribution of the 5th RTD framework
programme in which the renewable energy technologies will have a central role to
play. With the ALTENER programme
4
, the Council for the first time adopted a
specific financial instrument for renewables promotion. The European Parliament for
its part has constantly underlined the role of renewable energy sources and in a
recent Resolution
5
strongly advocated a Community action plan to advance them. In
its White Paper, “An Energy Policy for the European Union”
6
the Commission put
forward its views as regards Community energy policy objectives and instruments to
achieve them. Three key energy policy objectives were identified, viz. improved
competitiveness, security of supply, and protection of the environment. Promotion of
renewables is identified as an important factor to achieve these aims. A strategy for
renewable energy sources was proposed, and specifically cited in the ‘indicative
work programme’ attached to the Energy Policy White Paper.
At the same time some Member States have introduced some measures to support
RES and related programmes. Some have set up plans and targets aimed at
developing RES in the medium and long term. The share of renewable energies in
the gross inland energy consumption differs widely between Member States, from
less than 1% to over 25% (see table 1). A Community strategy will provide the
3
OJ C 241 of 25.9.1986, p.1
4
OJ L 235 of 18.9.1993, p.41
5
PE 216/788; fin
6
COM(95) 682 of 13.12.1995, “An Energy Policy for the European Union”
7
necessary framework and bring added value to national initiatives increasing the
overall impact.
A comprehensive strategy for renewables has become essential for a number of
reasons. First and foremost, without a coherent and transparent strategy and an
ambitious overall objective for renewables penetration, these sources of energy will
not make major inroads into the Community energy balance. Technological progress
by itself can not break down the several non-technical barriers which hamper the
penetration of renewable energy technologies in the energy markets. At present,
prices for most classical fuels are relatively stable at historically low levels and thus
in themselves militate against recourse to renewables. This situation clearly calls for
policy measures to redress the balance in support of the fundamental environmental
and security responsibilities referred to above. Without a clear and comprehensive
strategy accompanied by legislative measures, their development will be retarded. A
long-term stable framework for the development of renewable sources of energy,
covering political, legislative, administrative, economic and marketing aspects is in
fact the top priority for the economic operators involved in their development.
Furthermore, as the internal market develops, a Community-wide strategy for
renewables is required to avoid imbalances between Member States or distortion of
energy markets. The leading position of the European renewable energy industry
world-wide can only be maintained and strengthened on the basis of a significant
and growing home market.
A policy for the promotion of renewables requires across-the-board initiatives
encompassing a wide range of policies: energy, environment, employment, taxation,
competition, research, technological development and demonstration, agriculture,
regional and external relations policies. A central aim of a strategy for renewable
energy will be to ensure that the need to promote these energy sources is
recognised in new policy initiatives, as well as in full implementation of existing
policies, in all of the above areas. In fact, a comprehensive action plan is required to
ensure the necessary co-ordination and consistency in implementing these policies
at Community, national and local levels.
The role of Members States in the implementation of the Action Plan is crucial. They
need to decide on their own specific objectives witin the wider framework, and
develop their own national strategies to achieve them. The measures proposed in
this White Paper must also be adapted to the particular socio-economic,
environmental, energy and geographic situation of each Member State as well as to
the technical and physical potential of RES in each Member State.
With a view to illustrating the potential effects of specific policy initiatives in the
renewable energy field, the Commission sponsored an exercise referred to as
TERES. The TERES II study
7
builds on one of the scenarios previously developed
in the Commission’s European Energy to 2020
8
report but goes further by adding
various specific renewable energy policy assumptions to form three additional
scenarios. These scenarios predict the contribution of renewable energy sources to
gross inland energy consumption to be between 9.9% and 12.5% by 2010. The
technical potential, however, is much larger.
7
TERES II, European Commission, 1997
8
European Energy to 2020. A Scenario Approach, European Commission, 1996
8
The various scenarios clearly illustrate that renewable energy sources can make a
significant contribution to the energy supply of the European Union. On the other
hand the renewable energy component of the energy mix is very sensitive to
changing policy assumptions. Unless specific incentives are put in place, the large
potential for renewable energy will not be exploited and these sources will not make
a sufficient contribution to the European energy balance.
1.2 The Debate on the Green Paper
As a first step towards a strategy for renewable energy the Commission adopted a
Green Paper on 20 November 1996
9
A broad public debate took place during the
early part of 1997 focusing on the type and nature of priority measures that could be
undertaken at Community and Member States’ levels. The Green Paper has elicited
many reactions from the Community institutions, Member States’ governments and
agencies, and numerous companies and associations interested in renewables. The
Commission organised two conferences during this consultation period where the
issues were extensively discussed.
The Community Institutions have delivered detailed comments on the Green Paper
as well as opinions on what should be the essential elements and the major actions
to be undertaken for a future Community strategy on renewable energy sources and
the role of the Community in this process. The Council in its Resolution
10
on the
Green Paper, affirms that adequate action on renewables is vital for achieving
sustainable economic growth, the aim being a strategy that would lead to improved
competitiveness and a substantial share of renewables in the long term. Thus, it
confirms that Member States and the Community should formulate indicative targets
as a guideline for this ambitious indicative target of doubling the overall share of
renewable in the Community by 2010. The Council Resolution states that such a
comprehensive strategy should be based on certain basic priorities: harmonisation
of standards concerning renewables, appropriate regulatory measures to stimulate
the market, investment aid in appropriate cases, dissemination of information to
increase market confidence with specific actions to increase customer choice. It also
takes the view that adequate provision for the support for renewables in the Fifth
Framework Programme for Research, Technological Development and
Demonstration is required, as well as effective co-ordination and monitoring of
progress in order to optimise available resources.
The European Parliament in its Resolution
11
on the Green Paper recognises the
important role that renewable energy can play in combating the greenhouse effect,
in contributing to the security of energy supplies and in creating jobs in small and
medium enterprises and rural regions. It believes that the European Union urgently
needs a promotion strategy which will tackle the issues of tax harmonisation,
environmental protection and standards, internalisation of external costs, and
ensure that the gradual liberalisation of the internal energy market will not place
renewables at a disadvantage. It proposes a goal of a 15% share of renewables for
the European Union by the year 2010. It calls on the Commission to submit specific
measures to facilitate the large-scale use of renewable energy sources and
advocates certain specific measures. These include the setting of targets per
Member State, the concept of a common energy-related tax model, free non-
discriminatory access to the grid combined with a minimum payment by the utilities
9
COM(96)576 of 20.11.1996, “Energy for the future : renewable sources of energy”
10
Council Resolution n° 8522/97 of 10 June 1997
11
PE 221/398.fin
9
for the electricity supplied from renewable energies, the main features of a plan to
establish a European fund for renewable energies, a strategy for a common
programme to promote renewable energies to include a further 1,000,000
photovoltaic roofs, 15,000 MW of wind and 1,000 MW of energy from biomass.
Parliament’s Resolution also calls for a buildings directive, a plan for greater use of
structural funds, a strategy for the better utilisation of agricultural and forestry
biomass and an export strategy for renewable energy technologies. It reaffirms its
belief in the need to increase the Community budgetary appropriations in support of
renewable energy sources to the level currently used for nuclear research. It also
proposes the constitution of a new Treaty for the promotion of renewable energy
sources. The Committee on Agriculture and Rural Development of the Parliament
has also issued an Opinion in which it considers that the contribution of biomass-
derived energy to the primary energy mix could reach 10% by 2010. It also calls for
a better co-ordination of European Union energy policy and the common agricultural
policy and emphasises the need to make the necessary arable land available under
the latter.
The Economic and Social Committee
12
and the Committee of the Regions
13
have
also presented detailed comments on all chapters of the Green Paper, which also
stress, analyse, and support the overall goals relating to sustainability and the
different ways the potential contribution of renewables can be maximised.
Furthermore, these contributions set out ways in which the role and responsibilities
of regional and local public authorities and other bodies could be best harnessed to
facilitate renewables support and market penetration. Given the predominantly
decentralised implementation of most renewable technologies, practical measures
in this direction would allow recourse to the subsidiarity principle, in the framework
of a Community Strategy and Action Plan, facilitating local authorities in their
decision-making power and environmental responsibility. Moreover, this context is a
prime example where energy policy aims and those of structural and regional policy
can synergise with one another to great effect, as illustrated by the case of rural,
island, or otherwise isolated communities where sustainable development and the
maintenance of a population base can be actively supported by replacement of
inefficient small-scale fossil fuel use by renewables plants. That leads to better
living standards and job creation.
More than 70 detailed written reactions have been received from Member State
agencies, industries, professional associations, regional associations, institutes and
non-governmental organisations following the publication of the Green Paper. The
extensive public debate on the Green Paper and the many contributions received
have provided valuable input for the Commission in drafting this White Paper and in
proposing the Action Plan.
1.3 Strategic Goals
1.3.1 An Ambitious Target for the Union
In the Green Paper on Renewables the Commission sought views on the setting of an
indicative objective of 12% for the contribution by renewable sources of energy to the
European Union’s gross inland energy consumption by 2010. The overwhelmingly
positive response received during the consultation process has confirmed the
12
CES 462/97 of 23-24 April 1997, Opinion of the Economic and Social Committee
13
CdR 438/96.fin, Opinion of the Committee of the Regions
10
Commission’s view that an indicative target is a good policy tool, giving a clear political
signal and impetus to action. The strategy and action plan in this White Paper
therefore, are directed towards the goal of achieving a 12% penetration of renewables
in the Union by 2010 - an ambitious but realistic objective. Given the overall
importance of significantly increasing the share of RES in the Union, this indicative
objective is considered as an important minimum objective to maintain, whatever the
precise binding commitments for CO2 emission reduction may finally be. However, it
is also important to monitor progress and maintain the option of reviewing this
strategic goal if necessary.
The calculations of increase in RES needed to meet the indicative objective of 12%
share in the Union’s energy mix by 2010 is based on the projected energy use in the
pre-Kyoto scenario (conventional wisdom, European Energy to 2020, see footnote 8)
It is likely that the projected overall energy use in the EU 15 may decrease by 2010 if
the necessary energy saving measures are taken post Kyoto. At the same time, the
enlargement of the Union to new Member States where RES are almost non-existent
will require an even greater overall increase. It is therefore considered at this stage,
that the 12% overall objective cannot be refined further. It is in any case, to be
emphasised that this overall objective, is a political, and not a legally binding tool.
1.3.2 Member States Targets and Strategies
The overall EU target of doubling the share of renewables to 12%by 2010 implies that
Member States have to encourage the increase of RES according to their own
potential. Targets in each Member State could stimulate the effort towards increased
exploitation of the available potential and could be an important instrument for
attaining CO
2
emission reduction, decreasing energy dependence, developing
national industry and creating jobs. It is important, therefore, that each Member State
should define its own strategy and within it propose its own contribution to the overall
2010 objective, indicate the way it expects different technologies to contribute and
outline the measures it intends to introduce to achieve enhanced deployment.
Nevertheless, it should be emphasised that both the Community and the Member
States have to build on existing measures and strategies, as well as tackle new
initiatives. Some Member States have developed national Plans for RES and set
objectives for 2010, 2020 or even 2030. Annex III outlines the plans and actions of
Member States for renewables development. Member States are indeed already
making efforts to develop RES and the Community Strategy will provide a framework
to encourage those efforts and to ensure their cross-fertilisation. Action at the level of
the Community can provide added value in terms of the sharing and transfer of
successful technological and market experiences.
1.3.3 Possible Growth of RES by Sector
Achievement of the average 12% overall indicative objective for the Union clearly
depends on the success and growth of the various individual renewable technologies.
Views expressed during the consultation process on the Green Paper confirmed that it
is important to analyse how the overall objective can be achieved by a contribution
from each sector, and hence to estimate the contribution each renewable source is
likely to make. The potential sectoral growth of RES suggested in this Strategy has to
be considered as a first attempt to identify a possible combination of renewable
technologies that could allow the EU to reach the overall target, within technical,
practical and economic limitations. However, renewable energy technologies may well
evolve differently, depending on many factors, including market developments,
options chosen by Members States and technical developments. The estimate share
of different technologies are clearly indicative and will serve to help monitor progress
11
and ensure that each technology makes its optimal contribution, within a clear policy
framework.
The current share of renewables in the energy mix of approximately 6% includes
large-scale hydro, for which the potential for further exploitation in the European
Union, for environmental reasons, is very limited. This means that the increases in the
use of other renewables will have to be all the more substantial.
In Annex II a set of indicative estimated contributions from each renewable energy
source as well as for each market sector are outlined, as a projection of one way in
which the overall desired growth of RES can be achieved. According to the particular,
scenario outlined, the main contribution of RES growth (90 Mtoe) could come from
biomass, tripling the current level of this source. Wind energy, with a contribution of
40 GW is likely to have the second most important increase. Significant increases in
the solar thermal collectors (with a contribution of 100 million m
2
installed by 2010) are
also anticipated. Smaller contributions are foreseen from photovoltaics (3 GWp),
geothermal energy (1 GWe and 2.5 GWth) and heat pumps (2.5 GWth). Hydro power
will probably remain the second most important renewable source, but with a relatively
small future increase (13 GW), keeping its overall contribution at today’s level. Finally,
passive solar could have a major contribution in reducing the heating and cooling
energy demand in buildings. A 10% contribution in this sector, representing fuel
savings of 35 Mtoe, is considered feasible. If the sectoral growth outlined in the
scenario is achieved then the overall doubling of the current share of renewables can
be achieved, as shown in the tables in Annex II. As far as the market sectors are
concerned, the doubling of the current electricity and heat production from
renewables plus a significant increase of biofuel in transport fuel use by 2010 are
important elements in the scenario for achieving the overall Union objective.
1.4 Preliminary Assessment of some of the Costs and Benefits
In order to assess the feasibility of achieving the overall Community objective, the
necessary costs have to be estimated. Equally important, however, is the estimation of
the related benefits. The doubling of the current market penetration of renewable
energies by 2010 will have beneficial effects among others in terms of CO
2
emissions;
security of supply and employment. In table 6 of Annex II the estimated investment costs
required to achieve the target together with the estimated benefits are presented. The
total capital investment needed to achieve the overall target is estimated at 165 billion
ECU for the period 1997-2010. What is more relevant, however, is the net investment
which is estimated at 95 billion ECU
14
. However, it must be underlined that there are very
significant avoided fuel costs.
In table 5 of Annex II these figures are compared with the total investment of the energy
sector for the same period, as projected by the Conventional Wisdom scenario of the
“European Energy to 2020” study of the Commission. If we consider that in this scenario
an amount for investments in renewable energies is already included, the additional net
investment needed if the action plan is to have its full effect is then equal to 74 billion
ECU. In the same table, it can be seen that the doubling of the share of renewables may
require an increase of approximately 30% in the total energy sector investment but it
could create an estimated gross figure of 500,000 - 900,000 new jobs, save annually (in
2010) 3 billion ECU in fuel costs and a total of 21 billion ECU for the period 1997-2010,
14
It has been calculated by taking the total investment and subtracting the investment that would have
been needed if the energy from renewables was provided by fossil fuel technologies
12
reduce the imported fuels by 17.4% and the CO
2
emissions by 402 million tonnes/year by
2010.
This amount of CO
2
savings represents a significant contribution towards the CO
2
reduction needed to successfully combat climate change. The calculation of the figures
in the table needs some clarification. In the recent Communication from the Commission
“Climate Change - the EU approach to Kyoto”
15
it is estimated that the 800 million tonnes
CO
2
emission reduction potential can be achieved with an annual compliance cost of 15
to 35 billion ECU and with a total (primary and secondary) benefit which might range
from 15 to 137 billion ECU per year. From the analysis presented in Annex II, it is shown
that doubling the share of renewables can reduce the CO
2
emissions by 402 million
tonnes per year with respect to 1997. This corresponds to an additional reduction
possibility of 250 million tonnes of CO
2
with respect to the 2010 “business as usual” Pre-
Kyoto scenario used in the Climate Change Communication and one third of the
expected CO
2
reduction target. The difference between figures (402 and 250) is due to
the fact that in the scenario for 2010, an increase of 30 Mtoe in the use of renewable
between 1995-2010 is assumed which corresponds approximately to annual savings of
150 million tonnes of CO
2
by 2010. Therefore, the estimates of CO2 emission reduction
from RES cited in this White Paper results from a technical assessment and represents
the full expected reduction from a doubling of the current share of RES, whereas in the
policy communication on Kyoto, the figure cited is the additional reduction in CO2
emissions to be attained to reach a specific reduction target, over and above what may
have been attained under the specific Conventional Wisdom pre-Kyoto scenario for
2010.
Net employment figures in the renewable energy sector are difficult to predict and
calculate. Real figures exist in the sectors that have reached a certain level of
development. Wind energy, for example, has already created more than 30,000 jobs in
Europe. Each renewable energy technology has its own characteristics as far as the
quality and the kind of employment generated. Biomass has the particularity of creating
large numbers of jobs for the production of raw material. Photovoltaics creates a large
number of operational and maintenance jobs, since PV installations are small and
dispersed. Hydro is not expected to create more jobs than those already existing in
Europe.
Detailed estimations of net employment have been made in the TERES II study using the
SAFIRE market penetration model developed under the JOULE II programme. The
model predicts for 2010 a net employment of 500,000 jobs directly created in the
renewable energy sector and indirectly in the sectors that supply the sector. This is a net
figure allowing for losses of jobs in other energy sectors. Sectorial studies performed
mainly by the industry give much larger employment figures. The European Wind Energy
Association (EWEA)
16
estimates that the jobs to be created in 2010 by the wind sector
will be between 190,000 and 320,000, if 40 GW of wind power is installed. The European
Photovoltaic Industry Association (EPIA) estimates
17
that a 3 GWp installed power in
2010 will create approximately 100,000 jobs in the PV sector. The European Biomass
Association (AEBIOM)
18
believes that the Biomass employment figures in the TERES II
study are underestimated and that employment in the sector will increase by up to
1,000,000 jobs by 2010 if the biomass potential is fully exploited. The European Solar
Industry Federation (ESIF) estimates that 250,000 jobs will be created in order to meet
15
COM(97)481 final - see footnote 2
16
EWEA Strategy Paper ‘97, ALTENER publication, 1997.
17
EPIA, “Photovoltaics in 2010”, European Commission, 1996.
18
Statement of AEBIOM on the Green Paper of the European Commission, February 1997.
13
the solar collector 2010 market objective. While it is not possible to reach any hard
conclusions as is the likely cumulative level of job creation which would derive from
investments in the various forms of renewable energy sources, it is quite clear that a pro-
active move towards such energy sources will lead to significant new employment
opportunities.
An important additional economic benefit not included above is the potential growth of
the European renewable energy industry in international markets. In most technical
areas, European industry in this field is second to none in its ability to provide the
equipment and technical, financial and planning services required for market growth.
This offers therefore, significant business opportunities for exports and possibilities for
expansion of the European renewable technologies industry. A 17 billion ECU annual
export business is projected for 2010, creating potentially as many as 350.000 additional
jobs.
Considering all the important benefits of renewables on employment, fuel import
reduction and increased security of supply, export, local and regional development, etc.
as well as the major environmental benefits, it can be concluded that the Community
Strategy and Action Plan for renewable energy sources as they are presented in this
White Paper are of major importance for the Union as we enter the 21st century.
14
Chapter 2 Main Features of the Action Plan
2.1 Introduction
Without a determined and co-ordinated effort to mobilise the Union’s renewable
energies potential, this potential will not be realised to a significant extent, resulting
in missed opportunity to develop this sector and to reduce greenhouse gas
emissions significantly. If pro-active steps are not taken in a co-ordinated way within
the Union, renewable energies are only likely to emerge slowly from today’s niche
markets to become more widely used and hence fully cost competitive in around
2020, with full market penetration perhaps still years beyond. The Action Plan set
out below aims at providing fair market opportunities for renewable energies without
excessive financial burdens. Increasing the current share of renewables significantly
will not be an easy task, but the benefits to be obtained justify a major effort.
Investments will have to made made both by the private and public sectors, but
these will provide multiple dividends as Europe’s industry and service companies
demonstrate their technological leadership in a globally competitive market. At the
same time, the increasingly liberalised and globalised energy markets present a new
situation, which will have to be used in a positive sense to provide new
opportunities, while new obstacles to RES growth in the electricity sector will have to
be avoided.
The Community Strategy and Action Plan should be seen as an integrated whole, to
be further developed and implemented in close cooperation between the Member
States and the Commission. The challenge facing us requires a concerted and co-
ordinated effort by the various players over time. Measures should be taken at the
appropriate level according to the subsidiarity principle within the coordinated
framework provided by this Strategy and Action Plan. It would be incorrect and
unrealistic to assume that actions need only be taken at Community level. The
Member States have a key role to play in taking the responsibility to promote
Renewables, through national action plans, to introduce the measures necessary to
promote a significant increase in renewables penetration, and to implement this
strategy and Action Plan in order to achieve the national and European objectives.
Legislative action will only be taken at EU level when measures at national level
would be insufficient or inappropriate and when harmonisation is required across
the EU. The Strategy and Action Plan must be flexible and be updated over time in
the light of experience gained and new developments including international
commitments undertaken to reduce CO2 emissions. For this reason, a system of
continuous review is proposed.(see section 4.1. below).
2.2 Internal Market Measures
The following is a list of priority measures aimed at overcoming obstacles and
redressing the balance in favour of renewables, in order to reach the indicative
objective of 12% penetration by 2010.
2.2.1 Fair Access for Renewables to the Electricity Market
Electricity is the single most important energy sector as it accounts for about 40%
of gross energy consumption in the EU15. Access for renewables to the electricity
networks at fair prices is therefore a critical step for their development. The basis for
a Community legal framework largely exists and its implementation will have to
15
provide for the necessary degree of legislative harmonisation. Experience of
liberalisation elsewhere has shown that it can form the basis for a dynamic and
secure role for renewables so long as adequate market-based instruments are
provided.
At present Member States are transposing the internal market in electricity
Directive
19
into national law. The Directive, in Article 8(3), permits Member States to
require electricity from renewable sources to be given preference in dispatching.
Further schemes for the promotion of renewables may also be compatible with the
Directive, pursuant to Article 3 and/or Article 24. Most or all Member States are
planning to include such schemes in their transposition of the Directive. The
Commission is examining closely the different schemes proposed or introduced by
the Member States in order to propose a Directive which will provide a harmonised
framework for Member States to ensure that renewable energies make up a
sufficient contribution to overall electricity supply, both at the EU and at national
level. Different preference schemes for electricity from renewables will be
considered in this context.
Such an approach is an important element towards the creation of a true single
market for electricity. Where significant differences exist between Member States
regarding the extent to which renewable energy is supported and, possibly, the
manner in which any consequent support measures are financed, this may result in
significant trade distortions not related to efficiency.
Other issues to be addressed will include the following :
• the way in which transmission system operators should accept renewable
electricity when offered to them, subject to provisions on transport in the internal
market in electricity Directive;
• the guidelines on the price to be paid to a generator from renewable sources
which should at least be equal to the avoided cost of electricity on a low voltage
grid of a distributor plus a premium reflecting the renewables’ social and
environmental benefits
20
and the manner in which it is financed : tax breaks, etc.;
• • on which categories of electricity purchases such measures fall;
• • with regard to network access, avoiding discrimination between electricity
produced from solar radiation, biomass (below 20 MWe), hydroenergy (below 10
MWe) and wind.
2.2.2 Fiscal and Finance measures
The environmental benefits of renewable energies
21
justify favourable financing
conditions. The so-called “Green tariffs” already offered in certain Member States by
appealing to voluntary environmental solidarity on the part of those consumers -
19
Directive 96/92/EC of the European Parliament and of the Council of 19 December 1996 concerning
common rules for the internal market in electricity. JO L 27, 30.1.1997, p.20
20
This premium could be above 20% of that avoided cost which is about equivalent to the average tax
on electricity in the European Union. The avoided cost introduced here above refers to the cost at
the “city gate”, i.e. the wholesale price at which the grid operator of a municipal low voltage grid
buys electricity from the transmission network. The premium is put equivalent to the tax rebate or
tax exemption of renewable energy as it is currently implemented in those European Union Member
countries which have introduced CO
2
tax. Renewable energy tax exemption is also requested in a
recent Commission proposal modifying the Directive on taxation of energy products
21
Environmental benefits as established by the EXTERNE project (see also Annex II.11)
16
domestic or corporate - able and willing to pay higher rates are not sufficient, nor
appropriate in all cases.
The Commission has already made or will make the necessary additional proposals
for legislation and amendments to existing Directives before the end of 1998,
including tax exemption or reduction on RES energy products on behalf of Member
States “prerogatives” under art. 13 to 16 of the proposed Directive “Restructuring
the Community Framework for the Taxation of Energy Products”
22
;
In some cases it will be appropriate and sufficient for Member States’ authorities to
enact the necessary legislation or other provisions, in areas such as
• flexible depreciation of renewable energies investments;
• favourable tax treatment for third party financing of renewable energies;
• start up subsidies for new productions plants, SME’s and new job creation.
• financial incentives for consumers to purchase RE equipment and services;
The Commission however will also make a survey of the progress made throughout
the Union in this regard by the end of the year 2000, and if this indicates a
remaining need for Union-level measures in certain of the areas listed, the
necessary proposals will be put forward.
Other financial measures, which are proving their value in some Member States, will
also be examined and promoted more widely as appropriate such as:
• so-called “golden” or ‘green’ funds addressed to capital markets. Such funds are
financed from private bank accounts which in this case attract lower interest
rates. The margin consented by the lower interest rate paid to the account holder
is passed on by the bank to the renewable energies investor in the form of
discount rates;
• public renewable energy funds, managed by regulated agencies. The facilities
offered could include revolving funds as well as credit guarantees (renewable
energies bonds) and should in any case conform to the Treaty provisions;
• soft loans and special facilities from institutional banks (see Section 2.5.3)
2.2.3 New Bioenergy Initiative for Transport, Heat and Electricity
Specific measures are needed in order to help increase the market share for liquid
biofuels from the current 0.3% to a significantly higher percentage, in collaboration
with Member States.. The overall environmental effect varies from biofuel to biofuel
and depends, amongst others, on the crop cultivated and the crops replaced.
Promotion of biofuels has to be coherent with the AutoOil Programme and the
European policy on fuel quality, and should take account of the full cycle of
environmental costs/benefits. The role of biofuels in the clean fuel specification for
2005 and beyond is being studied under the Auto Oil II project.
Two new directives, currently under negotiation, concerning transport fuel
23
and
sulphur reduction in liquid fuels
24
already include provisions encouraging the use of
22
Com(97)30 final, 12 March 1997, Proposal for a Council Directive on “Restructuring the Community
Framework for the Taxation of Energy Products”
23
COM(97)248 final, 18 June 1997
24
COM(97)88 final, 12 March 1997 - Proposal for a Council Directive on “Reduction of sulphur content
in certain liquid fuels” and modification of Directive EC/93/12.
17
biofuels for transport, i.e. alcohols and ETBE, vegetable oils and esters for
biodiesel.
Given the fact that currently the production cost of liquid biofuel is three times that of
conventional fuels, a priority effort needs to be placed on further research and other
measures to reduce production costs of biofuels. An increased use of liquid biofuels
at present can only be obtained if there is a high rate of tax relief and subsidised
raw material production. Detaxation of biofuels is currently made on a limited scale,
in the framework of the directive 92/81
25
on harmonisation of the structures of
excise duties, allowing such detaxation on a pilot scale. The Commission proposes
that a market-share of 2% for liquid biofuels could still be considered a pilot phase.
This level may well be reached in the short or medium term in some countries (in
particular Austria, Germany, France and Italy). The Commission has already made
proposals for adjusting the relevant European legislation in order to allow a large
scale liquid biofuels detaxation
26
.
For biogas promotion, production of landfill gas or biogas from the food industry or
farms will be encouraged, in order to obtain with energy and environmental policy
benefits. Fair access to the electricity market will be promoted as indicated in point
2.2.1. above. Measures for biogas will contribute to the achievement of the
Commission’s strategy on reducing methane emissions
27
from manure by using
anaerobic digesters or covered lagoons as well as meeting the objectives on
protection of waters
28
and on landfill
29
.
It is proposed under this strategy that demonstration programmes at European
Union, national, regional and local level should be supported to install recovery and
use systems for intensive rearing. In addition, the Commission will examine the
possibility of integrating biogas actions in the structural funds.
In order for the markets for solid biomass to be further developed, the following
must be actively promoted:
• co-firing or fossil fuel substitution in coal power plants and in existing district
heating networks;
• new district heating or cooling networks as an outlet for co-generation with
biomass;
• greater access to upgraded fuels such as chips and pellets and a more intensive
exploitation of appropriate forest, wood and paper industry residues;
• new scaled up IGCC (Integrated Gasification in Combined Cycle) systems in the
capacity range of 25-50 Mwe based on a mixture of biomass and waste derived
fuels;
• Clean energy generation from municipal waste either by thermal treatment,
landfill gas recovery or anaerobic digestion as long as energy generation from
waste complements and does not replace waste prevention and recycling.
25
OJ L.316 of 31.10.1992, p. 12
26
a) JO n° C 209 of 29.7.1994, p.9 - Proposal for a Council Directive on excise duties on motor fuels
from agricultural sources; b) the above-mentioned in para 2.2.2 proposal for a Directive on the
taxation of energy products - see footnote 17
27
COM (96)557 of 15.11.96
28
OJ L.375 of 31.12.91 - Council Directive 91/676/EEC concerning the protection of waters against
pollution caused by nitrates from agricultural sources and OJ. C184/20 of 17.06.97, Proposal for a
framework Directive concerning waters protection
29
COM (97) 105 of 05.03.97 - Proposal for a Council Directive on the landfill of waste
18
The Commission has recently published a strategy
30
to promote combined heat and
power. CHP is of paramount importance for the success of biomass
implementation. Almost 1/3 of the new additional biomass exploitation by 2010
could fall in this category. District heating and cooling is also vital to maximise the
financial and economic benefits of cogeneration. Increased use of bioelectricity is
linked, like that for wind and solar electricity, to European Union wide measures for
fair access to the electricity market (see Section 2.2.1).
2.2.4 Improving building regulations: its impact on town and country planning
Energy consumption in the domestic and service sectors can be significantly
reduced by improving energy intensity overall in addition to more use - in retrofitting
as well as for new buildings - of renewables such as solar energy. It is important to
adopt a global approach and to integrate measures of rational use of energy (for the
building envelope as well as for heating, lighting, ventilation and cooling) with the
use of renewable energy technologies. Total energy consumption in this sector
could be reduced by 50% in the European Union by 2010, half of which could be
accounted for by introducing passive and active solar technologies in buildings for
which concrete promotional measures are necessary. This could be facilitated by
amendments to the existing Directives on improving energy efficiency in buildings
31
and to the Directive on building materials
32
in order to include new building materials
for solar efficiency in the standards specifications.
In order to promote the use of RES in buildings, the following specific measures are
proposed:
• incorporation of requirements on the use of solar energy for heating and cooling
in building approvals under current legislative, administrative and other provisions
on town and country planning should be considered;
• promotion of high efficiency windows and solar facades, natural ventilation and
window blinds in new buildings and for retrofitting;
• promotion of active solar energy systems for space heating and cooling and
warm water, e.g. solar collectors, geothermal heating and heat pumps;
• promotion of passive solar energy for heating and cooling;
• encouragement of PV systems to be integrated in building construction (roofs,
facades) and in public spaces;
• photovoltaic electricity sales to utilities from private customers should be priced
so as to allow direct reversible metering;
• measures to encourage the use of construction materials with a low intrinsic
energy content, e.g. timber.
2.3 Reinforcing Community Policies
The priority given to renewable energies in existing Community policies,
programmes and budgets is mostly very low. There is much scope for
reinforcement. It is also important to make the renewable energies potential better
known and to increase awareness among all those bearing responsibility for
Community programmes.
30
COM(97)514 final, “A Community strategy to promote CHP and to dismantle barriers to its
development”
31
Council Directive 93/76/EEC of 13 September 1993 “To limit carbon dioxide emissions by improving
energy efficiency (SAVE).
32
Council Directive 89/106/EEC of 21 December 1988 “On the approximation of laws, regulations and
administrative provisions of the Member States relating to building materials.
19
2.3.1 Environment
The Fifth Environmental Action Plan gives due consideration to renewable energies
and proposes support measures including fiscal incentives
33
The measures in the
Fifth Environmental Action Plan referring to renewable energies, will be
implemented by the year 2000, within the overall framework of the strategy
proposed in this White Paper. The net environmental effects of different renewable
energy sources will be taken into account when implementing different measures.
It is important to underline that a significant increase in the share of renewable
energy sources will play a key role in meeting the Union’s CO2 emission reduction
objectives, in parallel to efforts for energy efficiency and other areas. Measures
related to climate change will take into account the Community Strategy on RES.
2.3.2 Growth, Competitiveness and Employment
The Commission’s White Paper on Growth, Competitiveness and Employment
constitutes an important point of reference for further action on renewable
energies
34
There is indeed a great potential for renewable energies to contribute to
the aims set out in that White Paper. Achieving the indicative objective of 12% in
2010 would lead to an increase in the market for European Industry and could
create a significant number of new jobs as outlined in Section 1.4. The export
market is particularly important as Europe, with its traditional links with Africa, South
America, India and lately South-East Asia, is in a very favourable position. The
following actions deserve particular attention:
• strengthening the competitive edge of European industry in the global renewable
energies market by supporting its ventures into technological leadership and
supporting development of a substantive home market in addition to emerging
export opportunities;
• investigating opportunities for the creation of new SMEs and jobs;
• introducing RES issues in the actions addressed to SMEs under the social fund;
• action for education and training relating to renewable energies within existing
Community programmes.
2.3.3 Competition and State Aid
In considering the various ways in which to promote the development of renewable
energy sources, the positive effects of competition should be taken into account. In
order to make renewables more competitive, priority should be given to ways which
let the market forces function to bring down the costs for producing renewable
energy as rapidly and as far as possible.
When authorising State Aids, the Commission has to take into account the
derogations laid down in Article 92 of the Treaty. The guiding principle for the
Commission in assessing aid for renewable energies, contained in the Community
Guidelines on State Aid for Environmental Protection
35
is that the beneficial effects
of such measures on the environment must outweigh the distorting effects on
competition. The Commission will consider appropriate modifications in favour of
renewable energies in support of its policy in this area during the revision of the
present guidelines taking into consideration the Council’s Resolution on the Green
33
COM (92) 33, ... Fifth Environmental Action Plan - “Towards Sustainability”
34
COM (93) 700.fin - “Growth, Competitiveness and Employment - The Challenges and Ways
Forward in the 21st Century”
35
O.J. n° C72, 10 March 1994, p.3
20
Paper “Energy for the future : renewable sources of energy” which states that
investment aid for renewables can, in appropriate cases, be authorised even when
they exceed the general levels of aid laid down in those guidelines.
2.3.4 Research, Technological, Development and Demonstration
It is generally recognised that there is still great scope for Research, Technological
Development and Demonstration to improve technologies, reduce cost and gain
user experience in demonstration projects on condition that technological
development is guided by appropriate policy measures for introduction into internal
and third country markets and subsequent implementation.
Every kind of action, whether of a fiscal, financial, legal or other nature, is
addressed to facilitate the penetration of the technologies into the market. The
strategic goals presented under 1.3 above have to be reached at the end by the use
of renewable energy technologies, and the role of RTD is to help the development
of technologies which are continuously more efficient.
As research, development and demonstration on renewable energies is moving
strongly into industrial development and higher cost intensity, the financial means to
be earmarked for renewable energy sources should be increased significantly. The
4th Framework Programme for Research, Technological Development and
Demonstration and more particularly the Non Nuclear Energy RTD programme is
giving a priority to Renewable Energies sources as they represent about 45% of its
total budget. The 5th Framework Programme should offer the possibility to finance
the necessary RTD efforts in this area. The specific programme “Competitiveness
and Sustainable Growth” which will be part of the 5th Framework Programme,
contains a key action on energy which indicates clearly the important role of
renewable energies and decentralised production energy systems”.
All RTD activities related to RES should take into account the present Strategy and
Action Plan, including the socio-economic aspects. The complementarity between
RTD on RES and RTD on other technologies should also be encouraged. The role
of RTD is important upstream of the actions in the “Campaign for Take Off”
described later in that it should provide the cost efficient technologies to be used in
this Campaign.
2.3.5 Regional Policy
Renewable energies already feature to some extent in the European Union’s
regional policy. In 1999 new guidelines for 2000-2007 will be decided. The next
multi-annual funds negotiation package will be the occasion to extend, consolidate,
and clarify the aid opportunities available for renewable energies and above all to
increase the weight given to RES within the energy programmes. Decision-making
criteria must reflect the importance of renewables’ potential for less favoured
regions (which are in general dependent on energy imports), peripheral and remote
areas, islands, rural areas, in particular those lacking traditional energies. In those
areas RES have a high potential for new job creation, for the development of
indigenous resources and industrial and service activities (particularly in objective 1
areas). The latter also applies to industrial areas under reconversion and cities
(future objective 2). New incentives should also be undertaken in the tourism sector
as the great potential of renewable energies in this area is still largely unexplored.
The Community will give support to regional and local projects and planning in the
framework of its promotional programmes such as ALTENER (see 2.5.1). However,
21
it is essential to encourage the Member States to include RES implementation plans
in the programmes that they will submit to the structural funds for co-financing
(ERDF and accompanying Community Support Frameworks), so that the share of
RES in energy programmes under the Objective 1 CSF could reach at least 12 %.
This would reflect fully the objective set out in this White Paper for renewable
energy consumption by 2010. However, in order to stimulate a shift towards
renewable energy use so that this objective can be reached at MS level, a
considerably higher engagement of the structural funds seems appropriate. Since
the demand for funding for RES projects has to be Member State driven, effort has
to be put in explaining the possibilities for RES funding and raising awareness on
their potential and benefits for the regions. Other programmes for Objective 2
regions should also contribute to the promotion of RES.
It is important for the Commission to highlight that regional funds invested in
renewable energy sources development could contribute to increased standards of
living and income in less favoured, peripheral, island, remote or declining regions in
different ways :
• favouring the use of local resources and therefore indigenous development;
• being usually labour intensive, they could contribute to the creation of local
permanent jobs;
• contributing to reduce the dependency on energy imports;
• reinforcing energy supply for local communities, green tourism, preserved areas,
etc.;
• contributing to develop the local R&TD and Innovation potential, through the
promotion of specific research-innovation projects adapted to local needs.
The CSF sub-programmes for R&TD and innovation should also give particular
attention to projects aiming at the development of new technologies and processes
adapted to local and regional needs in the areas of RES.
2.3.6 Common Agricultural policy and rural development policy
Agriculture is a key sector for the European strategy of doubling the share of
renewable energies in gross energy demand in the European Union by 2010. New
activities and new sources of income are emerging on-farm and off-farm. Among
those, the production of renewable raw materials, for non-food purposes in niche
markets or the energy sector, can represent a new opportunity for agriculture and
forestry and contribute to job creation in rural areas
36
The reference in Agenda 2000 refers to the encouragement of renewable energies.
In particular biomass should be fully implemented using all available policy
instruments be they agricultural, fiscal or industrial. In the future CAP alternative
use for agricultural products will be a major element. Member States should be
encouraged, in the context of the national aid regimes, to support renewable
energies.
Within the future rural development policy, the Commission will encourage
Member States and regions to give renewable energy projects a high priority within
their programmes for rural areas. However, the regions will continue to have to
assume their responsibility for the selection of the projects.
36
COM(97)2000 Vol.I, p 26 (EN)
22
The Common Agricultural Policy could contribute by supporting the biomass energy
sector to increase standards of living and income in different ways :
• developing energy crops and utilising agricultural and forestry residues as a
reliable source of raw material, under the reformed common agricultural policy,
negotiated in accordance with Agenda 2000, making full use of the results of the
research and development policy;
• giving support for bio-based renewable energies under the rural development
policy and other ongoing programmes;
• supporting the regions by co-financing innovative, demonstrative and
transferable renewable energy projects, such as the installation of combined
solar, wind and biomass heat and electricity production under a new Community
initiative for rural areas, as it is already possible within the existing LEADER
programme;
• applying the regulation 951/97 on processing and marketing of agricultural
products in relation to renewable energy products wherever feasible;
the Commission will table a proposal enabling Member States to make the granting
of direct payments for arable crops and set-aside conditional on the respect of
environmental provisions, allowing them to be increasingly used to pursue
environmental objectives
37
.
The existing possibilities under Regulation 2078/92 will be reviewed in the context of
Agenda 2000. In this context, programmes which reduce environmental pressures
from biomass-production and other uses under the agri-environmental objectives
should be developed. In particular, schemes where energy crops are produced
using reduced water supply, low inputs, by organic methods or harvested in a way
to promote biodiversity etc could attract a premium. The Commission could
envisage more agri-environmental schemes being developed by national authorities
to support energy crops respecting the fact that priorities for programmes would
continue to be set by regional needs and potentials.
On a European forestry strategy the European Parliament, in its “Thomas Report”
has called on the Commission to put forward a legislative proposal. This report,
inter alia, considers the need for adding value to biomass through energy production
including a wide range of instruments. The report is currently under examination by
the Commission, and particular attention will be paid to this point.
Non food policy should also provide for support for energy uses of agricultural
products, by-products and short rotation forestry. The Commission intends to
examine the adequacy of existing instruments particularly in the sense of the need
to promote RES and to improve further harmonisation. Some support is in fact
already provided for in the European legislation, such as 1586/97 (non food set
aside) Regulation 2080/92 (forest measures), 2078/92 (agro-environmental
measures) and 950/97 (improvement of efficiency in the agricultural sector). Full use
should be made of those existing Regulations.
37
COM(97)2000 Vol. I, p 29 (EN)
23
2.3.7 External Relations
Information on and promotion of RES is important for third countries, especially as
they will also have to contribute to global CO2 emission reductions. In that respect,
it is important to promote RES in the European assistance programmes, such as
PHARE, TACIS, MEDA, the European Development Fund and other Lomé
Convention facilities, as well as in all relevant co-operation and other agreements
with developing or industrialised third countries, taking into account the possibilities
and constraints of each programme. For PHARE and TACIS, the promotion of
renewable sources has to be considered in the context of the economic and energy
sector reform priorities of these programmes.
A proactive co-operation and export policy to support renewable energies will be
stimulated, by enlarging the scope and basis of the relevant European Union energy
programmes such as SYNERGY, as well as the Scientific and Technological
Cooperation components of the 5th RTD Framework Programme. The action list
should include the following:
• support for co-operation on energy planning and integrated resource planning
with emerging economies, in order to optimise exploitation of the available
renewable energy potential;
• support for exporters, in the form of credit guarantees and “currency turmoil”
insurance and in the organisation of trade missions, fairs, joint workshops etc.;
• • collaboration in the implementation of the “Word Solar Programme 1996-2005”
which intends to realize worldwide, and especially in the developing countries,
high priority regional and national projects;
• • cooperation with the international financing organisations such as the World
Bank and the Global Environment Facility GEF.
Special action concerning ACP Countries :
• a special initiative to promote solar electricity (photovoltaics for deprived rural
areas in third countries currently without electricity)
38
;
• encourage increased use of alternative renewable energy sources to resolve the
problems caused by overconsumption of fuelwood in both rural and urban areas
of developing countries;
• encourage the development of suitable fuelwood species plantation;
• stepping up the ACP States’ research and development activities as regards the
development of new and renewable energy sources;
Special action concerning associated countries:
• • a special initiative to promote the process of approximation of Community
legislation on renewables in associated countries;
• • implementation of Protocols concerning the participation of associated countries
in promotional EU programmes such as ALTENER;
• • involving associated and third countries in demonstration programmes under the
5th RTD Framework Programme, in addition to specific energy policy
programmes such as SYNERGY and ALTENER;
38
Today, an estimated 2 billion people worldwide lack access to modern energy sources.
Photovoltaics technology is now cost-effective in stand-alone power applications remote fom utility
grids.
24
2.4 Strengthening co-operation between Member States
For successful implementation of the European Union Strategy and Action Plan for
renewable energies, effective co-operation between Member States is of paramount
importance. At present serious discrepancies persist in levels of advancement both
as regards renewable energy implementation in the different Member States, and
between the technologies themselves. Co-operation within a Europe-wide
implementation strategy offers considerable added value to Member States, as
successful policies and experiences at national level can be shared, and national
renewables goals better co-ordinated, with the result that the efficiency of overall
policies as well as particular projects will increase.
The Commission adopted on 4 October 1996 a proposal for a Council Decision
concerning the Organisation of Co-operation around Agreed Community Energy
Objectives
39
. The draft decision identifies the promotion of renewable energy
resources as one of the agreed common energy objectives and calls for supportive
measures at both Community and national levels with the aim of achieving a
significant share of renewables in primary energy production in the Community by
2010. Concrete measures will be proposed as part of the implementation of the
Council Decision, once adopted.
2.5 Support Measures
2.5.1 Targeted Promotion
The ALTENER II
40
programme, and the subsequent programme included in the
proposed Energy Framework Programme
41
will have a crucial role to play as the
basic instrument for the Action plan.
ALTENER II will continue to support the development of sectoral market strategies,
standards and harmonisation. Support will be given to RES planning at national,
regional and local levels and to information and education infrastructures. Support
will also be given to the development of new market and financial instruments.
Dissemination of information is also a major action in ALTENER II. In addition,
promotion of innovative and efficient renewable energy technologies and
dissemination of related information are also supported by JOULE-THERMIE.
In order to enhance the impact of ALTENER II in RES market penetration, new
measures to help overcome obstacles and increase operational capacity for the
production of energy from RES have been proposed. These actions will be
targeted on assisting biomass, solar thermal and PV, buildings, wind, small hydro
and geothermal to penetrate the market. Actions under ALTENER II will also be
crucial for the preparation of the Renewables Campaign for Take-off (see chapter
3).
39
COM (97)436 final, 26.08.97. Proposal for a Council Decision concerning the organisation of co-
operation around Community energy objectives
40
COM(97)87 final of 12.3.1997, Proposal for a Council Decision concerning a multiannual
programme for the promotion of RES (ALTENER II)
41
COM (97)550, 18.11.97, Proposal for a Council Decision establishing a multiannual framework
programme for actions in the energy sector, and associated measures.
25
Monitoring the progress in the implementation of the RES Strategy in Member
States and in the Community will be critical and measures in ALTENER II to support
monitoring and evaluation are essential (see chapter 4).
In order to achieve the objectives for renewables, a major effort will be required to
harness the potential, influence and experience of all manner of associations and
bodies such as citizens’ groups (grass-roots organisations), relevant non-
governmental organisations, and pressure-groups including the international
environmental protection organisations.
At local and regional level, the creation of energy agencies under the SAVE II
programme allows local authorities to play an important role in the promotion of
renewable energies, mobilising local partnerships, focusing on practical actions and
of becoming a key initiator of policies at local level.
The setting up of effective networks is important in order to convey information on
renewables at all levels - from the technological to the financial to the local public
environmental concerns. A major feature of the Commission effort in this area will
be the use of Internet websites.
Other public relations tools such as industry awards, renewable energy prizes,
conferences and other open events can and already do have a strong promotional
effect in the renewables field, but careful selection in the allocation of support is
essential to avoid dispersion of effort.
2.5.2 Market Acceptability and Consumer Protection
The following actions are planned:
• consumer information on quality goods and services for renewable energies. This
information is to be disseminated in such a way that customers can choose
anywhere in the internal market the most appropriate European product and
source at the least price;
• standards should be established at European level but also at a wider
international level in order to support exports. Since standardisation work in the
renewables field started only in 1995, an increased effort has to be made to
extend standards to all commercial equipment; provisional certification has also
to be promoted. The EU Joint Research Centre has an important role to play in
this respect, giving technical support to the CEN and CENELEC in the framework
of ALTENER;
• in order to respond to and mobilise the existing strong public support for
renewable energies, products should be clearly labelled as such;
• best practice experience in particular for services, system operation (a typical
field for this is passive solar applications) should be collected and widely
disseminated;
• regional focal points for information and consumer advice should be set up. The
existing regional and city energy centres - and those which continue to be set up
under the SAVE II programme are in most cases ideally situated and equipped to
take on this role.
2.5.3 Better positioning for RES on the institutional banks and commercial
finance market
International financial institutions such as the EIB (incl. EIF etc.) and the EBRD and
their national counterparts have already become involved in the financing of
26
renewable energies, in particular hydro and wind plants. Their role can be
strengthened considerably by :
• providing soft loans and credit guarantees;
• creating special facilities for renewable energies;
• developing schemes facilitating loans for small renewable energy projects.
Specific action focused on commercial banks will be promoted:
• guidelines and risk evaluation schemes to help banks to audit RES businesses
applying for loans;
• EU support to packaged projects in order to facilitate soft loans access.
2.5.4 Renewable Energy Networking
Transnational co-operation in Europe is important in order to exchange experience
and to increase effectiveness. As the scale of renewable energies implementation
becomes more significant, the following initiatives should be taken:
• networks of regions, islands, and cities aiming at a 100% energy supply from
renewable energies by 2010;
• networks of universities and schools pioneering renewable energies;
• renewable energies technology research and technological development
networks;
• renewable energies twinning of cities, schools, farms etc.;
• temporary networks for specific tasks;
• the virtual centre “AGORES” for the collection and dissemination of information
on: regulation, calls for proposals, Community and Member States programmes,
technical state-of-art, training, financing, assistance, etc.
27
Chapter 3 Campaign for take-off
3.1 Introduction
Even though renewable energy technologies have reached a certain maturity, there
are many obstacles to their market penetration.In order to assist a real take off of
renewables for large scale penetration, make progress towards the objective of
doubling the EU renewable energy sources share by 2010, and ensure a co-
ordinated approach throughout the Community, the Commission proposes a
campaign for take off of renewables. This will need to be undertaken over a number
of years and will require close cooperation between the Member States and the
Commission. The proposed campaign aims to promote the implementation of large-
scale projects in different renewable energy sectors and will send clear signals for
greater use of renewable energy sources. In preparation for the Campaign, the
Commission will catalogue and analyse all existing European Union and Member
States’ activities and programmes which could provide support for such a campaign.
The conclusion of this preparatory survey will be reported to Council and to the
European Parliament. Detailed guidelines for the campaign will then be drawn up,
together with the Member States.
It is clear that the role of Member States is critical in this concerted action for
promoting large scale implementation of renewables. The Commission’s role will be
to establish the framework, to provide technical and financial assistance, where
appropriate, and to coordinate actions. For such a major effort to succeed, it is also
important to implicate all the interested parties and bodies in promoting renewables
through the means available to them. The involvement of these actors can include
the negotiation of commitments and voluntary agreements where appropriate.
Many parties can be potentially active in a campaign to promote renewables,
including the following:
• the regions;
• municipalities and their distribution utilities;
• the oil and car industries;
• town and country planning bodies and architects;
• authorities in charge of public procurement;
• industry associations and utilities;
• farmers associations;
• forest-based industries and cooperatives.
In the preparatory phase for the campaign, proposals will be made for their
involvement and contribution.
3.2 Key Actions
The following key actions are proposed to be promoted during the campaign:
3.2.1 1,000,000 Photovoltaic Systems
Photovoltaics (PV) is a high technology with strong export potential in a very
competitive global market and fierce competition with Japan and the USA. There is
a very motivated PV industry in Europe which should be supported in its effort to
bring domestic and export markets off the ground. Besides the leading European
28
oil and other big companies, many SMEs are active in the field. There is much
scope for their number to increase and for large numbers of jobs to be created.
An ambitious and very visible promotion campaign is needed in order to provide a
sufficiently large market base to enable the prices to fall substantially, and so the
Campaign will comprise an EU wide 500,000 PV roof and façade initiative for the
domestic market and an export initiative for 500,000 PV village systems to kick start
decentralised electrification in developing countries. The basic capacity for each of
the systems (the integrated building systems in Europe as well as the solar village
schemes overseas), is 1kW
e
i.e. the total capacity to be installed in this Campaign
by 2010 is 1 GW
p
.
A large part of the future PV market will be associated with building applications,
especially in Europe where the electricity grid is omnipresent . A 500,000 PV roof
and facade campaign or the European Union will represent, on the basis of 1kW
generators, a total capacity of 500 MW
p
and will make up one-sixth of the 3 GW
p
estimated implementation potential outlined in Annex II. This is a very significant
campaign for the future of PV, even though it will affect less than 2% of the 30
million houses and non-residential units which will probably be built between now
and 2010. This is without taking into consideration the equally large potential for PV
retrofitting in existing buildings.
The rationale of such a goal in a global solar market is its consistency with the
corresponding goals fixed in Japan and the United States. The first 1000 PV roof
programme implemented in Germany at the beginning of the 1990’s proved highly
successful for market introduction of PV, quality assurance and cost improvements.
Japan is implementing in 1997 a 10,000 roof programme which is funded for one-
third from public sources. The total investment cost of a 500,000 roof programme
would be 1.5 billion ECU (assuming 1kW generators at an average price over the
13 year period of 3 ECU/W). On average, it would mean approximately the
installation of 40,000 systems per year. Total yearly investment costs would then be
120 million ECU of which one third i.e. 40 million ECU might be provided from public
funds. The equivalent amounts will be used for the export initiative. Although there
are virtually no regulations in place to promote PV in the European Union, there is a
wide spectrum of funding and fiscal incentives for PV employed today. The most
important ones are the 50 % investment subsidy in some German Länder, Greece
and other Member States, a full cost electricity tariff for PV energy supplied to the
grid in some German cities and accelerated depreciation in the Netherlands. A less
generous support of one-third of the investment cost from public funds which is
currently applied in Japan may actually be sufficient to open up the commercial
markets.
This campaign should incorporate specific actions such as:
• promotion of photovoltaics in schools and other public buildings. This action has
not only an educational effect to increase knowledge and awareness at an early
and receptive age, but it is technically sound as it minimises the need for storage
capacity and in many cases can benefit from advantageous financing;
• incentives for photovoltaics applications in tourism, and sports and recreational
facilities, which offers considerable potential due to strongly peaking seasonal
demand in mass tourism and the fact that a large proportion of tourist sites are
isolated and/or mountainous or otherwise expensive to supply from grids;
29
• incentives for financing from public funds and city utilities, for instance by
spreading the extra cost for photovoltaics over the entire customer base as
opposed to the sole purchasers for solar electricity.
3.2.2 10,000 MW of Large Wind Farms
Wind energy today is competitive and has already been widely installed at specific
sites with favourable conditions. Areas potentially suitable for wind energy
applications are dispersed throughout the European Union. At present, some have
to bear additional costs due to their particular location which increases installation
and/or operational costs (areas far from existing grids, in very cold, hot or dusty
climates, offshore, islands, remote rural areas etc.). In particular, there is enormous
potential for offshore wind farms. They have the advantage of higher wind speeds,
although access is clearly more difficult. In order to achieve large- scale penetration
of wind energy in the European Union these areas have also to be used. A specific
campaign is thus required to support large wind farms in such locations and the
development of such new or adapted technology as may be appropriate. This
programme will clearly imply a major role for the utilities most concerned.
The 10,000 MW of wind farms proposed here represent 25% of the feasible overall
wind energy penetration for 2010 outlined in Annex II. No public financing will be
needed for the 30,000 MW remaining installed capacity provided that a fair access
to the European grids for the wind turbines is guaranteed, as described in section
2.2.1. An additional help is needed only for the less favourable or unconventional
applications described above.
The average ex-works cost of wind turbines for wind farms is today less than 800
ECU/kW of installed capacity. Project preparation cost depends heavily on local
circumstances, such as condition of the soil, road conditions, proximity to electrical
grid sub-stations, etc. For flat onshore sites the overall cost of an installed wind farm
is about 1,000 ECU/kW. This cost could increase substantially for offshore and
unconventional site applications. On the other hand, costs are expected to fall by at
least 30% by 2010. It is then logical to assume the total investment cost of the
proposed 10,000 MW will be in the order of 10 billion ECU. A public expenditure of
15% would amount to 1.5 billion ECU throughout the Union or a little more than 100
million ECU per year.
3.2.3 10,000 MW
th
of biomass installations
Bioenergy is among the most promising areas within the biomass sector, and
combined heat and power using biomass has the greatest potential in volume
among all renewable energies. Consequently, a campaign to promote and support
decentralised biopower installations throughout the European Union is essential.
Such installations could range in scale from a few hundred kW to multi-MW and
combine different technologies, as appropriate to local circumstances, including fuel
switching. Wherever possible use should be made of opportunities for
rationalisation through regional and local level implementation.
The estimated contribution of biomass in combined heat and power plants, as
outlined in Annex II.1, could be 26 Mtoe. This corresponds typically to an overall
installed capacity of approximately 20 GW
e
or 60 GW
th
. The promotion of 10 GW
th
through this campaign represents 1/6 of the total estimated contribution biomass
could make by 2010. It will in particular be important to take measures in the early
years of this action plan in order to launch a bioenergy market.
30
The total installation cost of such an initiative would be in the order of 5 billion ECU,
assuming an average cost of 500 ECU/kW
th
of installed capacity. A public
expenditure of 20% would amount to 1 billion ECU for the whole period for the
whole Union or around 80 million ECU per year. The biomass feedstock cost would
amount to 270 million ECU per year, if we assume a 100 ECU/toe.
3.2.4 Integration of Renewable Energies in 100 Communities
To optimise the available potential of renewable energy technologies requires them
to be used together wherever this is productive either in integrated systems for local
power supply or, on the other hand, in dispersed schemes for regional power
supply. These obviously have to be adapted to the conditions of each specific
location, so as to ensure reliable power supply to the required quality and continuity
standards.
As part of this campaign action, a number of pilot communities, regions, cities and
islands will be selected from those which can reasonably aim at 100% power supply
from renewables. These pioneer collectivities, in order to feature as credible
pacemakers, should be of varying size and characteristics. On a small scale, the
units could be blocks of buildings, new neighbourhoods in residential areas,
recreational areas, small rural areas, or isolated ones such as islands or mountain
communities. On a larger scale, “solar cities” should be identified, as well as large
rural areas, and administrative regions which can benefit from an existing sense of
community. arge islands (e.g. Sicily, Sardinia, Crete, Rhodes, Mallorca, Canary
Islands or Madeira) could also be used as pilot regions.
In order to specify the actions required and to monitor progress, a strategy including
schedules, priorities and players must be defined. Local and regional authorities as
well as regional energy centres have a central role to play in implementing this
project.
Preference should be given to activities involving combinations of technology and
application in such a way that such projects have the potential to cover the entire
range from pre-feasibility study, through feasibility study and demonstration phase
(mainly programme financed), to large-scale implementation with (mainly)
commercial international financing.
The costs of this initiative are difficult to define with any precision at this stage due
to the different size and nature of each possible action. Projects implemented in
other sectors of the present campaign can also be a part of the actions promoted
here. As a first estimate one may assume a yearly cost of 200 million ECU, with a
public funding in the order of 20% or 40 million ECU per year throughout the Union
3.3 Estimates of some of the costs and benefits
Cost estimates and an investment plan to be financed by all partners, Community
and Member States’ programmes and funds and also by institutional and
commercial banks, utilities and others, will have to be drawn up. The effects of this
Campaign on CO
2
emissions and employment will also be analysed in detail. As a
first estimate, the Campaign could involve 20.5 billion ECU of investments for the
period 1998-2010. Public funding from all possible sources (European, national,
regional, local), to stimulate the Campaign could be in the order of 4 billion ECU or
31
300 million ECU per year. At the same time, it must be underlined that 3.3 billion
ECU will be saved in avoided fuel cost to 2010 and external benefits in the order of
2 billion ECU per year are estimated.
The following table summarises the figures related to the Campaign and estimates
the direct benefits in avoided fuel costs and reduction of CO
2
emissions.
Campaign
Action
Proposed
New
Installed
Capacity
Estimated
Total
Investment
Cost
billion ECU
Suggested
Public
Funding
billion ECU
Total
Avoided
Fuel Costs
billion ECU
CO2
Reduction
million
tn/year
1.1,000,000 PV
systems
1,000 MWp 3 1 0.07 1
2.10,000 MW
Wind Farms
10,000 MW 10 1.5 2.8 20
3.10,000 MWth
Biomass
10,000
MWth
5 1 - 16
4.Integration in
100
Communities
1,500 MW 2.5 0.5 0.43 3
Total 20.5 4 3.3 40
32
Chapter 4 Follow up and Implementation
4.1 Implementation and Monitoring of Progress
During the period of implementation of the Strategy and Action Plan outlined in this
White Paper, there is the need for a constant monitoring of activities in order to
follow closely the progress achieved in terms of penetration of RES, and to ensure
and improve co-ordination of programmes and policies under the responsibilities of
the Community and the Member States.
There is,in this context a case for improving the co-ordination and data collection as
regards the action on renewables undertaken within the various programmes of the
Community and the activities of Member States, and for developing a unified
acceptable system of statistics based on the substitution principle. The Commission,
in the framework of the ALTENER II programme and in co-operation with the
Statistical Office and the JRC will create a monitoring scheme which can register all
Community support given to renewables as well as the action undertaken at national
level and progress made in terms of renewables penetration in different sectors. In
this way policies and programmes affecting renewables and progress towards
increasing the share of renewables can be monitored reliably and effectively.
4.2 Internal Co-ordination of EU Policies and Programmes
A major added value of a Community Strategy is the proposed integration of the
promotion of RES in several policy areas. In order to ensure the effective follow-up
and implementation of this aspect within the Commission, the internal co-ordination
will be strengthened to deal with all policy aspects of renewable energy integration
in the Community’s policies and areas of responsibility.
4.3 Implementation by Member States and Co-operation at EU
level.
The active participation of the Member States in the further development and
implementation of the Strategy, as well as in the assessment and monitoring of
progress is essential. Co-operation within an EU-framework provides added-value
for the effectiveness of the actions and also offers considerable benefit to Member
States, as successful policies and experiences on national and local levels can be
disseminated and objectives and actions can be coordinated. Joint policies and
transnational Projects will increase efficiency.
A working group involving Commission and Member States representatives will be
established in order to monitor the measures undertaken and evaluate the impact of
energy policy decisions at all levels with regard to the use of renewable energy
sources. Member States need to adopt national goals and strategies, and these will
be compared alongside European wide action discussed and to be put into effect.
The Member States, as part of their contribution to this process, will be asked to
report to the working group the feasible contribution they can realistically make to
the 2010 target, including how they intend to promote renewables sector by sector.
The working group should also co-ordinate responses and form a view on the
likelihood of the RES Community objective being achieved,and if necessary
stimulate new measures.
33
4.4 Implementation of Action Plan - Next Steps
The Community Strategy presented above is the basic framework for action for
achieving the indicative objective of 12% penetration of renewables by 2010. In
order to implement the Strategy, concrete measures are proposed in an Action Plan
(Annex I), which the Strategy sets out the individual actions by categories, and
indicates the form of each action. Actions are attributed to the EU, Member States
or both, depending on the nature of the action and in accordance with the principle
of subsidiarity. Whole-hearted commitment will be necessary from all the players
involved, EU institutions, Member States, regional and local authorities, industry and
consumers, to implement this Action Plan and, in so doing, achieve the objective
adopted for a significant increase in the share of renewable energies in the total
inland energy consumption by 2010. If the objective of doubling the share is
achieved it will have an important impact on reducing the EU’s CO
2
emission as
well as contribute to job creation and regional economic development.
A Communication to the European Parliament, the Council, the Economic and
Social Committee and the Committee of the Regions will be produced every two
years in order to evaluate the success of the strategy and recommend a revised
direction and/or new actions if sufficient progress in the penetration of renewables
does not appear to be made.
The European Parliament, the Council, , the Economic and Social Committee and
the Committee of the Regions are invited to endorse the EU Strategy and Action
Plan set out in this White Paper, and to support its implementation over the period
to 2010.
34
Annex I
PRELIMINARY INDICATIVE ACTION PLAN FOR RES 1998-2010
(Includes some actions already initiated)
ACTION PLAN European Union Member States Chapter
1. Objectives and Strategies
Community Strategy and overall objectiveof 12% for the EU up
to 2010
Communication of the
Commission - White Paper -
(1997)
- 1.3.1
Member States setting individual objectives to 2005 and 2010
and establishing strategies
- action 1.3.1
2. Internal Market Measures
Fair Access for RES to the Electricity Market Proposal for a Directive (1998) transposition 2.2.1
Restructuring the Community Framework for the Taxation of
Energy Products
Proposal for a revised Directive
(COM/97/30)
transposition or
harmonisation
2.2.2
Start-up subsidies for new production plants. SME’s and new job
creation
- action 2.2.2.
Development or/and harmonisation concerning “golden” or
“green” funds
1998 : Promotion
2000 : Communication of the
Commission
action 2.2.2.
Progressive increase of the market share of liquid biofuels action 2.2.3
Promotion of Biofuels in transport fuel Proposal for a Directive
COM(97)248
transposition 2.2.3
Promotion of biofuels in low-sulphur liquid fuels Proposal for a Directive
COM(97)88
transposition 2.2.3
Extend the scope of the SAVE Directive to passive and active
solar systems in buildings to take into account the energy gains
for heating and cooling
Proposal for Amendment of
Directive 93/76/EC (1998)
transposition 2.2.4.
Extend the scope of the Directive to building materials with a
low intrinsic energy content
Proposal for Amendment of
Directive 89/106/EC (1998)
transposition 2.2.4.
35
3. Reinforcing Community Policies
Inclusion of Actions on Renewables in the overall strategy for
combatting climate change
Communication of the
Commission COM(97)481
- 2.3.1.
Adoption and implementation of the 5th Framework Programme
for RTD (1998-2002)
Decision of the EP and the
Council (.../.../...)
- 2.3.4.
RES to be included in the main priorities jointly with employment
and environment in the regional fund new phase (2000-2006)
To be decided in 1999. implementation 2.3.5.
and
2.3.6.
Promotion of biomass in CAP and rural development proposals
for 2000-2006
CAP proposals/Agenda 2000
Decision awaited 1998
2.3.6.
Review of Reg. 2078/92 in context of Agenda 2000
Examination of adequacy of existing instruments and possibility
of further harmonisation
Review of Reg. 2078/92 and
other existing instruments
2.3.6
Definition of an energy strategy for the co-operation with ACP
countries, in the Lomé Convention Framework, emphasizing the
role of RES
Communication 2.3.7
Sufficient funding from TACIS and PHARE for RES in order to
implement Protocoles opening EU support programmes
ALTENER and SYNERGY to associated countries. Appropriate
agreements with Mediterranean area countries as well as other
areas. Collaboration in the implementation of the World Solar
Programme 1996-2005.
Specific Protocols
Communication
2.3.7.
4. Strengthening Co-operation between Member States
Strengthening co-operation between MS under Council Decision
on the Organisation of Co-operation around Agreed Community
Energy Objectives
Proposal for a Council Decision
(COM/.../...)
implementation 2.4
5. Support measures
EU programme to promote RES, open to CEECs and Cyprus,
aimed at creating the necessary conditions for the
implementation of the Action Plan particularly the legal, socio-
economic and administrative conditions and encourage private
Proposal for a Council Decision
“ALTENER II”
(COM/97/87)
Proposal for Framework
submission of
projets
36
and public investments in the production and use of energy from
RES to include specific actions for the identification and
promotion of business opportunities
Programme for Energy Actions
1998-2002
Consumer information campaigns. Targeted information action
on the protection of environment with simultaneous energy
recovery
EU actions 2.5.2
Development of European standards and certifications CEN and CENELEC under
ALTENER
certification by
agreed bodies
2.5.2
Better positioning for RES on the institutional banks and
commercial finance market by developing schemes facilitating
investments in RES projects
agreements and projects agreements 2.5.3
Creation of a virtual centre “AGORES” for collection and
dissemination of information
action under ALTENER data 2.5.4
6. Campaign for take-off
1,000,000 PV systems half in EU, half in third countries. EU promotion and financial
contribution
co-funding 3.1
10,000 MW of large wind farm EU promotion and financial
contribution
co-funding 3.2
10,000 MWth of biomass installations EU promotion and financial
contribution
co-funding 3.3
Integration of Renewable Energies in 100 Communities EU promotion and financial
contribution
co-funding 3.4
7. Follow-up
Scheme to monitor progress EU action under ALTENER data 4.1
Improvement of data collection and Statistics Commission action 4.1
Inter-services co-ordination group Commission action 4.2
Creation of a Working Group involving Commission and
Member States
Commission action 4.3
Regular reporting to the Union’s Institutions Commission action 4.4
37
Annex II
Estimated Contributions by Sector - A scenario for 2010
In this Annex, the realistic potential for exploitation of the different renewable energy
sources is presented within the framework of the Strategy and Action Plan. The
contribution that the various renewable energy sectors could make by 2010 towards
achieving the indicative objective of 12% share of renewables is estimated. These
estimates present one particular scenario of RES development - it is clear that the
market could evolve differently. Nonetheless, it is considered important to present an
overall view of projected developments, in order to help orientate policy instruments
and campaigns.
II.1 Biomass
Currently biomass accounts for about 3% of total inland energy consumption (EU15).
However in the new Member States - Austria, Finland and Sweden - this renewable
source already accounts for 12%, 23% and 18% respectively of primary energy
supply. It is difficult to make estimates in this area on future development as regards
the extent to which the biomass and its distribution sector will expand. Under the
particular scenario followed in this Annex, use of three times the present amount of
44.8 Mtoe is considered to be a possible development for 2010, on condition that
effective measures are in fact adopted. This would mean additional biomass
amounting to 90 Mtoe, equivalent to 8.5% of the projected total energy consumption in
that year.
Biomass is a widespread resource as it includes in addition to woody biomass and the
residues of the wood working industry, energy crops, agricultural residues and agro-
food effluents, manures as well as the organic fraction of municipal solid waste or
source, separated household waste and sewage sludge. Energy from biomass is
versatile in that it can produce electricity, heat, or transport fuel as appropriate, and
unlike electricity it can be stored - simply and usually economically. In addition,
production units can range from small scale up to multi-megawatt size.
The additional estimated bioenergy use of 90 Mtoe by 2010 would be derived from
agricultural, forest, and forest industry residues, waste streams as well as from new
energy crops. Biomass exploitation has the double benefit of exploiting an important
renewable energy resource and also of improving the environment and climate.
Clearly in the development of biomass particular care will need to be taken to
safeguard bio-diversity in the EU. Strategies and approaches should be adopted that
minimise the impacts on bio-diversity.
The advantages of exploiting biomass, based on new technologies, can be clearly
seen in the case of biogas exploitation. This consists largely of methane, a gas with a
large greenhouse impact. It is estimated that the total energy content of land fill gas
and digestible agricultural wastes in the EU exceeds 80 Mtoe. The contribution that
could be made by biogas exploitation from livestock production, agro-industrial
effluents, sewage treatment and landfill by 2010 is estimated at 15 Mtoe. A stronger
exploitation of the biogas resource is indeed in line with the Commission’s strategy for
38
reducing methane emissions on environmental grounds. This point has received
particular attention in the preparation of a global agreement on greenhouse gas
emissions. On the other hand, a new directive on landfill which is currently being
discussed by the European Union institutions is rather going to limit the production of
biogas from land fill : The directive plans a 75% reduction of biodegradable rubbish
that can be dumped in landfill sites by 2010. However, the volume of the organic
matter that could be used as feed stock for the production of biogas by anaerobic
digestion would increase and the organic matter landfilled before 2010 will continue to
produce methane by fermentation for several years after 2010.
As far as solid residues are concerned, there is first at all a huge potential so far
unexploited in the form of wood and agricultural residues, straw etc. which exceeds
150 Mtoe per year. It is estimated that 30 Mtoe can be mobilised annually by 2010 for
the power and the heating and industrial process heat market.
Energy crops also need to be considered if the objective of doubling the renewable
energies’ share by 2010 is to be achieved. In total, the contribution for bioenergy
production from crops by 2010 is estimated at 45 Mtoe i.e. an amount equal to that
anticipated for bioenergy from residues and wastes. Of this 18Mtoe could be in the
form of liquid biofuels (including however liquid biofuels from non-energy crops such
as wood residues, used vegetal oils, or biogas used as motor fuel) and 27 Mtoe as
biomass for heat and/or power, under one particular scenario.
Liquid biofuels are currently the least competitive product from biomass in the market
place, given the low oil prices. It is, however, important to ensure their continuing and
growing, presence in the fuel market since the short/medium term oil-prices are
unpredictable, and in the longer term alternatives to the finite oil reserves are needed.
The energy demand in the transport sector is expected to grow strongly in the future
and so will the emission problems associated with it, and the external dependence on
oil, if no alternatives are available. Biofuels have an overall positive energy balance,
although this varies from crop to crop, and also depends on the crop replaced.
Whether there is such an increase will depend crucially on closing the gap between
production costs of bio-fuels and competing products.
Future development of biofuels will have to be based mostly on production in Europe.
In 1993 the "utilised agricultural area" of EU15 was approx. 141 million hectares of
which 76 million hectares were "arable land". t is doubtful that more than a maximum
of 10 Million hectares, i.e. 7.1% of the agricultural area would be sustainable for
biomass crop production, the choice of crop species for liquid biofuels would need to
be limited to the most productive ones with the maximum benefit and minimum
environmental impact.
As far as the potential contribution of 27 Mtoe from solid cellulosic bioenergy crops is
concerned, the options for production are manifold. This material can be derived from
short rotation forestry, (ex: willow), or non wood, energy crops (ex: miscantthus) also
good for combustion and gasification. There are various plant species suitable for
specific types of agricultural land. There is a choice of crops for short rotation forestry
on rather marginal land of lower value. At yields of 10 tonnes per hectare and year, a
production of for example, 27 Mtoe of solid biomass by 2010 would imply a cultivated
area of 6.3 Million hectares of land. There exist also various options for high yield C4
plants, annual or perennial ones. They deliver about twice as much material as the
short rotation forestry.
39
There are also plants which produce simultaneously cellulosic materials and
feedstocks for liquid biofuels. An example is sweet sorghum which typically yields 5
m³ bioethanol and 20 t of dry cellulosic material per hectare and year. It is important
here to note that the fast-growing plants have several other attractions : many are
annual and fit into conventional agricultural practice; they do not require the best
arable land; they require less than half the water and fertilisers required by fast
growing crops, such as maize. There is also a promising prospect for production of
liquid biofuels from cellulosic matter. All options of species should be carefully
examined with preference given to the high-yielding/low input crops, which respect
biodiversity. In any case, it seems appropriate in any biomass development strategy to
set an upper maximum a limit for land use. It is estimated, in this scenario approach,
that if the maximum reasonable development of biomass is made by 2010, as much
as 10 Million hectares of land would be needed, much of it marginal land. Clearly, the
environmental impacts of this development would need to be assessed, and the
growth of the biomass sector would have to be compatible with sustainable
development.
The overall volume of the solid vegetal biomass market is estimated at 57 Mtoe in
2010, the projected feedstocks being energy crops (27 Mtoe) and residues (30 Mtoe).
If the market indeed develops in this direction, it is predicted that 25 Mtoe would be
taken up by the market for direct heating and industrial process heat and 32 Mtoe
would go to power generation. A portion of these 32 Mtoe, i.e. 6 Mtoe could be used
in cofiring plants in combination with coal and the remaining 26 Mtoe in combined heat
and power installations
Projected additional bioenergy use by 2010
under the scenario presented 90 Mtoe
∗ Biogas exploitation (livestock production, sewage treatment, landfills) 15 Mtoe
∗ Agricultural and Forest Residues 30 Mtoe
∗ Energy Crops 45 Mtoe
II.2 Hydro Power
Hydro power is a proven mature technology and its operation has been competitive
with other commercial energy sources for many years. However, the existing technical
and economic potential for large hydro power plants has either been used, or is
unavailable due to environmental constraints. In contrast to this situation, only about
20% of the economic potential for small hydro power plants has been so far exploited.
In addition many existing small hydro plants are out of operation, often as a result of a
lack of specific incentives as to maintenance and other costs, as well as the overall
grid pricing situation, but can be refurbished with relatively modest outlay, especially in
the case of small typically rural and relatively isolated installations. European Union
countries dominate the world market for small hydro equipment.
In 1995 approximately 307 TWh of hydro energy was produced in the Union from an
overall capacity of 92 GW. Small hydro plants, i.e. plants smaller than 10 MW
accounted for 10% of installed capacity (9.3 GW) and produced 37 TWh.
40
An increase of 10 % in installed capacity of large hydro (8,500 MW) is likely by 2010 if
one takes into account projects already planned, and some environmentally
acceptable development. . An additional installed capacity of 4,500 MW of small
hydro plants by 2010 is a realistic contribution which could be achieved given a more
favourable regulatory environment, since these small projects, if correctly planned,
can have much lower environmental impact.
II.3 Wind Energy
Wind energy technology is developing fast. The average weight of wind turbines has
halved in five years, the annual energy output per turbine has increased fourfold, and
costs have decreased by a factor of ten in ten years. At present, the average size of
new machines being installed is 600 kW, although there are a few machines as
powerful as 1.5 MW on the market. About 90% of the world’s manufacturers of
medium and large-sized wind turbines are European. The largest machines are at
present produced only by European manufacturers. Wind turbines give rise to some
noise pollution, and research effort is being successfully undertaken to reduce noise
emissions.
Wind energy is in some Member States currently the fastest growing energy source
for electricity production. Europe is the world leader in wind energy, with more
installed capacity than any other region of the world: 3.5 GW in EU15 at the end of
1996. There has been an average annual installation growth rate of 36% in the past
five years, reaching, at present, an annual rate of 1 GW/year. If production continues
to increase by the same rate, yearly production of turbines in 2010 will amount to
more than 20 GW and the accumulated capacity will be more than 100 GW. A
constant installation rate at this current value (~ 1 GW per year) would mean 18 GW
of installed generation capacity in 2010. Therefore an estimated contribution of 40
GW wind power in the RES development by 2010 for the EU15, while ambitious, is
realistic given the strength of these trends. The campaign for take-off for 10GW
should provide a basis for wider implementation of wind powered electricity generation
under more difficult conditions.
A significant contribution from wind energy for 2010 can only be achieved if conditions
of access to the European grids are fair for the wind generators. A major factor in the
recent market success of wind energy in Member States such as Denmark, Spain,
and in particular in Germany, which now has the world’s largest electricity generating
capacity from wind, has been the price to be paid by utilities to wind generators for
sale onto the grid. Any major changes that might be made in this regulatory structure
should encourage and not jeopardise the appropriate development of wind energy.
II.4 Solar Thermal
Solar thermal heating technology is almost fully mature. There is nevertheless scope
for further cost reductions from larger scale production and improvements in both
production processes and marketing. At present in EU-15 about 300 small and
medium enterprises are active in this sector, directly employing about 10,000 people.
Solar thermal heating is cost-competitive today as compared with electric water
heating, in particular in the southern parts of the European Union. Design is constantly
being improved to minimise visual impact.
41
In 1995 there were 6.5 Million m
2
of solar collectors installed in the European Union
with a 15% growth rate over the preceding few years. The annual current installation
rate is 1,000,000 m
2
, concentrated in three EU member countries - Austria, Germany,
and Greece. A growth rate of 25% could be achieved if the other 12 European Union
member countries even partially followed this example. At a 20% annual growth rate,
total installed capacity would be 100 Million m
2
in 2010 which taking all relevant
factors into consideration is an achievable contribution to RES development. Use of
large collector fields in large-scale applications such as district heating systems - the
most economically rational way of using solar thermal energy - would in itself stimulate
a dramatic increase in collector production. Public awareness campaigns can
effectively also boost the market as has been borne out by experience in Greece.
II.5 Photovoltaics
Solar photovoltaic electricity generation is very much a recent and close-to-state-of-
the-art renewable energy technology. Costs have fallen dramatically with a 25% cost
decrease over the past 5 years, but are still significantly higher than for electricity
generated from conventional fuels. The European Union, currently accounts for about
one third of annual, more than 100 MW
p
, world-wide photovoltaic module production
and use. The European industry has built up a leading position in the field of
photovoltaic incorporation in buildings. Europe also has the lead in applications of
photovoltaics in developing countries.
Eurostat estimates that 32 MW
p
of photovoltaic generation capacity was installed
(EU12) at the end of 1995. The most recent estimate from the European Photovoltaic
Industry Association (EPIA) suggests as much as 70 MW
p
(EU 15). Photovoltaics is
very much a global market. World annual module production is forecast at 2.4 GW
p
by
2010. To attain an annual output of 2.4 GW
p
world-wide, would require annual growth
of 25%. Such an estimate is in fact compatible with the assumptions used in an EPIA
study commissioned by the Commission.
Under the above assumptions a contribution of 3 GW
p
installed capacity in EU15 from
photovoltaics by 2010 seems ambitious but realistic. It is forecast that this would be
accounted for mainly by grid-connected installations incorporated into the structure of
buildings (roofs and façades) as well as a certain number of large-scale power plants
(0.5-5.0 MW
p
). Anyhow, PV technology should be considered in a more general way
not just as a measure of GW
p
installed. As it is the case for solar thermal applications,
PV systems are always associated with Rational Use of Energy measures in buildings
and can be evaluated as a part of the significant effort of reducing energy
consumption, which always should accompany their utilisation. Grid-connected
photovoltaic generation is not competitive at currently prevailing classical fuel-based
generation costs and also compared with wind turbines, but it could be based on an
average cost level of 3 ECU/W
p
of installed capacity, which on the basis of current
trends could happen around 2005. A sizeable initiative at European level for
incorporating photovoltaic modules in roofs and facades can thus play a major part in
definitively launching this technology. Secondary advantages of building integration
such as lighting, heat supply, façade substitution should be valorised. The concept of
energy system should take into account the “added value of PV”. Integration of 2 PV
in buildings can also convert any visual impact into an architectural design
advantage.
42
The campaign for take-off promoting the installation of 1,000,000 photovoltaic roofs
and facades would mean new capacity of 0.5GWp in the Union and 0.5GWp in third
countries.
II.6 Passive Solar
Thermal energy demand (mostly for space heating) in the domestic and tertiary sector
in EU15 represents 23% of total energy demand. It is estimated that 40% of energy
actually consumed in this sector is in fact gained from solar energy through windows,
but this passive energy supply is not taken into account in statistics. Consequently,
the potential for further reducing the thermal energy demand in buildings with
available passive solar techniques is very substantial. "Solar" and "low-energy"
buildings cost almost no more to build than conventional ones. Experience in Austria
has shown that passive solar construction increases overall dwelling costs by less
than 4% while achieving 75% reductions in heating energy. Large gains can also be
achieved in the existing building stock by retrofitting windows and facades to make
more use of natural sunlight and simultaneously insulate. New materials for windows,
daylighting and insulation are commercially available. Passive cooling techniques
have also been developed during the last few years and could help reduce the fast-
growing cooling demand in southern European countries.
Even conservative estimates show that a 10% reduction by 2010 in thermal energy
demand for buildings is easily attainable by increased recourse to passive solar
techniques. If it is assumed that thermal energy demand in the domestic and tertiary
sector remains stable (at 23% of the total), then this represents fuel savings of 35
Mtoe. Switzerland has already committed itself to a 30% energy reduction for heating
in buildings by the same year. These additional gains should be counted in the
balance of the European Union’s gross energy consumption.
II.7 Geothermal and Heat Pumps
Geothermal energy accounts for only a very small part of total renewable energy
production in the European Union. Although power production is already viable from
high-temperature dry steam, the risks associated with exploitation still present a
disincentive to investment. The use of geothermal heat is thus growing slowly.
However, the use of heat pumps to upgrade lower temperature ground heat is
becoming much more common.
Currently installed geothermal power capacity in the European Union amounts to 500
MW. More electrical units are gradually coming on stream in France (above all
overseas departments), Italy, and Portugal (the Azores). It is estimated that a doubling
of the current installed capacity is an achievable contribution to RES growth by 2010.
Most low-temperature geothermal heat is employed in buildings applications. The
current capacity of 750 MW
th
is concentrated in France and Italy. This capacity could
be more than tripled in 2010, to give 2.5 GW
th
.
Turning to heat pumps, those installed to date mostly use electricity or fuel as the
necessary driving energy input. A new generation make use of heat exchangers
installed some 100m underground which thus exploit naturally stored solar energy and
some intrinsic heat from the earth itself already at such a depth. A total of 60,000
geothermal heat pumps were installed in 1995 in the European Union, most of them in
43
Sweden representing 8% of the capacity for all types. Assuming that this total installed
heat pump capacity will be tripled by 2010 in EU15 and that the market share of
geothermal heat pumps will double to reach 15%, gives an estimated achievable total
capacity of 2.5 GW
th
by 2010.
II.8 Other Renewable Technologies
There are a number of other renewable energy technologies, such as solar thermal
power, tidal power, ocean currents, wave power, hot dry rock, ocean thermal energy
conversion, for which the current market in the European Union is non-existent.
Projections are difficult to make, but some of these technologies will undoubtedly offer
significant potential in the future. It is reasonable to expect that at least one of these
renewable sources will have started to be exploited commercially over the coming
decade or so, which justifies assuming a marginal contribution of 1 GW by 2010.
II.9 Achieving the Overall Community objective for RES
Table 1A summarises the estimated contributions by sector described in the present
annex in the particular scenario chosen for projecting ways of achieving a 12% share
of renewables in the Union by 2010. Table 2 compares gross energy consumption by
type of renewable energy in Mtoe for the year 1995 with that projected for the year
2010, assuming that these contributions by the different RES are indeed made. On
this basis the overall objective of doubling the current share of renewables to 12% by
2010 can be realistically achieved. The projected total gross inland consumption for
2010 is taken from the Pre-Kyoto scenario (Conventional Wisdom, “European Energy
to 2020”, see footnote 8). If post-Kyoto energy use turns out to be lower than that
foreseen prior to Kyoto, this will have the effect of slightly increasing the current
indicative objective to above 12%. On the other hand, enlargement to States with very
little or no penetration of renewables may have the effect in practice of lowering the
objective to below 12%. This will be taken into account in the monitoring and review
mechanisms foreseen.
II.10 Estimated RES Contributions in Electricity and Heat Generation
In Table 3 the current and projected contribution of renewables to the electricity
market is presented by type of energy. If appropriate measures are taken, electricity
production from renewables could grow significantly by 2010, from the present
14.3% to 23.5%. The projected total electricity production for 2010, once again, is
taken from the Pre-Kyoto scenario. Finally, the doubling of the heat produced by
renewables is the projected development for 2010 for the heat sector as shown in
table 4 if the promotion strategy for RES is successful.
II.11 Assessment of some of the costs and benefits
In table 6 the estimated investment costs and the benefits related to, avoided fuel costs,
and CO
2
emissions reduction, are presented by type of renewable energy while Table 5
provides estimates for the overall strategy to 2010. The first column of Table 6 shows the
additional capacities needed to be installed in order to achieve the estimated
44
contributions by different RES. In columns 2 and 3 the current unit costs by type of
technology and the corresponding projected unit costs in 2010 are presented
respectively. The fourth column shows an average reference unit cost, where the
projected time frame for the deployment of each technology is taken into account. For
those types of energy where installations are projected to grow steadily, such as wind
energy, the average unit cost is nearer to the 2010 value. For those technologies, such
as hydro, where the installations will be more or less evenly distributed in time, the mean
value between 1997 and 2010 is taken as the average reference unit cost. In the 5th
column the total investment needed for the installations is presented. Column 6 shows
the expected annual business in 2010. Installation rate, operation and maintenance as
well as fuel costs (for biomass) are included in the figures presented in this column.
Estimations on avoided fuel costs are presented in columns 7 and 8. Additional fuel
savings from wind, hydro, photovoltaics and solar thermal collectors have been
estimated to be 3 billion ECU in the year 2010. Assuming a constant rate of increase of
installations during the period 1997-2010, a total amount of 21 billion ECU of additional
fuel savings is calculated. Fuel substitution of coal and oil at 1997 prices has been
assumed in all calculations. Biomass and geothermal are considered to have the same
fuel costs as fossil fuel technologies and they are not included in the estimation. On the
other hand, all renewables contribute to the reduction of fuel import supplies achieving a
17.4% reduction in 2010 with respect to the 1994 figures.
The last column shows the CO
2
emission reduction figures. For electricity production
from wind, hydro, photovoltaics and geothermal, the displacement mainly, but not
exclusively, of conventional coal fired power plants is assumed. The CO
2
emissions, in
this case, are calculated on the basis that one TWh produced by renewable saves one
million tonnes of CO
2
. As far as biomass is concerned, although it has a neutral effect
on CO
2
, the emissions generated during the feedstock production have been taken into
account.
In addition, a significant number of additional jobs are expected to arise as a result
of the doubling of the share of renewable energies foreseen in this Community
strategy (see section 1.4).
The sum of these estimated figures shows that a total investment of 165.1 billion ECU
could be needed in order to achieve the overall significant increase in renewable
penetration aimed for in this strategy. . As a result of this investment, an annual business
of 36.6 billion ECU is estimated to be generated in 2010, creating a significant number of
new jobs, avoiding fuel costs of 21 billion ECU, reducing imports by 17.4% and reducing
the CO
2
emissions by 402 million tones per year with respect to 1997.
45
Annexe III Member States’ plans and actions for the
development of renewables
Austria has a share of 24.3 % for RES. The Austrian government
introduced in 1996 an energy tax on electricity and gas excluding RES. In
1994 a promotional tariff for power generation from solar, wind and biomass
was introduced. Further development of hydro power, biomass in existing
thermal plants and energy crops and solar energy are the main objectives.
In Belgium, energy policy has been decentralized. While there is no specific
target for the energy sector, promoting RES is expected to see a reduction in
CO2 emissions of about 20 MT by 2000 in industry. In Wallonie the PEDD
(Environment plan for sustainable development), adopted in 1995 is expected
to be followed by a development programme for RES.
In 1996 Denmark elaborated an Energy Action Plan “Energy 21” including
medium and long-term scenarios to 2005, 2020 and 2030. The assumptions
to 2005 for RES include 200 MW offshore wind turbines, about 1 PJ landfill
gas and about 1 PJ geothermal heat. After 2005 the assumptions include
developing 5500 MW wind turbines (of which 4000 MW offshore), 145 PJ
annually from biomass and biogas including energy crops and 25 PJ annually
from geothermal and heat pumps in district-heating.
The Finnish government adopted in 1995 a decision on energy policy which
includes increased use of bioenergy of 25% by 2005. A promotion
programme for wind energy in 1993 set a target of 100 MW installed capacity
by 2005.
France started in 1996 a five year programme including 225 MW from wood
combustion, 20.000 solar thermal panels for the DOM areas and 250 to 500
MW of wind turbines “Eole 2005”.
In Germany the Act “Stromeinspeisungsgesetz” of 1991 has had a significant
effect on new capacity from RES. A programme to support RES was adopted
by the Federal Government with 100 million DM for the period 1995-98.
Many of the Länder also have programmes. RTD is very important, with a
250 MW wind demonstration programme. 30% of the government’s RTD
programme is for RES. Solar thermal and PV campaigns (1000 Roofs) have
had an important impact. In wind energy, Germany holds second place in the
world.
The Greek government has a comprehensive approach to encourage RES.
The law 2244/1994 was strengthened by the Decision 8295/1995 in order to
remove restrictions on electricity production from independent producers up
to 50 MW. The electric utility (PPC) has a ten year programme to develop
RES with the following targets : biomass (733 Mtoe by 2000 and 1400 Mtoe
46
by 2005) wind (68 and 136 Mtoe) small hydro (15 Mtoe and 41) solar (156
Mtoe and 204) and geothermal (20 Mtoe and 40). In 1994 a second Support
Framework of the Community earmarked 100 MECU for RES, 75% of funding
will come from structural funds.
In Ireland, as a result of the AER 1 and 2 initiatives (Alternative Energy
Requirement programme of 1994) and the RES Strategy, the additional RES
generation will be 6% of installed capacity by 1999 bringing the total to 11%.
In Italy, if progress continues the PEW (National Energy Plan) expectations
could be surpassed and RES could give a contribution of 2700 MW by 2000.
Specific targets are 600 MW for wind and 75 MW for PV by 2000.
Luxembourg has no specific policy objectives for RES, nevertheless
instruments include subsidies for solar, biomass, wind, small hydro and heat
pumps.
The Netherlands has an Action Programme 1997-2000 for RES and has
elaborated scenario for 2007 and 2020 which includes: development of wind
energy (750 MW in 2000, 2000 MW in 2007) solar PV(119 MW 2007)
biomass (residual flows 30-80PJ/year and energy crops (12-70 PJ/year) solar
Thermal (5 PJ in 2007 or 250.000 water heaters) and heat pumps (50 PJ in
2007).
In Portugal, the Energy Programme of 1994 had a target of about 170 MW
for RES electricity. Traditional biomass is about 26% of energy needs in the
residential sector. The biomass centre has a specific programme to develop
biomass.
In Spain the PEW (National Energy Plan) for 1991-2000 had the following
objectives : SMP 213 Mtoe, biomass 427 Mtoe, wind 35 Mtoe, PV 0.389 Mtoe,
solar 34 Mtoe and geo thermal 10 Mtoe. At the end of 1996 the objectives
were surpassed in SMP 1045%, wind 381.5% and PV 149%.
The Swedish Government Bill 1996/97 : 84 on a Sustainable Energy Supply
includes measures aimed at increasing the supply of electricity and heating
from RES. The five year scenario for RES includes an expansion of bio-fuel-
based CHP of approximately the equivalent of 0.75 Twh of electricity per
year, an annual increase of around 0.5 Twh from land-based wind facilities
and an annual increase of 0.25 Twh from small-scale hydropower.
The United Kingdom is currently reviewing its policy on renewable energy,
consideration being given to achieving 10% of the country’s electricity need
from RES by 2010.
47
Table 1
Share of Renewable Energy Sources in Gross Inland Energy
Consumption
1990 1995
Austria 22.1 24.3
Belgium 1.0 1.0
Denmark 6.3 7.3
Finland 18.9 21.3
France 6.4 7.1
Germany 1.7 1.8
Greece 7.1 7.3
Ireland 1.6 2.0
Italy 5.3 5.5
Luxembourg 1.3 1.4
Netherlands 1.3 1.4
Portugal 17.6 15.7
Spain 6.7 5.7
Sweden 24.7 25.4
United Kingdom 0.5 0.7
European Union 5.0 5.3
Source: EUROSTAT
48
Table 1 A
ESTIMATED CONTRIBUTIONS BY SECTOR
IN THE 2010 SCENARIO
TYPE OF ENERGY SHARE IN
THE EU IN
1995
PROJECTED
SHARE BY
2010
1. Wind
2.5 GW 40 GW
2. Hydro
92 GW 105 GW
2.1 Large
(82.5 GW) (91 GW)
2.2. Small
(9.5 GW) (14 GW)
3. Photovoltaics
0.03 GWp 3 GWp
4. Biomass
44.8 Mtoe 135 Mtoe
5. Geothermal
5.a Electric
0.5 GW 1 GW
5.b Heat (incl. heat pumps)
1.3 GWth 5 GWth
6. Solar Thermal Collectors
6,5 Million m
2
100 Million m
2
7. Passive Solar
35 Mtoe
8. Others
1 GW
49
Table 2
CURRENT AND PROJECTED FUTURE GROSS RENEWABLE ENERGY CONSUMPTION (Mtoe) FOR 2010
CONSUMPTION IN 1995 PROJECTED CONSUMPTION BY 2010
TYPE OF ENERGY
Eurostat
Convention
% of
total
Substitution
Principle
% of
total
Eurostat
Convention
%
of total
Substitution
Principle
%
of total
Total Gross Inland Consumption 1,366 1,409 1,583 (Pre-
Kyoto)
1,633
1. Wind 0.35 0.02 0,9 0.06 6.9 0.44 17.6 1.07
2. Total Hydro 26.4 1.9 67.5 4.8 30.55 1.93 78.1 4.78
2.a. Large (incl. pump storage) (23.2) (59.4) (25.8) (66)
2.b. Small (3.2) (8.1) (4.75) (12.1)
3. Photovoltaics 0.002 - 0.006 - 0.26 0.02 0.7 0.05
4. Biomass 44.8 3.3 44.8 3.12 135 8.53 135 8.27
5. Geothermal 2.5 0.2 1.2 0.1 5.2 0.33 2.5 0.15
5.a Electric (2.1) (0.8) (4.2) (1.5)
5.b Heat (incl. heat pumps) (0.4) (0.4) (1.0) (1.0)
6. Solar Thermal Collectors 0.26 0.02 0.26 0.02 4 0.25 4 0.24
Total Renewable Energies 74.3 5.44 114.7 8.1 182 11.5 238.1 14.6
7. Passive Solar 35 2.2 35 2.1
50
51
T
a
Table 3
CURRENT AND PROJECTED
ELECTRICITY PRODUCTION BY RES (tWh) FOR 2010
ACTUAL IN 1995 PROJECTED FOR
2010
TYPE OF ENERGY
TWh % of total TWh % of total
Total 2,366 2,870
(Pre-Kyoto)
1. Wind 4 0.2 80 2.8
2. Total Hydro 307 13 355 12.4
2.a. Large (incl. pumped storage) (270) (300)
2.b. Small (37) (55)
3. Photovoltaics 0.03 - 3 0.1
4. Biomass 22.5 0.95 230 8.0
5. Geothermal 3.5 0.15 7 0.2
Total Renewable Energies 337 14.3 675 23.5
52
Table 4
CURRENT AND PROJECTED
HEAT PRODUCTION (Mtoe) for 2010
TYPE OF ENERGY ACTUAL IN 1995 PROJECTED BY
2010
1. Biomass 38.04 75
2. Geothermal 0.4 1
3. Solar Thermal Collectors 0.26 4
Total Renewable Energies 38.7 80
4. Passive Solar _ 35
53
TABLE 5
ESTIMATED INVESTMENT COSTS AND BENEFITS
OF THE OVERALL STRATEGY IN THE 2010 SCENARIO
Total investment energy sector of which RES
42
249 billion ECU
39 billion ECU
Total investment RES in Action Plan 165 billion ECU
Net investment RES in Action Plan 95 billion ECU
Annual net investment RES in Action Plan 6,8 billion ECU
Additional net investment due to RES 74 billion ECU
Increase of total energy sector investment 29.7%
Employment creation see Section 1.4
Avoided annual fuel cost in 2010 3 billion ECU
Total avoided fuel cost 1997-2010 21 billion ECU
Import reduction (ref. 1994) 17.4%
CO
2
reduction (with respect to 1997)
(with respect to the 2010 pre-Kyoto scenario)
up to 402
million tn/ year
250 million tn/year
Annual benefits from CO
2
reduction
43
5 to 45 billion ECU
42
European Energy 2020. A scenario approach, European Commission, 1996
43
COM(97) 481 final - see footnote 2
54
TABLE 6
ESTIMATED INVESTMENT COSTS/ BENEFITS BY SECTOR
TYPE OF ENERGY
ADDITIONAL
CAPACITY
1997-2010
UNIT COST
1997 ECU
UNIT COST
2010 ECU
AVERAGE UNIT
COST ECU
TOTAL
INVESTMENT
1997-2010 billion
ECU
ADDITIONAL
ANNUAL
BUSINESS 2010
billion ECU
BENEFIT OF ANNUAL
AVOIDED FUEL
COSTS 2010
billion ECU
TOTAL BENEFIT
OF AVOIDED FUEL
COSTS 1997-2010
billion ECU
CO
2
REDUCTION
milliom tn/year
IN 2010
1. Wind 36 GW 1,000/KW 700/KW 800/KW 28.8 4 1.43 10 72
2. Hydro 13 GW 1,200/KW 1,000/KW 1,100/KW 14.3 2 0.91 6.4 48
3. Photovoltaics 3 GWp 5,000/KWp 2,500/KWp 3,000/KWp 9 1.5 0.06 0.4 3
4. Biomass 90Mtoe 84 24.1 - - 255
5.Geothermal
(+ heat pumps)
2.5 GW 2,500/KW 1,500/KW 2,000/KW 5 0.5 - - 5
6.Solar Collectors
94 Mio m
2
400/m
2
200/m
2
250/m
2 24 4.5 0.6 4.2 19
Total for EU
market
165.1 36.6 3 21 402
