Page 1


The European Union’s strategies and instruments to promote renewable energy sources Enzo Millich - Advisor Directorate General for Energy and Transport, European Commission


Today the EU suffers from a large energy deficit but, with technological progress, renewables are capable of producing significantly positive effects in the next ten years. The Commission has equipped itself with a series of political, legislative and financial instruments in support of renewables, whose level of competitiveness against conventional energy sources is progressively improving. The development of renewables will, however, accelerate only if certain political, legislative and financial imperatives are soon put properly into practice. In particular, the contribution from private investment will be crucial. are increasing their market share. Although we are far from obtaining a visible impact on total energy consumption, renewable sources and e n e rg y e f f i c i e n c y a re h e a d i n g towards a large change in the EU’s energy balance.

THE EU’S APPLICATION STRATEGIES AND INSTRUMENTS To a c c e l e r a t e t h i s p ro c e s s , t h e Commission has equipped itself with a series of political, legislative and financial instruments: White Paper, Green Paper, recommendations, regulations, directives and financial support schemes. Below are cited the Commission’s most recent initiatives in the energy efficiency and renewable energy sectors. At the beginning of last year the Commission adopted a directive proposal aimed at improving the energy performance of buildings. The proposal includes a methodology to establish integrated standards of energy performance of

buildings, taking onsite energy production into consideration, such as PV electricity, solar heating and refrigeration. The proposal is still being discussed by the Council and the European Parliament. As well as buildings, another area with great energy-saving potential is the electrical equipment sector

and in particular household appliances. A framework directive is currently being examined for minimum values of efficiency and performance requirements for these types of appliances. In the industrial sector voluntary measures have been widely used to improve the energy efficiency

European Union Energy mix in 1999 (EUROSTAT 2001)

WOOD ENERGY N°2 / 2003


THEME ENERGY POLICIES Primary energy Production of RES in 1999 (Eurostat 2002)

 How to Achieve the Energy Targets?

The Tools • White Paper on Energy Policy • White Paper on RES & Action Plan • Green Paper on security of supply • Draft Directives • Support programmes

The Basic Facts About Energy Energy self sufficiency is impossible to achieve

both in industry and transport. H o w e v e r, t h e C o m m i s s i o n h a s taken the initiative, by means of a recent proposal for a directive on biofuels, to coherently combine energy efficiency and transport. The proposal includes an obligation

WOOD ENERGY N°2 / 2003


for Member States to ensure that a minimum percentage of traction fuels used are made up of biofuels. The goal is 2% by 2005 and 6% by 2010. The directive on energy production from renewable sources, which was

approved in September 2001, establishes a juridical framework for future development of the renewable energy market in the EU. In it Member States are asked to reach the indicative objectives for the consumption of electricity supplies from renewable sources. Should national objectives be reached, European consumption of electricity from renewables would increase from the current 14% to 22% by 2010. The “Green Energy Directive” refrains from proposing a harmonised financi a l su ppor t sche m e for R ESE (renewable energy sources-electricity) but gives the Commission the job of presenting a proposal (if necessary) within 4 years, based on the experience acquired by Member States in their respective national support schemes. It also obliges Member States to issue guarantee of origin certificates for RES-E, to ensure re ne wa ble s ha ve a cc ess to the network as well as fair and transparent connection and transmission costs. Despite its rather “minimalist” content, the directive on green electricity can be considered a milestone in the evolution of renewable energies in that it provides the legal basis for the interconnection of all the Commission’s future initiatives in the field of renewable energy sources. To improve and strengthen existing measures which favour cogeneration, the Commission adopted a directive in 2002 aimed at promoting activities of this type. Special provisions are provided for which favour small CHP plants, higher efficiency and the involvement of renewable energy. The proposal, which should lead to a doubling of the share of cogeneration w i t h i n t e n y e a r s , i s c u r re n t l y under examination in the European Parliament and Council. It goes without saying that the legislative provisions which promote energy efficiency and the development of renewable energies should be accompanied by suitable financial support schemes. T h e C o m m i s s i o n h a s p ro v i d e d financial assistance for research and technological demonstrations in the energy field for over 25 years and will continue to support innovation in coming years through the VI Framework Programme for Research and Technological Development, which has a total budget for energy of 810 M Euros at its disposal.

THEME ENERGY POLICIES THE SUPPORT PROGRAMME: INTELLIGENT ENERGY FOR EUROPE 2003-2006 Among the Commission’s support programmes, it is worth pointing out the new long-term programme c a l l e d “ I n t e l l i g e n t E n e rg y f o r Europe” (IEE) which was passed onto the European Parliament and Council for approval in April last year. This multi-discipline scheme will be the Commission’s main instrument to support non technological activities in the energy sector. It will last for 4 years beginning next year and will have a total budget of 215 M Euros. The main objective of the programme is the strengthening and change of direction of Community action in the energy sector towards sustainable development, international cooperation and safety of energy supplies, in line with the EU’s recent political priorities. The IEE programme will ensure a follow-up to the support activities i n t h e f r a m e w o r k o f SAV E a n d ALTENER. Two other areas of intervention will be introduced: one linked to the

Composition of energy sources in the EU-15 (Source : Eurostat 2001)

energy aspects of transport (STEER), the other linked to the international promotion of renewable sources and of energy efficiency in the ambit of the COOPENER scheme. The new programme will be carried out through Targeted Key Actions which will be defined by the relevant Work Programme. T h e Ke y A c t i o n s c a n i n t e g r a t e various specific sectors of intervention and should be correlated to thematic areas such as:

 sustainable energy for the islands  energy efficiency in buildings  green transport  100% renewable communities  water and energy, etc… Putting the programme into effect through Key Actions will allow for a better concentration of resources towards projects of major impact at a local, regional, national and international level, highlighting the “visibility” of the interventions of the Community and the Member States.


Hauling consists in recovering forest resources after felling. Here in Finland.

WOOD ENERGY N°2 / 2003


THEME ENERGY POLICIES Damage Cost Estimates for Energy Fuel Cycles (UK Specific Results)

RES power plants Production cost

WE : Wind Energy BM : Biomass HY : Hydraulic Energy GE : Geothermal

RES ON THE AGENDA OF INTERNATIONAL POLITICAL SUMMITS In briefly citing some of the major international events which will greatly impact future activities, especially in the field of renewable sources, first and foremost we must remember the communiqué of the G8 summit in Genoa which recognised the importance of renewable energy for sustainable development, the diversification of energy supplies and the protection of the environment. Having highlighted the contribution of renewables to reducing poverty, the G8 Ministers concluded by


Before burning in a heating plant, woodchips are produced in the forest. This is an example of road side chipping in Chaux forest, France.

WOOD ENERGY N°2 / 2003

Financial support will be provided for proposals in the four main sectors of activity based on merit, their benefits to the European Union and their expected impact. As a general rule it will not exceed 50% of the project’s total cost. For some actions, such as studies or estimates of the impact of the strategies and Community measures, financial support may cover the entirety of the cost. The Commission’s proposal provides for the possibility of delegating some of the IEE programme’s management tasks to an Executive Agency.


THEME ENERGY POLICIES recommending the commitment of adequate financial resources to promote energy efficiency and alternative sources in developing parts of the world. In January this year a European Commission report echoed this message – “EU Energy Initiative for Poverty Eradication and Sustainable Development”. The main aim of the initiative is to help reach the Millennium Development Objectives by supplying sustainable services to the poorer parts of our planet. In practice, the initiative will take the shape of a partnership between the governments of developing countries, Member States, the Commission and other interested participants such as NGOs, development banks and the private sector. Altogether the EU provides several hundred million Euros each year for energy in developing countries. This figure may increase over the next few years following the requests of poor countries in the context of the EU initiative. The total capital required to satisfy energy needs is still, however, too high to be covered uniquely by aid donors and it must be completed by contributions from governments, banks and the private sector. The EU’s Energy Initiative was officially launched in Johannesburg at the World Summit for Sustain a b l e D e v e l o p m e n t , w h e re renewable energy was included as one of the five key topics for general discussion.

CONCLUSIONS I would like to end this article with a note of cautious optimism. The last decade has recorded great progress in the development of renewable sources of energy on a European level. In particular we have witnessed the gradual reduction in production costs for the green kilowatt, in some sectors to the point of reaching levels of real competitiveness with traditional sources of energy. The lowering of unit costs of electricity production must continue, in particular coupling generation from renewable sources with energy efficiency imperatives. The achievement of Community objectives will be accelerated only when certain political, legislative and financial imperatives are progressively put into practice:

Gas vs RES power plants Production cost

WE : Wind Energy BM : Biomass HY : Hydraulic Energy GE : Geothermal

Coal vs RES power plants Production cost

 firstly, development of renewable sources coupled with the rational use of energy must constitute a political priority for Europe;  secondly, the new European strategy must be accompanied by adequate and timely initiatives in the

WE : Wind Energy BM : Biomass HY : Hydraulic Energy GE : Geothermal

legislative, fiscal and financial fields;

 thirdly, in order to reach the ambitious goals set by the White Paper for Renewable Sources by 2010, the intervention of private financing in favour of renewables will be decisive. 

 Support Programmes on Renewables 1. The Vlth RTD Framework Programme • The main objective for RES is cost reduction and their integration. Budget of 810 M € (2003-2006). 2. “Intelligent Energy for Europe” programme: • Fills the gap between demonstration & commercialization - Non technological actions and studies aiming at overcoming non technical barriers. Budget of 86 M€ for RES (2003-2006). 3. Regional Policy & Structural Funds • Budget dedicated for deployment of RES in most promising EU Regions. Budget of 415 M€ (2000-2006).

WOOD ENERGY N°2 / 2003