. COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 26.11.1997 
COM(97) 599 final 
COMMUNICATION FROM THE COMMISSION 
ENERGY FOR THE FUTURE: 
RENEWABLE SOURCES OF ENERGY 
White Paper for a Community Strategy 
and Action Plan 

TABLE OF CONTENTS 
1 Setting the Scene p.4 
1.1 The General Framework p.4 
1.1.1 lntroductiQn 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 lnJernal 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 Communi!Y Policies p.18 
2.3.1 Environment p.19 
2.3.2 Growth, Competitiveness and Employment p.19 
2.3.3 Com petition and State Aid p.19 
2.3.4 Research, Technology, Development and Demonstration p.20 
2.3.5 Regional Policy p.20 
1 
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 Mwth 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 
2 
ANNEXES 
Preliminary Indicative Action Plan for RES 1998-201 O p.34 
II Estimated Contributions by Sector -A scenario for 201 o p.37 
11.1 Biomass p.37 
11.2 Hydro Power p.39 
11.3 Wind Energy p.40 
11.4 Solar Thermal p.40 
11.5 Photovoltaics p.41 
11.6 Passive Solar p.42 
11.7 Geothermal and Heat Pumps p.42 
11.8 Other Renewable Technologies p.43 
11.9 Achieving the Overall Community Objective for RES p.43 
11.10 Estimated RES contributions in Electricity and Heat 
generation p.43 
11.11 Assessment of some of the costs and benefits p.43 
Ill 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 201 O p.49 
3. Current and Projected Electricity Production by RES for 2010 p.50 
4. Current and Projected Heat Production {Mtoe) for 201 O 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.5::-
3 
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 cont~ibute 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 centr~ of 
international debate in view of the upcoming "Third Conference of the P~rties_ 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 201 0 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 preparati0n 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 
4 
the technical feasibility and economic manageability of the Union's negotiating 
mandate. In a recent Communication2, 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 ~re capidly 
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" 
5 
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 shar~. 
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 Council3 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 AL TENER programme4 , the Council for the first time adopted a 
specific financial instrument for renewables promotion. The European Parliam~nt for 
its part has constantly underlined the role of renewable energy sources and in a 
recent Resolution5 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 
6 PE 216/788; fin 
6 COM(95) 682 of 13.12.1995, "An Energy Policy for the European Union" 
6 
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. 
Further~ore, as the internal market develops, a Community-wide strategy for 
renewables is req,uired 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 study7 builds on one of the scenarios previously developed 
in the Commission's European Energy to 20208 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 
7 
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 19969 A broad public deb.ate 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 renewabJes 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 Resolution11 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 
1 COM(96)576 of 20.11.1996, "Energy for the future : renewable sources of energy" 
1° Council Resolution n° 8522/97 of 10 June 1997 
11 PE 221/398.fin 
8 
for the electricity supplied from renewable energies, the main features of a plan to 
establish a · Eur9pean 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 
beliijf in the need to inc;rease the Community budgetary appropriations in support of 
renewable energy sources to the level currently used for nuclear research. It also 
p_roposes 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 
9 
Commission's view that an indicative target is a good policy tool, giving a clear political 
signal and impetus to action. T~e 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 co_nsidered 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 CO2 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 Ill 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 
10 
and ensure that each technology makes its optimal contribution, within a clear policy 
framework. · 
. Tne 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 m2 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 CO2 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 ECU14. 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 ~020•! 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 7 4 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 
201 0} 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 
11 
reduce the imported fuels by 17.4% and t~e CO2 emissions by 402 million tonnes/year by 
2010. . 
This amount of CO2 savings represents a significant contribution towards the CO2 
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 
CO2 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 11, it is shown 
that · doubling the share of renewables can reduce the CO2 emissions by 402 million 
tonnes per year with respect to 1997. This corresponds to an additional reduction 
possibility of 250 million tonnes of CO2 with respect to the 2010 "business as usual" Pre­
Kyoto scenario used in the Climate Change Communication and one third of the 
expected CO2 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 CO2 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 (:3nergy 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 
201 o will create approximately 100,000 jobs in the PV sector. The European Biomass 
Association (AEBIOM) 18 believes that the Biomass employment figures in the TE RES 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 
16 COM(97)481 final -see footnote 2 
11 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. 
12 
the solar collector 2010 market objective. While it is not possible to reach any hard 
conclusions as is the likely cumul~tive 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 onvironmental 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. 
13 
. Chap~er ~ Main Features of the Action Plan 
2.1 lntrocJ uction 
' Without a determined and co-ordinated effort to mobilise the Union's renewable 
energies potential, t~is .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 posilive sense to provide new 
opportunities, while new obstacles to RES growth in the electricity sector will have to 
be avoided. 
The Comm~nity 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 
14 
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 benefits20 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 energies21 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 -
18 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 CO2 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 11.11) 
15 
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 ugolden" or 'green' funds addreJsed 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· repraced. 
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 fuel23 and 
sulphur reduction in liquid fuels24 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. 
16 
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 )he directive 92/8125 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 detaxation26
• 
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 emissions27 from manure by using 
anaerobic digesters or covered lagoons as well as meeting the objectives on 
protection of waters28 and on landfill29• 
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. 
26 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 Dir~ctive 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 
17 
The Commission has recently published a strategy30 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 buildings31 
and to the Directive on building materials32 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. 
3° 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. 
18 
2.3.1 Environment 
The Fifth Environmental Action Plan gives due consideration to renewable energies 
and proposes support measures including fiscal incentives33 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 
energies34 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 
201 O 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 Protection35 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'' 
36 O.J. n° C72, 10 March 1994, p.3 
19 
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, Gonselidate, 
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 objecave 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 Al TENER (see 2.5.1). However, 
20 
it is essential to encourag$ 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 Jeast 12 %. 
This W(?uld 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 areas36 
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 poUcy, 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. 
38 COM(97)2000 Vol. I, p 26 (EN) 
21 
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 objectives37• 
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 agrl-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) 
22 
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 Lome 
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 ~om')lunity 
legislation on renewables in associated countries; 
• implementation of Protocols concerning the participation of associated countries 
in promotional EU programmes such as AL TENER; 
• 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 AL TENER; 
38 Today, an estimated 2 billion people worldwide lack access to modern e~erg_y sources. . . 
Photovoltaics technology is now cost-effective in stand-alone power apphcat1ons remote fom utility 
grids. 
23 
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 
Objectives39
• 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 AL TENER 1140 programme, and the subsequent programme included in the 
proposed Energy Framework Programme41 will have a crucial role to play as the 
basic instrument for the Action plan. 
AL TENER 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 ~ill be 
targeted on assisting biomass, solar thermal and PV, buildings, wind, s·mall hydro 
and geothermal to penetrate the market. Actions under AL TENER II will also be 
crucial for the preparation of the Renewables Campaign for Take-off (see chapter 
3). 
39 COM (97)43ofinal, 26.08.97. Proposal for a Council Decision concerning the organisation of co­
operation around Community energy objectives 
4° COM(97)87 final of 12.3.1997, Proposal for a Council Decision concerning a multiannual 
programme for the promotion of RES (AL TENER 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. 
24 
Monitoring the progress in the implementation of the RES Strategy in Member 
States and in the Community will be critical and measures in AL TENER 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 protectiQn 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 AL TENER; 
• 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 EBRO and 
their national counterparts have already become involved in the financing of 
25 
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 
apptying 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 renew~ble 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 201 O; 
• 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, Comrr;unity and Member States programmes, 
technical state-of-art, training, financing, assistance, etc. 
26 
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 larg·e­
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 Jap~n 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 
27 
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 fa~de 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 1 kWe i.e. the total capacity to be installed in this Campaign 
by 2010 is 1 GWp. 
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 1 kW 
generators, a total capacity of 500 MWp and will make up one-sixth of the 3 GWp 
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 1 kW 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 Lander, 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 ~ommercial 
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 a~d 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; 
28 
• 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 favoura.ble or unconventional 
,I 
applications descri~ed 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 1 O 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 MWth 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 11.1, could be 26 Mtoe. This corresponds typically to an overall 
installed capacity of approximately 20 GWe or 60 GWth• The promotion of 10 GWth 
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 bioenorgy market. 
29 
The total installation cost of such an initiative would be in the order of 5 billion ECU, 
assuming an average cost of 500 ECU/kWth 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 conditipns 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 administrativ~ regions which can benefit from an existing sense of 
community. Large 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 action~ 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, wWI have to be drawn up. The· effects of this 
Campaign on CO2 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 ~illion ECU or 
30 
. 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 CO2 emissions. 
1. 1,000,000 PV 1,000 MWp 
systems 
2.10,000 MW 10,000 MW 
Wind Farms 
3.10,000 MWth 10,000 
Biomass MWth 
4.lntegration in 1,500 MW 
100 
Communities 
Total 3 
10 
5 
2.5 
20.5 1 0.07 1 
1.5 2.8 20 
1 16 
0.5 0.43 3 
4 3.3 40 
31 
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 Al TENER 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-ardination 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 201 O 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. 
32 
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 CO2 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. 
33 
Annex I 
PRELIMINARY INDICATIVE ACTION PLAN FOR RES 1998-2010 
(Includes some actions already initiated) 
ACTION PLAN European Union Member States 
1. Objectives and Strategies 
Community Strategy and overall objectiveof 12% for the EU up Communication of the -
to 2010 Commission -White Paper -
(1997) 
Member States setting individual objectives to 2005 and 201 0 - action 
and establishing strategies 
2. Internal Market Measures 
Fair Access for RES to the Electricity Market Proposal for a Directive (1998) transposition 
Restructuring the Community Framev-.,ork for the Taxation of Proposal for a revised Directive transposition or-
Enen:w Products (COM/97/30) harmonisation 
Start-up subsidies for new production plants. SME's and new job - action 
creation 
Development or/and harmonisation concerning "golden" or 1998 : Promotion action 
"green" funds 2000 : Communication of the 
Commission 
Progressive increase of the market share of liquid biofuels action 
Promotion of Biofuels in transport fuel Proposal for a Directive transposition 
COM(97)248 
Promotion of biofuels in low-sulphur liquid fuels Proposal for a Directive transposition 
CGM(97)88 
Extend the scope of the SAVE Directive to passive and active Proposal for Amendment of transposition 
solar systems in buildings to t~ke into account the energy gains Directive 93/76/EC (1998) 
for heating and cooling 
Extend the scope of the Directive to building materials with a Proposal for Amendment of transposition 
low intrinsic enerav content I Directive 89/106/EC (1998) Chapter 
1.3.1 
1.3.1 
2.2.1 
2.2.2 
2.2.2. 
2.2.2. 
2.2.3 
2.2.3 
2.2.3 
2.2.4. 
2.2.4. 
34 
3. Reinforcing Community Policies 
Inclusion of Actions on Renewables in the overall strategy for Communication of the - 2.3.1. 
combatting climate change Commission COM(97)481 
Adoption and implementation of the 5th Frame~rk Programme Decision of the EP and the - 2.3.4. 
for RTD {1998-2002) Council { ... / .. ./...) 
RES to be included in the main priorities jointly wth employment To be decided in 1999. implementation 2.3.5. 
and environment in the regional fund new phase (2000-2006) and 
2.3.6. 
Promotion of biomass in CAP and rural development proposals CAP proposals/Agenda 2000 2.3.6. 
for 2000-2006 Decision awaited 1998 
Review of Reg. 2078/92 in context of Agenda 2000 Review of Reg. 2078/92 and 2.3.6 
Examination of adequacy of existing instruments and possibility other existing instruments 
of further harmonisation 
Definition of an energy strategy for the co-operation wth ACP Communication 2.3.7 
countries, in the Lome Convention Frame~rk, emphasizing the 
role of RES ~ 
Sufficient funding from TACIS and PHARE for RES in order to Specific Protocols 2.3.7. 
implement Protocoles opening EU support programmes Communication 
AL TENER and SYNERGY to associated countries. Appropriate 
agreements wth Mediterranean area countries as well as other 
areas. Collaboration in the implementation of the Wortd Solar 
Prooramme 1996-2005. 
4. Strengthening Co-operation between Member States 
Strengthening co-operation between MS under Council Decision Proposal for·a Council Decision implementation 2.4 
on the Organisation of Co-operation around Agreed Community (COM/ .. ./ ... ) 
Energy Objectives 
5. Support measures 
EU programme to promote RES, open to CEECs and Cyprus, Proposal for a Council Decision submission of 
aimed at creating the necessary conditions for the "AL TENER II" projets 
implementation of the Action Plan particularty the legal, socio- (COM/97/87) 
economic and administrative conditions and encouraoe private Proposal for Frame~rk 
35 
and public investments in the production and use of energy from Programme for Energy Actions 
RES to include specific actions for the identification and 1998-2002 
promotion of business opportunities 
Consumer information campaigns. Targeted information action EU actions 2.5.2 
on the protection of environment 'Mth simultaneous energy 
recovery 
Development of European standards and certifications CEN and CENELEC under certification by 2.5.2 
AL TENER agreed bodies 
Better positioning for RES on the institutional banks and agreements and projects agreements 2.5.3 
commercial finance market by developing schemes facilitating 
investments in RES projects 
Creation of a virtual centre "AGORES" for collection and action under AL TENER data 2.5.4 
dissemination of information 
6. Campaign for take-off 
1,000,000 PV systems half in EU, half in third countries. EU promotion and financial co-funding 3.1 
contribution 
10,000 MW of large 'Mnd farm EU promotion and financial co-funding . 3.2 
contribution 
10,000 Mwth of biomass installations EU promotion and financial co-f-unding 3.3 
contribution 
Integration of Renewable Energies in 100 Communities EU promotion and financial co-funding 3.4 
contribution 
7. Follow-up 
Scheme to monitor progress EU action under AL TENER data 4.1 
Improvement of data collection and Statistics Commisston action 4.1 
Inter-services co-ordination group Commission action 4.2 
Creation of a Working Group involving Commission and Commission action 4.3 
Member States 
Regular reporting to the Union's Institutions Commission action 4.4 
36 
Annex II 
Estimated Contributions by Sector -A scenario for 201 o 
In this Annex, the realistic potential for exploitation of the different renewable energy 
sources is presented within the framework of the Strategy and Action P.lan." The 
contrib.ution that the various renewable energy sectors could make by 201 0 towards 
ac~iev·ing 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. 
11.1 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 201 0 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 201 0 is estimated at 15 Mtoe. A stronger 
exploitation of the biogas resource is indeed in line with the Commission's strategy for 
37 
reducing methane emissions on environmental grounds. This point has received 
particular attenti~n 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 201 O will continue to 
produce met~ane 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 201 o for 
the power and the heating and industrial process h,eat market. 
Energy crops also need to be considered if the objective of doubling the renewable 
energies' share by 201 0 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 1 BMtoe 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 1 0 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 1 0 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. 
38 
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 cellulQsic 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 
* Biagas exploitation (livestock production, sewage treatment, landfills) 15 Mtoe 
* Agricultural and Forest Residues 30 Mtoe 
* Energy Crops 45 Mtoe 
~ 
11.2 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 µewer 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 1 0 MW 
accounted for 10% of installed capacity (9.3 GW) arid produced 37 TWh. 
39 
An increase of 10 % in installed capacity of large hydro (8,500 MW) is likely by 201 o if 
one takes into account projects already planned, a·nd 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. 
11.3 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 1 0GW 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 to the existing regulatory 
structure should encourage and not jeopardise the appropriate development-of wind 
energy. 
11.4 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 abou~ 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. 
40 
In 1995 there were 6.5 Million m2 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 m2, 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 m2 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. 
11.5 Photovoltaics 
Solar photovoltaic electricity generation is v€ry 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 MWp, 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 MWp 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 MWp (EU 15). Photovoltaics is 
very much a global market. World annual module production is forecast at 2.4 GWp by 
2010. To attain an annual output of 2.4 GWp 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 GWp 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 fa~des) as well as a certain number of large-scale power plants 
(0.5-5.0 MWp). Anyhow, PV technology should be considered in a more general way 
not just as a measure of GWp 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 redtJcing_ 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/Wp 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, fa~de 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. 
41 
'The campaign for take-off promoting the installation of 1,000,000 photovoltaic roofs 
and facades would mean new capacity of 0.SGWp in the Union and 0.5GWp in third 
countries. 
. 11.6 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 onergy. 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. 
11.7 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 amounis 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-temp'-'rature geothermal heat is employed in buildings applications. The 
current capacity of 750 MWth is concentrated in France and Italy. This capacity could 
be more than tripled in 2010, to give 2.5 GWth• 
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 1 00m 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 
42 
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 GWth by 201 O. 
11.8 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 201 O. 
11.9 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 tt)at projected for the year 
201 O, assuming t~at these contributions b.y 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. 
11.1 O 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 takeA, 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. 
11.11 Assessment of some of the costs and benefits 
In table 6 the estimated investment costs and the benefits related to, avoided fuel costs, 
and CO2 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 
43 
contributions by different RES. In columns 2 and 3 the current unit costs by type of 
technology and the corresponding projected unit costs in 201 O 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 201 O 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 CO2 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 CO2 emissions, in 
this case, are calculated on the basis that one TWh produced by renewable saves one 
million tonnes of CO2. As far as biomass is concerned, although it has a neutral effect 
on CO2, 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 CO2 emissions by 402 million tones per year with respect to 1997. 
44 
Annexe Ill 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 Lander 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 ind~pendent 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 
45 
by 2005) wind (68 and 136 Mtoe) small hydro (15 Mtoe and 41) solar (156 
Mtoe an~ 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. 
46 
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 
47 
Table 1 A 
ESTIMATED CONTRIBUTIONS BY SECTOR 
IN THE 2010 SCENARIO 
TYPE OF ENERGY SHARE IN PROJECTED 
THE EU IN SHARE BY 
1995 2010 
1. Wind 2.5GW 40 GW 
2. Hydro 92GW 105GW 
2.1 Large (82.5 GW) (91 GW) 
2.2. Small (9.5 GW) (14 GW) 
3. Photovoltaics 0.03 GWp 3GWp 
4. Biomass 44.8 Mtoe 135 Mtoe 
5. Geothermal 
5.a Electric 0.5GW 1GW 
5.b Heat (incl. heat pumps) 1.3 GWth 5GWth 
6. Solar Thermal Collectors 6,5 Million m2 100 Million m2 
7. Passive Solar 35 Mtoe 
8. Others 1GW 
48 
Table 2 
CURRENT AND PROJECTED FUTURE GROSS RENEWABLE ENERGY CONSUMPTION (Mtoe) FOR 2010 
TYPE OFENERGY 
Total Gross Inland Consumption 
1. Wind 
2. Total Hydro 
2.a. Large (incl. pump storage) 
2.b. Small 
3. Photovoltaics 
4. Biomass 
5. Geothermal 
5.a Electric 
5.b Heat (incl. heat pumps) 
6. Solar Thermal Collectors 
7. Passive Solar Eurostat 
· · converitkm>. 
1,366 
26.4 
(23.2) 
(3.2) --
0.002 
44.8 
2.5 
(2.1) 
(0.4) 
0.26 % of 
to~t:. 
0~02 
1.9 
3.3 
0.2 
0.02 s~~1WJl::" k¾ total<<>f 111: · c~h~~!tJrl: I 1 ·. of!ta1 
1,409 I II 1,583 (Pre-Kyoto) I I 1,633 
0,9 0.06 •.. 0.44 
67.5 4.8 30.55 1.93 78.1 I 4.78 
(59.4) (25.8) (66) 
(8.1) , 
(4.75) (12.1) 
0.006 0.26 0.:02 0.7 I 0.05 
44.8 3.12 135 135 8.27 
1.2 0.1 5.2 2.5 0.15 
&. 
(0.8) (4.2) (1.5} 
(0.4) (1.0) (1.0) 
0.26 0.02 4 0.25 4 I 0.24 
35 2.2 35 2.1 
49 i 
Table 3 
CURRENT AND PROJECTED 
ELECTRICITY PRODUCTION BY RES (tWh) FOR 2010 
Total 
2. Total Hydro 
2.a. Large (incl. pumped storage) 
2.b. Small 307 
(270) 
37 13 355 
(300) 12.4 
50 
1. Biomass 
.< 2~ Ge,c:>thetmal Table 4 
CURRENT AND PROJECTED 
HEAT PRODUCTION (Mtoe) for 2010 
38.04 
0.4 
3. Solar Thermal Collectors 0.26 
4. Passive Solar 75 
1 
4 
35 
51 
TABLE 5 
ESTIMATED INVESTMENT COSTS AND BENEFITS 
OF THE OVERALL STRATEGY IN THE 2010 SCENARIO 
Total investment energy sector of which RES 42 
Total investment RES in Action Plan 
Net investment RES in Action Plan 
Annual net investment RES in Action Plan 
Additional net investment due to RES 
Increase of total energy sector investment 
Employment creation 
Avoided annual fuel cost in 2010 
Total avoided fuel cost 1997-2010 
Import reduction (ref. 1994) 
CO2 reduction (with respect to 1997) 
(with respect to the 2010 pre-Kyoto scenario) 
Annual benefits from CO2 reduction43 
42 European Energy 2020. A scenario approach, European Commission, 1996 
43 COM(97) 481 final -see footnote 2 249 billion ECU 
39 billion ECU 
165 billion ECU 
95 billion ECU 
6,8 billion ECU 
7 4 billion ECU 
29.7% 
see Section 1.4 
3 billion ECU 
21 billion ECU 
17.4% 
up to 402 
million tn/ year 
250 million ta/year 
5 to 45 billion ECU 
52 
TABLE 6 
ESTIMATED INVESTMENT COSTS/ BENEFITS BY SECTOR 
ADDITIONAL UNIT COST UNIT COST AVERAGE UNIT TOTAL ADDITIONAL BENEFIT OF ANNUAL TOTAL BENEFIT CO2 REDUCTION 
CAPACITY 1997 ECU 2010 ECU COSTECU INVESTMENT ANNUAL AVOIDED FUEL OF AVOIDED FUEL m illiom tn/year TYPE OF ENERGY 1997-2010 1997-201 O billion BUSINESS 2010 COSTS 2010 COSTS 1997-2010 
ECU billion ECU billion ECU billion ECU IN 2010 
-
1. 'Wind 36GW 1,000/KW 700/KW 800/KW 28.8 4 1.43 10 72 I . ·.. / y ·> .·. . .> > ........ /< .···.·. >·····•.···.·· ····•• ?·.· 6 .• t· i i' < > ~< < 
2. Hydro ,... 13GW 1,200/KW 1,000/KW 1,100/KW t·• 14~3 <~ ... . ·.· i • 
. . ..... I• . ...... . ·. I·. •·· ···• 
3. Photovoltaics 3GWp 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 2.5GW 2,500/KW 1,500/KW 2,000/KW 5 0.5 - - 5 
1 (+ heat pumps) 
... · .. > I> . ··• •· 
. / •·•·· ·. 
.· 
··•··••·J·2 6.SolariCoUe¢(or~••··• 94Miom2 400Jm2 200/m2 250/m2 24 .· V 0.6 I 19 .·· . 
. ·· .... .· .. .· ... . · . . ·. . 
Total for EU 165.1 36.6 3 21 402 
market 
53 
ISSN 02.54-1475 
COM(97) 599 final 
DOCUMENTS 
EN 12 14 
Catalogue number CB-C0-97-676-EN-C 
Office for Official Publications of the European Communities 
L-2985 Luxembourg ISBN 92-78-28533-1