Opinion on the Communication from the Commission to the Council, the European Parliament and the Economic and Social Committee on energy and economic and social cohesion (94/C 393/24)

On 16 February 1994 the Commission decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Community, on the Communication from the Commission to the Council, the European Parliament and the Economic and Social Committee on energy and economic and social cohesion.

The Section for Energy, Nuclear Questions and Research, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 14 July 1994. The Rapporteur was Mr Barbagli.

At its 318th Plenary Session (meeting of 15 September 1994) the Economic and Social Committee adopted the following Opinion by a majority vote with one abstention.

1. Introduction

1.1. The Commission Communication is a discussion and information document intended to fuel debate and to prepare for the decisions which the Community and the Member States will eventually have to take on policies and programmes relating to energy and regional development, and on the use of the Structural Funds.

1.2. The Communication endeavours to bring together all the references made in Commission documents, over the last two years, to the intermeshing of energy with the goal of economic and social cohesion. The list of contents and footnotes give copious evidence of this.

1.3. The basic aim is to highlight the importance given to the objective of economic and social cohesion in the Thermie, Save, Altener, Joule, Valoren, Poseima and Regen programmes, and in regional and urban energy planning. (No mention is made of the APAS programme as this was approved by the European Parliament after the Communication had been drafted.)

1.4. The Committee's Opinions on existing programmes have always been at pains to stress how important it is that each programme should help reinforce economic and social cohesion.

1.5. The present Communication is a step in this direction.

2. Gist of the Commission Communication

2.1. In the Communication, the Commission announces its intention to:

- ensure that the Community's energy policy measures take greater account of the objective of boosting economic and social cohesion;

- encourage other Community policies to consider the potential contribution of energy to cohesion;

- include energy-related elements in the new Community initiatives financed from the Structural Funds and set out in the relevant Green Paper [COM(93) 282 final].

The Commission also calls on the Member States to include energy considerations in their regional development plans and programmes.

2.2. Such considerations should embrace: cross-border energy; energy and the countryside, islands and outermost regions; and energy and the urban environment.

2.3. The Communication puts forward a number of measures designed to complement the specific initiatives already being taken within the framework of structural policies, energy policy and research and development policy (Thermie, Save, Valoren, Altener, Joule, Poseima, Regen and regional and urban energy planning).

2.4. The Commission notes that insufficient progress has hitherto been made towards cohesion, as indicated by the economic and general indicators for the various regions of the EU.

The Communication calls for additional measures more closely geared to the specific needs of the less developed regions.

2.5. With due respect for the subsidiarity principle, the Communication lists the respective responsibilities of the Community and the Member States, noting that both parties must recognize the priority nature of the problem.

2.6. The Communication puts forward a number of supporting measures (Box No 2) in the fields of energy infrastructure, energy efficiency and the exploitation of regional energy potential.

2.7. These supporting measures are designed to integrate the objective of cohesion into national and EU energy policies, as energy is recognized as an important consideration.

2.8. The Communication ends with a series of tables of energy indicators and information sheets on regional and R & D energy programmes. These cover:

- the impact of the objectives of energy policy and the proposed supporting measures on the less-developed regions (Box No 1);

- per capita energy consumption, dependence on imported energy, and energy intensity of the Member States (Table 1, Annex 1);

- employment in the energy industries, 1980 to 1991 (Table 1a, Annex 1);

- proportions of primary energy consumption accounted for by oil, coal and natural gas, and estimated proportion accounted for by renewable energy resources, in the Member States (Table 2, Annex 1);

- per capita CO2 emissions, and emissions of CO2 as a function of Member States' GDP (Table 3, Annex 1);

- relative distribution of energy infrastructure in the Member States (Table 4, Annex 1);

- information sheets on existing integrated programmes embracing energy, R & D and regional policies (Annex 2).

2.9. The Communication is being submitted to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions.

2.10. The Commission will take account of the conclusions of the debates triggered by the Communication on the Green Paper when it comes to decide the content of the relevant Community initiatives.

3. General comments

3.1. The Committee approves the Commission's intention, as stated in the Communication, to integrate the goal of economic and social cohesion into Community and national energy policies.

3.2. It agrees that the main objectives of Community energy policy are to improve the competitiveness of the Community economy and enhance the quality of life of its citizens. To this end, the aim shall be to supply energy on the best possible economic terms, with satisfactory security of supply and environmental protection conditions, within the framework of free market principles but without forgetting the need for economic and social cohesion. However, improving economic and social cohesion requires, in addition: linkage between energy and development, energy and environment, and energy and national, regional and social policies.

3.3. These objectives may be achieved by agreeing at Community, national or regional level on an energy policy designed to reduce the disparities between the less developed and the more favoured regions. Hence it will be particularly important to pinpoint disparate regional and local situations (in towns and cities, rural areas, and the outermost areas).

3.4. Energy is a vital element of cohesion, but to enable it to play its full role, attention should be focused, irrespective of all the wider issues which the Committee is currently addressing elsewhere in own-initiative work, on:

- establishing the internal energy market;

- linking energy to appropriate economic and fiscal instruments;

- stepping up research and dissemination work;

- consideration of an appropriate relationship between energy and the environment;

- consideration of the right balance between the international dimension of Community energy policy and the subsidiarity principle.

3.5. The definition of common energy objectives that take account of the specific potential of different parts of Europe would in itself contribute to economic and social cohesion. However, assuming there is access to oil and petrol by land and/or sea, there should be no doubt that the single most effective means by which energy can contribute to economic and social cohesion is via the extension of the appropriate national or regional electricity grids into areas which are at present unconnected. This is because on all general comparisons between the cost of electricity from a transregional or regional grid and the cost of electricity from diesel generators, wind power, solar power or other diverse sources (other than hydro-power) the cost from the grid is cheaper. It is also more reliably available, certainly in relation to electricity derived from the harnessing of the natural elements.

3.5.1. There will be particular circumstances in which the above generalization will not hold, so that it would be more economic for a particular area or local community to draw its power from sources other than the nearest available grid, or perhaps in addition to it. In such circumstances (and this applies to nearly all islands) it is necessary and appropriate that other means of providing electricity are utilized, depending on the particular circumstances.

3.5.2. Against that background the Committee would draw attention to other considerations which may have a bearing on the promotion of economic and social cohesion in particular areas and/or localities, for example:

- energy diversification, particularly in regions which are heavily dependent on oil;

- support for industrialization in less developed regions, linking this where possible to the use of local energy sources;

- support for the organization of regional energy interest groups.

3.6. While recognizing the priorities listed in point 3.5, the Committee notes that the EU's less favoured regions often find access to conventional energy more difficult and are less efficient in their energy use. On the one hand, efforts are needed to alleviate this handicap by connecting such regions to the energy networks and making their energy use more efficient; on the other hand, in many cases these regions have potential endogenous energy sources which could be tapped, thereby furthering the region's development and creating new jobs.

Exploitation of renewable energy sources - where feasible and economically sustainable - is desirable because:

3.6.1. small and medium sized local firms could provide the technology needed for the use of certain renewable sources;

3.6.2. in view of the endogenous potential offered by new uses for farmland under the CAP, the use as a raw material for biofuels and electricity of agri-forestry energy crops which are compatible with sustainable development may contribute significantly to employment, inter alia in the field of environment protection (reduction of the damage caused to the water system by harmful emissions, upkeep of the agriculture landscape, etc.).

3.7. With reference to the Community programmes, the Committee thinks that:

3.7.1. the aim should be to reduce their number by amalgamating those which share common features, so that each programme is more clearly distinguished;

3.7.2. the access procedures for the different programmes should be made easier, for example by simplifying and standardizing the participation forms so as to encourage more small firms to participate;

3.7.3. priority should be given to programmes for boosting energy efficiency and developing endogenous energy sources in the less developed regions, and encouraging cooperation between them;

3.7.4. the programmes should be allocated adequate financial resources.

3.8. Hence, while recognizing the Commission's endeavours to link energy and economic and social cohesion, the Committee considers that:

3.8.1. there are some inconsistencies in the Commission's view of the role of Community energy policy in cohesion;

3.8.2. the general approach approach within the document fails to take sufficient account of conflicts which can sometimes arise between the objectives of social cohesion and energy policy. Efficiency, environmental or even technical considerations can, at times, conflict with cohesion requirements. It is proposed by the Committee that, where proposals for energy policy or legislation give rise to potential conflicts with cohesion objectives, the Commission should be required to assess the likely detrimental effects on cohesion and to recommend appropriate action, e.g. through Community initiatives, under the Structural Funds or by means of other policies;

3.8.3. present funding and accompanying measures are insufficient. The Committee recognizes that the ideas put forward in the Communication are both useful and innovative, but suffer in this first consultative document from the lack of any guidance as to the relative costs, even in the most general terms, of the different energy sources discussed. The Committee shares the Commission's concern that although the finances set aside for cohesion work in the Structural Funds and the Cohesion Fund are considerable, they will not be sufficient for satisfying energy needs. They will only achieve the desired results if they are backed, wherever possible, by a concerted 'pro-cohesion' drive in the Community's other general programmes and measures;

3.8.4. the analyses and data are therefore insufficient for pinpointing appropriate programmes and projects. In particular, it would be helpful if the Commission could provide:

3.8.4.1. approximate indications of the size of the deprived areas in countries immediately concerned with problems of social cohesion, the nature of these areas, their chief geographical characteristics, their population sizes, whether they are primarily urban or rural, whether they have adequate transport communications and, in particular, whether they receive electricity from their national grid systems;

3.8.4.2. indications of reasonably typical relative costs for each area (capital and running costs) of receiving electricity from their national grid system as against producing it independently, for example by diesel, wind or solar power;

3.8.4.3. indications of the costs of petrol and oil in the different locations, and whether there are ways these might be reduced, for example by using different sources or by investing in different or more efficient transport arrangements.

3.9. In order to tailor Community R & D programmes more closely to economic and social cohesion, the Committee recommends that the programmes put greater emphasis on projects with the following aims:

3.9.1. market-oriented R & D projects for developing more appropriate technologies;

3.9.2. integrated demonstration projects and dissemination projects;

3.9.3. projects in the disadvantaged areas for making optimum use of local energy resources for local consumption;

3.9.4. projects for the definition of common standards as regards consumption, technologies and prices;

3.9.5. projects for the alignment of Member States' legislative and fiscal instruments, with special reference to incentives to produce clean energy in urban areas, rural areas, islands and the outermost regions.

4. Specific comments

4.1. The Committee feels that the Thermie programme should be extended to demonstration and/or dissemination projects using 'proven' technologies which, although not strictly innovative, may be innovative in certain contexts (underdeveloped rural areas, outlying areas, integrated projects, control systems, etc.).

4.2. The Committee welcomes the emphasis which the Altener programme is to place on the institutional and financial aspects affecting the less favoured regions. The Committee would recommend that:

4.2.1. apart from the 'legal obstacles' being removed, Member States' legislation should be harmonized, especially with regard to the use of biofuels and energy;

4.2.2. investors in renewable energies in the lagging regions should be offered financial and fiscal incentives, and not just 'conditions (...) as favourable as those available to the major energy producers';

4.2.3. as well as 'taking proper account of externalities (in particular environmental effects)' of renewable forms of energy, studies be made of the diseconomies, in pollution terms, of conventional energy sources in the lagging regions.

4.3. In the section on Energy and the Countryside, Islands and the Outermost Regions, the Commission suggests that 'priority should be given to capital grants, (although) other supplementary measures could be supported'. The Committee thinks that these supplementary measures should include aid for process selection and the transfer of knowhow.

Done at Brussels, 15 September 1994.

The President

of the Economic and Social Committee

Susanne TIEMANN