Opinion of the Committee of the Regions on the 'Communication from the Commission on "Energy for the future: renewable sources of energy: Green Paper for a Community strategy"` (97/C 244/01)

THE COMMITTEE OF THE REGIONS,

having regard to the communication from the EC Commission on Energy for the Future: Renewable Sources of Energy: Green Paper for a Community Strategy;

having regard to the decision taken by the EC Commission on 20 November 1996 to consult the Committee of the Regions on this subject, in accordance with Article 198 c (first paragraph) of the Treaty establishing the European Community;

having regard to the decision which it took on 8 March 1996, to direct Commission 5 for Land-use Planning, Environment and Energy to prepare its opinion;

having regard to the draft opinion (CdR 438/96 rev.) adopted by Commission 5 on 3 April 1997 (rapporteur: Mr Leinen),

adopted the following opinion at its 18th plenary session on 11 and 12 June 1997 (meeting of 11 June).

1. Introduction

1.1. The Green Paper on renewable energy sources is the first phase of a two-step approach to the development of a policy for promoting renewables set out in the Commission's White Paper entitled 'An energy policy for the European Union` (COM(95) 682 final).

1.2. The Committee of the Regions (COR) welcomes the green paper and supports the slanting of EU policy towards more intensive strategic promotion of renewables. The COR shares the Commission's view that the current level of use of renewables in the EU is both insufficient and unbalanced.

1.3. The COR welcomes the Commission's goal of doubling to 12 %, by the year 2010, the contribution made by renewable energy sources to the EU's energy balance. The COR requests the Commission to assess whether this contribution could not be raised to 15 %, as already called for by the European Parliament Resolution on a common action plan for renewables (). This percentage contribution could be achieved whilst intensifying efforts to attain a higher level of energy efficiency and a rational use of energy.

1.4. The COR agrees with the Commission's assessment that the use of renewables differs widely between Member States and these differences cannot be attributed solely to geographical and climatological conditions. Indeed, many examples of successful promotion of renewables demonstrate that by creating a favourable political and economic environment at national, regional and local level, it is possible to achieve a higher level of market penetration for renewables. Examples here include: the development of wind energy in Denmark and Germany; the use of biomass in Sweden, Finland and Austria; small-scale hydroelectric plants in northern Portugal; solar heat systems in Greece and Austria; and the use of photovoltaic cells in many local authority areas in the EU.

1.5. The COR takes the view that local and regional players, in particular, have a particularly significant role to play in expanding the use of renewables, as these resources are by their very nature decentralized phenomena exploited on a decentralized basis. Incentives at local and regional level can substantially boost the contribution of renewables to the energy balance.

1.6. The COR supports the reasons set out in the green paper for actively and intensively promoting the use of renewables, namely that:

- renewables protect the environment and help to cut greenhouse gas emissions (in particular CO2 emissions);

- the exploitation of renewables, which are indigenous sources of energy, will reduce the EU's growing dependence on energy imports;

- the use of renewables promotes regional development and creates jobs, in particular in regions suffering from structural weaknesses and in agriculture;

- renewables open up considerable export opportunities for EU industries on the world market, in particular in the developing countries and newly industrializing countries whose energy requirements are expanding at a meteoric pace;

- public opinion prefers the increased use of renewables over other energy sources.

1.7. The COR recommends that a legal basis for the promotion of renewables be incorporated in the Treaty on European Union, along the lines of the long-established Community instruments to promote the coal industry (European Coal and Steel Community) and atomic energy (Euratom).

1.8. The COR agrees with the Commission that policy in respect of renewables cannot be viewed in isolation from other policies. For this reason, special attention should be paid to incorporating renewables in other policies: policies in respect of: external trade, industry and competition, agriculture, development aid, the internal market, R& D, taxation, transport, the environment, structural matters, regional development and tourism. In future, therefore, the promotion of renewable energy sources should be considered in the context not only of energy policy and environmental policy but also of economic and technology policy.

2. Analysis of the current situation

2.1. The EU is already significantly dependent on energy imports and, unless appropriate counter-measures are taken, this dependence is, according to Commission estimates, set to increase from the current level of 50 % to more than 70 % by the year 2010. This dependence, which runs counter to the goal of achieving security of supply, can, the COR believes, be reduced by tapping clean, indigenous renewable sources of energy.

It is important for economic development, competitiveness on the world market and the prosperity of it citizens for the EU to benefit from inexpensive and safe energy supplies.

2.2. The COR takes the view that the use of renewables must not be hampered by the creation of an internal market for electricity in the EU. The energy directive thus brings both opportunities and also risks for the renewables. On the one hand, the requirement for energy supply utilities to submit separate accounts will facilitate effective monitoring of these enterprises, which in many cases are still monopolies. On the other hand, a unilateral targeting of lower energy prices will make it more difficult to secure more rapid market penetration by renewables. Without greater efforts and more extensive promotion of renewables, the establishment of an internal market in electricity may hamper their increased use.

2.3. The green paper rightly draws attention to the importance, for renewables, of the basic conditions prevailing in the different Member States. For example, Denmark and Germany had to enact the appropriate legislation, including specific obligations in respect of energy purchasing and payments, before securing a rapid increase in wind energy use. This legislation together with national and regional incentives enabled Denmark and Germany, within a few years, to secure approximately 75 % of total installed wind energy capacity in the EU.

2.4. The surmounting of market obstacles and deficiencies, as the green paper rightly points out, basically holds the key to achieving a higher level of market penetration by renewables. As wind energy and solar energy demonstrate, the best way to achieve optimal use of renewables is to market them rather than to test them in the laboratory. The only way to cut costs radically is to increase demand. This applies also to energy derived from photovoltaic (pv) cells, off-shore wind parks and biomass. The COR takes the view that in the case of these technologies, too, research, development and demonstration projects should go hand in hand with more intensive marketing and optimalization of existing procedures.

2.5. The renewable energy policies which have been pursued for some time by the EU's two main international competitors i.e. the US and Japan, call for a response on the part of the EU if it is to remain a player on one of the strategically most important growth markets of the 21st century. The COR agrees with the Commission that the EU will only secure and consolidate a strong position in international competition if its internal market can provide a sufficiently large basis for the development of this sector.

3. Forecasts for market penetration by renewable sources of energy

3.1. The green paper sketches a number of scenarios (see the document entitled 'European energy to 2020`, TERES II) for increasing renewables' share of the energy market over the next 25 years. The COR would point out that long-term energy forecasts are highly dependent upon the prevailing circumstances. This is also confirmed in the green paper which points out (in the final paragraph on page 18) that 'unless specific incentives are put in place, it is unrealistic to expect that the large potential for renewable energy will be exploited and that these sources will make a more significant contribution to the European energy balance`.

3.2. The COR alerts the Commission to the fact that other scientific studies postulate a much higher achievable potential for renewables. For example, the study of solar energy potential in the EU carried out by EUROSOLAR on behalf of the Commission forecasts that renewables will secure 50 % of the market by the year 2020, provided that overall energy consumption in the EU can be stabilized at the 1990 level.

3.3. The green paper points out that currently only some 16 % of the technical potential of renewables, estimated by the Commission at approximately 400 MToe, is being exploited. The COR reminds the Commission that, in scientific terms, renewable energy sources have sufficient potential in the long term to replace the entire range of fossil and atomic energy sources.

4. Advantages of renewable sources of energy

4.1. The COR endorses the Commission's observation that the only way to meet international environmental protection obligations, such as the Rio convention on climate conditions, is to considerably increase the contribution of renewables to the EU energy balance whilst, at the same time, cutting back on the use of fossil fuels. There are in practice no other ways of achieving this goal. Atomic energy cannot increase its contribution to solving climatological problems as so many EU Member States have decided against using this form of energy generation.

4.2. The COR points out that the time for greater efforts in the field of renewable energy sources is not in the future but right now, five years after the environmental conference in Rio de Janeiro, and the climate conference held in the Japanese city of Kyoto. Without wider use of renewables, it will not be possible to achieve the goal of stabilizing CO2 emissions by the year 2000 and subsequently reducing emission levels. The EU can only continue to play a credible leading role in the field of international environmental policy if it adopts a forward-looking energy policy, with the strategic promotion of renewable energy sources as its central plank.

4.3. Renewables are, by definition, indigenous, non-depletable sources of energy. They can make a major contribution towards guaranteeing security of supply and reducing dependence on energy imports, thereby making savings on the balance of payments. The impact of supply shortages and price hikes on the international energy markets can only be offset by increased use of renewables. In view of the anticipated increase in the EU's dependence on energy imports, the COR advocates a comprehensive external trade policy designed to promote the use of renewables.

4.4. The COR draws attention to the Commission's comments on competitiveness and cost trends in respect of technologies for the use of renewables. Under the current taxation system it is not possible to achieve optimal allocation of resources, in particular in the energy field. Distortions of the market and other direct and indirect measures to promote the use of conventional energy sources must therefore be removed. The massive subsidies which are pumped each year into promoting outdated technologies (fossil fuel and atomic energy) must therefore be channelled into the technologies of the future (renewable sources of energy).

4.5. The COR supports the Commission's view that clean technologies, in particular those relating to the renewable sources of energy, will play a key role in achieving future economic prosperity. The market for renewables in the next 25 years is estimated at ECU 1,700 billion and the EU will be called upon to make efforts on a par with those deployed in the field of telecommunications. This is a prerequisite if EU industry is to seize the export opportunities and exploit the scope for expansion on the world market.

4.6. The COR shares the green paper's view that the exploitation of renewable sources of energy has enormous potential for employment. It is particularly significant that up to five times more jobs are created by using renewables than by using conventional sources of energy. This point is underlined by the fact that in Denmark more people are already employed in the wind energy industry than in that country's traditional fishing industry. With consistent efforts to tap the potential of alternative energy sources, more than one million new, viable jobs could be created in the EU over the next 25 years.

4.7. Most jobs generated by use of renewables are in small and medium-sized enterprises (SMEs). For this reason SMEs, which invest in renewable energy sources, should receive special support from EU funds, particularly where less developed regions are concerned.

4.8. The COR also agrees that the promotion of renewables creates jobs in regions where traditional industrial development is not an option. Although many of the lesser developed EU areas suffer from a shortage of conventional forms of energy, they, in particular have enormous potential as regards renewable sources of energy and this potential must be tapped.

4.9. Renewables can play a much greater role in energy generation, not only in rural areas but also in urban areas. There is, for example, considerable potential for using renewables at local level by, e.g. in the field of active and passive solar architecture.

4.10. Tourism, too, provides scope for increased use of renewables since consumers are generally more favourable to them than to other energy sources. Some regions already attract tourists on the grounds that they use renewable sources of energy. Furthermore, the use of renewables can help meet seasonal peak demands for energy and thereby make it unnecessary to build additional generating capacity.

5. Obstacles to wider use of renewable sources of energy

5.1. The COR shares the Commission's view that there are still many obstacles and countervailing interests which hamper more intensive use of renewables. Apart from the issue of the internalization of external costs which, in the long term, can only be resolved at national and EU level, local authorities and regions have a special role to play in overcoming these obstacles by, for example, enacting specific provisions in the following areas: building and planning laws; financing; training and further training; and the organization of information and public awareness campaigns; action to ensure that energy suppliers at local and regional level make stronger commitments in respect of renewables.

5.2. The COR agrees with the Commission that once energy from renewables starts to be marketed the cost of the technologies involved will plummet. As experience with wind energy - and also with the use of PV cells and solar heat energy - has shown, the considerable cost reductions achieved over the last few years derives primarily from the constantly rising demand and the continued technological progress triggered by increased demand. The COR therefore calls for agreement to be reached throughout the EU on the establishment of an EU marketing strategy for renewables, bearing in mind that, according to the subsidiarity principle, responsibility for the promotion of renewables should lie primarily with Member States and the regions.

Future mass deployment of renewable energy technologies will undoubtedly bring about a further dramatic reduction in costs; at the same time the costs of conventional sources of energy will rise substantially in the medium term.

5.3. The internalization of external costs, as called for in the green paper, is an important factor in boosting renewables market share. The COR therefore urges the Council to adopt a European energy tax/climate protection levy without delay.

5.4. In addition to the removal of technical and administrative obstacles, further highly important factors are (i) the introduction of an obligation to purchase electricity and heat produced from renewables, and (ii) the prices paid. The COR agrees with the Commission that a centralized energy supply system may create additional problems in respect of the access of renewables to the market. The position of the many private operators of renewable energy plants, must be strengthened, vis-à-vis the large, usually monopolistic energy supply companies.

5.5. On the issue of connection to electricity grids and wheeling terms, the COR endorses the establishment of standard contracts and clear arrangements for payment of costs for connection to centralized grids. These measures may help to stamp out the practice of setting grid connection and wheeling charges which are frequently opaque and arbitrarily high.

5.6. The COR agrees with the Commission that inadequate payments for energy fed into grids frequently hamper higher market penetration by renewables. In most cases, the prices paid by energy supply companies for such electricity does not reflect the actual value of electricity produced from renewables. The COR therefore calls for the introduction at EU level of statutory minimum standards which take account of the advantages of using renewables. These minimum standards may also be established on the basis of agreement with the associations concerned. The environmental benefits must be integrated into price calculations along with the higher value of electricity and heat renewables as a result of lower distribution losses. Finally, the greater acceptability of renewables should be used to promote their use at local and regional level and to justify setting prices for energy from renewables which cover production cases.

5.7. The COR agrees with the Commission that biomass fuels can only be successfully marketed in the transport sector if the appropriate infrastructure is available. The COR does, however, take the view that this criterion applies to all renewable sources of energy.

5.8. The COR agrees with the Commission that funding constitutes a further decisive barrier to high market penetration by renewables. The COR therefore calls for the development of special loan instruments for renewables, such as a 'solar energy loan`, which would cater for the benefits and specific characteristics of renewables. Such arrangements could sharply reduce amortization periods.

5.9. Local and regional authorities have a major role as regards building regulations and natural and environmental conservation. The COR calls upon the competent administrative organizations to establish a range of incentives for the use of renewables. These incentives must also be incorporated into European environmental law in order to avoid conflicts between conservation measures and the use of renewable energy sources. If a balance has to be struck between the use of renewables and local concerns, appropriate weight must be given to the environmental benefits of renewables.

5.10. The green paper also lists differences between the Member States with regard to the level of information, depth of experience and awareness of the players involved as further obstacles to the marketing of renewables. Different standards and divergent national and regional promotional programmes, which are often subject to rapid change, can also generate instability and unpredictability on markets for renewables. The COR shares this assessment and supports the call for stable conditions within the EU for promoting the use of renewables, with a view to achieving continuity.

5.11. The COR regrets that in the context of the obstacles to market penetration by renewables, the green paper does not deal in greater depth with the forthcoming deregulation of EU energy markets. Without appropriate back-up measures, deregulation can place renewables at a disadvantage. In the COR's view, the optional provisions for promoting indigenous renewable energy sources, set out in the Directive on the internal market for electricity, should be made mandatory, in particular Articles 8(3) and 11(3) (priority for renewables).

6. The way forward: a strategy for renewable sources of energy

6.1. An ambitious objective of increasing the contribution made by renewables to the EU energy balance

6.1.1. The COR takes the view that rather than doubling the contribution of renewables to the EU energy balance to 12 % by the year 2010, a target of a 15 % increase should be set, as urged by the European Parliament Resolution on a Community action plan for renewables. This goal can certainly be achieved if efforts are stepped up in the area of energy efficiency and the rational use of energy.

6.1.2. The COR endorses the setting of sub-objectives for the individual renewable sources of energy. Concrete objectives and requirements provide a special incentive for all Member States really to implement a strategic policy for renewables.

6.1.3. The COR proposes the following examples for initiatives which could be taken at EU level:

- along the lines of the Japanese programme for installing photovoltaic cells (PVCs) in 70,000 roofs, the EU should adopt a programme for equipping 250,000 roofs and facades with PVCs. This would give EU industry and craft enterprises a strong incentive to sharply reduce the cost of PV cells in keeping with increased demand;

- in the field of wind energy, a further 10,000 MW should be installed over the next ten years, in addition to the existing planned capacity increases in the EU. The COR would point out that wind conditions are often excellent in the cohesion states and in those EU regions which suffer from structural weaknesses. In addition to the proposed installation of a further 10,000 MW capacity, the further development of off-shore wind energy production should be promoted by adopting a special programme for generating 5,000 MW by this method;

- with a view to exploiting the vast potential of biomass in the EU, the COR urges that energy generation from this source be increased from the 1989 figure of 2,200 PJ (Petajoule) to 7,000 PJ by the year 2010. The Austrian example demonstrates that, if appropriate measures are taken, a three-fold increase in the contribution made by biomass energy can be achieved within ten years.

6.1.4. The COR welcomes the Commission's intention to require Member States to submit regular reports on their national promotional measures and instruments. Local and regional authorities have a two-fold role to play in this context. Firstly, they can make a real, on-the-spot contribution to achieving EU targets in respect of renewables and, secondly, they can exercise a monitoring and corrective role vis-à-vis the work of the Member States and the EU.

6.2. Cooperation between the Member States

The COR supports the view expressed in the green paper that cooperation between the Member States in the field of renewables needs to be stepped up, bearing in mind that most measures for implementing the objectives in this context are implemented at national, regional or local level. Improved cooperation between all the players, together with increased funding for the Altener II and SAVE II programmes, could boost cooperation between the Member States.

6.3. Reinforcing Community policies

The COR supports the Commission's intention to set up an 'Inter-Service Group on Promoting of Renewables` for the purpose of improving coordination at EU level and within the Commission itself. The group's members should be drawn from all departments and directorates-general which are involved with renewables in any way (external trade, industry and competition policy, agricultural policy, development policy, the internal market, R& D, taxation policy, transport, the environment, structural policy, regional policy and tourism).

6.3.1. Renewable energy sources in the internal market framework

The COR points out that the establishment of an internal electricity market entails both opportunities and risks. This appraisal is confirmed by the experience acquired by countries which liberalized their energy markets some time ago, such as the US. The COR would point out that the objective of lowering energy prices in order to safeguard international competitiveness is open to question.

The COR calls upon the EC Commission to introduce back-up measures in respect of the internal energy market with a view to ensuring more rapid penetration of the market by renewables. Steps must be taken to ensure that environmental protection - i.e. through using renewable sources of energy - takes priority over cost factors. The relevant optional provisions in the directive should therefore become mandatory provisions for the Member States, in particular Article 8(3) and Article 11(3) (priority for renewables).

In view of their generally higher level of commitment to renewable sources of energy, local and regional energy suppliers, in particular, must not suffer any disadvantages from increased competition in the internal market.

Two fundamental issues in this context are: guaranteeing access to the grid and a guaranteed minimum price in the internal electricity market for energy produced from renewables. The COR calls upon the EC Commission to draft a directive on the feeding of electricity generated from renewable sources of energy into EU grids. Successful national provisions in this field must not be jeopardized by such a directive.

6.3.1.1. Renewable energy credits

The system of renewable energy credits proposed by the EC Commission is an interesting and innovative approach, in principle, but one which requires more thorough examination. The actual implementation of such a system cannot therefore be recommended at this time.

6.3.1.2. Internalization of costs and fiscal harmonization

The COR agrees with the EC Commission that fiscal harmonization, i.e. through the introduction of a European energy tax from which renewables would be exempted, would provide a substantial incentive to use energy from renewable sources. As experience in a number of Member States (Denmark, the Netherlands and Sweden) has demonstrated, however, such a tax exemption would not be sufficient in the short and medium term to enable renewables to achieve a higher level of market penetration. The introduction of an EU Directive on access to electricity grids, providing minimum payments for electricity generated from renewable sources, would constitute an important additional back up for the new fiscal departure in the energy sector.

6.3.1.3. State aid and other measures to promote renewables

The COR highlights the need for special public authority measures - at local, regional, national and EU-levels - to promote renewable sources of energy.

In this context the COR calls for the introduction of EU minimum standards in respect of energy prices. The Community Guidelines on State Aid for Environmental Protection should incorporate an additional objective, namely to boost national prices for energy produced from renewables because of their beneficial effects on the environment, over and above competition factors.

The following factors must be taken into account when determining the level of such prices:

- the marginal costs which are avoided in the long term;

- the external benefits derived from using energy from renewables and the external costs which are consequently avoided;

- profit margins on a par with those normally also earned by conventional energy suppliers.

The COR supports the concept of prices which reflect the costs involved in respect of all energy from renewable sources which are not yet in a position to compete, given the current levels of electricity prices. This is the case in particular as regards energy fed into electricity grids which is generated from photovoltaic cells, wind energy (from both shore-based and off-shore installations) and various biomass technologies.

Under the 'polluter-pays` principle, set out in Article 130r (2) of the Treaty establishing the European Community, all costs arising from the payment of higher prices for energy from renewable sources fed into electricity grids must be fully incorporated in the rates charged to all electricity consumers. In order to offset any regional imbalances, the COR supports the introduction of national or EU instruments, such as funds for compensatory payments between energy suppliers.

The call for an improved basis for calculating prices for energy from renewable sources fed into electricity grids is in accordance with paragraph 18 of the action plan on renewables adopted by the European Parliament in July 1996. The European Parliament called upon the Commission and the Member States to ensure that independent producers of electricity from renewables could supply energy to electricity grids at prices which encouraged the use of renewables or, at least, did not put them at a disadvantage.

6.3.1.4. Standardization

The COR supports the introduction of EU standards in the field of renewables. Until such time as EU standards have been introduced, however, the principle of mutual recognition should be applied. Care must also be taken to ensure that the introduction of an EU system of standardization does not create new obstacles, in particular in the form of disproportionately high costs for SMEs.

6.3.2. Specific financial support for actions for the promotion of renewables

6.3.2.1. The COR supports increased funding for Altener II. The activities carried out under this programme are tremendously important for the marketing of renewables.

6.3.2.2. The COR supports the Commission's proposal that in future all EU financial instruments should include special incentives for investment in renewable sources of energy. This applies in particular to investments and loan facilities provided by the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD). Steps should also be taken to improve the scope for promoting renewables under the Structural Fund, the Cohesion Fund, the Mediterranean programme (MEDA) and the development programmes for non-EU states.

6.3.3. Research, development and demonstration

6.3.3.1. Research policy should seek to remove the existing imbalances in the promotion of the various energy technologies. Funding for research into renewables must be increased in future.

6.3.3.2. The promotion of research into the use of renewables must be geared more closely to practically-orientated projects, i.e. research designed to optimize production processes. The COR fully supports the view set out in the green paper that the key to increased market penetration by renewables is, in the final analysis, to be found at the end of the technological process, i.e. at the marketing stage.

In basic research, support should be given to those technologies whose development level is furthest away from marketing thresholds. Examples of technologies which deserve support here are particular forms of biomass technology, wave and tidal energy and solar heat power stations.

6.3.3.3. Research policy is geared towards the future, particularly in the case of renewables. Funding cuts are therefore not acceptable. On the contrary, efforts must be stepped up in the field of technologies for the future, i.e. renewables. The COR therefore supports the call made in the green paper for the EU technological development programmes in the field of renewables to be extended.

6.3.4. Regional policy

6.3.4.1. Regional policy has a special role to play in promoting renewables. The use of renewables is a particularly attractive proposition in peripheral areas, i.e. rural areas and island communities as, by their very nature, renewable sources of energy are tapped on a decentralized basis. There is, however, enormous scope for using renewables in urban areas, particularly in the field of active and passive solar architecture. The greatest obstacle here is a shortage of financial resources and the fact that local and regional decision-making bodies are not fully aware of the advantages provided by renewables.

6.3.4.2. Bearing in mind the importance, in terms of structural policy, of renewables as a means of stimulating the economy and creating jobs, the COR proposes that special assistance be provided, under the EU regional programmes, Structural Funds and the Cohesion Fund, for facilities for manufacturing equipment for exploiting renewables. These funds could also be used to establish energy agencies and a network of local and regional bodies for promoting the use of renewables.

6.3.5. Agriculture and forestry policy

6.3.5.1. The COR highlights the importance of renewables for a future common agricultural policy committed to the principle of sustainability. It draws attention to the enormous potential of renewables with regard to job-creation and structural policy. EUROSOLAR calculations indicate that up to 500,000 jobs could be created in agriculture and forestry over the next 25 years. If this enormous potential can be realized - and the European Parliament's Committee for Agriculture and Rural Development expects biomass energy to provide 10 % of EU energy needs by the year 2010 and at least 20 % by the year 2025 - it will also be possible in the medium term to reduce subsidies in the agricultural sector. This opens up a new prospect for European agriculture as it could play a leading role in the supply of environmentally-friendly energy. But the Member States and regions and municipalities must play a greater part than hitherto in developing the plans and measures necessary for sustainable agricultural development and bear more responsibility for applying them.

6.3.5.2. The COR calls upon the Commission to endeavour to secure, via WTO negotiations, more generous arrangements in respect of agricultural and forestry raw materials used in energy production.

6.3.5.3. Fiscal measures to promote the production and use of renewable sources of energy derived from agricultural and forestry raw materials are an additional prerequisite for a higher level of market penetration by renewables. Tax exemptions or tax concessions, together with credit facilities and 'soft` loans, could also help to realize the potential in this field.

6.3.6. Actions in the field of external relations policy

6.3.6.1. The COR supports the Commission's view that the external-trade implications of the use of renewables are of particular importance, not only for reasons relating to energy and the environment but, above all, with a view to the future competitiveness of EU products. Throughout the world some two billion people do not have access to grid-based electricity. The International Energy Agency predicts that energy consumption in the developing countries and the newly industrializing countries will rise by over 100 % by the year 2010. By the middle of the next century, at the latest, these states will account for the bulk of global energy consumption. For this reason, too, the US and Japan have already targeted their strategic programmes for renewables at these states.

6.3.6.2. The COR supports gearing the following instruments to the promotion of renewables: the Synergy-programme, the new Mediterranean programme (MEDA), and the Phare and Tacis programmes for assisting the countries of central and eastern Europe and the states of the former Soviet Union.

6.3.6.3. The COR proposes that a European agency for renewable energy be set up for the purpose of facilitating more rapid transfer of know-how on the use of renewables. This could help speed up the increased use of renewables, particularly in the developing countries and the newly industrializing countries.

6.3.6.4. European enterprises seeking to export plant for exploiting renewables to non-EU states, or wishing to invest in the establishment of manufacturing capacities in the developing countries and the newly industrializing countries should be given appropriate support in the form of information and advice and export assistance and guarantees. The COR calls upon the Commission to provide the European Export Council for Renewables, set up in 1996, with adequate political support, staff and financial resources.

6.4. Assessment and monitoring

6.4.1. The COR agrees with the Commission that the quality of the statistics currently available in the EU needs to be improved. One step in this respect would be to compare the implementation of local, regional, national and EU promotional measures.

6.4.2. The following forms of energy should be treated as renewables in future statistics:

- small hydroelectric plants (with separate identification of plants producing less than 10 MW);

- wind energy;

- solar energy (solar heat, energy from photovoltaic cells fed into electricity grids and electricity produced from solar heat);

- biomass, in solid, liquid or gas form, irrespective of its organic origin (including organic waste);

- geothermal energy;

- wave energy;

- tidal energy.

7. An action programme for renewable sources of energy

7.1. The COR welcomes the Commission's intention to table an action programme for renewable sources of energy. In this context the COR would refer to the European Parliament's proposal for an EU action plan for renewables; the Commission should use this action programme as a guideline.

7.2. Referring to the role of the local authorities and the regions, the COR would draw attention to the conclusions of the Altener conference held on 25 to 27 November last in Sitges, near Barcelona. The COR supports the reference in point 7.1 of the conclusions to the special role of local and regional authorities in promoting the use of renewables.

7.3. Finally, the COR calls for the establishment of an advisory forum on which all the key players in the field of renewable sources of energy would be represented, i.e. EU, national, regional and local authorities, manufacturers and operators of plants for exploiting renewables, umbrella associations representing producers; representatives of consumer organizations and energy supply companies. This advisory forum could help the Commission to formulate and implement an action plan for renewables. In this context the COR proposes that a programme be introduced to support associations representing producers of energy from renewables.

Brussels, 11 June 1997.

The Chairman of the Committee of the Regions

Pasqual MARAGALL i MIRA

() EP 216.788/final.