Opinion on the proposal for a Council Regulation (EC) concerning a Community programme providing financial support for the promotion of European energy technology 1995-1998 (THERMIE II) () (94/C 393/15)

On 14 July 1994, the Council decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for Energy, Nuclear Questions and Research, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 8 September 1994. The Rapporteur was Mr Beale.

At its 318th Plenary Session (meeting of 14 September 1994), the Economic and Social Committee adopted the following Opinion unanimously.

1. Introduction

1.1. The THERMIE programme should be seen as part of the drive to attain the energy objectives for 1995 laid down in the Council Resolution of 16 September 1986 ().

1.2. The current THERMIE programme comprises a series of measures intended to support promotional schemes and demonstration and technical feasibility projects under Regulations (EEC) No 2008/90 () and No 3640/85 () and the programme of support for technological development in the hydrocarbons sector under Regulation (EEC) No 3639/85 ().

1.3. The new THERMIE II programme supports projects on the economic viability of new technologies, going beyond pure technical feasibility. The promotion of European Energy Technologies by demonstrating their economic viability, as well as the promotion of the results of similar projects financed by Member States' programmes or by industry alone, and assistance in their penetration of third country markets through industrial cooperation, cannot be included in the 4th framework programme and are therefore covered by this proposal.

1.4. In its Opinion on the current THERMIE programme, adopted at its Plenary Session on 12 July 1989, the Economic and Social Committee suggested various points which are largely reflected in the new proposal.

1.5. These concerned:

- explicit authorization of financial support for innovative programmes where the research/development phase was not yet completed,

- the inclusion of the concept of 'risk' in the technical and financial aspects,

- the necessary coordination with national programmes.

2. Summary of the Commission document

2.1. The legal basis for the proposal is Treaty Article 235, although Research and Technological Development (RTD) as such comes under Article 130.

2.2. The objectives of the proposal are in line with the main objectives of energy policy:

- security of the Community's long-term energy supply,

- rational management of energy resources,

- clean use of coal and other fossil fuels,

- diversification of energy supply,

- development of regional energy resources.

2.2.1. Furthermore, the programme should contribute to other major Community policy objectives stemming from the completion of the internal market and to improving living conditions in cities and rural areas, strengthening economic and social cohesion, and cooperation with third countries, in line with the priorities laid down in the Treaty on European Union and in the 4th Framework Programme concerning increasing the competitiveness of European industry.

2.3. The content of the new programme would work across sectors and would promote technologies by economic demonstration and dissemination for a specific end-use.

2.4. The proposed programme is intended to provide continuing support to SMEs, and would support small projects with good replication potential in the Community.

2.5. Project support is limited to 35 % of the eligible costs (at all events total public aid cannot exceed 49 % of the total cost of the project), except in the case of horizontal support measures where 100 % support is allowed.

2.6. The eligibility criteria for projects are:

2.6.1.

Basically:

- existence of financial risks in demonstrating viability of an energy technology;

- no possibility of sufficient Member State financing and support;

- increase in security of long-term energy supply of the Community;

- conservation of energy resources and the environment;

- improved competitiveness of European industry.

2.6.2. Additional criteria include:

- the 'Community dimension',

- the size of undertakings,

- projects from regions whose development is lagging behind.

2.7. The practical arrangements for the programme will be undertaken through the THERMIE Committee with the assistance of the Member States.

2.8. It is proposed that an Advisory Committee be set up, composed of national representatives, to assist the Commission in:

- defining the programme,

- establishing priorities,

- deciding whether to grant financial support,

- evaluating results.

2.9. The funding for THERMIE II, falling under Heading 3 of the budget, is ECU 30 million for 1995. The amounts not yet allocated, to cover the remaining three years of the programme, will depend on available budgetary resources in those years.

2.10. Administrative and staffing expenditure for 1995 is estimated at ECU 150,000.

2.11. The proposed Regulation is to come into force on 1 January 1995.

3. General observations

3.1. The Committee welcomes the Draft Regulation. The present THERMIE programme comes to an end on 31 December this year and it is desirable that THERMIE continue for another four years in order that the research results are brought to commercialization.

3.2. In its Opinion () on the first THERMIE programme, the Committee considered the programme 'to be necessary', although with some reservations.

3.3. The Committee notes that whereas under THERMIE reference is made to technical and economic risks, the word 'technical' has not appeared in the equivalent Article (Art. 2) of THERMIE II.

3.4. The Committee recently received from the Commission copies of the latter's report to the Parliament and the Council on the implementation of the first THERMIE programme which was issued as long ago as 9 December 1993 [COM(93) 642 final].

3.5. However, THERMIE and THERMIE II are not strictly comparable programmes since the technical demonstration part of THERMIE will be included in the 4th Framework Programme.

3.6. The Committee is also concerned to note that, as a result of the Maastricht Treaty, the specific non-nuclear energy-research programme and the THERMIE II programme are to be conducted under different Treaty Articles (Articles 130 and 235) and supervised by separate Directorates-General (XII and XVII, respectively).

3.7. Even though close liaison between those two DGs is understood to be assured, the Committee wonders whether such a division of responsibility might not constitute an obstacle to proper realization of the programme. The 'frontier' between what is research and technological development (RTD) and the proving and dissemination of technology that can be shown to have economic application in practice is not necessarily a fixed one.

3.8. That aspect is underlined by the fact that THERMIE II will almost certainly have less money allocated to it than under the present programme. The Committee understands that this is due to what is mentioned in paragraph 3.5, namely the transfer of technical demonstration to the 4th Framework Programme.

3.9. Another significant change from THERMIE to THERMIE II which the Committee has identified is, however, the proportions of funds to be allocated to each of the main energy sectors (see details under 'Specific Comments'). Whereas previously Rational Use of Energy (RUE) was to take 30 %, under THERMIE II RUE is to receive 60 %, with corresponding reductions in the other headings.

3.10. In the medium term, that is probably a sound move since RUE offers more immediate benefit in terms of energy supply and environmental protection. However, in the longer term the various renewables will be important to energy supply and employment.

3.11. The Committee also notes with interest the detailed figures published by the Commission suggesting certain macro-economic and environmental benefits expected per ECU spent on the THERMIE programmes. The Committee believes that these figures are at best illustrative, rather than certain to be achieved as a result of THERMIE alone (cf. paragraph 9.1 of the Financial Statement annexed to the Draft Regulation).

4. Specific comments

4.1.

Explanatory memorandum

While understanding that such a memorandum is necessary, the Committee feels that - taking up, as it does, one third of the Commission's document - it is more relevant to the specific

research programmes than to THERMIE II as such.

4.2.

Preamble

What is said about the explanatory memorandum above seems to apply a fortiori to the preamble, which ought to concentrate on the reasons why the Commission wishes to divide its efforts in these matters between two DGs, even if different Treaty articles are held to apply.

4.3.

Article 3

The Economic and Social Committee ought to be listed together with the European Parliament and the Council as 'being kept informed'.

4.4.

Article 5

A new paragraph should be added making clear that Community financial contributions to projects cannot be assured for projects whose life extends beyond the duration of the THERMIE II programme.

4.5.

Article 8

In the absence of expenditure estimates for any year after 1995, it is not clear how many projects the Community will be supporting within the range ECU 100,000-500,000 quoted.

4.6.

Article 10

The Committee would like to feel confident that 'closer coordination with national schemes' will 'avoid duplication of similar projects'.

4.7.

Article 16

The Economic and Social Committee ought also to receive the 'report on the implementation of the Regulation' and at the same time as the European Parliament and the Council, if it is to be able to offer worthwhile comments in good time.

4.8.

Statement of impact on SMEs and employment

Although the Committee shares the Commission's concern to ensure that it supports enterprises able to carry out the projects for which Community funding is requested, there is nevertheless a need for the formalities involved to be such as to encourage SMEs to participate in THERMIE II and not positively to discourage them.

4.9.

Annex 1

4.9.1.

Rational Use of Energy

The Committee notes and approves the Commission's evident intention to give Transport the first priority in RUE projects under THERMIE II, whereas it was listed after Building, Industry and Energy Industry under THERMIE.

4.9.2.

Renewable energy sources

Energy from Biomass and Waste and Solar is listed first, with Wind also receiving greater priority listing than Hydro and Geothermal, a re-ordering of priorities which the Committee welcomes. It is, however, questioned whether Wind will prove environmentally acceptable in inhabited areas, while there are known to be public objections to the construction of new dams for hydroelectricity.

4.9.3.

Financial statement

4.9.3.1. Paragraph 7.1 thereof shows that RUE is to receive 60 % of funding under the new programme, compared with 30 % under THERMIE. Consequent reductions in the other headings follow: 26 % down to 15 % for renewables; 23 % down to 13 % for solid fuels; 21 % down to 12 % for hydrocarbons. These changes are said to be justified by experience under THERMIE while renewables receive greater priority under the 4th Framework Programme.

Done at Brussels, 14 September 1994.

The President

of the Economic and Social Committee

Susanne TIEMANN

() OJ No C 158, 9. 6. 1994, p. 6.

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