Amended proposal for a COUNCIL REGULATION (EC) CONCERNING A COMMUNITY PROGRAMME PROVIDING FINANCIAL SUPPORT FOR THE PROMOTION OF EUROPEAN ENERGY TECHNOLOGY 1995-1998 ("THERMIE II")
Date: 1995-01-23
Institutions: European Commission
Subjects: EU financing, energy policy, energy technology, financial aid, research and development, research programme, technological change

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

COM(94)  654 

f i n al 

B r u s s e l s, 

2 3 . 0 1 . 1 9 95 

9 4/  0063(CNS) 

Amended  p r o p o s al 

f or  a 

COUNCIL  REGULATION 

(EC) 

CONCERNING A COMMUNITY  PROGRAMME PROVIDING FINANCIAL SUPPORT FOR THE PROMOTION OF 
EUROPEAN ENERGY TECHNOLOGY  1 9 9 5 - 1 9 98  ("THERMIE  II") 

(presented by the Commission pursuant to Article  189 A  (2) 
of the EC-Treaty) 

1 -

E X P L A N A T O RY  M E M O R A N D UM 

| 

PROMOTION OF EUROPEAN ENERGY TECHNOLOGIES 

A  COMMUNITY  PROGRAMME  PROVIDING  FINANCIAL  SUPPORT  FOR  THE PROMOTION  OF 

EUROPEAN  ENERGY  TECHNOLOGY  1995-1998  ("THERMIE-II") 

0 

INTRODUCTION 

0.1  The  Energy situation in the Community as well as the  necessity to contribute 

to the  achievement  of  the  goals  of  its  economic  and  political  integration  as 

laid down in the Treaty establishing the European Union call for public action 

to  promote  European  Energy  Technologies  on the  market.  The  Community 

programme  "THERMIE",  decided  by 
29June19901  and  granting 
31  December 1994. 

the  Council  of  Ministers  on 

financial  support 

for 

this  expires  on 

0.2  The  Commission has charged experts to assess the  results of the  THERMIE 

programme and  presents  its reports on the  implementation  of the  regulation 
and  on  the  compatibility  between  national  and  Community  action2.  This 
report  shows  clearly  that  there  is  a  certain  need  for  specific  support  on  a 

Community level. 

0.3  Since the  implementation of the Treaty  of the  European  Union, an  important 

part  of  promoting  European  Energy  Technologies  and  concerning  the 

demonstration  of  the  technical  feasibility  of  projects  is  covered  under  the 

provisions  of  articles 130f  and  followings.  The  Commission  has  therefore 
integrated  this  part  into  its  proposal  for  a  4th RDT  framework  programme3. 
The  Commission has specified  in annex III  of the  proposed  Council decision 
for a 4th RDT framework programme under action 1 point 5 "Energy"4 as well 
as  under  action 2  "co-operation  with  Third  Countries"5  and  action 3 
"Dissemination  and  valorisation  of  results"6 the  need  for  energy  technology 
demonstration  such  as  carried  out  by  the  THERMIE  programme  and  its 

Council Regulation (EEC)n°2008/90, OJ n°L185/1 of 17.07.1990 

1 
2  Ref. "Report on the implementation of Council Regulation n°2008/90 of 29 June 1990 

(THERMIE Programme)" COM(93) 642 final 

3  Ref. proposal of a Council decision doc. COM(93)276 final of 16.06.1993 - p.4 
4 
Ref. proposal of a Council decision doc. COM(93)276 final of 16.06.1993 -  p.50 
5  Ref. proposal of a Council decision doc. COM(93)276 final of 16.06.1993 - p.60 and 61 
6  Ref. proposal of a Council decision doc. COM(93)276 final of 16.06.1993 - p.63 and 64 

Organisations  for  the  Promotion  of  Energy  Technologies  as  well  as  by  its 

"Energy Centres" in Central and Eastern Europe. 

0.4  THERMIE  is supporting projects on the industrial viability of new technologies 

going  beyond  the  pure  technical  feasibility.  The  promotion  of  European 

Energy Technologies  by the demonstration  of their  economic  viability  as well 

as  the  promotion  of  results  of  similar  projects  financed  by  Member  States 

programmes  or  by  the  industry  alone  and  assistance  to  their  penetration  on 

markets  of  Third  Countries  through 

industrial  co-operation  cannot  be 

included  in  the  4th  framework  programme  and  are  therefore  subject  to  the 

present proposal based on art.235 of the Treaty. 

0.5 

In the following chapters, the  Commission  specifies the justification for  action 

at  Community  level,  as  well  as  the  objectives  of  this  new  complementary 

programme  ("THERMIE-H")  and  the  orientations  and  structure  of  the  new 

programme. 

1 

JUSTIFICATION FOR ACTION AT COMMUNITY LEVEL 

SUBSIDIARITY 

1.1  What are the objectives of the proposed action in relation to the  Community's 

obligations? 

The  new  Community 

instrument  for  providing  financial  support  for  the 

demonstration  and dissemination  of energy technology  1995/98 will take  into 

account  major  energy  policy  objectives  which  are  of  vital  importance  for 

economic  growth and  sustainable  economic  and  social  development  of  the 

EU; such as: 

security of long term energy supply of the Community, 

rational management of energy resources, 

clean use of coal and other fossil fuels, 

diversification of energy supply, 

development  of regional energy resources. 

Furthermore,  the  programme  will  contribute  to  other  major  Community's 

policy  objectives  due to the  achievement  of the  internal  market  as well  as in 

- 3-

accordance  to  priorities  laid  down  in the  Treaty  of the  European  Union  and 

the 4th  Framework  Programme  concerning  increasing the  competitiveness  of 

European  industry,  improving  living  conditions  in  cities  and  rural  areas, 

strengthening  economic  and  social  cohesion,  and  co-operation  with  Third 

Countries. 

1.2  Does competence for the  planned  activity  lie solely with the  Community  or is 

it shared with the Member States ? 

Competence  is shared with Member States. 

1.3  What  is  the  Community  dimension  of  the  problem  (for  example,  how  many 

Member States are involved and what solution has been used up to now) ? 

The  key objectives of the proposed programme  affect  all  Member  States  and 

have  pan-European  implications  -  e.g.  for  the  environment,  competitivity, 

energy supply and international  relations.  The evaluation  report of THERMIE 

and  the  appraisal  of  the  Member  States  support  programmes  show  clearly 

the  necessity for  Community  action  in energy  technology  demonstration  and 
dissemination7.  European  industry  is  in many  cases  capable  of  developing 
innovative  technologies  and  promoting  their  utilisation  on  its  own  ,  without 

public  support.  However,  as  in  the  USA,  Japan  and  other  major  industrial 

competitors,  industry  (and this applies  especially to SMEs)  is not always  in a 

position to succeed without the provision of public support,  since technical or 

financial  risks  may  be  high,  external  costs  are  not  included  in  energy 

production  and  consumption  and  market  information  may  not  be  readily 

available  or  accessible.  There  is  also  a  significant  need  for  financial 

assistance  in  the  services,  buildings,  transport  sectors,  etc.,  particularly 

where  they  are  publicly  owned.  Up  to  now,  Member  States  support 

programmes  have  been  complemented  by  a  series  of  Community 

demonstration programmes, the most recent of which is THERMIE. 

1.4  What  is the most effective solution taking into account the means available to 

the Community and those of the Member States ? 

7  Ref.  "Report  on  the  implementation  of  Council  Regulation  n°2008/90  of  29 June 1990 

(THERMIE Programme)" COM(93) 642 final 

4-

Many  Member  States  have  important  support  programmes  of their  own,  both 

on  a  national  and  a  regional  level,  which  may  focus  on  specific  energy 

sectors, technologies or end uses.  These  programmes have budgets roughly 

four  times  greater  than  the  Community's  programmes.  There  is therefore  a 

need,  before  thinking  of Community  support,  to  consider  making  greater  use 

of  the  results  which  are  already  available  from  these  programmes.  This 

requires  improved  co-ordination  between  Community  and  Member  States 

programmes,  which  the  Community  can  help  to  provide. 

In  certain  Member 

States  no  programmes  exist  at  all,  or  they  may  only  cover  certain  specific 

sectors.  Here again, the Community could fill in the gap which exists in some 

areas.  There  is,  of  course,  some  need  for  re-orientatibn  compared  with 

previous  Community  energy  technology  programmes  to  ensure  that  the 

Community  only  acts  insofar  as  the  objectives  of  the  action  could  not  be 

adequately  achieved  by the Member  States themselves and where,  by virtue 

of scale or effects, the Community is able to achieve more effective results. 

1.5  What  real  added  value  will  the  activity  proposed  by  the  Community  provide 

and what would be the cost of inaction ? 

The  added  value  would  be  to  bridge  the  gap  between  energy  technology 

development  by industry and Member  States on the one  hand and  promotion 

of its results for the  benefit of the consumers and users (public or private)  on 

the other.  The  cost  of  inaction  could  be  poorer  coordination,  an  absence  of 

dissemination  of  vital  technical  information  and  distortions 

in  technical 

development  across  the  Community  to  the  benefit  of  richer  Member  States 

and more powerful industrial interests. 

1.6  What  forms  of  action  are  available  to  the  Community  (recommendation, 

financial support, regulation, mutual recognition, etc.) ? 

It is considered that a  regulation  is the  most effective  means of achieving the 

objectives of the proposal by ensuring that all Member  States adopt the  same 

approach  within  the  same  structure,  secure  in the  knowledge  that  a  budget 

has  been  agreed  for  a  pre-defined  period  of  time.  A  directive  or 

recommendation  would  clearly  be  inadequate  in achieving  this framework  of 

action. 

5-

1.7 

Is  it  necessary  to  have  a  uniform  regulation  or  is  a  directive  setting  out  the 

general  objectives  sufficient,  leaving  implementation  at  the  level  of  the 

Member States ? 

A  regulation  actually  makes  it easier  to  run a  consistent  and fair  programme 

and  in this case  does  not affect  Member  States'  powers to develop  their own 

national programmes. 

COHERENCE WITH OTHER COMMUNITY ACTIONS 

1.8 

It is recognised that,  in order to be effective,  there should be  complementarity 

and  coherence  with  other  Community 

instruments, 

in  particular  with 

Community  programmes financed within the 4th  RDT framework  programme, 

the  structural  funds  or  external  aid  programmes.  Clearly,  the  energy-policy 

related  programmes  for  technology  demonstration  will  operate  downstream 

from  RDT  programmes;  so,  technology  development  would  have  to  be  fully 

completed  and  any  risks  would  be 

limited  to  those  related  to  the 

demonstration of economic viability or wider market penetration. 

1.9  A  Community  programme  which  bridges the  gap  between  energy  technology 

development  by industry and Member States on the one hand, and promotion 

of its results for the benefit of the consumers and users (public or private) on 

the other  hand,  must take  into account  advice from all  interested  institutions, 

industry,  other  companies,  customers etc. This can be achieved  by means of 

an  Advisory  Committee  of  Member  State  representatives,  and  also  through 

advisory  groups  to  the  Commission  representing  professional  associations, 

industry,  the  tertiary  sector  and  any  other  relevant  decision  makers  or 

customers. This would  be  important for  both the decisions on the  granting of 

financial support and for the implementation of support activities. 

1.10 An  important  role  in this context would be taken  by the  European  network of 

Organisations  for the  Promotion  of  Energy Technology  ("OPET-network") set 

up  by  the  THERMIE  Regulation,  which  brings  together  a  large  number  of 

public  and  private  organisations  experienced  in  technology  assessments, 

market penetration and dissemination  activities. The  role and structure  of the 

network  could  easily  be  adapted  in order  to  play  an  important  role  in  a  new 

"THERMIE"  programme.  Not  only  are  most  of the  necessary  skills  available 

within  this  network,  but  it  also  respects  the  principle  of  subsidiarity,  since 

6-

these organisations are operating at regional, national and Community level. 
The  network  would  be  supported  by  informal  groups  of  professional  and 
consumer  associations,  or  regional  or  national  agencies  which  would  bring 
involvement  with  other  relevant  actions  and  would  assist  the 
closer 
Community in orienting the programme. 

2 

OBJECTIVES 

2.1  Security of long term energy supply, the rational use of energy, the clean use 
of  fossil  fuels,  the  diversification  of  energy  supply  and  the  development  of 
regional  energy  resources  are  key  objectives  of  Community  policy  and  it  is 
vital  for  achieving  economic  growth.  These  goals  will  however  only  be 
achieved  if  European  industry  continues  to  develop  innovative  and  efficient 
technologies 
final 
consumption.  But  experience  has  shown that  these  technologies,  once  they 
have  been  developed,  do  not  always  succeed  in  penetrating  the  market 
without  some  public  support;  energy  efficiency  improvements  in  buildings, 
solar  photovoltaics  and  IGCC  are  examples  of  this.  These  objectives 
therefore lie at the heart of the proposed instrument. 

for  both  energy  production/transformation  and 

for 

2.2  A major challenge for  overcoming  unemployment  and for  ensuring economic 
growth  in  the  EU  is  maintaining  the  competitiveness  of  European  industry. 
This  will  not  be  possible  unless  full  use  is  made  of  innovative  and  efficient 
energy technologies.  The position of European industry appears not at all as 
favourable  as  that  of  the  USA  and  Japan;  as  pointed  out  in  COM  report 
(92)2000,  the  proportion  of  advanced  technologies  in  European  exports  is 
actually decreasing, now being only at the level of  17%, compared with 27% 
for Japan and 31 % for the USA.  It is recognised that the developing markets 
in  Asia  are  large  and  would  benefit  from  implementing  European  energy 
technology.  Furthermore,  European  technologies  could  even  increase  their 
penetration  of  the  USA  and  Japanese  markets.  An  energy  technology 
promotion  programme  would  therefore  be  of  valuable  support  for  the 
European initiative in terms of economic growth. 

2.3  The preservation of energy resources goes in hand with the protection of our 
In fact,  there  is  no way  in which  environmental  goals  will  be 
environment. 
achieved  without  widespread 
implementation  of  appropriate  energy 
technologies.  In the coming decade, technology development  and  utilisation 

can  reduce  energy  consumption  significantly,  in  some  cases  by  more  than 
50% per unit of output, with a corresponding reduction  in pollutant  emissions 
such  as  C02,  SO2,  NOx.  This  is  of  vital  importance,  not  only  for  the  EU 
(meeting the  CO2 stabilisation  target),  but  also for  its  neighbours  in  Central 
and Eastern Europe, and even more for the developing countries who are in 
the process of dramatically  increasing their economic growth. 

it  also  requires  companies 

2.4  Clearly  the  internal  market  offers  significant  new  opportunities  for  Member 
to  be  more 
State  businesses.  However, 
competitive,  and  one  important  means  of  enhancing  competitiveness  is  the 
implementation  of  better,  more  efficient  energy  technologies.  Technologies 
successfully developed by companies, often with public support at national or 
regional  level,  would  be  taken  up  more  easily  and  widely  if  economic  and 
technical  uncertainties  and  the  lack  of  market  transparency  could  be 
overcome by Community promotional support; this would in turn add value to 
the programmes administered by the Member States. 

2.5  Community policy objectives to strengthen social and economic cohesion and 
agricultural  policy  are also  met  by energy  technology  promotion.  The  living 
conditions  of  European  citizens,  in  particular  in  the  less  favoured  regions, 
technologies. 
can  be  improved  by  the  utilisation  of  efficient  energy 
Improvements  in public  transport  systems,  private  cars,  heating  and  lighting 
systems  can be achieved through  more efficient  energy  use  or through  new 
means;  although  energy  must  always  be  realistically  priced,  efficient 
technologies  can  make energy  available  at  more  reasonable  price  levels  to 
the  less favoured  regions  and thus  ensure  that  they  are  not  excluded  from 
In  fact,  energy  technology  will  have  a 
access  to  these  vital  services. 
important 
significant 
the 
instrument 
Community.  There  are  similar  considerations  which  apply  to  the  increased 
use of modern energy technology  in rural areas.  Also, the recent  reforms of 
the  Common  Agricultural  Policy  could  be  eased  by  associated  measures, 
such  as  the  utilisation  of  land  for  bio-fuel  plantations  (bio-methanol,  rape-
seed,  wood,  etc.),  to  provide  fuels  for  use  in  the  transport  and  buildings 
sector.  Technologies  are available  now,  but,  if  Europe's  rural  areas  are  not 
to  be  left  out,  they  need  a  vigorous  push  for  them  to  be  taken  up  in  the 
various sectors concerned. 

impact  on  societal  development  and  will  be  an 
for  strengthening  economic  and  social  cohesion 

in 

2.6  Finally,  another  major  Community  policy,  external  relations,  would  also 

benefit  from  a  programme  of  energy  technology  promotion. 

In  fact,  the 

international  dimension  of  energy  is  greater  than  for  any  other  commodity. 

Not  only  initiatives  such  as  the  EC-Energy  Centres,  but  also  international 

activity  to  decrease  CO2  emissions  (follow-up  to  the  Rio  conference)  and 

help for  developing  countries to gain access to adequate  and  clean  supplies 

of energy,  would  be  greatly  facilitated  by the  promotion  of  European  energy 

technologies.  Furthermore,  the  neighbouring  countries  of the  EU  are  either 

significant  energy  suppliers  (Russia,  Poland,  Norway,  Algeria,  Gulf  etc.),  or 

they have great potential for the utilisation of efficient technologies for energy 

consumption,  transformation  and  production.  The  prospect  of  a  number  of 

Central  and  Northern  European  Countries  joining  the  Community,  and  of 

association  agreements  with others  (Mediterranean  countries),  increases the 

necessity  for  considering 

them  as  partners 

in  the  new  Community 

programme.  THERMIE-II  could  contribute  to  successful  co-operation  in 

particular through  its dissemination action implemented by its OPET-network. 

2.7  These  gualitative  obiectives  could  be  illustrated  by some  Quantitative  targets 

which THERMIE-II  would seek to achieve.  For example: a decrease  of 2% in 

the  Community's  energy  imports,  thus  increasing  the  security  of  energy 

supply,  a  further  increase  in energy  savings  of 20Mt/y,  a  reduction  of 2%  in 

Community  CO2  emissions,  etc.  These  objectives would  need to  be  defined 

in  more  detail  and  measurement  criteria  must  be  developed  in  parallel  with 

the implementation of this new programme. 

3 

ORIENTATIONS - STRUCTURE OF THE PROGRAMME 

3.1 

In  order  to  successfully  meet  the  above  objectives  and  to  complete  the 

demonstration  action  undertaken  within  the  4th RDT  framework  programme, 

the  programme  has  to  be  adequately  structured  and  to  concentrate  on 

priorities; furthermore  it should be defined to face the problems  relating to the 

utilisation  of  energy  technologies,  rather  than  simply  the  problems  of 

particular  individual  energy  sectors  or  technologies.  Thus  the  traditional 

sectoral approach 

• Rational use of energy 

• Renewable  Energy  Sources 

• Fossil Fuels (Solid Fuels and  Hydrocarbons) 

-9 

will be completed  by one  related to the use of a technology  in order  to match 

with energy policy related problems of the market. 

The  specific  content  of  the  sectors  of  application  will  concentrate  only  on  a 

limited number and follow closely the results of the evaluation of the previous 

and  ongoing  Community  energy  technology  support  programmes  as  well  as 

the demonstration of technical feasibility undertaken within the 4th framework 

programme.  The  organisation  will  take  into  account  the  basic  principle  of 

common  action 

in  partnership  with 

industry  and  Member  States 

administrations.  A draft programme for the 3 sectors is attached. 

3.2  The content of the programme would work across sectors and would  promote 

technologies  by  demonstration  and  dissemination  for  a  specific  end-use. 

Actions  eligible for  support would  be  located  in one  or  more  of the  following 

areas: 

industry  (RUE  and  final  consumption  of  fuels  or  energy  sources,  for 

heat,  power,  lighting, etc.); 

energy  industry  (production/transformation  of  fuels  or  energy  sources, 

including  exploration  and  demand-side  management  action  on  efficient 

electricity production and utilisation); 

tertiary  sector  :  buildings  and  domestic  sector  (including  services  and 

administration:  RUE,  solar  thermal,  electricity,  etc.),  transport  sector 

(RUE,  bio-fuels,  electricity,  solar  PV,  etc.),  urban energy  systems  (CHP, 

district  heating,  traditional  energy  sources  combined  with  new  ones  -

geothermal,  biomass, wind, clean use of coal, gas, etc.); 

rural  energy  systems  (biomass  plantations),  isolated  areas  (islands, 

mountains and peripheral regions: Renewable  Energy Sources). 

Targeted  projects  and  programmes  with a  Community-wide  dimension  would 

be  a  suitable  instrument  to  assess  economic  viability  and  allow  for  major 

breakthroughs  in  the  utilisation  of  advanced  and  efficient  European  energy 

technologies.  Likewise,  THERMIE-II  has  to  allow  continuing  support  to 

SMEs,  and would support small projects with good replication  potential  in the 

Community. 

-10 

3.3  The  type  of  support  would  be  granted  accordingly  to  the  need  for  public 

action: 

Support  for  demonstration  projects:  -  to  cover  the  risk  of  economic 

viability  for  the  demonstration  of  a  first  commercial  size  project  in  a 

country  or  region  or of  a  technology  which  has  not  yet  been  introduced 

on the  market  in the  same  economic  conditions;  dissemination  through 

projects  promoting  energy  technologies  with  a  view  to  their  broader 

utilisation-

Measures  for  energy  technology  promotion  (dissemination,  technology 

transfer,  market  assessment,  information,  advice,  etc.)  in  particular  of 

results  of  Community  or  Member  States'  support  programmes  or  of 

similar  technologies  developed  by  industry  without  public  support  and 

on the same state of insufficient market penetration. 

Energy  technology  transfer  and 

industrial  co-operation  with  Third 

Countries and international organisations. 

Horizontal  support  measures:  Co-ordination  of  policies,  evaluation  of 

programmes and  administrative support. 

The  proportion  of  expenditure  for  these  various  types  of  support  will  be 

defined  in  consultation  with  the  advisory  committee  and  according  to  the 

annual budget provisions. 

3.4  Projects  should  generally  involve  several  companies  from  several  Member 

States (except for certain specific cases, to be defined). 

3.5  The  amount  of proiect  support  should be  limited as  in the  past to 35%  of the 

eligible  costs.  For  Measures  and co-operation with Third  Countries,  it would 

be  between  50%  and  100%.  Costs  for  horizontal  measures  should  be  fully 

covered (100%). 

3.6  Financial  resources:  the  duration  of the  programme  should  be  4 years  to  be 

in line with the demonstration  activity of the 4th framework  programme  and to 

allow  time  for  results  to  come  through,  for  a  good  and  efficient  organisation 

and  for  the  programme's  objectives  to  be  achieved.  The  level  of  finance 

foreseen  for  1995  in  the  context  of  funds  available  under  Heading 3,  other 

than  those  allocated  to  the  4th Framework  Programme  RTD  is  30 MECU. 

The  level  of  finance  for  1996-98  will  be  decided,  outside  the  resources 

11 

allocated to the 4th Framework Programme RTD, in the light of the revision of 
the  budget  estimates  and  defined  in the framework  of the  annual  budgetary 
procedure to an adequate extent to ensure that the programme  is carried out 
in a coherent  manner  until  its conclusion.  The geographical  coverage  of the 
THERMIE-II  programme would thus  be focused  on the  Community's  internal 
market,  but  would  allow  for  a  limited  action  to  be 
in 
neighbouring  regions  (Central  and  Eastern  Europe,  Northern  Europe, 
candidate  countries 
the 
Mediterranean,  as well as some specific  actions for  important  Third  Country 
markets). 

for  EU  membership,  Southern  Europe  and 

implemented 

3.7  Eligibility criteria for projects would be: 

existence  of  financial  risks  in  demonstrating  viability  of  a  energy 
technology; 
no possibility of Member State sufficient financing and support; 
increase in security of long term energy supply of the Community; 
preservation of energy resources and of the environment; 
improved competitiveness of European industry. 

Additional  criteria  would  be  as  in  the  existing  THERMIE  programme  the 
"Community dimension" (several proposers from different  countries), the size 
of  undertakings  (SMEs)  and  projects  from  regions  whose  development  is 
lagging  behind.  Every  year  priorities  would  be  defined  by  the  Commission 
(assisted  by  the  advisory  groups)  and  in  agreement  with  the  Advisory 
Committee of Member State representatives. 

3.8 

If  the  programme  is  to  be  effectively  organised  and  implemented  and  the 
objectives  achieved,  then  there  must  be  a  careful  examination  of  the 
complementarity  of THERMIE-II with  other  Community  financial  instruments: 
those "upstream", for R&D and energy programming; those "downstream", for 
energy  policy  (SAVE,  ALTENER),  regional  policy,  external  policy  and  co 
operation  (PHARE/TACIS,  Co-operation  agreements  and  EDF)  and  finally 
those  of  the  European  Investment  Bank,  other  financial  institutions  (e.g. 
EBRD),  other 
instruments  such  as  the 
European Energy Charter.  Co-ordination with Member State programmes will 
be most effectively ensured, as up to now, through an Advisory Committee. 

international  organisations  or 

12 

3.9  Organisational aspects. The projects will be selected following an annual call 
for proposals to be published in the Official  Journal.  Practicable  procedures 
will  be  developed  with assistance  of  Member  States  through  the  THERMIE 
Committee. 

to  public  or  private  organisations 

3.10 In order to facilitate the administration of the programme and to respect as far 
as  possible  the  principle  of  subsidiarity,  the  Commission would  continue  to 
have  recourse 
in  energy 
technology  promotion  in  the  Member  States  (OPET).  The  OPET-network 
would  also  play  an  increasing  role  in  the  organisation,  preparation  and 
management  of  promotional  measures  and  as  far  as  possible  in  projects. 
Professional  associations  would  also  be  involved  in  these  aspects  on  an 
informal  basis  and  at  low  cost.  All  interested  services  of  the  Commission 
should assist  in the decision-making  process, depending on their  interest  and 
competencies. The potential involvement of the European Investment  Bank in 
this programme should also be examined. 

involved 

4  BUDGET - PROVISIONS 

4.1  The  budget  will  be  determined  by  the  budgetary  authority  in  the  light  of 

available resources in the framework of Heading 3 of the budget. 
The indicative allocation of the amount between the different  mechanisms  of 
support as defined under point 3.3 will be 

project support in the EU 
promotional measures in the EU 
co-operation with Third Countries 
horizontal support measures 

This indicative allocation is based on the findings of the THERMIE evaluation 
report showing the need for wider replication of results of existing technology 
programmes  as  well  as  due  to  the  fact  that  the  closeness  to  the  market  of 
demonstration of economic viability calls for intensive promotional measures. 

4.2  The  annual  allocation for  the  different  fields  and  area  of  application  will  be 
fixed  annually  accordingly  to  the  potential  of  proposals  and  in  consultation 
with the Advisory Committee. 

- 1 3-

COUNCIL REGULATION (EC) No.../.. 
OF../../.... 
CONCERNING A COMMUNITY PROGRAMME PROVIDING FINANCIAL SUPPORT FOR THE 
PROMOTION OF EUROPEAN ENERGY TECHNOLOGY 1995-1998 ("THERMIE-H") 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular 
Article 235 thereof, 

Having regard to the proposal from the Commission^), 

Having regard to the opinion of the European Parliament^2), 

Having regard to the opinion of the Economic and Social Committee(3), 

Whereas  pursuant  to  Article 3(t)  of  the  Treaty  the  activity  of  the  Community  shall 
include measures in the spheres of energy, 

Whereas  in its resolution of  16 September  1986 concerning new Community energy 
policy objectives for  1995 and convergence of the policies  of the  Member  StatesW 
the Council stated that, possible short-term fluctuations on the energy  market apart, 
efforts  made  must  be  maintained  and,  if  necessary,  reinforced  between  now  and 
1995 and beyond that date  in order to reduce to a minimum the risk of tension at a 
later date on the market; 

Whereas  that  same  resolution  states  that  one  of  the  horizontal  objectives  of 
Community  energy  policy  is  to  encourage  continuous  and  reasonably  diversified 
promotion of technological  innovations  and appropriate  dissemination  of the  results 
throughout  the  Community;  whereas  in  spite  of  the  present  energy  situation  there 
should  be  no  relaxation  of  efforts  to  diversify  the  Community's  energy  supply  and 
improve  energy  efficiency;  whereas  the  promotion  of  new technologies  will  help to 
achieve these objectives and to ensure better protection of the environment from the 
impact of energy technologies; 

(1)  COM(93) 642 def., of 9 December 1993. 
(2) 
(3) 
(4)  O J No C 24* ,25.09.1986, p. 1. 

- 1 4-

Whereas  it  is  important  to  dovetail  these  efforts  with  the  Community  strategy  for 

science  and  technology  and  with  the  specific  programmes  in  particular  the  activity 

concerning  demonstration  of  clean  and  efficient  energy  technologies  defined  in the 

4th  framework  programme  for  Community  activities  in  the  field  of  research  and 

technological  development,  both  in terms  of  programme  execution  and  in  terms  of 

the financial status of the programme in the financial perspective; 

Whereas  the  resolution  of  16 September  1986  also  states  that  the  Community 

should  search  for  balanced  solutions  as  regards  energy  and  the  environment  by 

making use of the best available economically justified technologies; 

whereas  under Article 130r of the Treaty  environmental  protection  requirements  are 

to  be  a  component  of the  Community's  other  policies  and  action  by the  Community 

relating  to  the  environment  must  be  designed  to  ensure  a  prudent  and  rational 

utilisation of natural  resources; whereas  energy technology  has a  key  role to play in 

meeting  the  ecological  challenge  by  increasing  energy  efficiency,  developing  new 

and  renewable  sources  and  ensuring  the  clean  use  of  solid  fuels:  whereas  major 

efforts in all these areas will be needed to face up to the threat of climatic change; 

Whereas  the  promotion  of projects for  exploiting  the  indigenous  energy  potential of 

the  regions,  particularly 

less-developed  regions,  will  help  to  strengthen  the 

economic  and  social  cohesion  of  the  Community,  an  objective  which,  according  to 

Article 130b of the Treaty,  should be taken into account when implementing  common 

policies and the internal market; 

Whereas support for the promotion of energy technologies will benefit economic and 

social cohesion; 

Whereas  action  to  promote  innovative  technologies  taken  at  Community  level  will 

avoid the dissipation of resources and increase effectiveness; 

Whereas  this  action  should  be  co-ordinated  with  action  being  taken  by  the 

Community  within the framework  of other  specific  programmes  and  which  includes 

the activities  of demonstration  of technical feasibility  of projects,  of the  promotion of 

co-operation with Third Countries and of dissemination and optimisation of results of 

activities in Community RTD; 

Whereas financial support should be granted in appropriate cases to projects for the 

promotion of advanced technology  in the field of energy; 

15 

Whereas  it is appropriate  to  promote  the  market  penetration  of projects  likely  to  be 

rapidly  absorbed  by  the  market  but  also  of  projects  -  particularly  in  the  field  of 

renewable energy - which, although they might have less rapid access to the market, 

are  of  great  interest  in  the  long  term  in  terms  of  energy  supply,  environmental 

protection and employment; 

Whereas,  when  selecting  projects,  equal  preference  should  be  given  to  projects 

involving  the  association  of  independent  undertakings  established  in  different 

Member  States,  in projects proposed  by small  and  medium-sized  enterprises  and in 

dissemination  projects;  whereas  these  projects,  if  selected,  must  benefit  from 

increased Community support; 

Whereas  the  Commission  must pursue  its efforts to simplify  and  expedite  tendering 

and  selection  procedures  and  to  make  them  more  transparent,  with  a  view  to 

furthering  the  implementation  of the  programme  and  easing  the  steps  that  must  be 

taken by undertakings,  particularly  SMEs, to participate  in projects for the  promotion 

of energy technologies; 

Whereas  for  reasons  of  effectiveness  it  is  necessary  to  make  provision  for  a 

programme of four years duration with appropriate overall funding; 

Whereas  it  is  necessary  to  estimate  the  Community  finance  needed  to  implement 

this programme; whereas that amount must be covered by the financial  perspectives 

defined  by  inter  institutional  agreements;  whereas  the  appropriations  actually 

available  will  be  determined  under  the  budgetary  procedure  in  compliance  with  the 

said agreements; 

Whereas  the  overall  level  of  Community  effort  in the  field  of  non-nuclear  energies, 

including  measures  falling  within  the  scope  of  the  fourth  framework  programme, 

cannot  be  lower  in  real  terms  than  it  has  been  over  the  previous  corresponding 

period; 

Whereas,  notwithstanding  the  new' impetus  that  the  promotion  of  innovative  energy 

technologies  requires,  the  continuity  of  measure  undertaken  under  promotional 

schemes  and  demonstration  projects  and  industrial  pilot  projects  in the  energy  field 
referred  to  by  Regulation  (EEC)  No 2008/90(5),  3640/85  and  the  programme  of 

(5)  OJ No L 185,17.07.1990, p.1 

- 1 6-

support  for  technological  development  in  the  hydrocarbons  sector  referred  to  in 

Regulation  (EEC)  No 3639/85  must  be  ensured  in accordance  with this Regulation; 

whereas  such  continuity  must  be  achieved  on  the  one  hand  through  the  pursuit  of 

measures  to  promote  and  disseminate  technologies  that  have  received  Community 

support  under  such  Regulations; whereas  it may  also  be  achieved  through  support 

for the  later  stages  of  projects that  have  already  received  partial  support  under  the 

same  Regulations; whereas  it must be  possible  in certain  cases  to  support  projects 

of the same  sort as those covered  by these  Regulations  provided they also fulfil the 

requirements of this Regulation; 

Whereas  co-operation  between  undertakings  in various  Member  States  in the  field 

of energy technology  must be maintained and encouraged; 

Whereas  technology  transfer  in  the  energy  sector  could  contribute  significantly  to 

more efficient energy  production and the reduction of pollutant emissions  in the  less 

favoured areas of the Community and in Third Countries; 

Whereas  such technology transfers should therefore  be encouraged  both within the 

framework of existing Community programmes and by any other appropriate means; 

Whereas the grant of Community support must not affect conditions of competition in 

such way as to be incompatible with the competition provisions of the Treaty; 

Whereas the present  programme  must be subjected to a mid-term review and a final 

evaluation, to be conducted by independent experts; 

Whereas this regulation is based on Article 235 of the Treaty; 

Having  regard  to  the  Community's  commitment  under  the  International  Convention 

on  Climate  Change  to  participation  in  an  international  action  to  reduce  the  risks 

attached to emissions of pollutants, particularly CO2; 

Whereas,  in  order  to  meet  these  objectives,  the  Community  must  embark  on  a 

vigorous  plan  of action  involving  co-operation  with  developing  countries  which  lack 

access to modern production and rational use of energy technologies; 

Whereas,  of these countries,  it is now inter alia  in those  in the  Pacific  Rim and  Latin 

American  countries  that  a  rise  in  emissions  will  be  inevitable  unless  preventive 

action is taken; 

HAS ADOPTED  THIS  REGULATION: 

-17 

Article  1 

The  Community  may,  under  the  conditions  laid  down  in  this  Regulation,  grant 

financial  support  for  projects  for  the  promotion  of  energy  technology  (THERMIE 

1995-1998)  in  the  fields  of  application  referred  to  in  Article 3  and  undertake  the 

promotional activities referred to in Article 4. 

Article 2 

1.  For  the  purposes  of  this  Regulation,  'projects  for  the  promotion  of  energy 

technology',  hereinafter  referred  to  as  'projects',  means  projects  which  are  not 

eligible for the specific programmes of the 4th  Framework  Programme  and which 

are  designed  to  advance,  implement  and/or  promote  innovative  technologies  in 

the field of energy,  implementation  of which entails  a  large  element  of economic 

risk,  such  that  those  projects  would  in  all  likelihood  not  be  executed  without 

Community financial support. 

2.  Community  financial  support  may  be  granted  for  projects  designed  to  promote 

with  a  view  to  their  broader  utilisation,  either  under  different  economic  or 

geographical  conditions  or  with  technical  modifications,  innovatory  techniques, 

processes  or  products  which  have  already  been  applied  once  but,  owing  to 

residual risk, have not yet penetrated the market. 

Article 3 

The fields of application of this Regulation are selected areas of: 

- 

- 

rational use of energy, 

renewable energy sources, 

-  clean combustion of solid fuels, 

-  hydrocarbons. 

- 1 8-

Annex I  lists  the  sectors  of  application  covered  by  each  of  these  fields.  The 

contents  of  this  Annex  may  be  amended  to  keep  pace  with  technological 

developments  in accordance with the procedure defined in Article 9  paragraph  1,  the 

European Parliament and the Council being kept informed. 

Article 4 

The  Commission  might  undertake  promotional  actions,  such  as  those  defined  in 

Annex  II,  designed  to  encourage  the  application  and  market  penetration  of  energy 

technologies.  To  that  end  the  Community  may  provide  technical  and  financial 

support for bodies that promote innovative technologies in the Member  States.  A list 

of these  measures  appears  in Annex  II,  the  contents  of which  may  be  amended  in 

accordance with the procedure defined in Article 9 paragraph  1. 

These  promotional  actions  may  be  carried  out  in Third  Countries  in so far  as  such 

extension is in keeping with the objectives of this Regulation. 

Article 5 

1.  Any project within the meaning of Article 2  must meet the following conditions: 

(a) it  must  use,  with  a  view  to their  implementation  and  propagation,  innovatory 

techniques,  processes  or  products,  or  a  new  application  of  established 

techniques, processes or products; 

(b) it  must  offer  economically  viable  prospects  of  subsequent  commercial 

exploitation of the relevant technology; 

(c)  it must  offer  appropriate  solutions  compatible  with  safety  and  environmental 

protection requirements; 

(d) it must be difficult to finance because of major economic risks; 

(e)  it  must  be  proposed  by  natural  or  legal  persons  capable,  in the  case  of  the 

techniques,  processes  or  products  referred  to  in  (a),  of  implementing  and 

applying them, and of contributing to or assisting in the dissemination thereof; 

- 1 9-

(f)  in the  case  of any  project  of a  total  cost  of  ECU 2  million  or  more,  it  must be 

submitted  by  at  least  two  independent  promoters  established  in  different 

Member States. 

However,  exceptions  may  be  agreed  for  projects  submitted  by  a  single 

promoter 

if  their  implementation  would  be  of  particular 

interest  to  the 

Community; 

(g) it  must  be  carried  our  within  the  Community  unless  it  is  essential  to  the 

interests  of  the  Community  to  have  all  or  part  of  it  carried  out  in  an  area 

outside the  Community,  in particular  because  of the  special  characteristics of 

the project. 

(h) it must be carried out outside the Community  if such an action is necessary to 

meet  the  Community's  commitments  under  the  International  Convention  on 

Climate Change. 

2.  Additional conditions specific to the  sectors of application are given  in Annexes I 

and II. 

3.  When  selecting  projects,  as  an  adjunct  to the  criteria  laid  down  in paragraphs 1 

and  2,  it  shall  take  account  of  a  preference  to  be  given  to  projects  with  the 

following characteristics: 

(a) projects,  other  than  those  referred  to 

in  paragraph  1 (f), 

involving  an 

association  of  a  least  two  independent  undertakings  established  in  different 

Member  States,  provided  that  it  is  established  that  each  undertaking  can 

make an effective and significant contribution to canning out the project; 

(b) projects  proposed  by  small  and  medium-sized  undertakings  or  by  an 

association of such undertakings; 

(c) projects  which  are  to  be  implemented  in  regions  whose  development  is 
lagging behind as defined by Article 8 of Regulation (EEC)  No 2052/88(6). 

(6)  OJ No L 185,15.07.1988, p.9. 

- 2 0-

Article 6 

1.  Support  for  a  project  shall  take  the  form  of  a  financial  contribution  by  the 

Community  granted  in accordance  with the  conditions  set  out  in the  paragraphs 

below and in Articles 7,  11 and 14. 

2.  Financial support may be granted for an entire  project or for different  stages  of a 

project. 

In  the  latter  case,  without  prejudice  to  the  responsibilities  conferred 

upon  the  budgetary  authority  of  the  European  Communities,  financial  support 

may continue to be granted for  later stages of the same  project  provided that the 

eligibility criteria continue to be met and that the Commission  is satisfied with the 

progress of the project. 

3.  Financial support may not exceed 35% of the eligible cost of the projects  referred 

to in Article 2. 

4.  The  amount  of financial support  shall  be determined  separately for each  project. 

When determining the amount, one takes account of the element or proportion of 

the  risk which will  have  to  be  borne  directly  by those  responsible  for  the  project 

and of other support received or expected,  in such a way that the total amount of 

public support does not exceed 49% of the total cost of the project.  To this end, 

the person responsible for the project shall  be obliged to  inform the  Commission 

of any public aid expected or received. 

5.  Whenever  specifically  required,  a  decision  could  be  made  to  set  up  other 

appropriate  financial  mechanisms  according  to  the  procedure  referred  to  in 

Article 9 paragraph  1. 

Article 7 

1.  Projects  shall  be  submitted  by  natural  or  legal  persons  established  within  the 

Community,  whether  individually  or  in  the  form  of  associations,  following  the 

publication  of  an  invitation  to  submit  projects  in  one  or  more  of  the  fields  of 

application  referred  to  in  Article 3  in  the  Official  Journal  of  the  European 

Communities,  in  accordance  with  this  Regulation.  This  invitation  could  be 

preceded  by an  invitation from the  Commission  encouraging  or  coordinating  the 

launch  of  specific  projects,  called  "targetted  projects", whenever  a  technological 

gap  exists  in  a  specific  area  or  significant  progress  could  be  achieved  through 

-21 -

cooperation  between  individuals,  companies  or  other  bodies  established  in  at 
least two different  Member States. 

2.  In the  invitations to submit  projects, the  Commission  shall  specify  those  sectors 
to  be  given  priority  when  projects  are  selected;  this  list  of  priorities  shall  be 
drawn up in accordance with the procedure defined in Article 9 paragraph  1.  The 
Commission  shall  also  specify  the  information  applicants  will  be  required  to 
supply for the purposes of the selection of projects. 

Article 8 

1.  The Commission shall be responsible for applying this Regulation. 

2.  The procedure referred to in Article 9 paragraph 1 applies to: 

(a) the amendment of the contents of Annexes I and II; 

(b) the establishment of priorities for invitations to submit projects; 

(c) the  selection  of  projects,  including  the fixing  of the  rate  of financial  support, 
for  every  project  or  promotional  action  with  a  total  cost  exceeding 
ECU 500,000; 

(d) any institution of financing mechanisms in the sense of Article 6 paragraph 5. 

3.  The  procedure  referred  to  in  Article 9  paragraph 2  applies  to  the  selection  of 
projects and promotional actions, and to the fixing of the rate of financial support 
for every project  or promotional action, with a total cost exceeding  ECU 100,000 
but not exceeding ECU 500,000. 

Article 9 

1.  In  carrying  out  the  tasks  referred  to  in  Article 8  paragraph 2,  the  Commission 
shall be assisted by a committee composed of the representatives of the Member 
States and chaired by the representative of the Commission. 

- 22 -

The representative of the Commission shall submit to the committee a draft of the 

measures to be taken.  The committee shall deliver  its opinion on the draft within 

a  time  limit  which  the  chairman  may  lay  down  according  to  the  urgency  of  the 

matter.  The  opinion shall be delivered by the  majority  laid down  in Article  148(2) 

of the Treaty  in the case of decisions which the Council  is required to adopt on a 

proposalfrom  the  Commission.  The  votes of the  representatives  of the  Member 

States  within  the  committee  shall  be  weighted  in  the  manner  set  out  in  that 

Article.  The chairman shall not vote. 

The  Commission shall adopt measures which shall apply  immediately.  However, 

if these  measures  are  not  in accordance with the  opinion  of the  committee,  they 

shall be communicated by the Commission to the Council forthwith. 

In the event, the Commission shall defer application of the measures which  it has 

decided for a period of one month from the date of communication. 

The  Council,  acting  by  a  qualified  majority,  may  take  a  different  decision  within 

the time limit referred to in the previous paragraph. 

In  carrying  out  the  tasks  referred  to  in  Article 8  paragraph 3,  the  Commission 

shall be assisted by a committee composed of the representatives  of the Member 

States and chaired by the representative of the Commission. 

The representative of the Commission shall submit to the committee a draft of the 

measures to be taken.  The committee shall deliver  its opinion on the draft, within 

a  time  limit  which  the  chairman  may  lay  down  according  to  the  urgency  of  the 

matter,  if necessary  by taking a vote. 

The  opinion  shall  be  recorded  in  the  minutes;  in  addition,  each  Member  State 

shall have the right to ask to have its position recorded in the minutes. 

The  Commission  shall  take  the  utmost  account  of  the  opinion  delivered  by  the 

committee. 

It shall  inform the  committee  of the  manner  in which  its opinion  has 

been taken into account. 

- 2 3-

Article 10 

1,  In  the  application  of  the  current  Regulation,  the  Commission  ensures  co 

ordination with programmes  implemented  by the  Community  in the  framework  of 

other  specific  programmes  and  should  include  demonstration  of  the  technical 

viability  of  projects,  the  promotion  of co-operation  with Third  Countries,  relevant 

activities  of the  EIB  and  EBRD  as well  as  dissemination  and  optimisation  of the 

results of activities  in field of Community RTD. 

2.  In addition,  it shall ensure closer co-ordination with national  schemes  in order to 

avoid duplication of similar projects. 

Article 11 

1.  The  contractor  responsible  for  carrying  out  a  project  receiving  financial  support 

from the  Community  shall undertake  to use the successful  technique,  process or 

product or to facilitate its use, and to allow dissemination of the results obtained. 

2.  The  Commission  shall,  in  co-operation  with  the  bodies  responsible  in  the 

Member  States,  endeavour  to  ensure  the  dissemination  and  application  of 

projects  supported  in  accordance  with  this  Regulation  and  to  promote  their 

exploitation. 

It  shall  take  appropriate  steps  to  achieve  this  objective  in 

connection with the promotional actions referred to in Article 4. 

Article 12 

Contracts  signed  between  the  Community  and  the  persons  referred  to  in Article 14 

for  the  implementation  of  the  projects  and  promotional  actions  adopted  under  this 

Regulation,  shall  govern  the  rights  and  obligations  of  each  party,  including  the 

methods  of  dissemination,  protection  exploitation  of the  results  of  the  projects  and 

complete  or  partial  repayment  of  the  financial  support  in  the  event  of  non 

compliance with contractual obligations. 

- 2 4-

Article 13 

Subject  to  Article  11,  the  information  obtained  by  the  Commission  under  this 

Regulation shall remain confidential. 

Article 14 

Responsibility  for  any project  shall  lie with a  physical  or  legal  person  constituted in 

accordance with the  law applicable  in the  Member  States,  or with  an  association of 

such  persons,  within  they  are  jointly  and  severally  liable,  in  so  far  as  the  law 

applicable  in the Member  State permits. 

Article 15 

Financial  support  granted  by  the  Community  must  not  affect  conditions  of 

competition  in such a  way  as to  be  incompatible  with the  relevant  provisions  of  the 

Treaty. 

Article 16 

Two years  after the entry  into force  of this  Regulation  and  also  upon  expiry  thereof, 

the  Commission  shall  submit  a  report  on  the  implementation  of  this  Regulation,  in 

particular  on  the  compatibility  between  national  and  Community  action,  to  the 

European  Parliament  and  to  the  Council  for  the  purposes  of  assessing  the  results 

obtained,  together  with  the  external  evaluation  by  independent  experts  on  which  it 

will be based. 

Article 17 

The  appropriations  necessary  to  the  implementation  of  this  Regulation  shall  be 

entered each year  in the general budget of the European Communities. 

The  appropriations  shall  cover  the  financial  support  to  be  granted  to  projects 

referred to  in Article 2,  the financing  of the  actions  referred to  in Article 4  and  other 

expenditure necessary to the implementation of this Regulation. 

- 25 -

Article  18 

Regulation 2008/90 shall continue to apply to projects and measures which  support 
has been granted pursuant to those Regulations. 

Article 19 

The Regulation shall enter into force on 1 January 1995. 

It shall apply until 31 December 1998. 

This Regulation shall be binding in its entirely and directly  applicable  in all Member 
States. 

Done at..., 

For the Council 
The President 

- 26 -

ANNEX I 

LIST OF SECTORS OF APPLICATION 

The fields of application in Article 3 cover the sectors listed below. 

1.  RATIONAL USE OF ENERGY 

Financial support will focus on the following sectors of application: 

Transport; 
Building; 
Industry; 
Energy Industry. 

1.1  TRANSPORT 

Projects  must  lead to  a substantial  improvement  on the  overall  efficiency  as 
well  as  a  reduction  on  emissions,  CO2  and  other  atmospheric  pollutants, 
through 
traffic  conditions  and  vehicles. 
Preferences are given to fleets of vehicles for public transportation,  including 
urban freight delivery vehicles. 

improvements  on 

technical 

Two areas of projects can be considered: 

a)  RUE applications: 

-  Projects  related to the promotion of innovative fleets of vehicles.  (New 

designs, new fuels: CNG, LPG, biofuels, diesel-electric...) 

b)  Energy substitution applications: 

-  Projects  related  to  the  promotion  of  new  fuels  infrastructure  and 
distribution  systems.  (Rapid  and  slow  charging  units,  O+M  special 
requirements) 

-  Projects related to the technical adaptation of vehicles to new fuels. 

1.2  BUILDINGS 

- 2 7-

Projects  must 

lead  to  a  substantial  reduction 

in  energy  consumption 

according to standards  and  substantial  reduction  of emissions  and  pollutants 

in  building  stocks  through  integrated  technical  and  economic  improvements. 

Preference will  be given to projects with clear  integration  of design,  materials 

and equipments with loads control and  management. 

a)  RUE applications: 

-  Projects related to the promotion of rehabilitation of buildings. 

-  Projects  related  to  the  promotion  of  new  integrated  designs  for  new 

buildings. 

-  Projects  related  to  the  promotion  of  new  cooling  systems  (without 

CFCs). 

-  Projects related to technologies outwith of combined  production of heat 

and electrical power, for example fuel cells. 

1.3  INDUSTRY 

Heat  recovery  using  new  heat  exchanger  concepts  for  high  polluted 

exhausting  gases  or  new  kiln  designs  for  a  best  use  of  heat  in  the 

chamber(s).  Combustion  of  exhausting  gases  with  later  use  of  heat 

produced can  be also  considered  as well  as  CHP  schemes  improving the 

reliability of the equipment or incorporating new approaches for the use of 

the flue combustion gases. 

Technologies  for  the  recovery  of  energy  form  industrial  wastes  through 

the  production  of  by-products  to  be  used  as  derivated  fuel  or  direct 

energy  production. 

Solutions 

to  eliminate  possible  negative 

environmental  impact have to be incorporated. 

Improvements  of 

industrial  processes 

reducing  specific  energy 

consumption,  where  this  has  an  important  weight  in  the  total  benefits  of 

the project. 

- 

Technical  solutions for a  best  use of the electricity,  especially  in the  peak 

load  periods.  Automation  of  process  could  be  also  considered,  using 

- 2 8-

standard  and  modular  solutions  easily  replicable  or  new  approaches, 

such as predictable and adaptable systems. 

1.4  ENERGY  INDUSTRY 

Advanced  combustion  burners,  integrating  solutions  to  save  energy  and 

reduce  the  environmental  impact,  as  well  as  efficient  cooling  towers  with 

lesser  maintenance  costs  and  reduced  environmental 

impact. 

These 

solutions should be mainly addressed to the re-powering of existing plants. 

Advanced  systems  to  transport  the  heat  produced  in  the  District  Heating 

schemes either to reduce the cost of the installation or to decrease the energy 

losses in the distribution or through the heat exchangers. 

Fuel  cell  stacks  to  provide  electricity  more  efficiently  and  with 

less 

environmental damage. 

Technical solutions to reduce the electricity consumption  in power  plants, that 

could  be  also  used  to  get  a  most  flexible  operation  in  hydro  pump/turbine 

schemes.  Reduction  of  losses  and  increase  of  quality  in  the  transport  and 

distribution of electricity should be also considered. 

2. RENEWABLE ENERGY SOURCES 

Financial support will focus on the following sectors of application-

Energy from biomass and waste; 

Solar energy; 

Wind energy; 

Hydroelectric energy; 

Geothermal. 

2.1  ENERGY  FROM  BIOMASS AND  WASTE 

a)  Projects aiming at improving competitivity of biomass as fuel : 

-  Activities  aiming  at  improving  the  productivity  of  energy  crops  and 

harvesting and transformation technologies ; 

- 2 9-

-  activities  aiming  at  improving  and  upgrading  biomass  conversion 
technologies  for  energy  production  and  use  (production  and  use  of 
liquid, solid and gaseous fuels, production of heat and/or electricity) ; 

-,  activities  aiming  at  reducing  the  costs  for  providing  the  energy 
investment  costs, 

produced  from  biomass  (reduction  of  specific 
rationalisation of production technologies...). 

b)  Projects aiming at the energy  use of vegetal, animal, urban and industrial 

waste: 

-  activities for the upgrading of waste which have a significant  impact on 
the production, substitution of energies or on energy savings  aiming at 
the reduction of the costs of the energy produced. 
Projects  must  comply  with  the  guidelines  of  community  environment 
and agricultural policies. 

2.2  SOLAR ENERGY 

a)  Photovoltaics 

Objectives: 

Dissemination of photovoltaics processes to supply electricity for : 

-  groups of houses, villages ; 

-  buildings, with architectural  integration of PV modules into roofs and/or 

facades ; 

-  means of telecommunication, warning, signalling, water pumping, water 

purification, desalination, etc... ; 

-  distribution from PV central power stations. 

b)  Thermal applications 

Objectives: 

Dissemination  of  techniques  which  relate  to  optimal  technical  and 
economic  integration  of  active  solar  energy  systems  with  efficient 
conventional  systems,  with  guaranteed  results  for  an  overall  improved 
reliability, used for : 

- 3 0-

-  production  of  large  quantities  of  hot water  (or  other fluids)  for  heating 

and/or cooling  applications ; 

-  production  of  large  quantities  of  hot  air  for  ventilation  or  drying 

applications. 

2.3  WIND ENERGY 

Objectives: 

the 

Dissemination of the results obtained from previous  R&D programmes,  in 
order  to  assist  market  penetration,  encourage  European  industry,  and 
promote 
technology, 
transfer  and  broader  use  of  advanced 
particularly  in the less developed countries of Europe. 
Dissemination  and  popularisation  of  the  use  of  wind  energy  conversion 
systems  tailored  to  the  specific  nature  of  the  markets  in  the  different 
Member States by wind turbines of a wide range of nominal capacity. 
Dissemination  of  techniques  with  minimum  effect  to  the  environment, 
namely  reduced noise, minimum land use and improved aesthetic  impact 
that will lead to an increased public acceptability. 

2.4  HYDROELECTRIC  ENERGY 

Objective: 

Dissemination of techniques aimed at the production of electricity for a public 
network or for private use in low-power plants. 
Fields of application : 

Projects (targeted) aimed to bring together  industrial partners to carry out 
high  quality,  reliable  and  competitive  standard  equipment  in  order  to 
promote the creation of, or the penetration into new markets. 
Projects (targeted) aimed to perfect simple, reliable and cheap techniques 
or  technology,  especially  those  adapted  to  the  markets  and  needs  of 
countries whose development is lagging behind. 
Rehabilitation  or  modernisation  of  abandoned  sites  or  those  which  are 
approaching the end of their technical  or administrative  lives, by the  use 
of high performance of State of the art technologies (best quality/price). 

All  projects  must take  into consideration  existing and foreseen  environmental 

- 31 -

protection measures. 

2.5  GEOTHERMAL 

Objective: 

To  promote,  through  dissemination  actions,  the  utilisation  of  already  located 

important  geothermal  resources,  not yet  exploited,  bearing  in  mind  economic 

and environmental aspects, and security of supply. 

Fields of application: 

techniques  in the  drilling  sector,  wellhead  equipment,  corrosion,  scaling, 

automation and the treatment systems for brine waters ; 

exploitation of geothermal fields where the resources  are  proven,  in order 

to reduce the mining risk; 

Development  of  geothermal  applications  in  agriculture,  aquaculture  and 

water  desalination, thus  helping the  regions  affected  by the  modifications 

of the common agricultural policy. 

3.  CLEAN COMBUSTION  OF  SOLID  FUELS 

All type of  Fluidised  Bed  Combustion  (FBC)  should be  now spread  around  in the 

Community:  small  and  large  FBC  are  now reaching  the  industrial  maturity  and it 

will be effective to use them more and more.  They have not to be limited to a type 

of fuel.  But  on  the  contrary,  their  ability  to  use  a  wide  range  of  fuel  should  be 

taken  into  account  in  order  to  disseminate  this  technology.  Therefore,  use  of 

bituminous  coal,  lignite,  peat,  rest  coals,  wastes,  biomass,  RDF,  and  all  type  of 

carbonaceous  materials  should  be  encouraged  -  alone  or  in  mixture  -  to  be 

burned in FBC. 

FBC  should  be  promoted  to  produce  electricity,  and  also  to  be  used  in  CHP 

generation. 

- 32  -

4.  HYDROCARBONS 

Objectives: 

The programme should strengthen the industry capability to answer the short and 

long term  requirements  for  the  availability  of  efficient  technologies  in the field of 

oil and natural gas. The Community effort is therefore aiming at : 

the  dissemination  of  technologies  for  assisting  market  penetration/Special 

attention  (including  co-operation  projects) will be  given to  market  penetration 

in the PECOs and CIS. 

Beneficiaries  would  be  mainly  oil  and  gas  related  companies  which  are 

developing  and  promoting  innovative  and  effective  technologies  to  improve  the 

exploration, production, transportation and use of hydrocarbons,  preference  being 

given in the selection of projects to those proposed by SMEs. 

The fields of application in the upstream sector will be the dissemination of : 

tools  and  methods  for  enhancing  exploration  capability,  particularly  towards 

difficult  and  complex  targets  as  the  North  Sea  and  for  maximising  recovery 

rate ; 

new  technologies  for  marginal  fields  exploitation,  notably  for  gas  fields 

resulting  in  increased  production  from  those  reservoirs  characterised  by 

difficult economic conditions ; 

safety  and  the  environmental  protection  systems 

in  exploration  and 

production, particularly for the Offshore sector ; 

new  and  efficient  LNG  production  and  transport  systems  in  view  to  diversify 

the supply. 

- 3 3-

ANNEX II 

PROMOTIONAL ACTIONS FOR ENERGY TECHNOLOGIES 

1.  OBJECTIVES 

Encouraging the  application  and market  penetration  of  energy  technologies  as 
referred  to  in Article 4  requires  the  undertaking  of  actions  by  the  Community. 
Such actions are to be undertaken only  in so far as market conditions  require it 
and as they are in keeping with the objectives of this Regulation. 

Community  support  for  actions  may  therefore  be  granted  in  order  to  meet 
energy  policy  and  other  related  objectives  set  out  by  the  Treaty  on 
European Union, in particular concerning: 

• 

• 

• 

• 

• 

• 

Increased  utilisation  of  the  industrial  potential  of  energy  technology 
development and improving the technological base of European industry, in 
particular for SMEs; 

Encouraging  European  industry  to  become  more  competitive  by  exploiting 
technology development and market potential to the full; 

Protecting and improving the quality of the environment  by the rational use 
of  energy  resources,  the  use  of  renewable  energy  sources  and  clean 
energy technologies and reducing harmful emissions; 

Technology transfer into less developed regions h  Europe and exploitation 
of the local energy potential; 

Improved working  conditions  and  employment  opportunities  by  the  use  of 
innovative and efficient energy technologies developed and supplied within 
the Community; 

International  cooperation  facilitating  economic  and  social  development  of 
developing countries 

2.  TYPE  OF ACTIONS 

- 3 4-

The actions referred to in Article 4 jnclude: 

2.1  COORDINATION  with national schemes and other Community  programmes 

related to energy technology  in order to avoid duplication  of similar  actions 

and  to  ensure  fully  the  application  of  the  principle  of  subsidiarity  for 

Community action, and in particular through: 

a.  Systematic exchange of information about national support schemes; 

b.  Programme evaluation activities carried out jointly; 

c.  Definition  of  objectives  and  implementation  of  strategies  for  energy 

technology promotion; 

d.  Monitoring the achievement of objectives. 

2.2  INSTRUMENTS  of Community action: 

a.  Analysis  of  the  features  and  evaluation  of  the  potential  of  the  market 

for the  application of energy technologies and their  market  penetration 

(including 

technologies 

for  demand  side  management,  sectoral 

diagnosis, feasibility studies). 

b.  The  dissemination  of  information  on  European  energy  technologies, 

their  further  promotion  and  the  dissemination  of  the  results  of  public 

funded  projects  by  the  organisation  of  events  (technical  workshops, 

seminars,  conferences,  project  site  visits,  exhibitions),  participation  in 

technical  fairs,  the  production  of  documentary  material  etc.,  as  far  as 

the  undertakings'  contractual  obligations  do  not  provide  for  it  or  the 

undertakings concerned are not able to carry them out by themselves. 

c.  Advice  and  promotional  activities  to  guide  the  development  of  actions 

undertaken,  ensure 

the  wider  penetration  of  efficient  energy 

technologies and address barriers in the market. 

d.  Training  of  staff  involved  in  management  or  technical  applications  of 

innovative energy technologies. 

- 3 5-

e.  Development  of appropriate financial mechanisms. 

The  instruments  detailed  above  will  be  structured  in  synergy  with  the 

corresponding  instruments foreseen  in the 'non-nuclear  energy'  programme 

of the fourth framework  programme of research, technological  development 

and  demonstration,  in  the  context  of  'PLANS  TO  FACILITATE  MARKET 

ACCESS' for the various technologies covered by the present programme. 

2.3  Recourse  to  public  or  private  Organisations  cooperating  in  the  above 

activities  for  the  Promotion  of  Energy  Technologies  ("OPET")  in  particular 

by using the OPET  Network. 

2.4  Recourse  to  the  above  activities  with  a  view  to  industrial  cooperation  with 

third  countries,  providing  guidance  for  Community  aid  programmes  and 

achieving  optimal  use  of  energy  technologies  inside  and  outside  of  the 

Community. 

IMPLEMENTATION 

As referred to in Article 9 of the  Regulation, the implementation  of the  measures 

will  be  carried  out  in  close  cooperation  with  Member States  by the  Committee 

which  will  assist  the  Commission  in  the  definition  of  the  programme,  the 

establishment  of  the  priorities  for  action,  the  decision  of  granting  financial 

support and the evaluation of results. 

- 3 6-

ANNEX H (bis) 

Without prejudice to the provisions of Article 3, the various sectors concerned will be 
given support in the following proportions: 

rational energy use 

renewable energy sources 

dean combustion of solid fuels 

hydrocarbons 

45 % 

35% 

13 % 

7 % 

- 3 7-

FINANCIAL  STATEMENT 

1.  Title of operation  Promotion of European Energy Technologies  ("THERMIE-II") 

2.  Budget heading involved  B.4.1000 

3.  Legal basis  Council Regulation to be adopted in 1994 

4.  Description of operation 

4.1  General objectives:  Financial  support  for  promotional  projects  and  measures  for 

larger market penetration of energy technologies 

4.2  Period  covered:  4  years,  01.01.1995  to  31.12.1998  (in  parallel  to  the  4th 

Framework  Programme) 

5.  Classification of expenditure or revenue 

5.1  Compulsory/Non-compulsory expenditure 

5.2  Differentiated/Non differentiated appropriations 

5.3  Type of revenue involved:  No 

6.  Type of expenditure or revenue 

• 

100% subsidy:  for  some  associated  measures  to  be carried out  by  independent 
experts (consultant firms) 

Subsidy for joint  financing with  other sources in  the public  and/or private sector: 
for all projects and most of the associated measures, in particular for those carried 
out in co-operation with Member States Agencies 

• 

• 

• 

Interest subsidy:  subject to further discussion in energy working group 

Other: some service contracts (in particular for some associated measures) 

Should the operation prove an economic success, is there provision for all or part 
of the Community contribution to be reimbursed?:  No 

•  Will the proposed operation cause any change in the level of revenue? 

If so, what sort of change and what type of revenue is involved?  No 

7.  Financial impact 

7.1  Method of calculating total cost of operation (definition of unit costs) 

The  amount  of  30 MECU  for  1995  covers  financial  support  for  demonstration  of 
economic  risks  of  promotion  of  energy  technologies  as  defined  in  art. 2 b)  of 
Council  regulation  2008/90  ("dissemination  projects")  as  well  as  in  its  art. 5 
("associated  measures").  As  this  type  of  projects  is  closer  to  the  market  and 
subject of different  economic or geographical conditions, it is in particular  relevant 
for the sector of rational use of energy.  The level of finance  appropriate for  1996-
1998 will be decided in the light of available funds in Heading 3 of the budget. 

3 8-

The experience made today through the THERMIE Programme shows that there is 
a need for support in the sectors in the following proportions: 

Rational Use of Energy 
Renewable Energy Sources 
Clean use of Solid Fuels 
Hydrocarbons 

45% 
35% 
13% 
7% 

Again,  as experience  made with the THERMIE  regulation  shows,  not  only  project 
support  is required.  In fact,  many  efficient  technologies  have  been  developed  by 
the industry, whether with EC or MS support or not, and the aims of  larger market 
penetration can most effectively be achieved by dissemination measures. 

Finally,  around  13% of funding  is  necessary  for  economic  analysis,  evaluation  of 
projects  and support  programmes,  including those  of the  Member States  in  order 
to orientate the Community  activity and to ensure subsidiarity  of action, as well as 
for administrative support. 

7.2 

Itemised breakdown of costs 

Breakdown 

Projects 
Dissemination 
measures 
Strategy, Evaluation, 
Administrative 
Support 
TOTAL 

Budget 
year 95 
11 
15 

4 

I 

30 

7.3 

Indicative schedule of appropriations 

7.3.1 Schedule for proposed new operation 

Commitment 
appropriations 
f * pro memoria) 

1995 
30 

1996 
p.m.* 

1997 
p.m.* 

1998 
p.m.* 

TOTAL 
p.m.* 

The level  of finance  foreseen  for 1995 in the context  of funds  available  under 
Heading 3, other  than  those  allocated  to the 4th Framework  Programme  RTD  is 
30 MECU.  The level of finance  for 1996-98 will be decided,  outside the resources 
allocated to the  4th Framework  Programme  RTD,  in the  light  of the  revision  of the 
budget estimates and defined in the framework of the annual budgetary procedure to 
an adequate extent to ensure that the programme is earned out in a coherent manner 
until its conclusion. 

8.  Fraud prevention measures; results of measures taken 

9.  Elements of cost-effectiveness  analysis 

9.1  Specific and quantifiable objectives; target population 

-  Specific  objectives:  links with general objective:  Energy  Policy,  increase  of 

Energy Supply Security and improved Energy  Efficiency. 

- 3 9-

Support  of  about  150 projects  and  300 associated  measures  per  year  which, 
following the  recent  experience  with the  ongoing  THERMIE  Programme  would 
produce the following results for each ECU spent on a project: 
•  425 kg of oil equivalent saved or substituted 
•  1650 kg avoided CC_ emissions 
•  12 kg avoided SO2 emissions 
•  4 ECU increase of the Community GDP 
(See also attachment). 

-  Target population: distinguish as applicable for each objective; indicate the end-
beneficiaries  of  the  Community's  financial  contribution  and  the  intermediaries 
involved:  industry and other SMEs. 

9.2  Grounds for the operation 

-  Need for Community financial  aid:  many  significant  technology  break  through 
would not happen in the EC; some Member States have no similar programme. 

-  Choice of ways and means 

•  advantages  over  possible  alternatives (comparative advantages):  more 
immediate effect than regulatory measures, better effect than R&D measures. 

•  explanatory reference  to similar Community or national operations:  THERMIE 

1990/94,  UK  Best  Practice  Programme,  FR  and  DE  Demonstration 
Programmes. 

•  spin-off and multiplier effects expected: 

•  Generation  of potential investment of about  1,000 MECU  in total,  based on 

results of Cost Benefit Analysis of THERMIE 1990-1992. 

•  Job creation potential of tens of thousands of jobs, depending on success of 

replication. 

•  Promotion of European technologies on third country markets. 

-  Main  factors of  uncertainty  which could  affect  the  specific results of  the 
operation:  the  successful  projects  are  generally  replicated  several  times  by 
industry or Member States Institutions.  The associated measures contribute to a 
larger use by industry of technologies  developed  by industry or Member States 
programmes and which otherwise would not sufficiently penetrate the market. 

9.3 Monitoring and evaluation of the operation 

-  Performance indicators selected:  achievement of technology improvements (e.g. 
tonnes of oil equivalent saved or substituted, tonnes of CO2 avoided, number of 
projects generated, etc.) 

-  Details and frequency of planned evaluations:  Yearly 
-  Assessment  of the results  obtained: The  Regulation  foresees  2  exercises  by 
independent evaluations examining project files, making project visits, controlling 
replications  and  assessing  complementarity  with  Member  State  programmes, 
one two years after the  entry  into force, the other on expiry  of the Regulation. 
The  Commission will submit these  reports to the  European  Parliament  and the 
Council. 

9.4  Coherence with financial programming 

-  Is the operation incorporated in the DG's financial programming  for the  relevant 

years?: Yes, within Heading 3 Internal policies. 

-  To which broader objective defined in the DG's financial prognamming  does  the 
objective  of the proposed  operation  correspond?: Energy  policy,  increase  of 
energy supply security and improved energy efficiency. 

- 4 0-

10. Administrative expenditure (part A of the budget) 

This section of the financial statement must be sent to DGs IX and XIX; DG IX will then 
forward it to DG XIX with its opinion. 

10.1  Will the proposed operation  involve  an  increase  in  the  number of  Commission 

staff? If so, how many? No. 

10.2 Indicate  the  amount  of  administrative  expenditure  involved in  the  proposed 

operation.  Explain the method of calculation: 

The  amount of administrative  expenditure  necessary to carry out the  programme 
will be in the order of 150,000 ecus for 1995.  It is broken down as follows: 

-  MEETING COST: 

Advisory committee of Member State representatives; 
three  meetings  per  year  with  two  delegates  per 
Member State (one meeting of one day, two meetings 
of two days),  based on the average of 658 ECU (only 
travel cost) - budget heading A251 
Expert  committee  of Member State  representatives; 
two meetings  per year with  two delegates for  one or 
several days, based on the average of 658 ECU (only 
travel cost) - budget heading A250 

-  MISSIONS OF COMMISSION STAFF: 

TOTAL PER YEAR: 

48,000 

32,000 
70,000 
150,000 

ECU 

ISSN 0254-1475 

COM (94) 654 final 

DOCUMENTS 

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12  oi 

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ISBN 92-77-83961-9 

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