Proposal for a Council Decision concerning a multiannual programme for the promotion of renewable energy sources in the Community (Altener II)
Date: 1997-03-12
Institutions: European Commission
Subjects: EU programme, energy policy, environmental protection, renewable energy

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 12.03.1997 
COM(97) 87  final 

97/0106 (SYN) 

Proposal for a 
COUNCIL DECISION 
concerning a multiannuai programme for the promotion of 
renewable energy sources in the Community (Altener II) 

(presented by the Commission) 

•Mmm 

a i* 

4% 

i  M-

i:  i 

I.  EXPLANATORY  MEMORANDUM 

Contents 

1. 

Introduction 

2. 

The need for a European Community renewable energy programme 

2.1  The environment 
2.2  Security of supply 
2.3  Competitiveness 
2.4  Regional development, social and economic cohesion and employment 

3. 

The structure of Altener II 

3.1 

Introduction 

A.  EXTENSION OF ALTENER I ACTIONS 

3.2  Studies  and  other  actions  to  develop  the  potential  of  renewable  energy 

sources (Article 2(a)) 

3.2.1  Community legislation, harmonization and standardization 
3.2.2  Strategies for promoting the uptakes of renewable energy technologies 

3.3  Sectoral pilot actions aimed at creating or extending infrastructures  and tools 

for the development of renewable energy sources (Article 2(b)) 

3.3.1 Local and regional planning 
3.3.2  Tools for planning, design, monitoring and evaluation 
3.3.3 Financial and other instruments 
3.3.4  Information 
3.3.5 Education and training 

3.4  Dissemination of information (Article 2(c) and (d)) 

3.4.1  Information networks 
3.4.2 Centralized system for collecting and circulating information 

B.  NEW ACTIONS TO PROMOTE PENETRATION OF RES 

3.5  Targeted actions facilitating  the penetration of renewable energy sources and 

encouraging investments (Article 2(e)) 

3.5.1  The concept 
3.5.2 Lessons from Altener I 
3.5.3 Proposed Altener II action 

C.  NEW  ACTIONS  ON  THE  IMPLEMENTATION,  FOLLOW-UP  AND 

MONITORING OF THE COMMUNITY RES STRATEGY 

3.6  Actions  on  implementation,  follow-up  and  monitoring  of  the  Community 

RES Strategy in the EC and in Member States (Article 2(f)) 

3.6.1  Purpose of actions 
3.6.2  Actions under Altener I 
3.6.3  Proposed Altener II actions 

3.6.3.1 

3.6.3.2 

Implementation  of  a strategy  and a Community  action plan 
for  renewable  energy  sources,  and  monitoring  of  the 
progress  achieved 
the 
Member States 
Evaluation  of  the  actions  and  measures  taken  under 
the programme 

the  Community  and 

in 

in 

4. 

Financial considerations 

4.1.  Altener I 
4.2  Altener II 

4.2.1  Extension of Altener I actions 
4.2.2  Targeted actions to improve the uptake of renewables 
4.2.3  New actions on the implementation of a Community strategy 
4.2.4  The proposed budget 

5. 

The proposed measure and subsidiarity 

6.  Conclusions 

L  EXPLANATORY MEMORANDUM 

1. 

INTRODUCTION 

The  Altener  programme  was  established  by  Council  Decision  93/500/EEC  and  began 
officially  on 1  January  1993. Altener will expire on 31 December  1997. An interim report 
on the results achieved under the programme so far has been carried out at the end of the 
third year. 

The Commission considers that a continuation of the Altener programme is necessary. It 
makes an essential contribution to an increased use of environmentally friendly  renewable 
energies and is a major part of the Community's strategy to reduce CO2 emissions. This is 
in conformity with Articles 13 Or and  130s of the Treaty. 

The  increased  use  of  renewable  energies  also  makes  an  invaluable  contribution  to  the 
attainment  of the Community's  energy policy objectives.  This is clearly demonstrated  in 
the  Commission's  Communication  "Energy  for  the  Future:  Renewable  Energy;  Green 
Paper for  a Community  Strategy"  (COM(96)  576 of  20 November  1996, which  shows 
that renewable energy sources are currently unevenly  and insufficiently  exploited to play 
their  proper  role  in  reaching  community  energy  policy  objectives.  In  addition,  the 
promotion of renewable energy sources is_one of the pillars on which the White Paper on 
the Community's future  energy policy, which has been presented by the Commission and 
discussed by both the European Parliament and the Council, has been based. 

The Commission's White Paper on Growth, Competitiveness and Employment recognized 
that  clean  energy  technologies  are  a  key  to  future  economic  prosperity  and  that  the 
current taxation system does not lead to an optimum resource  allocation.  It  is generally 
agreed  that  renewable energies will be the cornerstone  of a future  policy  of  sustainable 
development  and will make a substantial  contribution  to improving  employment  and the 
social  conditions  of those  citizens  of the  Community  who  live in  remote  or  peripheral 
areas.  Increased  use  of  renewable  energies  will  thus  contribute  to  social  cohesion 
within the  Community,  promote  the  valorization  of  local  energies  and  accelerate  the 
penetration  of  new  energy  technologies  (many  of  which  have  been  developed  with 
Community funding) into the marketplace. 

In  the  light  of  the  consideration  mentioned  above,  the  Commission  is  proposing  a 
continuation  and  strengthening  of  the  Altener  programme  embodying  many  of  the 
recommendations made by a team of independent experts as well as the experience gained 
by  the  Commission  in  the  operation» of  the  Altener  programme  and  other  energy 
actions.At  this critical  stage for  the penetration  of Renewable Energy  Sources  into  our 
energy  mix,  new  actions  have  been  proposed  aiming  to  overcome  the  non-technical 
obstacles faced by RES. 

It  should  be  noted  that  following  a  request  by  Member  States,  the  Commission  is 
presently  reviewing  all  the financial instruments  available  to  implement  a  Community 
energy policy.  Should these considerations lead to the  adoption  by the Council  at some 
future  date  of  a  more  global  approach  to  energy  actions,  those  undertaken  under 
Altener II will obviously be integrated in this new approach. 

Altener  II  is scheduled  to  begin  on the  1 January  1998  and,  unless  it  is along the way 
incorporated into a more global framework, will run as proposed until 31 December 2002. 

The Altener II programme will consist of the following elements: 

A. 

EXTENSION OF ALTENER I ACTIONS 

studies and standardization actions (including voluntary agreements) in the 
area of renewable energy equipment; 

pilot  actions  to  remove  institutional  and  administrative  bottlenecks  and 
strengthen  infrastructures  for  the  promotion  of  renewable  energies  in 
Member States; 

improved  information  flow  to  professionals  and  potential  investors  in 
renewable energy projects, to be carried out by appropriate networks. 

B. 

NEW ACTIONS TO PROMOTE PENETRATION OF RES 

initiatives aimed  at mobilizing private  capital  to  accelerate  investments 
in renewable energy projects; 

C. 

NEW  ACTIONS  ON  THE  IMPLEMENTATION,  FOLLOW-UP  AND 
MONITORING OF THE COMMUNITY RES STRATEGY 

monitoring of progress made in renewable  energy  penetration  at  national 
and Community level and evaluation on the impact  of the various actions 
undertaken  under  the  RES  Strategy  to  be  decided  and  under  this 
programme. 

Renewable Energy Sources, in this proposal, refer to: 

biomass, including energy crops, fire wood, residues from forestry and agriculture, 
municipal waste1, liquid biofiiels and biogas; 

large and small scale (<10MW) hydro-power; 

wind energy; 

solar thermal and solar photovoltaics; 

geothermal energy; 

tidal, wave and other ocean energies. 

When  dealing  with  waste,  account  must be taken  of the  Communication  from  the  Commission 
on the  review  of  the  Community  Strategy  for  Waste  Management.  COM(96) 399  final  of 
30 July 1996, under which the reduction of waste at source and material recovery through recyling 
shall  be  given  priority,  where  environmentally  sound,  over  the  incineration  of  waste  with 
energy recovery. 

Renewable energy's contribution to the primary energy needs of the European Community 
is presently just below 6% and amounts to about 70 Mtoe/year. Biomass counts for about 
60% and hydro-power for 36%. 

Under  Altener  I  a quantitative  target  for  the  development  of  renewable  energy  sources 
had been  set  at  8%  for  the  Community  of  12  and  the  year  2005.  For  the  enlarged 
Community of 15, this target  has to  be revised.  In its  Communication  on a Green Paper 
for a Community RES  Strategy2 the Commission  suggests to  set  a new objective for the 
year 2010,  which  could  be  the  doubling  of  the  contribution  made  by  renewables  to  the 
energy mix. If after a wide consultation with interested  parties on t^e Green Paper,  such 
an  objective  is  adopted  and  would  be  achieved,  renewables  would  contribute  some 
190Mtoe  to  a  total  estimated  primary  energy  demand  of  1570  Mtoe.  The  additional 
contribution from renewables of  120 Mtoe would reduce CO2 emissions in the year 2010 
by330Mt. 

The  purpose  of the  Altener  II  programme  is  to  make  a  meaningful  contribution  to  the 
achievement  of the Community objective for a significant  increase in renewables.  Altener 
should therefore be considered  as an integral part of the forthcoming  community strategy 
on_renewable energy.  Its  actions  are  specifically  designed  to  address the  overcoming  of 
barriers  to  accelerating  the  penetration  of  renewable  energies  specifically  within  the 
Member States of the Community and does not cover actions in third countries. However, 
following a decision of the European Council, Altener II will be.open to cooperation with 
the CEEC countries who are in the pre-accession phase. The programme will also be open 
to cooperation with Cyprus. 

The  proposed  programme  has  been  developed  to  be  complementary  to  other 
Community programmes  and  in  particular  to  the  actions  of  the  renewable  energy 
technological programme of the Community (JOULE/THERMIE). It is not the aim of the 
Altener  II  programme  to finance any  research  activities  or  technological  demonstration 
projects.  Its focus  is  the  promotion  of  RES  so  that  they  can  significantly  penetrate  the 
European energy market The Green Paper for a Community strategy on renewable energy 
including  barriers  arising  from  market 
sources 
imperfections and a strengthened Altener II programme is required if these market barriers 
are to be overcome. 

identified  a  range  of obstacles, 

Altener II also forms an essential  element of the Community's strategy for the promotion 
of  Renewable  Energy  Sources  and  will  hopefully  make  an  important  contribution  to 
achieving the Community's aims under this strategy. 

Communication from the  Commission:  Energy  for  the  Future: Renewable  Sources  of  Energy  -
Green Paper for a Community Strategy - COM(96) 576 final of 20 November 19%. 

2. 

THE  NEED  FOR  A  EUROPEAN  COMMUNITY  RENEWABLE 
ENERGY PROGRAMME 

Increasing the penetration and use of renewables presents a number of advantages for the 
environment,  for  the  energy  sector  and  the  economy  as  a  whole.  The  Commission 
Communication on a Green Paper for a Community RES strategy includes an overview as 
to  how  development  of  renewables  will  contribute  to  achieving  the  Community's 
objectives  as  defined 
is  however 
worth highlighting  here  the  policy  justifications  underpinning  this  proposal  for  an 
Altener II programme, as outlined in the Green Paper. 

in  derived  policies.  It 

in  the  Treaty  and 

2.1 

The environment 

The Community CO2 reduction strategy developed by the Commission in 1992 highlighted 
the  role  of  renewable  energy  as  a  major  contributor  to  the  achievement  of  the 
Community's objective to reduce C02  emissions to the  1990 level by the year 2000. The 
Altener programme was therefore established as a principle element of that strategy. This 
situation  has  been  reinforced  by  the  conclusions  of  the  Environment  Council  of 
15/16 December  1994 which states 'The Council underlines once more that the target  of 
stabilizing CO2 emissions can only be achieved by a coordinated  package of measures to 
improve energy efficiency  and the rational use of energy which are based on supply and 
demand at all levels of energy production, conversion, transport and consumption and to 
exploit renewable energies3. 

This does not mean that increased use of renewable energies should be seen as a panacea 
for  our  environmental  problems  but  it  is widely  recognized  that  unless  renewables  are 
actively promoted the EC is not going to attain its objective. This will inevitably mean that 
Member States  will  have  to  supplement  their  efforts  to  create  favourable  market 
conditions for renewable energies and that the EC will have a role to play in coordinating 
and  optimising  the  Member  States'  efforts.  Most  importantly,  developments  in  recent 
years have highlighted the environmental problems directly linked to the use of fossil fuels, 
in particular the problems related to CO2 emissions and climate change. It is equally clear 
that renewable energies will have to play a much more prominent  role in the EU energy 
mix  in  order  to  achieve  the  most  recent  agreement  in  the  Council  on  long  term 
C02 reductions to be proposed at the COP HI meeting in Kyoto in December 1997. 

The  current  overall  energy  mix  is  incompatible  with  the  long-term  requirements  for 
sustainable development. This is by now widely recognized,  not only by Members of the 
United  Nations  International  Panel  on  Climate  Change  (IPCC),  but  also  by  other 
international  organizations,  such as the DEA and the World  Energy  Council  (WEC), by 
national governments, international  insurance companies,  and perhaps most  importantly, 
by the energy industry itself. Renewable energy technologies are not pollution free, but the 
use of renewables has the clear advantage that no net CO2 is emitted. Furthermore most 
renewables  imply  lower  emissions  of  S02  and  NOx.  This  means  that  renewables  are 
compatible with the overall strategy for sustainable development in the Community, in the 
industrialised countries but also in the developing countries. 

11870/94(Presse273 -G). 

The  use  of  renewable  energy  could  reduce  carbon  dioxide  emissions  by  16% 
(from  1990 levels)  by  2020.  Under  favourable  conditions  the  best  estimate  of  the 
reduction in external costs is ECU 20 billion by the year 20204. 

2.2 

Security of supply 

The European Community is increasingly dependent on imported energy. The great strides 
made by the Member States in the period  1973-1995 to reduce import dependency have 
been reversed by increases in demand mainly in the transport  sector, reductions in energy 
efficiency,  overall stagnant  production of nuclear energy, reduced indigenous oil and gas 
production and by soft international oil market prices. The abundant supply of fossil  fuels 
has  led  to  a  certain  level  of  complacency  which  has  in  turn  led  to  concerns  regarding 
friture  long-term  supply  security.  The  recent  tightening  in  the  oil  market  allied  to  the 
rapidly  growing  energy  requirements  of  South  East  Asia  will  increase  this  trend.  The 
European  Union  can  also  provide  competitive  renewable  energy  technologies  to  third 
countries, in particular developing countries, which could have the effect  of decreasing the 
demand  of fossil  fuels  and  substituting  traditional  fuels.  The  import  dependency  of the 
European Community currently stands at approximately 50% but could well according to 
most forecasts increase to as much as 70% over a period of 25 years. 

In  this  situation  the  European  Community  cannot  neglect  the  development  of  its 
indigenous  resources.  Renewable  sources  of  energy  are  all  indigenous  and  further 
exploitation  of their  potential  can  make a  strong  contribution  to  improving  security  of 
supply.  The  TERES  II  study5  has  identified  the  EC  technical  potential  for  renewable 
energies  at  408  Mtoe  by  the  year  2020.  The  corresponding  EC  best  practice  market 
penetration for renewables by 2020 is 228 Mtoe. The achievement of this potential would 
be a considerable contribution to security of supply. 

2.3 

Competitiveness 

The TERES II forecasts  show that in the EC renewable energies can contribute between 
7.4 and  14% of primary energy supply by 2020 depending on which scenario is followed. 
The  equivalent figures for  all  30  European  countries  are  6.9  and  12.8% respectively. 
This represents an equipment market with a cumulative value of between ECU 78 billion 
and  ECU 266 billion  by  2020.  This 
for 
European constructors. 

is  a  significant  market  potential 

At the present  point  in time renewable energy technologies,  in spite of rapidly dropping 
cost  curves,  are  not  always  competitive  vis-à-vis  conventional  sources  of  energy,  in 
particular when compared to centralized applications. In the medium to long term, it can 
however,  be  expected  that  renewable  energy  sources  will  be  competitive  with 
conventional energy production techniques. In this light, and with the prospect of a future 
internalization  of  external  cost,  renewables  could  make  a  strong  contribution  to  a 

This is highlighted in a recent Report from  Shell International, where long term scenarios show a 
rapid decline in the use of fossil  fuels,  notably oil, from 2020  and onwards  and  a similar steep 
increase in the use of alternative fuels, in particular renewables taking off just after the turn of the 
century. " 
The European Renewable Energy Study (TERES I, 1994) (TERES II, 1996). 

" Shell international, 1995. 

sustainable and competitive European energy system. Already at the present point in time, 
it is worth noting, however, that renewables, as indigenous resources, are hardly  affected 
by price fluctuations on imported fuels and will thus provide a stabilising effect  on energy 
cost. It should also be noted that some renewables are already competitive, in particular in 
certain regions of the Community. 

World  Energy  Council  and  International  Energy  Agency  forecasts  for  the  global 
renewable  energy markets by 2020  show, at  an estimated  ECU 1  700 billion,  a level of 
five  to  ten  times  the  European  market.  Europe's  renewable  energy  industry  is already 
leading  the  world  in  some  areas,  notably  wind,  and  is  a  world  pioneer  in  advanced 
biomass. With a strong home base and a supportive policy framework, European industry 
could become the leading global supplier of renewable energy technologies over the next 
25 years.  This  represents  a  significant  export  opportunity  for  European  industry.  But, 
the success  of  the  commercial  activities  will  also  depend  on  the  ability  of  the 
European industry to satisfy, for example, the particular needs of the developing countries 
in terms of renewable energies. 

2.4 

Regional development, social and economic cohesion and employment 

Development  of  renewables  can  also  bring  positive  and  tangible  effects  on  regional 
development and employment. Renewables are, by definition, local energies. Their use and 
the installation  of renewable  energy plants are - in many instances -  independent  of the 
existence  of  infrastructure.  Furthermore  many  less-developed  regions  have  a  good 
renewable  energy  resource  potential.  Promotion  of  renewables  is  therefore  a  major 
element in a regional policy and can create new business and bring employment to regions 
which are otherwise deprived of industrial development. 

With a supportive policy scenario, an additional ECU  180 billion of investment would be 
stimulated in the renewable energy home market by 2020. This would lead to the creation 
of 0.5 million jobs in the energy sector and associated  supply sectors. The jobs created in 
the industry would be evenly divided between urban and rural  areas. A great  deal more 
jobs could be created in the renewable sector through equipment export opportunities. 

3. 

THE STRUCTURE OF ALTENER U 

3.1 

Introduction 

Altener II has to contribute the overall Community objectives in those fields where RES can 
play a decisive role: the limitation of CO2 emissions; the increase of the share of renewable 
energy sources in the energy balance; the reduction of the energy import dependence; the 
security of energy supply; the economic development,  the economic and social cohesion 
and the regional and local development. 

The Altener II programme is also to contribute to two general objectives: 

(a) 

(b) 

to help create the necessary conditions for  the implementation  of a Community 
action  plan  for  renewable  energy  sources,  and  in  particular  the  legal, 
socio-economic and administrative conditions; and 

to encourage private and public investments in the production and use of energy 
from  renewable sources. 

In the current process of liberalization of the energy market specific measures for RES are 
needed at the legal, socio-economic and market level. Altener II has also to  complement 
the  Community  efforts  in  research  and  technology  helping  to  create  the  appropriate 
conditions for a greater penetration of RES. 

The actions proposed in Altener II are intended to fulfil  the following specific objectives. 

implement  and  complement  Community  measures  to  develop  the  potential 
ofRES; 

harmonization of products and equipment in the RES market; 

increase confidence in RES, accelerate their market penetration and improve the 
sector's global maturity and competitiveness by supporting infrastructures; 

improve  information  dissemination  and  coordination  between  international, 
Community, national, regional and local experience and activities; 

increase operational capacity for the production of energy from RES; 

implement the Community RES strategy. 

The actions and measures set out below have been conceived firstly on the basis of the 
experience gained by the Commission in carrying out the Altener programme over the past 
four years.  Secondly, they take account  of the conclusions  and  recommendations  of the 
group of experts which established an interim report  of the programme at the end of the 
third  year.  Thirdly,  they  reflect  the  opinions  expressed  by  those  taking  part  in  the 
contracting parties' meetings held during  1996 on the main topics of the programme and 
the  conclusions  of  the  Altener  Conference  held  on  25-27  November  1996  in  Sitges. 
Fourthly, they incorporate  certain  elements of the European  Parliament  Resolution  on a 
Community action plan for the promotion of renewable energy sources (Mombaur report) 
and the European Parliament  Resolution  on the White Paper  "An Energy Policy for  the 
European  Union".  Finally,  they  are  in  line  with  the  Commission  Green  Paper  on  a 
Community strategy for renewable energy sources6. 

A. 

3.2 

EXTENSION OF ALTENER I ACTIONS 

Studies and other  actions to  develop the potential  of renewable  energy  sources 
(Article 2(a)) 

Actions under  Article 2(a) are the main instruments  for  building up a RES policy.  This 
Article is partly the former  Article 3(a) in Altener I. About  15% of the Altener I budget 
was allocated to these actions. 

COM(96) 576 of 20 November 1996. 

10 

Under Altener II the preparation  and evaluation  of policy measures are to be pursued  and 
extended to the EEA and CEEC countries and to Cyprus. 

3.2.1  Community legislation, harmonization and  standardization 

Renewable  energy  sources  are  local  resources.  It  is  primarily  a  matter  for  the  local, 
regional  and  national  authorities  to  create  the  administrative  and  regulatory  instruments 
needed  to  exploit  them.  In  an  internal  energy  market  it  is  however  essential  that 
developments  in the  various  regions  of  the  Community  are  consistent.  The  Commission 
will  closely  monitor  the  development  of  renewables  in  the  various  regions  and  will,  if 
necessary, propose any legislative measures that might prove necessary. 

It  is essential  to  draw up  technical  norms  and  standards  in order  to  complete  an  internal 
market  in renewable energy  products  and in 'equipment  and give confidence  to  users.  The 
development  of performance  or quality "labels" serves the same purpose. The Commission 
will pursue its efforts  to draw up norms, standards and quality labels. 

Norms  and  standardization  work  began  under  Altener I:  CEN  and  CENELEC  are 
developing  norms  on  solar  thermal,  solar  photovoltaic,  wind  turbines  and  bio-diesel. 
Developing  a  norm  takes  two  to  three  years  time.  This  work  must  continue  under 
Altener II  in  the  field  of  biomass  (biogas  and  other  biofiiels  equipment),  small  hydro 
and geothermal. 

3.2.2 

Strategies for promoting the uptake of renewable energy technologies 

Market  strategies  are  needed  for  the various  energy  sources  or  technologies  in  order  to 
clarify  objectives and the paths to be followed.  Regular updating will be undertaken,  along 
with  greater  efforts  to  inform  businessmen,  policy  makers,  financial  institutions,  etc, 
including specific  actions to inform  potential users in SMEs about renewable energies. 

Strategy  and  sectoral  studies  carried  out  during  Altener I  (TERES  II,  wood,  solar  PV, 
solar  thermal,  wind,  geological  risks,  legal  environment  for  small  hydro,  ENER  -
IURE, etc.)  will,  for  some  of  them,  be  completed  under  Altener II.  As  a  general  rule  all 
sectoral  studies  must  be  updated  and  extended  to  the  EEA  and  CEEC  countries  and 
Cyprus in order to  develop  enlarged  market  strategies.  Sectoral  studies are  carried  out in 
collaboration with the industrial sectors and business organizations. 

3.3 

Sectoral pilot actions aimed at creating  or extending infrastructures  and tools  for 
the development  of renewable energy sources (Article 2(b)) 

These  actions  play  a  key  role  particularly  in  those  Member  States  where  there  are  no 
comparable measures, thus filling  a major  gap. The introduction  in this programme of new 
targeted  actions for the penetration of renewables (point  3.5, Article 2(e)) does not  reduce 
the  need  for  sectoral  pilot  actions.  They  are  different  in  nature  and  conceived  to 
be complementary. 

The  sectoral  pilot  actions  under  Article  2(b)  are  aimed  at  creating  or  extending  the 
infrastructure  in Member  States  and  are not  directly  linked  to  specific  projects.  They  are 
intended  to  continue  the  actions  under  former  Article  3(b)  in  Altener  I.  Pilot  actions  on 
infrastructures  and tools  have been the main chapters  in Altener  I with  66 %  of the  total 
budget.  Projects  have been  proposed  through  Member  States where  often  a  preselection 

11 

has been made, thus guaranteeing a high level of project  quality. And yet only 43% of the 
projects  selected  and  submitted  by  Member  States  in  the  first  four  years  could  be 
supported because of a shortage of budget. The enlargement  of the Community in 1995 
further increased the need for additional funds. 

Projects  on  pilot  actions  are frequently submitted  and  implemented  by  partners from 
different  Member States; even in regional and local planning, some projects  involve more 
than one Member State. Cooperation between Member States in this type of action is thus 
one of the main elements, together with widespread dissemination of the results. 

During Altener I guidelines for four main groups of pilot actions have been established on 
an annual basis. The budget has been equally distributed between these four  main groups 
(Planning,  Tools,  Financial  and  Market  instruments  and  Information  and  Training). 
From 1993 to  1996, 279  projects  have been  supported.  Until  now  only  two  have been 
cancelled.  Contractors' meetings have been organized  with two  main purposes:  evaluate 
the  progress  and  share  experience  and  know-how.  The  Altener  Conference  held  on 
25-27 November  1996  was  structured  following  the  same  lines  and  the  conclusions 
showed the importance of continuing this action. 

3.3.1  Local and regional planning 

Planning  is  no  longer  a  mere  inventory  of  resources  but  an  instrument  whereby  an 
evaluation can be made of the possible impact of the various measures to be undertaken in 
all the areas concerned, including environment, employment and the local economy. 

The  implementation  of  plans  is  one  of  the  weak  links  in  the  chain;  the  actions  under 
Article 2(e) described in point 3.5 aim to overcome this weakness. 

3.3.2  Tools for planning, design, monitoring and evaluation 

Carrying  out  projects  involving  renewables  is  not  made  easier  by  the  complexity  and 
diversity of renewable energy sources and their technologies,  e.g.  in the areas of energy 
crops,  forestry  and  waste.  Effective  tools  for  planning,  design,  testing,  monitoring  and 
evaluation  are  increasingly  necessary  in  order  to  reduce  the  costs  inherent  in  project 
implementation  as  well  as  to  improve  the  operation  of  renewables  energy  systems. 
Planning  methods  and  tools  for  renewable  energy  sources  have  been  developed 
considerably.  Computer  software  or  geographic 
information  systems  are  now 
sophisticated tools which have to be widely available. Telematic systems and services can 
play  an  important  role  in  optimising  the  supply  of  energy  extracted  from  renewable 
sources, by automatically and continuously monitoring and adjusting the production to the 
consumption pattern. 

3.3.3 

Financial and other instruments 

New financial arrangements must be developed. The possibilities of third  party  financing 
are far from being exploited to the full. New arrangements such as green pools, grouping 
of  users  or  producers,  green  pricing,  should  be  developed.  The  widely  varying 
characteristics  of  renewable  energy  sources  with  high  investments  in  some  cases 
(e.g. photovoltaics)  and  high  operational  cost  in  others  (e.g.  biomass),  dictate  a 
diversification of financial instruments. 

12 

A major factor facilitating  the funding  of investments are market instruments such as the 
"guaranteed  results"  arrangements.  These  can  reduce  or  even  eliminate  the  risks  and 
engender confidence among potential investors. 

3.3.4 

Information 

In contrast to specific information  measures, information  infrastructures  are the pivots of 
the  whole  process  of  informing  the  public  in  general,  but  also  target  groups  such  as 
businessmen, students, civil servants, etc. in particular. 

3.3.5  Education and training 

The introduction of education in the renewable energy technologies (RET) in schools and 
universities  is  essential  for  the  future  development  of  renewables;  this  is  particularly 
necessary in disciplines where they are still too often lacking, e.g. architecture, economics, 
law and administration. 

Courses on renewable  energy technologies  as part  of continuing vocational  training but 
also,  and  above  all,  within  companies  would  encourage  the  penetration  of  such 
technologies  in a field dominated  by conventional  energy  sources.  The  development  of 
teaching materials is also an important element of this action. 

3.4 

Dissemination of information (Article 2(c) and (d)) 

3.4.1 

Information networks 

Information  is  an important  element  in increasing  awareness  and  promoting  the use of 
renewables. The network concept appears to lend itself particularly to the dissemination of 
information.  Experience gained in the course  of Altener  I with  such networks  has been 
very  positive.  The  dissemination  of  information * through  appropriate  networks  will 
therefore  be  continued  and  expanded.  Some  of  these  networks  may  have  a  variable 
geometry  and  be  temporary  in  nature;  specific  tasks  may  be  allocated  to  them  for  a 
given period. 

Under  Altener  I  no  distinction  was made between  dissemination  actions  undertaken  on 
request of the Commission and actions asked for by third parties. In both cases  financial 
contribution  of  the  Community  was  limited  to  60%.  Experience  under  Altener  I 
demonstrates that  some information  actions have to  be fully  funded  by the Community. 
Only support  to Member  States'  initiatives may be in a co-financing  - financing regime. 
Consequently  information  actions  have  been  split  in  two:those  funded  up  to  100% 
(initiated by the Commission) funded  actions and those funded  up to 50% funded  actions 
(initiated by others). 

Dissemination of information  through networks allowed the management  of a number of 
events  and  publications  under  a  global  contract  and,  very  important,  in  closed 
collaboration with national energy agencies and associations. Under Altener II this kind of 
collaboration  has to  be extended  to, firstly, other  "networks"  as the  Euro-Info-Centres 
and, secondly other areas. 

13 

In  respect  of  "targeted  tasks  networks"  the  three  biomass  networks  built  up  under 
Article 3(d) of Altener I and concerning energy crops, waste and liquid biofuels have been 
extremely efficient.  Their activities shall be pursued under Altener II within the  framework 
of Article 2(d). 

3.4.2  Centralized system for collecting and circulating information 

Following  a  suggestion  made  by  the  European  Parliament  (Report  of  Mr.  Mombaur, 
point 7),  a  centralized  system  for  collecting  and  circulating  information  on  renewables, 
including  financing  methods,  will  be  established.  It  will  be  coordinated  with 
Members States  and  regional  efforts  in this  regard.  Information  will  be  made  available 
via Internet. 

* 

B. 

3.5 

NEW ACTIONS TO PROMOTE THE PENETRATION OF RES 

Targeted  actions  facilitating  the  penetration  of  renewable  energy  sources  and 
encouraging investments (Article 2(e)) 

3.5-1  The concept 

Many renewable energy sources are presently competitive or close in reaching this goal. 
In spite  of this favourable  development  penetration  of  renewable  energy  sources  in the 
market  is remarkably  slow.  The  reasons  for  this  market  malfunctioning  are  a  series  of 
obstacles.  They  can  best  be  illustrated  by  following,  step  by  step,  a  typical 
project implementation: 

There  is  a  lack  of  awareness  of  the  business  opportunities  or  the  economical 
benefit  offered  to  them  by  renewable  energies  sources  available  in  their 
immediate  surroundings.  Lack  of  information  and  knowledge  are  the  main 
reasons.  The  solution  to  this  problem  is  a widely  increased  effort  on  targeted 
information campaigns, addressing whenever possible, directly and personally the 
potential investors and promoters. 

Once the awareness has been created,  a number  of questions will need  a quick 
answer: what  can be done  exactly,  what  is the  cost  and what  is its benefit?  A 
market assessment and an evaluation  of the potential is needed to answer these 
questions. This service has to be offered  quickly and at reasonable cost. 

Is  the  evaluation  is  positive  and  indicates  economically  viable  opportunities,  a 
detailed  study has to be undertaken.  In many cases the potential promoter  does 
not have the necessary skills and needs assistance. 

Once the project  has been defined  and its investment  costs established,  a major 
problem has to be faced: construction and operation permits have to be obtained 
from  the competent authorities and, if electricity production is involved, fair grid 
connection  conditions  have  to  be  negotiated.  The  availability  of  advice  is  a 
critical  factor,  otherwise  many  economically  viable  projects  are  abandoned  at 
this stage. 

14 

After  project  authorization  and  grid  connection  have  been  clarified,  another 
major  hurdle  has  to  be  taken,  it  is  financing.  Commercial  banks  often  lack 
experience  in financing renewable  energy  projects  or  do  not  trust  inexperienced 
investors.  These concerns of the banking institutions need to be overcome.  Even 
when  all  these  problems  have  been  solved  in  an  emerging  sector  such  as 
renewables there are additional needs, such as training of operators. 

As illustrated,  there is a need  for  certain  services to  be provided  to  promoters  of RES in 
order  to  overcome  the  non-technical  obstacles  present.  This  extra  service  has  its  cost. 
Under  favourable  conditions  and  fairly  large  projects,  the  peripheral  costs  can  be  of  the 
order of magnitude of  10% of the investment  costs. Under less favourable  conditions  and 
for  smaller  projects,  peripheral  costs  can be  as  high  -  or  higher  than  -  investment  costs. 
Technology development  has drastically reduced  the equipment  investment  costs over the 
recent  years  and,  as  mentioned,  made  renewable  energy  projects  in  many  areas 
economically  viable.  A further  effort  needs to  be  made  now  to  bring  down  peripheral  or 
service  costs  and  make  project  implementation  a  less  risky  task  for  inexperienced 
investors. This is the purpose of the new Altener action proposed here. 

3.5.2 

Lessons from Altener I 

Under  Altener  I  about  half  of  the  pilot  projects  supported  under  Article  3(b)  of  the 
Council Decision addressed the obstacles to market  penetration: 

local  and  regional  plans  were  drawn  up  with  the  purpose  of  creating  the 
necessary awareness of potential investors; 

pre-feasibility  infrastructures  were  set  up  and  evaluation  tools  were  created  to 
provide quick and low cost advice to investors; 

detailed  country-by-country  studies  were  undertaken  to  identify  bottlenecks  in 
the authorization procedures; 

a  particular  attention  was  given  to  financing  instruments;  the  concept  of 
"guaranteed results" was  introduced  in order  to  reduce the risk of investors  and 
of their financial institutes; 

infrastructures  were set up for training of operators and maintenance  staff. 

The evaluation team of Altener I welcomed this type of initiative of the programme, which 
were  particularly  useful  in  Member  states  without  comprehensive  programmes  for 
promoting  renewables;  they  thus  filled  an 
important  gap.  The  team,  however, 
recommended  a strengthening and a more strategic approach for actions under Altener II. 

3.5.3 

Proposed Altener II action 

Future  actions  under  Article  2(e)  of Altener  II  are  designed  to  improve  the  efficiency  of 
the programme in this respect: 

all obstacles, in the whole process, from raising awareness to new capacity  being 
installed,  should be addressed; 

15 

target  groups  will  be  set  up  for  action  in  support  of  the  different  types  of 
renewable energies. Local authorities will be an important target group in future. 

No  funding  should  be  granted  to  investments  for  equipment  procurement,  or  plant 
construction.  Community support will be available exclusively to assist in the preparatory 
phases of projects aiming to increase the renewable energy capacity. The Commission will 
select  promoters,  who  propose  to  encourage  the  implementation  either  of  a  certain 
number of  smaller-scale  projects,  or of  a few  projects  of  a certain  size.  The  conditions 
governing  eligibility  of  projects  will  be  determined  annually  for  each  type  of  targeted 
action.  The support to be given to the preparatory phase will be determined  on the basis 
of the electrical  or thermal production capacities which are expected  to  be installed  as a 
result of the action supported. 

In  order  to  ensure  results,  the  Commission  intends  to  link  contract  conditions  to 
achievement.  A first instalment  of Community  support  will  be  paid after  conclusion  of a 
contract  with the  promoter.  The  second  payment  will  be  made  after  evidence  has been 
provided  to  the  Commission  that financing arrangements  for  a  project  or  a  series  of 
projects  have  been  made.  The  third  and final instalment  will  be  paid  when  completed 
projects enter normal operation. 

If a project fails to be fully  implemented  and is  abandoned  at an earlier stage,  a detailed 
report will  be requested  to  establish the reasons for the  failure.  The  second  and/or third 
instalment will not be paid.  Should  a promoter have an abnormally high level  of failures, 
he might be disqualified for future participation in the programme. 

Applicants  will  be  encouraged  to  put  forward  projects  which  have  a  multi-regional  or 
multinational dimension or benefit Grouping together of projects will be promoted. Apart 
from  facilitating  transfer  of  experience  and  know-how,  grouping  of  projects  allows 
promoters  to  obtain  better  conditions  from  their  suppliers  and  to  make  use  of  more 
efficient  and new financial arrangements such as Third Party Financing. 

Renewable  energy installations are often  not on a sufficient  scale to  obtain support from 
the  major financial instruments  EIB,  EBRD,  ERDF,  EDF,  World  Bank,  etc.  or  even 
commercial banks. It is expected that the Altener II action, assisting promoters to present 
financing  arrangements for grouped  actions or a combination of actions to be carried out 
in different regions or different Member States, could result in funding by public or private 
instruments which otherwise would not be involved. 

Promoters of targeted actions for market penetration may be any public, private or mixed 
bodies or groups which have all the necessary qualifications  to carry out  the programme 
put forward and are capable of entering into a firm commitment in this connection. 

Every project funded under the targeted actions for promoting market penetration will be 
followed  up. An intermediate evaluation will be carried out when the investment  funding 
package  is  drawn up.  When  a project  becomes  operational,  a "report will  be  established 
describing  in  detail  the whole  process  of  implementing  the  project.  This  report  may be 
circulated widely. 

In the event  of total  or partial failure,  a report will be drawn up to  establish the reasons 
thereof and draw the necessary conclusions. 

16 

This  measure  concerning  targeted  actions  is  intended  to  test  the  ways  of  best 
assisting renewable  energy  technologies  to  penetrate  the  market  and  to  overcome 
existing obstacles. 

C. 

3.6 

NEW  ACTIONS  ON  THE  IMPLEMENTATION  OF  THE  COMMUNITY 
REST STRATEGY 

Actions  on  the  implementation,  follow-up  and  monitoring  of  the  Community 
RES Strategy in the EC and in Member States (Article 2(f)) 

3.6.1 

Purpose of actions 

Renewable energy sources are local resources. It is primarily the matter for local, regional 
and national authorities to undertake, within the framework of an established Community 
strategy, the appropriate initiatives to promote their development. On the other hand, and 
according  to  the  subsidiarity  principle,  it  will be the task  of the  EC to  closely  monitor 
progress  made  in  developing  renewables  in  the  various  regions  and  play  its  role  in 
coordinating and optimizing Members States efforts.  These efforts  must be converging, be 
fully  in  line  with  established  Community  policies  and  strategies  and  lead  to  a  greater 
economical cohesion. The purpose of this new action under Altener II is to provide to the 
Community the necessary tool to undertake this important task of coordination. 

Actions undertaken under the Altener programme itself will also need careful  evaluation. 
Results must be efficiently  disseminated to make full use of the Community dimension of 
the programme. 

3.6.2  Actions under Altener I 

Objectives have been established  at Community level for  the limitation of CO2 emissions 
and  for  the  development  of renewable  energy  sources.  In  order  for  these  objectives  to 
have  a  meaningful  purpose,  progress  should  be  monitored  at  regular  intervals.  Results 
must be reliable and comparable between Member  States. However,  official  statistics on 
renewable energy sources did not exist before the year  1994. The Statistical Office  of the 
European  Community  has  therefore  established  a  system  for  regular  collection  of 
statistical  data on the production  and use of renewable energies.  The first series for  the 
years  1989-1993  were  published  in  1994.  Since  these  data  are  not  readily  available in 
Member  States  but  need  to  be  compiled  on  special  request,  the  Altener  I  programme 
offered  financial  assistance  (ECU 10 000/country/year)  under  Article  3(a)  of  the 
Council Decision to undertake the yearly data collection.  However,  Member states need 
to be more closely involved in the analysis and interpretation of the collected data. 

As far as the specific actions under the Altener programme are concerned, a data base has 
been established under Article 3(a) of the Council Decision. This data base has.now been 
incorporated in the Commission data base CORDIS and can be accessed via Internet and 
COROM. However, the project  evaluation was not considered to be fully  satisfactory.  A 
considerably increased effort  will be needed to fully exploit available results. 

17 

3.6.3 

Proposed Altener II actions 

3.6.3.1  Implementation of a strategy and a Community action plan for renewable energy 
sources, and monitoring  of the progress  achieved  in the Community and  in the 
Member States 

Following  a wide debate on the  Green Paper  on  a  Community  Strategy  for  Renewable 
Sources  of  Energy,  the  Commission  will  adopt  during  1997  a  White  Paper  on  a 
Community  Strategy  and  Action  Plan.  Altener  II  will  be  an  important  tool  for  the 
implementation  of  the  strategy  and  for  monitoring  progress  made  under  the  various 
actions proposed. Periodic reports will be prepared. 

Part  of  the  strategy  will  involve  promotion  of  renewables  under  other  Community 
programmes and a clo'se synergy with Altener should be promoted. 

It  is  also  important  to  monitor  Programmes  carried  out  and  policy  measures  taken by 
Member States in favour of renewable energies. Reports will be prepared, and suggestions 
will be made to improve, where appropriate, coordination between the various actions. 

Under this action an annual progress report  will also be made on the implementation  of 
the Community RES strategy. 

As  long  as  Member  States  do  not  compile  the  necessary  information  on  renewable 
energies  at  national  level,  the  Community  has  to  pursue  its  annual  effort  to  collect 
available  data.  This  effort  has  to  be  extended  to  the  associated  Central  and  Eastern 
European Countries and Cyprus. 

An annual meeting of Member States experts will be held to evaluate the results and the 
progress  made  by  renewables  to  achieve  the  objectives  for  CO2 emissions  and  for  the 
penetration of renewable energies. 

3.6.3.2  Evaluation of the actions and measures taken under the programme. 

To evaluate the individual actions and measures taken directly under the programme and 
to disseminate the results an appropriate team of experts will be set Up. Special attention 
will be paid to the definition  of target groups; statistics will also be drawn up to monitor 
the involvement of different  size classes of enterprises7. 

96 (280) EC, OJ No L 107, 30.4.1996. 

18 

4. 

FINANCIAL  CONSIDERATIONS 

4.1 

Altener I 

The budget  for  Altener  I was  set  in  1993 at  ECU 40  million.  In  reality  it  will  amount  by 
the  end  of the  programme  to  some ECU 43.5  million.  Allocation  of funds  to  the  various 
actions under the programme will approximately be as follows: 

Article 3a: Studies and  Standards 
Article 3b: Pilot  projects 
Article 3c: Information  dissemination 
Article 3d: Biomass Networks 

ECU  6.4 million 
ECU 28.8 million 
ECU  4.5 million 
ECU  3.8 million 

14.7% 
66.3% 
10.2% 
8.8% 

TOTAL 

ECU 43.5 million 

100.0% 

4.2 

Altener II 

As  outlined  in  Chapter  3,  the  Altener  II  programme  will  include  three  main  areas 
of actions: 

A. 
B. 
C. 

Extension of Altener I actions. 
New targeted actions to improve penetration of renewables. 
New actions on the implementation of a Community strategy. 

If Altener II is to make a meaningful  contribution to the goals set for renewables under the 
various  Community  policies  not  only  the  successful  actions  under  Altener  I  have  to  be 
pursued  and  strengthened,  but  new actions, influencing  directly the uptake  of  renewables 
and achieving a better coordination of the many efforts  undertaken in Member States have 
to be introduced.  This enlarged  scope of the Altener II  programme will require  additional 
resources. 

The  following  considerations  are  based  on  the  assumption  that  Altener  II  will  cover  a 
five-year  period,  for  which  funding  will  be  at  first  allocated  for  a  two-year  period. 
Financial  allocations will need  to  be  reconsidered  for  the  remaining three years  at  a later 
stage.  It  should  be  noted  that  if  Altener  II  is  later  incorporated  into  a  more  global 
framework,  of  energy  policy  instruments  a  suitable  adjustment  of  the  programme  will 
be made. 

4.2.1 

Extension of Altener I actions 

The  Community  has  grown  from  12  to  15  members  since  the  inception  of  the 
Altener programme.  This  growth  alone  would  have  required  a  modest  increase  in  the 
budget  to  maintain  the  former  (and  ostensibly  inadequate)  Altener  financial  efforts, 
especially  after  the  Community's  expansion  towards  the  north  where  the  implantation  of 
renewable technologies  presents new challenges.  A certain,  though  small, increase  would 
have also been justified  by inflation. 

19 

The  report  on  the  results  achieved  by  Altener  I  came  to  the  conclusion  that  studies 
preparing  new  Community  initiatives  to  complete  the  internal  market  for  renewables 
energy  equipment,  to  establish  standards  and  quality  labels,  to  prepare  voluntary 
agreements  with  equipment  manufacturers  and  to  develop  market  strategies  for  the 
various energy  sources  and technologies  will need  more attention than  in the past.  It is 
therefore  proposed  to  increase  the  indicative  budget  for  these  actions  under  Altener  II 
(Article 2(a)). 

Sectoral  pilot  actions  aimed  at  creating  or  extending  infrastructures  played  a  key  role 
particularly  in  those  Member  States  not  having  comparable  measures.  To fill the  still 
existing gap  actions in this field should be continued  under  Altener II  at  a more or less 
constant level (Article 2(b)) 

Dissemination  of  information  including  the  activities  of  the  biomass  networks  is  an 
essential task for the Community. It needs to be considerably strengthened. A major  effort 
will  also  be  necessary  to  set  up  a  centralized  system  for  collecting  and  circulating 
information  on 
the 
European Parliament.  The indicative  budget  for  information  dissemination  including  the 
biomass networks should be increased under Altener II (Article 2(c)and ((d)). 

following  a  suggestion  made  by 

renewable  energies, 

The indicative budget for  the extension  of Altener I activities (Article 2(a), (b), (c), (d)) 
will amount to ECU 19.2 million (4 + 9.4 + 5.8) over the first two years. 

4.2.2  Targeted actions to improve the uptake of renewables 

This action is proposed to provide a new tool for bringing down peripheral costs linked to 
project  implementation.  It  is  very  different  from,  but  complementary  to  technology 
development action supported by JOULE-THERMIE aimed at reducing equipment costs. 
Targeted  actions  are  addressed  to  promoters  of  RES  and  are  aimed  to  assist  in 
overcoming  non-technical  barriers  to  implementation.  Only  projects  involving  mature 
technologies and likely to have wide application will be considered. 

No investments in equipment or installations will be supported. The purpose of this action 
is to encourage investments in the sector by providing  assistance in a preliminary phase 
where promoters have to face major non-technical problems and higher costs in preparing 
to enter the market of RES than they would face if they were dealing with conventional 
energy  sources  The  measurable  result  of  this  action,  if  successful,  will  be  to  directly 
stimulate, through a leverage effect,  the construction  of a new production  capacity from 
RES of at least  1  000 MW. It should in this way make a meaningful  contribution towards 
the achievement  of the objective  for  significant  increase in the penetration  of renewable 
energy sources in the Community. 

To illustrate the pump-priming effect,  it has been estimated that a financial support during 
a  preliminary  phase  of  planning  for  RES  implementation  of  only  ECU  42  in  order  to 
reduce the high peripheral costs, could induce a private investment of ECU 326, resulting 
in  1 KW new  capacity from RES.  (This  is  the  estimated  to  be  the  average  unit  cost 
per KW for new capacity in the year 2000). 

20 

The  effectiveness  of  Altener  II  will,  to  a  large  extent,  depend  on  this  new  action.  Its 
budget has to be high enough to reach meaningful  results but nevertheless remain limited 
until sufficient  experience has been gained with this new scheme. The proposed budget is 
ECU 8.0 million over the first two years.. 

4.2.3  New actions on the implementation of a Community strategy 

Renewable  energy  sources  are  decentralized  and  local  resources.  Their  development  is 
primarily a matter for  private  initiatives  and  for  local, regional  and  national authorities. 
The  role  of  the  Community,  according  to  the  subsidiarity  principle,  is  essentially  to 
guarantee that the developments in Member  States are coherent  and  converging,  and in 
line with established Community policies. A major new element in Community policy will 
be the adoption in  1997 of a Community Strategy and Action plan for  the promotion of 
renewable  energies.  An important  task  of  Altener  II  will  be the  implementation  of this 
strategy  and  a  permanent  monitoring  of  progress  made.  A  major  new  effort  will  be 
required  to  evaluate  the  impact  of  all  measures  taken  at  local,  regional,  national  and 
Community level. To finance this monitoring actions a budget of ECU 2.8 million over the 
first  two years appears to be appropriate. 

4.2.4 The proposed budget 

In summary, the proposed  indicative budget  for  the first two years of Altener II will be 
as follows: 

A.  Extension of Altener I activities (Article 2(a), (b), (c), (d)): 

ECU 19.2 million 

B.  New actions promoting penetration of renewables (Article 2(e)): ECU  8.0 million 

C. 

Implementation of the Community RES Strategy (Article2(f)):  ECU  2.8 million 

ECU 30.0 million 

The proposed budget for the first two years takes into account the budgetary restrictions 
in the framework of the current financial provisions for  1998 and 1999. Adequate funding 
to  ensure an appropriate  level of  actions  will be foreseen  at  a later  stage to  enable the 
programme  to  be  continued  for  the  remaining  period  of  three  years,  on  the  basis  of 
experience and results from the completed  Altener I programme and the first year of the 
Altener II programme. 

In the case of the new targeted actions under Article 2(e) the first two year period is to be 
considered as a "start up" phase, and, if successful,  these actions are likely to be expanded 
in the following three years of the programme. 

The necessary measures will be taken to ensure an appropriate monitoring and evaluation 
of the programme. During the course of the second year of Altener II an evaluation report 
will be presented  to  the  European  Parliament  and  to  the  Council.  On the  basis  of this 
report  the Commission will define  any new implementing  guidelines necessary,  and will 
propose a new budgetary framework for the following three years. 

21 

5. 

THE PROPOSED MEASURE AND  SUBSIDIARITY 

The  measure  proposed  by  this  communication  is  presented  within  the framework of 
Article  13Or and  130s  of the  Treaty,  the objectives  of which are to  preserve,  to  protect 
and  to  improve  the  quality  of  the  environment  and  to  ensure  a  prudent  and  rational 
utilization of natural resources. 

The  proposal  will  contribute  to  the  attainment  of  the  Community's  environmental  and 
energy policy objectives, areas in which the Community has a shared competence with the 
Member States. 

The proposed action is complementary to actions being undertakeif by the Community and 
by  Member  States  in  favour  of  renewable  energies.  At  their  meeting  on  the 
15/16 December  1994,  the  Council  of  Ministers  underlined  the  need  for  both 
Member States and Community efforts  in the area of CO2 emissions  reduction by stating 
'the Council invites the Commission to  submit to the Council  as soon  as possible,  in due 
time before the first Conference  of the Parties of the World Climate Conference,  a set  of 
options in terms of policies to be taken at Community level and by Member States...8. 

Therefore  the  Council  recognized  that  a  concerted  effort  at  both  Community  and 
Member State level would be required if the Community's C02  objective is to be attained. 
The  transnational  nature  of  CO2  emissions  as  well  as  the  possible  distortion  in 
competitiveness  caused  by  different  and  unconnected  national  measures  requires  a 
common approach. The actions proposed by this Programme represents a real added value 
in  that  they  contribute  to  the  development  of  transnational-national  solutions  to 
bottlenecks  in  the  development  of  renewable  energy  and  endeavour  to  build  upon  the 
experience  of  some  Member  States  in  developing  renewable  energy  solutions  by 
transferring this experience to other regions. 

The  actions  envisaged  under  this  proposal  are  economically  viable  and justified.  The 
added  value  element  of  the  programme  is  enhanced  in  that  it  will  improve  the 
competitiveness  of  the  EC  industry,  increase  its  export  opportunities  and  create 
employment,  as well  as  help improve  the  environment  and  reduce  reliance  on  imported 
energy supplies. 

6. 

CONCLUSIONS 

Tl .e  Altener  I  programme  has  been  assessed  as  having  had  a  positive  effect  on  the 
evolution  of the  penetration  of  renewable  energy  in  the  EC.  There  are  many important 
reasons  for  continuing  and  expanding  this  effort  including  environmental  protection, 
energy policy  considerations,  employment,  regional  and local  policy and social  cohesion. 
Lessons learned from the Altener programme indicate a re-orientation of activities towards 
those action with a high Community dimension and actions aimed at coherence within the 
Community in order to accelerate the use of renewable energy. 

11870/94, (Presse 273- G). 

22 

The  proposal  for  a Altener  II  Programme  represents  a  comprehensive  approach  by the 
Community  to  achieve  the  great  environmental  and  economic  potential  to  which  an 
increased use  of renewable  energy would  contribute.  An important  element  of Altener II 
will be an initiative  aimed at overcoming  obstacles to wide-scale  implementation  of RES 
and thus mobilizing  private  capital  for  renewable  energy projects.  It is important to find 
mechanisms to ensure a place for renewables in a liberalized energy market. 

The  proposal  incorporates  those  elements  which  have  proved  successful  in  Altener  I 
augmented by a series of new actions aimed at strengthening the programme and creating 
a  more  effective  and  synergetic  approach  to  the  Community's  environmental  and 
energy problems. 

The Commission invites the Council  and the European Parliament to adopt the following 
decision concerning the Altener  II programme. 

23 

Proposal for a 
COUNCIL DECISION 
concerning a multiannuai programme for the promotion of renewable 
energy sources in the Community (Altener II) 

(Text with EEA relevance) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Commumty,  and  in  particular 
Article 13 0s(l) thereof, 

Having regard to the proposal from the Commission9, 

Having regard to the opinion of the Economic and Social Committee10, 

Having regard to the opinion of the Committee of the Regions11, 

Acting  in  accordance  with  the  procedure  laid  down  in  Article  189c  of  the  Treaty,  in 
cooperation with the European Parliament12, 

1.  Whereas  Article 13 Or of  the  Treaty  lays  down  that  one  of  the  objectives  of  the 

Community action is to ensure prudent and rational utilization of natural resources; 

2.  Whereas  Article  129  of 

that  health  protection 
requirements shall form  a constituent  part  of Community's  other policies; whereas 
the Altener programme contributes to health protection; 

the  Treaty 

lays  down 

3.  Whereas, at its meeting on 29 October 1990, the Council announced its objective of 
stabilizing  total  CO2 emissions  by  2000  at  the  1990  level  in  the  Commumty  as 
a whole; 

4.  Whereas a mechanism for monitoring CO2 and other greenhouse gas emissions was 

established by Council Decision 93/389/EEC13; 

5.  Whereas CO2 emissions from energy consumption in the Community are likely to 
increase by about 3% between  1995 and 2000, assuming normal economic growth; 
whereas it is, therefore, essential to adopt additional measures; 

9 

10 

11 

12 

13 

OJNoL167,9.7.1993,p.31. 

24 

6.  Whereas,  at  its  meeting  on  25  and  26  June  1996,  the  Council  noted  that  in the 
framework  of  negotiations  seeking  a  protocol  according  to  the  Berlin  Mandate, 
the Second  Assessment  Report  of the Intergovernmental  Panel  on Climate Change 
(SAR BPCC) had  concluded  that  the  balance  of  evidence  suggests  that  there  is a 
discernible human influence  on global climate change and had stressed the need for 
urgent  action  at  the  widest  possible  level,  noted  that  significant  "no-regrets" 
opportunities  were  available  and  requested  the  Commission  to  identify  which 
measures have to be taken at Community level; 

7.  Whereas  with  the  Green  Paper  of  11 January 199514  and  the  White  Paper  of 
13 December  199515  the  Commission  communicated  to  the  European  Parliament 
and the Council its views  on the future  of energy policy  in the  Community  and on 
the role that renewable energy sources should play; 

8.  Whereas  in  its  Resolution  of  4 July 199616  the  European  Parliament  calls  on  the 
Commission  to  implement  a  Community  action  plan  to  promote  renewable 
energy sources; 

9.  Whereas  with  the  Green  Paper  of  20  November  199617,  Energy  for  the 
Future: Renewable  Sources  of  Energy,  the  Commission  started  a  process  for  the 
development  and  further  implementation  of  a  Community  Strategy  and  an 
Action Plan on Renewable Energy Sources (RES); 

10.  Whereas  in  its  Resolution  of  14  November  199618  on  the  White  Paper  of  the 
Commission  "An Energy Policy for the European Union" the European Parliament 
calls on  the  Commission  to  establish  a financial programme  aimed  at  promoting 
sustainable energy; 

11.  Whereas Article 130a of the Treaty provides that the Commumty shall develop and 
pursue its actions leading to  the strengthening  of its  economic  and social  cohesion 
and  that,  in  particular,  it  shall  aim  at  reducing  disparities  between  the  various 
regions  and  especially  the  backwardness  of  the  least-favoured  regions;  whereas 
those actions cover inter alia the energy sector; 

12.  Whereas by Decision 93/500/EEC19 the Council  adopted a Community programme 
for  the  promotion  of  renewable  energy  sources  "Altener"  aimed  at  reducing CO2 
emissions  by  increasing  the  market  share  of  renewable  energy  sources  and  its 
contribution to  overall primary energy  production in the  Community; whereas that 
programme ends on 31 December 1997; 

13.  Whereas the Community has recognized  that the Altener programme represents an 

important element of the Community strategy for reducing CO2 emissions; 

14 

15 

16 

17 

18 

19 

COM(94) 659 of 11 January 1995. 
COM(95) 682 of 13 December 1995. 
OJNo C 211, 22.7.1996, p. 27. 
COM(96) 576 final  of 20 November  1996. 
OJ No C 362, 2.12.19%, p. 279. 
OJ No. L 235,  18.9.1993, p. 41. 

25 

14.  Whereas European Parliament and Council Decision No  1110/94/EC20,  as amended 
by Decision  No  616/96/EC21,  has  established  a fourth  framework  programme  for 
research, technological  development  and demonstration  projects; whereas policy in 
the field of  renewable  energy  sources  is  an  important  instrument  for  the  use  and 
promotion  of  the  new  energy  technologies  that  the  framework  programme  will 
develop;  whereas  the  Altener  II  programme  is  an instrument  which  complements 
that programme; 

15.  Whereas the increased  use  of renewable  energy  sources will  have a positive  effect 
both on the environment  and on security of energy supplies; whereas a high degree 
of international cooperation is desirable to achieve the best results; 

16.  Whereas a strengthened Altener II programme represents an essential instrument for 

developing the potential of renewable energy sources; 

17.  Whereas  in implementing  the  programme,  there  should  be  close  cooperation  with 
other  Commumty  actions  and  programmes  also  concerned  with  promoting 
renewable energy sources; 

18.  Whereas  it  is  politically  and  economically  desirable  to  open  the  Altener  n 
programme to the associated Central and Eastern European countries in accordance 
with  the  conclusions  of  the European  Council  meeting  in  Copenhagen  on  21  and 
22 June 1993, and as outlined in the communication on this subject presented to the 
Council by the Commission in May 1994, and also to Cyprus, 

HAS ADOPTED THIS DECISION. 

Article 1 

1.  A  five-year  programme  of  measures  and  actions  to  promote  renewable  energy 
in  the  Community,  called  Altener  II,  hereinafter  referred  to  as 

sources 
"the programme" is hereby established. 

The objectives of the programme shall be to: 

(a)  help create the necessary  conditions  for the  implementation  of  a Community 
action  plan  for  renewable  energy  sources,  and  in  particular  the  legal, 
socio-economic and administrative conditions; and to 

(b) 

encourage private and public investments in the production and use of energy 
from  renewable sources. 

OJNoL126,  18.5.1994, p. 1. 
OJ No L 86, 4.4.1996, p. 69. 

26 

The  objectives  contribute  to  achieving  the  overall  Commumty  objectives  and 
concerns  of  limiting  CO2  emissions,  increasing  the  share  of  renewable  energy 
sources  in  the  energy  balance,  reducing  energy  import  dependence,  ensuring  the 
security  of  energy  supply,  and  fostering  economic  development,  economic  and 
social cohesion and regional and local development. 

2.  Commumty financial support  shall  be  granted  under  the  programme  for  actions 

meeting the objectives set out-in paragraph 1. 

3. 

The  annual  appropriations  for  the  implementation  of  the  programme  shall  be 
authorized by the budget authority within the limits of the financial perspectives. 

Article 2 

1. 

The  following  actions  and measures  relating  to  renewable  energy  sources  shall be 
financed  under the programme: 

(a) 

studies and other actions, intended to implement and complement Community 
measures taken to  develop  the potential  of renewable  energy  sources.  These 
include the development of sectoral and market strategies, the development  of 
norms  and  standards,  grouped  procurement  and  the  analysis  of  the  legal, 
socio-economic  and  administrative  conditions  which  are  more  favourable  to 
the  market  penetration  of  renewable  energies  and  the  preparation  of 
appropriate legislation; 

(b)  pilot actions aimed at creating or extending infrastructures and instruments for 

the development of renewable energy sources in: 

local and regional planning, 

the tools for planning, design and evaluation, 

new financial and market instruments, 

information, 

education and training; 

(c)  measures  proposed  by  the  Commission  to  encourage  the  exchange  of 
experience  and  know-how  aimed  at 
improving  coordination  between 
international, Commumty, national, regional and local activities; establishment 
of a centralized  system for collecting,  prioritizing  and circulating  information 
and know-how on renewable energy sources; 

(d)  measures to encourage the exchange of experience  and know-how,  proposed 

by an entity other than the Commission; 

(e) 

targeted  actions  facilitating  the  market  penetration  of  renewable  energy 
sources  and  encouraging  investment,  by  assisting  the  preparation  and 
presentation of implementation projects. 

27 

(f) 

actions intended to: 

monitor the implementation  of the Community  strategy  and action plan 
for the development of renewable energy sources; 

support  initiatives  taken  in  implementing  the  Action  Plan,  particularly 
with  a  view  to  promoting  better  coordination  and  greater  synergy 
between actions, including all Community funded activities; 

monitor the progress achieved by the Community and its Member States 
with regard to the development of renewable energy sources; 

evaluate the impact and cost effectiveness  of measures undertaken under 
this  programme.  This  evaluation  shall  also  take  into  account  the 
environmental and social aspects. 

2. 

The aim of the targeted actions referred to in point (e) of paragraph  1 is to facilitate 
and accelerate investment  in new operational  capacity for the production  of energy 
from  renewable  sources  by  providing  financial  support  in  order  to  reduce  the 
peripheral  and  service  costs  of  renewable  energy  projects,  and  thus  overcome  the 
non-technical obstacles present. 

This action shall promote, inter alia: access to specialized advice, analysis of market 
prospects, choice of location of projects, application for construction and operation 
permits, establishment of financing plan, preparation of calls for tenders, training of 
operators, and plant commissioning. 

The targeted actions shall concern projects carried out in the following areas: 

biomass, 
and agriculture, municipal waste, liquid biofuels and biogas; 

including  energy  crops,  fire  wood,  residues  from  forestry 

thermal and photovoltaic solar systems; 

passive and active solar systems in buildings; 

small scale (<  10 MW) hydroelectric projects; 

wind power; 

geothermal energy. 

Article 3 

1.  All costs relating to the actions and measures referred to in points (a), (c) and (f)  of 

Article 2(1) shall be borne by the Community. 

2. 

The level of funding under this programme for the actions and measures referred to 
in points  (b)  and  (d)  of  Article  2(1)  may not  exceed  50% of  their  total  cost,  the 
balance  being  made up from either  public  or  private  sources  or  a combination  of 
the two. 

28 

3. 

The level of funding  under this programme for  the actions and measures referred  to 
in  Article  2(e)  shall  be  established  annually  for  each  of  the  targeted  actions  in 
accordance with Article 4(2). 

Article 4 

1. 

The Commission shall be responsible for the implementation of the programme. 

2. 

The  conditions  and  guidelines  applicable  to  funding  for  the  actions  and  measures 
referred  to in Article 2(1) shall be defined  annually, regard being had to: 

(a) 

(b) 

(c) 

the  priorities  set  out  by  the  Community  and  the  Member  States  in  their 
programmes for the promotion of renewable energy sources; 

criteria  relating  to  the  profitability  and  development  potential  of  renewable 
energy  sources  and  their  effects  on  employment  and  the  environment,  in 
particular the reduction of CO2 emissions; 

for  the actions referred  to  in point  (e)  of Article 2(1), the  relative  cost  of the 
assistance,  the  new  production  capacity  expected  to  arise  and  the  extent  of 
transregional and/or transnational benefits; 

(d) 

the  principles  established  in  Article  92  of  the  Treaty  and  the  relevant 
Community guidelines on State aid for environmental  protection. 

The Committee referred  to in Article 5 shall assist the Commission  in defining  these 
conditions and guidelines. 

Article 5 

The Commission  shall be assisted by an advisory  committee  composed  of  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  opimon  has  been  taken 
into account. 

29 

Article 6 

1. 

During the second year of the programme, the Commission shall present  a report 
to the European Parliament, the Council, the Economic and Social Committee and 
the  Committee  of  the  Regions,  on  the  measures  taken  to  promote  renewable 
energy  sources  at  the  level  of  the  Community  and  of  the  Member  States,  with 
reference  in particular to  the objectives  set  out  in Article  1. This report  shall be 
accompanied by proposals for  any amendments to the programme which may be 
necessary in the light of those results. 

2.  On  expiry  of  the  programme,  the  Commission  shall  assess  the  results  obtained 
from the  application  of  this  Decision  and  the  consistency  of  national  and 
Community actions.  It shall  present  a report  thereon  to  the European  Parliament, 
the  Council,  the  Economic  and  Social  Committee  and  the  Committee  of 
the Regions. 

Article 7 

The programme shall be open to participation by associated Central and Eastern European 
Countries  (CEEC)  in  accordance  with  the  conditions,  including financial provisions, 
laid  down  in  the  additional  protocols  to  the  Association  Agreements,  or  in  the 
Association Agreements themselves, relating to participation in Community programmes. 
The programme  shall also be open to participation by Cyprus on the basis of additional 
appropriations,  under  the  same  rules  as  those  apphed  to  EFTA/EEA  countries,  in 
accordance with procedures to be agreed with those countries. 

This Decision shall apply from 1 January 1998 to 31 December 2002. 

Article 8 

This Decision is addressed to the Member States. 

Article 9 

Done at Brussels, 

For the Council 
The President 

30 

IE.  FINANCIAL STATEMENT 

1.  TITLE OF THE ACTION 

Proposal for  a Council Decision concerning a multiannuai programme for the promotion 
of renewable energy sources in the Commumty (Altener II) 

2.  BUDGET HEADING CONCERNED 

B4.1030 

3.  LEGAL BASIS 

Council Decision 93/500/CEE of 13 September  1993 (OJ No L 235, 18.9.1993, p. 41). 
Altener I programme. 

Jhe attached proposal for a Council Decision. 

4.1  Aim of the action 

The Commission considers that a continuation of the Altener programme is necessary. It 
makes an essential contribution to an increased use of environmentally friendly renewable 
energies and is an important  part  of the Community's strategy to reduce CO2 emissions. 
This objective is in conformity with Articles 130r and 130s of the Treaty. 

Renewable energy's contribution to the primary energy needs of the European Community 
is  presently just  below  6%  and  amounts  to  about  70  Mtoe.  In  its  Communication  on 
"Energy  for  the  Future:  Renewable  Energy  Sources.  Green  Paper  for  a  Commumty 
Strategy", the Commission proposes a significant increase in the use of renewables for the 
year 2010. 

The  purpose  of  the  Altener  programme  is  to  make  a  meaningful  contribution  to  the 
achievement  of this Commumty objective.  Increased use of renewable  energies will also 
contribute  to  social  cohesion  within  the  Commumty,  promote  the  valorization  of  local 
energies and accelerate the penetration of new energy technologies (many of which have 
been developed with Community funding) into the marketplace. 

In  the  light  of  the  consideration  mentioned  above,  the  Commission  is  proposing  a 
continuation of the Altener programme which will embody many of the recommendations 
made by a team of independent experts and the conclusions of the Altener Conference as 
well  as  the  experience  gained  by  the  Commission 
in  the  operation  of  the 
Altener programme and other energy actions. 

4.2  Period  covered by the action and methods planned for its renewal 

The action lasts in principle five years from 1  January  1998 to 31 December 2002. 

31 

However,  a more integrated  approach to Community energy policy financial instruments 
is  presently  under  consideration.  Should  a more  global framework be  adopted,  actions 
presented under this Altener II proposal will be integrated in this new approach. 

In  the  following  Financial  Statement,  only  the finance for  the  first  two  years  of  the 
five-year  programme is considered, for the period  1 January  1998 to 31 December 1999, 
which  falls  within  the  remaining  period  of  the  present  budgetary  perspectives. 
The financing for  the remaining period  will be fixed once the new financial perspectives 
are defined. 

5.  CLASSIFICATION OF EXPENDITURE 

DNO/CD 

6.  TYPE OF EXPENDITURE/INCOME 

The budget proposed for Altener II is ECU 30 million for the two first years after which a 
further budget allocation shall be envisaged for the remaining three years. 

The budget for Altener I was originally ECU 40 million but the allocation was increased 
by the end of the programme to some ECU 43.5 million. As shown in Table I,  76.5% of 
the total budget was spent in the years  1994,  1995 and  1996. Year  1993 had in practice 
only four months - the programme was adopted on  18 September  1993 - and in  1997 the 
budget available is limited to ECU 5.2 million. 

Table I 

Altener I - Allocation of  funds 

in million ECUs 

1993 

1994 

Altener  programme 
1995 

1996 

1997* 

Total  Altener 
% 

million 
ECU 
5  119 
1259 
28 785 
4 446 
3 837 

11.8 
2.9 
66.3 
10.2 
8.8 

100.0 

1320 
0 454 
6 005 
1245. 
1031 

0 380 
0 400 
2 700 
1 000 
0 800 

10 055 
10 000 
0  158 
10 158** 

5 280 
5 200 
0 082 
5 282** 

43 446 
43 500 
0 240 
43 740** 

3a Studies 
Standards 
3b Pilot projects 
3 c. Information 
3d Biomass 
network 
Total 
Budget 
Allocation EEA 
Total 

0 892 

3 913 
0  194 
-

4 999 
5 000 

0611 
0 405 
7  190 
1004 
0 785 

1916 

8 977 
1003 
1221 

9 995 
10 000 

13 172 
13 300 

5 000 

10 000 

13 300 

* 
** 

Indicative. 
Including EEA Contribution. 

32 

Altener II will  be  composed  of  six types  of  actions  and measures  concerning  renewable 
energy sources: 

A.  EXTENSION OF ALTENER I ACTIONS 

(a) 

studies  and  other  actions  intended  to  implement  and  complement  Community 
measures  taken  to  develop  the  potential  of  renewable  energy  sources,  such  as 
sectoral  and market  strategies,  the  development  of  norms  and  standards,  grouped 
procurement and legislation; 

(b)  pilot  actions aimed at creating  or extending  infrastructures  and instruments for the 

development of renewable energy sources in: 

local and regional planning, 
the tools for planning, design and evaluation, 
new financial and market instruments, 
information, 
education and training; 

(c)  measures  proposed  by the  Commission to  encourage  exchanges  of  experience and 
knowhow;  establishment  of  a  centralized  system  for  collecting  and  circulating 
information on renewable energy sources; 

(d)  measures  to  encourage  exchange  of  experience  and  knowhow  proposed  by  an 

entity other than the Commission. 

B.  NEW ACTIONS TO PROMOTE PENETRATION OF RENEWABLES 

(e) 

targeted  actions  facilitating  the  penetration  of  renewable  energy  sources  and 
encouraging investment in the following areas: 

biomass,  including  energy  crops,  fire  wood,  residues  from  forestry  and 
agriculture, municipal waste22, liquid bipfuels and biogas, 
thermal and photovoltaic solar systems, 
passive and active solar systems in buildings, 
small scale hydroelectric projects, 
wind power, 
geothermal energy. 

22 

Communication  from 
Waste Management  COM(96) 399 final of 30 July 19%. 

the  Commission  on  the  review  of  the  Community  Strategy  for 

33 

C.  NEW ACTIONS IMPLEMENTING THE COMMUNITY RES STRATEGY 

(f)  Actions intended to: 

monitor the implementation of the Community strategy and action plan for the 
development of renewable energy sources; 
support initiatives taken to implement the Action Plan particularly with a view 
to promoting greater synergy between actions; 
monitor the progress achieved by the Community and its Member States with 
regard to the development of renewable energy sources; 
evaluate measures taken under this programme. 

Financial support will be: 

up to  100% for the expenses relating to the actions described in paragraphs (a), (c) 
and(f); 
between 30% to  50% of the total cost for  actions described in paragraphs (b) and 
(d), the remainder being borne by the Member States or by private companies. 

The  level  of  financial  support  for  different  actions  under  Article  2e  will  be 
defined annually. 

The  actions  selected  will  enter  under  an  indicative  programme  with  annual fixing of 
priorities and guidelines. 

Annual  guidehnes  will be  submitted  for  opimon to  an  advisory  committee  made  up  of 
representatives of the Member States. 

Any financing will be the subject  of a contract between the Commission  and the person 
responsible or the coordinator of the financed action. 

7. 

FINANCIAL CONSEQUENCE 

The annual appropriations for  the implementation  of the programme shall be established 
by the budget authority within the limits of the financial perspectives. The amount will be 
fixed  annually by the budgetary Authority. 

The proposed indicative budget is ECU 30 million for the first two years. The financing of 
the remaining period will be fixed once the new financial perspectives are defined. 

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

The following detailed breakdown and explanation by action indicate how the total cost of 
the operation has been calculated. 

Actions under Article 2(a) Implementing and complementing Community measures 
taken to develop the potential of RES 

Sectoral studies:  the past average cost has been taken as basis considering, however, that 
all the studies have now to include all 15 Member States. In 1998/99 the market strategies 
will include  "biogas" and "hydro". 

34 

Background  for  harmonization:  same  approach  as  for  sectoral  studies  -  in  1998/99 
harmonization of authorizations procedures and conditions for the connexion to the grid. 

Standards: the past average cost ~ ECU 500 000/mandate - in 1998/99 continuing PV and 
wind,  biodiesel, biogas. 

Breakdown 

2002 
Article 2(a) Implementing and complementing Community measures taken to develop the potential 
ofRES 
* Studies on sectoral and market 

500 000 

500 000 

p.m. 

p.m. 

p.m 

2000 

2001 

1998 

1999 

strategies 

* Background for  harmonization 
* Development  of norms and 

1 000 000 
500 000 

500 000 
1 000 000 

p.m. 
p.m. 

standards 

Subtotal Article 2(a) 

2 000 000 

2 000 000 

p.m. 

p.m. 
p.m. 

p.m. 

p.m. 
p.m. 

p.m. 

Actions  under  Article  2(b)  infrastructures  and  instruments  for  the  development 
of RES 

Infrastructures  and planning:  1998/99 at least  one project  for  ten  countries  and two  for 
five  countries  in  the  three  types  of  infrastructures.  Past  average  cost  around 
ECU 100 000. 

In planning the ceiling is ECU 150 000. 

Breakdown 

1998 

1999 

2000 

2001 

2002 

Article 2(b) Actions on  infrastructures  and instruments for the development  of RES 
* Local and regional planning 
* Projects developing tools  for 

p.m. 
p.m. 

1 500 000 

1 600 000 

p.m. 
p.m. 

planning, design, assessment and 
evaluation 

* Projects  on new financial and 

market  instruments 

* Development  of infrastructures  on 
information,  and education  and 
training programmes 

Subtotal Article 2(b) 

1 000 000 

1 100 000 

1 000 000 

1  100 000 

p.m. 

p.m. 

p.m. 

p.m. 

1 000 000 
4 500 000 

1  100 000 
4 900 000 

p.m. 

p.m. 

p.m. 

p.m. 
p.m. 

p.m. 

p.m. 

Actions under Article 2(c) - Dissemination of information 

Commumty events and publications: Four contractors meeting on infrastructures  and two 
on sectoral items per year at the past average cost of ECU 65 000. Promotional expenses 
(fact-sheets, brochures, etc.) average cost of around ECU 100 000 per year. 

Temporary  networks  for  specific  tasks:  In  Altener  I  the  three  biomass  networks  were 
financed  at 30% and the cost was ECU 1.2  million in  1995 and ECU 1 million in 1996. 
In 1998 to  1999, only the running  of two  networks  per year  has been  scheduled  at an 
average cost of ECU 250 000 per year. 

35 

Centralized  system  for  collecting  and  circulating  information  (creation  of  WEB-siteV 
Being a new action, estimated costs have been calculated from the experience of the EnR 
network on collecting and processing information from Member States for Altener and its 
cost  (ECU 200 000  per  year),  and  extrapolating  taken  into  account  the  increase  of 
countries, tasks and items to be included. 

Breakdown 

1998 

1999 

2000 

2001 

2002 

Article 2(c) Dissemination of information 
* Community events and 

500 000 

500 000 

p.m. 

publications 

* Temporary networks for  specific 
tasks on biomass, waste, liquid, 
biofuels,  solar thermal, solar PV, 
buildings, etc. 

500 000 

500 000 

p.m. 

* Centralized  system for  collecting 

500 000 

500 000 

p.m. 

and circulating  information 

Subtotal Article 2(c) 

1 500 000 

1 500.000 

p.m. 

Actions under Article 2(d) - Co-financed dissemination of information 

p.m. 

p.m. 

p.m. 

p.m. 

p.m. 

p.m. 

p.m. 

p.m. 

Support  to  national,  regional  and  local  information  actions  in  collaboration  with 
Member States,  etc.:  Support  to  at  least  two  country  events  per  year  at  ECU 30 000 
(50% funding) with special relevance in 1998 when launching the programme. 

Support  to  existing  networks,  associations  and  other  actions:  Almost  each  industrial 
sectoral association or federation held one event per year and, for  some of them, a world 
event  every two  years. Financial  support  could  be from ECU 30 000  to  ECU 100 000. 
Support to newsletters or information actions also could be given. 

Breakdown 

1998 

1999 

2000 

2001 

Article 2(d) - Co-financed  dissemination of information 
* Support to national, regional and 

1 000 000 

900 000 

p.m. 

p.m. 

2002 

p.m. 

local information  actions in 
collaboration with  Member  States 
local authorities, 
CEEC, Cyprus, 

including EEA, 

* Support to existing networks, 
associations, and other actors 

Subtotal Article 2(d) 

500 000 

400 000 

p.m. 

1 500 000 

1 300 000 

p.m. 

p.m. 

p.m. 

p.m. 

p.m. 

36 

Actions  under Article 2(e)  -  Targeted  actions  promoting  the  penetration  of RES 
and  encouraging investment through a leverage effect 

The financing will be for  peripheral activities assisting the penetration of renewables and 
facilitating  investments.  The  amounts  proposed  for  this  action  have  been  based  on 
discussions with industry taking into account projections  of development  of the  different 
sectors  and  the  estimations  of  the  varying  peripheral  costs from industry.  The  type  of 
contribution  from  this  Programme  to  these  peripheral  costs  will  be  defined  by  the 
Commission during the call for tenders. 

Breakdown 

1998 

1999 

|  2000 

2001 

2002 

Article  2(e)  Targeted  actions  promoting  the  penetration  of  RES  facilitating  and  speeding  up 
investment 
* Launching annual calls for 

100 000 

100 000 

p.m. 

p.m. 

p.m. 

tender/proposals  and  modifications 
or reorientations 
* Targeted actions: 
- Area  1 : biomass, biogas,  biofuels 
- Area 2: solar thermal and PV 
- Area 3 : solar in buildings 
- Area 4: small hydro 
- Area 5: wind 
- Area 6: geothermal 
Subtotal Article 2(e) 

1 000 000 
750 000 
500 000 
500 000 
500 000 
250 000 
3 600 000 

1 000 000 
1 000 000 
1 000 000 
500 000 
500 000 
300 000 
4 400 000 

p.m. 

p.m. 

p.m. 

p.m. 

p.m. 

p.m. 

Actions  under  Article  2(f)  Implementation  of  the  Community  RES  strategy  and 
action plan 

Monitoring of Member  States and Community strategy measures: survey on action plan 
progress:  Monitoring  mechanisms  have to  be built  up  on  a progressive  basis based  on 
national  institutions  (Energy  agencies)  for  which  the  cost  could  be  estimated  at 
ECU 200 000-300 000 per year. Surveys are calculated on a ECU 10 000 per country and 
year basis. 

Support  of  initiatives  under  the  Action  Plan:  The  costs  are  calculated  on  average 
ECU 15 000 per country per year, with a coordinating organizational cost of ECU 25 000 
per year. 

Monitoring  progress  in  the  Community  and  in  Member  States  with  regard  to  the 
development  of  RES:  Surveys  for  statistical  purposes  have  been  calculated  by  the 
Statistical Office on a ECU 20 000 per country and year basis. 

37 

Ongoing evaluation and follow-up  of the programme: The costs are calculated  on average 
ECU  15 000 per country per year, with a coordinating organizational cost of ECU 25 000 
per year. 

Breakdown 

1998 
Article 2(f) Implementing Community strategy and action plan for the development of RES 
* Monitoring of Member States  and 
Community strategy  measures; 
survey on action  plan progress 

500 000 

500 000 

2000 

p.m. 

p.m. 

2001 

1999 

2002 

p.m. 

* Support of initiatives taken to 
implement the Action Plan 
particularly with a view to 
promoting greater synergy  between 

actions. 

* Monitoring progress on RES in  the 
Commumty, in  Member  States 
and associated  countries; statistics 

250 000 

450 000 

p.m. 

p.m. 

p.m. 

300 000 

300 000 

p.m. 

p.m. 

p.m. 

* Ongoing evaluation and  follow-up 

250 000 

250 000 

p.m. 

p.m. 

p.m. 

of the programme 

38 

7.2.  Breakdown by elements of the action 

Table II 

Indicative amounts in ECU 

Breakdown 

1998 

1999 

Article2(a) Implementing and complementing 
Commumty measures taken to develop the 
potential of RES 
Article2(b) Actions on infrastructures and 
instruments for the development  of RES 
Article2(c) Dissemination of  information 
Article2(d) Co-financed  dissemination of 
information 
Article2(e) Targeted  actions for the penetration 
of RES aimed at speeding up investment 
through leverage  effect 
Article2(f)  - Monitoring of Member  States and 
Community strategy and action plan for the 
development  of RES and Survey of progress 
-Support  of initiatives taken to implement the 

2 000 000 

2 000 000 

4 500 000 
1 500 000 
1 500 000 

4 900 000 
1 500 000 
1 300 000 

3 600 000 

4 400 000 

500 000 

500 000 

Action Plan 

250 000 

450 000 

- Monitoring progress in the Community and in 
Member States  with regard to the 
development of RES 
- Ongoing evaluation and follow-up of 
the programme 
Subtotal Article 2(0 
Total 

300 000 

250 000 

300 000 

250 000 

1 300 000 
14 400 000 

1 500 000 
15 600 000 

7.3.  Operating expenses for studies, experts, meetings, etc. included in part B 

Table III 

Ventilation 

in million ECU 

Budget 

- Studies (specified  actions under Article 2(a) 
- Expert meeting and evaluators (for actions under 

Article 2(a,) (b), (e) and (f) 

- Conferences and congresses (specified  actions  under 
Article 2(c) and (d) 
- Information  and publication (specified  action under 

*) 

./. 

1.4 

*) 

./. 

Article 2(c) and (d) 

TOTAL 

./. 

*) 
1  1.4 

~ 

*)  Included in the budget of the programme. 

39 

8.  ANTI-FRAUD  MEASURES  FORESEEN 

(AND  THE  RESULT  OF 

THEIR OPERATION) 

The  contracts  undertaken  are  paid  on  the  basis  of  real  expenditure  (except  for  study 
expenses which are flat-rate and  paid  on the basis  of the  accepted  results).  The larger 
share  of  the  costs  associated  with  the  Altener projects  are  not  associated  with 
investments, therefore in most cases are paid on the basis of the accepted results. 

9.  ELEMENTS OF A COST-BENEFIT ANALYSIS 

9.1  Specific  objectives  of  the  action  to  be  taken  under  Altener  H  and 

target population 

The  Commumty  shall  implement  a five-year programme  of  measures  and  actions  to 
promote renewable energy sources in the Commumty.  The objectives of this programme 
shall be to: 

40 

Specific Objectives 
Implement and complement 
Community measures to develop the 
potential of RES 
Harmonization in the RES market 

Increasing confidence and RES 
market penetration and improving 
the sectors global maturity and 
competitiveness by supporting 
infrastructures 

Increasing confidence and RES 
market penetration by improving 
dissemination and coordination 
between international, Community, 
national, regional and local 
experiences and activities 

Means 

Target Population 

Sectoral market strategies 

Decision makers, industry, promoters 

Development of norms and 
standards and harmonization of 
legal, socio-economic and 
administrative conditions 
National, regional and local 
planning 

Development of planning, design, 
assessment and evaluation tools and 
methodologies 

Development of new financial and 
market instruments (TPF-guarantee 
of results) 

Industry, producers, users 

National, regional and local authorities, 
decisionmakers 

Decision makers, promoters, industry, 
producers 

Financial institutions, promoters, 
investors, producers, users 

Information infrastructures 

Decision makers, users 

Education and training 
infrastructures. 

University and technical students, 
retraining courses for workers, 
technicians, architects, engineers, 
schools, users 

Community, national and regional 
events and publications 

Decision makers, industry, promoters, 
developers, producers, users 

Temporary and specific networks 
for exchanging know-how 

Promoters, developers 

Centralized system for collecting 
and circulating information 

International, national, regional and local 
authorities, policy and decision makers, 
industry, promoters,developers, 
producers, users 

Support to existing networks 

Industry, producers and users 
associations 

Accelerate investment by increasing  Financial support for the assistance 
operational capacity for the 
production of energy from RES 

to projects in order to reduce 
peripheral and service costs 

Public and private promoters, investors, 
producers and users 

Implement Community RES strategy  Assesment of Member States  and 
Community strategy measures and 
surveys on action plan progress 
- Implementation of the Action Plan, 
particularly with a view to 
promoting synergy with other 
Community and Member States 
actions. 
- Monitoring of progress in the 
Community and Member States 

Community institutions, Member States 
authorities, policy and decision makers, 
industry, promoters, producers and users 

41 

9.2  Justification  of the action 

Costs 

If we were to achieve a significant  improvement in the share of RES in the gross internal 
energy  consumption,  the  supplementary  investments  necessary  as  estimated  in  the 
TERES II report could be ECU 80 billion up to 2020. Financing of such a volume  from 
the budgets  of the European  Union and from the Member  States is excluded.  The only 
possibility is independent financing by all the economic operators acting in a Community 
framework.  The Commission  intervenes by creating  harmonized  marked  conditions and 
supporting actions where the additional, multiplier effect  is demonstrated objectively. 

The expected results are: 

Improvement in the quality of RES in the market; 
Increase in confidence of promoters and investors in RES; 
Increase in confidence in RES for users and consumers; 
Appropriate solutions related to specific conditions and adequate infrastructures; 
Adequate access to RES in the market; 
Implementation on large-scale RES projects; 
Effective monitoring of RES strategies in place; 
Better complementarity between actions. 

9.3  Monitoring and evaluation of the action 

For the evaluation  and the establishment  of the criteria  of  selection of the projects,  the 
Commission will be is assisted by an Advisory Committee composed of representatives of 
the Member  States and national  experts.  For the actions under Article 2(e)  a technical 
group arising from the Advisory Committe will meet annually. 

Selected performance indicators: 

Global indicators: 

the reduction of CO2 emissions; 
the increase of the share of renewable energies in the gross internal consumption of 
the Community; 
the increase of the energy production capacity from renewable energies; 
the progress on the implementation of the Community RES strategy and action plan 
in the EC and in Member States. 

Specific indicators: 

the number of norms and standards developed (Article 2a); 
the number and extent of financial and market instruments that increase  confidence 
(Article 2(a) and (b)); 
the  number  and  extent  of  dissemination  products  and  activities  that  increase 
confidence (Article 2(c) and (d)); 
the number and type of infrastructures operating (Article 2(b)) (by survey); 
the number and extent of local, regional and national plans (Article 2(b)). 

42 

the  extent  and target  groups  attained  by the  promotion  campaigns  or  information 
activities (Article 2(c) and (d)) (by survey); 
the new capacities installed (Article 2(e)) (see Table IV); 
the rate of success in targeted projects (Article 2(e)); 
the rate of SMEs involved in the projects (Article 2(e)); 
the measures implementated in Member States (Article 2(f)); 

A monitoring system will be designed which will indicate how data on the listed indicators 
will be gathered and how the results will be reported. 

Table IV 

Type of RES 

Biomass 
Solar PV 
Solar Thermo-ellect 
Solar thermal 
Solar buildings 
SHP 
Wind 
Geothermal 
Total 

Total  estimated 
cost per  unit 
new  capacity 
ECU/KW 

Estimated 
new 
Capacity 
MW 

500 
6 000 
1600 
200 
100 
1200 
800 
1000 

360 
5 
3.1 
350 
400 
13.3 
33.3 
20 
1 184.7 

Total 
Investment 
Needed 
million ECU 
180 
30 
5 
70 
40 
16 
25 
20 
386 

Estimated 
Peripheral 
Cost 
million ECU 
18 
6 
1 
7 
8 
4 
4 
2 
50 

Methods and periodicity of the evaluation envisaged. 

The  Commission  continuously  assesses  the  development  of  renewable  energy  in  the 
Member States and submits a report periodically to Council and Parliament. 

In  addition,  the  Commission  will  make  continuous  reports  to  the  Altener Advisory 
Committee  which is made up of representatives  of the  Member  States  and which  meets 
four times a year. 

The Commission engaged a team of independent consultants to carry out an evaluation of 
the Altener I programme.  The new  Altener  II programme comprises  a large  number  of 
the recommendations proposed by this group of experts. The Commission also established 
a report on the results achieved  at the end of the third year of the  Altener  programme. 
This  report  will  be  forwarded  to  the  Council  and  to  the  European  Parliament,  in 
accordance with Article 8 of the Council Decision of 13 September 1993 (93/500/EEC). 

During the second year of Altener  II, an evaluation on the programme will be initiated so 
that  an interim report  on the results  achieved  can be  presented  before  a new  budgetary 
framwork  is proposed. 

43 

10.  ADMINISTRATIVE INCIDENCE 

The effective  mobilization  of the necessary  administrative resources will result from the 
annual Commission Decision pertaining to the allocation of resources, taking account  of, 
in particular,  manpower and the additional amounts which will have been granted by the 
Budgetary Authority. 

10.1  Impact on staff requirement 

Table V 

Types 
post 

of 

Manpower  to 
be  assigned  to 
the 
management 
of the action 
Permanent 
posts 

Temporary 
posts 

or 

A 
B 
C 

8 
2 
4 

Officials 
temporary 
staff 
Other 
resources 

experts 

5 
extra 
muros 

of which 

duration 

by  the  use  of 
the 
existing 
resources 
within 
DG 
4 
0 
1 

the 

by  recourse  to 
additional 
resources 
within the DG 

or 

4 
2 
3 

• 

5 years 

44 

IV.  IMPACT REPORT ON THE SMEs AND EMPLOYMENT 

1.  Administrative obligations arising from the application of legislation to companies 

There will be an application procedure to obtain financial support. 

2.  Advantages for companies 

Yes. 

The renewable  energy  sources  developed  by the  companies,  bodies  and  the 
agencies of the Member States, are indigenous resources and are not  affected 
by price fluctuations  on  imported  fuels;  they  provide  a  stabilising  effect  on 
energy cost. In many cases this leads to a reduction in  production costs and a 
consequent  increase  in  industrial  competitiveness.  Where  the  use  of 
renewables 
could 
benefit additionally. 

resources 

financial 

requires 

limited 

SMEs 

The  proposed  measures  provide  additional  support  to  the  initiatives  which 
have  been  developed  by  the  research,  development  and  demonstration 
programmes of the European Commumty and by the national programmes of 
the Member States. 

Strong  international  cooperation  with  third  countries  is  stimulated.  The 
programme  will  be  open  to  EEA  and  the  Associated  CEECs,  Cyprus 
and Malta, 

Most of Altener contractors are SMEs and will benefit from the programme. 

3. 

Effects on employment 

Positive,  owing to  the  fact  that  an increased  production  of  indigenous  energy by 
renewables will correspondingly decrease imports of fossil fuels from third countries 
and  consequently  create  new jobs  in the  Community.  Renewable  energy  sources 
favour  mainly small and medium-sized  industry  and skilled workers as in the same 
time create and/or secure jobs. 

Investments in renewables can produce targeted benefits of income and employment 
to rural areas. 

4.  Was there a preliminary cooperation with the social partners? 

No. 

45 

Is there a less restrictive alternative approach? 

No. 

The  only  alternative would  be to  have  no  programme  or  only  a «recommendation 
without financial support, which at a period when the level of energy prices does not 
constitute an incentive for the development of renewables, would not lead to actions 
which  would  benefit  SMEs  and  reduce  CO2 emissions.  No  Community  initiative 
would only handicap the SMEs and result in a lack of action. 

46 

ISSN 0254-1475 

COM(97) 87 final 

DOCUMENTS 

EN 

12  15  14 

Catalogue  number  :  CB-CO-97-103-EN-C 

ISBN  92-78-17123-9 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg 

4?