Opinion of the Economic and Social Committee on the 'Proposal for a Council Decision concerning a multiannual programme for the promotion of renewable energy sources in the Community (Altener II)'
Date: 1997-10-29
Institutions: European Economic and Social Committee
Subjects: EU programme, energy policy, environmental protection, renewable energy

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Opinion of the Economic and Social Committee on the ‘Proposal for a Council Decision
concerning a multiannual programme for the promotion of renewable energy sources in the
Community (Altener II)’ (1)

(98/C 19/09)

On 25 June 1997 the Council decided to consult the Economic and Social Committee, under
Articles 198 and 130s (1) of the Treaty establishing the European Community, on the
above-mentioned proposal.

The Section for Energy, Nuclear Questions and Research, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 19 September 1997. The
rapporteur was Mr Bernabei.

At its 349th plenary session (meeting of 29 October 1997) the Economic and Social Committee
adopted the following opinion by 112 votes to two.

1.

Introduction

1.1.
The Altener II multiannual programme for the
promotion of renewable energy resources (RES) was
tabled by the Commission on 12 March 1997 (2), and
falls within the Commission’s broader strategy for
Community energy policy. It follows on from Altener I
(1993-1997) (3) which comes to an end this year, and
which the Committee endorsed on 24 November 1992 (4),
with some reservations about the limited financial
resources provided and the need for assessment and
monitoring procedures.

1.2.
The Commission is using the Altener programme
to bridge the gap between technical development,
demonstration and release onto the market. It stresses
the need for expansion of capacity, information net-
works and better targeted training, and for Europe-wide
technical standards and regulations. The total funding
for Altener I over its five year span was ECU 43,7
million, including the additional funding made available
after the enlargement of the EU and the extension of the
programme to the EEA.

1.3.
The aims of the programme were to help achieve
the Community’s energy policy targets for reducing CO2
emissions, boosting renewable resources’ share of energy
production, reducing the Community’s dependence on
imported energy, security of supply, economic and social
development and local and regional development.

1.4.
According to the Commission’s report on the
impact of the Altener programme (5), presented in

conjunction with Altener II, the programme has through
information measures and a network approach ‘played
an important role in raising awareness about the role of
renewable energy sources in the Community’. A number
of reports and studies contribute to ‘filling the gap
between research and commercial application of renew-
able sources of energy, but it has proved difficult to
draw conclusions from the pilot projects, since few have
been completed’. The report concludes that ‘this part of
the programme is seriously underfunded as less than
half of the proposed projects ... could be funded under
the current budgetary provisions’.

1.5. On this subject, the Committee feels it important
that the final report should fully detail past experiences
in order to enable errors and shortcomings to be
corrected, based on the actual results of Altener-funded
projects. For the purposes of the 1998-2002 multiannual
programme, it would be useful for this report to be
completed over the programme’s final year so as to
allow appropriate changes to be made.

1.6. Moreover,
it should be noted that a report
compiled by independent experts in 1996 (6) endorsed
the programme, with the proviso that funding was
insufficient to achieve the declared objectives. Moreover,
the proposal comes in the wake of the report on ‘TERES
II — the prospects for renewable energy in 30 European
countries from 1995 to 2020’, funded under Altener I.

In its opinion of 24 April 1997, the Committee
1.7.
commented comprehensively on the Commission Green
Paper on ‘Energy for the future: renewable sources of
energy’ (7), asserting, in particular, that ‘strengthened

(1) OJ C 192, 24. 6. 1997, p. 16.
(2) COM(97) 87 final, 20. 11. 1996.
(3) OJ L 235, 18. 9. 1993, p. 41.
(4) OJ C 19, 25. 1. 1993, p. 7.
(5) COM(97) 122 final, 12. 3. 1997.

(6) ‘Evaluation of the Altener programme (1993-1997) and
proposal for the future’, report to the European Com-
mission by Andersson, Del Rio, Janssen and McKeogh,
Brussels 1996.

(7) COM(96) 576, 20. 11. 1996.

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actions under Altener II could create a competitive
market for the renewables industry and thereby reduce
costs and create jobs in the sector. The TERES II
Report has underlined the need for further technological
development if renewables are to achieve significant
market penetration. Action at Community level would
be targeted at certain well-defined areas such as photo-
voltaic roofs and cladding, solar thermal heating for
sport, tourism and health facilities, active and passive
solar architecture, production of bio-methane from
municipal biodegradable solid waste, stand-alone facili-
ties etc. with the Community support as low as possible
to avoid market distortion and calculated to take into
account the external cost avoided’ (1).

1.8. Moreover, in its opinion on the draft Council
decision concerning the organization of cooperation
around agreed Community energy objectives (2), adopted
on 23 April 1997 (3),
the Committee reiterated its
endorsement of the objectives concerning measures to
promote use of renewable energy resources and to
increase energy efficiency; ‘these objectives can make a
significant contribution to achieving a healthier environ-
ment and,
in conjunction with the development of
indigenous resources, reduce the Community’s depen-
dence on external energy resources, thereby boosting
economic growth and employment’, the Committee
said.

2. The Commission proposal

2.1.
The draft decision singles out six areas for action
and measures in the field of renewable energy. Four of
these extend Altener I initiatives, whilst the other two
aim to promote the market penetration of RES, and to
carry out proper strategic monitoring and control.

2.2.

In particular, intervention will include:

— studies and other actions to implement or comp-
lement Community measures taken to develop the
potential of various renewable energy sources, such
as sectoral and market strategies, the development of
norms and standards, procurement and legislation,
with up to 100 % Commission funding. For these
actions, a budget of ECU 4 million has been
earmarked for the two year period (13,3 %);

— pilot actions designed to create or extend infrastruc-
tures and local and regional planning instruments,
design, evaluation, information, education and train-
ing, and new financial and market instruments, with

between 30 % and 50 % of total cost funded by the
Commission. For these actions, a budget of ECU 9,4
million has been earmarked for the two year period
(31,3 %);

— measures for the exchange of experience and know-
how, for improved coordination between inter-
national, Community, national, regional and local
activities, and the establishment of a centralized
system for compiling and circulating information,
with Commission financial support of up to 100 %.
For these actions, a budget of ECU 3 million has
been earmarked for the two year period (10 %);

— measures for the exchange of experience and know-
how proposed by an entity other than the European
Commission, with between 30 % and 50 % Com-
mission funding. For these actions, a budget of ECU
2,8 million has been earmarked for the two year
period (9,3 %);

— actions to facilitate the penetration of RES and
encourage investment by providing access to special-
ist advice, analysis of market prospects, choice of
location of projects, establishment of financing
plans in the following fields: biomass, thermal and
photovoltaic solar systems, passive and active solar
systems in buildings, small scale hydroelectric pro-
jects, wind power, geothermal energy. The Com-
mission intends to define the level of financial
support for these actions on an annual basis. For
these actions, a budget of ECU 8 million has been
earmarked for the two year period (26,6 %);

— actions intended to monitor the implementation of
the strategy and action plan for the development of
RES; to evaluate the impact and cost effectiveness of
measures undertaken under the programme; and to
monitor the progress achieved by the Community
and its Member States with regard to the develop-
ment of RES, funded up to 100 % by the Commission.
For these actions, a budget of ECU 2,8 million has
been earmarked for the two year period (9,3 %).

2.3.
The Commission also intends to frame the
indicative programme’s priorities and guidelines on an
annual basis; these will, however, be submitted for
opinion to the advisory committee composed of Member
State representatives provided for under Article 5.

(1) OJ C 206, 7. 7. 1997, p. 41.
(2) OJ C 27, 28. 1. 1997, p. 9.
(3) OJ C 206, 7. 7. 1997, p. 23.

2.4.
In addition to general anti-fraud measures, the
programme explicitly provides for funding for the new
RES penetration actions (Article 2e) to be subject to the
actual results of the proposed projects.

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2.5. When the programme has been running for two
years, the Commission will also submit a programme
assessment report to the European Parliament, the
Council, the Economic and Social Committee and the
Committee of the Regions; this will be followed by a
final report at the end of the programme.

penetration require much greater resources than those
made available in the first five-year period, and probably
greater than those proposed by the Commission for
Altener II,
if RES are to win a sizeable share of
Community energy consumption, and achieve the econ-
omies of scale needed for the industry to be able to
compete globally.

2.6.
The programme is open to the associated central
and eastern European countries and to Cyprus, under
the rules governing EFTA participation and on the basis
of existing association agreements.

2.7.
Since the EU’s post-1999 financial perspective is
not yet available, the proposed budget only covers the
first two years of the programme, and comes to ECU 30
million. The proposal’s declared strategy must be
properly incorporated within a systematic, long-term
energy policy, with valid arguments for increasing the
budget headings and bringing them under Title III (other
policies) of the financial perspective for 2000-2004.

3. General comments

3.1.
The Committee is fully aware of the key strategic
role which the development of RES will play in future
Community sustainable development policy, quality of
life for citizens, and the need to create new jobs and
boost economic and social cohesion. In line with some
of its more recent opinions, the Committee thus reiterates
its support for a strengthened Altener programme.

3.2.
The Committee feels that it is essential, in the
light of the declared indicative target of the Green Paper
on renewable energy sources (1), to double the share of
RES in European energy consumption from 6 % to 12 %
by 2010, to strengthen the activities of the European
Community and the Member States in order to speed up
— by coordinating all relevant Community instruments,
particularly the RTD Framework Programme — RES
penetration in the internal and global markets, in EU
border markets, and, more generally,
in terms of
competitiveness in the global market.

3.3.
Despite the regrettable absence of a full assess-
ment of Altener I’s effectiveness and consistency with
the declared objectives, experience with the programme
has shown that the challenges facing RES in terms of
industry, competitiveness and market
technology,

3.4.
The Committee therefore endorses the con-
clusions of the first report on the results of the Altener
programme (2), which called for future actions to focus
on particular strategic aspects, such as solving market
penetration problems, whilst avoiding unwarranted
distortions of competition.

3.5.
In this respect, the two new actions aiming to
facilitate RES market penetration, encourage invest-
ment, and control, monitor and constantly assess the
programme’s compliance with these objectives, are of
particular strategic importance, whilst the fact that
financial support is contingent on the actual results of
the proposed projects could ensure better targeted
selection. Hence, the Committee would particularly like
to see a further increase in the percentage of funding
devoted by Altener II to these objectives.

3.6. Nevertheless, the Commission’s declared inten-
tion to define objectives, criteria and access procedures
for this type of action on an annual basis does not allow
a full assessment; nor does it allow the creation of stable,
predictable market conditions for firms which provide
energy products and services, or for investors and
customers.

The Committee feels that the objectives, criteria
3.7.
and access procedures should be defined immediately,
whilst keeping the intervention levels flexible and within
predetermined limits in order to avoid distortions of
competition.

3.8.
The Committee feels that this action should
place more emphasis on projects which are accompanied
by a cost-benefit analysis, including an environmental
balance sheet, carried out according to fixed criteria and
objectives, to encourage local authorities and citizens to
exploit RES directly in specific areas, such as those
outlined in point 1.7. Direct involvement of the public
could, in itself, speed up public awareness of the potential
of renewable energy sources.

3.9. Moreover, the Committee believes that the advis-
ory committee provided for under Article 5 should be

(1) COM(96) 576, 20. 11. 1996.

(2) COM(97) 122 final, 12. 3. 1997.

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accompanied by sectoral mechanisms for permanent
dialogue with the representatives of energy producers
the energy industry,
and energy service providers,
technicians and professionals (architects, engineers,
builders, etc.) and end-users, in order to ensure that the
programme’s measures are consistent with and interact
with market trends, in terms both of supply and demand,
giving greater priority to European interregional cooper-
ation.

3.10.
Standardization via CEN and Cenelec is an
important area which should receive more adequate
funding under Altener II, both for the positive impact
on the single market and accompanying economies of
scale, and for the penetration of renewable energy
technologies into third country markets, particularly
those of central and eastern Europe and the Euro-
Mediterranean area. The Committee believes that the
creation of pan-European standards is an important
factor in promoting renewable energy sources and would
ensure lower manufacturing costs for customers and
interested parties, particularly in a global market per-
spective.

3.11.
The Green Paper on energy for the future:
renewable sources of energy, recognizes the strategic
priority of international cooperation on RES, both to
bolster Community industry in the sector (1), via actions
to promote exports, and to mitigate any damage to the
global environment by virtue of growth in developing
countries being based solely on traditional energy
sources. In this respect, the Altener programme, which
is restricted to associated CEECs and to Cyprus, should
promote cooperation with international cooperation
programmes such as MEDA, Phare, Tacis, the EDF and
the ALA countries, and focus primarily on the promotion
of RES.

framework of

Moreover, within the
the Euro-
Mediterranean partnership in the field of energy, the
recently-established Euro-Mediterranean Energy Forum
and its joint medium-term action plan, should include
arrangements for cooperation and coordination with
Altener. As with the EU-Turkey Joint Consultative
Committee, the ESC-Third Country Joint Consultative
Committees should also strive to cooperate on RES.
Similarly, the programme should play a suitable role in

(1) According to the European Council for the Export of
Renewable Energy Sources, 75 % of the Community’s
energy industry is export-dependent. Cf. Teres II, Novem-
ber 1996, p.12.

preparing European strategy to stimulate discussion at
the third UN conference on climate change to be held
in Kyoto in December. The Committee is currently
preparing an opinion on the subject.

3.12.
RES play a very important role in the develop-
ment of local energy, since installation and operation
often rely less on infrastructure and networks, and this
makes them particularly suitable for the more isolated
regions of the Community, where infrastructure is
inadequate. These peripheral regions have considerable
resources for producing renewable energy.

3.13.
The development of RES is directly linked to
the existing situations in the different areas of the
Community which have developed different approaches
depending on their structural, climatic and environmen-
tal features. Community action, and consequently Al-
tener II, must be developed in accordance with the
subsidiarity principle,
in order to incorporate and
complement existing local projects, providing them with
added input and renewed vigour. Full coordination with
national and regional programmes, as a step towards a
common strategy, would ensure resources were pooled
and allow effective dissemination of best practice at the
various regional, national and Community levels, under
a bottom-up procedure.

3.14.
The emergence of new energy technologies, to
be further developed via priority RTDD actions under
the 5th Framework Programme, will open up great
potential for decentralized cleaner energy production,
as long as research and demonstration activities are
consistent and focus on cutting costs and addressing
the problem of reliable, low-cost decentralized energy
storage which will be safe and have a minimum impact
on the environment.

3.15. With a view to greater economic and social
cohesion, structural fund and cohesion fund intervention
should focus on supporting these initiatives. The EIB,
the EIF and the EBRD for the CEECs should fund
RES-related projects, and in this context, co-financing
techniques should be developed.

In particular, difficulties in securing funding —
3.16.
due to credit institutions’ limited awareness of RES
potential — could be smoothed out via the quality
guarantees provided for under Article 2e. These certify
that the project complies with national and Community
regulations, and vouch for its technical feasibility and
profitability.

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3.17. Whilst the Committee deplores the failure to
include a specific title on energy policy in the Treaty on
European Union, as it had strongly advocated, it feels
that, in accordance with the Energy Council Resolution
of 27 May 1997, RES support actions should be included
in a strategic framework programme of consistent,
transparent Community actions and instruments in the
energy field, which should be coordinated with other
relevant Community policies and Member States’ poli-
cies.

3.18.
In particular, a coherent framework of this kind
would include the Thermie programme (management
and application), Save II and Synergy alongside Altener,
thus avoiding operational sub-division and duplication,
and should make it possible to link up with relevant
RTD programmes such as Joule/Thermie and Flair, and
with the relevant policy areas on external relations, the
environment, competition, the single market, the regions
and agriculture.

3.19. Moreover, an ‘ad hoc’ institute for RES within
the framework of the JRC — as recommended by the
Committee in its opinion on the Green Paper on
renewable sources of energy (1) — could provide coordi-
nation, promotion and forward-studies services.

4. Specific comments

4.1.

Article 1(1)a: add the following:

‘within the framework of a future integrated Com-
munity energy policy, coordinating all up-and-
running actions and programmes in the field, and
the relevant aspects of agricultural, environmental,
RTDD, cohesion and external relations policies.’

4.2.

Article 2(1)e: add the following:

‘and providing quality guarantees which vouch for
the economic, social and environmental feasibility
of the project, and affording greater access —
particularly for SMEs — to public and private

(1) COM(96) 576, 20. 11. 1996.

Brussels, 29 October 1997.

finance. The projects must be grouped in sufficiently
broad clusters as to be cost-effective.’

4.3.

Article 2(1)c: add the following:

‘by creating a database using harmonized statistics,
and providing access to it via a dedicated, open web
site.’

4.4.

Article 2(2): add the following:

‘energy storage’.

4.5.

Article 4(2): amend to read as follows:

‘The conditions and guidelines applicable to funding
for the actions and measures referred to in Article 2(1)
shall be defined at the beginning of the programme
and appended to this decision, and reviewed annu-
ally, regard being had to: ...’

4.6.

Article 4(2), second indent: add the following:

‘via a comprehensive, global cost-benefit assessment
based on predetermined criteria and objectives.’

4.7.

Article 4, last sentence: amend to read as follows:

‘The Committee referred to in Article 5, and sectoral
instruments for permanent dialogue, comprising
representatives of end-users, technicians and pro-
fessionals, energy producers and energy service
providers and the energy industry, shall assist ...’.

4.8.

Article 6(2): amend to read as follows:

‘During the final year of the programme, and prior
to the formal presentation of a new proposal for a
programme...’.

4.9.

Article 7, add the following:

shall

the Commission

promote
‘Moreover,
exchanges of information, dissemination of best
practice, and coordination between projects and
with international cooperation programmes which
focus primarily on developing renewable energy
sources.’

The President

of the Economic and Social Committee

Tom JENKINS