Proposal for a Council Decision adopting a multiannual programme for the promotion of renewable energy sources in the Community - (1998-2002) - Altener II
Date: 1997-11-18
Institutions: European Commission
Subjects: EU financing, EU policy, action programme, energy policy, international cooperation

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  18.11.1997 
COM(97) 550  final 

97/0302 (CNS) 

Proposal  for a 

COUNCIL DECISION 

adopting a multiannual framework programme for actions in the energy sector 

(1998-2002) and 

CONNECTED MEASURES 

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'y-^xA y.-."3 

(presented by the Commission) 

EXPLANATORY MEMORANDUM 

INTRODUCTION 

1. IMPROVING THE COHERENCE AND EFFECTIVENESS OF ENERGY POLICY 

1.1 Generallogic 

1.1.1 Horizontal actions 

1.1.2 Thematic programmes 

1.1.3  Co-ordination  of  energy  components  under  other  Community  programmes 

and policies 

1.2 Structure of the framework  programme 

1.2.1 Legislative basis 

1.2.2 Bodies 

1.2.3 Management and control 

1.3 Actions and programmes 

1.3.1 Prospective analyses and market monitoring (cf..  Annex II) 

1.3.2 International energy co-operation (cf. Annex III) 

1.3.3  Promotion of renewable energy sources and implementation of a strategy and 

Community action plan in this area (cf. Annex IV) 

1.3.4 Encouragement of energy efficiency  (see Annex V) 

1.3.5 Promotion of clean and efficient  use of solid fuels (cf.  Annex VI) 
1.3.6  Co-operation  in  the  nuclear  sector  on  safety,  industrial  collaboration  with 
Russia  and  the  New  Independent  States,  transport  of  radioactive 
materials, including the fight against illicit trafficking)  (cf. Annex VII) 

1.4 Co-ordination with energy components of other Community Programmes and Policies 

1.4.1 Support for research and technological development 

1.4.2 Trans-European energy networks 

t 

1.4.3 Other policies or programmes 

1.5 General financial elements 

2.  IMPROVING  THE  CO-ORDINATION  OF  THE  ENERGY  COMPONENTS  OF  THE 

VARIOUS COMMUNITY POLICIES 

CONCLUSIONS 

ANNEXES 

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3 

7 

7 

7 

7 

8 

8 

8 

8 

9 

10 

10 

12 

14 

16 

17 

18 

21 

21 

21 

22 

22 

23 

24 

PROPOSAL FOR A COUNCIL DECISION 

adopting 
a multiannual framework programme for actions in the energy sector 
(1998 - 2002) 
and connected measures 

EXPLANATORY MEMORANDUM 

INTRODUCTION 

Calls for the establishment  of a framework  programme for  actions undertaken  as part of 
energy  policy  have  been  heard  in  the  institutions  on  numerous  occasions  during 
discussions  on  this  sector,  culminating  in  a  formal  request  by  the «Council.1  On  the 
occasion of their examination of the Commission communication  on "An overall view of 
energy  policy  and  actions",2  the  European  Parliament3  and  the  Economic  and  Social 
Committee4 expressed the same sentiment. 

Developments  related  to  energy  -  a vital  sector  for  the  economy  of the  Union  and the 
well-being  of the European  citizen  - require a response with  a  suitable  energy  strategy: 
The decision  taken  at  the Denver  Summit  to  convene  a  GS meeting  in Moscow in the 
spring of 1998 which is entirely devoted to energy confirms, if there were any doubt, the 
importance that has to be attached to this sector and all the questions relating thereto. 

The communication  of 23 April 1997 on "An overall view of energy policy and actions", 
drawn up at the express request of the Council, clearly outlined the following situation: 

I. 

The Union is, and will increasingly be, confronted  with major challenges in terms 
of energy strategy: 

a) By 2020,  the  degree  of  external  dependency  for  energy  supplies,  currently 
standing  at  50%, could  reach,  if current  trends  continue  and  no measures are 
taken,  80%  for  coal,  70%  for  natural  gas  and  90%  for  oil,  the  latter  two 

1  Council Resolution  of 8 July  1996 on the White Paper "An energy policy for  the European  Union" 
(OJ  No  C  224,  1.8.1996)  and  Council  Regulation  (EC)  No  701/97  adopting  the  SYNERGY 
programme (OJ No L 104, 22.4.1997). 

2  COM(97)167finalof23.4.1997. 

3  EP reference... 

4  EC reference... 

remaining the two main  sources of energy used  in Europe  for  the  foreseeable 
future;  moreover,  this  dependency  has  to  be  seen  in  a  geopolitical  context 
whose  development  is very  difficult  to  predict  and  it  should  be  noted  in this 
connection  that the analysis and  planning group  of the  Council  (COPLA) has 
been instructed  by the Political  Committee of the CFSP to  devote its work in 
the  second  half of  1997 to  the  importance  of  the  new  geopolitical  energy 
situation  for  the  European  Union.  A  security  of  supply  strategy  based  on 
diversification  of  sources,  the  promotion  of  renewable  energy  sources 
indigenous  to  the  Union,  combined  with  rational  use  of  energy  is  required, 
supported  by «greater  international  co-operation  and  the  development  of 
trans-European  energy  network  infrastructures  connecting  the  Union  to 
external supplies. 

b) The  need  for  vigorous  action  to  improve  the  competitiveness  of  Union 
businesses, which are too often  handicapped by energy costs higher than those 
borne  by  their  non-European  counterparts,  particularly  American  companies 
(for  instance,  it  is estimated  that  in the  chemical  sector  European  companies 
pay up to 45% more than their US counterparts). 

c) The need  to  ensure that  the  development  of the  energy  market  is  compatible 
with  environmental  objectives,  given  the  concerns  expressed  by  European 
citizens  and  the  international  commitments  of  the  Community.  The  alarming 
level of  pollution at the very heart of European cities and the impact of climate 
change  on  the  environment  and  public  health  give  a  sharp  reminder  to 
governments  and  citizens  about  the  urgent  and  far-reaching  measures  to  be 
taken in the field  of energy choices.  The current  discussions in the context of 
the Climate Change Convention  and the measures which will have to be taken 
after  the  Kyoto  Conference  put  a  particular  stress  on  this  necessity.  These 
decisions  imply  a  profound  change  in  consumer  culture  to  be  brought  about 
through a voluntarist policy on supply and demand. 

II. 

The Community is pursuing numerous  actions  in the energy field,  but  these  are 
scattered: 

a)  either between  different  energy policy programmes  set up at different  times 

and in different  circumstances;5 

b) or over various  Community  policies, such as environment,  taxation,  external 
relations,6  internal  market,  structural  policies,  research  or  even  agricultural 
policy. 

This  situation  has  arisen  from  the  gradual  development  of  the  approach  to  energy 
questions within  the  Community  and  the  desire to  deal with  all  aspects  of  this complex 
question.  The  instruments  established  to  this  end  have  demonstrated  their  ability  to 

5  SAVE,, ALTENER, SYNERGY, .... 

6 

Including the energy parts of the PHARE and TACIS programmes. 

respond and overall their operations may be considered satisfactory.  Such a scattering of 
actions does however have the following consequences: 

•  some lack of transparency for the parties involved; 

•  the risk of duplication; 

•  a danger of inconsistency between the various actions; 

•  management  difficulties; 

•  use of resources which is not always optimum; 

•  missed  opportunities  for  synergistic  effects  and  for  maximising  complementarity 

of actions. 

In  order  to  respond  effectively  to  the  challenges  and  difficulties  that  have  to  be  faced, 
Community  energy  policy  should  be  both  more  focused  and  more  integrated.  The 
establishment of the internal market in gas and electricity in accordance with the principle 
of competing, open markets is a key element in this respect. 

At  the  level  of  the  actions  undertaken  by  the  Community,  the  concentration  of 
operations is the primary condition for an effective  policy.  In the case of energy, it means 
that efforts must be focused  on the following three priority objectives: 

•  security of supply; 

•  competitiveness; 

•  environmental protection. 

Every  energy  related  action,  whether  taken  under  the  energy  policy  as  such  or  under 
another Community policy, will have to contribute to these objectives. 

However,  if each of these objectives  is pursued  in a purely "operational"  way, the limits 
would soon be reached and the objectives could even prove incompatible with each other. 
The  complexity  of  the  situation  in  which  energy  policy  operates  makes  it  necessary, 
perhaps more than in other fields, to strive for a satisfactory  balance between the various 
political, economic and social factors in play.  Only a genuinely integrated approach can 
take adequate account of all aspects of the problems to be solved,  as has been shown for 
instance by the strategy adopted for the implementation of the "auto oil" programme. 

It is also particularly significant that Agenda 2000 mentions that "The external dimension 
of  Community policies- on  the environment  or  energy,  for  instance  -  will  more than 
before become an integral component of its external policy". 

Energy policy needs to be given higher priority.  In order to maximise the benefit  from the 
support given by the Union, actions relating to energy policy will have to be implemented 
in accordance with the following guidelines; 

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•  every Community action must contribute directly to the achievement of one or 

more of the abovementioned priority objectives; 

•  significant  improvement  in  co-ordination  between  all  actions  with  an  energy 

component; 

•  greater co-operation between the various interested parties within the Community 
institutions  and  in  the Member  States,  in  full  accordance  with  the  principle  of 
subsidiarity; 

•  ability to respond quickly to developments; 

•  clarification and simplification of procedures; 

•  strengthening of actions on the basis of priorities and needs. 

Finally, it is essential that this principle of coherence and co-ordination  be applied  at all 
levels: 

•  in Community energy policy itself:  the "energy" framework programme has been 

established with this in view (cf. Chapter 1); 

•  between the energy components found  in a number of other Community policies 
which will be ensured by the establishment of an appropriate structure within the 
Commission (cf. Chapter 2); and the reinforcement of existing co-ordination. 

•  with the Member States and the interested parties.7 

Care will also be taken to ensure that the external image of the framework  programme is a 
coherent and integrated one.  To this end, the Commission will identify  key messages and 
target  groups  for  all  the  information  and  communication  actions  organised  under  the 
programme.  Actions  aimed  at  the general  public will  also be  organised,  exploiting  the 
information networks available in the Member States. 

Co-operation with the Member States and interested parties is set to develop in the appropriate bodies 
provided  for  firstly  by  Commission  Decision  96/642  of  8  November  1996  setting  up  an  Energy 
Consultative  Committee  and  secondly  by  the  proposal  for  a  Council  Decision  COM(97)436 
concerning the organisation of co-operation around agreed Community energy objectives. 

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1. 

IMPROVING THE COHERENCE AND EFFECTIVENESS OF ENERGY POLICY 

.  1.1  General logic 

The  main  aim  of  an  Energy  framework  programme  is  to  ensure  the 
coherence  and  effectiveness  of actions undertaken  under  energy  policy; it 
will,  then,  be  the  effective  instrument  for  rationalising  the  programmes 
stemming directly from  that  policy and obtaining the  maximum benefit.  As 
mentioned  above,  these  programmes  were  drawn  up  and  implemented  at 
different  times  and  in  different  circumstances:  they  now  have  to  be 
incorporated  into a more integrated, transparent and effective  approach, 
established for a period of five years. 

The  logic  of  this  approach  will  be based  on  the  links  between  horizontal 
actions  and  thematic  actions  or  programmes.  These  two  categories  of 
in - Section  1.3  below,  will  be 
actions,  described 
complementary and organised so as to focus on the priority objectives which 
will remain the constant point of reference for any operation carried out. 

in  greater  detail 

In terms of resources (cf.  Section  1.5), the amounts allocated  are determined 
by present financial  perspectives.  Beyond  that  period,  reassessments and/or 
increases  will  have  to  be  made  on  the  basis  of  political  requirements  and 
priorities. 

1.1.1  Horizontal actions 

By their nature, these  actions go beyond  any specific  programme,  making a 
global  contribution  to  the  priority  objectives.  While  they  have  their  own 
purpose,  they  will  also  ensure  that  actions  taken  under  the  thematic 
programmes  in  the  framework  programme  are  co-ordinated  and  will 
contribute towards coherence with other Community policies.  They cover: 

•  Prospective analyses and market monitoring 

•  International energy co-operation 

1.1.2  Thematic programmes 

These programmes correspond to specific  priority themes under the Union's 
energy  policy  and  are justified  because  they  contribute  to  priority  energy 
policy  objectives,  with  a  particular  emphasis  on  the  promotion  of 
environmentally friendly technologies and sustainable development: 

1) Promotion  of  renewable  energy  sources  and  implementation  of  a 

Community strategy and action plan until 2010 

2) Promotion of energy efficiency  and energy saving 

3) Promotion of clean and efficient  solid fuels technologies 

4) Nuclear  sector  co-operation  on  safety,  industrial  co-operation  with  NIS, 
transport  of  radioactive  materials,  including  measures  to  combat  illegal 
trafficking 

1.1.3  Co-ordination  of  energy  components  under  other  Community 

programmes and policies 

This  particularly  concerns two  types  of action which  are very  important  for 
the  energy  sector,  in  terms  of  both  content  and  the  scale  of  the  resources 
employed, but which fall within a specific  procedural framework  and are not 
therefore included as such in this framework programme : 

•  Support for research and technological development (RTD) 

•  Trans-European energy networks 

Attention  will  also  be  paid  to  improved  co-ordination  between  all  other 
policies  or  programmes  whose  area  of  activity  include  energy  components, 
such  as  external  relations  (PHARE,  TACIS,  MEDA),  structural  fiinds  or 
investment support. 

1.2 

Structure of the framework  programme 

1.2.1  Legislative basis 

The implementation of the framework programme will be based on 

•  a  basic  decision  setting  out  the  general  framework,  its  duration,  its 
main financial  elements  and the  implementing  bodies;  the  annex to  this 
decision 
..  .,  sets  out  on  an  indicative  basis  the  spreading  of 
resources between the different  specific actions 

" 

•  where  necessary,  specific  measures  designed  to  specify  the  objectives, 
contents  and details  of  each of the actions  in question  and which,  where 
appropriate,  will  replace  the  corresponding  acts  currently  in force  or in 
the course of being adopted (cf.  Annexes II to VII). 

The  decision  relating  to  the  framework-programme  itself  will  be  based  on 
Article  235  EC.  Those  specific  actions  whose  particular  focus  is  the 
promotion  of  environmental  friendly  technologies  will  be  based  on 
Article  130s, § 1, and the other ones will be based on Article 235.  In order to 
maximise  transparency  and to  ensure the  degree  of  coherence  necessary  for 
the  definition  and implementation  of the  approach,  it  is important  that these 
texts should be considered as a package. 

1.2.2  Bodies 

The  guiding  principle  in  the  search  for  greater  coherence  is  that  particular 
care  should  be  paid  to  the  effectiveness  of  the  decision-making  process, 

which itself is based on improved co-ordination, flexibility and availability of 
information. 

The  approach  will  be  based  on  the  setting-up  of  a  single  committee, 
consultative  in  nature,  for  the Energy  framework  programme  (horizontal 
actions and thematic programmes).  This single committee will  cooperage 
with  all  the  bodies  involved,  including  the  various  committees  mentioned 
below.  It will  actively contribute towards the co-ordination between energy 
measures  undertaken  under  the  various  Community  policies, 
and  will 
examine  the  report  drawn  up  periodically  by the  Commission  on  the  co 
ordination between actions. 

However,  given  the  wide  range  of  questions  to  be  dealt  with,  and  their 
technical  complexity,  the working  methods  and  organisation  must  be as 
flexible as  possible to  ensure access to  all the specialist  skills required.  It 
will  be  for  the  single  committee  to  organise  its  working  procedures 
accordingly. 

The establishment of this committee does not affect  some of the bodies set up 
for a very specific  purpose which will  continue their work.  This applies to, 
among others: 

- 

- 

the Consultative Committee on Energy;8 

the Committee for co-operation around agreed Community objectives;9 

- 

the Guidelines Committee (trans-European energy networks); 

-  RTD management bodies set up in accordance with the procedures of the 

4th and 5th RTD framework programmes. 

1.2.3  Management and control 

By  among  other  things  avoiding  duplication  of  effort,  integration  of  the 
approach, instruments and bodies will ensure: 

•  optimum  management  of  resources,  also  guaranteed  by  recourse  to 

costTbenefit analyses; 

•  complete  transparency  for  all the parties involved  (institutions, Member 

States, companies). 

Systematic evaluation  of the actions will be carried out at regular intervals. 
Every year, the Commission will review the implementation of the framework 

8  Commission Decision 96/ 642 of 8 November 1996 setting up an Energy Consultative Committee, OJ 

NoL 292, 15.11.1996. 

9  Proposal  for  a  Council  Decision  COM(97)436 concerning  the organisation  of co-operation  around 

agreed Community energy objectives. 

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programme  and  its  specific  parts,  and  make the appropriate  changes  in the 
implementation.  In the third  year of the framework  programme  and,  in any 
event, before  presenting its proposals modifying  this framework  programme 
or proposing subsequent  programmes, the Commission will ask independent 
experts to carry out an overall external evaluation of the Community actions 
carried out under the Energy framework programme. 

1.3  Actions and programmes 

The  implementation  of  the  framework  programme  will  rationalise  to  a 
significant  extent  all the actions and programmes  referred  to  in points  1.1.1 
and  1.1.2  above and provide a further  benefit  in the shape of greater synergy 
and complementarity between these actions and programmes.  The objective 
of this  section  is to  describe these actions  and/or  programmes  and  identify 
developments  or  improvements  which  might  be  decided  upon  as  policy 
requirements  and  priorities  evolve.  In  accordance  with  the  Commission's 
recommendations  on reinforcing  the pre-accession  strategy  as  mentioned  in 
Agenda 2000, candidate countries will be given the opportunity to participate 
in  all  the  actions  and  programmes  undertaken  under  this  framework 
programme. 

Horizontal actions 

1.3.1  Prospective analyses and market monitoring (cf.. Annex 11) 

More  than  any  other,  energy  policy  cannot  be  conceived  without  taking 
account  of the medium  and long-term  prospects.  This need,  underlined by 
the  Commission  in its Energy White Paper,10  was endorsed  by the Council 
and the European Parliament in their examination of this document. 

The  studies,  analyses,  forecasts  and  connected  work  (dissemination  and 
discussion  of  results)  already  form  part  of  the  Commission's  activities 
concerned with the formulation of energy policy.  To do this, the Commission 
relies  on  the  expertise  that  it  has  promoted  at  the  most  distinguished 
European centres in this field. This makes it possible to avoid duplication of 
effort  and  exploit  at  the  lowest  cost  the  results  of  the  work  and  the 
knowledge  gained,  funded  by  the  various  departments  of  the  Commission 
and/or the Member States. 

However,  progress  has  to  be  made  in  the  area  of  shared  analyses: 
analysis in the energy field is currently in a transitional phase which makes it 
more  difficult  to  carry  out.  The  situation  is  changing  in  economic terms, 
given the gradual  opening up of energy markets, the increasing importance 
of  environmental  constraints,  and  technological  prospects  calling  for  the 
development  and  application  of new concepts  and  different  methods taking 
into  account  work undertaken under the RTD Programme.  As regards the 
framework  programme,  the  new  analysis  must  therefore  go  further, 

10  « An energy policy for the EU" COM(95)682 final, 13.12.1995. 

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strengthening  co-operation between the Commission  and the Member States 
on  the  forecasts  and  involving firms, academic  circles  and  other  sources  of 
knowledge  or  experience  in  the  work.  The  fundamental  aim  of  this 
programme and of the actions proposed  in response to this requirement  is to 
ensure that decisions at national and Community level  on energy matters can 
be taken on common analytical bases.  The objective is clearly not to achieve 
standardisation but to align points of view so that those taking decisions have 
identical  reference  bases in terms of: 

•  economic studies and analyses; 

•  energy forecasts; 

•  the dynamics of energy systems. 

In  this  context,  particular  attention  should  be  paid  to  the  effects  of  the 
implementation  of  the  Single  Currency,  considering  the  positive  impact  on 
competitiveness which can be expected from "EURO-pricing" of oil. 

This  action,  aimed  at  greater  co-ordination  of  the  factors  to  be  taken  into 
account,  will  be  based  on  the  development  of  an  effective  partnership 
between  the Commission,  the Member  States  and the other  parties involved 
in the energy field and will find expression in a work programme covering the 
energy  sector  in  the  widest  sense.  The  introduction  of  coherent  analysis 
procedures  will  make  it  easier  to  identify  the  main  questions  arising  in 
connection  with 
the  priority  objectives  of  security  of  supply, 
competitiveness and environmental protection. 

In this connection, the main areas for actions covered by this programme are: 

(a) 

identification,  at  European  level,  of  the  major  problems  concerning 
future  energy  demand  and  production  as  well  as  energy  policy,  with 
special emphasis on: 

• 

• 

• 

strategies  for  responding  to  the  challenge  of  climate  change  in 
energy  terms  and  more  general  questions  relating  to  the 
environment  (including  an  evaluation  of  the  cost  of  possible 
responses); 

the  dynamics  of  the  opening  up  of  energy  markets  and 
corresponding  structures,  particularly  in  terms  of  consequences 
for the future and behaviour of  firms; 

world  energy  market  trends  and  their  influence  on  the  external 
dependency  of the European  Union  (in  particular  the  anticipated 
significant  increase in energy demand in Asia and Latin America); 

(b) 

improved  analytical  capability so as to be able to  identify  energy trends 
and  possible  scenarios  on  a  comparable  basis  in  all  Member  States, 
having regard in particular to the evolution of market structures and the 
challenge posed by climate change. 

- 1 1-

The  need  for  action  in this area  is clearly  in line with  the  priority  objectives 
on  energy  matters,  particularly  as  regards  the  environmental  aspects 
(underlined  again  by  the  Council  at  its  meeting  on  27 May  1997)  and  the 
completion  of  the  internal  energy  market,  a  key  element  for 
the 
competitiveness of European firms. 

The  action will reinforce  the achievement  of the  energy  policy  objectives  as 
outlined  in the White Paper  and  will  build  on the  efforts  already  underway. 
The annual appropriations necessary to implement these actions are indicated 
in the financial  statement in Annexe II. 

1.3.2  International energy co-operation (cf. Annex III) 

The  international  dimension  is  assuming  increasing  importance  in 
energy questions affecting  the Union. 

The  increasing  dependency  of the  Union  on  its  external  suppliers  above  all 
raises  the  question  of  security  of  supply.  The  situation  is  moreover 
complicated  by the emergence  of energy-hungry  markets  in the  developing 
countries,  whereas  the  European  market  is  expanding  only  slowly.  The 
competitiveness  of European  businesses  in the face  of these  new  markets  is 
also  of  paramount  importance.  The  fact  that  the  major  environmental 
problems  connected  with  energy  consumption  now  affect  the  whole  planet 
requires  global  co-operation  which  takes  account  ôf the  circumstances  of all 
the  parties  involved,  including %the  role  of  energy  as  a  key  element  of 
sustainable  economic  development.  Finally,  steps  should  be  taken  now  to 
prepare  for  the  changes  that  enlargement  will  inevitably  bring  for  Union 
energy policy. 

SYNERGY  represents  the  main  external  element  of  the  Energy  framework 
It  constitutes  the  link  between  an  internal  policy  and  the 
programme. 
external  actions  of  the  Community  and  is  one  of  the  main  supports  for 
penetration  by  Community  firms  of  the  major  external  markets. 
It  is 
important  in  this  connection  to  emphasise  that  with  the  technologies 
associated  with  renewable  energy  sources  and  the  improvement  in  energy 
efficiency, 
the  Union  has  significant  industrial  and  employment  potential 
which  would  be  further  strengthened  if  new  outlets  in  third  countries  were 
opened  up to trade with the Member States. 

Compared  with  other  Community  instruments  which  might  bè  involved  in 
external  actions  in  the  energy  sector,  SYNERGY  will  concentrate  on  the 
achievement  at  international  level  of  the  three  objectives  of  the  framework 
programme:  global  competitiveness,  security  of  supply  and  environmental 
protection.  Moreover,  SYNERGY will seek to improve co-ordination,  in the 
interests  of greater  efficiency,  of the various  international  actions  carried  out 
by the  Community  in the  energy field and  ensure  greater  coherence  with  the 
work of international  organisations in the sector. 

Within  a framework  which takes greater  account  of all energy aspects  on the 
one  hand  and  medium  term  strategy  on  the  other  SYNERGY  will  help  to 

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to  research  and 

fund  co-operation  on  the  formulation,  preparation  and  implementation  of 
energy  policy  in  areas  of  mutual  interest.  However,  SYNERGY  does  not 
fund  actions  relating 
technological  development, 
demonstration  projects  or energy  infrastructure  investment.  Projects  of this 
type  can  be  financed  under  other  Community  instruments. 
Similarly, 
SYNERGY  is not  an instrument  for assistance  to  or economic  co-operation 
with  third  countries.  SYNERGY  actions  mainly  concern  third  countries 
facing  energy  challenges,  mainly  those  in  Central  and  Eastern  Europe,  the 
New  Indépendant  States,  non-member  countries  in the Mediterranean basin, 
Latin America and Asia and the African,  Caribbean and Pacific  signatories to 
the  Lomé  Convention.  SYNERGY  can  also  cooperate  with  international 
organisations  engaged  in  this  sector  (e.g.  International  Energy  Agency,  the 
Latin  American  Energy  Organisation),  international  financial  institutions 
(EE3,  World  Bank,  EBRD)  or  developed  countries  (USA,  Japan,  Norway 
etc.)  to initiate actions of mutual benefit  in third countries.  The programme 
It  will 
will  be  more  clearly  slanted  in  favour  of  Community  interests. 
therefore  be  possible  for  most  actions  to  be  initiated  by  the  Union  alone, 
including those in the field of energy supply as well as demand. 

On the  basis  of  these  guidelines,  a multiannual  programme  of  actions  to  be 
initiated  and  a  list  of  beneficiary  countries  are  annexed  to  the  decision 
adopting  the  SYNERGY  programme.  Under  this  multiannual  programme 
specific action plans will then be established each year on the basis of: 

•  other Community programmes and instruments; 

•  actions carried out in certain third countries by the Member States; 

•  needs expressed by the national industries of the Member States; 

•  needs expressed by beneficiary countries. 

To  take  account  of the various complementary  elements,  these plans will be 
drawn up  in  a process  of  consultation  of the  departments  concerned  within 
the Commission then submitted to the single committee set up by the Council 
Decision  establishing  the  Energy  framework  programme.  This  committee 
will  also  receive  periodic  reports  on  the  implementation  of  the  various 
programmes. 

The co-operation will take the form of: 

•  advice on energy policy; 

•  visits by experts to bodies in third countries; 

•  energy studies and forecasts; 

•  assistance  for  international  networks  discussing  and  advising  on  energy 

policy; 

training actions (courses, seminars, technical missions); 

- 1 3-

•  co-ordination  of  the  various  Community 
international actions in the energy sector; 

instruments 

involved 

in 

•  dissemination of information, (brochures, newsletter); 

•  promotion  of  dialogue  and  exchanges  of  information  and  experience 

through conferences, seminars, etc. 

The funding  provided by SYNERGY could  cover the total  requirement  of a 
particular project where it is in the interests of the Community  alone or take 
the form of cofunding with another partner. 

The  total  budget  for  this  programme  must  be  sufficient  to  contribute 
effectively  to  an improvement  in the  coherence  and  complementarity  of the 
internal  and  external  dimensions  of  Union  policies,  as  stressed  by  the 
Commission  in  Agenda 2000. nThe  breakdown  of  the  required  funding  is 
indicated in the Financial Statement in Annex III. 

Thematic programmes 

1.3.3  Promotion  of  renewable  energy  sources  and  implementation  of  a 

strategy and Community action plan  in this area (cf. Annex IV) 

Renewable energy sources (RES) help to protect the environment and ensure 
security  of  supply  through  diversification  of  sources.  Their 
increased  use 
will  also  help  to  achieve  other  Community  objectives  of  major  importance 
such  as  regional  development,  economic  and  social  cohesion,  employment 
and competitiveness. 

The  aim  of  this  action,  which  adopts  the  main  elements  of  the  proposal 
already  presented  by  the  Commission  concerning  the  ALTENERII 
programme,12  is to  help  increase  use  of  renewable  energies  and  hence  of 
their  share in the Community's  energy  balance,  including  by  facilitating  the 
legal,  socio-economic  and  administrative  conditions  required  for  the 
implementation  of the White Paper and  action  plan for renewable energy 
sources  up to  201013  being  adopted  by the  Commission  following  the wide 
ranging discussions on the 1996 Green Paper.14 

Once these  conditions  have been determined,  it will  be easier  to  encourage 
private  and  public  investment  in  the  production  and  use  of-energy  from 
renewable  sources.  The economic  penetration  of  renewable  energy  sources 

11  Agenda 2000, Vol. 1, Part 1, Section IV.2 "A strong and coherent Europe". 

12  COM(97) 87 final of 12.3.1997. 

13  COM(97)... 

14  "Energy for  the future:  renewable  energy sources.  Green Paper for  a  Community  strategy", 

COM(96) 576 final of 20.11.1996. 

14 

will  be  helped  by  targeted  actions  aimed  at  increasing  operator  confidence 
through  assistance  with  the  preparation  and  presentation  of  projects  and 
through  the  development  of  new  funding  possibilities  (such  as  third  party 
financing). 

Specific  actions  eligible  for  funding,  which  will  involve  the  promotion  of 
market penetration of innovative environmentally friendly technologies, which 
have proved their value and effectiveness will cover among other things: 

•  monitoring of the implementation of the strategy and action plan regarding 
RES, and evaluation of the measures to be taken under this programme; 

•  market  penetration  of RES by facilitating,  among  other  things,  access  to 
specialist  advice,  analysis  of  market  prospects,' choice  of  location  of 
projects, drawing up of funding plans; the projects will cover, among other 
things,  biomass  and waste,  photovoltaic  and thermal  solar  systems,  solar 
power  in  buildings,  small-scale  hydroelectric  projects,  wind  power  and 
geothermal energy; 

•  promotion of product and equipment standardisation; 

•  extension  of  infrastructures  for  the  development  of  RES  in  local  and 
regional  planning,  design  and  evaluation,  information,  education  and 
training; 

•  circulation of information with a view to improved  co-ordination between 
international, Community, national,  regional and local  activities,  as well as 
the pooling of experience and know-how; 

•  studies  or  other  work  aimed  at  implementing  or  complementing 
Community  measures  taken  to  develop  the  potential  of  the  various 
renewable energy sources. 

The  contribution  of  the  renewable  energies  to  the  primary  energy 
requirements of the European Community is currently slightly below  6% and 
represents  some  70  million  tpe.  In  its  abovementioned  Green  Paper,  the 
Commission  proposed  a significant  increase  in the use  of  renewable  energy 
sources by the year 2010. The proposed indicative target of a doubling of the 
share  of  renewable  energies  by  2010  has  been  confirmed  during  the 
consultation process and integrated in the White Paper. 

This  programme  is  a  fundamental  element  of  the  implementation  of  the 
strategy and action  plan for renewable  energy sources  which  will  give  effect 
to the Paper. The budget available for the actions must be sufficient  to make 
a  significant  contribution  to  the  achievement  of  this  Community  objective. 
Details  are  outlined  in  the  Financial  Statement  in Annexe  IV.  The  increase 
proposed from 2000  onwards is aimed at taking full advantage, with the new 
financial  perspectives,  of the White Paper and the action  plan.  It  should  also 
be emphasised that the increased use of renewable energies will contribute to 
economic  and  social  cohesion,  particularly  through  the  exploitation  of  local 
energy sources. 

- 1 5-

1.3.4  Encouragement of energy efficiency (see Annex V) 

In  the  medium  and  long  term,  prudent  and  rational  end  use  of  energy 
resources  is,  in  terms  of  cost  effectiveness,  the  best  available  solution  for 
reducing CO2 emissions. 

The programme  SAVE II,  adopted  by the Council  in December  1996,15  has 
proved  its effectiveness  as a non-technological  programme  in promoting  the 
rational  use  of  energy  in  all  consumer  sectors.  The  previous  programme 
(SAVE  I)  had  already  made  an  important  contribution  towards  the 
Community's energy objectives, implementing a wide range of measures such 
as legislative  acts, practical pilot projects,  studies, monitoring  and evaluation 
of progress on energy efficiency,  dissemination of information  and innovative 
mechanisms for funding and awarding contracts. 

In  connection  with  SAVE,  the  Council  and  the  Commission  have  adopted 
nine  directives  on  energy  efficiency  in  domestic  appliances,  buildings  and 
industry:  This programme  of  legislation,  as well  as the  other  measures,  will 
have to be continued. 

Electricity  is  of  particular  importance  in  the  energy  sector,  since  its 
production  accounts  for  around  35%  of  primary  energy  consumption  and 
30%  of  CO2  emissions.  The  end  use  of  energy  offers  great  potential  for 
improving  efficiency  in  all  sectors  of  activity  (domestic  and  industrial).  The 
old  PACE  programme,  a  Community  action  programme  to  improve  the 
efficiency  of  electricity  use,  adopted  in  1989  by  the  Council,  has  been 
integrated  in full  into  SAVE II. PACE  provided  for  a range  of  measures to 
improve  the  energy  efficiency  of  various  types  of  equipment  (domestic 
appliances,  electric  motors),  to  promote  information  for  consumers  on  the 
purchase and use of efficient  electrical equipment etc.  ... These actions, which 
make  a  significant  contribution  to  reducing  CO2 emissions  will  have  to  be 
pursued  under  the  new  Energy  framework  programme.  In  this  connection, 
particular attention could  be paid to  actions to  promote  energy  management 
at regional  and local  level  which  could  usefully  be developed  in  conjunction 
with the City of the Future project. 

In  the  context  of  enlargement,  the  benefits  of  measures  linked  to  energy 
efficiency  will  take  on  a  new  dimension  when  the  pricing  policies  and 
metering  practices  used  in  the  applicant  countries  are  more  in  line  with 
market-oriented mechanisms. 

If  these  objectives,  which  are  particularly  important  given  the  priority 
accorded  to  environmental  considerations,  are  to  be  achieved,  the  funds 
allocated  for  the  SAVE II  programme  (whose  period  of  application  as 
currently fixed by the Decision of 16 December  1996 will be aligned with that 
of the Energy framework  programme) will  have to  be  increased  accordingly 

15  Council Decision  of  16 December  1996 concerning a pluriannual programme for  the promotion  of 

energy efficiency in the Community (SAVE II), OJ No L 335 of 24.12.1996. 

16 

in line with the new financial  perspectives. Details of the estimated  financial 
requirements are given in the Financial Statement in Annex V. 

7.3.5  Promotion of clean and efficient use of solid fuels (cf.  Annex VI) 

Solid fuels  play à considerable part in the energy balance of the Union, and 
account for 30% of electricity generation.  They play a major role in security 
of supply and,  as a key element in the establishment  of the internal  market, 
effectively  regulate the prices of other fuels such as natural gas.  Maintaining 
diversification  of the  energy balance and  access to  all  sources  is  crucial  to 
security  of  supply  but  also  to  a  balanced  approach  to  the  three  priority 
objectives  of  Union  energy  policy.  However,  a  prerequisite  to  this  is  the 
increased  penetration  of  cleaner  and  more  efficient  technologies  for  solid 
fuels, in order to reduce pollutant emissions. 

Clean and efficient  solid fuel combustion technologies are rich in potential in 
terms  of reducing  emissions not  only of CO2 but  also  SO2 and  Nox,  which 
cause  acidification.  The  action  proposed  under  the  Energy  framework 
programme  (CARNOT)  is  intended  to  help  achieve  this  objective.  The 
Community must play a role in promoting the market penetration  of these 
technologies,  encouraging  the  companies  in  this  sector  to  establish  the 
necessary  long term  strategies  with  a view to  replacing  the  thermal  power 
stations currently in operation. 

Encouraging  the  clean  and  efficient  use  of  sold  fuels  is  particularly  urgent 
with the prospect  of enlargement.  Most  of the applicant countries are large 
scale  producers  and  consumers  of  solid  fuels:  in  Poland,  coal  and  lignite 
account  for  76%  of  primary  energy  consumption  and  94%  of  electricity 
generation.  The corresponding figures for the Czech Republic are 62% and 
76%  respectively,  and  19 and 27.5% for  Hungary.  In  spite  of the  reforms 
carried out by these countries with a view to greater diversification,  it is likely 
that  a significant  proportion  of their production  of solid  fuels  will continue. 
Conversion  of  the  plants  using  these  fuels  is  of  mutual  interest  to  the 
applicant countries and the Union in both economic and environmental terms. 
The  experience  of  converting  plants  burning  lignite  in  the  new  German 
Lander provides a good example of the potential contribution  of lignite from 
the  countries  of  Central  and  Eastern  Europe  to  the  energy  supplies  of  an 
enlarged  Europe.  Technological  co-operation  on  "clean  coal"  will  help  to 
integrate those countries into the European Union. 

The year 2002 will see the expiry  of the ECSC  Treaty which  has made a 
major  contribution  to  economic  and  social  expansion  in  Europe.  The 
experience gained with the ECSC Treaty is an asset that the Community must 
exploit  to  the  full.  It  is particularly  important  to  ensure  that  the  results  of 
research  already  financed  or  currently  under  way  under  the  ECSC  are 
sufficiently  exploited.  This  proposed  action  aims  to  bring  new  more 
environmentally friendly solid fuel technologies closer to the market. 

Actions to promote the clean and efficient  use of solid fuels  are in line with 
the  conclusions  of  the  Amsterdam  European  Council  on  growth  and 

17-

employment,  which  approved  allocating  financial  resources  from  its  reserves 
to  'coal'  and  'steel'  research  on  expiry  of  the  ECSC  Treaty.  The  proposed 
CARNOT  action  under  the  Energy  framework  programme  will  complement 
this future  research activity. 

Finally,  for  the technologies  in question,  the  growth  prospects  on  external 
markets  such as China, ASEAN, India etc. are rich in potential  for  European 
companies,  while  at  the  same  time  helping  to  reduce  greenhouse  gas 
emissions, a problem affecting  the whole world. 

Details of the financing  required for this programme are given in the Financial 
Statement in Annex VI. 

1.3.6  Co-operation in the nuclear sector on safety, industrial  collaboration 
with  Russia  and  the  New  Independent  States,  and  the  transport  of 
radioactive  materials,  including  the fight  against  illicit  trafficking 
(cf. Annex VII) 

The  nuclear  sector  is  the  subject  of  a  number  of  Commission  action 
programmes,  mainly in the areas  of research,  technological  development  and 
education,  nuclear  safety,  health  protection,  technical  assistance  and  co 
operation  with  the  countries  of  Central  and  Eastern  Europe  and  the  New 
Independent  States, 
the 
implementation  of safeguards.  Although  most  of these operations  do not  fall 
under  energy  policy  in  the  strict  sense,  three  actions  (co-operation  on 
safeguards,  industrial  collaboration  with  the  New  Independent  States 
and  the  transport  of  radioactive  materials,  including  the  fight  against 
illicit  trafficking)  come  directly  under  that  policy  and  should  therefore 
constitute a specific part of the Energy framework  programme. 

transport  of  radioactive  materials  and 

the 

Given  the  existing  provisions  in the  Euratom  Treaty,  the  implementation  of 
such  action  does  not  require  the  adoption  of  specific  formal  acts. 
However,  continued  funding  should  be  provided  for  these  actions,  the  need 
for which is beyond  question. 

Co-operation  in  relation  tô  the  accounting  and  monitoring  of  nuclear 
materials 
the  New 
Independent  States and Mongolia 

(safeguards)  as  part  of 

technical  assistance 

to 

The  aim of these measures  is to  help to  improve  and  computerise  the  system 
of accounting  and safeguards  at all levels:  installation  (site), regional centres, 
company headquarters and national systems. 

In  1993,  the  Euratom  Safeguards  Directorate  began  to  collaborate  with 
Russian  officials  with  responsibility  in  this  area  and,  since  1994,  specific 
projects  have  been  drawn  up.  The  results  of this  co-operation  are  certainly 
encouraging  but  it will  have to  be pursued  for  some time  still  to  achieve  the 
desired  objectives.  As  regard  Russian  participation,  apart  from  training  and 
familiarisation,  seven inspections and two  measurement  workshops have been 
organised. 
From  these  it  emerges  that  the  technical  knowledge  and 
experience  of  Russians  working  in  the  field  of  nuclear  technology  is 

- 1 8-

considerable  but  the  training  requirements  in  relation  to  modern  methods  of 
organisation,  evaluation  and  logistics  are  still  great.  As  regards  systems 
design,  seven  Russian  experts  worked  for  a  period  of  eight  weeks  each  in 
Luxembourg  from  October  Ï993 to March  1994.  Each  period  was  followed 
by  an  examination  and  evaluation  of  their  contributions  and  conclusions. 
Two  seminars  were  organised  within  the European  Union  and  a  conference 
on nuclear safeguards  in St Petersburg. 

It  is then useful  to pursue measures relating to  training  and  familiarisation  in 
the  techniques,  methods,  logistics  and  evaluation  of  modern  nuclear  safety. 
Co-operation  should  therefore  continue between  Russia  and  Euratom  in this 
sector,  particularly  with  a  view  to  combating  the  illicit  trafficking  of 
radioactive  materials.  With  the  entry  into  force  of  the  partnership  and 
co-operation  agreements with the New Indepedent  States, these activities will 
be further  extended. 

In budget  terms,  the  actions in question  are funded  under  TACIS,  but  as the 
Commission  has decided16 that their management  should  be the  responsibility 
of  the  services  in  charge  of  energy  policy,  it  is  proposed  to  examine 
transferring  the corresponding  appropriations to a budget  heading  specifically 
relating to energy policy. 

Industrial  co-operation  with Russia and the NIS: 

Nuclear  energy  now  provides,  with  the  required  degree  of  security,  a 
significant  proportion  of the  electricity  requirements  of the  Community,  with 
significant  environmental  implications.  The use of nuclear  energy  is however 
conceivable  only  if appropriate  safety  and  industrial  viability  criteria  are  met. 
This is the case today in the Community, but  it is reasonable to  take  a critical 
look  at the situation in certain neighbouring countries, particularly Russia,  the 
Ukraine  and  a  number  of  others  which  have  applied  for  membership,  which 
may  wish  to  expand  their  use of nuclear  energy  as their  economies  develop. 
It  is  therefore 
important  to  go  beyond  specific  short  term  measures  to 
improve  the  safety  of  nuclear  plants  in  operation  and  examine  ways  of 
ensuring that in the longer term the  use of nuclear energy  is accompanied  by 
all the necessary safety guarantees comparable to those used in the Union. 

For  some years the Commission has been carrying out  studies and  conducting 
working  groups  with  experts  in  the  European  nuclear  industry,  focusing 
mainly  on  Russia  at  this  stage,  in  order  to  gain  a  better  knowledge  of  the 
present  state  of the  local  nuclear  industry  and  define  a possible  approach  to 
achieve  a fundamental  improvement  in safety.  This approach  is based  on the 
concept  of transferring  the  culture  of  safety  through  industrial  co-operation, 
which  is particularly  attractive  for  a country  which  wishes  to  expand  its  use 
of  nuclear  energy.  The  Commission  is  currently  studying  with  the  Russian 
authorities  the  technical,  financial  and  legal  barriers  to  the  establishment  of 
co-operation  schemes  between  businesses.  This  process  should  lead  by  the 

16  Commission Decision  C(97)2879  of 24.9.1997 on the funding  of Euratom nuclear  safeguards. 

19-

beginning of  1998 to the definition  of courses of action and proposals which 
it  would  be  unwise  not  to  pursue.  This  requires  funding  of  more  detailed 
studies  of  particular  problems  (e.g.  the  conditions  required  for  investment, 
specific  legal  difficulties,  etc.)  and  providing  the  means  to  solve  generic 
problems.  The objective for the Commission is to help establish industrial co 
operation on the largest possible scale without becoming involved in carrying 
out specific projects which is a matter for the operators concerned. 

Transport of radioactive materials 

The  production  of  electricity  by means of nuclear  power  and  the  increasing 
use of radioactive materials in the health sector,  industry or research requires 
such materials to be transported under conditions which guarantee the safety 
of  the  general  population  and  workers  in  the  industry; 
in  order  to  take 
account of developments in the transport of radioactive materials, progress of 
technology  and  know-how  and  ever  stricter  obligations  concerning 
radiological  protection,  international,  Community and national  laws will have 
to adapt to the new circumstances and requirements. 

At the request of the European Parliament, the Commission  set up in  1982 a 
standing group of experts in the field of the transport of radioactive materials 
to  advise  it  on  the  studies  and  experiments  to  be  carried  out  and  the 
legislation to be drawn up in this sector.  The most recent recommendation  of 
this groups calls for the implementation of a five-year multiannual programme 
with  appropriate  funding.  This programme  should  revolve  around  six  fields 
of activity which would benefit from action at Community level: 

•  facilitating  the  functioning  of  the  internal  market  by  identifying  the 

harmonisation measures that are required; 

•  contributing  to  the  subsequent  evolution  of  legislation  through  the 

development of experimentation and know-how; 

•  evaluating incidents occurring during transport and learning the lessons for 

the future; 

• 

improving the coherence of emergency measures and the training of those 
involved; 

•  co-operating  with  the  countries  of  Central  and  Eastern  Europe "and the 
New Independent States to help them to improve the safety of transport in 
those countries; 

• 

improving  the  public's  knowledge,  understanding  and  perception  in this 
field. 

The  appropriation  proposed  for  the  various  categories  of  nuclear  action  as 
described  above  for  the  period  in  question  is  outlined  in  the  Financial 
Statement in Annex VII. 

- 2 0-

1.4  Co-ordination  with  energy  components  of  other  Community 

programmes and policies 

1.4.1  Support for  research and technological development 

industry,  research  centres  and  universities 

Research  and  technological  development,  including  demonstration,  play  an 
essential role in the elaboration of methods which offer high energy  efficiency 
and  new  techniques  for  the  exploitation  of  fossil,  nuclear  or  renewable 
sources.  In this connection, the Fourth Framework Programme for  research 
and technological  development,  established  by Articles 13 Of to  13 Op of the 
Treaty, includes for non-nuclear energies a research and energy development 
section (JOULE) and a "demonstration" section (THERMIE).  These enable 
major  projects  in the field of  new energy  technologies to  be  carried  out in 
conjunction  with 
in  the 
Member States.  An  RTD  programme  in  the  field  of  nuclear  safety  and 
controlled thermonuclear fusion  based on the Euratom Treaty has also been 
implemented  with the participation of the Joint Research  Centre.  Given the 
context  and  specific  structures  in  which  these  actions  take  place,  their 
operating  methods,  bodies  and  implementing  instruments  will  remain 
unchanged.  It is however clear that there is a close link between energy RTD 
activities  and  the  more  market-oriented  actions  carried  out  under  this 
framework  programme.  A special  effort  will therefore  have to  be  made to 
improve  co-ordination  at  the  appropriate  level  between  the  Commission's 
departments  and  between  the  other  parties  involved.  More  specifically,  a 
more  formalised  approach  will  be followed  for  increased  co-operation  and 
co-ordination  between  the  Single  Energy  Committee  and  the  equivalent 
structure  which will be  set  up  in the context  of the Fifth  RTD  Framework 
Programme. 

1.4.2  Trans-European energy networks 

The  trans-European  networks  are vital  arteries  for  economic  development, 
the working of the internal market and greater Community cohesion.  Under 
the  Treaty  (Article  129b,  c,  d),  the  European  Community  has  given  itself 
powers relating to networks and, in the energy field, it has pursued  a policy 
of developing these infrastructures  in the electricity  and natural  gas sectors, 
on  account  also  of  the  positive  effects  on  security  of  Community  energy 
supply  and  international  co-operation.  As regards  Community  cohesion in 
particular,  the  Commission  is  devoting  a great  deal  of  its  attention  to  the 
energy problems arising from the special situation of the islands, archipelagos 
and extremely remote areas of the Community.17 

Given the context and specific structures in which this action is being carried 
out,  its  methods  of  operation,  bodies  and  implementing  instruments  will 
remain unchanged,  as with research.  A special effort  is underway to  further 

17  Cf.  for example the Report presented by the Commission on the progress achieved  in  implementing 

POSEIMA. COM(94)476 final of 09.12.1994. 

21 

improve  co-ordination  at  the  appropriate  level  between  the  Commission's 
departments and between the other parties involved. 

7.4.3  Other policies or programmes 

Some other policies, such as external relations (for instance in the context of 
the PHARE, TACIS or MEDA programmes), structural funds  or investment 
support  include  in  their  area  of  activity  important  energy  components. 
Special  attention  will then  also  be  paid  to  improving  co-operation  and  co 
ordination between the Commission's departments in charge. 

1.5  General financial elements 

In absolute terms, the budget for energy policy as such is not large, not only 
in comparison with other chapters under heading 3 but also in relation to the 
sums  set  aside  for  energy  measures  undertaken  under  certain  Community 
policies. 

The main purpose  of developing  an integrated  approach  to  energy policy is 
the rationalisation and improved co-ordination of actions.  The establishment 
of  the  multiannual  framework  programme  focusing  on  the  three  major 
priority objectives will facilitate the management and more transparent and 
rigorous  use  of  resources  thus  resulting  in  more  effective  actions  on the 
existing financial bases. 

set  out  by 

It  is  however  essential  that  the  Union  should  provide  itself  with  sufficient 
resources  to  implement  its  policy  priorities  in  the  energy  sector  and  that 
provision should therefore be made for certain increases in anticipation of the 
forthcoming  financial perspective.  This is moreover in line with the  financial 
framework 
the  Commission 
its  memorandum  on 
Agenda 2000,18  which 
the 
development  of  a  number  of  internal  policies  intended  to  serve  priority 
objectives  shared  by  all the  Member  States  and  where  there  is  an  obvious 
added  value  and  refers  in  this  connection  to  certain  priority  programmes, 
particularly ones linked with enlargement, innovation and the introduction of 
environment-friendly  technologies whose allocations may be increased  faster 
than GNP growth. 

in 
in  Part 3  makes  express  provision  for 

Given  their  potential  not  only  in  terms  of  environmental  protection,  of 
course, but also job creation, it is proposed to place particular emphasis on 
actions  to  promote  renewable  energies  (ALTENER)  and  encourage  energy 
efficiency (SAVE). 

The  table  below  gives  an  indicative  breakdown  in  million  ECU,  without 
prejudice to any priorities which may be adopted, between the various actions 
and  programmes.  The  estimated  budgets,  are  outlined  in  detail  in  the 
Financial Statements in the Annex; 

18 Agenda 2000, Vol. I,  "The new financial  framework". 

- 2 2-

1998 

1999 

2000 

2001 

2002 

Total 

1.50 

1.53 

1.56 

1.59 

1.62 

7.8 

7.00 

7.14 

7.28 

7.42 

7.57 

36.4 

14.4 

15.6 

17 

17 

17.1 

81.1 

Energy markets 
analyses and 
monitoring 

International co 
operation in the 
energy sector 

Renewable  energy 
sources 

Energy  efficiency 

12.5 

12.8 

13.9 

14.6 

14.6 

68.4 

Solid fuels sector 

0.80 

0.81 

0.82 

0.83 

Nuclear security 

0.5 

0.51 

0.5? 

0.53 

0.84 

0.54 

4.1 

2.6 

Total 

Nuclear 
B7-535 

36.7 

38.39 

41.08 

41.97 

42.47 

200.4 

security 

2.5 

2.5 

2.5 

2.5 

2.5 

12.5 

2. 

IMPROVING THE CO-ORDINATION OF THE ENERGY COMPONENTS  OF THE VARIOUS 
COMMUNITY  POLICIES 

As stated  in the  introduction,  the  April  1997 communication  on  an overall view of 
energy policy and  actions underlined  the importance,  including in terms of funding, 
of the energy  component  in a number of major  Community policies.  Co-ordination 
mechanisms already operate for  example in relation to  structural  policies.  Effective 
integration is not however possible without special attention being paid, to improving 
co-ordination  between  all  the  parties  involved  and  the  coherence  of  all  actions, 
particularly within the Commission and its departments. 

1) In accordance with its internal procedures, the Commission has formally  decided 
to  set  up  a  network  of  the  Directors-General  concerned  which  will  have the 
task of ensuring that: 

•  the policy or operational guidelines involving an energy dimension will be drawn 

up in accordance with the principles of consultation and transparency;  -

•  the actions implementing these guidelines and the allocation of resources relating 
thereto will be co-ordinated  on a constant basis and assessed  in the light of their 
contribution to the priority objectives of energy policy. 

2) Each year, the network of Directors-General will draw up a summary of all the 
energy  actions  undertaken  under  the various  Community  policies.  This report 
will  be  transmitted  to  the  committee  established  under  the  Energy  framework 
programme  for  its  consideration,  as well  as to  other  interested  committees, and 

23 

will  be  made  public  thereafter.  This  will  also  ensure  that  the  other  European 
Institutions are kept informed. 

A  more  formalised  approach  will  be  followed  for  increased  co-operation  and  co 
ordination  between  all  committees which  deal  with programmes  and  policies which 
have an energy component. Automatic information exchange mechanisms will also be 
introduced. 

It  is  expected  that  the  establishment  of  a single  committee  for  energy  actions  and 
programmes falling within the scope of this framework programme, will facilitate the 
co-ordination and coherence  of actions undertaken at Community  level.  It would be 
important for Member States to undertake their own internal reviews of their system, 
in order to improve the links between national and Community bodies. 

CONCLUSIONS 

The  Commission  communication  on  an  overall  view  of  energy  policy  and  actions 
represented a first step in response to the requests expressly made by the Council and 
the Member States for an integrated approach to Community energy policy. 

Given the vital importance of the sector for the economic  and social  development  of 
the  Union  and  the  high  priority  that  should  be  attached  to  defining  a  coherent, 
transparent and effective European energy policy, the Commission considers that the 
introduction  of  the  multiannual  Energy  framework  programme  along  the  lines 
proposed  will  give  practical  effect  to  this  approach  and  provide  an  appropriate 
response  at operational  level  to  the requirements  ascertained  by the  institutions and 
the Member States. 

*)|c)|c)|<)|(*:|c:fc*>|t:|c)|c)|c:|c)ic>|e)|c)|(>|c>|c)|c:|c 

24 

EUROPEAN COMMISSION 

PROPOSAL FOR A COUNCIL DECISION 

adopting a 

MULTIANNUAL FRAMEWORK PROGRAMME FOR 

ACTIONS IN THE ENERGY SECTOR 

(1998-2002) 

PROPOSAL FOR A COUNCIL DECISION ADOPTING A MULTIANNUAL 
FRAMEWORK PROGRAMME FOR ACTIONS IN THE ENERGY SECTOR 
(1998-2002) 

97/0302 (CNS) 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to the proposal from the Commission,1 

Having regard to the opinion of the European Parliament,2 

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

Having regard to the opinion of the Committee of the Regions,4 

Whereas  the  Commission  communicated  its views  on  the  future  of  Community  energy 
policy to the Council  in its White Paper  "An energy policy for  the European Union" of 
13 December 1995;5 

Whereas the Commission communicated to the Council in its White Paper of....  1997 its 
views on the implementation and monitoring of a Community strategy and action plan for 
renewable energy sources to the year 2010 with the aid of new technologies;6 

Whereas the Council  adopted  the SAVE II programme on  16 December  19967 to boost 
energy efficiency  initiatives in the Community with a view to reducing CO2 emissions; 

Whereas the Council  and the European Parliament  adopted  a decision  on 26 April  1994 
concerning  the  fourth  framework  programme  of European  Community  activities  in  the 
field  of  research,  technological  development  and  demonstration  (1994-1998)8  and  a 

4 

5  COM(95) 682, 13.12.1995. 

6  COM(97) 

7  Decision  737/96/EC, OJ No L 335, 24.12.1996. 

8  Council and Parliament Decision  1110/94/EC, OJNoL  115, 6.5.1994, page 31. 

26 

decision of the same date concerning a framework  programme of Community activities in 
the field  of research and training for the European Atomic Energy  Community;9  whereas 
the  Commission  adopted  a proposal  on  the  5th  framework  programme  of  research and 
technological  development on 30 April 1997;10 

Whereas the Commission adopted and transmitted to the Council a communication on the 
energy dimension of climate change on 14 May 1997;11 

Whereas the use  of cleaner technologies  contributes to  the objectives  of  the  Community 
strategy to combat  acidification;12 

Whereas  energy  is  a  vital  factor  in  the  economic  and  social  development  of  the 
Community; 

Whereas  the  Community's  dependence  on  external  energy  supplies  is  set  to  increase 
significantly in the years to come; 

Whereas  the  competitiveness  of European  business  is  heavily  influenced  by  the  level  of 
energy costs; 

Whereas it is necessary to the quality of life of citizens to ensure that the development  of 
energy  production  and  consumption  is  compatible  with  environmental  protection 
objectives; 

Whereas CO2 emissions must be reduced; 

Whereas,  particularly  in view  of the political  uncertainties involved  in the external supply 
markets, the Community must implement a coherent, effective  energy policy geared to the 
medium and long-term prospects for economic development; 

Whereas the actions taken under the energy policy should therefore be focused  on specific 
priority objectives; 

Whereas,  in  view  of  the  strategic  challenges  facing  the  Community,  these  objectives 
should focus  in particular on ensuring the security of supplies,  completing the integration 
of the energy markets, enhancing the competitiveness  of European business and the quest 
for environmentally sustainable economic development; 

Whereas the balanced  achievement  of these objectives  requires particular  attention to be 
devoted to the transparency, coherence and coordination of all of the energy actions taken 
at Community level; 

9  Council Decision  268/94(Euratom), OJ No L  115, 6.5.1994, page  31. 

10  COM(97)142  final. 

11  COM(97)196  final. 

12  COM(97)88 final  of  12.3.1997. 

-  3  - 

on 

<v  <f 

Whereas  the  Council  stressed  this  need  in  its  Resolution  of  8 July 199613  on  the White 
Paper "An energy policy for  the European  Union"; 

Whereas the Council,  when it adopted the Regulation adopting a programme to  promote 
international cooperation in the energy sector,14 considered that it would be opportune for 
the Commission  to  present  a communication  on all the  Community  programmes with an 
energy  component,  which  could  be  followed  by  a  proposal  on  the  establishment  of  a 
framework programme for energy; 

Whereas the Commission  presented  a communication: "An overall  view  of energy policy 
and  actions",15  from  which  it  emerges  that  the  Community  is  pursuing  a  great  many 
actions, but that these are scattered either between different  energy policy programmes or 
various Community policies; 

Whereas it is necessary to  ensure the management,  complementarity  and optimum use  of 
budget resources; 

Whereas only a truly integrated approach will enable proper account to be taken of all the 
aspects of the problems to be resolved; 

Whereas  this  coherent,  coordinated  approach  must  apply both  to  energy  policy  as  such 
and to the energy components of other Community policies; 

Whereas  it  is  therefore  necessary  to  define  and  establish  a  multiannual  framework 
programme for the actions taken under the Community's energy policy; 

Whereas  this  framework  programme  should  be  implemented  in  the  form  of  horizontal 
actions and thematic programmes; 

Whereas  the  horizontal  actions  cover  forward  analyses,  market  monitoring  and 
international energy cooperation; 

Whereas  the  thematic  programmes  concern  the  promotion  of  renewable  energy  sources 
and the  implementation  of  a Community  strategy  in  this  area,  the  promotion  of  energy 
efficiency,  promotion of solid fuels and the safe use of nuclear energy; 

Whereas,  in view  of  the  context  and the  specific  structures  within  which  energy  actions 
relating  to  trans-European  networks  are  conducted,  the  structures  and  the  manner  in 
which such actions are implemented must be maintained in the appropriate framework; 

Whereas  in view  of  the  context  and  the  specific  structures  within  which  energy  actions 
relating to RTD  are conducted,  the  structures and the manner in which  such  actions are 
implemented will continue to conform with the arrangements and procedures  of the RTD 

13  O J N oC  224,  1.8.1996. 

14  Council Regulation  (EC) No 701/97, OJ No L  104, 22.4.1997. 

15  COM(97)167 final,  23.4.1997. 

2  H 

framework  programme; whereas,  however,  cooperation  and  coordination  with  the  other 
structures must be enhanced; 

Whereas  the  actions  or  programmes  referred  to  above  should  be  implemented  where 
necessary  by  means  of  specific  measures  which,  where  appropriate,  would  replace  the 
corresponding instruments currently in force; 

Whereas the principle of seeking the greatest possible coherence calls for the setting up of 
a single committee of an advisory nature for the whole of the framework  programme and 
its constituent actions; 

Whereas, in view of the variety and technical complexity of the questions to be addressed, 
the  single  committee  and  the  Commission  should  seek  the  assistance  of  appropriate 
experts where necessary; 

Whereas the single committee will assist the Commission in ensuring the greatest possible 
transparency  and the  dissemination of information  between  all the  parties  concerned  and 
ensure  greater  consistency  of  the  energy  actions  taken  under  the  various  Community 
policies; 

Whereas,  notwithstanding  a  systematic,  regular  evaluation  of  the  actions,  the  "energy" 
framework  programme  and its  specific  programmes  should  be the  subject  of  a mid-term 
review by independent experts; 

Whereas focusing  the actions on the three major priority objectives  of security of supply, 
competitiveness  and  protection  of the  environment  will  facilitate  a more  transparent and 
more efficient  use of resources; 

Whereas some additional funding could be decided in the light of the political  choices and 
priorities adopted; 

Whereas  the  funding  of  actions  carried  out  in  the  priority  areas  of  promotion  of 
renewables  (ALTENER  programme)  and  energy  efficiency  (SAVE  programme)  in 
particular could be reviewed when the next financial perspective is drawn up; 

Whereas,  in  keeping  with  the  subsidiarity  principle  and  the  principle  of  proportionality 
pursuant to Article 3b of the Treaty, the above priority objectives of energy policy and the 
boosting  and coordination  of  energy  actions  carried  out  under the  energy  policy  proper 
and  in  the  framework  of  other  Community  policies  should,  by  their  nature,  be 
implemented  at  Community  level;  whereas  this  Decision  is  confined  to  the  minimum 
required to achieve these goals; 

Whereas  the  Treaty  does  not  provide  powers  for  the  adoption  of  this  Decision,  the 
purpose of which is the coordination  of  all  aspects  of  energy  policy,  other than those in 
Article 235;  whereas  the  specific  programmes  which  will  implement  this  framework 
programme will  each be adopted  on the appropriate legal  basis,  in particular where their 
objective is the prudent  and rational  utilisation  of natural  resources  referred  to  in Article 
130r of the Treaty, 

5-

29 

HAS DECIDED AS FOLLOWS: 

Article 1 

(lj 

A  multiannual  framework  programme  for  Community  actions  in  the  field  of 
energy,  hereinafter  referred to as the "framework  programme",  is hereby adopted 
for the period  1998-2002. 

(2) 

The  framework  programme  shall  primarily  contribute  to  the  pursuit  of  the 
following priority objectives: 

(3) 

(1) 

to guarantee the security of energy supplies; 

. to ensure competitiveness; 

to promote the compatibility of the development of the energy market with 
environmental protection objectives. 

The  framework  programme  shall  also  contribute  to  greater  transparency, 
coherence  and coordination  of all the  Community's  energy  actions  in the field of 
energy  policy  and ensure that they  mesh effectively  with  the  actions  taken in the 
framework of other Community policies. 

Article 2 

Notwithstanding  the  actions  relating  to  energy  conducted  in  the  framework  of 
the  framework 
research  policy  or  trans-European  networks  respectively, 
programme  shall be implemented through six specific  programmes  of a horizontal 
or thematic nature corresponding to the following actions: 

(a) 

(b) 

development,  in cooperation with the Member States,  of a programme for 
regular  monitoring  of  the  evolution  of the  energy  markets  and  trends,  so 
that  political  decisions  relating  to  energy  can  be  taken  on  the  basis  of  a 
joint analysis; 

reinforcement,  within  the  area  of  competence  of  the  framework 
programme,  of  international  cooperation  in  the  energy  field  in  order  to 
encourage,  firstly,  greater  diversification  of  energy  sources  and, secondly, 
greater transparency and stability of the international gas and oil markets in 
particular; 

(c) 

promotion  of new  and renewable  energy sources  and implementation  of a 
Community  strategy  and  action  plan for  renewable  energy  sources  to  the 
year 2010; 

(d) 

encouragement of rational and efficient use of energy resources; 

(e) 

regeneration of the coal sector,  notably through the use of environmentally 
compatible technologies; 

Q 0 

(2) 

(3) 

(1) 

(2) 

(1) 

(2) 

(f) 

safer use of nuclear energy. 

Each  specific  programme,  the  duration of which will  coincide  with  the  period  of 
application  of  this  framework  programme,  shall  set  out  the  arrangements  for  its 
implementation. 

Implementation  of  the framework programme  may  give  rise,  within  its  area  of 
competence, 
in 
programmes  undertaken  by  several  Member  States. 
It  may  also  lead  to 
cooperation with third countries or international organizations. 

to  additional  programmes  and  Community  participation 

Article 3 

The  annual  appropriations  shall  be  authorized  by  the  budgetary  authority  within 
the constraints of the financial perspective. 

The  detailed  rules  for  financial  participation  by the  Community  in  actions  taken 
under  the  framework  programme  shall  be  laid  down  in  accordance  with  the 
provisions  of  the  Financial  Regulation  applicable  to  the  general  budget  of  the 
European Communities. 

Article 4 

The  Commission  shall  be  responsible  for  the  implementation  of  the  framework 
programme and for drafting guidelines applicable to the actions and measures to be 
taken under each of the specific programmes. 

The Commission shall be assisted in the management of the framework programme 
by a committee of an advisory nature 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 within a time limit 
which  the  chairman  may  lay  down  according  to  the  urgency  of  the  matter,  if 
necessary by taking a vote. 

The opinion shall be recorded in the minutes; in addition, each Member State shall 
have the right to ask to have its position recorded in the minutes. 

The  Commission  shall  take  the  utmost  account  of  the  opinion  delivered  by  the 
committee.  It  shall  inform  the committee  of the manner in which  its  opinion has 
been taken into account. 

Article 5 

(1) 

The  Commission  shall  examine  each  year  the  state  of  implementation  of  the 
framework  programme  and  its  specific  programmes.  It  shall  assess  the  overall 
effectiveness  of the framework programme and its contribution to the objectives of 
Community  policy.  It  shall  also  assess  whether  the  objectives,  priorities  and 
financial  resources  are still  appropriate to the changing  situation.  If necessary,  it 

31 

shall  submit  proposals to  adapt  or supplement  the framework  programme  and/or 
the specific programmes. 

(2) 

In the third year of the period of application of this framework  programme and at 
all  events  before  submitting  its  proposals  for  the  establishment  of  a  subsequent 
framework programme,  the  Commission  shall  have  an  external  assessment 
conducted by independent experts of the overall implementation of the Community 
actions  carried  out  under  the  framework  programme.  The  Commission  shall 
communicate  the  conclusions  thereof,  together  with  its  comments,  to  the 
European Parliament,  the  Council,  the  Economic  and  Social  Committee  and  the 
Committee of the Regions. 

(3) 

The independent experts referred to in the preceding paragraph shall be chosen by 
the Commission in a balanced fashion. 

This Decision is addressed to the Member States. 

Article 6 

Done at Brussels, 

For the Council 
The President 

Ox* 

FINANCIAL  STATEMENT 

,1. 

TITLE OF OPERATION 

Proposal  for  a  Decision  defining  and  establishing  a  multiannual  framework 
programme for actions in the energy sector (1998-2002). 

2.  BUDGET HEADING INVOLVED 

B4-1  andB7-535inpart. 

3. 

LEGAL BASIS 

Article  130s or 235 of the EC Treaty (see individual decisions). 

4.  DESCRIPTION OF OPERATION 

4.1 

General  objective 

Energy  is a decisive factor in economic  and social  development.  At present, 
the Community's energy actions are scattered between different  programmes 
established  at different  times and in different  contexts  and between  different 
Community policies, such as external relations, structural policies or research. 
This  results  in  a  lack  of  transparency  and  the  risk  of  duplication  or 
inconsistency of the actions. 

The  development  of  an  integrated  approach,  and  in  particular  the 
establishment  of  a  multiannual  framework  programme  for  actions  by  the 
Community  in the  energy  sector,  is designed  to  meet  the  need  identified  by 
Member  States  and  within  the  Commission  to  improve  the  transparency, 
coordination  and  effectiveness  of  these  actions.  It  will  also  be  easier  to 
identify  the  additional  measures  needed  with  regard  to  the  priority 
objectives  of  security  of  supply,  competitiveness  and  environmental 
protection. 

The  framework  programme  will  be  the  umbrella  for  the  programmes  and 
actions for which the Directorate-General  for Energy is currently responsible. 
In legislative terms, it will take the form of a basic instrument  setting out the 
general  framework  and  specific  instruments  defining  the  content  of  and 
implementing the specific  actions (see Annexes II to VII to this proposal and 
the corresponding  financial  statements). Furthermore,  in order to  ensure the 
necessary  coherence  between  the  energy  components  of  the  various 
Community  policies,  the  Commission  will  set  up  a  network  of  the 
Directorates-General concerned. 

- 9-

33 

4.2 

Period  covered 

1998-2002. 

The  arrangements for renewal  of the action  are indicated  in  Article  5 of the 
proposal for a decision. 

5.  CLASSIFICATION OF EXPENDITURE OR REVENUE 

5.1 

Non-compulsory  expenditure 

5.2 

Differentiated  appropriations 

5.3 

Type of revenue involved 

Some  associated  countries  will  be  able  to  contribute  to  the  funding  of  the 
in  these 
thematic  programmes  under  the  arrangements  provided  for 
programmes (see individual financial statements). 

6. 

TYPE  OF  EXPENDITURE 

Apart from its participation in the energy-related  activities carried  out  in the context 
of  Community  policies  in  the  field  of  RTD,  trans-European  networks,  etc.,  the 
European Community participates in the funding of activities concerning: 

- 

forward studies and monitoring of the energy markets; 

- 

international  energy cooperation; 

-  promotion  of  renewable  energy  sources  and  implementation  of  a  Community 

strategy and action plan in this area; 

-  promotion of energy efficiency; 

-  promotion of the clean and efficient use of solid fuels; 

-  nuclear  sector  (cooperation  on  safety,  industrial  cooperation  with  the  NIS, 
transport of radioactive materials, including action to combat illegal  trafficking). 

The arrangements for and rates of Community financial  participation are described in 
detail in the financial  statements for the individual actions. 

7.  FINANCIAL IMPACT 

7.1  Method  of calculating total cost of operation 

The  "energy" framework  programme  sets the maximum  overall  amount and 
its  distribution  between  the  various  horizontal  actions  and  thematic 
programmes.  These  amounts  cover  the  funding  of  the  actions  as  such  and 
personnel  and administrative expenses. 

-10-

34 

7.2 

Itemised breakdown in heading 3 (in million ECU) 

Analyses and monitoring of the energy  7.8 
markets 

International energy cooperation 

Promotion of renewables 

36.4 

81.1 

Encouragement of energy efficiency 

68.4 

Penetration of clean technologies for 
solid fuels 

4.1 

Nuclear safety 

TOTAL 

2.6 

200.4 

7.3 

Indicative schedule of appropriations 

The  effective 
resources to be planned for the whole of the period covered. 

implementation  of  the  framework  programme  requires 

The  development  of  an  integrated  approach  to  energy  policy  is  primarily 
intended  to  streamline  and  improve  the  coordination  of the  measures.  The 
establishment  of  the  multiannual  framework  programme  and  its  focus  on 
three  major  priority  objectives  will facilitate  the  management  and  the more 
transparent, more rigorous use of resources, which in turn will contribute to 
greater efficiency  of the actions on the basis of the available budget. 

However,  the Union must procure the resources  necessary  to  implement  its 
political  priorities  in  the  energy  sector  and  already  make  provision  for 
certain increases when the next financial perspective is drawn up. This would 
be  in  line  with  the  financial  framework  defined  by  the  Commission  in  its 
communication  Agenda 2000,16  which  explicitly  provides  in  heading  3  for 
the development  of a number of internal policies intended to serve objectives 
shared  by all the Member States and where there is an obvious added.value, 
and cites in this connection  certain priority programmes related  in particular 
to  enlargement,  innovation  and  the  application  of  environment-friendly 
technologies which should see their allocation rise more rapidly than GNP. 

In view of their potential in partiuclar as regards environmental  protection 
and job  creation,  it is proposed to  place particular  emphasis  on  actions to 

16  Agenda 2000, Volume I, "The new financial  framework'' 

11  -

35 

promote  renewable energy  sources (ALTENER programme)  and  encourage 
energy efficiency  (SAVE programme). 

1998 

1.50 

1999 

2000 

2001 

2002 

Total 

1.53 

1.56 

1.59 

1.62 

7.8 

7.00 

7.14 

7.28 

7.42 

7.57 

36.4 

14.4 

15.6 

17 

17 

17.1 

81.1 

12.5 

0.80 

0.5 

36.7 

12.8 

0.81 

0.51 

38.9 

13.9 

0.82 

0.52 

14.6 

0.83 

0.53 

14.6 

0.84 

0.54 

68.4 

4.1 

7.6 

41.08 

41.97 

42.27 

200.4 

2.5 

2.5 

2.5 

2.5 

2.5 

12.5 

Analyses and 
monitoring of the 
energy markets 

International 
energy 
cooperation 

Renewable 
energy sources 

Energy efficiency 

Solid fuels sector 

Nuclear safety 

Total 

Nuclear safety 
B7-535 

8. 

FRAUD PREVENTION MEASURES 

Several financial and administrative fraud  prevention measures are planned which are 
adapted to the specific nature of the individual actions. They operate throughout the 
process and include: 

Before contract signature: 

-  qualitative and financial analysis of the bids, proposals or grant applications;. 

- 

involvement of the other Commission services concerned with a view to avoiding 
any duplication of effort. 

After contract signature: 

-  examination  of  the  schedules  of  expenditure  before  payment,  on  several  levels 
(financial  management,  officials  technically  responsible)  and  consultation  of  the 
Commission departments concerned on the results; 

12-

36 

-  payment  of  the  work  after  acceptance  on  the  basis  of  a  percentage  estimated 
before  contract  award,  and  in the  light  of  a final financial  report  on  the  action. 
Supporting documentation may be required for travel and subsistence expenses; 

- 

internal audit by the financial controller; 

- 

local  inspection  to  detect  errors  or  other  irregularities  by  examination  of  the 
supporting documentation. 

The single  committee  for the "energy" framework  programme  and the  other bodies 
concerned will be fully informed of the results of the work. 

9. 

ELEMENTS OF COST-EFFECTIVENESS  ANALYSIS 

9.1 

Objectives  and target  population 

The Union is increasingly facing major challenges in terms of energy strategy: 

• 

increasing  dependence  on external  supplies,  in a geopolitical  context 
whose development is unpredictable; 

•  need to support the competitiveness  of European industries; 

•  need  to  ensure  that  the  development  of  the  energy  market  is 

compatible with the environmental  protection objectives. 

At present, the Community's energy actions are scattered: 

•  between  different  Community policies; 

•  or,  in  the  case  of  the  energy  policy  itself,  between  different 
programmes  established at different times and in different contexts. 

This  dispersal  of  effort  results  in  a  lack  of  transparency,  the  risk  of 
inconsistency  of  the  various  actions,  management 
duplication  and/or 
difficulties  and a risk of non-optimum use of resources. 

The  establishment  of  a  multiannual  framework  programme  in  the  energy 
sector is designed to: 

• 

improve the situation  in order to  provide  a sound basis for  responding to 
the problems and challenges facing Community energy policy; 

•  reinforce  and  consolidate  the  action  needed  to  implement  a  successful 

energy policy in the Union. 

These  actions  will  be  implemented  in  accordance  with  the  following 
guidelines: 

- 13 

37 

each  Community  action  should  contribute  to  the  achievement  of  the 
priority  objectives  of  security  of  supply,  competitiveness  and 
environmental protection; 

• 

significant  improvement  in  the  coordination  of  all  the  actions  with  an 
energy component; 

•  promotion  of cooperation between the various actors in the Community 

institutions and the Member States; 

•  clarification and simplification of procedures. 

This  general  improvement  will  benefit  all  the  actors,  from  institutions  and 
national and local administrations to businesses in the sector, many of whom 
are SMEs. 

9.2  Grounds for the operation 

The assessments carried out in 1997 of all the energy programmes found that 
they had largely met their objectives.  The aim of establishing the multiannual 
improve  the  coherence  and 
"energy"  framework  programme 
effectiveness  of  the  actions  in  view  of  the  strategic  importance  of  the 
challenges facing the Union in the energy sector, more particularly as regards 
environmental concerns.  The follow-up  to the Kyoto Conference  on climate 
change and the implementation of the Community strategy and action plan for 
renewable energy sources to the year 2010 will be decisive in this respect. 

is  to 

9.3  Monitoring and evaluation of the operation 

The actions will be systematically reviewed.  Each year the Commission will 
examine progress in implementing the framework  programme and its specific 
programmes.  Depending  on  the  evolution  of  priorities,  proposals  may be 
presented  to  adjust  or  supplement  the  framework  programme  and/or  the 
specific  programmes.  During the third year of application  of the  framework 
programme  and,  at  all  events,  before  presenting  proposals  on  the 
establishment  of a subsequent  framework  programme,  the Commission will 
have independent experts carry out an overall external evaluation of progress 
in  implementing  the  Community  actions  carried  out  under  the  framework 
programme. 

- 1 4-

38 

1 0. 

A D M I N I S T R A T I VE  E X P E N D I T U RE 

(for details, please refer to the financial statements for each part of the programme) 

10.1  Impact on the number of staff 

Type of post 

Staff to be assigned to 
management of the action 
permanent 
staff 

temporary 
staff 

or 

Officials 
temporary 
agents 
Other resources 

A 
B 
C 

30.5 
10 
15 

: j | | | | | | | | | | l | |; 

Total 

55.5 

Seconded 
national 
exp: 
7 
Exp:  6 
Temp:  3 
16 

Indicate when the additional resources will be required. 

of whom 

duration 

existing resources 
within the DG or 
service concerned 

additional 
resources 

22 

7.5 

10 

5 
2 
2 
48.5 

5 years 

8.54 
2.5 
5 

2 
4 
1.5 

16 

•  The necessary human and administrative resources will be mobilised on the basis of the 
annual Commission decision on the allocation of resources, in particular in the light of 
the staff and additional amounts to be granted by the budgetary authority. 

•  One category A post has been entered in the preliminary draft budget for 1998. 

10.2 Overall financial impact of the additional human resources 

Amounts 

(ecus) 
Calculation method 

Officials 
Temporary agents 
resources 
Other 
budget heading) 
OA 1520 sec. nat. exp. 
OA 1178 service providers 
OA 1175 temporary 

(state 

Total 1 

1  648 000  103 000 ecus x 16 

Sec. nat. exp.= 40 000 x 2 
Service providers = 120 000 x 4 
Temporary = 80 000 x 3 

80 000 
480 000 
240 000 
2 448 000 | 

• 

The  amounts  show the total cost of additional posts for  the entire duration  of  the action where  it is 
specified and for  12 months where it is indeterminate. 

- 1 5-

39 

10.3 Increase in other operating expenditure resulting from the operation 

Budget heading 
(No and title) 

OA 1300 Missions 
OA 25  committees,  groups, 
invitation of experts 

Amounts 

; 

(ecus) 

Calculation method 

420 000  based  on  available  statistics  in  1996 
366 200  and 1997 

'• 

Total 1 

786 200 | 

The  amounts  correspond  to  the total expenditure for  the operation  if  its  duration  is fixed  or  to  the 
expenditure for  12 months if its duration is indeterminate. 

Post 

Existing 

New 

A 

2 

6 

11 

10 

1 

0.5 

30.5 

B 

1 

1 

3 

3 

0.5 

1.5 

10 

C 

1 

4 

5 

5 

0 

0 

15 

A 

2 

6 

6 

6.5 

1 

0.5 

22 

B 

1 

1 

1.5 

2 

0.5 

1.5 

7.5 

C 

1 

4 

2 

3 

0 

0 

10 

A 

0 

0 

2.5 

1.5 

0 

0 

4 

B 

0 

0 

1 

1 

0 

0 

2 

Observatory 

Synergy 

Altener 

Save 

Solid  fuels 

Nuclear 

Total 

c 
0 

0 

1 sec nat exp 

1 sec nat exp 

1.5 

2 sec nat exp 

3 sec nat exp 

1 

0 

0 

2.5 

external 
1178  2 experts (Alt) 
1175  1  temporary (Alt) 

2 experts (SAVE) 
1.5 temporary (SAVE) +1.5 seconded nat. experts 

Missions 

0A 1B00 

Committees 

Observatory 
Synergy 
Altener 
Save 
Solid fuels 
Nuclear 

1 

50 000 
120 000 
130 000 
100 000 
10 000 
10 000 
420 000 1 

. 

20 000 
46 200 
108 000 
216 000 
0 
0^ 
390 200 

-16 

0 

EUROPEAN COMMISSION 

ANNEX II 

Establishment of a 

MULTIANNUAL PROGRAMME OF STUDIES, 

ANALYSES, FORECASTS AND OTHER 

RELATED WORK IN THE ENERGY SECTOR 

(1998-2002) 

41 

FINANCIAL STATEMENT 

1. 

TITLE  OF  OPERATION 

"European Energy  Observatory"  - Forward analysis,  forecasting  and observation 
of markets 

2. 

BUDGET  HEADING  INVOLVED 

Item B4-1040 

3. 

LEGAL BASIS 

Operation for which the amount is not significant. 

4. 

DESCRIPTION OF OPERATION 

4.1 

General  objective 

To develop, in cooperation with the Member States, a programme of regular 
monitoring  of  market  developments  and  energy  trends  in  order  that  energy 
policy decisions can be taken on the basis of a shared analysis. 

As an indication, the following are among the main areas covered: 

1.  identification  and  analysis  of  the  main  European  problems  as  regards 
future energy demand and production and energy policy, focusing on: 

strategies for meeting the energy challenge posed by climate 

(a) 
change and respect for the environment; 

(b) 
the dynamics of the  opening-up  of the  energy  markets and 
its 
the  corresponding  structures,  particularly 
consequences  for  the  future  and  the  behaviour  of  firms  in  the 
context  of  completion  of  the  internal  energy  market,  which 
requires an effective  mechanism for observing  and monitoring the 
markets; 

in  terms  of 

(c)  world energy market trends influencing external dependence 
(particularly  the considerable growth  of  energy  demand  expected 
in Asia and South America); 

2. 

improvement  of  the  analysis  capability  in  order  to  be  able  to  make 
comparative  forecasts  of  energy  trends  and  scenarios  in all  the Member 
States  in the  light  of  changes  in  market  structures  and  of  the  challenge 
posed by climate change and the environmental imperatives. 

40 

The action is intended to promote the formulation  of new  energy  choices 
on  the  basis  of  medium  and  long-term  forecasting  analysis  models  with 
the aim of developing a Community Analysis Method which would better 
serve the European Union's  information  exchanges  and analytical  needs. 
The emphasis will be on: 

- 

cooperation between the Commission and the Member  States and on the 
involvement  of  the  circles  concerned,  enterprises,  academic  circles  and 
other sources of knowledge and experience; 

-  complementarity of the work with similar work carried out by the Member 
States  or  international  organisations  such  as  the  International  Energy 
Agency. 

Particular  attention  will  be given  to  consolidation  of  the  internal  energy 
market,  security  of  supply,  protection  of  the  environment  and  the 
economic development of the energy industry. 

The  analyses  and forecasts  concerning  the Member  States  in the field  of 
energy also cover the Central and Eastern European Countries that are in 
the process of joining. 

4.2 

Period  covered  and arrangements  for renewal or extension 

Selective programme of study and related work with the aim of developing a 
Community-level  capability  for  analysis  and  forecasting  of  activities  and 
problems  in  the  field  of  energy,  incorporated  in  the  energy  framework 
programme (1998-2002). 

5. 

CLASSIFICATION OF EXPENDITURE 

NCE/DA 

6.  TYPE OF EXPENDITURE 

-  Financing,  part financing  or subsidy of studies concerning the analysis of markets 
and  their  development,  evaluation  of  the  operation  and  new  guidelines  (the 
subsidised  bodies  may  also  purchase  results  of  studies,  surveys  and  analyses  as 
well as software,  including its development costs, etc.). 

-  Financing,  part  financing  or  subsidy  of  expenditure  on  information  and 
including  printing  and 

(conferences,  seminars,  publications 

dissemination 
translation costs, etc.). 

-  Financing, part financing  or subsidy of expenditure on informatics  connected with 
the  data  necessary  for  carrying  out  additional  energy  analyses  (in  particular 
collection, database storage, statistical processing and presentation). 

43 

7.  FINANCIAL IMPACT 

7.1  Method  of  calculating  the  total  cost  of the operation  (link  between  the  costs  of its 
individual  components  and the total  cost).  The nature of the work  does  not  change 
from  one  year  to  the  next.  The  studies  are  specified  in  accordance  with  the 
Commission's  objectives in order to answer the policy questions put by the Member 
States, the Council and Parliament. 

•  Analyses of European energy markets 

studies costing an average of ECU 50 000 x  11 x 5 years, 
including: 
studies and multi-client forecasts costing ECU 10 000-20 000, 
sectoral subject-related and/or fuel-related  studies, ECU 40 000-300 000, 
e.g.  liberalisation of gas and/or electricity, refining, prices and taxation; 

•  World market analyses 

studies costing an average of ECU 50 000 x  10 x 5 years, 
including: 
studies and multi-client forecasts by region costing ECU  10 000-20 000, 
sectoral subject-related and fuel-related  studies by region, ECU 40 000-300 000, 
e.g.  security of supply, geopolitical  strategy, consumer-producer dialogue; 

•  Financial support for economic analysis networks 

4 

' 

participation expenses averaging ECU 66 000 x 3 x 5 years, 
including: 
energy policy research centres, 
collaboration with industry at the European level (Eurogas, Eurelectric, Europia); 

•  Other operational expenditure 

seminars or workshops costing ECU 80 000 x  1  x 5 years, 
conferences  costing ECU  120 000 x 1  x 5 years, 
information and publications costing an average of ECU 50 000 x 2 x 5 years, 
including publication of the "Annual Energy Review". 

44 

7.2  Breakdown of the operation by individual components (in million ECU) 

Breakdown 

1998 

1999 

2000 

2001 

2002 

Total 

Analyses  of  European  energy 
markets 

World market analyses 

Financial  support  for  economic 
analysis networks 

operational 

Other 
expenditure 
including  overall  evaluation  of  the 
framework  programme 

0.5 

0.53 

0.56 

0.59 

0.62 

0.5 

0.2 

0.5 

0.2 

0.5 

0.2 

0.5 

0.2 

0.3 

0.3 

0.3 

0.3 

0.5 

0.2 

0.3 

2.8 

2.5 

1.0 

1.5 

TOTAL 

1.5 

1.53 

1.56 

1.59 

1.62 

7.8 

Comments: 

The nature of the work does not change so the budget resources are stable between  1999 
and 2002. 

7.3  Operational expenditure on studies, experts, etc., entered in part B of the budget 

EC in million ECU (current prices) 

1998 

1999 

2000 

2001 

2002 

Total 

Conferences, 
workshops, 
information  and 
publications 

0.3 

0.3 

0.3 

0.3 

0.3 

1.5 

7.4  Schedule of commitment appropriations 

1998 

1999 

2000 

2001 

2002 

Total 

1.5 

1.53 

1.56 

1.59 

1.62 

7.8 

Commitment 
appropriations 

45 

8.  FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN 

Before signing of contracts: 

-  qualitative and financial analysis of tenders, proposals or requests for subsidies; 

- 

involvement  of  other  Commission  departments  concerned  in  order  to  avoid  any 
duplication of effort. 

After signing of contracts: 

-  examination  of  expenditure  records  before  payment,  at  several  levels  (financial 
manager,  technical  managers),  and  consultation  of  Commission  departments 
concerned on the results; 

- 

internal audit by the financial controller; 

-  on-the-spot  checks  making  it  possible  to  find  mistakes  or  irregularities  by 

examining supporting documents; 

-  notification  of the committee referred to in Article 4 of the Decision  adopting the 
multiannual  framework  programme  on  energy  and  of  the  Energy  Consultative 
Committee set up by Commission Decision 96/642/EC of 8 November  1996. 

9. 

ELEMENTS OF COST-EFFECTIVENESS ANALYSIS 

9.1 

Specific  and quantified  objectives; target  population 

Links with general objective 

The operation is designed to improve the European Union's  energy balance, 
first of  all  by  analysing  the  energy  situation  and  preparing  energy  policy 
guidelines,  particularly those responding to the challenges  of climatic change 
and respect for the environment. 

Secondly  the  operation  aims  to  improve  forecasting  of  how  the  European 
Union's  energy  economy  is going  to  develop  in its  international  context.  It 
will  thus  help  to  consolidate  the  internal  energy  market,  manage  the 
relationship between energy and the environment and develop cooperation on 
energy  matters with third countries.  By  aggregation  of  the  results  obtained, 
the operation will give added value to the complementary analysis work being 
done in the Member States. 

Target population 

For  observation  of  the  energy  markets:  decision-making  bodies  at  the 
Commission  and in the Member States. As regards the production, transport 

46 

and  consumption  of  energy:  the  whole  population  of  the  Community,  the 
OECD and the world in general. 

9.2  Grounds for the operation 

Section 86 of the Green Paper (COM(94) 659 final of 11  January  1995) says 
that  convergence must  start  at the level of economic analysis.  The sine qua 
non of an energy policy is the ability to  accommodate market trends and to 
adapt immediately to any new developments. But these developments on the 
Community's internal market will be increasingly dependent on global trends 
in consumption, in production and in transport conditions. These analyses are 
made by companies and international organisations. Without  duplicating this 
work  and by using its results, it  seems necessary to have at  the Community 
level  means  of  analysis  which  would  enlighten  the  Community  decision 
making process. It is obvious that the application of the rules of operation of 
the  internal  market  and  the  adjustment  of  priorities  as  regards  research, 
environment,  international  cooperation,  networks  and  economic  and  social 
cohesion  have to  rest  on a consensual  analysis of the  problems  and  market 
trends.  Involvement  of  academic  circles,  industries,  consumers  and  the 
administrations  in an open and transparent  way would guarantee  a coherent 
analysis on which to base the development of an energy policy. 

Point  6  of  the  Council  Resolution  (No  7802/95)  on  the  Green  Paper,  of 
1 June 1995: 

the  operation  of  the  internal  market  requires  the 
"Considers  that 
strengthening  of  consultation  and  cooperation  between  the  Member  States 
within  the  Community  and  the  development  of  Community  methods  of 
analysis,  in  particular  with  respect  to  the  functioning  of  the  market 
mechanisms,  which  could  enlighten 
the  Community  decision-making 
process". 

The White Paper (COM(95) 682 final of 20 December  1995) recommends, in 
section 134: 

"In terms of immediate action the Commission intends to take the  following 
initiatives  in  1996 without  prejudging  the  results  of the  forthcoming  Inter-
Governmental  Conference:  the  establishment  of  a  programme  to -monitor 
energy trends, in cooperation with Member States, industry and other bodies, 
in order that political decisions related to energy can be made on the basis of 
a shared analysis". 

This proposal, based on the existing treaties, is necessary to meet the need for 
a more cooperative and transparent policy-making procedure. 

The operation is also justified by the fact that the analysis methods contribute: 

47 

to  managing  Community  policies  in  such  a  way  as  to  help  in  achieving 
common  goals,  in  particular  completion  of  the  internal  energy  market, 
improvement of the quality of the environment, and security of supply; 

to  the  convergence  of European  policy  by  a better  knowledge  of  the  long-
term development prospects of the world market; 

to  securing added value for the studies and expert assessments  carried out in 
the Member States by putting them into a common perspective. 

Carrying out studies and surveys of the energy market will make it possible to 
measure how far national policies and Community objectives  coincide and to 
open up discussion of the long-term prospects. 

At  the  Community  level  the  Commission  will  be  undertaking  additional 
analysis  work  to  complement  that  being  done  in  the  Member  States  and 
aggregating the results obtained. 

Choice of instruments 

Depending  on the nature of the activities planned or appearing to be in need 
of  action,  recourse  will  be  had  to  calls  for  tender,  calls  for  proposals  or 
subsidies.  Collaborative efforts will be strongly encouraged  not  only in order 
to  take  advantage  of  the  complementarity,  the  multidisciplinary  nature  of 
expert  studies  and  the  resulting  creativity,  but  also  to  foster  a  common 
approach and a common understanding. 

9.3  Monitoring  and evaluation  of the operation 

The  committee  of  the  energy  framework  programme  and  the  Energy 
Consultative  Committee  set  up  by  Council  Decision  No  96/642/EC  of 
8 November  1996 will be kept regularly informed of the results of the work. 

The two  main recommendations of the recent evaluation of heading B4-1040 
for the period  1993-1995 are as follows: 

More use  should be made of frame-contracts  for recurring tasks such as data 
modelling and conference organisation. 

The  Member  States'  energy  ministries  are  currently  playing  a  relatively 
passive  role  in European  analysis  and  forecasting.  To  make  full  use  of  the 
added  value  at  Community  level,  Member  States  should  be  encouraged  to 
work  more  closely  together,  perhaps  in  small  groups,  to  take  on  common 
sectoral  problems.  There  should  be  more  pooling  and  sharing  of  modelling 
and analysis of competence. 

48 

10.  COMPONENTS OF ADMINISTRATIVE EXPENDITURE 

Effective  mobilisation  of the necessary administrative resources will result from the 
Commission's  annual  decision  on  the  allocation  of  resources,  taking  account  in 
particular of the additional  human and financial  resources granted  by the budgetary 
authority. 

10.1 

Impact on the number of jobs 

Job type 

Staff needed for managing the 
operation 

permanent jobs 

temporary jobs 

of whom 

Duration 

by using existing 
resources in DG 
or department 
concerned 

by using 
additional 
resources 

Officials 

A 

or temporary  B 

staff 

C 

Other resources 

Total 

2 

1 

1 

4 

2 

1 

1 

1 seconded 
national expert 

1 seconded 
national expert 

1 

5 

5 years 

5 years 

10.2  Overall financial  impact of additional human  resources 

None. 

49 

10.3  Other annual operating expenditure arising out of the operation 

Budget heading 
(number and title) 

Amounts 

Calculation method 

« 

A-1300 Mission expenses, 
travel expenses and incidental 
expenditure 

50 000 

A-2500 Expenses of experts 
in the Framework Programme  20  0 0° 
Committee 

Total  70 000 

Missions  connected  with  financial 
and 
support, 
workshops  on  basis  of  financial 
year 1996 

conferences 

One  meeting  of  15  experts  from 
the  Member  States  +  5  from 
outside 

The  appropriations  shown  are  financed  from  within  the  existing  allocations  of  the  departments 
managing the programme. 

50 

EUROPEAN COMMISSION 

ANNEX III 

PROPOSAL FOR A COUNCIL REGULATION 

adopting a 

MULTIANNUAL PROGRAMME TO PROMOTE 

INTERNATIONAL COOPERATION IN THE ENERGY SECTOR 

(1998-2002) 

51 

PROPOSAL FOR A COUNCIL REGULATION ADOPTING A MULTIANNUAL PROGRAMME 

TO PROMOTE INTERNATIONAL COOPERATION IN THE ENERGY SECTOR (SYNERGY 

PROGRAMME) (1998-2002) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 235 thereof, 
Having regard to the proposal from the Commission1, 
Having regard to the opinion of the European Parliament2, 

Whereas,  for  reasons  of  the  competitiveness  of  the  Community's  industries,  security  of 
supply and protection of the environment,  energy matters must be an important element in 
the Community's international activities; 

Whereas  a  multiannual  framework  programme  for  actions  in the  energy  sector  is  being 
implemented; 

Whereas the Community's accession to the Energy Charter Treaty and the Convention on 
Climate Change commits it to continue with international cooperation in the energy  field; 

Whereas the conclusions of the Council of Ministers for Development  and Cooperation of 
18 November  1992  on the  guidelines  for  cooperation  with  the  developing  countries  for 
clean  and  efficient  energy  technology  stressed  that  an  essential  objective  of  energy 
cooperation  with  all  developing  countries  was  the  implementation  of  effective  energy 
policies; 

Whereas,  as  stressed  in the  Council  resolution  of  8  July  1996  on  the  White  Paper "An 
energy  policy  for  the  European  Union",  energy  developments  in  the  Community  are 
increasingly  influenced  by  external  developments  and efforts  must  therefore  be  made  to 
ensure  that  the  Community  develops  a  coherent  and  consistent  approach  to  energy 
matters with third countries; 

Whereas  the  Community  is  engaged  in  international  energy  activities  under  various 
programmes;  whereas,  to  ensure  that  these  activities  are  consistent,  they  should  be 
coordinated more closely; 

Whereas  coordination  of  the  Community's  other  measures  in  the  energy  sector  is 
necessary; whereas there must therefore  be no duplication with other programmes of the 
Community,  of the Member  States  or of third countries  or international  organisations in 
the field of energy policy; 

O  A'., 

WThereas,  by  reason  of  their  wide-ranging  nature,  the  principal  objectives  of  the 
programme,  particularly  the  coordination  of  the  various  programmes  of  international 
measures, can be attained best at Community level; 

Whereas  it  is  necessary  to  establish  a  specific  legal  instrument  for  the  Community's 
international cooperation activities in the field of energy policy; 

Whereas according  to  the  Council  resolution  on the White Paper "An  energy  policy  for 
the  European  Union",  political  and  trade  relations  are  essential  components  of  energy 
policy  and,  accordingly,  the  Community's  international  energy  cooperation  measures 
should be integrated more effectively  in its external policy as a whole; 

Whereas  the  objectives  of  energy  cooperation  pursuant  to  the  programme  should  be  to 
improve the  competitiveness  of  Community  industries,  to  enhance  security  of  supply,  to 
promote  sustainable  development  and  to  improve  energy  efficiency;  whereas  such 
cooperation may be put into effect by cooperating in and co-financing projects; 

Whereas such cooperation should be anchored in an indicative programme and may be the 
subject  of agreements with the  States concerned  or with  international  networks  of study 
and research centres; 

Whereas,  since the  cooperation  in question  is external  cooperation,  it is governed  by the 
special provisions laid down in Title IX of the Financial Regulation of 21 December  1977 
applicable to the general budget of the European Communities, 

HAS ADOPTED THIS REGULATION: 

Article 1 

Within the framework  programme for actions in the energy  sector,  a specific  programme 
of  cooperation  with  third  countries  in fields of mutual  benefit,  hereinafter  referred  to  as 
"SYNERGY",  shall be implemented by the Community. 

This programme shall concern: 

•  aid  with  the  definition,  formulation  and  implementation  of  energy  policy  for  third 

countries; 

•  promotion of industrial cooperation between the Community and third countries in the 

energy sector; 

•  closer coordination of the Community's external activities in the energy  field. 

Article 2 

SYNERGY shall be addressed to all States which are not members of the Community and 
first and foremost  those  countries  and  regions  considered  priorities  in  the  Community's 
external  relations  in terms  of  its  political  and  economic  interests  and  security  of  energy 
supply. 

1. 

Implementation  of the  SYNERGY  programme  shall  start  on  1 January  1998  and 
end on 31 December 2002. 

Article 3 

53 

2. 

The  annual  appropriations  shall  be  authorised  by the  budgetary  authority  within 
the limits of the financial perspectives. 

Article 4 

1. 

The  programme  shall  help  achieve  the  Community's  main  energy  objectives  as 
described  in the White Paper "An energy policy for the European Union". To the 
same  end,  the  Community  may  also  maintain  relations  with  international  energy 
organisations.  The  measures  to  implement  the  programme  shall  be  adopted  in 
accordance  with  the  rules  set  out  in  Article  4  of  the  Decision  adopting  the 
multiannual  framework  programme  for  actions  in the  energy  sector.  No  funding 
may be granted to research, development and demonstration projects. 

2. 

In order to achieve these objectives, the Community shall contribute,  in particular, 
to the financing of activities concerning: 

energy policy advice and training; 

energy analyses and forecasting; 

closer dialogue and exchanges of information on energy policy,  notably by 
means of organisation of conferences and seminars; 

support to regional transboundary cooperation; 

improving the framework for industrial cooperation on energy; 

coordination  of the  Community instruments  for  international  action in the 
energy sector and other similar international programmes. 

The cooperation shall also cover costs related to the preparation,  implementation, 
monitoring  and  evaluation  of  performance  of  these  operations,  as  well  as  costs 
concerning information. 

Article 5 

Community  contributions  may take the form  of grants which  shall  be released  in 
tranches as projects materialise. 

SYNERGY  programme  funding  shall  be  granted  only  after  verification  that  the 
activities cannot qualify for financing from other programmes. 

Financing decisions  and any contracts resulting therefrom  shall  expressly provide, 
inter  alia,  for  acceptance  by the  beneficiaries  of  supervision  by  the  Commission 
and the Court of Auditors, which may be carried out on the spot if necessary. 

Article 6 

An indicative programme covering the period referred to in Article 3 is established 
in  the  Annex.  This  programme  defines  the  principal  objectives,  guidelines  and 
priorities of Community cooperation in the indicative areas referred to in Article 4. 

An action programme based on the indicative programme referred to in paragraph 
1  shall be  adopted  in accordance with the procedure  provided  for  in Article 4  of 
the Council Decision  adopting  a framework  programme for  actions in the energy 
sector.  This  action  programme  shall  include  a  list  of  the  main  projects  to  be 

3 

54 

3. 

1. 

2. 

3. 

1. 

2. 

financed  within  the  indicative  areas  referred  to  in  Article  4.  The  content  of  the 
programme shall be determined  so as to provide Member  States with the relevant 
information  to  enable the  committee  set up under the  abovementioned  procedure 
to give its opinion. 

Specific  agreements  may  be  concluded  with  third  countries  and  international 
organisations,  in the framework  and for the duration of the indicative programme 
referred to in paragraph 1, in order to define the main lines of cooperation with the 
countries  concerned  and the consultation procedures regarding  implementation  of 
the programme. 

Contracts  may  also  be  concluded  within  the  framework  of  the  indicative 
programme  referred  to  in  paragraph  1 with  international  networks  of  study and 
research  centres  in  order  to  define  the  contribution  of  these  networks  to 
achievement  of  the  objectives  described  in  the  abovementioned 
indicative 
programme. 

1. 

2. 

3. 

4. 

Article 7 

The  Commission  shall  implement  operations  in  accordance  with  the  action 
programme referred to in Article 6(2). 

Service  contracts  shall,  as  a general  rule,  be  awarded  by  restricted  invitations  to 
tender in conformity with Article  118 of the Financial Regulation applicable to the 
general budget of the European Communities. 

Negotiated  contracts  may be  awarded  for  operations  involving  an amount  below 
ECU 50 000. 

Supply contracts, where needed to supplement service contracts and limited to the 
objectives of SYNERGY,  shall be awarded by means of open invitations to tender, 
except in the cases provided for in Article  116 of the Financial Regulation. 

Participation in invitations to tender and contracts shall be open on equal terms to 
all natural and legal persons in the Member States and in the beneficiary States. 

Participation by natural and legal  persons from other countries may be authorised 
by  the  Commission  on  a  case-by-case  basis  if  the  programmes  or  projects 
concerned  require  specific  forms  of  assistance  specifically  available  in  these 
countries. 

Taxes,  duties and the purchase  of immovable property  shall not be funded  by the 
Community. 

In the case of co-financing,  the participation of enterprises from the third countries 
concerned  in  invitations  to  tender  and  contracts  may  be  authorised  by  the 
Commission on a case-by-case basis. The Commission shall render account thereof 
in the report referred to in Article 9. 

55 

1. 

2. 

3. 

1. 

2. 

3. 

Article 8 

The  Commission  shall,  together  with  the  Member  States,  ensure  effective 
coordination  of  the  expert  assistance  provided  in  the  beneficiary  States  by  the 
Community and individual Member States on the basis of the information  supplied 
by the Member States. 

Coordination and cooperation with the international financial  institutions and other 
sources of funds shall be encouraged. 

The Commission shall examine ways of promoting co-financing by the SYNERGY 
programme,  bilateral  cooperation  from  the  Member  States,  the  programmes  of 
other  international  organisations  and  other  Community  programmes.  It  shall,  in 
particular,  contribute  to  closer  coordination  and  complementarity  between  the 
contributions  made  by  SYNERGY  and  the  other  Community  instruments  for 
international energy cooperation in order to avoid duplication. It shall  also ensure 
that  duplication  is  avoided  between  the  SYNERGY  programme  and  any  other 
programme or action of other international organisations in the field of energy. 

Article 9 

The  Commission  shall  present  a  report  by  31  December  2000  on  the 
implementation  of  the  specific  programme  in  the  two  previous financial years, 
based on an external assessment by independent experts. 

The  Commission  shall  present  a  report  by  31  December  2002  on  the 
implementation  of the programme  and the results  obtained  in third  countries and 
Member  States,  accompanied  by the  external  assessment  by  independent  experts 
on which it is based. 

Each  year  the  Commission  shall  present  a  report  on  the  implementation  of  the 
external energy activities under the various Community instruments. 

4. 

These reports shall be addressed to the European Parliament and the Council. 

Article 10 

This Regulation annuls and replaces Council Regulation (EC) No 

/ 

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

Done at Brussels, 

For the Council 

The President 

56 

INDICATIVE ACTION PROGRAMME 

Annex 

For  the  purposes  of  implementing  the  SYNERGY  programme  and  drawing  up  the 
action programme the following guidelines shall be taken into account. 

The tasks of SYNERGY are to help achieve the Community's energy objectives as set 
out in the Council's resolution on the White Paper "An energy policy for the European 
Union": 

overall competitiveness, 

security of supply, 

environmental protection. 

Each  of  these  objectives  has  a  sizeable  external  component,  as  is  made  clear  in the 
White Paper.  SYNERGY  will  implement  action  in line with  its  objectives  and ensure 
closer coordination  of international  cooperation  activities  in the field of energy  policy 
being conducted elsewhere in the Community. 

The SYNERGY guidelines have been drawn up on that basis. 

I. 

AREAS OF COOPERATION LINKED TO THE COMMUNITYS ENERGY 
OBJECTIVES 

A) 

Activities pursuant to all three objectives: 

advise third countries on energy policy; 

encourage energy efficiency  in third countries; 

develop local and, in particular, renewable energy sources; 

encourage regional energy integration; 

promote  consistency  in  the  implementation  of  Community  programmes  in 
specific regions (e.g. the Black Sea, the Mediterranean and the Gulf). 

B) 

Overall competitiveness: 

support the development  of cooperation designed to strengthen the presence of 
European  players  on  key  markets  in the  energy  sector,  in particular  Asia and 
Latin America; 

advise third countries on organisation of the energy sector; 

support  liberalisation  and  opening-up  of  the  energy  sector,  helping  third 
countries  to  draw  up  energy  policies  in  this  new  situation,  in  particular  in 
conformity with the Energy Charter Treaty; 

favour  greater  investment  by  European  undertakings  in  the  energy  sector  in 
third countries. 

57 

C) 

Security of supply: 

dialogue  with  energy-producing  and  exporting  countries:  Gulf,  Russia, 
producer countries in America, Asia and Africa; 

encouraging  dialogue  between  the  European  Community  and  the  countries 
which have signed the Energy Charter Treaty, in particular with the transit and 
energy-producing  transit  countries,  by helping to  implement  the  provisions  of 
the Energy Charter Treaty; 

participation in and support for the work of international bodies  in this sector: 
ministerial and producer/consumer conferences, International Energy Agency; 

support  in creating  a favourable  environment  for investment  in third  countries 
in the  production  and transit  of  energy,  in  conformity  with  international  law, 
particularly  the  Energy  Charter  Treaty  and  the  disciplines  agreed  within  the 
WTO. 

D) 

Environment: 

training  decision-makers  and  staff  in the  energy  industry  in  third  countries  in 
environmental awareness; 

disseminating  the Community's  experience  and information  on  energy  and the 
environment; 

encouraging use of clean technology, in particular for the combustion of coal in 
major  consumers  like  China,  taking  the  implications  for  energy  policy  into 
account; 

strengthening  and supporting  efforts  to  have environmental  aspects  taken into 
account in third countries' energy policy and planning; 

encouraging  and helping third countries to  plan and implement  national energy 
supply and use policies in keeping with each different  environmental situation. 

II. 

GEOGRAPHICAL  PRIORITIES  AND  CONSISTENCY  WITH  THE 
COMMUNITY'S INTERNATIONAL COOPERATION PROGRAMMES 

A) 

Role and priorities: 

In international relations in the energy field SYNERGY: 

- will promote energy cooperation vis-à-vis third countries; 

-  will  aim  at  having  its  objectives  taken  into  account  in  the  external  cooperation 
activities carried out by other Community programmes; 

-  will  facilitate  the  emergence  of  energy  projects  financed  by  other  Community 
cooperation instruments. 

58 

B) 

Geographical priority areas 

SYNERGY will concentrate on the geographical priorities in the Community's external 
relations and will help achieve certain of those priorities. 

The areas given priority by SYNERGY are: 

Central and Eastern Europe; 

New Independent States (NIS); 

Mediterranean third countries; 

Latin  America:  emphasis  will  be  placed  on  Mercosur,  Chile,  Mexico  and 
Venezuela; 

Asia: China, India and the Asean countries; 

Africa. 

59 

FINANCIAL STATEMENT 

ITEMB4-1041 

1. 

TITLE OF  OPERATION 

Promotion  of  international  cooperation  in  the  energy  sector -  SYNERGY 
programme. 

2. 

BUDGET HEADING INVOLVED 

B4-1041 

3. 

LEGAL BASIS 

Council  Regulation  (EC) No  701/97  of  14 April  1997  adopting  a programme  to 
promote  international  cooperation  in the  energy  sector -  SYNERGY  programme 
(OJNoL104,  22.4.1997, p. 1). 

Proposal  for  a  Council  Regulation  (EC)  extending  the  programme  to  promote 
international  cooperation  in  the  energy  sector-  SYNERGY  programme  -  as 
established by Council Regulation (EC) No 701/97 of 14 April 1997. 

Proposal  for  a Council Decision  adopting  a framework  programme  for  actions in 
the energy sector (1998-2002). 

4. 

DESCRIPTION  OF OPERATION 

4.1  General  objective 

The  need  for  an  international  cooperation  programme  at  European  level  to 
complement  the 
internal  policies  in  this  sector  has  been  heightened  by 
developments on the world energy scene in recent years: 

-  Europe's growing dependence on outside energy sources; 

-  extremely sharp increase in demand for energy in developing countries; 

-  growing  impact  of  environmental  problems,  particularly  greenhouse  gas 

emissions, on energy choices. 

60 

The  objective  is  to  promote  cooperation  in  the  field  of  formulation  and 
implementation of energy policy in third countries to help achieve the objectives of 
the European Union's energy strategy, namely: 

-  overall competitiveness; 

-  security of energy supply for Europe; 

-  environmental protection. 

This operation should help to attain these objectives by launching schemes aiming, 
in particular, at: 

- 

improving energy efficiency  in third countries; 

-  promoting use of clean technologies; 

-  encouraging use of local and, in particular, renewable energy sources; 

-  providing  support for regional  integration and opening-up of the  energy  sector 

in third countries; 

- 

fostering  dialogue  and  contacts  between  Europe,  third  countries  and,  in 
particular,  producer  countries  and  international  organisations  in  the  energy 
field; 

-  supporting penetration by European energy undertakings in third countries; 

-  strengthening  ties  between  experts  and  decision-makers  in  the  energy  sector 

within the Community and between the Community and third countries. 

The operation  also  provides  support  for  the European Union's  external  relations 
policy and helps to establish frameworks for steering and preparing energy projects 
and to pave the way for the accession of Central and Eastern European countries. 

Formulation  of  the  annual  programme,  in  collaboration  with  other  Commission 
departments and representatives of the Member States, will provide an opportunity 
to  target  SYNERGY  on  the  priority  issues,  taking  account  of  the  annex  to  the 
Regulation, as proposed by the European Parliament. 

4.2 

Period  covered 

Five years, from  1  January 1998 to 31 December 2002. 

5. 

CLASSIFICATION  OF EXPENDITURE 

Non-compulsory expenditure/differentiated  appropriations. 

61 

6.  TYPE OF EXPENDITURE OR RE VENUE 

EXPENDITURE 

Financing  of  studies,  technical  assistance  and  advice  through  the  possible 
intermediary  of  experts,  training  and  promotion  activities,  dissemination  of 
information,  organisation  of  conferences,  seminars,  workshops,  technical  and 
educational visits, support for energy cooperation or energy policy institutions and 
other activities in support of energy policy. 

Expenditure  on  promotion  of  the  programme,  dissemination  of  the  results  and 
evaluation  of  the  programme  by  outside  experts  and  operating  expenditure  of 
bodies supporting cooperation in the energy  field. 

Normally  the  Community will  contribute  not  more than 50% of the  total  cost  of 
the project  and will  fund projects jointly with third countries,  the Member  States 
or international organisations. 

In certain cases,  however,  the Community  can contribute up to  100%: to  finance 
experts  seconded  full  time to  the authorities  in third  countries  or  action  solely in 
the  interest  of  the  Community  (preliminary  studies,  reconnaissance  missions, 
European energy centres, project evaluation, etc.). 

REVENUE 

Any  revenue  from  repayments  by  States  participating  in  the  European  Energy 
Charter is available for re-use in accordance with Article 27(2)(b)  of the Financial 
Regulation of 21 December  1977 applicable to the general budget of the European 
Communities  (OJ No  L  356,  31.12.1977,  p.  1),  as  last  amended  by  Regulation 
(EC, Euratom, ECSC) No 2335/95 (OJNo L 240, 7.10.1995,  p. 12). 

7. 

FINANCIAL  IMPACT 

7.1  Method  of  calculating  total  cost  of  operation  (link  between  unit  costs  and  total 

cost) 

•  Horizontal measures 

Short-term missions by experts from Europe or third countries: 
transport, fees and daily allowances: 240 missions costing ECU  10 000 each 
One  interim  evaluation  and  one  final  evaluation  of  the  programme  costing  an 
average of ECU  150 000 = ECU 300 000. 

Energy analyses 

Studies costing an average of ECU 100 000 x 64 

Cooperation in formulating energy policy in third countries 

Long-term  (six-month)  missions  by  experts  costing  an  average  of  ECU  100 000 
per mission x 63 

62 

•  Financial support for energy institutions 

Long-term (one-year) missions by experts costing an average of ECU 200 000 per 
mission x  30 

Technical visits and training in Europe for 25 citizens from third countries costing 
an average of ECU 20 000 x  150 visits 

•  Support for industrial cooperation 

Seminars costing an average of ECU 100 000 x 10 

Visits  by  European  delegations  to  third  countries  costing  an  average  of 
ECU 74  000x10 

•  Seminars, conferences and workshops 

Seminars or workshops costing an average of ECU  100 000 x 20 

Conferences costing an average of ECU 200 000 x 15 

•  Information and training 

(Grants and scholarships) 

63 

7.2 

Itemised breakdown of cost in ECU million 

Breakdown 

1998 

1999 

2000 

2001 

2002 

Total 

Horizontal  measures 

0.5 

0.5 

0.58 

0.5 

0.62 

Energy analyses 

Cooperation 
policy in third  countries 

in  formulating  energy 

1.2 

1.2 

1.3 

1.2 

1.3 

1.3 

1.3 

1.3 

Support for industrial  cooperation 

0.3 

0.34 

0.3 

0.4 

1.8 

1.8 

1.8 

1.8 

Financial support for  energy 
institutions 

Seminars, conferences  and 
workshops 

Information  and training 

1 

1 

1 

1 

1 

1 

1 

1 

1.12 

1.15 

5.27 

1.3 

1.3 

0.4 

1.8 

2.7 

6.4 

6.3 

1.74 

9 

5 

TOTAL= 

7.00 

7.14 

7.28 

7.42 

7.57 

36.4 

Comments: 

The  increase  in  budgetary  resources  from  2000  on  will  be  allocated  to  three  types  of 
action: 

-  support  for  industrial  cooperation  to  help  European  undertakings  in  this  sector  to 

penetrate markets in third countries; 

-  cooperation  in formulating  energy  policy  so that  third  countries  take  account  of the 

Community's energy objectives; 

- 

increased  expenditure  on  evaluation  and  monitoring  of  the  action  envisaged  (under 
"Horizontal measures"). 

7.3 

Operating  expenditure  on studies, experts, etc. entered  in Part B of the 
budget 

EC in ECU million (current prices) 

1998 

1999 

2000 

2001 

2002 

Total 

Information  and  publications 

0.2 

0.2 

0.2 

0.2 

0.2 

1 

64 

7.4 

Indicative schedule of commitments and payments 

The amount will be set annually by the budgetary authority. 

The  indicative  commitment  and  payment  appropriations  (in  ECU  million)  will  be  as 
follows: 

1998 

1999 

2000 

2001 

2002 

Total 

7.14 

7.28 

7.42 

7.57 

36.4 

Commitment 
appropriations 

Payment appropriations 

1997 

1998 

1999 

2000 

2001 

2002 

2003 

Total 

6 

1.14 

6 

1.28 

6 

6 

7 

7.14 

7.28 

1.42 

6.5 

7.92 

1.07 

1.07 

7.14 

7.28 

7.42 

7.57 

36.4 

I 
Financial  support  for  energy  institutions  in  third  countries  should  decrease  as  the 
institutions become  self-sufficient. 

l_ 

1 

I 

I 

I 

I 

8.  FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN 

The work is paid after  its acceptance on the basis of a contribution rate set before award 
of the contract, and in the light of a final financial  report on the operation.  Documentary 
proof of travel and subsistence expenses may be required. Checks on the documents and 
on-the-spot inspections may be carried out. 

9. 

ELEMENTS OF  COST-EFFECTIVENESS 

9.1 

Specific  objectives 

A distinction can be drawn between: 

• 

the  specific  objectives  to  which  SYNERGY  contributes  without  bearing 
sole responsibility for the results; 

65 

• 

the direct  objectives  of the SYNERGY schemes. 

9.1.1  Objectives  of the  programme 

•  To  reduce  the  predicted  increase  in  greenhouse  gas  emissions  worldwide  by 
technologies, 

to  encourage  energy  efficiency,  new 

means  of  measures 
renewable sources and energy planning. 

•  To  increase  energy  investment  and  exports  by European  undertakings  in  third 

countries. 

•  To  facilitate  interconnection  of  the  energy  networks  in  third  countries  and 

between third countries and Europe. 

•  To  prepare  for  accession  of the  associated  countries  by  helping  to  bring  their 

energy policies closer to EU energy policy. 

•  To  maintain  or  increase  the  capacity  for  exporting  energy  from  third  countries 

to Europe, despite the growing demand in third countries. 

9.1.2  Specific  objectives  of the  schemes 

In  the  case  of  seminars,  conferences,  workshops  and  financial  support  for 
cooperation bodies: 

• 

to  strengthen  ties  between  decision-makers  in  the  public  or  private  sectors  in 
Europe and in third  countries; 

• 

to foster  contacts between the authorities responsible in third countries; 

• 

to  help  to  implement  other  cooperation  schemes  between  the  Community  and 
third  countries; 

• 

to disseminate information  on the energy situation in Europe. 

In  the  case  of  cooperation  in  formulating  energy  policy  in  third  countries  and 
energy analyses: 

• 

to make a European  contribution to formulation  of energy plans and  regulations 
in third  countries. 

In the case of training and  information: 

• 

to  train  members  of  the  profession  in third  countries  and  make  them  aware  of 
European  points of view. 

Target population 

States,  public  energy  services,  businesses,  individuals  from  third  countries  and 
from  the European  Community. 

9.2 

Grounds for the operation 

Action at Community level is justified  for the following  reasons: 

•  only the  Community  can  support  European  interests  and  undertakings  without 

favouring  any particular Member State; 

• 

the Community  as such is designated  as the intermediary with third  countries in 
contexts  such  as the  G-24  or  agreements  concluded  with  some  third  countries 
which explicitly include energy in their scope; 

•  action at Community level will make it possible to complete the measures taken 

at the level of Member States and to strengthen their impact; 

• 

the  European  Community  can  represent  better  the  interests  of  the  Member 
States as a whole; 

•  action  at  European  Community  level  will  make  it  possible  to  use  expertise 

scattered between several Member States. 

Compared  with  the  Community's  other  international  cooperation  programmes, 
SYNERGY  provides  a  means  of  taking  account  of  the  Community's  energy 
interests with  the aim of closer  coordination  of the programmes  covering  different 
regions of the world. 

9.3  Monitoring  and  evaluation  of the  operation 

First,  the  officials  responsible  for  each  geographical  region  already  manage, 
monitor and evaluate, at their level, each project  of which they are in charge. 

Performance  indicators selected 

As SYNERGY is a programme  of cooperation  in formulating  energy policies, it is 
difficult  to determine quantitative indicators of its impact. 

to  energy  policy 
relating 
Furthermore,  action 
consumption figures only in the medium or long term. 

influences  production  or 

Nevertheless,  it  is possible  to  apply  indicators  corresponding  to  the  two  types  of 
objective  mentioned  in Section 9.1. 

In the case of the general  objectives: 

•  comparison  of greenhouse gas emission levels with  forecasts; 

•  country-by-country trends in the energy efficiency  index; 

• 

increase in local production,  particularly the share taken by renewable sources; 

•  amount  of European  energy investment  and exports; 

6 

•  growth  in  energy  exports  from  third  countries,  in  relation  to  their  domestic 

demand trends; 

• 

investments  in  interconnections  between  third  countries  and  between  Europe 
and third countries. 

In the case of the specific objectives of the schemes: 

•  number  of  participants  at  conferences  or  meetings  organised  by  SYNERGY 
plus,  possibly,  number  of  business  contacts  made  and  of  measures  taken  to 
follow up suchf meetings; 

•  number of countries drawing on European experience to formulate their energy 

policy; 

•  number of members of the profession trained; 

•  number of people informed about the projects; 

•  cooperation schemes to follow up a SYNERGY project. 

Details and frequency  of planned evaluations 

The  proposal  for  a  Council  Regulation  provides  for  two  reports,  based  on  an 
assessment by independent experts. 

The first, after  two  years'  activity,  will  focus  primarily  on  implementation  of the 
programme. 

The  second,  at  the  end  of  the  programme,  will  also  examine  the  results  of  the 
programme in the countries concerned. 

The projects funded will also be audited by independent experts. 

9.3 

Elements for evaluation  of  cost-effectiveness 

To  compare the  figures  with  other programmes,  allowance  must be  made for the 
fact that the projects are managed and monitored directly by officials  from the Unit 
and that these tasks are not farmed out.  Moreover,  SYNERGY takes the form of 
Community  initiatives  and action (such as the Euro-Mediterranean  Forum) which 
provide  results  that  can  be  used  by  other  programmes.  This  calls  for  greater 
involvement by officials  for identification  and negotiation of the projects. 

10. 

ADMINISTRATIVE  EXPENDITURE 

The  annual  decisions  taken  by  the  Commission  on  allocation  of  resources  will 
make sure that the administrative resources required are effectively  made available, 

68 

taking account, in particular, of any extra staff and funds granted by the budgetary 
authority. 

10.1 

Impact on the number of staff 

Post 

Staff  to  be  assigned  to 
the 
management 
operation 

of 

permanent 
staff 

temporary 
staff 

Officials 
or temporary 
staff 
Other resources 

A 
B 
C 

2.5 
1 
2 

0.5 

1  seconded 
national 
expert 

of whom 

duration 

additional 
resources 

existing 
resources 
the 
within 
DG 
or 
department 
concerned 
3 
1 
2 
1  seconded 
national 
expert 

Total 

5.5 

1.5 

7 

10.2  Total financial  impact of the human  resources 

The  total  annual  cost  of  administration  of  the  programme  can  therefore  be 
estimated at 7 x ECU 103 000 = ECU 721  000. 

10.3  Other operating  expenditure 

Budget heading 

Amount  Method of calculation 

A-130  Mission  expenses, 
expenses and incidental expenditure 

A-2510 Meeting specifically on 
international cooperation within the 
Framework Programme Committee 

travel  120 000  Estimate based  on expenditure  in the 

first 

nine months of 1997. 

46 200  Two  meetings  per  year  with  two 
representatives  per  Member  State, 
based  on  an  average  cost  "of  ECU 
770. These meetings should be held in 
common  with  the  meetings  on  the 
other specific programmes. 

Total 

166 200 

The  appropriations  indicated  are  funded  from  the  existing  amount  allocated  to  the 
departments running the programme. 

10 

69 

EUROPEAN COMMISSION 

ANNEX IV 

PROPOSAL FOR A COUNCIL DECISION 

adopting a 

multiannual programme for 

the promotion of renewable energy sources 

in the Community 

(1998-2002) 

70 

PROPOSAL FOR A COUNCIL DECISION ADOPTING A MULTIANNUAL 

PROGRAMME FOR THE PROMOTION OF RENEWABLE ENERGY SOURCES 

IN THE COMMUNITY - ALTENER II 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the Treaty establishing the European  Community,  and  in particular 
Article 130s (1) thereof, 

Having regard to the proposal from the Commission,1 

Having regard to the opinion of the Economic and Social Committee,2 

Having regard to the opinion of the Committee of the Regions,3 

Acting  in accordance with the procedure laid  down in Article  189c of the Treaty, in 
cooperation with the European Parliament,4 

Whereas Article  13 Or of the Treaty lays down that one of the objectives of Community 
action is to ensure prudent and rational utilization of natural resources; 

Whereas Article  129 of the Treaty lays down that health protection requirements shall 
form  a  constituent  part  of the  Community's  other  policies; whereas  this  programme 
contributes to health protection; 

Whereas,  at  its meeting on 29 October  1990, the Council  announced  its objective  of 
stabilising total C02 emissions by 2000 at the 1990 level in the Community as a whole; 
whereas at its meetings in March and June 1997, the Council adopted as a negotiating 
position  for the Kyoto meeting under the Convention  on Climate Change a reduction 
in greenhouse gas emissions of 7.5% by 2005 and  15% by 2010 compared with  1990 
levels; 

71 

Whereas to achieve significant  reductions in C02  emissions in the Community greater 
efforts  are required,  particularly  in view  of the  fact  that  C02  emissions  from  energy 
consumption  in the  Community  are likely to  increase by between  5  and  8% between 
1995  and 2000,  assuming  normal  economic growth; whereas  it is, therefore,  essential 
to adopt additional measures; 

Whereas  a mechanism  for  monitoring  C02  and other  greenhouse  gas  emissions  was 
established by Council Decision 93/398/EEC of 24 June 1993;5 

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 
(SARIPCC)  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 
'no-regrets' 
urgent  action  at  the  widest  possible  level,  noted  that  significant 
opportunities were available and requested the Commission to identify which measures 
have to be taken at Community level; 

Whereas  with  the  Green  Paper  of  11  January  19956  and  the  White  Paper  of 
13 December  19957  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; 

Whereas  in  its  resolution  of  4  July  19968  the  European  Parliament  calls  on  the 
Commission  to  implement  a  Community  action  plan  to  promote  renewable  energy 
sources; 

Whereas  with  the  Green  Paper  of  20  November  1996,9  Energy  for  the  Future: 
Renewable sources  of energy, the Commission started the process of the development 
and  subsequent  implementation  of  a  Community  strategy  and  an  action  plan  on 
renewable energy sources (RES); 

Whereas  Article  130a  of  the  Treaty  provides  that  the  Community  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; 

5 

6 

7 

8 

9 

OJNoL167,  9. 7.  1993, p. 31. 

COM(94)649 of  11.01.1995. 

COM(95)682ofl3.12.1995. 

A4-0188/96-EP 251.039. 

COM(96)576 final of 20.11.1996. 

7 O 

Whereas  by  Decision  93/500/EEC  of  13  September  199410  the  Council  adopted  a 
Community  programme for  the promotion  of renewable  energy  sources  (ALTENER) 
aimed at reducing C02  emissions by increasing the market share of renewable energy 
sources and their contribution to overall primary energy production in the Community; 
whereas that programme ends on 31 December 1997; 

Whereas the Community has recognised that the ALTENER programme represents an 
important element of the Community strategy for reducing C02 emissions; 

Whereas the Commission has presented a proposal11 for a Council Decision adopting a 
multiannual  programme  for  the  promotion  of  renewable  energy  sources  in  the 
Community (ALTENER II); 

Whereas  a  multiannual  framework  programme  for  actions  in  the  energy  sector  has 
been implemented; 

Whereas  European  Parliament  and  Council  Decision  No  1110/94/EC  of 
26 April  199412 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; 

Whereas the Commission has presented to the Council and the European Parliament its 
proposals relating to the 5th RTD Framework Programme;13 

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; 

Whereas  a strengthened  ALTENER  II programme  represents  an essential  instrument 
for developing the potential of renewable energy sources; 

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

Whereas  it  is  politically  and  economically  desirable  to  open  the  ALTENER  II 
programme to the associated  Central  and East European countries in accordance with 
the  conclusions  of the European  Council  meeting in Copenhagen  in June  1994,14 and 

OJ No L 235, 18.09.1993. 

COM(97)87 final of 12.03.1997. 

OJNoL  126, 18.05.1994. 

10 

11 

12 

13 

14 

73 

as  outlined  in  the  communication  on  this  subject  presented  to  the  Council  by  the 
Commission in May  1994,15 and also to Cyprus, 

HAS ADOPTED THIS DECISION: 

Article 1 

1.  A five-year programme  of  measures  and  actions  to  promote  renewable  energy 
sources  in  the  Community,  called  ALTENER  II,  hereinafter  referred  to  as 'the 
programme", shall be implemented. 

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, 
socioeconomic  and administrative conditions, and to 

(b)  encourage  private  and  public  investments  in  the  production  and  use  of 

energy from renewable sources. 

These  two  objectives  contribute  to  achieving  the  overall  Community  objectives 
and  concerns  of  limiting  C02  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.  Community  financial  support  shall be granted  under the  programme  for  actions 

meeting the objectives of this Decision. 

3. 

4. 

The  ALTENER  II  programme  shall  begin  on  1 January  1998  and  end  on  31 
December 2002. 

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

Article 2 

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, 
socioeconomic  and  administrative  conditions  which  are more  favourable  to  the 

15 

COM 

74 

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 
international, 
Community,  national, regional  and local  activities; establishment  of a centralised 
system  for  collecting  and  circulating  information  and  know-how  on  renewable 
energy sources; 

improving  coordination  between 

(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,  presentation  and 
implementation of projects. 

The  aim  of  these  targeted  actions  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  services  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  tender,  training  of 
operators, and plant commissioning. 

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

biomass,  including  energy  crops,  fire  wood,  residues  from  forestry  and 
agriculture, municipal waste,16 liquid biofuels and biogas, 

thermal and photovoltaic solar systems, 

passive and active solar systems in buildings, 

16 

Communication  from  the  Commission  on the  review  of the  Community  strategy for  waste 
management, COM(96)399 final of 30.07.1996. 

75 

small scale (< 10 MW) hydroelectric projects 

wind power 

geothermal energy. 

(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. 

Article 3 

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

of Article 2 shall be borne by the Community. 

2. 

3. 

The level of funding under this programme for the actions and measures referred 
to  in points (b) and (d) of Article 2 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. 

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 shall be defined annually, regard being had to: 

(a)  the  priorities  set  out  by  the  Community  and  the  Member  States  in  their 

programmes for the promotion of renewable energy sources, 

(b)  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 C02 emissions; 

76 

(c)  for the  actions  referred  to  in point  (e)  of  Article  2,  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. 

Article 5 

The  Commission  shall  be  assisted  by  the  committee  referred  to  in  Article 4  of  the 
Council  Decision  adopting  a  multiannual  framework  programme  for  actions  in  the 
energy sector. 

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 applied to EFTA/EEA 
countries, in accordance with procedures to be agreed with those countries. 

This Decision cancels and replaces Council Decision (EC) No 

Article 8 

Article 9 

This Decision is addressed to the Member States. 

Done at Brussels, 

For the Council  • 

The President 

77 

FINANCIAL STATEMENT 

1.  TITLE OF THE OPERATION 

Energy framework programme (1998-2002) 

ALTENER  II. Multiannual  programme for  the promotion  of  renewable energy 
sources in the Community 

2.  BUDGET HEADING 

B4.1030 

3.  LEGAL BASIS 

Council  Decision  93/500/CEE  of  13  September  1993  (OJ  No.  L  235  of  18.9.93, 
p. 41). ALTENER I Programme. 

Proposal  for  a  Council  Decision,  presented  on  22 May 1997,  concerning  a 
multiannual  programme  for  the  promotion  of  renewable  energy  sources  in  the 
Community (ALTENER II) (OJNo C 192, 24.06.1997, p. 16). 

Proposal for  a Council Decision adopting a framework  programme for  actions in the 
energy sector (1998-2002). 

4.  DESCRIPTION OF THE OPERATION 

4.1. 

General objective 

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 Community Strategy", the Commission proposes a significant  increase in 
the use of renewables for  the year 2010.  An indicative target  of  a doubling  of the 
share of renewable energies by 2010 was settled upon during the process of adopting 
the Green Paper.  The Commission is preparing a proposal for  a Communication on 
the White Paper.  "Community  strategy for  renewable energy  sources up to 2010", 
together  with  an  action  plan.  ALTENER  II  has  an  important  role  to  play  in the 
implementation and follow-up of this strategy and its action plan. 

The purpose  of the ALTENER programme is to make a meaningful  contribution to 
the achievement  of this Community objective.  Increased use of renewable energies 
will  also  contribute  to  social  cohesion  within  the  Community,  promote  the 
valorisation  of  local  energies  and  accelerate  the  penetration  of  new  energy 

78 

technologies (many of which have been developed with Community funding)  into the 
marketplace. 

In the light  of the considerations  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 and arrangements for renewal or extension 

The action covers a period of five years from  1  January 1998 to 31 December 2002. 

5.  CLASSIFICATION OF EXPENDITURE 

NCE/DA 

6.  TYPE OF EXPENDITURE OR REVENUE 

The budget proposed for ALTENER II is ECU 81.1 million. 

The budget  for  ALTENER I was  originally ECU 40 million but  the allocation was 
increased  by the end of the programme to some ECU 46.4 million.  72% 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  18.09.1993 - and in  1997 the budget 
available is ECU 8.2 million. 

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, 
- 
-  education and training; 

information, 

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

79 

(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 waste, liquid biofuels and biogas, 

-  thermal and photovoltaic solar systems, 
-  passive and active solar systems in buildings, 
-  small scale hydroelectric projects, 
-  wind power, 
-  geothermal energy. 

C.  NEW  ACTIONS 
STRATEGY 

(f)  Actions intended to: 

IMPLEMENTING  THE  COMMUNITY  RES 

-  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 the various  actions  under Article  2(e)  will be 
defined annually. 

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

Annual guidelines will be  submitted  for  opinion 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. 

10 

Ï0 

7. 

FINANCIAL IMPACT 

The  annual  appropriations  for  the  implementation  of  the  programme  will  be 
established  by  the  budgetary  authority  within  the  limits  of  the financial 
perspectives.  The amount will  be fixed annually by the budgetary  authority  (see 
Table 7.2). 

The proposed indicative budget is ECU 81  100 000. 

The  amounts  proposed  are  subject  to  the  limits  of  the  financial  perspectives 
currently  in  force.  When  the  next  financial  perspectives  are  drawn  up,  the 
funding  of  priority  actions  to  promote  renewable  energy  sources  could  be 
reconsidered. 

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  Art.  2a)  Implementing  and  complementing  Community 
measures taken to develop the potential of RES 

Sectoral  studies:  the past average cost  has been taken as the basis  considering, 
however,  that all the studies have now to  include all  15 Member  States  and the 
CEECs.  (As  regards  the  Member  States,  the  studies  were  carried  out  on  the 
basis of EUR-12 and have now to be extended to EUR-15). 

Harmonisation:  same  approach  as  for  sectoral  studies.  The  harmonisation  of, 
among  other  things,  authorisation  procedures  and  conditions  for  connection  to 
the  grid  as  well  as  measures  in force  in the  Member  States  is  analysed  on the 
basis of the projects in implementation of the strategy. 

Standards: the past average cost ~ ECU 500.000/mandate. 

H 

81 

Breakdown 
Art. 2a) 

1998 

2000 
Implementing  and  complementing  Community  measures  taken  to  develop 
the potential of RES 

2002 

2001 

1999 

inkECU 
I Total 

*  Studies  on  sectoral 
and market  strategies 
* 
for 
Background 
harmonisation 
*  Development 
norms and  standards 
Subtotal Art. 2a 

of 

500 

500 

1000 

1000 

1000 

4 000 

1000 

500 

1 500 

1 500 

1 500 

6 000 

500 

1000 

1 500 

1 500 

1 500 

6 000 

2 000 

2 000 

2 000 

2 000 

2 000 

10 000 

Actions  under  Art.  2b)  Infrastructures  and 
development of RES 
Infrastructures  and planning: At least one project per year for  10 countries and 2 
for  5 countries in the three types of infrastructures.  Local and regional planning 
and training and information infrastructures  must be improved. 

instruments  for  the 

Breakdown 
Art. 2b)  Actions on infrastructures  anc 
relating 
*  Projects 
planning and tools 

1 500 

1998 

to 

2000 

1999 
instruments for the development  of R 
1 600 

1 900 

1 900 

1900 

2001 

2002 

inkECU 
|| Total 
ES 
8 800 

*  Projects  developing  tools 
for  design,  assessment  and 
evaluation 
*  Projects  on  new financial 
and market  instruments 
for 
Infrastructures 
* 
information,  education  and 
training 

1 000 

1 100 

1 000 

1000 

1 000 

5  100 

1 000 

1 100 

1000 

1 000 

1 000 

5  100 

1 000 

1 100 

1  100 

1  100 

1  100 

5 400 

Subtotal Art. 2b 

4 500 

4 900 

5 000 

5 000 

5 000 

24 400 

Actions under Art 2c) and Art. 2d) Dissemination of information 

Community  events  and  publications:  Four  contractors'  meetings  on 
infrastructures  and  four  on  sectoral  items.  Promotional  expenses,  fact-sheets, 
brochures, etc.  Promotion of the "campaign for  take-off'. 

Temporary  networks  for  specific  tasks:  In  ALTENER  I  the  three  biomass 
networks were financed  at only 30% and the cost was ECU 1.2 million in 95 and 
ECU 1  million in 96.  The action has to be extended to other energy sources and 
the rate of funding increased. 

Centralised  system  for  collecting  and  circulating  information  (creation  of 
"Agores"  virtual  centre):  Being  a  new  action,  estimated  costs  have  been 

12 

82 

calculated  from the experience of the EnR network on collecting  and processing 
information  from Member States for ALTENER and its cost,  and extrapolating, 
taking  into  account  the  increased  number  of  countries,  tasks  and  items  to  be 
included.  The action will gradually be developed and extended to other targeted 
countries and activities. 

Support to  national, regional  and local information  actions in collaboration with 
Member States local authorities, etc.: Support to at least two national events per 
year (max. 50% funding). 

Support to  existing networks, associations and other parties: Almost  all sectoral 
associations  or  federations  hold  one  event  per year  and,  for  some  of  them,  a 
world  event  every  two  years.  Financial  support  could  be  from  30.000  to 
100.000.  Support to newsletters or information actions could also be given. 

1998 

Breakdown 
Art. 2c) + 2d)  Dissemination of information, including co-
*  Community  events  and 
publications,  promotion  of 
"campaign for  take-off' 

2000 

500 

400 

500 

1999 

2001 
2002 
inanced  actions 
500 

500 

inkECU 
|| Total 

2 400 

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

*  Centralised 
collecting 
and 
information 

system 

for 
circulating 

local 

actions 

to 
and 

national, 
*  Support 
local 
regional 
information 
in 
collaboration  with  Member 
States, 
authorities, 
including  EEA,  CEECs, 
Cyprus 
* 
networks,  association 
other parties 
Subtotal Art. 2c) and 2d) 

existing 
and 

Support 

to 

750 

750 

750 

750 

750 

3 750 

750 

750 

750 

750 

750 

3 750 

500 

500 

500 

500 

500 

2 500 

500 

400 

500 

500 

500 

2 400 

3 000 

2 800 

3 000 

3 000 

3 000 

14 800 

Actions  under Art. 2e) Targeted  actions promoting  the penetration  of RES 
and encouraging  investment 

The  financing  will  be  for  peripheral  activities  assisting  the  penetration  of 
renewables  and  facilitating  investments.  The  amounts  proposed  for  this  action 

13 

83 

have  been  based  on  the  calculations  provided  by  industry  taking  into  account 
projections  of  development  of  the  various  sectors  and estimates  of  the varying 
peripheral  costs  from  industry.  The contribution  from this programme to  these 
peripheral  costs  will  be  defined  by the  Commission  during  the  call  for tenders. 
This  action  has  a  very  important  role  to  play  in  the  implementation  of  a 
"campaign for take-off' that the Commission is planning under the White Paper 
on  renewables,  one  aim  of  which  is  to  fill  the  gaps  after  the  demonstration 
projects and encourage investment. 

100 

1998 

Breakdown 
Art. 2e)  Targeted actions promoting t 
* Launching annual calls for 
and 
tender/proposals 
or 
modifications 
reorientations 
* Targeted  actions: 
-Area  1:  biomass,  biogas, 
biofuels 
-Area  2:  solar  thermal  and 
PV 
-Area 3 : solar in buildings 
-Area 4: small hydroelectric 
-Area 5: wind 
-Area 6: geothermal 

1 000 
750 
500 
500 
500 
250 

1999 

2000 

îe penetration of R 

2001 
ES 

inkECU 
|  Total 

2002 

100 

100 

100 

100 

500 

1000 
1000 
1 000 
500 
500 
300 

1 500 
1 500 
1 100 
500 
500 
300 

1 500 
1 500 
1 100 
500 
500 
300 

1 500 
1 500 
1 200 
500 
500 
300 

6 500 
6 250 
4 900 
2 500 
2 500 
1 450 

Subtotal Art.  2e) 

3 600 

4 400 

5 500 

5 500 

5 600 

24 600 

inkECU 
|  Total 

to 

for 

1998 

and 

500 

500 

500 

500 

500 

2001 

2000 

2002 

2 500 

1999 
Breakdown 
Art.  2f)  Implementing  Community  strategy  and  action  plan  for  the  development  of 
RES 
*  Monitoring  of  Member 
Community 
States 
strategy  measures;  survey 
on action plan  progress 
*  Support 
taken 
Action Plan 
*  Monitoring  progress  on 
RES  in  the  Community,  in 
Member 
and 
associated 
countries; 
statistics 
*  Ongoing  evaluation  and 
follow-up  of the  programme 
TOTAL 

initiatives 
the 

implement 

States 

1 500 

2 050 

1 500 

1 500 

1 300 

1 500 

1 500 

1250 

7 300 

450 

250 

250 

300 

250 

250 

250 

450 

450 

250 

300 

300 

450 

300 

300 

14 

84 

7.2. 

Itemised breakdown  (commitment appropriations) 

inkECU 

Breakdown 

1998 

1999 

2000 

2001 

2002 

Total 

Implementing  and 
art.2  a) 
complementing  Community 
measures  taken  to  develop 
the potential  of  RES 

2 000 

2 000 

2 000 

2 000 

2 000 

10 000 

b) 

art.2 
infrastructures 
instruments 
for 
development  of RES 

Actions  on 
and 
the 

art.2 
c) 
Dissemination 
information 

and 

d) 
of 

art.2  e)  Targeted  actions 
facilitating  penetration  of 
RES 
encouraging 
investment 

and 

-  Monitoring  of 
art.2  f) 
strategy 
progress; 
and 
evaluation  and  follow-up  of 
the programme and  actions 

4 500 

4 900 

5 000 

5 000 

5 000 

24 400 

3 000 

2 800 

3 000 

3 000 

3 000 

14 800 

3 600 

4 400 

5 500 

5 500 

5 600 

24 600 

1 300 

1 500 

1 500 

1 500 

1 500 

7 300 

Total 

14 400 

15 600 

17 000 

17 000 

17 100 

81 100 

15 

85 

Comparison  investment 
RES 

Overall 
unit cost 

t/peripheral 
• Peripheral 
costs 
as 
% 

ECU/kW 
800 
4  000 
250/m2 
100 
1 100 
800 
2 000 

% 
10 
20 
10 
20 
25 
15 
10 

in 

Biomass 
Solar PV 
Solar 
thermal 
Solar 
buildings 
Small 
hyrdo 
Wind 
Geotherm 
al 
TOTAL 

costs 
Peripheral 
costs 
in 
ECU 

ECU/kW 
80 
800 
25/m2 
20 
275 
120 
200 

Estimate 
of  eligible 
peripheral 
costs  on 
basis 
of 
planned 
resources 
MECU 
18 
6 
8 
8 
4 
4 
2 

Installed 
capacity 

Estimate 
of 
(non-
eligible) 
investmefi 
ts 

MECU 
180 
30 
80 
40 
14 
26.5 
20 

MW 
225 
7.5 
320  mio 
m2 
400 
14.5 
33.5 
10 

50 

392.5 

Actions under Art 2f) 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  an  average  ECU  15.000  per  country  and  year  basis.  Gradual 
extension to CEECs. 

Support of initiatives under the action plan: The costs are calculated on average 
ECU  15,000  per country  per year, plus ECU 25,000 for  coordination.  Gradual 
extension to CEECs. 

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.  Gradual 
extension to CEECs and to other sectors:  employment, training, etc. 

Ongoing  evaluation  and  follow-up  of the programme: The costs are calculated 
on  average  ECU  15.000  per  country  per  year,  plus  ECU  25.000  for 
coordination.  Gradual  extension  to CEECs and increase as the programme and 
strategy progress. 

16 

86 

7.3. 

Operating expenses for studies, experts, meetings, etc. included in 
partB 

Breakdown 

- Studies 
*- Experts and evaluators meetings 
- Conferences and congresses 
- Information and publication 

TOTAL 

inkECU 
Budget 

50 000 
25 000 
25 000 

250 000 

' 

7.4. 

Schedule of commitment appropriations 

Commitment 
appropriations 

1998 
14 400 

1999 
15 600 

2000 
17 000 

2001 
17 000 

2002 
17 100 

TOTAL 
81 100 

FRAUD PREVENTION MEASURES; RESULTS OF MEASURES 
TAKEN 

The contracts  awarded  are paid  on the  basis  of actual  expenditure  (except  for 
study expenses which are flat-rate  and paid on the basis of the accepted results). 
Most  of  the  costs  associated  with  the  ALTENER  projects  are  not  linked  to 
investments, so in most cases they are paid on the basis of accepted results. 

ELEMENTS OF COST-EFFECTIVENESS ANALYSIS 

9.1. 

Specific objectives of the action to be taken under ALTENER II 

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

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

Increase  confidence  and  RES 
market  penetration,  and  improve 
the  sectors  global  maturity  and 
competitiveness  by 
supporting 
infrastructures 

Means 

Sectoral market strategies 

Target Population 
Decision makers, industry, promoters 

norms 

Development 
and 
of 
standards  and  harmonisation  of 
and 
socio-economic 
legal, 
administrative conditions 
National, 
planning 

regional 

local 

and 

Industry, producers, users 

National, regional and local authorities, 
decision makers 

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

Decision makers, promoters, industry, 
producers 

17 

87 

Development of new financial and 
market instruments 

Financial institutions, promoters, 
investors, producers, users 

Information  infrastructures 

Decision makers, users 

Increase  confidence  and  RES 
market  penetration  by  improving 
dissemination  and  co-ordination 
between 
international, 
Community, national, regional and 
local experiences and activities 

Education 
infrastructures. 

and 

training 

Community,  national and  regional 
events and publications 

University  and 
retraining 
technicians, 
schools, users 

courses 

technical  students, 
for  workers, 
engineers, 

architects, 

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

investment 

Accelerate 
by 
increasing operational  capacity for 
the production of energy from RES 

Implement  Community  RES 
strategy 

Temporary  and  specific  networks 
for exchanging know-how 

Promoters, developers 

Centralised  system  for  collecting 
and circulating information 

Support to existing networks 

Financial  support  for  projects  in 
order  to  reduce  peripheral  and 
service costs 

-  Assessment  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  on 
the  Community  and 

RES 
in 
Member States 

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

Industry, 
associations 

producers 

and 

users 

Public and private promoters, investors, 
producers and users 

Community institutions, Member States 
authorities, policy and decision makers 

Community institutions, Member States 
authorities 

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

9.2. 

Grounds for the operation 

Costs 

If we  are  to  achieve  a  significant  improvement  in  the  share  of  RES  in  gross 
internal  energy  consumption,  the  supplementary  investments  necessary  as 
estimated  in  the  TERES  II  report  could  be  ECU  180  billion  up  to  2020. 
Financing of such levels 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  market  conditions  and  supporting  actions 
where additionality is clearly established or which have a multiplier  effect. 

18 

88 

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 
infrastructures 
Adequate access to RES in the market 
Implementation of large-scale RES projects 
Effective  monitoring of RES strategies in place 
Better complementarity between actions 

to  specific  conditions  and  adequate 

9.3.  Monitoring and evaluation of the action 

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

Selected performance indicators: 

Global indicators: 

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

Specific indicators: 

number of norms and standards developed (art. 2a) 
number  and  scope  of  financial  and  market  instruments  that  increase 
confidence (art 2a and b) 
number  and  scope  of  dissemination  products  and  activities  that  increase 
confidence (art. 2c and d) 
number and type of infrastructures  operating (art. 2b) (by survey) 
number and scope of local, regional and national plans (art. 2b) 
scope  and  groups  targeted  by  promotion  campaigns  or  information 
activities (art 2c and d) (by survey) 
new capacities established (art 2e) (see point 7.1 art. 2e) 
success rate of targeted projects (art. 2e). 
rates of SMEs involved in the projects (art. 2e) 
measures implemented in Member States (art 2f). 

19 

89 

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

The  peripheral  costs  vary  according  to  the  technologies.  The  level  of 
* 
Community  support for eligible costs connected with targeted  actions  (art.  2)  is 
determined annually for each technology in accordance with art. 3.3  and 4.2. 

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  regular  reports  to  the  ALTENER 
Advisory  Committee which is made up of representatives  of the Member  States 
and which meets three or 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 
incorporates  a large number of the recommendations  put forward  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 of the programme will be 
initiated so that an interim report on the results achieved can be presented before 
a new budgetary framework is proposed. 

10.  ADMINISTRATIVE  IMPACT 

The  effective  mobilisation  of  the  necessary  administrative  resources  will  result 
from the annual Commission decision on the allocation of resources,  taking into 
account  in  particular  manpower  and  the  additional  amounts  which  will  be 
granted by the budgetary authority. 

10.1 

Impact on staff  requirements 

The ALTENER  programme develops Community strategy for renewable energy 
sources  and  is  the  only  Community  programme  dedicated  solely  to  promoting 
the penetration of renewable energy sources.  The administrators responsible for 
the  technical  management  of  the  contracts  concerning  pilot  projects,  studies, 
standards,  dissemination of information  and monitoring of  specific  networks are 
at the same time in charge of preparing Commission  communications,  legislative 
proposals  to  promote  the  penetration  of  renewable  energy  sources  and  the 
preparation,  follow  up  and  monitoring  of  Community  strategy  and  the  action 
plan.  The  procedures  and  discussions  leading  to  the  legislative  proposals 
presented  to  the  other  institutions  of  the  Union  may  be  seen  as  a  laborious 
exercise  taking  up  around  30% of  staff  working  time.  The  remaining  70% is 
spent  on  the  technical  management  of  projects  funded  under  the  ALTENER 
programme  (in  October  1997,  the  number  of  contracts  under  way  was  around 
190).  ALTENER activities concern seven major energy sectors - biomass, small 

20 

O 0 

hydroelectric wind power, solar thermal, solar PV, passive solar in buildings and 
geothermal  -  and  four  areas  for  pilot  projects  -  local  and  regional  planning, 
infrastructures for information,  education and training,  new financial  and market 
instruments  and  the  development  of  tools  for  the  design  and  follow  up  of  the 
evaluation. 

For the sound  management  of the ALTENER  programme,  it  is  essential  that at 
least  one  person  should  be  responsible  for  each  sector  in  order  to  be  able  to 
develop sectoral strategies properly and have an overview of all activities. 

Types of post 

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

Temporary 
posts 

or 

A 
B 
C 

8.5 
2.5 
4.5 

Officials 
temporary 
staff 
Other 
resources 

2 END 
2 experts 
2 interim 

of which 

duration 

by  the  use  of 
the 
existing 
resources 
within 
DG 
6 
1.5 
2 

the 

2 interim 

by  recourse  to 
additional 
resources 
within the DG 

or 

2.5 
1 
1.5 
2 END 
2 experts 

5 years 

10.2 

Overall financial  impact of the additional human resources 

The  additional  overall  cost  for  administering  the  programme  may  therefore  be 
estimated at: 

Officials: 

5 x5  years x ECU  103 000 x 0.70 (see point  10.1) = 

ECU  1 802 500 

Experts: (AO-1178) 

2x  5 years x ECU 120 000 = 

ECU  1  200 000 

END: (AO-1520) 

2x  5 yearsxECU40 000 = 

TOTAL = 

ECU 400 000 

ECU 3 402 500 

21 

31 

10.3 

Other operating expenditure arising from the action 

Budget  heading 
(no title) 
A-1300  Mission expenses, 
travel expenses and 
incidental  expenditure 

A-2510  Specific  meetings 
for renewal of members of 
framework  programme 
committee (four  times a 
year) 
Total 

Annual amounts 

Method of calculation 

Meetings  of  contractors 
the 
for  each  part  of 
actions, 
of 
follow-up 
projects 
ECU  900  x  30  persons  x 
four  meetings 

ECU  130 000 

ECU  108 000 

ECU 238 000 

The  total  cost  for  the  entire  duration  of  the  programme  will  be  238 000  x  5  = 
ECU1  190 000. 

# 

The  appropriations  indicated  are financed from  the  existing  allocations  for  the 
departments administering the programme. 

22 

32 

EUROPEAN COMMISSION 

ANNEX V 

PROPOSAL FOR A COUNCIL DECISION 

adopting a 

MULTIANNUAL PROGRAMME 

FOR THE PROMOTION OF 

ENERGY EFFICIENCY 

(1998-2002) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  130s(l) thereof, 

Having regard to the proposal from the Commission,1 

Having regard to the opinion of the Economic and Social Committee,2 

Having regard to the opinion of the Committee of the Regions,3 

Acting  in  accordance  with  the  procedure  laid  down  in  Article  189c  of  the  Treaty,4  in 
cooperation with the European Parliament, 

Whereas Article  13 Or of the Treaty states that one objective of the Community policy on 
the environment shall be to ensure a prudent and rational utilisation of natural resources; 

Having  regard  to  Council  Decision  No.  736/97  of  16  December  1996  concerning  a 
multiannual  programme  for  the  promotion  of  energy  efficiency  in  thé  Community  -
SAVE II;5 

Whereas at its meeting on 29 October  1990 the Council set an objective of stabilising total 
CO2 emissions by the year 2000  at the  1990 level  in the Community  as  a whole; whereas 
at its meetings in March and June  1997 the Council adopted as its negotiating position for 
the  Kyoto  meeting  under  the  Convention  on  Climate  Change  a  7.5%  reduction  in 
greenhouse gas emissions by 2005 and a 15% reduction by 2010 in relation to  1990 levels; 

Whereas to achieve significant  reductions in Community CO2 emissions further efforts will 
have  to  be  made,  particularly  since  CO2  emissions  due  to  energy  consumption  are 
expected  to  increase  by  5  to  8% between  1995  and  2000,  assuming  normal  economic 
growth;  whereas, therefore, additional measures are indispensable; 

Whereas Decision  93/389/EEC6  established  a monitoring mechanism  of  Community  C02 
and other greenhouse gas emissions; 

Whereas  the  Commission,  in  its  communication  of  8 February  1990  on  energy  and the 
environment,  highlighted  energy  efficiency  as the  cornerstone  of. future  efforts  to  reduce 
the negative impact of energy on the environment; 

5  OJL 335, 24.12.1996 

6  OJL  167, 9.7.1993, p.31. 

94 

Whereas  improvement  in  the  management  of  energy  is  urgently  needed  in  order  to 
contribute to the protection of the environment,  to  a better security of energy  supply and 
to sustainable development; 

Whereas the Commission has communicated to the Council and the European Parliament, 
by means of the  Green  paper of  11 January  1995  and the White Paper  of  13  December 
1995, its views on the future of energy policy in the Community,  and the role of energy-
saving and energy efficiency measures; 

Whereas  Article  130a  of  the  Treaty  provides  that  the  Community  should  develop  and 
pursue its  actions  leading  to  the  strengthening  of  its  economic  and  social  cohesion,  and 
that it  should,  in particular,  reduce  disparities  between  the  levels  of  development  of the 
various  regions  and  the  backwardness  of  the  least-favoured  regions;  whereas  energy 
should be integrated into that effort; 

Whereas, by Decision  91/565/EEC,7 the Council  adopted  a Community  energy  efficiency 
programme  (SAVE)  aimed  at  strengthening  energy  efficiency  infrastructures  within  the 
Community; whereas that programme expired on 31 December 1995; 

Whereas the Community recognised the SAVE programme as an important element of the 
Community's C02  reduction strategy; whereas the communication of the Commission of 8 
May  1991 on the European Community's energy programming activities at regional  level, 
the conclusion of the Council on this communication,  and the Resolution  of the European 
Parliament  of  16  July  1993  stated  that those  activities  should  be  pursued,  amplified  and 
utilised as a support  for the energy strategy of the Community; whereas this initiative for 
regional actions should now be totally incorporated into a new SAVE II programme; 

Whereas, by Decision No  1110/94/EC of the European Parliament  and of the Council,8 a 
fourth  framework  programme  for  actions  in  technological  research,  development  and 
demonstration was  established; whereas energy efficiency  policy  constitutes  an important 
instrument for the use and promotion of the new energy technologies that the framework 
programme will establish; whereas the SAVE II programme represents a policy instrument 
which complements this programme; 

Whereas  the Commission  has presented  to  the European Parliament  and  the  Council  its 
proposals for the 5th RTD Framework Programme;9 

Whereas the SAVE II programme aims at improving energy intensity of final  consumption 
by a further one percentage  point per annum over that which would  have been  otherwise 
attained; 

Whereas at its meeting  on  15 on  16 December  1994 the Council  stated that the target  of 
stabilising C02  emissions can only be achieved by a co-ordinated  package of measures to 
import  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 

7  OJL  307, 8.11.1991, p.34. 

8  OJL  126,  18.5.1994,  p.l 

9  COM(97) 

95 

exploit  renewable  energies,  and that  local  energy  management  programmes  are  amongst 
these measures; 

Whereas, in its opinion on the Commission's Green Paper on energy policy,  the European 
Parliament  called for the formulation  of objectives and a common programme for energy 
efficiency  and  savings  compatible  with  the  objectives  concerning  the  emissions  of 
greenhouse gases as agreed in Rio de Janeiro (1992) and Berlin (1995), called for a SAVE 
II programme and requested that the Commission clarify the role which it intends to play 
in energy savings and efficiency by creating practical projects; 

Whereas improved  energy efficiency  will have a positive impact on both the  environment 
and the  security  of  energy  supplies  which  are global  in  nature; whereas  a  high  level  of 
international cooperation is needed to produce the most positive results; 

Whereas between  180 and 200 million tonnes of C02  emissions could be  avoided  by the 
year 2000 by an improvement of 5 %  in the energy intensity of final  demand additional to 
the conventional expectations; 

Whereas the SAVE II programme is an important and necessary instrument for promoting 
increased energy  efficiency; 

Whereas in order to  prevent duplication and to  achieve synergy,  care should  be taken in 
implementing  the  programme  to  ensure  close  cooperation  with  other  Community 
programmes linked directly with energy efficiency promotion; 

Whereas it  is  politically  and economically  desirable  to  open  the  SAVE  II  programme  to 
the  associated  Central  and  Eastern  European  Countries  in  accordance  with  the 
conclusions of the European Council meeting in Copenhagen in June 1994 and as outlined 
in the Commission communication to the Council  on the subject  in May  1994,  and to the 
associated Mediterranean Countries and Cyprus; 

Whereas, in order to ensure that Community aid is used efficiently,  the Commission must 
ensure  that  projects  are  subject  to  thorough  prior  appraisal  and  shall  systematically 
monitor and evaluate the progress and results of supported projects; 

Whereas a multiannual programme of action in the energy sector is being implemented, 

HAS ADOPTED THIS DECISION: 

Article 1 

1. 
The  Community  shall  implement,  within  the  Energy  Framework  Programme,  a 
multiannual  specific  programme  for  the  preparation  and  implementation  of  schemes and 
measures  in  a  cost-effective  manner  in  order  to  promote  energy  efficiency  within  the 
Community. The general overall objectives of this programme shall be: 

(a) 

to stimulate energy efficiency  measures in all sectors; 

(b) 

to encourage investments in energy conservation by private and public consumers 
and by industry; 

(c) 

to create the conditions for improving the energy intensity of final consumption. 

36 

2. 
Community  financing  shall  be  provided  under  the  'SAVE  II  programme  to 
promote energy  efficiency  in the  Community',  hereafter  referred  to  as  'the programme', 
for actions which fall within the objectives of this Decision. 

Article 2 

Under the programme,  financing  shall be provided for the following  categories  of energy 
efficiency  schemes and measures: 

studies  and  other  related  measures  designed  to  implement  and  supplement 
(a) 
Community  schemes  (such as voluntary agreements,  mandates to  standardisation  bodies, 
cooperative  procurements  and  legislation)  for  improving  energy  efficiency,  studies 
concerning the  effects  of energy pricing on energy efficiency,  and studies with  a view to 
establishing energy efficiency  as a criterion within Community programmes; 

(b) 
targeted  sectoral  pilot  schemes  aimed  at  speeding  up  investment  in  energy 
efficiency  and/or  improving  energy use patterns, to  be  carried  out  by  public  and  private 
firms  or  organisations  and  by  existing  Community-wide  networks  or  temporary 
Community-wide  groupings  of  organisations  and/or  firms  set  up  to  carry  out  these 
schemes; 

(c)  measures  proposed  by  the  Commission  for  fostering  exchanges  of  experience 
aimed  at  improving  coordination  between  international,  Community,  national,  regional 
and local activities, using appropriate means of disseminating information; 

(d)  measures such as those described in (c) above but proposed by entities other than 
the Commission; 

(e)  monitoring  energy  efficiency  progress  in  the  Community  and  in  each  Member 
State; ongoing evaluation and monitoring of the schemes and measures carried out under 
the Programme; 

(f) 
specific  measures to improve energy management at regional  and urban level with 
a view to  achieving  greater cohesion between Member States  and regions  in the field of 
energy  efficiency. 

Article 3 

All the costs  relating to the schemes and measures referred to  in Article 2 (a),  (c) 

1. 
and (e) shall be borne by the general budget of the European Communities. 

The level of funding for the schemes and measures referred to in Article 2 (b), (d) 

2. 
and (f) shall be set at a maximum of 50 % of their total cost. 

3. 
The balance  of the  funding  of the  schemes  and measures  referred  to  in Article  2 
(b),  (d)  and  (f)  may  be  made  up  from  either  public  or  private  sources  or  from  a 
combination of the two. 

Article 4 

1. 

Implementation of the programme shall begin on  1 January  1998 and terminate on 
31 December 2002. 

37 

2. 

The  annual  appropriations  shall  be  authorised  by  the  budgetary  authority  within 
the limits of the financial perspectives. 

Article 5 

The  Commission  shall  be  responsible 

financial  execution  and 
1. 
implementation  of  the  programme.  The Commission  shall  also  ensure that  action under 
this programme is subject to prior appraisal, monitoring and subsequent evaluation, which, 
on  completion  of  the  project,  shall  include  assessment  of  impact,  implementation  and 
whether their original objectives have been achieved. 
« 

the 

for 

The selected beneficiaries shall submit reports to the Commission on a six-monthly 

2. 
basis and on completion. 

The  conditions  and  guidelines  to  be  applied  for  the  support  of  all  actions  and 

3. 
measures referred to in Article 2 shall be defined each year taking into account: 

the  cost  effectiveness  criteria,  the  savings  potential  and  environmental  impact,  in 

particular the reduction of CO2 emissions, 

the list of priorities referred to in Article 7, 

the cohesion of Member States in the field of energy efficiency. 

The  Committee  referred  to  in  Article  6  shall  assist  the  Commission  in  defining  these 
conditions and guidelines. 

Article 6 

The  Commission  shall  be  assisted,  for  the purposes  of implementing  the  programme,  by 
the  Committee  referred  to  in Article 4  of the Council  Decision  concerning  a multiannual 
framework programme for action in the energy sector. 

Article 7 

The  Commission  shall  draw  up  annually  a  list  of  priorities  for  funding  under  the 
programme.  This  list  shall  take  into  account  complementarity  between  the  SAVE  II 
programme and the national programmes on the basis of annual information in a summary 
form  supplied  by  each  Member  State.  Priority  shall  be  given  to  those  areas where  such 
complementarity is greatest. 

The committee  referred  to  in Article 6 shall assist  the Commission  in defining  the  list  of 
priorities. 

Article 8 

After each year of the programme, the Commission  shall present to  the European 
1. 
Parliament  and to  the  Council  a progress  report together  with proposals  concerning any 
changes  in  the  guidelines,  defined  in  accordance  with  Article  5(3),  which  may  prove 
necessary in the light of the previous year's results. 

2. 
After  the  third  year of the  programme,  the  Commission  shall  present  a report  to 
the European Parliament  and to  the  Council  on  the  energy  efficiency  measures  taken at 
Community and Member State level  and on the results achieved, with particular reference 

38 

to the objectives outlined in Article  1.  The report shall be accompanied  by proposals for 
any  amendments  to  the  programme  which  may  prove  necessary  in  the  light  of  those 
results. 

3. 
On expiry of the programme, the Commission shall make an overall  assessment  of 
the results achieved by applying this Decision, and of the coherence between national and 
Community measures.  It  shall  present  a report thereon to  the European Parliament,  the 
Council, the Economic  and Social  Committee and the Committee  of the Regions,  stating 
in particular how far the objective outlined in Article 1  has been achieved. 

Article 9 

The  programme  shall  be  open  to  the  participation  of  associated  Central  and  Eastern 
European  countries  in  accordance  with the  conditions,  including  financial  arrangements, 
agreed  to  in  the  Additional  Protocols  to  the  association  Agreements,  concerning 
participation  in  Community  programmes.  This  programme  shall  be  open  to  the 
participation  of  Cyprus  on  the  basis  of  additional  appropriations  in accordance  with  the 
same  rules  as  apply  to  the  EFTA  countries  following  procedures  to  be  agreed  with  the 
countries in question. 

Article 10 

This Decision  cancels  and  replaces  Council  Decision  (EC)  No.  736/97  of  16  December 
1996. 

Article 11 

This Decision is addressed to the Member States, 

Done at Brussels, 

For the Council 

The President 

39 

FINANCIAL STATEMENT 

1.  TITLE OF OPERATION 

Energy Efficiency  SAVE - Renewed efforts  to achieve greater energy efficiency  in the 
European Union. 

2.  BUDGET HEADINGJNVOLVED 

B4.1031 

3.  LEGAL BASIS 

Article  130s(l) of the EC Treaty. 

Council  Decision  91/565/EC  of  29  October  1991  (OJ  L  307,  8/11/1991,  p.34). 
SAVE I Programme. 

Council Decision  96/737/EC of  16 December  1996 (OJ L 335, 24/12/1996, p.50). 
SAVE II Programme. 

Proposal  for  a Council Decision  concerning  a framework  programme  for  action in 
the energy sector (1998-2002). 

4. 

DESCRIPTION  OF  OPERATION 

4.1 

General  objective 

The  general  objective  is  to  give  added  force  to  the  Member  States'  energy 
efficiency  schemes with  a view to  achieving  - by 2010  - final energy  savings 
of  100 Mtoe/year.  In relation to the  1990 figures, this represents  a reduction 
of  12% in final energy consumption  and of more than  15% in CO2 emissions. 
In  the  absence  of  an  appropriate  fiscal  measure  adopted  at  EU  level,  the 
Energy  Efficiency  SAVE  Programme  (part  of  the  Framework  Programme) 
remains  one  of  the  few  Community  instruments  which  can  still  significantly 
help cut  CO2 emissions by 2010.  Its contribution  will depend  directly  on the 
vigour  with  which  the  programme  is  implemented.  As,  moreover,  the 
regulations  introduced  under  the  SAVE  Programme  will  be  kept  to  an 
essential  minimum,  other types of measure under the Programme  will have to 
be  given  added  force.  For  these  reasons,  and  in  view  of  the  EU's 
forthcoming  enlargement,  a significantly  greater  budget  must  be  allocated  to 
achieving the Programme's  objectives. 

Implementation  of  SAVE  I  and  II  has  shown  that  the  effectiveness  of  these 
measures increased with their proximity to the consumer. 

100 

4.2 

Period covered 

Five years, from  1  January 1998 to 31 December 2002. 

5.  CLASSIFICATION OF EXPENDITURE OR REVENUE 

DNO/CD 

6.  TYPE OF EXPENDITURE OR REVENUE 

The programme will consist of six types of measure: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

studies and other related measures designed to implement and supplement 
Community  schemes  (such  as  voluntary  agreements,  mandates  given  to 
standardisation  bodies,  cooperative  procurements  and  legislation)  for 
studies  concerning  the  effects  of  energy 
improving  energy  efficiency; 
pricing  on  energy  efficiency;  studies  with  a view  to  establishing  energy 
efficiency  as a criterion within Community programmes; 

targeted  sectoral pilot  schemes aimed at speeding up investment in energy 
efficiency  and/or improving energy use patterns, to be carried out by public 
and  private  firms  or  organisations  and  by  existing  Community-wide 
networks  or  temporary  Community-wide  groupings  of  organisations 
and/or firms set up to carry out these schemes; 

measures  proposed  by  the  Commission  for  fostering  exchanges  of 
experience  aimed  at  improving  coordination  between 
international, 
Community, national, regional and local activities, using appropriate means 
of disseminating information; 

measures  such  as  those  described  in  (c)  above  but  proposed  by  entities 
other  than  the  Commission,  e.g.  universities,  public  and  private  bodies, 
energy agencies, consultants, etc.; 

monitoring  energy  efficiency  progress  in  the  Community  and  in  each 
Member  State;  ongoing  evaluation  and  monitoring  of  the  schemes  and 
measures carried out under the Programme; 

specific  measures  to  improve  energy  management  at  regional  and  urban 
level  with  a view  to  achieving  greater  cohesion  between  Member  States 
and regions in the field of energy  efficiency. 

100% subsidies for  the  costs of the measures described  in paragraphs 4(a), (c) and 
(e). 

Cofinancing  contributions  ranging  from  30% to  50% for  measures  to  support  the 
Member States as described in paragraphs 4(b), (d) and (f). 

The  measures  concerned  will  be  covered  by  a  multiannual  indicative  programme 
under which priorities and action plans will be decided annually. 

01 

The plans will be submitted to  an advisory committee made up of representatives  of 
the Member States. 

All financing  will  be the  subject  of a contract  between  the Commission  and the co 
ordinator or person responsible for the measure being financed. 

7. 

FINANCIAL  IMPACT 

The  proposed  amounts  will  be  subject  to  the  limits  set  by  the  financial  perspective 
currently  in  force.  When  the  next financial perspective  is  drawn  up,  the financing of 
priority measures to promote energy efficiency  might be reconsidered. 

The proposed indicative budget is 68.4 MECU. 

7.1  Method used to calculate the cost of the measure 

Global  climate  change  poses  a  major  challenge  to  us  all.  In  preparation  for  the  3rd 
Conference  of  the  Parties  in Framework  Convention  of  the  United  Nations  on  Climate 
Change  in  Kyoto  in  December  1997,  the  Council  adopted  a  negotiating  position  for 
industrialised countries for a  15% reduction in emissions of the principal greenhouse gases 
by the  year  2010  and  at  least  7.5%  by the  year  2005  compared  with  1990  levels.  The 
present  trend  in  emissions,  based  on  the  application  of  current  policies  and  measures, 
indicates an increase in CO2 emissions of approximately 8% by 2010, which means that a 
reduction in real terms of 23 % may well be required. Major effort  in several policy areas 
will be needed,  in particular as regards energy production and use, as outlined  in a recent 
Commission Communication on Climate Change - The EU Approach for Kyoto. SAVE II 
stands  for  Specific  Actions for  Vigorous Energy Efficiency.  It  was  approved  by  the 
European Council  on December  16,  1996 (96/73 7/EEC) as one of the three main Union-
wide programmes to promote energy efficiency.  The other two programmes, JOULE and 
THERMIE, are technology-oriented,  representing the spectrum from research through to 
demonstration and dissemination of energy technologies,  of which energy efficiency  is but 
one of the technology  areas promoted.  SAVE is the only Community  programme  solely 
dedicated to improving energy  efficiency. 

7.1.1.  Studies and other related measures designed  to implement  and supplement 
Community  schemes  (such  as  voluntary  agreements,  mandates  to 
standardisation  bodies,  cooperative  procurements  and  legislation)  for 
improving  energy  efficiency,  studies  concerning  the  effects  of  energy 
pricing on energy efficiency,  and studies with a view to establishing energy 
efficiency  as a criterion within Community programmes. 

Studies  are required  to  prepare the technical  dossiers  which  are necessary 
for developing  effective  energy efficiency  standards and legislative activity, 
if appropriate.  A  certain  amount  of  ongoing  work  in the  area of labelling 
and  equipment  standards  has  been  completed  but  the  effort  should  be 
continued.  The  savings  arising  from  the  Boiler  Directive  (92/42/EEC) 
alone  could  be  as  much  as  ECU  1 billion  per  year  (with  annual  energy 
savings of over  11 million tonnes of oil equivalent to the year 2010 for the 
twelve  Member  States).  The budget  amounts given  in the table below are 
estimations based on the experience of recent years.  It is estimated that 30 
studies,  each  costing  ECU  200  000  on  average,  are  needed  to  continue 
SAVE activities in the following areas: 

102 

•  Buildings, Transport, Demand side Management 

•  Combined Heat and Power 

•  Appliance labelling and European Community energy end-use  efficiency 

standards. 

•  Voluntary Agreements. 

•  International energy end-use efficiency  standards . 

•  Studies leading to other legislative measures 

•  Measures  aimed  at  establishing  energy  efficiency  as  a  criterion  within 

existing EU strategic programmes. 

This  is  an  activity  which  has  evolved  as  the  Community's  programmes  have  evolved. 
Programmes  such  as  VALOREN  (now  included  within  INTERREG)  which  was  funded 
by the European Development Fund have an enormous potential of energy efficiency  as an 
engine for regional development. This very positive experience should be built upon. 

7.1.2.  Targeted sectoral pilot schemes. 

By  the  end  of  1997,  SAVE  will  have  supported  approximately  350 
sectoral  pilot  schemes.  The  main  areas  of  interest  were  education  and 
training,  information,  integrated  resource  planning,  transport,  buildings, 
cogeneration  and monitoring  and targeting.  This activity will  include more 
international projects where several Member States will be involved. As the 
annual  budget  of  SAVE  is  limited,  experience  shows  that  despite  their 
good  quality  only  20%  of  the  proposals  are  likely  to  be  approved  each 
year.  The average  cost  of a pilot  scheme,  based  on  the  experience  of the 
last  six years, is ECU  100 000.  For targeted  schemes  in which more than 
one Member State participates, this cost will be increased: the average cost 
of  each  project  is  expected  to  be  ECU  200  000.  For  a  total five-year 
budget  of ECU 28  million,  140  schemes  may be  supported  in all Member 
States or 9 pilot schemes per Member State. 

7.1.3.  Dissemination of information. 

Information  to  the  consumer  is  an important  element  in raising  awareness 
of improvements  in energy consumption behaviour.  Although  most  SAVE 
projects  are  included  to  the  CORDIS  database  which  is  open,  free  of 
charge,  through  the  world  wide  web  to  the  general  public,  more 
information activities should be undertaken to improve dissemination of the 
results of  programme activities and to make Member States more aware of 
energy  efficiency  issues.  This  action  would  be  closely  co-ordinated  with 
the results of all the initiatives developed under the  SAVE  programme. In 
the  light  of  the  experience  gained  in  previous  years  and  the  need  for 
dissemination and information activities in all Member States, the estimated 
budget is ECU 9.1  million, of which roughly 45% is for activities proposed 
by  the  Commission  (conferences,  web  sites,  databases,  contractors 
meetings,  publications  etc.)  and  55% for  information  activities  proposed 

103 

and  co-financed  by  third  parties  such  as  national  energy  agencies, 
consultants, universities etc. 

7.1.4.  Monitoring  energy  efficiency  progress  at  national  and  EU  level  and 
ongoing  evaluation  and  monitoring  of  the  schemes  and  measures  carried 
out under the programme. 

A number of important analytical tools have been developed under SAVE . 
These  include energy indicators (useful  for comparing the Member States' 
energy efficiency  in different  sectors), the extension of the MURE II model 
to  policy  measures  in  the  field  of  energy  efficiency,  a  database  on  the 
SAVE 
and  Member  State  initiatives  and  a  user-friendly  method  of 
disaggregating  energy  intensity  information  in  such  a way  as  to  highlight 
the  advances  attributable  to  energy  efficiency  alone.  All  these  activities 
should  be  continued  and  expanded  to  include  the  Central  and  Eastern 
European countries and Cyprus with a  view to monitoring the progress of 
energy  efficiency  in Europe.  This will be very important  in the  context  of 
the  EU1 s  environmental  commitments.  The  evaluation  of  SAVE  pilot 
schemes and of the programme as a whole must be given  priority over the 
next  few  years  in  order  to  satisfy  requirements  of  the  other  EU  bodies. 
Further  development  and  updating  of  the  above  tools  will  cost  about 
ECU 200  000  per year,  to  which  should  be  added  the  cost  of  monitoring 
energy  efficiency  progress  in the third  countries  awaiting  accession.  This 
monitoring of energy efficiency  progress together with the evaluation of all 
SAVE  activities  is  expected  to  cost  ECU  2.5  million  over  the  next  five 
years. 

7.1.5.  Specific  measures  to  improve  energy  management  at  regional  and urban 
level and to promote greater cohesion between Member  States and regions 
in the field of energy  efficiency. 

to 

This  scheme  is  designed  to  assist  local  authorities  in  regions,  islands and 
urban areas in setting up energy management agencies whose main role will 
be  to  implement  regional  and local  policies  for  optimum  energy  use.  The 
local  plans  for 
programme  thus  helps  integrate  energy  policy  into 
sustainable  development  and  contributes 
local  and  regional 
environmental  efforts.  Action  to  set  up  local  energy  agencies  and  to 
improve  collaboration  between  local,  regional  and  national  authorities  on 
energy issues  should be continued  in order to  make local  authorities more 
aware  of  these  issues  and to  improve  the  link  between  energy  efficiency 
and environmental  protection.  Experience  in previous years indicates that 
it will cost about ECU  175 000 to maintain a local energy agency for three 
years.  This means that, with a budget of ECU 22.8  million,  130 new local 
agencies will be created - an average of 9 local agencies per Member State. 
There is potential  in the European Union for setting up  1 600  local energy 
management  agencies  in  administrative  units  with  a  population  of  over 
100 000.  To  date the Commission  has contributed  to  the  creation  of  140 
such agencies.  This phase should be considered  as a pilot  phase: the local 
benefits  are  already  starting  to  be  acknowledged,  and  increasing  numbers 
.  of local  authorities  are keen to  set up their own  local  energy  management 

agency. 

104 

7.2 

Breakdown of the costs (ECU million) 

The amount will be fixed annually by the budgetary authority. 

Art. 2 activities 

1998 

1999  2000 

2001 

2002 

Total 

1 

2 

3 

4 

5 

6 

studies  and  other  measures  designed  to 
implement  and 
supplement  Community 
schemes for improving  efficiency 

targeted sectoral pilot schemes 

dissemination  of  information  (proposed  by 
the Commission) 

dissemination  of  information  (proposed  by 
third parties) 

monitoring energy efficiency  progress in  the 
Community  and  in  each  Member  State; 
ongoing  monitoring  and  evaluation  of  the 
schemes and  measures carried  out under the 
Programme 

specific  measures 
improve  energy 
to 
management at regional and urban level with 
a  view 
to  achieving  greater  coherence 
between  Member  States  and  regions  in  the 
field  of energy  efficiency 

7 

Total 

1.0 

1.0 

1.4 

1.3 

1.3 

6.0 

5.0 

1.0 

5.0 

1.0 

5.5 

1.0 

6.2 

0.6 

6.3 

0.5 

28.0 

4.1 

1.0 

1.0 

1.0 

•  1.0 

1.0 

5.0 

0.5 

0.5 

0.5 

0.5 

0.5 

2.5 

4.0 

4.3 

4.5 

5.0 

5.0 

22.8 

12.8 

13.9 

14.6 

14.6 

68.4 

12 

,.5 

7.3. 

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

Breakdown 

- Studies 
(specified in Article 2(a) )* 
- Meetings of experts and assessors (for all measures 
under Article 2) 
- Conferences and seminars 
(measures specified by...) 
- Information and publications 
TOTAL 

7.4. 

Schedule of appropriations for commitments 

ECU million 

Budget 

0.050 

0.025 
0.025 
0.150 

0.250 

ECU million 

1998 

12.5 

1999 

12.8 

2000 

13.9 

2001 

14.6 

20002 

TOTAL 

14.6 

68.4 

05 

8.  ANTI-FRAUD  MEASURES  PROVIDED  FOR  (AND  RESULTS  OF THEIR 

IMPLEMENTATION 

The  contracts  awarded  are  paid  for  on  the  basis  of  actual  expenditure  and  after 
verification  (except for  study fees,  where a fixed amount is paid on the basis of the 
accepted results). 

9.  COST-EFFECTIVENESS ANALYSIS 

9.1 

Specific  aims  of  the  action  to  be  taken  under  the  Energy  Framework 
Programme (1998-2002) : Energy efficiency  SAVE 

The  SAVE  Programme  aims  at  improving  energy  intensity  of  final 
consumption in the EU by a further  one percentage point per annum over that 
which would have been otherwise attained; 

Who is affected by this action 

Public and private bodies; universities; national, regional  and urban  agencies 
and bodies for promoting energy efficiency;  all sectors involved in promoting 
energy  efficiency  (e.g.  consultants,  manufacturers  of  household  electrical 
appliances, central heating suppliers, architects) and, by extension, the entire 
population of the EU. 

9.2 

Justification for the action 

Costs 

In  order  to  achieve  permanent  annual  energy  savings  of  1 tonne  oil  equivalent 
(toe) an average capital outlay of ECU 1  000 is required.  To save  100 Mtoe/year 
will thus  require  an investment  of ECU  100 billion.  Financing  such  an amount 
from the budget of the EU and its Member States is out of the question.  The only 
solution  is  joint  financing  by  all  the  economic  operators  acting  within  a 
Community  framework.  The  Commission  will  cofinance  only  those  schemes 
which clearly show evidence of additionality. 

Derived effects 

To be supported by SAVE, projects must: 

help improve energy intensity; 

make  a  significant  contribution  to  protecting  the  environment  and 
combating the greenhouse effect; 

have a stabilising effect  on world energy prices; 

improve the EU's balance of payments; 

make EU industry more competitive on the world market; 

improve the EU's security of supply and reduce its vulnerability to energy 
market disturbances; 

106 

help  complete  the  internal  market  and  increase  economic  and  social 
cohesion. 

Furthermore,  the  availability  of  highly  energy-efficient  technologies  means  this 
technology  can  be  transferred  to  third  countries,  thus  helping  improve  the 
the  world 
management  of  resources  and  provide  better  protection 
environment. 

for 

The  legislative  and  regulatory  approach  yields  the  greatest  multiplier  effect.  A 
large  multiplier  effect  is  also  achieved  by  the  introduction  of  performance 
standards.  In the case of other jointly financed  measures, the multiplier effect  is at 
least 2 or 3. 

9.3  Monitoring  and  evaluation 

Selected performance  indicators 

Reduction in CO2 emissions, 

Improved  energy intensity in the Community, 

The  number  of  measures  proposed,  accepted  and  translated  into  action  at 
national level, 

The number of man days per year allocated to training, 

The number of software  packages and data bases pooled, 

The number of conferences,  seminars, newsletters and other publications. 

Assessment procedures  and schedule 

The  Commission  will  constantly  monitor  the  changes  in  energy  intensity  in 
the Member  States and report regularly to the Council. 

The Commission will also refer constantly to the SAVE Advisory  Committee, 
which  will  be  made  up  of  representatives  of  the  Member  States  and  meet 
three or four  times a year. 

The  Commission  will  have  an  assessment  drawn  up  by  a  team  of  outside 
experts.  Their report will be sent to the Council and European Parliament,  in 
accordance with Article 7 of the attached  proposal for  a Council Decision. 

The assessment  must also consider: 

the  past  and  present  Programme  guidelines,  with  a  view  to 
identifying  any scope for  improvement; 

the  relationships  between  the  means  deployed  and  the  results 
obtained; 

107 

the  actual  and  potential  complementarities  between 
programmes and the other instruments available. 

these 

10.  ADMINISTRATIVE EXPENDITURE 

The actual mobilisation of the necessary administrative resources will be triggered 
by the annual Commission Decision on the allocation of resources, taking account 
of  such  factors  as  staffing  levels  and  any  additional  financing  granted  by  the 
budgetary authority. 

10.1  Impact on the number of jobs 

SAVE is a programme dealing with the EU's energy efficiency  strategy,  and it is 
the only Community programme solely dedicated  to  improving  energy  efficiency. 
Officials  handling contracts for pilot schemes or studies will, at the same time, be 
drafting communications and legislative proposals concerning the energy  efficiency 
of  household  appliances  and  boilers,  Integrated  Resource  Planning,  Combined 
Heat and Power etc.  These procedures and the discussion of legislative proposals 
within all EU institutions take time: it is estimated that 30% of the time is spent on 
drafting  and following  up the above measures, while the remaining  70% is spent 
managing SAVE contracts (in October 1997 there were 162 current contracts). 

SAVE  has  activities  in  ten  sectors:  buildings,  transport,  industry,  information, 
training, Demand  Side Management, Third Party Financing, household appliances, 
Combined  Heat  and  Power  and  energy  efficiency  policy.  There  should  be  one 
person dealing with each sector and responsible for  energy efficiency  strategy and 
for following up the related activities. 

Type of post 

Staff to be employed in 
managing the measure 

of which 

Duration 

permanent 
posts 

temporary 
posts 

using  the  existing 
the 
resources  of 
DG/department 
concerned 

using 
additional 
resources 

Officials  or  A 

temporary 

staff 

B 

C 

8.0 

3.0 

4.0 

6.5 

2.0 

3.0 

1.5 

5 years 

1.0 

1.0 

Other resources 

3.0  seconded 
nat. experts 

3.0  seconded 
national  experts 

2.0 
experts 

5 years 

2.0 experts 

1.5 temp. 

1.5 temp. 

3.0 temp. 

108 

10.2  Overall financial  impact of additional  human  resources 

The total additional cost of administering the Programme would thus be: 

Officials: 
3.5 x 5 years x ECU  103 000 x  0,70 (see par.  10.1) = 

Experts (A0-1178): 
2x  5 years x ECU  120 000 = 

Temp.(A0-1175): 

1.5x5 years x ECU 80 000 = 

Total 

ECU 

1 261 750 

1 200 000 

600 000 

3 061 750 

10.3  Other operational  expenses arising from the measure 

Budget heading 

Amounts per year 

Method  of calculation 

(N° and title) 

(ECU million) 

A-1300  Mission  and  travel  0.100 
expenses  and  other  incidental 
expenditure 

A-2510  Special  meetings  on 
(four 
"energy  efficiency" 
times a year)  and  meetings  of 
the 
committee 
(four  times  a year)  within  the 
Programme 
Framework 
Committee 

"labelling" 

0.216 

Total 

0.316 MECU 

Following 
up 
local agencies**, 

contracts*, 

meetings, 
contractors' 
participation 
information 
in 
activities  organised  by  SAVE 
etc.*** 

ECU  900  per  person  x  30 
persons x 8 meetings 

* In October  1997 there were  162 current  SAVE contracts. 
** Up to October  1997,  140 local agencies were subsidised by SAVE 
***  SAVE  must  inform  interested  parties  as  to  the  legislative  measures  adopted 
concerning  energy  efficiency  (Directives  on  labelling,  the  energy  efficiency  of  household 
appliances, the new strategy on CHP, etc.) 
The total cost for the entire duration  of the Programme will be 0.316 x 5 yrs = 
ECU  1.58 milliion 
The  amounts  indicated  are  to  be  financed  from  the  budget  already  allocated  to  the 
departments managing the programme. 

109 

EUROPEAN COMMISSION 

ANNEX VI 

PROPOSAL FOR A COUNCIL DECISION 

adopting a 

MULTIANNUAL PROGRAMME OF 

TECHNOLOGICAL ACTIONS PROMOTING THE 

CLEAN AND EFFICIENT USE 

OF SOLID FUELS 

(1998-2002) 

110 

THE COUNCIL OF THE EUROPEAN UNION 

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

Having regard to the proposal from the Commission1; 

Having regard to the opinion of the European Parliament2 

Having regard to the opinion of the Economic and Social Committee; 

Having regard to the opinion of the European Coal and Steel Community Consultative Committee; 

Having regard to the opinion of the Committee of the Regions; 

Having  regard  to  the  White  Paper  on Energy  indicating  the  energy  policy  objectives  of  economic 
competitiveness, environmental control, security of supply and maintenance of employment; 

Whereas solid fuels are available in the Community and the ready,  abundant, diverse sources of hard 
coal traded world-wide ensure that such fuels are and will remain a low-cost energy source; 

Whereas  the  promotion  of  clean  and  efficient  technologies  for  solid  fuels  contributes  to  the 
diversification  of  primary  energy  resources  and  to  the  balance  of  Community  energy  policy 
objectives; 

Whereas solid fuels will be increasingly utilised both in developed  and emerging  areas of the world, 
thereby  contributing  to  emissions  of  pollutants  and  C02;  whereas  every  effort  should  be  made  to 
ameliorate such emissions by the promotion of clean and efficient  technologies and the application of 
BAT (Best Available Technologies) to existing and new plant using solid fuels; 

Whereas the manufacture  and supply of equipment for the clean utilisation  of coal,  lignite and other 
forms of solid fuels, for use both within and outside the European Community,  can contribute to the 
maintenance of employment; 

Whereas, pursuant to Article  13 Or of the Treaty on the European Union,  action by the Community 
relating to the environment  should improve the quality of the environment  and ensure a prudent and 
rational  utilization  of  natural  resources,  objectives  which  are  furthered  by  the  implementation  of 
clean coal technologies; 

Whereas  the  promotion  of  more  efficient  clean  solid  fuel  technologies  can  make  a  significant 
contribution to the reduction  of polluting  emissions  arising from the traditional  use of fossil  fuels at 
European  Union  level;  whereas  use  of  cleaner  technologies  contributes  to  the  objectives  of  the 
Community strategy to combat acidification ;3 

1  OJNo 

2  OJNo 

3  COM(97)88 final,  12.3.97 

111 

Whereas the promotion of more efficient  clean solid fuel technologies will contribute to the reduction 
of greenhouse gases and the danger of global  climate change; whereas wide-ranging  co-operation is 
therefore desirable in order to obtain significant results; 

Whereas,  since  the  Treaty  establishing  the  European  Economic  Community  does  not  provide  for 
other powers to  cover the energy aspects of the programme referred  to  in Article  2  below,  Article 
235 of the Treaty should be invoked; 

Whereas  Council  has  adopted  a White  Paper  defining  the  main  lines  of  new  Community  energy 
policy objectives for  coherence  and convergence  of the policies of the Member  States; whereas this 
White Paper states that the contribution of new clean solid fuel technologies can enhance the use of a 
wide variety of fuels,  so that they can continue to play a significant  part in the overall energy balance 
sheet but with an improved environmental image; 

Whereas the promotion and exploitation of clean solid fuel technologies offers  economic advantages 
in terms of employment opportunities with companies in the Union operating on a world-wide basis; 

Whereas  to  sustain  a  cleaner,  environment,  advanced  clean  solid  fuel  technologies  should  be 
developed to achieve improved BAT (Best Available Technologies) at costs which can be afforded; 

Whereas  certain  countries  which  are  expected  to  become  members  of  the  European  Union  in the 
coming  years  are very  strongly  dependent  on  the  production  and  use  of  solid  fuels  to  meet  their 
energy  requirements;  whereas  those  countries  will  need  to  modernise  and  improve  their  energy 
technologies  in  order  to  comply  with European  Union  legislation  relating  to  the  protection  of  the 
environment; 

Whereas  a  number  of  Member  States  have  their  own  clean  solid  fuel  technology  programmes; 
whereas  there  should  be  an opportunity  for those  programmes  to  co-ordinate  with  each  other and 
with the relevant European Union programmes; 

Whereas it is also  important  to  promote the uptake  of technologies  developed  with  financing  from 
the specific Research and Technical Development non-nuclear energy programme; 

Whereas a multiannual Framework Programme for Actions in the energy field has been established; 

Whereas the European Parliament  and EU industry have indicated  their keen  interest  in pursuing a 
policy of developing clean coal technologies for use in the Union and elsewhere in the world; 

Whereas  the  Amsterdam  European  Council  highlighted  the  importance  of  solid  fuel  Research and 
Development  by  its  request  that  the  research  in  that  field  currently  supported  under  the  Treaty 
establishing  the  European  Coal  and  Steel  Community  should  be  continued  after  the* expiry  of  the 
Treaty in 2002; 

i 

Whereas  there  is  a  need  to  transfer  to  the  industry  the  results  of  the  research  funded  under  the 
European  Coal  and  Steel  Community,  the  need  for  whose  continuation  has been  acknowledged  by 
the Amsterdam European Council; 

The term 'solid fuels'  covers anthracite, coal, lignite, peat, emulsion and the heavy fraction  of petroleum products. 

2 

119 

JL  JL  A_< 

Whereas the  promotion,  demonstration  and  exploitation  of clean  solid  fuel  technologies  throughout 
the  Community  are  likely  to  strengthen  its  economic  and  social  cohesion,  as  called  for  by  Article 
130a of the Treaty; 

Whereas,  to this end,  it is appropriate to  take  account  of the Community's  indicative  objectives  and 
make provision  for  resources to  further  the attainment  of those  objectives,  taking  into  consideration 
the particular conditions in each Member State; 

Whereas provision  should be made for  a five-year programme; 

HAS ADOPTED THIS DECISION: 

Article 1 

Member  States  shall endeavour  to  contribute  in their energy policies to the promotion  of clean  solid 
fuel  technologies, where  appropriate,  so as to  ensure that  the best  available technologies  (BAT)  are 
used  in  order  to  limit  emissions  from  solid  fuel  use,  including  carbon  dioxide  emissions.  Account 
shall  be  taken  of  the  Community's  indicative  objectives  relating  to  clean "coal  technologies.  These 
objectives  are to be reviewed with the Energy Committee (see Article 7.2)  on a year by year basis. 

Article 2 

Within  the Framework  Programme  for  Energy,  the  Community  shall  support  a  series  of  actions  to 
promote  the  exploitation  of  clean  solid  fuel  technologies  within  the  context  of  the  specific 
programme  CARNOT  (actions  for  greater  penetration  and  exploitation  of  clean  solid  fuel 
technologies), hereinafter  referred  to as 'the programme' 

The programme shall last for five years, from  1  January  1998 to 31 December  2002 

The annual appropriations  are authorised  by the budgetary authority within the ceiling of the  financial 
perspectives. 

Article 3 

Two  categories  of  actions  on  clean  solid  fuel  technologies  shall  be financed under  the  programme, 
namely: 

a) 
Measures to  foster  the creation  of an information  network  aimed  at  promoting  better  market 
and  technical  information  between  national,  Community  and  international  activities  through  the 
establishment  of  appropriate  means  for  exchanging  information,  helping  to  remove  barriers  and 
evaluating the impact of the various actions provided for in this article: 

b) 
Measures to foster  industrial  strategic cooperation,  such as business workshops  and seminars, 
industrial  on-site  visits,  studies,  evaluations  and  concertation  groupings,  aimed  at  promoting  the 

113 

industrial  exploitation  of  clean  technologies  for  energy  purposes,  in  particular  heat  and  power 
production.  This will include the promotion of exports of European clean solid fuel  technology. 

Article 4 

All costs relating to the actions referred  to in Article 3 a) shall be borne by the Community. 

The level of funding  for  the actions referred  to in Article  3 b)  shall be between  30 and  50% of their 
total cost. 

The  balance  of  the  funding  of  the  actions  referred  to  in  Article  3  b)  may  be  made  up  from  either 
public or private sources or from  a combination of the two. 

Article 5 

The  Commission  shall  establish  guidelines  for  the  support  measures  referred  to  in Article  3 b)  each 
year, in consultation with the committee provided for in Article 7.1. 

The proposed  initiatives  referred  to  in Article  3 and the  list  of bodies  which  are  to  implement  them 
shall be submitted  annually by the Member  States to the Commission,  which shall decide on the level 
and  conditions  of  Community  funding  according  to  the  procedure  provided  for  in  Article  7.  The 
Commission  shall sign contracts relating to the support  measures with those bodies. 

Article 6 

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

For  the  implementation  of the  actions  referred  to  in Article  3 a)  and  b)  the  Commission  shall  apply 
the procedure laid down in Article 7. 

The  Commission  shall  be  assisted  by the  Committee  referred  to  in article  4  of the  Council  decision 
setting up a multiannual Energy Framework Programme. 

Article 7 

Article 8 

1. 
During  the  third  year  of  the  programme,  the  Commission  shall  present  a  report  to  the 
European Parliament  and to the Council  on the results achieved.  The report  shall be accompanied  by 
proposals for any amendments which might be necessary in the light of these results. 

On  expiry  of  the  programme,  the  Commission  shall  assess  the  results  obtained,  the 
2. 
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. 

114 

Article 9 

The programme shall be open to associated Central and East European countries in accordance with 
the  conditions,  including  financial  arrangements,  agreed  on  in  the  Additional  Protocols  to  the 
Association Agreements, for participation in Community programmes. The programme shall be open 
to  Cyprus  on  the  basis  of  additional  appropriations  in  accordance  with  the  same  rules  as  those 
applied to the EFTA countries following procedures to be agreed on with the countries concerned. 

This Decision is addressed to the Member States 

Article 10 

Done at Brussels, 

115 

FINANCIAL STATEMENT 

1.  Title of the operation 

Programme of technological actions promoting the clean use of solid fuels.4 

2.  Budget heading 

B4-1004 

3.  Legal basis 

Proposal  for  a Council Decision  adopting  a framework  programme for  actions in the energy 
sector (1998-2002). 

4.  Description of the action 

4.1.  General objective 

Actions  to  promote  the  industrial  penetration  of  clean  and  efficient  technologies  for 
coal utilisation are the means whereby coal can make an important  contribution to the 
objectives of EU energy policy. 

- 

- 

- 

through  its contribution  to  security  of supply and the competitiveness  at European 
level of a primary energy  source which accounts for  30% of electricity production, 
and diversification of resources at low and stable prices; 

through the established  potential  of a 25% reduction  in CO2 emissions from  power 
stations through increased  efficiency; 

through  its  contribution  to  Community  action  to  combat  acidification  and  other 
pollutants. 

A Community action to promote clean coal will complement the incorporation into the 
Treaties  of  the  specific  coal  provisions  of  the  ECSC  Treaty  and  help  the  CEEC 
applicants to adapt to the environmental standards of the Union. 

This action will also  enable the results  of RTD supported  by the European  Coal and 
Steel  Community  (ECSC)  technical  research  programme  or  by  national  RTD 
programmes to be applied in industry.  The new programme does hot provide for any 
RTD actions as such, as these are already covered by the abovementioned programmes. 

4.2 

Period covered 

5 years from  1  January 1998 to 31 December 2002. 

5.  Classification  of expenditure 

NCE/DA 

116 

6.  Type of expenditure  or revenue 

The programme will be made up of two categories of actions: 

a)  Measures leading to the creation  of an information  network  aimed  at promoting  commercial 
opportunities  and  technical  information  among  national,  Community  or  international 
activities. 

b)  Measures  to  foster  industrial  strategic  cooperation,  such  as  business  workshops  and 
seminars, industrial  on-site visits, studies, evaluations and concertation groupings,  aiming at 
promoting the  industrial  exploitation  of clean  coal technologies,  including the  promotion  of 
exports of European  technology. 

100% funding  for  actions described in point a). 
Up to 50% for  cofiinding for  actions in point b). 

7.  Financial  impact 

7.1  Method  of calculating total cost of  operation 

The amount will be fixed annually by the budgetary  authority. 
The proposed  amount is ECU 4.10 million for the entire programme. 

It breaks down  as follows: 

Horizontal  actions 

measures  to  stimulate the creation  of an information  network  with the aim 
of  obtaining  better  information  on  the  market  and  technologies.  The 
necessary  information  could  be incorporated  into  data bases which will be 
available  for  example  on  the  Internet.  Consideration  will  be  given  to  one 
member  of the  network  per Member  State, which  at  the  same time would 
play  the  role  of  server  for  the  network  and  disseminate  the  information. 
This network  would  be coordinated  with  other  existing  networks,  such  as 
the Relay Centres or the OPET. 

ECU  1.54  million 

ECU 2.56 million 

(for 

the  following 

ten  market  studies 

measures  such  as  the  organisation  of  workshops,  conferences  on  the 
funding  of  clean  coal  technologies  and  conferences  whose  aim  is  to 
disseminate information  on such technologies.  Consideration  will be given 
to 
GICC, 
Ultrasupercritique,  NOx  systems,  SOx  systems,  atmospheric  circulating 
fluidised  bed,  pressurised  circulating  fluidised  bed,  pressurised  stationary 
fluidised  bed,  low-cost  pulverised  coal,  among  others)  as  well  as  eight 
business  workshops  of  a  technical,  economic  and  financial  nature  to 
facilitate  the use of the technologies.  Also, the possibility  of supporting  15 
feasibility  studies for various  specific  projects  of the type mentioned  above 
is  being  kept  open.  In  all  these  actions,  the  "market  in  third  countries" 
element will be a priority  factor. 

technologies: 

actions  to  promote  exports  of  clean  coal  combustion  technologies.  These 
actions could  cover activities such as those described  above as well as, 

workshops  aimed  at identifying  opportunities  for  international  cooperation 
and possible obstacles to investments in advanced technologies, at the level 
7 

117 

of both  energy  efficiency  and  control  of  emissions.  Consideration  will be 
given  to  4  and  7  industrial  missions  in  third  countries  and  the  EU 
respectively.  For  each  of  these  missions,  some  30  businessmen  will 
establish  contact  and  visit  existing 
facilitating 
professional  relations  and  the  decision-making  process.  The  actions 
mentioned  here will cover all coordination  expenses as well  as, in the  case 
of  third  country  missions  in  the  EU,  a  part  Of the  cost  of  travelling  on 
Community territory. 

installations, 

thus 

7.2 

Itemised breakdown  Tin million ECU) 

1998 

1999 

2000 

2001 

2002 

Total 

0.3 

0.31 

0.31 

0.31 

0.31 

1.54 

Measures  leading  to  the 
an 
creation 
information  network 

of 

Promotion  measures 

0.50 

.0.51 

0.51 

0.52 

0.53 

2.56 

TOTAL 

0.80 

0.81 

0.82 

0.83 

0.84 

4.10 

8.  Fraud prevention  measures;  results  of measures taken 

* 

The contracts awarded  are paid on the basis of actual expenditure and after  verification  (with the 
exception of study costs which are flat-rate  and paid on the basis of the results accepted). 

9.  Elements of cost-effectiveness  analysis 

9.1. 

Specific  objectives  of  the  action  to  be  carried  out  under  the  Energy  Framework 
Programme  (1998-2002) 

To  complement  action  by  the  Member  States  and  industry  so  as  help  achieve  the  Community 
objective  of  reducing  greenhouse  gas  emissions  by  15%  compared  with  1990  levels,  and  to 
combat  acidification.  Contribution  to  a  reduction  in  CO2  emissions  throughout  the  world 
through the transfer  of technology. 

Target  population 

-  National,  regional  and  urban  European  agencies  and  bodies  promoting  clean  and 

efficient  technologies; 

-  Electricity  industry  and  manufacturers  of  coal  combustion  installations  in  the 

European Union; 

-  Agencies, governments and industry in third countries,  mainly China, India, Asia and 

other regions which are expected to be major  coal consumers. 

\  9 
J LO 

9.2. 

Grounds for the operation 

Costs 

According  to  the  studies  available  to  the  Commission,  for  the  period  covered  by  the 
programme,  an investment  potential  of ECU  15 800 million  has been identified  for new 
clean  coal  installations  in  the  European  Union.  This  amount  will  be  used  mainly  to 
upgrade  indigenous  coal  and  lignite produced  under  satisfactory  economic  conditions. 
When EU dependency on energy imports is expected  to rise to  70% in 2020,  economic 
upgrading of Community resources is very important. 

It  costs  ECU  500  to  remove  a  tonne  of  SO2.  If  one  considers  that  the  Community 
strategy  against  acidification  calls  for  a  reduction  in  annual  SO2  emissions  from 
combustion  plants  of  around  9 million  tonnes  (between  1990  and  2010),  the  potential 
benefit  of  the  application  of  clean  coal  technology  merely  in  terms  of  a  reduction  in 
SO2,  would  be  around  ECU 4 500 million  per  year.  The  benefits  in  terms  of  a 
reduction in NOx are even greater. 

In terms of CO2, a 5% improvement  in the efficiency  of electricity generation from coal 
in the European  Union would  produce  a reduction  in CO2 of  some  100 million  tonnes 
per year. 

Spin-off  effects 

The actions supported  under this programme will meet the following  criteria: 

-  make  a  significant  contribution  to  environmental  protection  and  control  of  the 

greenhouse  effect, 

-  exercise a stabilising effect  on energy prices at world level, 

- 

improve the balance of payments of the European Union, 

-  make European  industry more competitive on the world  market, 

- 

improve  security  of  supply  for  the European  Union  and  make  it  less  vulnerable  to 
disruption  in the energy market, 

-  help to achieve the internal market and economic and social cohesion. 

Moreover,  the  availability  of  high  efficiency  energy  technologies  makes  it  possible  to 
transfer 
technology  to  third  countries  and  thus  contributes  to  better  resource 
management  and environmental  protection  at world level. 

9.3. 

Monitoring  and  evaluation  of the  operation 

Performance  indicators selected 

reduction  of C02  emissions, 

number of initiatives proposed,  accepted  and adopted by industry, 

private investments intthe promoted  projects, 

number of conferences,  seminars, newsletters and other publications, 

degree of use of the information  network  created. 

119 

Details and frequency of planned evaluations 

Moreover, the Commission will report on a regular basis to the Programme Committee 
made  up  of  representatives  of  the  Member  States  meeting  in  accordance  with  the 
procedure. 

This report will be sent to the Council and the European Parliament in accordance with 
Article 7 of the attached proposal for a Council decision. 

The evaluation must also examine: 

past  and  present  guidelines  for  the  programme  in  a  search  for  possible 
improvements, 

the relationships between the resources employed and the results obtained, 

actual  and  potential  ways  in which these  programmes  complement  other  existing 
instruments. 

10.  Administrative  expenditure 

The necessary  resources  are funded  from the existing  appropriations  of  the  services  managing 
the programme. 

10 

1 9 0 

Table of financial  considerations 

Budget (million ECU) 

Activities Article 3 

Number 

factions 

•venge  unit 
cost 

1998 

1999 

2000 

2001 

2002 

Total 

'ECU): 

a) Measures to stimulate the creation 
of  an  information  network  on  the 
market and technologies 
-  cost  associated  with  network 
hardware 
- cost of servers (private or public) 
- costs associated with the operation of 
the  network  and  the  creation  of  a 
database 

1 

155 

0.20 

0.02 

0.10 

0.21 
0.10 * 

0.21 
0.10 

0.21 
0.10 

0.21 
0.10 

0,20 

0.84 
0.50 

SUB-TOTAL 

-

-

0.30 

0.31 

0.31 

0.31 

0.31 

1.54 

b) Marketing, feasibility  studies  and 
other investment incentives 
- Market studies 
- "Business workshops" 

1 
10 

0.20 
0.10 

0.20 
0.10 

0.20 

0.21 

0.22 

0.23 

c)  Promoting  exports  of  clean  coal 
technologies to third countries 
-  Industrial  missions  by  European 
businessmen in third countries 
- Industrial missions by third countries 
in the EU 

2 

0.30 

0.30 

0.30 

0.30 

0.20 

0.30 

SUB-TOTAL 

GRAND TOTAL 

-

-

-

-

0.50 

0.50 

0.51 

0.52 

0,8 

0.81 

0.82 

0.83 

0.30 

0.53 

0.84 

0.20 
1.96 

0.60 

0.80 

2.56 

4.10 

Number of servers. 

11 

121 

EUROPEAN COMMISSION 

ANNEX VII 

Introduction 

OF MULTIANNUAL ACTIONS CONCERNING NUCLEAR 

SAFEGUARDS AND TRANSPORT OF 

RADIOACTIVE MATERIALS 

(1998 - 2002) 

199 

X 

/w A-» 

FINANCIAL STATEMENT 

1. TITLE OF OPERATION 

a. 

Nuclear industry cooperation and transport of radioactive materials 

- Transport of radioactive materials:  problems of safeguards, health protection and nuclear 
safety technologies. 

-  Industrial  cooperation  in  the  civil  nuclear  sector  with  the  Central  and  East  European 
Countries (CEEC), Russia and the Ukraine. 

b. 

Training  safeguards  experts  from  the  CEEC  and  the  New  Independent  States  (NIS)  -
Establishing a fissile materials compatibility and control system in Russia. 

2. BUDGET HEADING INVOLVED 

a. 

b. 

B4-1020  of  the  General  Budget  of  the  European  Communities  (Nuclear  industry 
cooperation and transport of radioactive material) 

B7-535 of the General Budget of the European Communities (Training and implementation 
of safeguards). 

3. LEGAL BASIS 

Chapters EI and X of the EAEC Treaty (Euratom Treaty), plus: 

a. 

b. 

Article 75 of the EC Treaty (common transport policy) and the 
Council  Resolution  of  22  July  1996  on  technological  problems  connected  with  nuclear 
safety (JO No C 185 of 14 August  1996, p. 1). 

Council  Resolution  of  22  July  1996  on  technological  problems  connected  with  nuclear 
safety  (JO  No  C  185  of  14  August  1996,  p.  1),  and  Resolution  16  in  EP  document 
217.774/final  of  11  July  1996  "East-West  cooperation  activities  in  energy  and  nuclear 
security". 

European  Parliament  Resolution  of  9  April  1992  on  nuclear  safety  in  the  countries  of 
Central and Eastern Europe and the Commonwealth of Independent  States (JO No  C 125 
of  18 May  1992, p. 244)  and the European Parliament  Resolution  of 29  September  1994 
(PE-B4-00621) on illicit trafficking  in nuclear materials and 
Commission  communication  of  19 April  1996  on  illicit  trafficking  in  nuclear  materials 
and radioactive  substances (COM (96)  171 final). 

123 

4. DESCRIPTION OF OPERATION 

4.1. General objective 

The objectives of the action programme are to improve nuclear safety and safeguards. 

a. 

Improving nuclear safety in general, particularly by working to improve: 

the transport of radioactive materials by: 

- 
•  facilitating 

the  operation  of  the 

internal  market  by 

identifying 

justifiable 

harmonisation  measures 

•  helping improve legislation further  by developing experimentation  and  know-how 
•  evaluating  incidents which  have  occurred  during  transport  and  learning  lessons  for 

the  future 

•  making  emergency  procedures  more  consistent  and  giving  those  involved  more 

training 

•  cooperating with CEEC and NIS to help them improve transport  safety  in their own 

countries 
improving public information,  comprehension and awareness in this area. 

• 

-  Long-term  nuclear safety  in Eastern Europe, Russia and Ukraine.  These countries  fully 
intend  to  continue  to  use  nuclear  power  as a major  source  of  energy.  In  addition  to 
short-term measures carried out under assistance programmes designed to solve specific 
problems, these countries must be helped to develop a quality and safety approach to the 
whole of the nuclear industry.  This is a long-term measure which will be possible only 
through  close  cooperation  between  industry  in the EU  and  in Eastern  Europe.  As a 
means  of  encouraging  cooperation,  the  Commission  should  help  to  identify  general 
(industrial, financial and legal) barriers and support pilot ventures where appropriate. 

b. 

Helping  to  establish  a  system  of  effective  and  reliable  safeguards  in the NIS  and  CEEC 
through cooperation in the following areas: 

training and retaining of nuclear safeguards  experts 

- 
-  establishing a fissile materials compatibility and control  system in Russia 
- 

installing control equipment under (b). 

4.2. Period covered 

Five years.  The operation should begin in 1998 and continue until 2002. 

5. CLASSIFICATION OF EXPENDITURE 

Non-compulsory expenditure 

124 

6. TYPE OF EXPENDITURE 

a. 

Subsidies for joint financing with other sources in the private and/or private sectors.  In 
some cases, the Commission of the European Communities could  fund  up to  100% of 
proposals which it considers to be of extreme interest but which cannot be financed jointly 
by other sources (e.g. cooperation with East European countries). 

b. 

Subsidies/financing for: 

-  vocational  training  classes  and  courses  for  safeguards  experts  in  the  European 
Union and/or  in the NIS  and CEEC, including their costs (travel, daily allowance, 
etc.) 

-  seminars for experts in the EU and/or the NIS 

-  visits by experts to nuclear plants in the European Union and/or NIS 

-  the necessary equipment, logistical and DP support 

-  translation and interpreting costs 

- 

travel  expenses  of  the  ESD  staff  and  EU  experts  chosen  to  carry  out  the  above 
activities 

-  taking, transporting  and  analysing samples, including samples taken  in the context 

of illicit trafficking  in nuclear materials. 

7. FINANCIAL IMPACT 

7.1. Method of calculating total cost of operation (link between unit costs and total cost) 

The  following  amounts  should  be  earmarked  to  cover  the  objectives  of  this  multiannual 
programme: 

a. 

B4-1020 

Implementation of the programme for the  period from  1998 to 2002. 

-  some  ECU 0.5 million  a  year  for  transport  of  radioactive  materials.  Financing 
requirements were put at ECU 2 million a year (exceeding current forecasts) by the 
Permanent Working Party for the Transport of Radioactive Materials at its meeting 
on 23 September  1997 in Brussels, on the basis  of the work  already  done  on the 
budget for  1996 and 1997 and all the measures to be carried out in 1998 and 1999. 

-  some  ECU 0.1 million  a  year  as  of  2000  for  nuclear  industry  cooperation  with 
Eastern Europe. These requirements were worked out at ECU 0.5 million a year on 
the basis of the results of a study on industrial  cooperation  being conducted with 
Russia. 

b. 

B7-535 

Implementation of the programme for the period from 1998 to 2002. 

-  The cost of this action has been put at ECU 2.5 million a year, on the basis of the 
resources used up to now for assistance on safeguards given to the CEEC and NIS 
and the objectives  still to  be achieved,  which means that  the total  cost  should  be 
ECU 12.5 million. 

7.2. Itemised breakdown of cost 

Nuclear industry cooperation and transport of radioactive materials 
(B4-1020) 

Breakdown 

EC in ECU million (at current prices) 

1998  1999 

2000 

2001 

2002 

Transport of nuclear materials 
Operation of the single market and harmonisation 
Studies  on 
incidents  and  accidents  during 
transport - Emergency measures 
Assistance to CEEC and NIS 
Public awareness 

Sub-total 

0.2 
0.2 

0.1 
0.0 
0.5 

0.2 
0.2 

0.1 
0.0 
0.5 

0.2 
0.1 

0.1 
0.0 
0.4 

0.1 
0.1 

0.1 
0.1 
0.4 

0.1 
0.1 

0.1 
0.1 
0.4 

Industrial cooperation 

Evaluation of the situation in the NIS 
Bringing industrialists together 
Sub-total 

p.m. 
p.m. 
p.m. 

0.01 
p.m. 
0.01 

0.02 
0.1 
0.12 

0.03 
0.1 
0.13 

0.04 
0.1 
0.14 

TOTAL 

0.5 

0.51 

0.52 

0.53 

0.54 

foLG 

b. 

Training experts and implementing safeguards (CEEC and NIS) 
(B7-535) 

Breakdown 
Safeguards training 
Approximation to the Euratom system 
Illicit  trafficking 
Improving legislation 
TOTAL 

EC in ECU million (at current prices) 

1998 
0.75 
0.75 
0.50 
0.50 
2.5 

1999 
0.75 
0.75 
0.50 
0.50 
2.5 

2000 
0.75 
0.75 
0.50 
0.50 
2.5 

2001 
0.75 
0.75 
0.50 
0.50 
2.5 

2002 
0.75 
0.75 
0.50 
0.50 
2.5 

7.3. Operational expenditure on studies, experts, etc. included in part B of the budget 

a. 

Nuclear industry cooperation and transport of radioactive materials 
(B4-1020) 

Studies - experiments 
Support for pilot ventures 
Meetings of experts-
Total 

1998 

0.4 

0.1 
0.5 

0.41 

2000 

2001 

EC in ECU million (at current prices) 
1999 
2002 
0.34 
0.1 
0.1 
0.54 

0.33 
0.1 
0.1 
0.53 

0.32 
0.1 
0.1 
5.2 

0.0 
0.1 

0.51 

b. 

Training experts and implementing safeguards (CEEC and NIS) 
(B7-535) 

1998 

EC in ECU million (at current prices) 
2001 

2000 

2002 

1999 

training  classes  and 

-  Specialised 
courses 
-  Seminars 
-  Visits by experts to nuclear plants in 

the EU 
-  Equipment, 
support 

logistical 

and  DP 

-  Travel  expenses  of  officials  on  the 
spot (including help for operators in 
their own plants) 

0.75 
0.50 

0.75 
0.50 

0.75 
0.50 

0.75 
0.50 

0.75 
0.50 

0.15 

0.15 

0.15 

0.15 

0.15 

0.8 

0.8 

0.8 

0.8 

0.8 

Total 

0.2 
2.5 

0.2 

2.5 

0.2 
2.5 

0.2 

2.5 

0.2 
2.5 

1  on 

J-  /-v  a' 

7.4.  Schedule:  commitments and payments in ECU 

a. 

Nuclear industry cooperation and transport of radioactive materials 
(B4-1020) 

1998 
0.5 

1999 
0.51 

0.8 

0.15 
0.36 

Appropriations for  commitment 

Appropriations for  payment 

1998 
1999 
2000 
2001 
2002 
2003 

0.52 

0.15 
0.37 

EC in] 
2000 

on 

ECUmilli 
2001 
0.53 

2002 
0.54 

2003 

0.15 
0.38 

0.15 
0.39 

0.15 

0.8 

0.51 

0.52 

0.53 

0.54 

0.15 

b. 

Training experts and implementing safeguards (CEEC and NIS) 
(B7-535) 

Appropriations for  commitment 
Appropriations for  payment 

1998 
1999 
2000 
2001 
2002 
2003 

1998 
2.0 

1999 
2.0 

1.5 

2.5 

EC in] 
2000 

on 

ECU milli 
2001 
2.0 

2002 
2.0 

2003 

2.0 

2.0 

2.5 

2.5 

2.5 

1.0 

1.5 

2.5 

2.5 

2.5 

2.5 

1.0 

8. FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN 

a. 

Call  for  proposals  each  year  during  the  period  from  1998  to  2002.  Evaluation  and 
selection of proposals by a Commission committee of experts in this field on the basis 
of: 

technical scientific merit 

- 
-  an analysis of the financial data on each proposer. 

128 

After signature of the contract: 

•  scrutiny  of  statements  of  expenditure  before  payment  at  various  levels  (financial 

manager, scientific manager); 
internal audit by the financial controller; 

• 
•  continual  on-the-spot  inspections,  checking  supporting  documents,  checking  for 

errors or other irregularities. 

Checking  invoices  against  expenditure  actually  incurred  and  against  the  guide  to 
missions  for  the  duty  travel  expenses  of  officials  and  experts,  costs  of  meetings and 
costs of conferences. 

9.  ELEMENTS  OF COST-EFFECTIVENESS  ANALYSIS 

9.1. Specific  and quantified  objectives, target  population 

9.1.1. Specific and quantified objectives. 

a. 

Nuclear industry cooperation and transport of radioactive materials 

Transport of radioactive materials 

-  Facilitating the operation of the internal market by identifying justifiable harmonisation 

measures: 

•  harmonising  methods  for  evaluating  conditioning  safety  in  accordance  with  the 

regulations; 

•  harmonising conditioning standards and of the level of intrinsic safety of materials. 

-  Helping to improve legislation further by developing experiments and know-how. 
-  Evaluating incidents which occurred during transport and learning lessons for the future. 
-  Making emergency procedures more consistent and giving those involved more training. 
-  Cooperating with CEEC and NIS to help them improve transport  safety in their own 

countries (some of them will be negotiating accession to the Community). 
-  Improving public information, comprehension and awareness in this area. 

Nuclear industry cooperation 

-  Identifying  specific  barriers to  cooperation  between  industries,  within  the  context  of 
existing  industrial,  financial  and  legal  structures,  with  a  view  to  establishing  a 
market-orientated approach in the East;  proposing ways of facilitating cooperation. 
-  Establishing an information/contact network between industrialists in the EU and in 

Eastern Europe. 

129 

b. 

Training experts and implementing safeguards (CEEC and NIS) 

Following  the  political  upheavals  in  the  Eastern  bloc  and  in  view  of  cases  of  illicit 
trafficking  in  nuclear  and  radioactive  materials  from  the  East,  it  is  essential,  in 
accordance  with  the  resolutions  of  the  European  Parliament  and  the  policy  of  the 
Council and the Commission, to provide for the on-going training of local operators to 
control nuclear materials in the power plants of these countries.  It is also necessary to 
set up an effective  nuclear materials control and compatibility system. 

The  aim  of  the  programme,  which  already  started  between  1993  and  1996  (budget 
heading B4-2001), will be to continue with and to develop on-the-spot  actions in close 
cooperation with the  operators.  The proposed  actions will  concern  the  compatibility 
of  nuclear  materials,  physical  inventory-taking  procedures,  computerised  nuclear 
material  accounting  by the plant  and the  central  control  body,  the  organisation  of an 
independent  inspectorate  and  the  establishment  of  monitoring  and  measurement 
systems. 

The  Commission  considers  that  the  scope  of  the  problem  justifies  continuing  this 
action since the work already done has given encouraging results. 

9.1.2. Target population 

All citizens of the EU, CEEC and NIS. 

Transporters of radioactive materials. 

Those in the nuclear industry. 

National safety and safeguards authorities. 

Nuclear  safety  safeguards,  control  experts  from  the  CIS  and  the  nuclear  plants  of  these 
countries. 

International organisations concerned with nuclear safety and safeguards. 

9.2. Grounds for the operation 

9.2.1. Need for  Community financial  aid 

a. 

Nuclear industry cooperation and transport of radioactive materials 

Transport of radioactive materials 

130 

In order to support these activities and at the request of the European Parliament,1 the 
Commission  in  1982  established  a  Permanent  Working  Party  of  national  experts 
technically  responsible  for  the  safe  transport  of  radioactive  materials.  The  Working 
Party  organised  exchanges  of  information  on  the  application  of  regulations  on  the 
international transport of radioactive materials between Member States and outside the 
European Union.  The Working Party proposed guidelines for an action programme on 
this  subject  to  be  prepared  by  the  Commission,  with  the  aim  of  providing  the  basic 
knowledge required to improve international regulations. 

The Commission was also asked to  provide the European Parliament  and the Council 
with  regular  information  on  new  developments  in  the  transport  of  radioactive 
materials, and on the recommendations prepared by the Working Party. 

In  1996  the  European  Parliament  reinstated  the  budget  heading  on  the  transport  of 
radioactive materials.2  The heading was allocated ECU 2 million in appropriations for 
commitment for  1996, and for  1997 was allocated ECU 0.7 million. 

The  total  amount  committed  for  1996-97  was  ECU 2 661 971  (98.59%  of  the 
resources available). 

At  its  last  meeting  in  Brussels  on  23  September  1997,  the  Working  Party 
re-emphasised  the  importance  of  implementing  a  multiannual  programme  (over  five 
years) in this sensitive area with substantial funding (ECU 2 million a year). 

Nuclear industry cooperation 

To  date the  Commission  has  been  concentrating  on  short-term  measures  to  improve 
nuclear safety problems in the East.  Action has been focused  primarily on those power 
plants  still  operating,  in  terms  of  analysing  safety,  providing  operational  support 
(operational  safety)  and purchasing  equipment  from the West.  Since  these  countries 
intend  to  continue  to  use  nuclear  power  in  the  long  term,  the  processes  for 
manufacturing  parts  and  equipment  locally  must  be  improved  in  order  to  provide 
components  whose  quality  is  a  guarantee  of  safety.  One  way  of  doing  this  is  to 
improve cooperation between the industry in the Union and in the East, by overcoming 
the barriers to  this  cooperation.  The  Commission  can play  a guiding  role  by helping 
with general analysis, contacts and information,  and even by supporting pilot ventures. 

1 

2 

European Parliament Resolution published in OJ No C40 of 15.2.1982, p. 43. 

General Budget of the European Communities for 1996 - budget heading No B4-1020. 

1 ^1 
J-  ^  -L. 

b. 

• Training experts and implementing safeguards (CEEC and NIS) 

This  is  one  of the key  elements  for  achieving  the  objectives  established  by the Essen 
European  Council,  in  accordance  with  the  European  Parliament  Resolution  and  the 
Commission Communication.  It also ties in perfectly with the general objectives of the 
Union to improve the operating conditions of nuclear plants in Eastern Europe. 

Moreover,  the  problems  of  improving  the  control  of  nuclear  materials  and,  by 
extension,  reducing  illicit  trafficking  in  nuclear  materials  were  the  subject  of  an 
important declaration by the G8 countries at the Moscow Summit in April 1996. 

In addition,  informal  procedures have been established  for  achieving  complementarity 
between  activities  organised  by third countries  (USA  and Japan),  the  Member  States 
(UK,  France,  Sweden and Finland) and the IAEA,  and those  organised through Phare 
and Tacis. 

It is important to make it clear that, unlike with Phare and Tacis, the training of experts 
and  the  implementation  of  projects  is  essentially  the  task  of  the  Euratom  inspectors, 
who have the requisite experience.  Proper monitoring requires frequent visits to sites, 
the routing  of equipment  and the ability to  adapt  swiftly  to  needs  as they  arise.  It  is 
essential to act quickly and very flexibly. 

9.2.2.  Choice of ways and means 

This project will be financed by subsidies and financial aid. 

9.3. Monitoring  and evaluation  of the operation 

a. 

Nuclear industry cooperation and transport of radioactive materials 

Transport of radioactive materials 

This  action  should  make  it  possible  to  check  whether  existing  regulations  are  being 
correctly  applied,  to  determine the need to  improve them  and to  help  to  establish the 
internal  market.  If  necessary,  this  action  should  result  in  further  measures  by  the 
Commission  to  harmonise  legislation  or  practices  concerning  the  transport  of 
radioactive materials in the EU. 

To  help  Central  and  East  European  Countries  and  the  CIS  and  those  joining  the 
Community or operating in its territory. 

One  objective  still  to  be  achieved  is  to  improve  information  to  the  public  on  the 
transport of radioactive materials.. 

10 

1 °,^ 

JL  xJ  fj 

Nuclear industry cooperation 

Fuller understanding  of  local  industrial  problems  and  support  for  a  market  approach 
should generally  help to  improve  economic  development  in Eastern Europe,  which is 
also in the interests of the Union. 

b. 

Training experts and implementing safeguards (CEEC and NIS) 

Performance indicators: 

If this action is successful  it should ensure that in Eastern Europe nuclear materials will 
be subject to more rigorous control, as in the European Union.  The best  indicator  of 
success will be that nuclear energy is used only for peaceful purposes. 

Measuring the activities used: 

To  give  some  idea,  in  1995  the  Safeguards Directorate  launched  27  activities,  ten in 
Russian territory and  17 within the European Union, chiefly  in Luxembourg,  with  103 
experts from Eastern Europe participating in one or more of these activities for a total 
of 850 man-days.  To this total should be added the number of days spent by Euratom 
staff on these various activities. 

10. Administrative  expenditure 

a. 

b. 

Nuclear industry cooperation and transport of radioactive materials 
The proposed annual commitments are less than the level of commitments in 1996. The 
human resources allocated to them in 1996 and 1997 correspond to  1.5 B officials and 
0.25 A officials.  Thus no additional resources will be required. 

Training experts and implementing safeguards (CEEC and NIS) 
Between  1993 and  1996 the Commission was able to manage and absorb the activities 
provided for in heading B4-2001  without requiring any additional staff and despite the 
workload arising from the obligations in Chapter 7 of the Euratom Treaty.  To date, no 
additional resources have been requested. 

11 

13 

XJ 

ISSN 0254-1475 

COM(97) 550 final 

DOCUMENTS 

EN 

12  01 

Catalogue  number  :  CB-CO-97-643-EN-C 

ISBN  92-78-28180-8 

Office  for Qfficial  Publications of the European  Communities 

L-2985  Luxembourg 

1  A 
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