Communication from the Commission - Energy for the future: renewable sources of energy - White Paper for a Community strategy and action plan
Date: 1997-11-26
Institutions: Directorate-General for Energy, European Commission
Subjects: EU policy, EU programme, action programme, energy policy, energy technology, environmental protection, renewable energy

. COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

Brussels,  26.11.1997 
COM(97)  599  final 

COMMUNICATION FROM THE COMMISSION 

ENERGY FOR THE FUTURE: 
RENEWABLE SOURCES OF ENERGY 

White Paper for a Community Strategy 
and Action  Plan 

TABLE OF CONTENTS 

1 

Setting the Scene 

1.1 

The General Framework 

1.1.1 

lntroductiQn 

1.1.2 

The Current Situation 

1.1.3 

The Need for a Community Strategy 

1.2 

1.3 

1.3.1 

1.3.2 

1.3.3 

1.4 

2 

2.1 

2.2 

2.2.1 

2.2.2 

2.2.3 

2.2.4 

The Debate on the Green Paper 

Strategic Goals 

An Ambitious Target for the Union 

Member States Targets and Strategies 

Possible Growth of RES by Sector 

Preliminary Assessment of some of the costs and benefits 

Main Features of the Action Plan 

Introduction 

lnJernal Market Measures 

Fair Access for Renewable to the Electricity Market 

Fiscal and Finance Measures 

New Bioenergy Initiative for Transport, Heat and Electricity 

Improving building regulations: its impact on town and country 
planning 

2.3 

Reinforcing Communi!Y Policies 

2.3.1 

Environment 

2.3.2 

2.3.3 

2.3.4 

2.3.5 

Growth, Competitiveness and Employment 

Com petition and State Aid 

Research, Technology, Development and Demonstration 

Regional Policy 

1 

p.4 

p.4 

p.4 

p.4 

p.6 

p.8 

p.9 

p.9 

p.10 

p.10 

p.11 

p.14 

p.14 

p.14 

p.14 

p.15 

p.16 

p.18 

p.18 

p.19 

p.19 

p.19 

p.20 

p.20 

2.3.6 

2.3.7 

2.4 

2.5 

2.5.1 

2.5.2 

2.5.3 

Common Agricultural Policy and Rural Development Policy 

External Relations 

Strengthening co-operation between Member States 

·Support Measures 

Targeted promotion 

Market Acceptability and Consumer Protection 

Better positioning for RES  on the institutional banks and 

commercial finance market 

2.5.4 

Renewable Energy Networking 

3 

Campaign for take-off 

3.1 

Introduction 

3.2 

Key Actions 

3.2.1 

1.000.000 photovoltaic systems 

3.2.2 

10.000 MW of large wind farms 

3.2.3 

10.000 Mwth  of biomass installations 

3.2.4 

Integration of Renewable Energies in 100 Communities 

3.3 

Estimates of some of the costs and benefits 

4 

Follow-up and Implementation 

4.1 

4.2 

4.3 

Implementation and Monitoring of Progress 

Internal Co-ordination of E.U.  Policies and Programmes 

Implementation by Member States and Co-operation at 

EU  level 

4.4 

Implementation of Action Plan - Next Steps 

p.21 

p.23 

p.24 

p.25 

p.24 

p.25 

p.25 

p.26 

p.27 

p.27. 

p.27 

p.27 

p.29 

p.29 

p.30 

p.30 

p.32 

p.32 

p.32 

p.32 

p.33 

2 

p.34 

p.37 

p.37 

p.39 

p.40 

p.40 

p.41 

p.42 

p.42 

p.43 

p.43 

p.43 

p.43 

p.45 

p.47 

p.48 

p.49 

ANNEXES 

Preliminary Indicative Action Plan for RES  1998-201 O 

II 

Estimated Contributions by Sector - A scenario for 201 o 

11.1 

11.2 

11.3 

11.4 

11.5 

11.6 

11.7 

11.8 

11.9 

Biomass 

Hydro Power 

Wind Energy 

Solar Thermal 

Photovoltaics 

Passive Solar 

Geothermal and Heat Pumps 

Other Renewable Technologies 

Achieving the Overall Community Objective for RES 

11.10 

Estimated RES contributions in Electricity and Heat 

generation 

11.11 

Assessment of some of the costs and benefits 

Ill 

Member States plans and actions for RES  development 

1. 

1A 

2. 

3. 

4. 

5. 

6. 

TABLES 

Share of Renewable Energy Sources in Gross Inland Energy 
Consumption 

Estimated contributions by Sector in the 2010 scenario 

Current and Projected Future Gross Renewable Energy 

Consumption {Mtoe) for 201 O 

Current and Projected Electricity Production by RES for 2010 

p.50 

Current and Projected Heat Production {Mtoe) for 201 O 

Estimated Investment costs and benefits of the ·overall 
Strategy in the 2010 scenario 

Estimated Investment costs and benefits by sector 

p.51 

p.52 

p.5::-

3 

Chapter 1 

Setting the Scene 

1.1 

The General Framework 

Introduction 

1.1.1 
Renewable  sources  of energy are  currently  unevenly and  insufficiently exploited  in 
the  European  Union. Although  many of them are abundantly available,  and the  real 
economic  potential  considerable, 
renewable  sources  of  energy  make  a 
disappointingly small contribution of less than  6% to the  Union's overall gross inland 
energy consumption,  which  is  predicted to grow steadily  in  the  future.  A joint effort 
both at the Community and  Members States' level is  needed to meet this  challenge. 
Unless  the  Community  succeeds  in  supplying  a  significantly  higher  share  of  its 
energy  demand  from  renewables  over the  next decade,  an  important  development 
opportunity will  be  missed  and  at the  same  time,  it will  become  increasingly difficult 
to comply with  its commitments  both  at European and  international level as  regards 
environmental protection. 

Renewable energy sources are indigenous, and can therefore cont~ibute to reducing 
dependency on  energy  imports  and  increasing  security of supply.  Development of 
renewable  energy  sources  can  actively  contribute  to  job  creation,  predominantly 
among  the  small  and  medium  sized  enterprises  which  are  so  central  to  the 
Community economic fabric,  and indeed themselves form the  majority in  the various 
renewable  energy  sectors.  Deployment  of  renewables  can  be  a  key  feature  in 
regional  development  with  the  aim  of  achieving  greater  social  and  economic 
cohesion within the Community. 

The  expected  growth  in  energy consumption  in  many third  countries,  in  Asia,  Latin 
America  and  Africa,  which  to  a  large  extent  can  be  satisfied  using  renewable 
energies,  offers  promising  business  opportunities  for  European·  Union  industries, 
which  in  many areas  are  world  leaders  as  regards  renewable  energy technologies. 
The  modular  character  of  most 
technologies  allows  gradual 
implementation, which is easier to finance and allows rapid  scale-up where  required. 
Finally,  the  general  public favours  development of renewables  more  than  any other 
source of energy, very largely for environmental reasons. 

renewable 

1.1.2  The Current Situation 
Five  years  after  the  Rio  Conference,  Climate  Change  is  again  at  the  centr~  of 
international debate in view of the  upcoming  "Third  Conference of the  P~rties_ to the 
United  Nations  Framework  Convention  on  Climate  Change"  to  be  held  in  Kyoto  in 
December 1997. The  European  Union  has recognised the  urgent need to tackle the 
climate change issue.  It has also adopted a negotiating  position of 15% greenhouse 
gas emissions reduction target for industrialised countries  by the year 201 0 from the 
1990  level. 
the 
Commission, _ in  its  communication  on  the  Energy  Dimension  of  Climate  Change 1 
identified a series of energy actions - including a prominent role  for renewables. 

the  Member  States  achieving 

this  objective, 

facilitate 

To 

The  Council _of  Ministers endorsed this when  inviting  the  Commission  to  prepare  an 
action  programme  and  present a  strategy for  renewable  energy. 
In  preparati0n  for 
the  international  climate  change  conference  in  Kyoto,  the  Commission  confirmed 

1  COM  (97)  196 final,  14 May 1997,  "The Energy Dimension of Climate Change 

4 

In  a 

recent  Communication2

the  technical  feasibility  and  economic  manageability  of  the  Union's  negotiating 
mandate. 
the 
consequences of reducing CO2 emissions significantly,  including the implications for 
the energy sector.  In order to achieve such a reduction,  the  Union will require major 
intensity. 
energy.  policy  decisions,  focusing  on  reducing  energy  and  carbon 
· Accelerating  the  penetration  of  renewable  energy  sources  isvery  important  for 
reducing  carbon intensity and  hence CO2 emissions, whatever the  precise outcome 
of the Kyoto Conference. 

the  Commission  analysed 

, 

The  EU's  dependence  on  energy  imports  is  already  50%  and  is  expected  to  rise 
over  the  coming  years  if  no  action  is  taken,  reaching  70%  by  2020.  This  is 
especially true  for oil and  gas  which  will  increasingly come  from  sources  at greater 
distances  from  the  Union,  often  with  certain  geopolitical  risks  attached.  Attention 
will  therefore  increasingly  focus  on  security  of  supply.  Renewable  energies  as 
indigenous  sources  of energy  will  have  an  important  role  to  play  in  reducing  the 
level of energy imports with  positive implications for balance of trade and security of 
supply. 

Much  progress  has  been  achieved  towards  completion  of  the  Internal  Energy 
Market.  Agreement has  been  reached  in  the Council of Ministers on  the first  phase 
of liberalisation  of the  electricity  sector and  negotiations  in  the  gas  sector are  well 
under way.  Opening  the  markets  for the  network-bound  energies  will  bring  market 
forces  into  play in  sectors which  until  recently were  for the  most  part  dominated  by 
monopolies.  This  will  provide  a  challenging  new  environment  for  renewable 
energies,  providing more opportunities but also posing the challenge of a very cost 
competitive  environment.  Suitable  accompanying  measures  are  needed  in  order to 
foster the development of renewables. 

Renewable  energy  sources  still  make  an  unacceptably  modest  contribution  to  the 
Community's  energy  balance  as  compared  with  the  available  technical  potential. 
There are  signs,  however,  that this  is  changing,  albeit slowly.  The  resource  base  is 
better  understood,  the  technologies  are  improving  steadily,  attitudes  towards  their 
uses are changing,  and  the  renewable  energy manufacturing  and  service  industries 
are  maturing.  But renewables  still have difficulties in  ''taking off', in  marketing terms. 
In  fact  many  renewable  technologies  need  little  effort  to  become  competitive. 
Moreover,  biomass,  including  energy crops,  wind  and  solar energy all  offer a  large 
unexploited technical potential. 

Current  trends  show that  considerable  technological  progress  related  to  renewable 
energy  technologies  has  been  achieved  over  recent  years.  - Costs  ~re  capidly 
dropping  and  many  renewables,  under  the  right  conditions,  have  reached  or  are 
approaching  economic  viability.  The  first  signs  of  large-scale  implementation  are 
also  appearing  as  regards  wind  energy  and  solar  thermal  collectors.  Some 
technologies,  in  particular biomass,  small  hydro and  wind,  are  currently competitive 
and  economically viable  in  particular compared  to other decentralised  applications. 
Solar photovoltaics,  although  characterised  by rapidly  declining  costs,  remain  more 
dependent  on  favourable  conditions.  Solar water  heaters  are  currently  competitive 
in many regions of the Union. 

Under  prevailing  economic  conditions,  a  serious  obstacle  to  greater  use  of certain 
renewables  has been higher initial investment costs. Although comparative costs for 

2  COM (97) 481  final,  1 October 1997,  "Climate Change - The EU Approach to Kyoto" 

5 

many  renewables  are  becoming  less  disadvantageous,  in  certain  cases  quite 
markedly,  their use  is  still  hampered  in  many  situations  by  higher initial  investment 
costs as compared with conventional fuel cycles (although operational fuel costs are 
non-existent for renewables  with  the  exception  of biomass).  This  is  particularly the 
case due to the fact that energy prices  for conventional  fuel  cycles  do not currently 
reflect the objective full cost,  including the  external cost to society of environmental 
damage  caused  by  their  use.  A  further  obstacle  is  that  renewable  energy 
technologies,  as  is  the  case  for  many  other  innovative  technologies,  suffer  from 
initial lack of confidence on the part of investors, governments and users, caused  by 
lack  of  familiarity  with  their  technical  and  economic  potential  and  a  general 
resistance to change and new ideas. 

· 

Globally,  Europe  is  at  the  forefront  for  several  renewable  energy  technologies. 
Significant employment is associated with the  industries concerned  in  the  European 
Union,  involving  several  hundred  companies,  mainly  small  and  medium-sized 
enterprises,  in  primary assembling/manufacturing alone~  without taking  into account 
other  service  and  supply  needs.  For  the  new  renewable  energy  technologies  (i.e. 
not including  large  hydro-electric power stations and the traditional  use of biomass) 
the world-wide annual turnover of the  industry is  estimated to be  higher than  ECU  5 
billion, of which  Europe has more than a one third shar~. 

1.1.3  The  Need for a Community Strategy 
Development  of  renewable  energy  has  for  some  time  been  a  central  aim  of 
Community energy policy, and as early as  1986 the  Council3  listed the  promotion of 
renewable  energy  sources  among  its  energy  objectives.  Significant  technological 
progress  has  been  achieved  since then  thanks to the various  Community  RTD  and 
demonstration  programmes  such  as  JOULE- THERMIE,  INCO  and  FAIR which  not 
only  helped  in  creating  a  European  renewable  energy  industry  in  all  sectors  of 
renewables  but  also  in  achieving  a world-wide  leading  position.  This  technological 
leadership  will  be  maintained  by  the  contribution  of  the  5th  RTD  framework 
programme  in  which  the  renewable  energy technologies  will  have  a  central  role  to 
play.  With  the  AL TENER  programme4 
,  the  Council  for  the  first  time  adopted  a 
specific financial instrument for renewables promotion.  The  European  Parliam~nt for 
its  part  has  constantly  underlined  the  role  of renewable  energy  sources  and  in  a 
recent Resolution 5  strongly advocated a Community action  plan to advance them.  In 
its  White  Paper,  "An  Energy  Policy  for the  European  Union"6  the  Commission  put 
forward  its views as  regards Community energy policy objectives and  instruments to 
achieve  them.  Three  key  energy  policy  objectives  were  identified,  viz.  improved 
competitiveness,  security of supply, and  protection of the environment.  Promotion of 
renewables  is  identified as an  important factor to achieve these aims. A strategy for 
renewable  energy  sources  was  proposed,  and  specifically  cited  in  the  'indicative 
work programme' attached to the Energy Policy White Paper. 

At the  same time  some  Member States  have  introduced  some  measures to support 
RES  and  related  programmes.  Some  have  set  up  plans  and  targets  aimed  at 
developing  RES  in  the  medium and  long  term.  The  share  of renewable  energies  in 
the  gross  inland  energy  consumption  differs  widely  between  Member States,  from 
less  than  1%  to  over  25%  (see  table  1).  A  Community  strategy  will  provide  the 

3  OJ  C 241  of 25.9.1986,  p.1 
4  OJ  L 235 of 18.9.1993, p.41 
6  PE 216/788; fin 
6  COM(95) 682 of 13.12.1995, "An  Energy Policy for the European Union" 

6 

necessary  framework  and  bring  added  value  to  national  initiatives  increasing  the 
overall impact. 

A  comprehensive  strategy  for  renewables  has  become  essential  for  a  number  of 
reasons.  First  and  foremost,  without  a  coherent  and  transparent  strategy  and  an 
ambitious overall objective for renewables  penetration,  these  sources of energy will 
not make major inroads into the Community energy balance. Technological progress 
by  itself can  not  break  down  the  several  non-technical  barriers  which  hamper the 
penetration  of renewable  energy technologies  in  the  energy  markets.  At  present, 
prices for most classical fuels are relatively stable at  historically low levels and thus 
in themselves militate against recourse to renewables.  This situation clearly calls for 
policy measures to redress the balance in support of the fundamental environmental 
and  security  responsibilities  referred  to above.  Without a clear and  comprehensive 
strategy accompanied by legislative measures, their development will be  retarded. A 
long-term  stable  framework  for  the  development  of renewable  sources  of energy, 
covering  political,  legislative,  administrative,  economic  and  marketing  aspects  is  in 
fact  the  top  priority  for  the  economic  operators  involved  in  their  development. 
Further~ore,  as  the  internal  market  develops,  a  Community-wide  strategy  for 
renewables is  req,uired  to avoid  imbalances between  Member States or distortion of 
energy  markets.  The  leading  position  of the  European  renewable  energy  industry 
world-wide  can  only  be  maintained  and  strengthened  on  the  basis  of a  significant 
and growing home market. 

A  policy  for  the  promotion  of  renewables  requires  across-the-board  initiatives 
encompassing a wide range of policies:  energy,  environment,  employment, taxation, 
competition,  research,  technological  development  and  demonstration,  agriculture, 
regional  and  external  relations  policies.  A  central  aim  of a  strategy  for  renewable 
energy  will  be  to  ensure  that  the  need  to  promote  these  energy  sources  is 
recognised  in  new  policy  initiatives,  as  well  as  in  full  implementation  of  existing 
policies, in all of the above areas.  In fact, a comprehensive action  plan  is  required to 
ensure the  necessary co-ordination  and  consistency in  implementing  these  policies 
at Community,  national and local levels. 

The role of Members States in the implementation of the Action  Plan  is crucial.  They 
need  to  decide  on  their  own  specific  objectives  witin  the  wider  framework,  and 
develop  their own  national  strategies  to  achieve  them.  The  measures  proposed  in 
this  White  Paper  must  also  be  adapted 
to  the  particular  socio-economic, 
environmental,  energy and  geographic situation of each Member State as well as to 
the technical and physical potential of RES  in  each Member State. 

With  a  view  to  illustrating  the  potential  effects  of specific  policy  initiatives  in  the 
renewable  energy  field,  the  Commission  sponsored  an  exercise  referred  to  as 
TERES.  The  TERES  II  study7  builds  on  one  of the  scenarios  previously  developed 
in  the  Commission's  European  Energy to  20208  report  but  goes  further  by  adding 
various  specific  renewable  energy  policy  assumptions  to  form  three  additional 
scenarios.  These  scenarios  predict the contribution  of renewable  energy sources to 
gross  inland  energy  consumption  to  be  between  9.9%  and  .12.5%  by  2010.  The 
technical potential, however, is much larger. 

7 TERES  II,  European Commission,  1997 
8  European Energy to 2020.  A Scenario Approach,  European Commission,  1996 

7 

The  various  scenarios  clearly illustrate that renewable  energy sources  can  make  a 
significant  contribution  to the  energy  supply  of the  European  Union.  On  the  other 
hand  the  renewable  energy  component  of  the  energy  mix  is  very  sensitive  to 
· changing  policy assumptions.  Unless  specific incentives  are  put  in  place,  the  large 
potential for renewable energy will not be exploited and these sources will  not make 
a sufficient contribution to the European energy balance. 

1.2  The Debate on  the Green Paper 
As  a first  step towards a  strategy for renewable  energy the  Commission  adopted  a 
Green  Paper on  20  November  19969  A  broad  public  deb.ate  took  place  during  the 
early part of 1997 focusing on the type and nature of priority measures that could  be 
undertaken at Community and Member States' levels. The Green paper has elicited 
many reactions  from  the  Community institutions,  Member States'  governments  and 
agencies, and  numerous companies and associations interested in renewables.  The 
Commission  organised  two  conferences  during  this  consultation  period  where  the 
issues were extensively discussed. 

The  Community Institutions have delivered  detailed comments  on  the  Green  Paper 
as well as opinions on what should  be the essential elements and the major actions 
to be undertaken for a future Community strategy on  renewable energy sources and 
the  role  of the  Community  in  this  process.  The  Council  in  its  Resolution 10  on  the 
Green  Paper,  affirms  that  adequate  action  on  renewables  is  vital  for  achieving 
sustainable economic growth,  the aim being  a strategy that would  lead to improved 
competitiveness  and  a  substantial  share  of renewabJes  in  the  long  term.  Thus,  it 
confirms that Member States and the Community should formulate  indicative targets 
as  a  guideline  for  this  ambitious  indicative  target  of doubling  the  overall  share  of 
renewable  in  the  Community  by  2010.  The  Council  Resolution  states  that  such  a 
comprehensive  strategy  should  be  based  on  certain  basic  priorities:  harmonisation 
of standards  concerning  renewables,  appropriate  regulatory  measures  to  stimulate 
the  market,  investment  aid  in  appropriate  cases,  dissemination  of  information  to 
increase market confidence with specific actions to increase customer choice.  It also 
takes  the  view  that  adequate  provision  for the  support  for  renewables  in  the  Fifth 
Framework  Programme 
for  Research,  Technological  Development  and 
Demonstration  is  required,  as  well  as  effective  co-ordination  and  monitoring  of 
progress in order to optimise available resources. 

The  European  Parliament  in  its  Resolution11  on  the  Green  Paper  recognises  the 
important  role  that renewable  energy can  play in  combating the  greenhouse  effect, 
in  contributing  to the  security of energy  supplies  and  in  creating  jobs  in  small  and 
medium enterprises and  rural  regions.  It believes that the  European  Union  urgently 
needs  a  promotion  strategy  which  will  tackle  the  issues  of  tax  harmonisation, 
environmental  protection  and  standards,  internalisation  of  external  costs,  and 
ensure  that  the  gradual  liberalisation  of the  internal  energy  market  will  not  place 
renewables at a disadvantage.  It proposes a goal of a 15% share of renewables for 
the  European  Union by the year 2010.  It calls on the Commission to submit specific 
measures  to  facilitate  the  large-scale  use  of  renewable  energy  sources  and 
advocates  certain  specific  measures.  These  include  the  setting  of  targets  per 
Member  State,  the  concept  of  a  common  energy-related  tax  model,  free  non 
discriminatory access to the  grid  combined  with  a minimum  payment by the  utilities 

1  COM(96)576 of 20.11.1996, "Energy for the future : renewable sources of energy" 
1° Council Resolution n° 8522/97 of 10 June 1997 
11  PE 221/398.fin 

8 

for the  electricity  supplied  from  renewable  energies,  the  main  features  of a  plan  to 
establish  a · Eur9pean  fund  for  renewable  energies,  a  strategy  for  a  common 
programme  to  promote  renewable  energies  to 
further  1,000,000 
photovoltaic roofs,  15,000 MW of wind and  1,000 MW of energy from biomass. 

include  a 

Parliament's  Resolution also calls  for a buildings  directive,  a  plan  for greater use of 
structural. funds,  a  strategy  for  the  better  utilisation  of  agricultural  and  forestry 
It  reaffirms  its 
biomass  and  an  export strategy for renewable  energy technologies. 
beliijf in  the need to inc;rease the Community budgetary appropriations  in  support of 
renewable  energy  sources  to  the  level  currently  used  for  nuclear  research.  It  also 
p_roposes  the  constitution  of a  new  Treaty  for  the  promotion  of renewable  energy 
sources.  The  Committee  on  Agriculture  and  Rural  Development  of the  Parliament 
has  also  issued  an  Opinion  in  which  it  considers  that  the  contribution  of biomass 
derived  energy to the primary energy mix could  reach  10% by 2010.  It also calls  for 
a better co-ordination of European  Union  energy policy and the common agricultural 
policy and  emphasises the need to make the  necessary arable  land  available  under 
the latter. 

The  Economic  and  Social  Committee 12  and  the  Committee  of the  Regions 13  have 
also  presented  detailed  comments  on  all  chapters  of the  Green  Paper,  which  also 
stress,  analyse,  and  support  the  overall  goals  relating  to  sustainability  and  the 
different  ways 
the  potential  contribution  of  renewables  can  be  maximised. 
Furthermore,  these  contributions  set out ways  in  which  the  role  and  responsibilities 
of regional and  local public authorities and  other bodies  could  be  best  harnessed to 
facilitate  renewables  support  and  market  penetration.  Given  the  predominantly 
decentralised  implementation  of most  renewable  technologies,  practical  measures 
in  this  direction  would  allow  recourse  to  the  subsidiarity  principle,  in  the  framework 
of  a  Community  Strategy  and  Action  Plan,  facilitating  local  authorities  in  their 
decision-making power and environmental responsibility.  Moreover,  this context is a 
prime  example where energy policy aims and those  of structural and  regional  policy 
can  synergise  with  one  another to  great  effect,  as  illustrated  by  the  case  of rural, 
island,  or otherwise  isolated  communities  where  sustainable  development  and  the 
maintenance  of  a  population  base  can  be  actively  supported  by  replacement  of 
inefficient  small-scale  fossil  fuel  use  by  renewables  plants.  That  leads  to  better 
living standards and job creation. 

More  than  70  detailed  written  reactions  have  been  received  from  Member  State 
agencies,  industries,  professional associations,  regional  associations,  institutes and 
non-governmental organisations  following  the  publication  of the  Green  Paper.  The 
extensive  public  debate  on  the  Green  Paper  and  the  many  contributions  received 
have  provided  valuable input for the  Commission  in  drafting this White Paper and  in 
proposing the Action Plan. 

1.3  Strategic Goals 

1.3.1  An  Ambitious Target for the  Union 
In the Green Paper on  Renewables the  Commission  sought views on the setting of an 
indicative objective of 12% for the contribution  by renewable  sources of energy to the 
European  Union's  gross  inland  energy  consumption  by  2010.  The  overwhelmingly 
positive  response  received  during  the  consultation  process  has  confirmed  the 

12  CES  462/97 of 23-24 April  1997, Opinion of the Economic and Social Committee 
13  CdR 438/96.fin,  Opinion of the Committee of the Regions 

9 

Commission's view that an  indicative target is a good policy tool, giving a clear political 
signal  and  impetus  to  action.  T~e  strategy  and  action  plan  in  this  White  Paper 
therefore, are directed towards the goal of achieving a 12% penetration of renewables 
in  the  Union  by  2010  - an.  ambitious  but  realistic  objective.  Given  the  overall 
importance  of significantly  increasing  the  share  of RES  in  the  Union,  this  indicative 
objective  is  co_nsidered  as  an  important  minimum  objective to  maintain,  whatever the 
precise  binding  commitments  for CO2  emission  reduction  may finally  be.  However,  it 
is  also  important  to  monitor  progress  and  maintain  the  option  of  reviewing  this 
strategic goal if necessary. 
The  calculations  of increase  in  RES  needed  to  meet  the  indicative  objective  of 12% 
share  in  the  Union's energy mix by 2010  is  based  on  the  projected  energy use  in  the 
pre-Kyoto scenario (conventional wisdom,  European  Energy to 2020,  see  footnote  8) 
It is  likely that the  projected overall energy use  in  the  EU  15 may decrease by 2010 if 
the  necessary energy saving  measures  are  taken  post  Kyoto.  At the  same  time,  the 
enlargement of the  Union to new Member States where  RES  are almost  non-existent 
will  require  an  even  greater overall  increase.  It  is  therefore  considered  at this  stage, 
that  the  12%  overall  objective  cannot  be  refined  further.  It  is  in  any  case,  to  be 
emphasised that this overall objective,  is a political, and not a legally binding tool. 

1.3.2  Member States Targets and Strategies 
The overall EU  target of doubling the share of renewables to 12%by 2010 implies that 
Member  States  have  to  encourage  the  increase  of  RES  according  to  their  own 
potential.  Targets  in  each  Member State could  stimulate  the  effort towards  increased 
exploitation  of  the  available  potential  and  could  be  an  important  instrument  for 
attaining  CO2  emission  reduction,  decreasing  energy  dependence,  developing 
national industry and creating jobs.  It is  important,  therefore,  that each  Member State 
should  define  its  own  strategy and within  it  propose  its own  contribution to the  overall 
2010  objective,  indicate  the  way  it  expects  different  technologies  to  contribute  and 
outline the measures it intends to introduce to achieve enhanced deployment. 

Nevertheless,  it  should  be  emphasised  that  both  the  Community  and  the  Member 
States  have  to  build  on  existing  measures  and  strategies,  as  well  as  tackle  new 
initiatives.  Some  Member  States  have  developed  national  Plans  for  RES  and  set 
objectives  for  2010,  2020  or  even  2030.  Annex  Ill  outlines  the  plans  and  actions  of 
Member  States  for  renewables  development.  Member  States  are  indeed  already 
making  efforts to  develop  RES  and  the  Community Strategy will  provide a framework 
to encourage those efforts and to ensure their cross-fertilisation. Action  at the  level of 
the  Community  can  provide  added  value  in  terms  of  the  sharing  and  transfer  of 
successful technological and market experiences. 

1.3.3  Possible Growth of RES by Sector 
Achievement  of  the  average  12%  overall  indicative  objective  for  the  Union  clearly 
depends on  the success and  growth of the  various  individual renewable technologies. 
Views expressed during the consultation process on the Green Paper confirmed that it 
is  important  to  analyse  how  the  overall  objective  can  be  achieved  by  a  contribution 
from  each  sector,  and  hence  to  estimate  the  contribution  each  renewable  source  is 
likely to make. The potential sectoral growth of RES  suggested  in  this Strategy has to 
be  considered  as  a  first  attempt  to  identify  a  possible  combination  of  renewable 
technologies -that  could  allow  the  EU  to  reach  the  overall  target,  within  technical, 
practical and  economic limitations.  However,  renewable  energy technologies  may well 
evolve  differently,  depending  on  many  factors, 
including  market  developments, 
options chosen  by Members  States and  technical  developments.  The  estimate  share 
of different technologies  are  clearly indicative  and  will  serve to  help  monitor  progress 

10 

and  ensure  that  each  technology  makes  its  optimal contribution,  within  a clear policy 
framework. 

· 

. Tne  current  share  of  renewables  in  the  energy  mix  of  approximately  6%  includes 
large-scale  hydro,  for  which  the  potential  for  further  exploitation  in  the  European 
Union, for environmental reasons,  is  very limited. This means that the  increases in  the 
use of other renewables will have to be all the more substantial. 

In  Annex  II  a  set  of indicative  estimated  contributions  from  each  renewable  energy 
source  as  well as  for each  market  sector are  outlined,  as  a  projection  of one  way  in 
which the overall desired growth of RES  can  be achieved. According  to the  particular, 
scenario  outlined,  the  main  contribution  of RES  growth  (90 .Mtoe)  could  come  from 
biomass,  tripling  the  current  level  of this  source.  Wind  energy,  with  a  contribution  of 
40  GW is  likely to  have  the  second  most  important  increase.  Significant  increases  in 
the solar thermal collectors (with a contribution of 100 million  m2  installed by 2010) are 
also  anticipated.  Smaller  contributions  are  foreseen  from  photovoltaics  (3  GWp), 
geothermal energy (1  GWe and  2.5 GWth) and  heat pumps (2.5  GWth).  Hydro power 
will probably remain the second most important renewable source,  but with a relatively 
small future  increase (13 GW), keeping  its overall contribution at today's  level.  Finally, 
passive  solar  could  have  a  major  contribution  in  reducing  the  heating  and  cooling 
energy  demand  in  buildings.  A  10%  contribution  in  this  sector,  representing  fuel 
savings  of  35  Mtoe,  is  considered  feasible.  If  the  sectoral  growth  outlined  in  the 
scenario is  achieved then  the  overall doubling  of the current  share  of renewables  can 
be  achieved,  as  shown  in  the  tables  in  Annex  II.  As  far  as  the  market  sectors  are 
concerned,  the 
doubling  of  the  current  electricity  and  heat  production  from 
renewables  plus  a  significant  increase  of biofuel  in  transport  fuel  use  by  2010  are 
important elements in the scenario for achieving the overall Union objective. 

1.4  Preliminary Assessment of some of the Costs and  Benefits 

In  order  to  assess  the  feasibility  of  achieving  the  overall  Community  objective,  the 
necessary costs  have  to  be  estimated.  Equally  important,  however,  is  the  estimation  of 
the  related  benefits.  The  doubling  of  the  current  market  penetration  of  renewable 
energies  by  2010 will  have  beneficial  effects  among  others  in  terms  of CO2  emissions; 
security of supply and employment.  In table 6 of Annex II the estimated  investment costs 
required  to  achieve  the  target  together with  the  estimated  benefits  are  presented.  The 
total  capital  investment  needed  to  achieve  the  overall  target  is  estimated  at  165  billion 
ECU  for  the  period  1997-2010.  What  is  more  relevant,  however,  is  the  net  investment 
which  is  estimated at 95 billion  ECU14
.  However,  it must be  underlined that there are very 
significant avoided fuel costs. 

In  table  5 of Annex II  these  figures are compared  with  the total  investment of the  energy 
sector  for  the  same  period,  as  projected  by  the  Conventional  Wisdom  scenario  of the 
"European  Energy to ~020•!  study of the  Commission.  If we consider that in  this  scenario 
an  amount for investments  in  renewable  energies  is  already  included,  the  additional  net 
investment  needed  if the  action  plan  is  to  have  its  full  effect  is  then  equal  to  7 4  billion 
ECU.  In the same table, it can  be seen that the doubling of the share of renewables  may 
require  an  increase  of approximately  30%  in  the  total  energy  sector  investment  but  it 
could  create an  estimated  gross  figure  of 500,000 - 900,000 new jobs,  save  annually (in 
201 0}  3 billion  ECU  in  fuel  costs  and  a total  of 21  billion  ECU  for the  period  1997-2010, 

14  It has  been calculated by taking the total investment and subtracting the investment that would have 

been needed if the energy from  renewables was  provided by fossil fuel technologies 

11 

reduce the imported fuels by 17.4% and t~e CO2 emissions by 402 million tonnes/year by 
2010. 

. 

This  amount  of  CO2  savings  represents  a  significant  contribution  towards  the  CO2 
reduction  needed  to  successfully combat  climate  change.  The  calculation  of the  figures 
in  the table  needs some clarification.  In  the  recent Communication  from the  Commission 
"Climate Change - the EU  approach to Kyoto"15  it is  estimated that the 800 million tonnes 
CO2 emission  reduction  potential can  be achieved with  an  annual compliance  cost  of 15 
to  35  billion  ECU  and  with  a  total  (primary  and  secondary)  benefit  which  might  range 
from  15 to 137 billion ECU  per year.  From the analysis  presented  in Annex 11,  it  is  shown 
that · doubling  the  share  of  renewables  can  reduce  the  CO2 emissions  by  402  million 
tonnes  per  year  with  respect  to  1997.  This  corresponds  to  an  additional  reduction 
possibility of 250 million tonnes of CO2 with  respect to the 2010  "business as  usual" Pre 
Kyoto  scenario  used  in  the  Climate  Change  Communication  and  one  third  of  the 
expected  CO2 reduction  target.  The  difference  between  figures  (402  and  250)  is  due  to 
the  fact  that  in  the  scenario  for 2010,  an  increase  of 30  Mtoe  in  the  use  of renewable 
between  1995-2010 is  assumed  which  corresponds  approximately to annual  savings  of 
150 million  tonnes  of CO2  by 2010.  Therefore,  the  estimates of CO2  emission  reduction 
from  RES  cited  in  this  White  Paper results  from  a technical  assessment  and  represents 
the  full  expected  reduction  from  a doubling  of the  current  share  of RES,  whereas  in  the 
policy  communication  on  Kyoto,  the  figure  cited  is  the  additional  reduction  in  CO2 
emissions to  be  attained to  reach  a specific reduction  target,  over and  above what  may 
have  been  attained  under  the  specific  Conventional  Wisdom  pre-Kyoto  scenario  for 
2010. 

Net  employment  figures  in  the  renewable  (:3nergy  sector  are  difficult  to  predict  and 
calculate.  Real  figures  exist  in  the  sectors  that  have  reached  a  certain  level  of 
development.  Wind  energy,  for example,  has  already created  more  than  30,000  jobs  in 
Europe.  Each  renewable  energy  technology  has  its  own  characteristics  as  far  as  the 
quality and  the  kind  of employment generated.  Biomass  has  the  particularity of creating 
large  numbers  of jobs  for the  production  of raw  material.  Photovoltaics  creates  a  large 
number  of  operational  and  maintenance  jobs,  since  PV  installations  are  small  and 
dispersed.  Hydro  is  not  expected  to  create  more  jobs  than  those  already  existing  in 
Europe. 

Detailed estimations of net employment have been  made in the TERES II  study using the 
SAFIRE  market  penetration  model  developed  under  the  JOULE  II  programme.  The 
model  predicts  for  2010  a  net  employment  of  500,000  jobs  directly  created  in  the 
renewable  energy sector and  indirectly in  the  sectors that supply the sector.  This  is  a net 
figure  allowing  for  losses  of jobs  in  other  energy  sectors.  Sectorial  studies. performed 
mainly by the industry give  much  larger employment figures.  The  European  Wind  Energy 
Association  (EWEA)16  estimates  that the  jobs  to  be  created  in  2010  by  the  wind  sector 
will be  between  190,000 and  320,000,  if 40 GW of wind  power is  installed. The  European 
Photovoltaic  Industry  Association  (EPIA)  estimates 17  that  a  3  GWp  installed  power  in 
201 o will  create  approximately  100,000 jobs  in  the  PV  sector.  The  European  Biomass 
Association  (AEBIOM) 18  believes  that  the  Biomass  employment  figures  in  the  TE RES  II 
study  are  underestimated  and  that  employment  in  the  sector  will  increase  by  up  to 
1,000,000 jobs  by  2010  if the  biomass  potential  is  fully  exploited.  The  European  Solar 
Industry  Federation  (ESIF)  estimates  that  250,000  jobs  will  be  created  in  order to  meet 

16  COM(97)481  final - see footnote 2 
11  EWEA Strategy Paper '97, ALTENER  publication,  1997. 
17  EPIA,  "Photovoltaics in 2010",  European Commission,  1996. 
18  Statement of AEBIOM on the Green Paper of the European Commission,  February 1997. 

12 

the  solar  collector  2010  market  objective.  While  it  is  not  possible  to  reach  any  hard 
conclusions  as  is  the  likely  cumul~tive  level  of job  creation  which  would  derive  from 
investments in the various forms of ·renewable energy sources,  it is quite clear that a pro 
active  move  towards  such  energy  sources  will  lead  to  significant  new  employment 
opportunities. 

An  important  additional  economic  benefit  not  included  above  is  the  potential  growth  of 
the  European  renewable  energy  industry  in  international  markets. 
In  most  technical 
areas,  European  industry  in  this  field  is  second  to  none  in  its  ability  to  provide  the 
equipment  and  technical,  financial  and  planning  services  required  for  market  growth. 
This  offers  therefore,  significant  business  opportunities  for  exports  and  possibilities  for 
expansion  of the  European  renewable  technologies  industry.  A  17  billion  ECU  annual 
export business is  projected for 2010, creating  potentially as  many as  350.000 additional 
jobs. 

Considering  all  the  important  benefits  of  renewables  on  employment,  fuel  import 
reduction  and  increased  security of supply,  export,  local  and  regional  development,  etc. 
as  well  as  the  major  onvironmental  benefits,  it  can  be  concluded  that  the  Community 
Strategy  and  Action  Plan  for  renewable  energy  sources  as  they  are  presented  in  this 
White Paper are of  major importance for the Union as we enter the 21st century. 

13 

. Chap~er ~ 

Main Features of the Action Plan 

2.1 

lntrocJ uction 

' 

Without  a  determined  and  co-ordinated  effort  to  mobilise  the  Union's  renewable 
energies  potential, t~is .potential will  not  be  realised  to a significant extent,  resulting 
in  missed  opportunity  to  develop  this  sector  and  to  reduce  greenhouse  gas 
emissions significantly.  If pro-active steps are not taken  in a co-ordinated way within 
the  Union,  renewable  energies  are  only  likely to  emerge  slowly  from  today's  niche 
markets  to  become  more  widely  used  and  hence  fully  cost  competitive  in  around 
2020,  with  full  market  penetration  perhaps  still  years  beyond.  The  Action  Plan  set 
out below aims at providing fair market opportunities for renewable  energies without 
excessive financial burdens.  Increasing the current share of renewables  significantly 
will not be an  easy task,  but the benefits to be obtained justify a major effort. 

Investments  will  have  to  made  made  both  by  the  private  and  public  sectors,  but 
these  will  provide  multiple  dividends  as  Europe's  industry  and  service  companies 
demonstrate  their technological  leadership  in  a  globally competitive  market.  At  the 
same time, the increasingly liberalised and globalised energy markets present a new 
situation,  which  will  have  to  be  used 
in  a  posilive  sense  to  provide  new 
opportunities, while new obstacles to RES growth in the electricity sector will  have to 
be avoided. 

The Comm~nity Strategy and Action Plan should be  seen as an  integrated whole, to 
be  further  developed  and  implemented  in  close  cooperation  between  the  Member 
States  and  the  Commission.  The  challenge  facing  us  requires  a  concerted  and  co 
ordinated  effort  by the  various  players  over time.  Measures  should  be  taken  at the 
appropriate  level  according  to  the  subsidiarity  principle  within  the  coordinated 
framework  provided  by  this  Strategy  and  Action  Plan.  It  would  be  incorrect  and 
unrealistic  to  assume  that  actions  need  only  be  taken  at  Community  level.  The 
Member  States  have  a  key  role  to  play  in  taking  the  responsibility  to  promote 
Renewables,  through  national action  plans,  to introduce the  measures  necessary to 
promote  a  significant  increase  in  renewables  penetration,  and  to  implement  this 
strategy and  Action  Plan  in  order to achieve  the  national  and  European  objectives. 
Legislative  action  will  only  be  taken  at  EU  level  when  measures  at  national  level 
would  be  insufficient  or  inappropriate  and  when  harmonisation  is  required  across 
the  EU.  The Strategy and Action  Plan  must  be  flexible  and  be  updated  over time  in 
the  light  of  experience  gained  and  new  developments  including  international 
commitments  undertaken  to  reduce  CO2  emissions.  For  this  reason,  a.  system  of 
continuous review is proposed.(see section 4.1.  below). 

2.2 

Internal Market Measures 

The  following  is  a  list  of  priority  measures  aimed  at  overcoming  obstacles  and 
redressing  the  balance  in  favour  of  renewables,  in  order  to  reach  the  indicative 
objective of 12% penetration by 2010. 

2.2.1  Fair Access for Renewables to the Electricity  Market 
Electricity  is  the  single  most  important  energy  sector as  it  accounts  for about  40% 
of gross  energy consumption  in  the  EU15.  Access  for renewables  to the  electricity 
networks at fair prices is therefore a critical step for their development. The basis for 
a  Community  legal  framework  largely  exists  and  its  implementation  will  have  to 

14 

provide  for  the  necessary  degree. of  legislative  harmonisation.  Experience  of 
liberalisation  elsewhere  has  shown·  that  it  can  form  the  basis  for  a  dynamic  and 
secure  role  for  renewables  so  long  as  adequate  market-based  instruments  are 
provided. 

At  present  Member  States  are  transposing  the  internal  market  in  electricity 
Directive 19 into national law.  The Directive,  in Article 8(3),  permits Member States to 
require  electricity  from  renewable  sources  to  be  given  preference  in  dispatching. 
Further schemes  for the  promotion  of renewables  may also  be  compatible  with  the 
Directive,  pursuant  to  Article  3  and/or  Article  24.  Most  or  all  Member  States  are 
planning  to  include  such  schemes  in  their  transposition  of  the  Directive.  The 
Commission  is  examining  closely the  different schemes  proposed  or introduced  by 
the  Member States  in  order to propose a Directive which  will  provide  a  harmonised 
framework  for  Member  States  to  ensure  that  renewable  energies  make  up  a 
sufficient  contribution  to  overall  electricity  supply,  both  at  the  EU  and  at  national 
level.  Different  preference  schemes  for  electricity  from  renewables  will  be 
considered in this context. 

Such  an  approach  is  an  important  element  towards  the  creation  of a  true  single 
market  for  electricity.  Where  significant  differences  exist  between  Member  States 
regarding  the  extent  to  which  renewable  energy  is  supported  and,  possibly,  the 
manner in  which  any consequent support measures are financed,  this  may  result  in 
significant trade distortions not related to efficiency. 

Other issues to be addressed will include the following  : 

• 

• 

the  way  in  which  transmission  system  operators  should  accept  renewable 
electricity when  offered to them,  subject to provisions on  transport  in  the  internal 
market in  electricity Directive; 
the  guidelines  on  the  price  to  be  paid  to  a  generator  from  renewable  sources 
which  should at least be  equal to the avoided  cost of electricity on  a low voltage 
grid  of  a  distributor  plus  a  premium  reflecting  the  renewables'  social  and 
environmental benefits20 and the manner in which  it is financed  : tax breaks,  etc.; 

•  on which categories of electricity purchases such measures fall; 
•  with  regard  to  network  access,  avoiding  discrimination  between  electricity 
produced  from  solar radiation,  biomass  (below 20 MWe),  hydroenergy (below  10 
MWe) and wind. 

2.2.2  Fiscal and  Finance measures 
The  environmental  benefits  of  renewable  energies21 
justify  favourable  financing 
conditions. The so-called "Green tariffs" already offered in  certain Member States by 
appealing  to  voluntary  environmental  solidarity  on  the  part  of those  consumers  -

18  Directive 96/92/EC of the European Parliament and of the Council of 19 December 1996 concerning 

common rules for the internal market in electricity,  JO L 27, 30.1.1997,  p.20 

20 This premium could be above 20% of that avoided cost which is about equivalent to the average tax 
on electricity in the European Union.  The avoided cost introduced here above refers to the cost at 
the "city gate",  i.e. the wholesale price at which the grid operator of a municipal low voltage grid 
buys electricity from the transmission network.  The premium is put equivalent to the tax rebate or 
tax exemption of renewable energy as it is currently implemented in those European Union Member 
countries which  have introduced CO2 tax.  Renewable energy tax exemption is also requested in a 
recent Commission proposal  modifying the Directive on taxation of energy products 
21  Environmental  benefits as established by the EXTERNE project (see also Annex 11.11) 

15 

domestic or corporate  - able  and  willing  to  pay  higher  rates  are  not  sufficient,  nor 
appropriate in all cases. 

The Commission  has already made or will  make the necessary additional proposals 
for  legislation  and  amendments  to  existing  Directives  before  the  end  of  1998, 
including tax exemption or reduction on  RES  energy products on  behalf of Member 
States  "prerogatives"  under art.  13  to  16  of the  proposed  Directive  "Restructuring 
the Community Framework for the Taxation of Energy Products"22

; 

In  some cases  it will  be  appropriate and  sufficient for Member States' authorities to 
enact the necessary legislation or other provisions, in areas such ·as 

flexible depreciation of renewable energies investments; 
• 
• 
favourable tax treatment for third party financing of renewable energies; 
•  start up subsidies for new productions plants, SME's and new job creation. 
financial incentives for consumers to purchase RE equipment and services; 
• 

The Commission  however will also make a survey of the  progress  made throughout 
the  Union  in  this  regard  by  the  end  of  the  year  2000,  and  if  this  indicates  a 
remaining  need  for  Union-level  measures  in  certain  of  the  areas  listed,  the 
necessary proposals will be put forward. 

Other financial measures, which are proving their value  in  some Member States, will 
also be examined and promoted more widely as appropriate such as: 

•  so-called  ugolden" or 'green' funds addreJsed to capital  markets.  Such  funds  are 
financed  from  private  bank  accounts  which  in  this  case  attract  lower  interest 
rates. The margin consented  by the  lower interest rate  paid to the account holder 
is  passed  on  by  the  bank  to  the  renewable  energies  investor  in  the  form  of 
discount rates; 

•  public  renewable  energy  funds,  managed  by  regulated  agencies.  The  facilities 
offered  could  include  revolving  funds  as  well  as  credit  guarantees  (renewable 
energies bonds) and should in any case conform to the Treaty provisions; 
•  soft loans and special facilities from institutional banks (see Section 2.5.3) 

2.2.3  New Bioenergy Initiative for Transport,  Heat and  Electricity 
Specific measures are  needed  in  order to help  increase the  market  share  for liquid 
biofuels from the  current  0.3% to a  significantly higher percentage,  in  collaboration 
with  Member States ..  The overall environmental effect varies  from  biofuel to biofuel 
and  depends,  amongst  others,  on  the  crop  cultivated  and  the  crops·  repraced. 
Promotion  of  biofuels  has  to  be  coherent  with  the  AutoOil  Programme  and  the 
European  policy  on  fuel  quality,  and  should  take  account  of  the  full  cycle  of 
environmental  costs/benefits.  The  role  of biofuels  in  the  clean  fuel  specification  for 
2005 and beyond is being studied under the Auto Oil II  project. 

Two  new  directives,  currently  under  negotiation,  concerning  transport  fuel23  and 
sulphur reduction  in  liquid fuels24  already include  provisions  encouraging the  use of 

22 Com{97)30 final,  12 March 1997, Proposal for a Council  Directive on "Restructuring the Community 

Framework for the Taxation of Energy Products" 

23  COM{97)248 final,  18 June 1997 
24  COM(97)88 final,  12 March 1997 - Proposal for a Council  Directive on "Reduction of sulphur content 

in certain liquid fuels" and modification of Directive EC/93/12. 

16 

biofuels  for  transport,  i.e.  alcohols  and  ETBE,  vegetable  oils  and  esters  for 
biodiesel. 

Given the fact that currently the_production cost of .liquid biofuel is three times that of 
conventional fuels,  a priority effort needs to be  placed on  further research and other 
measures to reduce  production costs of biofuels. An  increased  use of liquid biofuels 
at  present  can  only  be  obtained  if there  is  a  high  rate  of tax relief and  subsidised 
raw material  production.  Detaxation of biofuels is  currently made on  a  limited  scale, 
in  the  framework  of )he  directive  92/81 25  on  harmonisation  of  the  structures  of 
excise duties, allowing such detaxation on a pilot scale.  The  Commission  proposes 
that a market-share of 2% for liquid  biofuels could  still  be  considered  a  pilot  phase. 
This  level  may well  be  reached  in  the  short  or medium  term  in  some  countries  (in 
particular Austria,  Germany,  France and  Italy).  The  Commission  has  already made 
proposals  for adjusting  the  relevant  European  legislation  in  order to  allow  a  large 
scale liquid biofuels detaxation26

• 

For biogas promotion,  production of landfill  gas or biogas  from  the  food  industry or 
farms  will  be  encouraged,  in  order to  obtain  with  energy  and  environmental  policy 
benefits.  Fair access to the  electricity market will  be  promoted  as  indicated  in  point 
2.2.1.  above.  Measures  for  biogas  will  contribute  to  the  achievement  of  the 
Commission's  strategy  on  reducing  methane  emissions27  from  manure  by  using 
anaerobic  digesters  or  covered  lagoons  as  well  as  meeting  the  objectives  on 
protection of waters28 and on  landfill29

• 

It  is  proposed  under  this  strategy  that  demonstration  programmes  at  European 
Union,  national,  regional  and  local  level should  be  supported  to  install  recovery and 
use  systems  for  intensive  rearing.  In  addition,  the  Commission  will  examine  the 
possibility of integrating biogas actions in the structural funds. 

In  order  for  the  markets  for  solid  biomass  to  be  further  developed,  the  following 
must be actively promoted: 

•  co-firing  or  fossil  fuel  substitution  in  coal  power  plants  and  in  existing  district 

heating networks; 

•  new  district  heating  or  cooling  networks  as  an  outlet  for  co-generation  with 

biomass; 

•  greater access to upgraded fuels  such as chips and  pellets and  a more  intensive 

exploitation of appropriate forest, wood and paper industry residues; 

•  new scaled  up  IGCC  (Integrated  Gasification  in  Combined  Cycle)  systems  in  the 
capacity  range  of 25-50  Mwe  based  on  a mixture of biomass and  waste  derived 
fuels; 

•  Clean  energy  generation  from  municipal  waste  either  by  thermal  treatment, 
landfill  gas  recovery  or anaerobic  digestion  as  long  as  energy  generation  from 
waste complements and does not replace waste prevention and recycling. 

26 OJ  L.316 of 31.10.1992,  p.  12 
26  a)  JO n° c 209 of 29.7.1994,  p.9 - Proposal for a Council  Directive on  excise duties on  motor fuels 
from agricultural  sources;  b) the above-mentioned in para 2.2.2 proposal for a Dir~ctive on the 
taxation of energy products - see footnote 17 

27  COM (96)557 of 15.11.96 
28  OJ  L.375 of 31.12.91  - Council  Directive 91/676/EEC concerning the protection of waters against 

pollution caused by nitrates from agricultural sources and OJ.  C184/20 of 17.06.97, Proposal for a 
framework Directive concerning waters protection 

29  COM  (97)  105 of 05.03.97 - Proposal for a Council  Directive on the landfill of waste 

17 

CHP 

is  of  paramount 

The Commission has recently published a strategy30  to promote combined heat and 
the  success  of  biomass 
power. 
implementation.  Almost  1/3  of  the  new  additional  biomass  exploitation  by  2010 
could  fall  in  this  category.  District heating and  cooling  is  also vital to maximise the 
financial  and  economic benefits  of cogeneration. 
Increased  use  of bioelectricity  is 
linked,  like that for wind  and  solar electricity,  to European  Union wide  measures for 
fair access to the electricity market  (see Section 2.2.1). 

importance 

for 

2.2.4 
Improving building regulations:  its impact on town  and country planning 
Energy  consumption  in  the  domestic  and  service  sectors  can  be  significantly 
reduced  by improving energy intensity overall in  addition to more  use - in  retrofitting 
as well as for new buildings - of renewables  such  as  solar  energy.  It  is  important to 
adopt a global approach and to integrate measures of rational use of energy (for the 
building  envelope  as  well  as  for  heating,  lighting,  ventilation  and  cooling)  with  the 
use  of  renewable  energy  technologies.  Total  energy  consumption  in  this  sector 
could  be  reduced  by  50%  in  the  European  Union  by 2010,  half of which  could  be 
accounted  for by  introducing  passive  and  active  solar technologies  in  buildings  for 
which  concrete  promotional  measures  are  necessary.  This  could  be  facilitated  by 
amendments  to the  existing  Directives on  improving  energy efficiency in  buildings31 
and to the Directive on  building  materials32  in  order to include new building materials 
for solar efficiency in the standards specifications. 

In  order to promote the  use of RES  in  buildings, the following  specific measures are 
proposed: 
• 

incorporation of requirements on  the  use  of solar energy for heating and  cooling 
in  building approvals under current legislative, administrative and other provisions 
on town and country planning should be considered; 

•  promotion  of high  efficiency windows  and  solar facades,  natural  ventilation  and 

window blinds in  new buildings and for retrofitting; 

•  promotion  of  active  solar  energy  systems  for  space  heating  and  cooling  and 

warm water,  e.g.  solar collectors,  geothermal heating and  heat pumps; 

•  promotion of passive solar energy for heating and cooling; 
•  encouragement  of PV  systems  to  be  integrated  in  building  construction  (roofs, 

facades) and in  public spaces; 

•  photovoltaic  electricity  sales  to  utilities  from  private  customers  should  be  priced 

so as to allow direct reversible metering; 

•  measures  to  encourage  the  use  of  construction  materials  with  a·  low  intrinsic 

energy content, e.g. timber. 

2.3  Reinforcing Community Policies 

to  renewable  energies 
is  mostly  very 

in  existing  Community  policies, 
The  priority  given 
programmes  and  budgets 
for 
low.  There 
reinforcement.  It  is  also  important  to  make  the  renewable  energies  potential  better 
known  and  to  increase  awareness  among  all  those  bearing  responsibility  for 
Community programmes. 

is  much  scope 

3° COM(97)514-final,  "A Community strategy to promote CHP and to dismantle barriers to its 

development" 

31  council Directive 93/76/EEC of 13 September 1993 ''To limit carbon dioxide emissions by improving 

energy efficiency (SAVE). 

32  Council  Directive 89/106/EEC of 21  December 1988 "On the approximation of laws,  regulations and 

administrative provisions of the Member States relating  to building  materials. 

18 

2.3.1  Environment 
The  Fifth  Environmental Action Plan gives  due consideration to renewable  energies 
and  proposes  support  measures  including  fiscal  incentives33  The  measures  in  the 
Fifth  Environmental  Action  Plan 
renewable  energies,  will  be 
referring 
implemented  by  the  year  2000,  within  the  overall  framework  of  the  strategy 
proposed  in this White  Paper.  The  net environmental  effects of different renewable 
energy sources will be taken into account when  implementing different measures. 
It  is  important  to  underline  that  a  significant  increase  in  the  share  of  renewable 
energy sources will  play a  key  role  in  meeting  the  Union's  CO2  emission  reduction 
objectives,  in  parallel  to  efforts  for  energy  efficiency  and  other  areas.  Measures 
related to climate change will take into account the Community Strategy on RES. 

to 

2.3.2  Growth, Competitiveness and  Employment 
The  Commission's  White  Paper  on  Growth,  Competitiveness  and  Employment 
constitutes  an 
important  point  of  reference  for  further  action  on  renewable 
energies34  There  is  indeed  a great potential  for renewable  energies  to contribute to 
the  aims  set  out  in  that  White  Paper.  Achieving  the  indicative  objective  of 12%  in 
201 O would  lead  to  an  increase  in  the  market  for  European  Industry  and  could 
create  a  significant  number  of  new  jobs  as  outlined  in  Section  1.4.  The  export 
market is  particularly important as  Europe, with  its traditional  links with Africa,  South 
America,  India  and  lately  South-East  Asia,  is  in  a  very  favourable  position.  The 
following actions deserve particular attention: 

•  strengthening the competitive edge of European  industry in  the  global  renewable 
energies  market  by  supporting  its  ventures  into  technological  leadership  and 
supporting  development  of a  substantive  home  market  in  addition  to  emerging 
export opportunities; 
• 
investigating opportunities for the creation of new SMEs and jobs; 
introducing  RES  issues in the actions addressed to SMEs under the social fund; 
• 
•  action  for  education  and  training  relating  to  renewable  energies  within  existing 

Community programmes. 

2.3.3  Competition and  State Aid 
In  considering  the  various ways  in  which  to  promote the  development of renewable 
energy sources, the positive effects of competition  should  be taken  into account.  In 
order to make  renewables  more competitive,  priority should  be  given to ways  which 
let  the  market  forces  function  to  bring  down  the .costs  for  producing  renewable 
energy as rapidly and as far as  possible. 

When  authorising  State  Aids,  the  Commission  has  to  take  into  account  the 
derogations  laid  down  in  Article  92  of  the  Treaty.  The  guiding  principle  for  the 
Commission  in  assessing  aid  for  renewable  energies,  contained  in  the  Community 
Guidelines on  State Aid  for Environmental  Protection35  is  that the  beneficial  effects 
of  such  measures  on  the  environment  must  outweigh  the  distorting  effects  on 
competition.  The  Commission  will  consider  appropriate  modifications  in  favour  of 
renewable  energies  in  support  of its  policy  in  this  area  during  the  revision  of the 
present  guidelines  taking  into consideration  the  Council's  Resolution. on  the  Green 

33  COM (92) 33,  ...  Fifth Environmental Action Plan - "Towards Sustainability" 
34  COM (93)  700.fin - "Growth,  Competitiveness and  Employment-The Challenges and Ways 

Forward in the 21st Century'' 
36 O.J.  n°  C72,  10 March  1994,  p.3 

19 

Paper  "Energy  for  the  future  :  renewable  sources  of  energy"  which  states  that 
investment aid  for renewables can,  in  appropriate cases,  be  authorised  even  when 
they exceed the general levels of aid laid down in those guidelines. 

2.3.4  Research, Technological, Development and  Demonstration 
It  is  generally recognised  that there  is  still  great scope  for Research,  Technological 
Development  and  Demonstration  to  improve  technologies,  reduce  cost  and  gain 
user  experience 
technological 
in  demonstration  projects · on  condition 
development is  guided  by appropriate policy measures for  introduction  into internal 
and third country markets and subsequent implementation. 

that 

Every  kind  of  action,  whether  of  a  fiscal,  financial,  legal  or  other  nature,  is 
addressed  to  facilitate  the  penetration  of the  technologies  into  the  market.  The 
strategic goals presented under 1.3 above have to be reached at the end by the use 
of renewable  energy technologies,  and  the  role  of RTD  is  to help  the  development 
of technologies which are continuously more efficient. 

As  research,  development  and  demonstration  on  renewable  energies  is  moving 
strongly into industrial development and  higher cost intensity, the financial  means to 
be earmarked for renewable  energy sources  should  be  increased  significantly.  The 
4th  Framework  Programme 
for  Research,  Technological  Development  and 
Demonstration  and  more  particularly  the  Non  Nuclear  Energy  RTD  programme  is 
giving a priority to Renewable  Energies  sources  as  they represent  about 45% of its 
total budget.  The 5th  Framework Programme  should  offer the  possibility to  finance 
the  necessary  RTD  efforts  in  this  area.  The  specific  programme  "Competitiveness 
and  Sustainable  Growth"  which  will  be  part  of  the  5th  Framework  Programme, 
contains  a  key  action  on  energy  which  indicates  clearly  the  important  role  of 
renewable energies and decentralised production energy systems". 

All  RTD  activities  related  to RES  should  take  into account the  present Strategy and 
Action  Plan,  including  the  socio-economic aspects.  The  complementarity  between 
RTD  on  RES  and  RTD  on  other technologies  should  also  be  encouraged.  The  role 
of  RTD  is  important  upstream  of  the  actions  in  the  "Campaign  for  Take  Off' 
described  later in  that it should  provide the cost efficient technologies to  be  used  in 
this Campaign. 

2.3.5  Regional Policy 
Renewable  energies  already  feature  to  some  extent  in  the  European  Union's 
regional  policy. 
In  1999  new  guidelines  for  2000-2007  will  be  decided.  The ·next 
multi-annual  funds  negotiation  package will  be  the  occasion  to extend,  Gonselidate, 
and  clarify the  aid  opportunities  available  for  renewable  energies  and  above  all  to 
increase the weight  given to RES  within  the  energy programmes.  Decision-making 
criteria  must  reflect  the  importance  of  renewables'  potential  for  less  favoured 
regions  (which  are  in  general dependent on  energy imports),  peripheral  and  remote 
In  those 
areas,  islands,  rural  areas,  in  particular those  lacking  traditional  energies. 
areas  RES  have  a  high  potential  for  new  job  creation,  for  the  development  of 
indigenous  resources and  industrial and  service  activities  (particularly in  objective  1 
areas).  The  latter  also  applies  to  industrial  areas  under  reconversion  and  cities 
(future objecave 2).  New incentives should also be  undertaken in the tourism  sector 
as the great potential of renewable energies in this area is  still largely unexplored. 

The  Community will  give  support to  regional  and  local  projects  and  planning  in  the 
framework of its  promotional programmes  such  as Al TENER (see  2.5.1).  However, 

20 

it is essential to encourag$ the Member States to include RES  implementation plans 
in  the  programmes  that . they  will  submit·  to  the  structural  funds  for  co-financing 
(ERDF  and  accompanying  Community  Support  Frameworks),  so  that  the  share  of 
RES  in  energy programmes  under the  Objective  1 CSF  could  reach  at Jeast  12  %. 
This  W(?uld  reflect  fully  the  objective  set  out  in  this  White  Paper  for  renewable 
energy  consumption  by  2010.  However,  in  order  to  stimulate  a  shift  towards 
renewable  energy  use  so  that  this  objective  can  be  reached  at  MS  level,  a 
considerably  higher engagement  of the  structural  funds  seems  appropriate.  Since 
the demand for funding  for RES  projects has to be Member State  driven,  effort has 
to  be  put  in  explaining  the  possibilities  for  RES  funding  and  raising  awareness  on 
their  potential  and  benefits  for  the  regions.  Other  programmes  for  Objective  2 
regions should also contribute to the promotion of RES. 

It  is  important  for  the  Commission  to  highlight  that  regional  funds  invested  in 
renewable  energy sources development could  contribute  to  increased  standards  of 
living and income in  less favoured,  peripheral,  island,  remote or declining  regions  in 
different ways : 

favouring the use of local resources and therefore indigenous development; 

• 
•  being  usually  labour  intensive,  they  could  contribute  to  the  creation  of  local 

permanent jobs; 

•  contributing to reduce the dependency on energy imports; 
•  reinforcing  energy supply for local communities,  green tourism,  preserved  areas, 

etc.; 

•  contributing  to  develop  the  local  R& TD  and  Innovation  potential,  through  the 

promotion of specific research-innovation projects adapted to local needs. 

The  CSF  sub-programmes  for  R& TD  and  innovation  should  also  give  particular 
attention to projects aiming at the  development of new technologies and  processes 
adapted to local and regional needs in the areas of RES. 

2.3.6  Common Agricultural policy and rural development policy 
Agriculture  is  a  key  sector  for  the  European  strategy  of  doubling  the  share  of 
renewable  energies in  gross energy demand in the  European  Union  by 2010.  New 
activities  and  new sources  of income  are  emerging  on-farm  and  off-farm.  Among 
those,  the  production  of renewable  raw  materials,  for  non-food  purposes  in  niche 
markets  or the  energy  sector,  can  represent  a  new opportunity  for  agriculture  and 
forestry and contribute to job creation in rural areas36 

The  reference  in  Agenda 2000 refers to the encouragement of renewable  energies. 
In  particular  biomass  should  be  fully  implemented  using  all  available  policy 
instruments  be  they agricultural,  fiscal  or  industrial. 
In  the  future  CAP  alternative 
use  for  agricultural  products  will  be  a  major  element.  Member  States  should  be 
encouraged,  in  the  context  of  the  national  aid  regimes,  to  support  renewable 
energies. 

Within  the  future  rural  development  poUcy,  the  Commission  will  encourage 
Member States and  regions  to give  renewable  energy projects  a high  priority within 
their  programmes  for  rural  areas.  However,  the  regions  will  continue  to  have  to 
assume their responsibility for the selection of the projects. 

38  COM(97)2000 Vol. I,  p 26 (EN) 

21 

The Common Agricultural  Policy could contribute  by supporting the  biomass  energy 
sector to increase standards of living and  income in  different ways : 

•  developing  energy  crops  and  utilising  agricultural  and  forestry  residues  as  a 
reliable  source  of raw  material,  under the  reformed  common  agricultural  policy, 
negotiated in accordance with Agenda 2000,  making  full  use of the  results of the 
research and development policy; 

•  giving  support  for  bio-based  renewable  energies  under  the  rural  development 

policy and other ongoing programmes; 

•  supporting 

the 

regions  by  co-financing 

innovative,  demonstrative  and 
transferable  renewable  energy  projects,  such  as  the  installation  of  combined 
solar,  wind  and  biomass  heat and  electricity production  under a new Community 
initiative  for  rural  areas,  as  it  is  already  possible  within  the  existing  LEADER 
programme: 

•  applying  the  regulation  951/97  on  processing  and  marketing  of  agricultural 

products in  relation to renewable energy products wherever feasible; 

• 

the  Commission  will  table  a  proposal  enabling  Member  States  to  make  the 
granting  of  direct  payments  for  arable  crops  and  set-aside  conditional  on  the 
respect  of  environmental  provisions,  allowing  them  to  be  increasingly  used  to 
pursue environmental objectives37

• 

' 

The existing possibilities under Regulation 2078/92 will be  reviewed  in the context of 
Agenda 2000. 
In  this  context,  programmes  which  reduce  environmental  pressures 
from  biomass-production  and  other  uses  under  the  agrl-environmental  objectives 
should  be  developed. 
In  particular,  schemes  where  energy  crops  are  produced 
using  reduced  water supply,  low  inputs,  by organic  methods  or harvested  in  a way 
to  promote  biodiversity  etc  could  attract  a  premium.  The  Commission  could 
envisage more agri-environmental  schemes  being  developed  by  national authorities 
to  support  energy  crops  respecting  the  fact  that  priorities  for  programmes  would 
continue to be  set by regional needs and potentials. 

On  a  European  forestry strategy the  European  Parliament,  in  its  "Thomas  Report" 
has  called  on  the  Commission  to  put  forward  a  legislative  proposal.  This  report, 
inter alia, considers the need for adding value to biomass through energy production 
including a wide range of instruments.  The  report  is currently under examination  by 
the Commission, and particular attention will be paid to this point. 

Non  food  policy  should  also  provide  for  support  for  energy  uses  of  agricultural 
products,  by-products  and  short  rotation  forestry.  The  Commission  intends  to 
examine the  adequacy of existing  instruments  particularly  in  the  sense  of the  need 
to  promote  RES  and  to  improve  further  harmonisation.  Some  support  is  in  fact 
already  provided  for  in  the  European  legislation,  such  as  1586/97  (non  food  set 
aside)  Regulation  2080/92  (forest  measures),  2078/92  (agro-environmental 
measures) and 950/97 (improvement of efficiency in the agricultural sector).  Full use 
should be made of those existing Regulations. 

37  COM(97)2000 Vol.  I,  p 29 (EN) 

22 

2.3. 7  External Relations 
Information  on  and  promotion  of RES  is  important for third  countries,  especially as 
they will also have to contribute to global CO2  emission  reductions.  In  that respect, 
it  is  important  to  promote  RES  in  the  European  assistance  programmes,  such  as 
PHARE,  TACIS,  MEDA, 
the  European  Development  Fund  and  other  Lome 
Convention  facilities,  as  well  as  in  all  relevant  co-operation  and  other agreements 
with  developing or industrialised third countries,  taking  into account the  possibilities 
and  constraints  of  each  programme.  For  PHARE  and  TACIS,  the  promotion  of 
renewable sources has to be considered  in  the context of the  economic and  energy 
sector reform priorities of these programmes. 

A  proactive  co-operation  and  export  policy  to  support  renewable  energies  will  be 
stimulated, by enlarging the scope and basis of the relevant European  Union energy 
programmes  such  as  SYNERGY,  as  well  as  the  Scientific  and  Technological 
Cooperation  components  of the  5th  RTD  Framework  Programme.  The  action  list 
should include the following: 

•  support  for  co-operation  on  energy  planning  and  integrated  resource  planning 
with  emerging  economies~  in  order  to  optimise  exploitation  of  the  available 
renewable energy  potential; 

•  support  for  exporters,  in  the  form  of credit  guarantees  and  "currency  turmoil" 
insurance and in the organisation of trade missions, fairs, joint workshops etc.; 
•  collaboration  in  the  implementation  of the  "Word  Solar  Programme  1996-2005" 
which  intends  to  realize  worldwide,  and  especially  in  the  developing  countries, 
high priority regional and national projects; 

•  cooperation  with  the  international  financing  organisations  such  as  the  World 

Bank and the Global Environment Facility GEF. 

Special action concerning ACP Countries : 
•  a  special  initiative  to  promote  solar  electricity  (photovoltaics  for  deprived  rural 

areas in third countries currently without electricity)38

; 

•  encourage  increased use of alternative  renewable  energy sources to resolve  the 
problems caused  by overconsumption of fuelwood  in  both  rural  and  urban  areas 
of developing countries; 

•  encourage the development of suitable fuelwood species plantation; 
•  stepping  up the ACP States' research  and  development activities  as  regards  the 

development of new and renewable energy sources; 

Special action concerning associated countries: 
•  a  special  initiative  to  promote  the  process  of  approximation  of  ~om')lunity 

• 

• 

legislation on renewables in associated countries; 
implementation of Protocols concerning  the  participation  of associated  countries 
in  promotional EU  programmes such as AL TENER; 
involving associated and  third  countries  in  demonstration  programmes  under the 
5th  RTD  Framework  Programme, 
to  specific  energy  policy 
programmes such as SYNERGY and AL TENER; 

in  addition 

38  Today, an estimated  2 billion people worldwide lack access to modern e~erg_y sources. 

. . 

Photovoltaics technology is now cost-effective in stand-alone power apphcat1ons remote fom utility 
grids. 

23 

2.4  Strengthening co-operation between Member States 

For successful implementation of the  European  Union Strategy and  Action  Plan  for 
renewable· energies, effective co-operation between Member States is of paramount 
importance. At present  serious  discrepancies  persist  in  levels of advancement both 
as  _regards  renewable  energy  implementation  in  the  different  Member  States,  and 
between 
themselves.  Co-operation  within  a  Europe-wide 
implementation  strategy  offers  considerable  added  value  to  Member  States,  as 
successful  policies  and  experiences  at  national  level  can  be  shared,  and  national 
renewables  goals  better co-ordinated,  with  the  result  that  the  efficiency  of overall 
policies as well as particular projects will increase. 

technologies 

the 

The  Commission  adopted  on  4  October  1996  a  proposal  for  a  Council  Decision 
concerning  the  Organisation  of  Co-operation  around  Agreed  Community  Energy 
Objectives39
•  The  draft  decision  identifies  the  promotion  of  renewable  energy 
resources as one of the  agreed  common  energy objectives and  calls  for supportive 
measures  at  both  Community  and  national  levels  with  the  aim  of  achieving  a 
significant  share  of renewables  in  primary  energy production  in  the  Community  by 
2010.  Concrete  measures  will  be  proposed  as  part  of the  implementation  of the 
Council Decision, once adopted. 

2.5  Support Measures 

2.5.1  Targeted  Promotion 
The  AL TENER  1140  programme,  and  the  subsequent  programme  included  in  the 
proposed  Energy  Framework  Programme41  will  have  a  crucial  role  to  play  as  the 
basic instrument for the Action plan. 

AL TENER II  will  continue to  support the  development of sectoral  market  strategies, 
standards  and  harmonisation.  Support  will  be  given  to  RES  planning  at  national, 
regional and  local  levels  and  to information  and  education  infrastructures.  Support 
will  also  be  given  to  the  development  of  new  market  and  financial  instruments. 
Dissemination  of  information  is  also  a  major  action  in  ALTENER  II. 
In  addition, 
technologies  and 
promotion  of 
dissemination of related  information are also supported  by JOULE-THERMIE. 

innovative  and  efficient 

renewable  energy 

In  order  to  enhance  the  impact  of ALTENER  II  in  RES  market  penetration,  new 
measures  to  help  overcome  obstacles  and  increase  operational  capacity  for_ the 
production  of  energy  from  RES  have  been  proposed.  These  actions  ~ill  be 
targeted  on  assisting  biomass,  solar thermal  and  PV,  buildings,  wind,  s·mall  hydro 
and  geothermal  to  penetrate  the  market.  Actions  under AL TENER  II  will  also  be 
crucial  for the  preparation  of the  Renewables  Campaign  for  Take-off  (see  chapter 
3). 

39  COM (97)43ofinal, 26.08.97.  Proposal for a Council  Decision concerning the organisation of co 
4° COM(97)87 final of 12.3.1997, Proposal for a Council  Decision concerning  a multiannual 

operation around Community energy objectives 

programme for the promotion of RES  (AL TENER II) 

41  COM (97)550,  18.11.97, Proposal for a Council  Decision establishing a multiannual framework 

programme for actions in the energy sector,  and associated  measures. 

24 

Monitoring  the  progress  in  the  implementation  of  the  RES  Strategy  in  Member 
States and  in the Community will be critical and measures in AL TENER II to support 
monitoring and evaluation are essential (see chapter 4). 

In  order to achieve the  objectives  for renewables,  a major effort will  be  required  to 
harness  the  potential,  influence  and  experience  of all  manner of associations  and 
groups  (grass-roots  organisations),  relevant  non 
bodies  such  as  citizens' 
international 
governmental  organisations,  and  pressure-groups 
environmental protectiQn organisations. 

including 

the 

· At  local  and  regional  level,  the  creation  of  energy  agencies  under  the  SAVE  II 
programme  allows  local  authorities  to  play  an  important  role  in  the  promotion  of 
renewable  energies,  mobilising  local partnerships,  focusing  on  practical actions and 
of becoming a key initiator of policies at local level. 

The  setting  up  of effective  networks  is  important  in  order to  convey  information  on 
renewables  at  all  levels  - from  the  technological  to  the  financial  to  the  local  public 
environmental concerns.  A  major feature  of the  Commission  effort in  this  area will 
be the use of Internet websites. 

Other  public  relations  tools  such  as  industry  awards,  renewable  energy  prizes, 
conferences and  other open  events  can  and  already  do  have  a  strong  promotional 
effect  in  the  renewables  field,  but  careful  selection  in  the  allocation  of  support  is 
essential to avoid dispersion of effort. 

2.5.2  Market Acceptability and Consumer Protection 
The following actions are planned: 

•  consumer information on  quality goods and services for renewable energies.  This 
information  is  to  be  disseminated  in  such  a  way  that  customers  can  choose 
anywhere  in  the  internal  market  the  most  appropriate  European  product  and 
source at the least price; 

•  standards  should  be  established  at  European  level  but  also  at  a  wider 
international  level  in  order to  support  exports.  Since  standardisation  work  in  the 
renewables  field  started  only  in  1995,  an  increased  effort  has  to  be  made  to 
extend  standards  to all  commercial  equipment;  provisional  certification  has  also 
to  be  promoted.  The  EU  Joint  Research  Centre  has  an  important  role  to  play  in 
this respect,  giving technical support to the CEN  and CENELEC  in  the framework 
of AL TENER; 
in  order  to  respond  to  and  mobilise  the  existing  strong  public  support  for 
renewable energies,  products should  be clearly labelled as  such; 

• 

•  best  practice  experience  in  particular  for  services,  system  operation  (a  typical 
field  for  this  is  passive  solar  applications)  should  be  collected  and  widely 
disseminated; 

•  regional focal  points for information and  consumer advice  should  be  set  up.  The 
existing  regional and city energy centres - and those which  continue to be  set up 
under the SAVE II  programme are in  most cases ideally situated and  equipped to 
take on this role. 

2.5.3  Better  positioning  for  RES  on  the  institutional  banks  and  commercial 

finance market 

International financial  institutions  such  as the  EIB  (incl.  EIF  etc.) and the  EBRO and 
their  national  counterparts  have  already  become  involved  in  the  financing  of 

25 

renewable  energies,  ·in  particular  hydro  and  wind  plants.  Their  role  can  be 
strengthened considerably by-: 

•  providing soft loans and credit guarantees; 
•  creating special facilities for renewable energies; 
•  developing schemes facilitating loans for small renewable energy projects . 

. Specific action focused on commercial banks will be promoted: 

•  guidelines  and  risk  evaluation  schemes  to  help  banks  to audit  RES  businesses 

apptying for loans: 

•  EU  support to packaged projects in order to facilitate soft loans access. 

2.5.4  Renewable Energy Networking 
Transnational co-operation  in  Europe  is  important  in  order to exchange  experience 
and  to  increase  effectiveness.  As  the  scale  of renew~ble  energies  implementation 
becomes more significant, the following  initiatives should be taken: 

•  networks  of regions,  islands,  and  cities  aiming  at  a  100%  energy  supply  from 

renewable energies by 201 O; 

•  networks of universities and schools pioneering renewable energies; 
•  renewable  energies 

technology  research  and 

technological  development 

networks; 

•  renewable energies twinning of cities,  schools, farms etc.; 
• 
• 

temporary networks for specific tasks; 
the  virtual  centre  "AGORES"  for the  collection  and  dissemination  of information 
on:  regulation,  calls  for proposals,  Comrr;unity and  Member States  programmes, 
technical state-of-art, training, financing,  assistance, etc. 

26 

Chapter 3 

Campaign for take-off 

3.1 

Introduction 

Even though  renewable energy technologies  have  reached  a certain  maturity, there 
are  many  obstacles  to their  market  penetration. In  order to  assist  a  real  take  off of 
renewables  for  large  scale  penetration,  make  progress  towards  the  objective  of 
doubling  the  EU  renewable  energy  sources  share  by  2010,  and  ensure  a  co.: 
ordinated  approach  throughout  the  Community,  the  Commission  proposes  a 
campaign for take off of renewables. This will need to be  undertaken over a number 
of years  and  will  require  close  cooperation  between  the  Member  States  and  the 
Commission.  The proposed campaign aims to promote the  implementation of larg·e 
scale  projects  in  different renewable  energy  sectors  and  will  send  clear  signals  for 
greater  use  of  renewable  energy  sources.  In  preparation  for  the  Campaign,  the 
Commission  will  catalogue  and  analyse  all  existing  European  Union  and  Member 
States' activities and programmes which could  provide support for such a campaign. 
The  conclusion  of this  preparatory  survey  will  be  reported  to  Council  and  to  the 
European  Parliament.  Detailed  guidelines  for the  campaign  will  then  be  drawn  up, 
together with the Member States. 

It  is  clear  that  the  role  of  Member  States  is  critical  in  this  concerted  action  for 
promoting  large scale  implementation of renewables.  The  Commission's  role  will  be 
to  establish  the  framework,  to  provide  technical  and  financial  assistance,  where 
appropriate,  and to coordinate actions.  For such  a major effort to  succeed,  it  is  also 
important to implicate all the  interested  parties  and  bodies  in  promoting  renewables 
through  the  means available  to them.  The  involvement of these  actors  can  include 
the negotiation of commitments and voluntary agreements where appropriate. 

the regions; 

Many  parties  can  be  potentially  active  in  a  campaign  to  promote  renewables, 
including the following: 
• 
•  municipalities and their distribution utilities; 
• 
• 
•  authorities in charge of public procurement; 
• 
• 
• 

industry associations and utilities; 
farmers associations; 
forest-based  industries and cooperatives. 

the oil and car industries; 
town and country planning bodies and architects; 

In  the  preparatory  phase  for  the  campaign,  proposals  will  be  made  for  their 
involvement and contribution. 

3.2  Key Actions 

The following  key actions are proposed to be  promoted during the campaign: 

3.2.1  1,000,000 Photovoltaic Systems 
Photovoltaics  (PV)  is  a  high  technology  with  strong  export  potential  in  a  very 
competitive global market and fierce competition with  Jap~n and the  USA.  There  is 
a very  motivated  PV  industry  in  Europe  which  should  be  supported  in  its  effort  to 
bring  domestic and  export  markets  off the  ground.  Besides  the  leading  European 

27 

oil  and  other  big  companies,  many  SMEs  are  active  in  the  field.  There  is  much 
scope for their number to increase and for large numbers of jobs to be created. 

An  ambitious  and  very visible  promotion  campaign  is  needed  in  order to  provide  a 
,  sufficiently  large  market  base  to  enable  the  prices  to  fall  substantially,  and  so  the 
Campaign  will  comprise  an  EU  wide  500,000  PV  roof and  fa~de  initiative  for the 
domestic market and an export initiative for 500,000 PV village  systems to kick start 
decentralised  electrification  in  developing  countries.  The  basic capacity for each  of 
the  systems  (the  integrated  building  systems  in  Europe  as  well  as  the  solar village 
schemes  overseas),  is  1 kWe  i.e.  the  total  capacity to  be  installed  in  this  Campaign 
by 2010 is 1 GWp. 

A  large  part  of the  future  PV  market  will  be. associated  with  building  applications, 
especially  in  Europe  where  the  electricity  grid  is  omnipresent  . A  500,000  PV  roof 
and  facade  campaign  or the  European  Union  will  represent,  on  the  basis  of  1 kW 
generators,  a  total  capacity of 500  MWp  and  will  make  up  one-sixth  of the  3  GWp 
estimated  implementation  potential  outlined  in  Annex  II.  This  is  a  very  significant 
campaign  for the  future  of  PV,  even  though  it  will  affect  less  than  2%  of the  30 
million  houses  and  non-residential  units  which  will  probably  be  built  between  now 
and 2010. This is without taking into consideration the  equally large  potential for PV 
retrofitting in  existing buildings. 

The  rationale  of such  a  goal  in  a  global  solar  market  is  its  consistency  with  the 
corresponding  goals  fixed  in  Japan  and  the  United  States.  The  first  1000  PV  roof 
programme  implemented  in  Germany at  the  beginning  of the  1990's  proved  highly 
successful for market introduction of PV,  quality assurance and  cost  improvements. 
Japan  is  implementing  in  1997 a  10,000  roof  programme  which  is  funded  for  one 
third  from  public  sources.  The  total  investment cost  of a  500,000  roof  programme 
would  be  1.5  billion  ECU  (assuming  1 kW generators  at  an  average  price  over the 
13  year  period  of  3  ECU/W).  On  average,  it  would  mean  approximately  the 
installation of 40,000 systems per year.  Total yearly investment costs would then be 
120 million  ECU of which one third i.e.  40 million  ECU  might be  provided from public 
funds.  The  equivalent amounts will  be  used  for the  export  initiative.  Although  there 
are virtually no regulations in  place to promote  PV in the  European  Union, there  is a 
wide  spectrum  of funding  and  fiscal  incentives  for  PV  employed  today.  The  most 
important ones  are  the  50  %  investment  subsidy  in  some  German  Lander,  Greece 
and  other Member States,  a  full  cost  electricity tariff for  PV energy  supplied  to  the 
grid  in  some  German cities and  accelerated  depreciation  in  the  Netherlands. A  less 
generous  support  of  one-third  of the  investment  cost  from  public  funds  which  is 
currently  applied  in  Japan  may  actually  be  sufficient  to  open  up  the  ~ommercial 
markets. 

This campaign  should incorporate specific actions such as: 

•  promotion  of photovoltaics  in  schools  and  other public buildings.  This action  has 
not only an  educational effect to  increase  knowledge  and  awareness  at an  early 
and  receptive age,  but it is technically sound as it minimises the need for storage 
capacity and in  many cases can  benefit from advantageous financing; 
incentives  for  photovoltaics  applications  in  tourism,  and  sports  a~d  recreational 
facilities,  which  offers  considerable  potential  due  to  strongly  peaking  seasonal 
demand  in  mass  tourism  and  the  fact  that  a  large  proportion  of tourist  sites  are 
isolated and/or mountainous or otherwise expensive to supply from grids; 

• 

28 

• 

incentives  for  financing  from  public  funds  and  city  utilities,  for  instance  by 
spreading  the  extra  cost  for  photovoltaics  over  the  entire  customer  base  as 
opposed to the sole purchasers for solar electricity. 

favourable  conditions.  Areas  potentially  suitable 

3.2.2  10,000 MW of Large Wind  Farms 
Wind  energy today is competitive and  has  already been  widely  installed  at specific 
sites  with 
for  wind  energy 
applications are  dispersed  throughout the  European  Union.  At present,  some  have 
to  bear additional  costs  due  to their particular location  which  increases  installation 
and/or  operational  costs  (areas  far  from  existing  grids,  in  very  cold,  hot  or  dusty 
climates,  offshore, islands,  remote rural areas etc.).  In  particular,  there is enormous 
potential for offshore wind  farms.  They have the advantage of higher wind  speeds, 
although access is clearly more difficult.  In  order to achieve  large- scale  penetration 
of wind  energy in the European  Union these areas have also to be  used.  A specific 
campaign  is  thus  required  to  support  large  wind  farms  in  such  locations  and  the 
development  of  such  new  or  adapted  technology  as  may  be  appropriate.  This 
programme will clearly imply a major role for the utilities most concerned. 

The  10,000 MW of wind farms  proposed  here represent 25% of the feasible  overall 
wind  energy  penetration  for  2010  outlined  in  Annex  II.  No  public  financing  will  be 
needed  for the  30,000 MW remaining  installed  capacity provided  that a  fair access 
to the  European  grids  for the  wind  turbines  is  guaranteed,  as  described  •in  section 
2.2.1.  An  additional  help  is  needed  only  for  the  less  favoura.ble  or unconventional 
.. 
applications descri~ed above. 

,I 

The  average  ex-works  cost  of wind  turbines  for wind  farms  is  today  less  than  800 
ECU/kW  of  installed  capacity.  Project  preparation  cost  depends  heavily  on  local 
circumstances,  such  as  condition  of the  soil,  road  conditions,  proximity to  electrical 
grid sub-stations, etc.  For flat onshore sites the overall cost of an  installed wind farm 
is  about  1,000  ECU/kW.  This  cost  could  increase  substantially  for  offshore  and 
unconventional site applications.  On the other hand, costs are  expected to fall  by at 
least  30%  by  2010. 
It  is  then  logical  to  assume  the  total  investment  cost  of the 
proposed  10,000 MW will  be  in  the order of 1 O billion  ECU.  A  public expenditure of 
15% would amount to 1.5 billion  ECU throughout the  Union or a little more than  100 
million  ECU  per year. 

3.2.3  10,000 MWth of  biomass installations 
Bioenergy  is  among  the  most  promising  areas  within  the  biomass  sector,  and 
combined  heat  and  power  using  biomass  has  the  greatest  potential  in  volume 
among  all  renewable  energies.  Consequently,  a campaign  to  promote  and  support 
decentralised  biopower  installations  throughout  the  European  Union  is  essential. 
Such  installations  could  range  in  scale  from  a  few  hundred  kW to  multi-MW  and 
combine different technologies, as appropriate to local circumstances,  including fuel 
switching.  Wherever  possible  use  should  be  made  of  opportunities 
for 
rationalisation through regional and local level implementation. 

The  estimated  contribution  of  biomass  in  combined  heat  and  power  plants,  as 
outlined  in  Annex  11.1,  could  be  26  Mtoe.  This  corresponds  typically  to  an  overall 
installed capacity of approximately 20  GWe  or 60 GWth•  The  promotion  of 10  GWth 
through  this  campaign  represents  1 /6  of the  total  estimated  contribution  biomass 
could  make  by 2010.  It  will  in  particular  be  important to take  measures  in  the  early 
years of this action plan in  order to launch a bioenorgy market. 

29 

The total installation cost of such an initiative would be in the order of 5 billion  ECU, 
assuming  an  average  cost  of  500  ECU/kWth  of  installed  capacity.  A  public 
expenditure  of  20%  would  amount  to  1  billion  ECU  for  the  whole  period  for  the 
whole  Union or around  80  million  ECU  per year.  The biomass feedstock cost would 
amount to 270 million ECU per year,  if we assume a 100 ECU/toe. 

Integration of Renewable Energies in  100 Communities 

3.2.4 
To optimise the available potential of renewable  energy technologies  requires them 
to be used together wherever this is productive either in  integrated systems for local 
power  supply  or,  on  the  other  hand,  in  dispersed  schemes  for  regional  power 
supply.  These  obviously  have  to  be  adapted  to  the  conditipns  of  each  specific 
location,  so as to ensure reliable  power supply to the  required  quality and continuity 
standards. 

As  part  of this  campaign  action,  a  number of pilot communities,  regions,  cities  and 
islands will be  selected from those which can  reasonably aim at 100% power supply 
from  renewables.  These  pioneer  collectivities,  in  order  to  feature  as  credible 
pacemakers,  should  be  of varying  size  and  characteristics.  On  a  small  scale,  the 
units  could  be  blocks  of  buildings,  new  neighbourhoods  in  residential  areas, 
recreational  areas,  small  rural  areas,  or isolated  ones  such  as  islands  or mountain 
communities.  On  a  larger scale,  "solar cities"  should  be  identified,  as  well  as  large 
rural  areas,  and  administrativ~  regions  which  can  benefit from  an  existing  sense  of 
community.  Large  islands  (e.g.  Sicily,  Sardinia,  Crete,  Rhodes,  Mallorca,  Canary 
Islands or Madeira) could also be used as pilot regions. 

In order to specify the actions required and to monitor progress, a strategy including 
schedules,  priorities and  players  must  be  defined.  Local  and  regional  authorities as 
well  as  regional  energy  centres  have  a  central  role  to  play  in  implementing  this 
project. 

Preference  should  be  given  to  activities  involving  combinations  of technology  and 
application  in  such  a  way that  such  projects  have  the  potential  to  cover the  entire 
range  from  pre-feasibility  study,  through  feasibility  study and  demonstration  phase 
(mainly) 
(mainly  programme 
commercial international financing. 

implementation  with 

large-scale 

financed), 

to 

The  costs  of this  initiative are  difficult to define with  any precision  at this  stage  due 
to  the  different  size  and  nature  of each  possible  action.  Projects  implemented  in 
other sectors  of the  present  campaign  can  also  be  a  part  of the  action~  promoted 
here.  As  a first  estimate  one  may assume  a yearly cost of 200  million  ECU,  with  a 
public funding  in the order of 20% or 40 million ECU per year throughout the Union 

3.3  Estimates of some of the costs and  benefits 

Cost  estimates  and  an  investment  plan  to  be  financed  by all  partners,  Community 
and  Member  States'  programmes  and 
institutional  and 
commercial  banks,  utilities and  others,  wWI  have to be  drawn  up.  The· effects of this 
Campaign  on  CO2  emissions  and  employment  will  also  be  analysed  in  detail.  As  a 
first  estimate,  the  Campaign  could  involve  20.5  billion  ECU  of investments  for the 
period  1998-2010.  Public  funding  from  all  possible  sources  (European,  national, 
regional,  local),  to  stimulate the  Campaign  could  be  in  the  order of 4  ~illion  ECU  or 

funds  and  also  by 

30 

. 300  million  ECU  per year.  At the  same  time,  it  must  be  underlined  that  3.3  billion 
ECU will be saved  in  avoided fuel cost to 2010 and external benefits  in the order of 
2 billion  ECU per year are estimated ... 

The  following  table  summarises  the  figures  related  to the  Campaign  and  estimates 
the direct benefits in avoided fuel costs and reduction of CO2  emissions. 

1. 1,000,000 PV  1,000 MWp 

3 

1 

0.07 

systems 

2.10,000 MW 
Wind Farms 

10,000 MW 

10 

1.5 

2.8 

3.10,000 MWth 

Biomass 

10,000 
MWth 

5 

1 

4.lntegration in  1,500 MW 

2.5 

0.5 

0.43 

100 
Communities 

1 

20 

16 

3 

Total 

20.5 

4 

3.3 

40 

31 

Chapter 4 

Follow up and Implementation 

4.1 

Implementation and Monitoring of Progress 

During the period of implementation of the Strategy and Action  Plan  outlined  in  this 
White  Paper,· there  is  the  need  for  a  constant  monitoring  of activities  in  order  to 
follow closely the progress achieved  in  terms  of penetration  of RES,  and  to ensure 
and  improve co-ordination  of programmes and  policies  under the  responsibilities  of 
the Community and the Member States. 

There is,in this context a case for improving the co-ordination and data collection  as 
regards the action on  renewables  undertaken within  the various  programmes of the 
Community  and  the  activities  of  Member  States,  and  for  developing  a  unified 
acceptable system of statistics based on the substitution  principle. The Commission, 
in  the  framework  of  the  Al TENER  II  programme  and  in  co-operation  with  the 
Statistical Office and the JRC will create a monitoring  scheme which can  register all 
Community support given to renewables as well as the action undertaken at national 
level and  progress  made  in  terms  of renewables  penetration  in  different sectors.  In 
this  way  policies  and  programmes  affecting  renewables  and  progress  towards 
increasing the share of renewables can  be monitored reliably and effectively. 

4.2 

Internal Co-ardination of EU  Policies and  Programmes 

A  major  added  value  of a  Community  Strategy  is  the  proposed  integration  of the 
promotion of RES  in  several  policy areas.  In  order to ensure the  effective follow-up 
and  implementation of this  aspect within  the  Commission,  the  internal co-ordination 
will  be  strengthened to deal with  all  policy aspects  of renewable  energy integration 
in the Community's policies and areas of responsibility. 

4.3 

Implementation  by  Member  States  and  Co-operation  at  EU 
level. 

The  active  participation  of  the  Member  States  in  the  further  development  and 
implementation  of the  Strategy,  as  well  as  in  the  assessment · and  monitoring  of 
progress  is  essential.  Co-operation  within  an  EU-framework  provides  added-value 
for the  effectiveness of the actions and  also offers considerable  benefit to Member 
States,  as  successful  policies  and  experiences  on  national and  local  levels  can  be 
disseminated  and  objectives  and  actions  can  be  coordinated.  Joint  policies· and 
transnational Projects will increase efficiency. 
A  working  group  involving  Commission  and  Member States  representatives  will  be 
established in order to monitor the measures undertaken and evaluate the impact of 
energy  policy  decisions  at  all  levels  with  regard  to  the  use  of  renewable  energy 
sources.  Member States need to adopt national goals and  strategies,  and these will 
be  compared  alongside  European  wide  action  discussed  and  to  be  put  into  effect. 
The  Member  States,  as  part  of their  contribution  to  this  process,  will  be  asked  to 
report  to the  working  group  the  feasible  contribution  they  can  realistically  make  to 
the 201 O target,  including  how they intend  to  promote  renewables  sector by sector. 
The  working  group  should  also  co-ordinate  responses  and  form  ·a  view  on  the 
likelihood  of  the  RES  Community  objective  being  achieved,and  if  necessary 
stimulate new measures. 

32 

4.4 

Implementation of Action  Plan - Next Steps 

The  Community  Strategy  presented  above  is  the  basic  framework  for  action  for 
achieving  the  indicative  objective  of 12%  penetration  of renewables  by 2010. 
In 
order to implement the Strategy, concrete measures are proposed in an Action  Plan 
(Annex  I),  which  the  Strategy  sets  out  the  individual  actions  by  categories,  and 
indicates the  form  of each  action.  Actions  are attributed  to the  EU,  Member States 
or both,  depending on the  nature of the action  and  in  accordance with the principle 
of subsidiarity.  Whole-hearted  commitment  will  be  necessary  from  all  the  players 
involved, EU  institutions, Member States, regional and local authorities, industry and 
consumers,  to  implement  this  Action  Plan  and,  in  so  doing,  achieve  the  objective 
adopted  for  a  significant  increase  in  the  share  of renewable  energies  in  the  total 
inland  energy  consumption  by  2010.  If  the  objective  of  doubling  the  share  is 
achieved  it  will  have  an  important  impact  on  reducing 
the  EU's  CO2  emission  as 
well as contribute to job creation and regional economic development. 

A  Communication  to  the  European  Parliament,  the  Council,  the  Economic  and 
Social  Committee  and  the  Committee  of the  Regions  will  be  produced  every  two 
years  in  order  to  evaluate  the  success  of the  strategy  and  recommend  a  revised 
direction  and/or new actions  if sufficient  progress  in  the  penetration  of renewables 
does not appear to be made. 

The  European  Parliament,  the  Council,  , the  Economic and ~Social  Committee  and 
the  Committee  of the  Regions  are  invited to endorse  the -EU  Strategy  and  Action 
Plan  set out  in  this ··White  Paper,  and  to  support  its  implementation  over the  period 
to 2010. 

33 

Annex I 

PRELIMINARY INDICATIVE ACTION  PLAN  FOR RES 1998-2010 
(Includes some actions already initiated) 

ACTION  PLAN 
1. Objectives and Strategies 
Community Strategy and overall objectiveof 12% for the EU  up 
to 2010 

Member States setting individual objectives to 2005 and 201 0 
and establishing strategies 

2.  Internal Market Measures 

Fair Access for RES to the Electricity Market 
Restructuring the Community Framev-.,ork for the Taxation of 
Enen:w Products 
Start-up subsidies for new production plants.  SME's and new job 
creation 
Development or/and harmonisation concerning "golden" or 
"green" funds 

Progressive increase of the market share of liquid biofuels 
Promotion of Biofuels in transport fuel 

Promotion of biofuels in low-sulphur liquid fuels 

Extend the scope of the SAVE Directive to passive and active 
solar systems in buildings to t~ke into account the energy gains 
for heating and cooling 
Extend the scope of the Directive to building materials with a 
low intrinsic enerav content 

I 

European Union 

Member States 

Chapter 

Communication of the 
Commission - White Paper -
(1997) 

-

-

action 

transposition 
transposition or-
harmonisation 
action 

action 

action 
transposition 

transposition 

Proposal for a Directive (1998) 
Proposal for a revised Directive 
(COM/97/30) 

-

1998 : Promotion 
2000 : Communication of the 
Commission 

Proposal for a Directive 
COM(97)248 
Proposal for a Directive 
CGM(97)88 
Proposal for Amendment of 
Directive 93/76/EC (1998) 

Proposal for Amendment of 
Directive 89/106/EC (1998) 

1.3.1 

1.3.1 

2.2.1 
2.2.2 

2.2.2. 

2.2.2. 

2.2.3 
2.2.3 

2.2.3 

transposition 

2.2.4. 

transposition 

2.2.4. 

34 

3.  Reinforcing  Community Policies 

Inclusion of Actions on Renewables in the overall strategy for 
Communication of the 
Commission COM(97)481 
combatting climate change 
Adoption and implementation of  the 5th Frame~rk Programme  Decision of the EP and the 
for RTD {1998-2002) 
RES to be included in the main priorities jointly wth employment  To be decided in  1999. 
and  environment in the regional  fund  new phase (2000-2006) 

Council  { ... / .. ./...) 

-

-

implementation 

Decision awaited  1998 
Review of Reg.  2078/92 and 
other existing instruments 

Promotion of biomass in CAP and rural  development  proposals  CAP proposals/Agenda 2000 
for 2000-2006 
Review of Reg.  2078/92 in context of Agenda 2000 
Examination of adequacy of existing instruments and possibility 
of further harmonisation 
Definition of an energy strategy for the co-operation wth ACP 
countries,  in the Lome Convention Frame~rk, emphasizing the 
role of RES 
Sufficient funding from TACIS and PHARE for RES in order to 
implement Protocoles opening EU support programmes 
AL TENER and  SYNERGY to associated countries.  Appropriate 
agreements wth Mediterranean area countries as well  as other 
areas.  Collaboration in the implementation of the Wortd Solar 
Prooramme  1996-2005. 

Specific Protocols 
Communication 

Communication 

~ 

2.3.1. 

2.3.4. 

2.3.5. 
and 
2.3.6. 

2.3.6. 

2.3.6 

2.3.7 

2.3.7. 

4.  Strengthening Co-operation between Member States 

Strengthening co-operation between MS under Council  Decision  Proposal for·a Council  Decision 
on the Organisation of Co-operation around Agreed Community 
Energy Objectives 

(COM/ .. ./ ... ) 

implementation 

2.4 

5.  Support measures 

EU programme to promote RES,  open to CEECs and  Cyprus, 
aimed at creating the necessary conditions for the 
implementation of the Action Plan particularty the legal, socio-
economic and administrative conditions and  encouraoe private 

Proposal for a Council  Decision 
"AL TENER II" 
(COM/97/87) 
Proposal for Frame~rk 

submission of 
projets 

35 

and  public investments in the production and  use of energy from  Programme for Energy Actions 
RES to include specific actions for the identification and 
promotion of business opportunities 
Consumer information campaigns.  Targeted information action 
on the protection of environment 'Mth simultaneous energy 
recovery 
Development of European standards and certifications 

EU actions 

1998-2002 

Better positioning for RES on the institutional  banks and 
commercial finance market by developing schemes facilitating 
investments in RES projects 
Creation of a virtual centre "AGORES" for collection and 
dissemination of information 

1,000,000 PV systems  half in EU,  half in third countries. 

6.  Campaign for take-off 

10,000 MW of large 'Mnd farm 

10,000 Mwth of biomass installations 

Integration of Renewable Energies in 100 Communities 

7.  Follow-up 

Scheme to monitor progress 
Improvement of data collection and Statistics 
Inter-services co-ordination group 
Creation of a Working Group involving Commission and 
Member States 
Regular reporting to the Union's Institutions 

CEN and CENELEC under 
AL TENER 
agreements and  projects 

certification  by 
agreed bodies 
agreements 

action under AL TENER 

data 

co-funding 

co-funding 

. 

co-f-unding 

co-funding 

data 

EU  promotion and financial 
contribution 
EU  promotion and financial 
contribution 
EU  promotion and financial 
contribution 
EU  promotion and financial 
contribution 

EU action under AL TENER 
Commisston action 
Commission action 
Commission action 

Commission action 

2.5.2 

2.5.2 

2.5.3 

2.5.4 

3.1 

3.2 

3.3 

3.4 

4.1 
4.1 
4.2 
4.3 

4.4 

36 

Annex II 

Estimated Contributions by Sector - A scenario for 201 o 

In  this Annex,  the  realistic  potential  for exploitation  of the  different  renewable  energy 
sources  is  presented  within  the  framework  of  the  Strategy  and  Action  P.lan."  The 
contrib.ution  that  the  various  renewable  energy  sectors  could  make  by  201 0 towards 
ac~iev·ing  the  indicative  objective  of  12%  share  of  renewables  is  estimated.  These 
. estimates  present  one  particular  scenario  of RES  development  - it  is  clear  that  the 
market could  evolve differently.  Nonetheless,  it  is considered  important to present an 
overall  view  of projected  developments,  in  order to  help  orientate  policy  instruments 
and campaigns. 

11.1  Biomass 

Currently biomass accounts for about 3%  of total  inland  energy consumption  (EU15). 
However  in  the  new Member States  - . Austria,  Finland  and  Sweden  - this  renewable 
source  already  accounts  for  12%,  23%  and  18%  respectively  of  primary  energy 
supply.  It  is  difficult to make estimates  in .this area on  future  development as  regards 
the  extent  to  which  the  biomass  and  its  distribution  sector  will  expand.  Under  the 
particular  scenario  followed  in  this  Annex,  use  of three  times  the  present  amount  of 
44.8  Mtoe  is  considered  to  be  a  possible  development  for  2010,  on  condition  that 
effective  measures  are  in  fact  adopted.  This  would  mean  additional  biomass 
amounting to 90 Mtoe, equivalent to 8.5% of the projected total energy consumption  in 
that year. 

Biomass is a widespread resource as  it includes in addition to woody biomass and the 
residues  of the  wood  working  industry,  energy crops,  agricultural  residues  and  agro 
food  effluents,  manures  as  well  as  the  organic  fraction  of  municipal  solid  waste  or 
source,  separated  household  waste  and  sewage  sludge.  Energy  from  biomass  is 
versatile  in  that  it  can  produce  electricity,  heat,  or transport  fuel  as  appropriate,  and 
unlike  electricity  it  can  be  stored  - simply  and  usually  economically.  In  addition, 
production  units can range from small scale up to multi-megawatt size. 

The  additional  estimated  bioenergy  use  of 90  Mtoe  by  201 0  would  be  derived  from 
agricultural,  forest,  and' forest  industry  residues,  waste  streams  as  well. as  from  new 
energy crops.  Biomass  exploitation  has the  double  benefit of exploiting  an  important 
renewable  energy  resource  and  also  of  improving  the  environment  and  climate. 
Clearly  in  the  development  of  biomass  particular  care  will  need  to  be  taken  to 
safeguard  bio-diversity in  the  EU.  Strategies and  approaches  should  be  adopted  that 
minimise the impacts on  bio-diversity. 

The  advantages  of exploiting  biomass,  based  on  new  technologies,  can  be  clearly 
seen in the case of biogas exploitation. This consists largely of methane,  a gas with  a 
large  greenhouse  impact.  It  is  estimated that the total  energy content  of land  fill  gas 
and  digestible  agricultural wastes  in  the  EU  exceeds  80  Mtoe.  The  contribution  that 
could  be  made  by  biogas  exploitation  from  livestock,  production,  agro-industrial 
effluents,  sewage treatment and  landfill  by 201 0 is  estimated  at  15 Mtoe.  A  stronger 
exploitation of the  biogas  resource  is  indeed  in  line with the Commission's strategy for 

37 

reducing  methane  emissions  on  environmental  grounds.  This  point  has  received 
particular  attenti~n  in  the  preparation  of  a  global  agreement  on  greenhouse  gas 
emissions.  On  the  other  hand,  a  new  directive  on  landfill  which  is  currently  being 
discussed  by the European  Union  institutions is  rather going to limit the  production  of 
biOgas  from  land  fill  : The  directive  plans  a  75%  reduction  of biodegradable  rubbish 
that  can  be  dumped  in  landfill  sites  by  2010.  However,  the  volume  of the  organic 
matter that  could  be  used  as  feed  stock  for the  production  of  biogas  by  anaerobic 
digestion would  increase and the organic matter landfilled before 201 O will continue to 
produce met~ane by fermentation for several years after 2010. 

As  far  as  solid  residues  are  concerned,  there  is  first  at  all  a  huge  potential  so  far 
unexploited  in  the  form  of wood  and  agricultural  residues,  straw  etc.  which  exceeds 
150 Mtoe per year.  It is  estimated that 30 Mtoe can  be  mobilised annually by 201 o for 
the power and the heating and industrial process h,eat market. 
Energy  crops  also  need  to  be  considered  if the  objective  of doubling  the  renewable 
energies'  share  by  201 0  is  to  be  achieved. 
In  total,  the  contribution  for  bioenergy 
production  from  crops  by  2010  is  estimated  at  45  Mtoe  i.e.  an  amount equal  to  that 
anticipated  for  bioenergy  from  residues  and  wastes.  Of this  1 BMtoe  could  be  in  the 
form  of liquid  biofuels  (including  however liquid  biofuels  from  non-energy crops  such 
as  wood  residues,  used  vegetal  oils,  or biogas  used  as  motor  fuel)  and  27  Mtoe  as 
biomass for heat and/or power, under one particular scenario. 

Liquid  biofuels are currently the least competitive  product from  biomass  in  the  market 
place,  given the  low oil  prices.  It  is,  however,  important to ensure their continuing and 
growing,  presence  in  the  fuel  market  since  the  short/medium  term  oil-prices  are 
unpredictable, and in the longer term alternatives to the finite oil reserves are  needed. 
The  energy demand  in  the transport  sector is  expected  to  grow strongly in  the  future 
and  so will the emission  problems associated with  it,  and the external dependence on 
oil,  if no alternatives are  available.  Biofuels  have  an  overall  positive  energy  balance, 
although  this  varies  from  crop  to  crop,  and  also  depends  on  the  crop  replaced. 
Whether there  is  such  an  increase  will  depend  crucially  on  closing  the  gap  between 
production costs of bio-fuels and competing products. 

Future development of biofuels will have to be  based  mostly on  production  in  Europe. 
In  1993 the  "utilised  agricultural  area"  of EU15  was  approx.  141  million  hectares  of 
which  76  million  hectares were  "arable  land".  t is  doubtful that more than  a maximum 
of  1 0  Million  hectares,  i.e.  7.1 %  of  the  agricultural  area  would  be  sustainable  for 
biomass crop  production,  the  choice  of crop  species  for liquid  biofuels would  need  to 
be  limited  to  the  most  productive  ones  with  the  maximum  benefit  and  minimum 
environmental impact. 

As  far as the  potential contribution of 27 Mtoe  from  solid  cellulosic bioenergy crops  is 
concerned, the options for production are manifold.  This material can  be  derived from 
.  short  rotation  forestry,  (ex:  willow),  or non  wood,  energy crops  (ex:  miscantthus)  also 
good  for  combustion  and  gasification.  There  are  various  plant  species  suitable  for 
specific types of agricultural land.  There is a choice of crops for short rotation  forestry 
on  rather marginal land of lower value.  At yields of 1 0 tonnes per hectare and year,  a 
production of for example,  27  Mtoe of solid  biomass  by 2010 would  imply a cultivated 
area of 6.3 Million  hectares of land.  There  exist also various options. for high yield  C4 
plants,  annual  or perennial  ones.  They  deliver about  twice  as  much  material  as  the 
short rotation  forestry. 

38 

There  are  also  plants  which  produce  simultaneously  cellulosic  materials  and 
feedstocks  for liquid  biofuels.  An  example  is  sweet  sorghum which  typically yields  5 
m3  bioethanol and  20 t  of dry cellulQsic  material  per hectare and  year.  It  is  important 
here  to  note  that  the  fast-growing  plants  have  several  other  attractions  :  many  are 
annual  and  fit  into  conventional· agricultural  practice;  they  do  not  require  the  best 
arable  land;  they  require  less  than  half  the  water  and  fertilisers  required  by  fast 
growing  crops,  such  as  maize.  There  is  also  a  promising  prospect  for  production  of 
liquid  biofuels  from  cellulosic  matter.  All  options  of  species  should  be  · carefully 
examined  with  preference  given  to  the  high-yielding/low  input  crops,  which  respect 
biodiversity.  In any case, it seems appropriate in any biomass development strategy to 
set an  upper maximum a  limit for land  use.  It  is  estimated,  in  this  scenario  approach, 
that  if the  maximum  reasonable  development of biomass  is  made  by 2010,  as  much 
as 10 Million hectares of land would  be  needed,  much of it  marginal land.  Clearly,· the 
environmental  impacts  of  this  development  would  need  to  be  assessed,  and  the 
growth  of  the  biomass  sector  would  have  to  be  compatible  with  sustainable 
development. 

The  overall  volume  of the  solid  vegetal  biomass  market  is  estimated  at  57  Mtoe  in 
2010, the projected feedstocks being  energy crops (27 Mtoe) and  residues  (30 Mtoe). 
If the  market  indeed  develops  in  this  direction,  it  is  predicted  that  25  Mtoe  would  be 
taken  up  by the  market  for  direct  heating  and  industrial  process  heat  and  32  Mtoe 
would  go to power generation. A  portion  of these  32 Mtoe,  i.e.  6 Mtoe could  be  used 
in cofiring plants in combination with coal and the remaining 26 Mtoe in combined heat 
and power installations 

Projected additional bioenergy use by 2010 

under the scenario presented 

90 Mtoe 

*  Biagas exploitation (livestock production,  sewage treatment,  landfills)  15 Mtoe 
*  Agricultural and Forest Residues 
30 Mtoe 
45 Mtoe 
*  Energy Crops 

11.2  Hydro Power 

~ 

Hydro  power  is  a  proven  mature  technology  and  its  operation  has  been  competitive 
with other commercial energy sources for many years.  However, the existing technical 
and  economic  potential  for  large  hydro  power  plants  has  either  been  used,  or  is 
unavailable  due to  environmental constraints.  In  contrast to this  situation,  only-about 
20% of the economic potential for small hydro µewer plants has been  so far exploited. 
In addition many existing small hydro plants are out of operation, often as a result of a 
lack  of specific  incentives  as  to  maintenance  and  other costs,  as  well  as  the  overall 
grid pricing situation,  but can be refurbished with  relatively modest outlay,  especially in 
the  case  of small  typically  rural  and  relatively  isolated  installations.  European  Union 
countries dominate the world  market for small hydro equipment. 

In  1995 approximately 307 TWh of hydro energy was  produced  in  the  Union  from  an 
overall  capacity  of  92  GW.  Small  hydro  plants,  i.e.  plants  smaller  than  1 0  MW 
accounted for 10% of installed capacity (9.3 GW) arid produced 37 TWh. 

39 

An  increase of 10 % in  installed  capacity of large hydro  (8,500  MW) is  likely by 201 o if 
one takes  into account projects already planned,  a·nd  some environmentally acceptable 
development.  . An  additional  installed  capacity of 4,500  MW of small  hydro  plants  by 
. 2010  is  a  realistic  contribution  which  could  be  achieved  given  a  more  favourable 
regulatory environment, since these small  projects,  if correctly planned,  can  have much 
lower environmental impact. 

11.3  Wind Energy 

Wind  energy  technology  is  developing  fast.  The  average  weight  of wind  turbines  has 
halved  in  five  years,  the  annual  energy output per turbine  has. increased  fourfold,  and 
costs  have  decreased  by  a factor of ten  in  ten  years.  At  present,  the  average  size  of 
new  machines  being  installed  is  600  kW,  although  there  are  a  few  machines  as 
powerful as  1.5 MW on the market. About 90%  of the world's manufacturers of medium 
and  large-sized  wind  turbines  are  European.  The  largest  machines  are  at  present 
produced  only  by  European  manufacturers.  Wind  turbines  give  rise  to  some  noise 
pollution,  and  research  effort  is  being  successfully  undertaken  to  reduce  noise 
emissions. 

Wind energy is  in  some Member States currently the fastest growing energy source for 
electricity  production.  Europe  is  the  world  leader  in  wind  energy,  with  more  installed 
capacity than  any other region  of the world:  3.5 GW in  EU15 at the end  of 1996. There 
has  been  an  average  annual  installation  growth  rate  of  36%  in  the  past  five  years, 
reaching,  at present,  an  annual  rate  of 1 GW/year.  If production continues  to  increase 
by  the  same  rate,  yearly  production  of turbines  in  2010  will  amount  to  more  than  20 
GW and  the  accumulated  capacity will  be  more  than  100  GW.  A constant  installation 
rate at this  current value  ( ~  1 GW per year) would  mean  18 GW of installed  generation 
capacity in  2010.  Therefore an estimated contribution of 40 GW wind  power in  the  RES 
development  by  2010  for  the  EU15,  while  ambitious,  is  realistic  given  the  strength  of 
these  trends.  The  campaign  for  take-off  for  1 0GW  should  provide  a  basis  for  wider 
implementation of wind  powered electricity generation under more difficult conditions. 

A significant contribution  from  wind  energy for 2010  can  only be  achieved  if conditions 
of access  to  the  European  grids  are  fair for the  wind  generators.· A major factor in  the 
recent market success of wind  energy in  Member States such  as  Denmark,  Spain,  and 
in  particular  in  Germany,  which  now  has  the  world's  largest  electricity  generating 
capacity from wind,  has been the price to be paid  by utilities to wind  generators for sale 
onto  the  grid.  Any  major  changes  that  might  be  made  to  the  existing  regulatory 
structure  should  encourage  and  not  jeopardise  the  appropriate  development-of wind 
energy. 

11.4  Solar Thermal 

Solar thermal  heating  technology  is  almost fully  mature.  There  is  nevertheless  scope 
for  further  cost  reductions  from  larger  scale  production  and  improvements  in  both 
production  processes  and  marketing.  At  present  in  EU-15  about  300  small  and 
medium  enterprises  are  active  in  this  sector,  directly  employing  abou~  10,000  people. 
Solar  thermal  heating  is  cost-competitive  today  as  compared  with  electric  water 
heating,  in  particular in  the  southern  parts of the  European  Union.  Design  is  constantly 
being  improved to minimise visual  impact. 

40 

In  1995 there  were  6.5  Million  m2  of solar collectors  installed  in  the  European  Union 
with  a  15% growth  rate  over the  preceding  few years.  The  annual  current  installation 
rate  is  1,000,000 m2
,  concentrated  in three  EU  member countries -Austria, Germany, 
and Greece.  A growth rate of 25% could  be achieved if the other 12  European  Union 
member countries  even  partially followed  this  example.  At a 20% annual  growth  rate, 
total  installed  capacity  would  be  100  Million  m2  in  2010  which  taking  all  relevant 
factors  into  consideration  is  an  achievable  contribution  to  RES  development.  Use  of 
large collector fields  in  large-scale  applications  such  as  district  heating  systems  - the 
most economically rational way of using solar thermal energy - would  in  itself stimulate 
a  dramatic  increase  in  collector  production;  Public  awareness  campaigns  can 
effectively also boost the market as has been borne out by experience in  Greece. 

11.5  Photovoltaics 

Solar  photovoltaic  electricity  generation  is  v€ry  much  a  recent  and  close-to-state-of 
the-art  renewable  energy technology.  Costs  have  fallen  dramatically with  a  25%  cost 
decrease  over  the  past  5  years,  but  are  still  significantly  higher  than  for  electricity 
generated from conventional fuels.  The  European  Union,  currently accounts for about 
one  third  of annual,  more  than  100 MWp,  world-wide  photovoltaic  module  production 
and  use.  The  European  industry  has  built  up  a  leading  position  in  the  field  of 
photovoltaic  incorporation  in  buildings.  Europe  also  has  the  lead  in  applications  of 
photovoltaics in  developing countries. 

, . 

Eurostat  estimates  that  32  MWp  of  photovoltaic  generation  capacity  was  installed 
(EU12) at the  end of 1995.  The  most recent estimate from the  European  Photovoltaic 
Industry Association  (EPIA)  suggests  as  much  as  70  MWp  (EU  15).  Photovoltaics  is 
very much a global market.  World annual module production  is forecast at 2.4 GWp by 
2010.  To attain an annual output of 2.4 GWp world-wide,  would  require annual growth 
of 25%.  Such  an  estimate  is  in  fact compatible with  the assumptions used  in  an  EPIA 
study commissioned by the Commission. 

Under the above assumptions a contribution of 3 GWp installed capacity in  EU15 from 
photovoltaics  by  2010  seems  ambitious  but  realistic.  It  is  forecast  that  this  would  be 
accounted  for mainly by grid-connected  installations  incorporated  into the  structure of 
buildings  (roofs  and  fa~des) as well as  a certain  number of large-scale  power plants 
(0.5-5.0  MWp).  Anyhow,  PV technology  should  be  considered  in  a  more  general  way 
not just as a measure of GWp installed.  As it is the case for solar thermal applications, 
PV systems are always associated with  Rational  Use of Energy measures  in  buildings 
and  can  be  evaluated  as  a  part  of  the  significant  effort  of  redtJcing_  energy 
consumption,  which  always  should  accompany  their  utilisation.  Grid-connected 
photovoltaic  generation  is  not  competitive  at  currently  prevailing  classical  fuel-based 
generation  costs  and  also  compared  with  wind  turbines,  but  it  could  be  based  on  an 
average  cost  level  of 3  ECU/Wp  of installed  capacity,  which  on  the  basis  of current 
trends  could  happen  around  2005.  A  sizeable  initiative  at  European  level  for 
incorporating  photovoltaic modules  in  roofs  and  facades  can  thus  play a major part  in 
definitively  launching  this  technology.  Secondary  advantages  of building  integration 
such as  lighting,  heat supply,  fa~de substitution  should  be  valorised.  The concept of 
energy system  should  take  into account the  "added  value  of PV".  Integration  of 2 PV 
in 
buildings  can  also  convert  any  visual  impact  into  an  architectural  design 
advantage. 

41 

'The  campaign  for take-off  promoting  the  installation  of 1,000,000  photovoltaic  roofs 
and  facades  would  mean  new capacity of 0.SGWp  in  the  Union  and  0.5GWp  in  third 
countries. 

.  11.6  Passive Solar 

Thermal energy demand (mostly for space heating) in the domestic and tertiary sector 
in  EU15  represents  23% of total  energy  demand.  It  is  estimated  that  40%  of energy 
actually consumed  in  this  sector is  in  fact gained  from  solar energy through windows, 
but  this  passive  energy  supply  is  not  taken  into  account  in  statistics.  Consequently, 
the  potential  for  further  reducing  the  thermal  energy  demand  in  buildings  with 
available  passive·  solar  techniques  is  very  substantial.  "Solar"  and  "low-energy" 
buildings  cost almost  no  more to  build  than  conventional  ones.  Experience  in  Austria 
has  shown  that  passive  solar  construction  increases  overall  dwelling  costs  by  less 
than  4%  while  achieving  75%  reductions  in  heating  onergy.  Large  gains  can  also  be 
achieved  in  the  existing  building  stock  by  retrofitting  windows  and  facades  to  make 
more use of natural sunlight and simultaneously insulate.  New materials for windows, 
daylighting  and  insulation  are  commercially  available.  Passive  cooling  techniques 
have  also  been  developed  during  the  last few years  and  could  help  reduce  the  fast 
growing cooling demand in  southern European countries. 

Even  conservative  estimates  show  that  a  10%  reduction  by  2010  in  thermal  energy 
demand  for  buildings  is  easily  attainable  by  increased  recourse  to . passive  solar 
techniques.  If it  is  assumed  that thermal  energy demand  in  the  domestic and  tertiary 
sector  remains  stable  (at  23%  of the  total),  then  this  represents  fuel  savings  of  35 
Mtoe.  Switzerland  has already committed  itself to a 30%  energy reduction  for heating 
in  buildings  by  the  same  year.  These  additional  gains  should  be  counted  in  the 
balance of the European Union's gross energy consumption. 

11.7  Geothermal and Heat Pumps 

Geothermal  energy  accounts  for  only  a  very  small  part  of  total  renewable  energy 
production  in  the  European  Union.  Although  power  production  is  already viable  from 
high-temperature  dry  steam,  the  risks  associated  with  exploitation  still  present  a 
disincentive  to  investment.  The  use  of  geothermal  heat  is  thus  growing  slowly. 
However,  the  use  of  heat  pumps  to  upgrade  lower  temperature  ground  heat  is 
becoming  much  more common. 

Currently installed  geothermal power capacity in the  European  Union  amounis to  500 
MW.  More  electrical  units  are  gradually  coming  on  stream  in  France  (above  all 
overseas departments), Italy, and Portugal (the Azores).  It is estimated that a doubling 
of the current installed capacity is an achievable contribution to RES growth by 2010. 

Most  low-temp'-'rature  geothermal  heat  is  employed  in  buildings  applications.  The 
current  capacity of 750  MWth  is  concentrated  in  France  and  Italy.  This  capacity could 
be more than tripled in 2010, to give 2.5 GWth• 

Turning  to  heat  pumps,  those  installed  to  date  mostly  use  electricity  or  fuel  as  the 
necessary  driving  energy  input.  A  new  generation  make  use  of  heat  exchangers 
installed some 1 00m underground which thus exploit naturally stored  solar energy and 
some  intrinsic  heat  from  the  earth  itself  already  at  such  a  depth.  A  total  of 60,000 
geothermal heat pumps were installed in  1995 in the  European  Union,  most of them in 

42 

Sweden representing 8% of the capacity for all types. Assuming that this total installed 
heat  pump  capacity  will  be  tripled  by  2010  in  EU15  and  that  the  market  share  of 
geothermal heat pumps will double to reach  15%, gives an  estimated achievable total 
capacity of 2.5 GWth by 201 O. 

11.8  Other Renewable Technologies 

There  are  a  number of other  renewable  energy technologies,  such  as  solar thermal 
power,  tidal  power,  ocean  currents,  wave  power,  hot  dry rock,  ocean  thermal  energy 
conversion,  for  which  the  current  market  in  the  European  Union  is  non-existent. 
Projections are difficult to make,  but some of these technologies will undoubtedly offer 
significant  potential  in  the future.  It  is  reasonable  to expect that at  least one  of these 
renewable  sources  will  have  started  to  be  exploited  commercially  over  the  coming 
decade or so, which justifies assuming a marginal contribution of 1 GW by 201 O. 

11.9  Achieving the Overall Community objective for RES 

Table  1A summarises  the  estimated  contributions  by  sector  described  in  the  present 
annex in  the  particular scenario chosen  for projecting ways of achieving  a  12% share 
of renewables  in  the Union by 2010.  Table 2 compares gross energy consumption  by 
type  of renewable  energy  in  Mtoe  for the  year  1995  with  tt)at  projected  for the  year 
201 O,  assuming  t~at these  contributions  b.y  the  different  RES  are  indeed  made.  On 
this basis the overall objective of doubling the current share of renewables to  12% by 
2010  can  be  realistically  achieved.  The  projected  total  gross  inland  consumption  for 
2010 is  taken  from the  Pre-Kyoto scenario (Conventional Wisdom,  "European  Energy 
to  2020",  see  footnote  8).  If post-Kyoto  energy  use  turns  out  to  be  lower  than  that 
foreseen  prior  to  Kyoto,  this  will  have  the  effect  of  slightly  increasing  the  current 
indicative objective to above 12%. On the other hand,  enlargement to States with very 
little or no  penetration  of renewables  may  have  the  effect  in  practice  of lowering  the 
objective  to  below  12%.  This  will  be  taken  into account  in  the  monitoring  and  review 
mechanisms foreseen. 

11.1 O Estimated RES Contributions in  Electricity and Heat Generation 

In  Table  3  the  current  and  projected  contribution  of  renewables  to  the  electricity 
market is  presented  by type of energy.  If appropriate measures are takeA,  electricity 
production  from  renewables  could  grow  significantly  by  2010,  from  the  present 
14.3% to 23.5%.  The  projected total  electricity  production  for 2010,  once  again,  is 
taken  from  the  Pre-Kyoto  scenario.  Finally,  the  doubling  of the  heat  produced  by 
renewables  is  the  projected  development  for 2010  for the  heat  sector as  shown  in 
table 4 if the promotion strategy for RES  is successful. 

11.11  Assessment of some of the costs and benefits 

In table  6 the  estimated  investment costs  and  the  benefits  related  to,  avoided  fuel costs, 
and  CO2  emissions  reduction,  are  presented  by type  of renewable  energy while  Table  5 
provides estimates for the overall strategy to 2010. The first column  of Table 6 shows the 
in  order  to  achieve  the  estimated 
installed 
additional  capacities  needed  to  be 

43 

the  corresponding  projected  unit  costs 

In  columns  2  and  3  the  current  unit  costs  by  type  of 
contributions  by  different  RES. 
technology  and 
in  201 O  are  presented 
respectively.  The  fourth  column  shows  an  average  reference  unit  cost,  where  the 
projected  time  frame  for the  deployment  of each  technology  is  taken  into  account.  For 
, those  types  of energy  where  installations  are  projected  to  grow  steadily,  such  as  wind 
energy,  the average  unit cost  is  nearer to the  201 O value.  For those  technologies,  such 
as  hydro, where the installations will  be  more or less evenly distributed  in  time,  the  mean 
In  the  5th 
value  between  1997 and  2010  is  taken  as  the  average  reference  unit  cost. 
column  the  total  investment  needed  for the  installations  is  presented.  Column  6  shows 
the  expected  annual  business  in  2010 .. Installation  rate,  operation  and  maintenance  as 
well as fuel costs (for biomass) are included in the figures  presented in this column. 

Estimations  on  avoided  fuel  costs  are  presented  in  columns  7  and  8.  Additional  fuel 
savings  from  wind,  hydro,  photovoltaics  and  solar  thermal  collectors  have  been 
estimated to be  3 billion  ECU  in  the year 2010.  Assuming  a constant  rate  of increase of 
installations  during the  period  1997-2010,  a total  amount  of 21  billion  ECU  of additional 
fuel  savings  is  calculated.  Fuel  substitution  of  coal  and  oil  at  1997  prices  has  been 
assumed  in  all  calculations.  Biomass  and  geothermal are  considered  to have  the  same 
fuel costs as fossil fuel technologies and  they are  not included  in  the  estimation.  On  the 
other hand,  all  renewables  contribute to the  reduction  of fuel  import supplies achieving  a 
17.4% reduction in 2010 with  respect to the  1994 figures. 

The  last  column  shows  the  CO2  emission  reduction  figures.  For  electricity  production 
from  wind,  hydro,  photovoltaics  and  geothermal,  the  displacement  mainly,  but  not 
exclusively,  of conventional coal  fired  power plants  is  assumed.  The  CO2 emissions,  in 
this  case,  are  calculated  on  the  basis  that  one  TWh  produced  by  renewable  saves  one 
million  tonnes  of CO2.  As  far as  biomass  is  concerned,  although  it  has  a  neutral  effect 
on  CO2, the  emissions  generated  during  the  feedstock  production  have  been  taken  into 
account. 

In  addition,  a significant  number of additional jobs are  expected  to arise  as  a result 
of the  doubling  of  the  share  of  renewable  energies  foreseen  in  this  Community 
strategy (see section  1.4). 

The  sum  of these  estimated  figures  shows  that  a total  investment  of 165.1  billion  ECU 
could  be  needed  in  order  to  achieve  the  overall  significant  increase  in  renewable 
penetration aimed for in this strategy .. As a result of this investment,  an  annual business 
of 36.6 billion  ECU  is estimated to be  generated  in  2010, creating  a significant number of 
new jobs, avoiding fuel costs  of 21  billion  ECU,  reducing  imports  by  17.4% and _reducing 
the CO2 emissions by 402 million tones per year with  respect to 1997. 

44 

Annexe  Ill  Member  States'  plans  and  actions  for  the 

development- of renewables 

Austria  has  a  share  of  24.3  %  for  RES.  The  Austrian  government 
introduced  in  1996  an  energy  tax on  electricity  and  gas  excluding  RES. 
In . 
1994 a  promotional  tariff for power generation from  solar,  wind  and  biomass 
was· introduced.  Further  development  of  hydro  power,  biomass  in  existing 
thermal plants and energy crops and solar energy are the main objectives. 

In  Belgium, energy policy has been decentralized.  While there  is  no  specific 
target for the energy sector,  promoting  RES  is  expected to  see  a reduction  in 
CO2  emissions  of about 20  MT by  2000  in  industry. 
In  Wallonie  the  PEDD 
(Environment plan for sustainable development),  adopted  in  1995 is expected 
to be followed by a development programme for RES. 

In  1996  Denmark  elaborated  an  Energy  Action  Plan  "Energy  21"  including 
medium and  long-term scenarios to  2005,  2020  and  2030.  The  assumptions 
to  2005 for  RES  include  200  MW offshore  wind  turbines,  about  1  PJ  landfill 
gas  and  about  1  PJ  geothermal  heat.  After  2005  the  assumptions  include 
developing  5500  MW wind  turbines  (of  which  4000  MW offshore),  145  PJ 
annually from biomass and biogas including energy crops and 25  PJ  annually 
from geothermal and heat pumps in  district-heating. 

The  Finnish government adopted  in  1995 a decision  on  energy policy which 
includes  increased  use  of  bioenergy  of  25%  by  2005.  A  promotion 
programme for wind energy in  1993 set a target of 100 MW installed capacity 
by 2005. 

France started  in  1996 a five  year programme  including  225 MW from  wood 
combustion,  20.000  solar thermal  panels for the  DOM  areas  and  250  to  500 
MW of wind turbines "Eole 2005". 

· 

In Germany the Act "Stromeinspeisungsgesetz" of 1991  has had a significant 
effect on  new capacity from  RES.  A programme to  support RES was  adopted 
by  the  Federal  Government  with  100  million  DM  for  the  period  1995-98. 
Many  of the  Lander  also  have  programmes.  RTD  is  very  important,  with  a 
250  MW wind  demonstration  programme.  30%  of  the  government's  RTD 
programme  is for RES.  Solar thermal  and  PV campaigns  (1000  Roofs)  have 
had an  important impact.  In wind energy,  Germany holds second place  in  the 
world. 

The  Greek  government has  a  comprehensive  approach  to  encourage  RES. 
The  law 2244/1994 was  strengthened  by the  Decision  8295/1995  in  order to 
remove  restrictions  on  electricity production  from  ind~pendent  producers  up 
to  50  MW.  The  electric  utility  (PPC)  has  a  ten  year  programme  to  develop 
RES  with  the following  targets  : biomass  (733  Mtoe  by 2000  and  1400 Mtoe 

45 

by 2005)  wind  (68  and  136 Mtoe)  small  hydro  (15  Mtoe  and  41)  solar  (156 
Mtoe an~  204) and geothermal (20 Mtoe and 40).  In  1994 a second  Support 
Framework of the Community earmarked  100 MECU for RES,  75%  of funding 
will come from structural funds. 

In  Ireland,  as  a  result  of  the  AER  1  and  2  initiatives  (Alternative  Energy 
Requirement programme  of 1994) and  the  RES  Strategy,  the  additional  RES 
generation will be 6% of installed capacity by 1999 bringing the total to  11 %. 

In  Italy,  if progress  continues  the  PEW (National  Energy  Plan)  expectations 
could  be  surpassed and  RES  could  give a contribution  of 2700 MW by 2000. 
Specific targets are 600 MW for wind and 75 MW for PV by 2000. 

Luxembourg  has  no  specific  policy  objectives  for  RES,  nevertheless 
instruments  include subsidies for solar,  biomass,  wind,  small  hydro  and  heat 
pumps. 

The  Netherlands  has  an  Action  Programme  1997-2000  for  RES  and  has 
elaborated  scenario for 2007 and  2020  which  includes:  development of wind 
energy  (750  MW  in  2000,  2000  MW  in  2007)  solar  PV(119  MW  2007) 
biomass (residual flows 30-80PJ/year and  energy crops (12-70 PJ/year) solar 
Thermal  (5  PJ  in  2007  or 250.000 water  heaters)  and  heat  pumps  (50  PJ  in 
2007). 

In  Portugal,  the  Energy  Programme  of 1994  had  a target  of about  170  MW 
for RES  electricity.  Traditional  biomass  is  about 26%  of energy needs  in  the 
residential  sector.  The  biomass centre  has  a specific programme to  develop 
biomass. 

In  Spain  the  PEW (National  Energy  Plan)  for  1991-2000  had  the  following 
objectives:  SMP 213 Mtoe,  biomass 427 Mtoe, wind 35 Mtoe,  PV 0.389 Mtoe, 
solar  34  Mtoe  and  geo  thermal  10  Mtoe.  At the  end  of  1996  the  objectives 
were surpassed in  SMP  1045%, wind 381.5% and  PV 149%. 

The  Swedish  Government Bill  1996/97 : 84  on  a Sustainable  Energy Supply 
includes  measures  aimed  at  increasing  the  supply  of electricity  and  heating 
from  RES.  The five year scenario for RES  includes an  expansion  of bio-fuel 
based  CHP  of  approximately  the  equivalent  of  0.75  Twh  of  electricity  per 
year,  an  annual  increase  of  around  0.5  Twh  from  land-based  wind  facilities 
and an  annual  increase of 0.25 Twh from ,small-scale hydropower. 

The  United  Kingdom  is  currently  reviewing  its  policy on  renewable  energy, 
consideration  being  given  to  achieving  10%  of the  country's  electricity  need 
from RES  by 2010. 

46 

Table 1 

Share of Renewable Energy Sources in Gross Inland Energy. 
Consumption 

Austria 
Belgium 
Denmark 
Finland 
France 
Germany 
Greece 
Ireland 
Italy 
Luxembourg 
Netherlands 
Portugal 
Spain 
Sweden 
United Kingdom 
European Union 

1990 
22.1 
1.0 
6.3 
18.9 
6.4 
1.7 
7.1 
1.6 
5.3 
1.3 
1.3 
17.6 
6.7 
24.7 
0.5 
5.0 

1995 
24.3 
1.0 
7.3 
21.3 
7.1 
1.8 
7.3 
2.0 
5.5 
1.4 
1.4 
15.7 
5.7 
25.4 
0.7 
5.3 

Source:  EUROSTAT 

47 

Table 1 A 

ESTIMATED CONTRIBUTIONS BY SECTOR 
IN  THE 2010 SCENARIO 

TYPE OF  ENERGY 

1. Wind 

2.  Hydro 

2.1  Large 

2.2.  Small 

SHARE IN 
THE EU  IN 
1995 

PROJECTED 
SHARE BY 
2010 

2.5GW 

40  GW 

92GW 

105GW 

(82.5 GW) 

(91  GW) 

(9.5 GW) 

(14 GW) 

3.  Photovoltaics 

0.03 GWp 

3GWp 

4.  Biomass 

44.8 Mtoe 

135 Mtoe 

5.  Geothermal 

5.a  Electric 

0.5GW 

5.b  Heat (incl.  heat pumps) 

1.3 GWth 

1GW 

5GWth 

6.  Solar Thermal  Collectors 

6,5 Million  m2 

100 Million m2 

7.  Passive Solar 

8.  Others 

35 Mtoe 

1GW 

48 

CURRENT AND  PROJECTED FUTURE GROSS RENEWABLE ENERGY CONSUMPTION (Mtoe) FOR 2010 

Table 2 

TYPE OFENERGY 

Eurostat 
· · converitkm>. 

% 

of 

to~t:. 

s~~1WJl::" 

k¾  total<<>f 111: 

Total Gross Inland Consumption 

1,366 

1,409 

I 

· c~h~~!tJrl: 
II  1,583 (Pre-Kyoto) I 

I 

1 ·.  of!ta1 

1,633 

I 

1.  Wind 

2.  Total  Hydro 

2.a.  Large  (incl.  pump storage) 

2.b.  Small 

3.  Photovoltaics 

4.  Biomass 

5.  Geothermal 

5.a Electric 

5.b  Heat (incl.  heat pumps) 

6.  Solar Thermal Collectors 

26.4 

(23.2) 

(3.2) 
- -
0.002 

44.8 

2.5 

(2.1) 

(0.4) 

0.26 

0~02 

1.9 

3.3 

0.2 

0.02 

0,9 

67.5 

(59.4) 

(8.1) 

0.006 

44.8 

1.2 

(0.8) 

(0.4) 

0.26 

0.06 

4.8 

, 

3.12 

0.1 

&. 

0.02 

30.55 

(25.8) 

(4.75) 

0.26 

135 

5.2 

(4.2) 

(1.0) 

4 

•.. 0.44 

1.93 

0.:02 

4.78 

I 

I 

0.05 

8.27 

0.15 

78.1 

(66) 

(12.1) 

0.7 

135 

2.5 

(1.5} 

(1.0) 

0.25 

4 

I 

0.24 

7.  Passive Solar 

35 

2.2 

35 

i 

2.1 

49 

(cid:127)
(cid:127)
Table 3 

CURRENT AND PROJECTED 
ELECTRICITY PRODUCTION BY RES (tWh) FOR 2010 

Total 

2.  Total Hydro 

2.a. Large (incl.  pumped storage) 

2.b.  Small 

307 

(270) 

37 

13 

355 

(300) 

12.4 

50 

Table 4 

CURRENT AND PROJECTED 
HEAT PRODUCTION (Mtoe) for 2010 

1. Biomass 

.< 2~  Ge,c:>thetmal 

3.  Solar Thermal Collectors 

38.04 

0.4 

0.26 

4.  Passive Solar 

75 

1 

4 

35 

51 

TABLE 5 

ESTIMATED INVESTMENT COSTS AND BENEFITS 
OF THE OVERALL STRATEGY IN  THE 2010 SCENARIO 

Total investment energy sector of which RES  42 

Total investment RES  in Action Plan 

Net investment RES  in Action Plan 

249 billion ECU 
39 billion ECU 

165 billion ECU 

95 billion ECU 

Annual net investment RES  in Action Plan 

6,8 billion ECU 

Additional net investment due to RES 

7 4 billion ECU 

Increase of total energy sector investment 

29.7% 

Employment creation 

Avoided annual fuel cost in 2010 

Total avoided fuel cost 1997-2010 

Import reduction (ref. 1994) 

CO2  reduction 

(with respect to 1997) 

(with respect to the 2010 pre-Kyoto scenario) 

see Section 1.4 

3 billion ECU 

21  billion ECU 

17.4% 

up to 402 
million tn/ year 

250 million ta/year 

Annual benefits from CO2 reduction 43 

5 to 45 billion ECU 

42  European Energy 2020. A  scenario approach,  European Commission,  1996 
43  COM(97) 481  final  - see footnote 2 

52 

TABLE 6 

ESTIMATED INVESTMENT COSTS/ BENEFITS BY SECTOR 

TYPE OF  ENERGY 

-

ADDITIONAL 
CAPACITY 
1997-2010 

UNIT COST 
1997 ECU 

UNIT COST 
2010 ECU 

AVERAGE UNIT 
COSTECU 

TOTAL 
INVESTMENT 
1997-201 O billion 
ECU 

ADDITIONAL 
ANNUAL 
BUSINESS 2010 
billion ECU 

BENEFIT OF ANNUAL 
AVOIDED  FUEL 
COSTS 
2010 

billion ECU 

TOTAL BENEFIT 

CO2 REDUCTION 

OF AVOIDED FUEL  m illiom tn/year 
COSTS 1997-2010 
billion ECU 

IN 2010 

1.  'Wind 

I 

. ·.. 

2.  Hydro 

. 

. 

/ y ·> 
,... 
.....  I• 

36GW 
.·. 
13GW 

. 

. 

1,000/KW 

700/KW 

800/KW 

28.8 

1,200/KW 

1,000/KW 

1,100/KW 

t·• 

14~3 

4 

.>  > 
<~ 

........ 
... 

1.43 
.···.·.  >·····•.···.·· 

····•• 

/< 

. 

·.· 

i 

• 

...... 

10 

?·.· 6 .• t·  i i' 

. 

·. 

I·. 

72 

<  > ~<  < 

•·· 

···• 

3.  Photovoltaics 

3GWp 

5,000/KWp 

2,500/KWp 

3,000/KWp 

4.  Biomass 

90Mtoe 

5.Geothermal 
1  (+  heat pumps) 

2.5GW 

2,500/KW 

1,500/KW 

2,000/KW 

... · 

6.SolariCoUe¢(or~••··• 

.· 

94Miom2 

400Jm2 

Total for EU 
market 

200/m2 

250/m 2 

24 

. ·· .... 

.· 

.. 

165.1 

36.6 

9 

84 

5 

.. 

1.5 

24.1 

0.5 

> I> 

.·  V 

.· 

... 

0.06 

-

-

. 

0.6 

. ·. 

3 

0.4 

-

-

··• 

I 

. · 

•· 

··•··••·J·2 

. 

. 

21 

3 

255 

5 

. 

/ 
19 

402 

•·•·· 

·. 

.·· 

. 

53 

ISSN 02.54-1475 

COM(97) 599 final 

DOCUMENTS 

EN 

12  14 

Catalogue  number  CB-C0-97-676-EN-C 

ISBN  92-78-28533-1 

Office for Official Publications of the European Communities 

L-2985  Luxembourg