Opinion of the Economic and Social Committee on the 'Communication from the Commission on Energy for the future: renewable sources of energy (White Paper for a Community Strategy)'
Date: 1998-04-29
Institutions: European Economic and Social Committee
Subjects: action programme, energy recovery, energy saving, renewable energy, soft energy

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technology — to a broad information and exploitation
network, which is consistent with all national and

Community arrangements. The Committee is preparing
a specific own-initiative opinion on this project.

Brussels, 29 April 1998.

The President

of the Economic and Social Committee

Tom JENKINS

Opinion of the Economic and Social Committee on the ‘Communication from the Commission
on Energy for the future: renewable sources of energy (White Paper for a Community
Strategy)’

(98/C 214/14)

On 19 December 1997 the Commission decided to consult the Economic and Social Committee,
under Article 198 of the Treaty establishing the European Community, on the above-mentioned
communication.

The Section for Energy, Nuclear Questions and Research, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 7 April 1998. The rapporteur
was Mr Morgan.

At its 354th plenary session held on 29 and 30 April 1998 (meeting of 29 April), the Economic
and Social Committee adopted the following opinion by 106 votes to 1, with 3 abstentions.

1.

Introduction

The Economic and Social Committee welcomes the
white paper as a constructive and positive follow-on to
the earlier green paper (1).

The white paper is written in four chapters:

— Setting the scene;

— The action plan;

— Campaign for take-off;

— Follow-up and implementation.

Our opinion follows this outline.

2. Setting the scene

2.3. We are pleased to see that the strategy and action
plan in the white paper are directed towards the goal
of achieving 12 % penetration of renewables in the
European Union by 2010. We have already given
our support to this ambitious and radical objective.
However, we have made no attempt to evaluate or
substantiate the claims in the document for job creation,
power generation, reduced CO2 emissions etc. We have
simply accepted them as a basis of the programme.

2.3.1. With respect to Member States’ targets and
strategies, we are pleased to support a conclusion in line
with our response to the green paper. The relevant
passages are as follows:

2.1.
The first two sections of this chapter re-state the
green paper thesis and report on the submissions received
in response to it. In this context we have nothing to add
to our submission in response to the green paper.

2.2.
The third section of the first chapter re-states the
strategic goals in a form with which the Committee
positively agrees.

(1) OJ C 206, 7.7.1997.

‘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 consul-
tation process on the green paper confirm 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.’

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‘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 in which it expects different
technologies to contribute and outline the measures
it intends to introduce to achieve enhanced deploy-
ment.’

2.3.2.
Annex III to the white paper summarizes
current Member State plans and actions for the develop-
ment of renewables. The Committee takes the view that
these do not yet represent an adequate response to the
potential and need for increased renewable energy
deployment. The scale of the programme implied by the
12 per cent target will need a radical and revolutionary
approach to this opportunity which is not yet in place
at the Member State level.

2.3.3.
In Annex II, the white paper establishes targets
for the various technologies. This is consistent with the
approach which the Committee recommended and
provides the necessary framework for the action plan.
This is a considerable improvement on the prior use of
TERES II forecasts.

2.4.
In the fourth section of this chapter, there is a
preliminary assessment of costs and benefits. This shows
that the action plan targets require additional net
investment of ECU 74 billion. This is a big number and
seems to be out of proportion compared with other
energy investment costs and will need a significant
commitment.

2.5.
It is not possible within the white paper to
evaluate the economic return on this investment. Nor is
it possible at the global level to anticipate the levels of
price support which will be involved at the Member
State level. Accordingly, although the white paper spells
out a number of important public good benefits including
CO2 reduction, it is not possible to calculate the impact
on the profits of companies or the benefits to consumers.
These will be important issues for the follow-up and
implementation phase of this programme (Chapter 4).

2.6.
It is also important to understand the uncertainty
which surrounds the white paper proposals. We are
dealing with new technologies. We are making assump-
tions about performance improvements. We are making
assumptions about rates of take-up for markets. There
is a large body of experience which shows that technology
projects with these characteristics cost a good deal more
than was originally estimated. Such projects tend to
produce returns on the investment later than expected
at the outset.

2.6.1.
There are two ways of looking at the costs
detailed in Table 5 of the white paper. The absolute
numbers are very large; yet in the context of overall
energy investment they are regarded by the Commission
as quite reasonable. Either way, given the element of

technological risk which surrounds this whole pro-
gramme, there have to be concerns about the feasibility
of achieving the 12 % target for renewable energy within
the overall European energy scenario.

2.6.2.
The programme needs to be tightly managed
and controlled, otherwise there is little prospect of
achieving the radical changes implied in the targets. In
this context the Commission must act as one and each
DG involved must step up to the scale of this project.
It is likely that the Committee of Director-Generals
discussed in the proposal for the multiannual framework
programme for actions in the energy sector (1998-
2002) (1) will provide a useful forum for focusing its
commitment.

2.6.3. Member States will need to coordinate Govern-
ment action and initiatives across many government
departments. As noted in the green paper, there is a
requirement for coordination and cooperation between
Member States.

2.6.4. While the costs in Table 5 are absolutely huge,
it needs to be recognized that they are not specifically
budgeted for. They either depend on the budgets of
other EC programmes or on expectations of programmes
yet to be finalized. The Commission and the Council,
in deciding whether to accept the white paper, should
give serious consideration to the sources of funds and
the commitment of those funds.

3. The action plan

3.1.
Chapter 2 describes the main features of the
action plan. This adds more detail to the actions in the
green paper and we would generally endorse it. We
agree that the plan is highly dependent on action being
taken by Member States and we welcome the proposal
to institute a system of continuous review. The action
plan describes:

— internal market measures;

— reinforcing Community policies.

As compared with the green paper and the Committee’s
response, the most important actions are the internal
market measures.

3.2.

Internal market measures

3.2.1. F a i r a c c e s s f o r r e n e w a b l e s t o t h e
i n t e r n a l e l e c t r i c i t y m a r k e t

3.2.1.1. We endorse the view that fair access for
renewables to the internal electricity market is central

(1) COM(97) 550 final, ESC opinion in elaboration.

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and fundamental
project.

to the whole renewable energy

3.2.1.2. With reference to the proposal for a Directive
on Fair access for RES to the electricity market (see
section 2.2.1 of
the white paper, Fair Access for
Renewables to the Electricity Market, and Annex I on
related Action Plans), the white paper makes the point
that there is an opportunity for renewable energy access
obligations to be included when the internal market on
electricity directive is being transposed into national
law. The Commission should communicate to the
Member States this specific requirement. If the Member
States fail to incorporate this obligation into national
law, then we recommend that a further directive be
drafted. In this context, we have noted the draft report
prepared by Mr. Linkohr MEP ‘drawing up a Directive
on Network access for electricity from renewable sources
of energy in the European Union’. It is a positive
initiative.

3.2.1.3.
The white paper calls out a number of issues
to be addressed within the framework of this legal
obligation.
In addition to those points we would
underline the potential contractual problems. Renew-
able energy project investment will require that contracts
reflect the period of time needed to get an adequate
return on investment.

3.2.2. F i s c a l a n d f i n a n c e m e a s u r e s

3.2.2.1.
It is clear that renewable energies will con-
tinue to have difficulty competing with fossil fuels in
price terms over most if not all of the period till 2010.
Accordingly it will be necessary for Member States to
put in place guaranteed medium to long term price
programmes. With the support of guaranteed price
contracts it will then be possible for the promoters of
renewable projects to raise money from the private
sector. These price support programmes are in effect a
public subsidy to be paid for out of taxes but they are
essential if private capital is to be raised and the growth
of renewable energy production is to be increased.

3.2.2.2.
In addition to a programme of price support
there are other measures which Member States can take
to encourage private sector financing of renewable
energy investment, for example:

— flexible depreciation;

— favourable tax treatment for third party financing;

— start-up subsidies in certain circumstances for new

production plants.

3.2.2.3. Not all renewable energy projects will be
grid-connected. It will therefore be necessary to provide
financial
incentives for consumers to purchase RE
equipment and services. Clearly there is a role for public
utilities in this context.

3.2.2.4. Within the general framework of fiscal and
financial measures, the Committee would like to reiterate
its stance on the relationship between a carbon tax and
the promotion of renewable energies. There are many
reasons why Member States may wish to introduce a
carbon tax; the promotion of renewable energy is not
one of them. To tax 94 per cent of energy sources in
order not to tax six per cent is an exaggerated case of
the tail wagging the dog. Renewable energy technologies
should be promoted through positive fiscal incentive.

3.2.3. N e w

b i o e n e r g y

i n i t i a t i v e

f o r

t r a n s p o r t , h e a t a n d e l e c t r i c i t y

Within the time frame to 2010 there should be consider-
able changes in fuel efficiency and use. There should be
considerable advances in electric traction and fuel cells
for road transport. The programme for biofuels should
take account of the likely pace of these other develop-
ments.

3.2.4.

r e g u l a t i o n s :
i m p a c t o n t o w n a n d c o u n t r y

I m p r o v i n g b u i l d i n g
i t s
p l a n n i n g

3.2.4.1. We very much endorse the point that ‘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’.

The specific measures proposed will in some
3.2.4.2.
countries mean major changes in building regulations,
building technologies and the property market. Accord-
ingly these changes will need to be driven through
forcibly following consultation with industry pro-
fessionals; and the results monitored.

3.2.4.3. Within many Member States of the EU
the potential for photovoltaics is significantly limited.
However we endorse the inclusion of photovoltaics in
the campaign for take-off. The white paper explains
that not only is the potential in buildings important but
there is also an opportunity to create a basis for
technology export.

Building technology is of colossal importance
3.2.4.4.
for EU energy use. The Committee is preparing an ‘own
opinion’ on this whole area. Clearly there are major
opportunities for energy saving which fall outside the
scope of the white paper. There is scope for building
regulations to be changed to cover not only insulation
but also thermal gain (passive solar).

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3.2.4.5. Public Procurement

3.5. Support measures

In this context there is clearly a need for coordinated
and informed action. All buildings for central and local
government and public authorities need to be checked
for energy efficiency and, where possible, photovoltaics.
Private companies and individuals should be encouraged
to follow this example. Architects and builders and
other involved professions need to be engaged. There
must be communication with the general public and
in particular with householders in relation to new
standards.

3.2.4.6.
Planning regulations and the attitudes of
local planning authorities will need to be modified in
favour of renewable energy sources, installations and
designs.

3.3. Reinforcing Community policies

3.3.1.
The actions proposed in the context of other
Community policies are consistent both with the green
paper and the Committee’s response to it. The detailed
plans are richer and more complete than previously
and provide a sound basis for action throughout the
Commission and the Member States.

3.3.2. One of the specific concerns is the requirement
that the common agricultural policy should provide for
energy crops from agriculture in an equivalent way to
the provision for food crops. This does not mean
necessarily that we are proposing additional subsidies.
What we are proposing is equivalent treatment. It cannot
make sense that a farmer is required to plant long-term
crops for fuel purposes with an uncertain demand in the
year when the crop matures when the same or similar
land could be used for short-term food crops with a
guaranteed return. It is also important to consider the
environmental outcome of these policies.

Following the emphasis which we placed in
3.3.3.
our Opinion on the green paper on export opportunities,
we endorse the attention which this subject receives in
the white paper. In particular, we support the selection
of photovoltaic technology for the start up campaign.

3.4. Strengthening

cooperation between Member

States

The Committee endorses the need to strengthen cooper-
ation between Member States because we agree with the
statement that, ‘at present serious discrepancies persist
in levels of advancement both as regards renewable
energy implementation in the different Member States,
and between the technologies themselves’. For the 12 per
cent target to be met, all Member States will have
to fully exploit the renewable energy opportunities
available within their boundaries.

3.5.1. T a r g e t e d p r o m o t i o n

3.5.1.1. We agree that action programmes designed to
meet the penetration objectives for targeted technologies
will provide a more focused framework for actions
under Altener II.

3.5.1.2. We support the need to mount a major effort
influence, experience and
to harness the potential,
enthusiasm of all manner of associations and bodies
such as citizens groups, non governmental organizations
and other special interest groups.

3.5.1.3. We are pleased to note the general level of
interest shown by the white paper in the need to
empower and activate individuals, local authorities and
other organizations at all levels of society. This was a
key concern in our submission on the green paper. We
are glad to note this response. For the same reasons, we
endorse the proposals on market acceptability and
consumer protection.

3.5.1.4.
In the context of the need for coordinated
action referred to in 2.6.3 above the projects supported
by both Altener II and the Fifth Framework Programme
need to be specifically linked to the White Paper
initiative.

3.6. Annex I to the white paper

We have reviewed the preliminary indicative action plan
for renewable energies in the period 1998 to 2010. We
have commented in the above paragraphs on many of
the specifics but we have not tried to anticipate the
contents of any proposed directives or proposals for
revised directives. These must await the publication
of the draft documents in due course. However the
Committee has submitted Opinions on Alterner II and
the Fifth Framework Programme and is continuing to
work on the latter.

4. Campaign for take-off

4.1.
There are a number of positive aspects to this
campaign. We welcome the focus on large-scale projects
for the different renewable energy sectors. We welcome
the recognition that the critical success factor for this
campaign is the quality of Member State action plans
and that within those plans there are many active and
involved parties. An urgent aspect of Member State
action plans will be submission of request for Structural
Funds for renewable energy projects.

4.2.
The list of interested parties is not complete and
will need to be further developed to include, for example,
non-government organizations, the construction indus-

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try and its sub-contractors and, in due course, airports
and the travel industry. Other interested parties are of
course the clients of all these industries.

4.3.
The white paper suggests communicating with
all interested parties. It is probable that involvement
will not be enough: education and training will also
be needed. The Committee is concerned that many
interested parties are not sufficiently knowledgeable to
play their part to the full. It will be necessary for Member
States to put in place communication, information and
education plans. We believe that the Commission is
correct to propose a limited number of high impact,
high profile campaigns which will grab public and
political imaginations alike.

4.4. We endorse the selection of three technologies
for the take-off campaign but we have major concerns
about the biomass project. This is because of the:

a) sheer scale of the project: the growth rate is significant
and the 2010 outcome is a very large share of the
RES total; and,

b) complexity of biomass projects: this is because of

the two-level contracting process.

The plant operator needs assured prices in his electricity
sale contracts to underpin investment in RES generation.
He also needs contracts in place to guarantee a supply
of biomass fuel for generation.

4.4.1.
To the extent that the fuel comes from wastes
new legislation is needed to require waste generators
e.g. in the food processing industry to generate energy
from waste.

To the extent that the fuel comes from agricul-
4.4.2.
tural crops, we are concerned that there is nothing
effective in place to incentivise farmers. Indeed it seems
that Agenda 2000 will make agricultural biomass supply
even more problematical. The move to large-scale
agricultural cropping will require detailed planning and
implementation on the producer side. In addition it will
be necessary to formulate the long term contractual
framework which the producers will need. On the
it will be necessary to establish the
technical side,
projects to research, develop and install the power plants
given the huge dependence overall on the massive growth
in biomass as a source of renewable energy. This whole
area needs greater definition and precision.

4.6. One final caveat on the campaign for take-off
— as the Committee stated its our opinion on the
previous green paper — the programme still does not
acknowledge the problems of scale in renewable energy.
As volumes grow, the problems grow exponentially.
Examples are the impact of variable electricity volumes
on network capacity, the impact of intensive farming of
energy crops over vast acreages, and the impact of
windfarms on the environment.

4.7.
There are now less than 13 years to the year
2010. In this period, renewable energy sources other
than hydro-electric has to increase by a factor of five.
The successful
implementation of the campaign for
take-off is therefore very critical. It needs to be effective
in terms of volumes and schedules. Once the campaign
has been formally accepted by the Council of Ministers
it will be necessary to get action plans in the Member
States in place with the utmost urgency.

5. Follow-up and implementation

5.1.
In our green paper submission we have already
endorsed the proposal for improved data collection and
measurement.

5.2.
There is no doubt that implementation by Mem-
ber States must be coordinated at EU level. There are a
number of reasons for this: first, it is essential to know
that the sum of Member State action plans and targets
do indeed meet the Union objective of 12 % penetration
by 2010; second, it will be necessary to see that the
countries apply for the Structural funding available;
third, there will need to be check points on the progress
of key technologies across the Union, particularly where
the key action campaigns are concerned; and fourth, the
Commission and the Member States together will need
to be certain that any necessary harmonization or
standardization needed for the working of the internal
market is put in place as soon as it is needed.

5.3.
In this context, the Economic and Social Com-
mittee welcomes the intent of the Commission to
produce a regular communication 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. It will however
be essential for the Commission’s statistics to be seen to
be soundly-based.

4.5. While acknowledging the logic behind the choice
of technologies for the start-up campaign, the ESC
would also emphasise the need for continued support to
other technologies with potential such as solar thermal.

The Economic and Social Committee endorses
6.1.
the EU strategy and action plan set out in this white

6. Conclusion

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paper and supports the proposals for its implementation
over the period to 2010.

However the scale and radical nature of the programme
means that it can only succeed if there is a fundamental
change of attitude in a number of areas.

In particular for the biomass programme to
6.2.
succeed there will need to be a significant change in
the CAP incorporating new financial arrangements to
provide incentives for farmers to grow energy crops.

6.3.
Associated with the photovoltaic programme
there has to be a revolutionary change in the construction
industry — in technology, architecture and planning
authorities.

6.4.
it is
For the overall programme to succeed,
imperative that all affected departments in each Member
State Government and all affected DGs in the Com-
mission understand the radical and ambitious under-
taking that this programme represents and act accord-
ingly to implement it.

Brussels, 29 April 1998.

The President

of the Economic and Social Committee

Tom JENKINS

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Decision on
approving amendments to the statutes of the Joint European Torus (JET), Joint Undertaking’

(98/C 214/15)

On 27 March 1998 the Council decided to consult the Economic and Social Committee, under
Article 198 of the Treaty establishing the European Atomic Energy Community, on the
above-mentioned proposal.

The Section for Energy, Nuclear Questions and Research, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 7 April 1998. The rapporteur
was Mr Beale.

At its 354th plenary session held on 29 and 30 April 1998 (meeting of 29 April), the Economic
and Social Committee adopted the following opinion by 122 votes to 0, with 3 abstentions.

1. The proposed amendments are:

(i) The Forschungszentrum Jülich Gmbh (KFA, Feder-
al Republic of Germany) will be replaced as
member of the JET Joint Undertaking by the
Forschungszentrum Karlsruhe
(FZK, Federal
Republic of Germany).

(ii) The Dublin City University will represent Ireland

as member of the JET Joint Undertaking.

(iii) The O¨ sterreichische Akademie der Wissenschaften
(O¨ AW) will represent Austria as member of the
JET Joint Undertaking.

(v) The JET Council approved another amendment to
the Statutes required by the adoption of the new
UK Companies Act 1985 and 1989.

(vi) To accept certain other amendments to the working
of the JET statutes following the judgement of the
Court of First Instance in Joined Cases T-177/94
and T-377/94.

2.
The amendments referred to under (i), (ii), (iii),
(iv) and (v) above are administrative in nature and are
agreed to.

(iv) The Junta Nacional de Investigaça˜o Cientifica e
Tecnolo´gica (JNICT) will be replaced as member
the Joint Undertaking by the Instituto de
of
Cooperaça˜o Cientifica e Tecnolo´gica.

3.
Relating to the amendment under point (vi), the
Commission, drafted a proposal for a Council decision
taking into account the judgement of the Court of First
Instance of 12 December 1996.