Communication from the Commission to the Council and the European Parliament - The share of renewable energy in the EU - Commission Report in accordance with Article 3 of Directive 2001/77/EC, evaluation of the effect of legislative instruments and other Community policies on the development of the contribution of renewable energy sources in the EU and proposals for concrete actions {SEC(2004) 547}
Date: 2004-05-26
Institutions: European Commission
Subjects: EU Member State, EU law, application of EU law, electrical energy, renewable energy

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 26.5.2004 
COM(2004) 366 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

The share of renewable energy in the EU 

Commission Report in accordance with Article 3 of Directive 2001/77/EC, evaluation of 
the effect of legislative instruments and other Community policies on the development of 
the contribution of renewable energy sources in the EU and proposals for concrete 
actions 

{SEC(2004) 547} 

EN 

   EN 

 
 
 
  
 
 
 
TABLE OF CONTENTS 

Executive Summary ................................................................................................................. 4 

1. 

1.1. 

1.2. 

1.3. 

1.4. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

2.5. 

2.6. 

2.7. 

2.8. 

Introduction ................................................................................................................ 7 

The global challenges................................................................................................... 7 

Europe’s role ................................................................................................................ 8 

Scope of this Communication .................................................................................... 10 

New Member States ................................................................................................... 11 

Commission report on national progress towards electricity produced from 
renewable energy sources (RES-E) targets............................................................ 12 

Information sources used ........................................................................................... 12 

The overall picture ..................................................................................................... 12 

Assessment of progress at the national level.............................................................. 13 

Practical requirements laid down in Directive 2001/77/EC....................................... 14 

Guarantees of origin................................................................................................... 16 

Clarification of the role of the guarantee of origin in the calculation of progress 
towards national targets.............................................................................................. 17 

Infringement procedures ............................................................................................ 18 

Development of electricity from wind, biomass and solar ........................................ 18 

2.8.1.  Wind energy ............................................................................................................... 19 

2.8.2.  Electricity from biomass ............................................................................................ 20 

2.8.3.  Electricity from solar photovoltaics ........................................................................... 21 

2.9. 

Conclusions on the development of electricity from renewable energy sources ....... 21 

3. 

3.1. 

3.2. 

3.3. 

Efforts and results for 2010..................................................................................... 22 

The legislative framework developed since 2000...................................................... 22 

Member State Actions................................................................................................ 24 

Community support instruments ................................................................................ 24 

3.3.1.  Community support programmes............................................................................... 24 

3.3.2.  Dissemination – Public Awareness Campaigns......................................................... 26 

3.4. 

Achieving the 12% target – the impact of Community legislation............................ 26 

3.4.1.  Energy efficiency legislation...................................................................................... 26 

3.4.2.  Legislation on electricity from renewable energy source .......................................... 28 

2 

 
 
  
 
3.4.3.  Biofuels ...................................................................................................................... 28 

3.5. 

Renewable energy for heat production ...................................................................... 30 

3.5.1.  The trend in geothermal ............................................................................................. 30 

3.5.2.  Solar thermal heat. ..................................................................................................... 31 

3.5.3.  Biogas......................................................................................................................... 31 

3.5.4.  Woody Biomass ......................................................................................................... 32 

3.5.5.  Summary .................................................................................................................... 33 

3.6. 

Conclusion: Scenario for the renewable energy share in 2010 .................................. 33 

4. 

4.1. 

4.2. 

Concrete Actions ...................................................................................................... 34 

New initiatives to reinforce the financing of renewable energy – action by Member 
States .......................................................................................................................... 34 

New initiatives to reinforce the renewable energy and energy efficiency – action at 
European level............................................................................................................ 35 

4.3. 

Other measures........................................................................................................... 36 

4.3.1.  A Community plan for biomass ................................................................................. 36 

4.3.2.  Developing renewable energy in heating................................................................... 37 

4.3.3.  Offshore wind policy.................................................................................................. 37 

4.3.4.  Electricity from solar irradiation................................................................................ 38 

4.3.5.  Research and technological development .................................................................. 38 

4.3.6.  Using major Community financing instruments ........................................................ 39 

4.3.7.  Placing biofuels on the market................................................................................... 39 

4.3.8.  Timely data................................................................................................................. 39 

5. 

5.1. 

5.2. 

5.3. 

6. 

International political context and EU perspectives beyond 2010....................... 39 

The Lisbon process and the environmental dimension .............................................. 39 

The Johannesburg conference and its follow-up........................................................ 40 

The role of targets at EU level ................................................................................... 42 

Conclusions ............................................................................................................... 43 

3 

 
 
  
 
Executive Summary 

1. 

As set out in the Green Paper on security of energy supply (2000), key priorities for 
European  Union  energy  policy  are  to  address  the  Union’s  growing  dependence  on 
energy imports from a few areas of the world, and to tackle climate change. Looking 
ahead  to  the  next  twenty  to  thirty  years,  the  Green  Paper  drew  attention  to  the 
structural weaknesses and geopolitical, social and environmental shortcomings of the 
EU’s  energy  supply,  notably  as  regards  European  commitments  in  the  Kyoto 
Protocol. 

The promotion of renewable energy has an important part to play in both tasks. Since 
1997,  the  Union  has  been  working  towards  the  ambitious  target  of  a  12%  share  of 
renewable  energy  in  gross  inland  consumption  by  2010.  In  1997,  the  share  of 
renewable energy was 5.4%; by 2001 it had reached 6%. 

2. 

This  Communication  assesses  the  state  of  development  of  renewable  energy  in  the 
European Union. It serves three purposes: 

- 

- 

- 

The formal report that the Commission is required to make under Article 3 of 
Directive  2001/77/EC,  evaluating  the  progress  made  by  the  EU15  towards 
achieving  national  targets  for  2010  for  electricity  from  renewable  energy 
sources; 

Assessment  of  the  prospects  for  achieving  the  target  of  a  12%  share  of 
renewable  energy  in  overall  energy  consumption  in  the  EU15  in  2010 
(including heating, electricity and transport), taking into account EU legislation 
since 2000 and other measures in renewable energy and energy efficiency; 

Proposals for concrete actions at national and Community level to ensure the 
achievement  of  EU  renewable  energy  targets  for  2010,  in  the  context  of  the 
Bonn World Renewable Energy Conference (June 2004) and, building on this, 
the line to take on the scenario for 2020. 

3. 

In accordance with Directive 2001/77/EC, all Member States have adopted national 
targets  for  the  share  of  electricity  production  from  renewable  energy  sources. 
These are mostly in line with the reference values given in Annex I of the Directive.  

If Member States adopt the measures necessary for the achievement of their national 
targets,  the  share  of  electricity  from  renewable  energy  sources  in  EU15  electricity 
production should approximate to the share of 22% targeted by the Directive. 

However, analysis of the progress reports that Member States have submitted to the 
Commission  shows  that  policies  and  measures  currently  in  place  will  probably 
achieve a share of only 18-19% in 2010 compared to 14% in 2000. 

One of the reasons for this discrepancy appears to be that a number of Member States 
have not yet introduced active policies in line with the targets that they adopted.  

The Commission will closely monitor the situation in those Member States, and the 
full implementation of all requirements of the Directive, in order to prepare follow-
up actions at a later stage. 

4 

 
 
  
 
4. 

Since  2000  the  Commission  has  proposed  a  considerable  number  of  new  legal 
instruments  to  promote  renewable  energy  and  energy  efficiency.  The  European 
Parliament  and  Council  have  adopted  most  of  them.  The  remainder  are  in  an 
advanced stage of the inter-institutional process.  

The adopted proposals are: 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Directive 2001/77/EC on the promotion of electricity produced from renewable 
energy sources (OJ L283/33, 27.10.2001) 

Directive 2003/30/EC on the promotion of biofuels (OJ L123/42, 17.5.2003) 

Directive  2002/91/EC  on  energy  performance  of  buildings  (OJ  L1/65, 
4.1.2003) 

Directive 2004/8/EC on the promotion of cogeneration (OJ L52/50, 21.2.2004) 

Directive  2003/96/EC  for  the  taxation  of  energy  products  and  electricity  (OJ 
283/51, 31.10.2003) 

Directive  2000/55/EC  on  energy  efficiency  requirements  for  ballasts  for 
fluorescent lighting (OJ L279/33, 01.11.2000) 

Commission Directive 2002/40/EC on labelling of electric ovens (OJ L128/45, 
15.05.2002) 

Commission Directive 2002/31/EC on labelling of airconditioners (OJ L86/26, 
03.04.2003) 

Commission  Directive  2003/66/EC  on  labelling  of  refrigerators  (OJ  L170/10, 
09.07.2003) 

Regulation  2422/2001/EC  on  Energy  Star  labelling  for  office  equipment  (OJ 
L332/1, 15.12.2001) 

The proposals under examination by the European Parliament and Council are: 

- 

- 

COM  (2003)453  of  01.08.2003  on  Eco  design  requirements  for  energy  using 
products 

COM (2003)739 of 10.12.2003 on energy efficiency and energy services 

5. 

6. 

The  Commission  also  brought  forward  a  proposal  for  the  multiannual  programme 
Intelligent Energy – Europe (EIE), building on the successes of previous Community 
support  programmes  (ALTENER,  SAVE  and  RTD).  The  European  Parliament  and 
Council adopted the proposal in June 2003 with a budget of €250 million. 

With  the  measures  that  have  been  put  in  place,  the  Commission  estimates  that  the 
share  of  renewable  energy  sources  in  the  EU15  is  on  course  to  reach  10%  in 
2010.  The  shortfall  compared  to  the  12%  target  is  caused  by  sluggish  growth  of 
renewable  energy  markets  for  heating  and  cooling,  leading  to  the  conclusion  that 
considerable extra action is needed in this sector to enable the full 12% target to be 
reached.  

5 

 
 
  
 
However,  this  assessment  assumes  full  implementation  of  the  requirements  of  EU 
legislation  by  national  and  local  authorities.  The  example  of  Directive  2001/77/EC 
demonstrates that this cannot be taken for granted. If this directive delivers only a 18-
19%  renewable  energy  share  of  the  electricity  market  in  2010,  then  the  share  of 
renewable energy in energy consumption as a whole will reach no more than 9%. 

With  a  framework  of  Community  legislation  in  place,  it  is  to  Member  States  that 
responsibility  falls  for  ensuring  that  the  agreed  targets  and  measures  are,  in  fact, 
implemented  on  the  ground.  This  will  require  a  wide  range  of  national  actions, 
including efforts to ensure that established firms in the energy supply industries pay a 
share of the costs of promoting renewable energy. 

The  Communication  also  announces  a  number  of  additional  concrete  actions  at 
Community  level  in  order  to  support  Member  States’  efforts  to  achieve  the  EU15 
12% share. 

7. 

The  World  Renewable  Energy  Conference,  to  be  held  in  Bonn  in  June  2004,  will 
address  the  promotion  of  renewable  energy  across  the  globe  as  a  means  to  combat 
climate change, promote the security of energy supply and - notably for developing 
countries - reduce poverty.  

A  European  preparatory  conference  held  in  Berlin  in  January  2004  considered  that 
the use of overall, general targets for renewable energy should be extended beyond 
2010.  It  noted  a  range  of  technical  studies  that  suggest  a  target  of  at  least  20%  of 
renewable energy in overall energy consumption in the EU25 in 2020, using the tools 
established  in  existing  Community  legislation  and  additional  actions  to  deliver 
results.  

The  Commission  is  committed  to  contributing  to  the  successful  outcome  of  this 
conference  and  has  highlighted  a  number  of  actions  it  will  offer  as  an  input  the 
International Programme of Action. 

6 

 
 
  
 
1. 

INTRODUCTION 

1.1. 

The global challenges 

As set out in the Green Paper on security of energy supply (2000), key priorities for European 
Union energy policy are to address the Union’s growing dependence on energy imports from 
a few areas of the world, and to tackle climate change. Looking ahead to the next twenty to 
thirty  years,  the  Green  Paper  drew  attention  to  the  structural  weaknesses  and  geopolitical, 
social  and  environmental  shortcomings  of  the  EU’s  energy  supply,  notably  as  regards 
European commitments in the Kyoto Protocol. 

The promotion of renewable energy has an important part to play in both tasks. Since 1997, 
the Union has been working towards the ambitious target of a 12% share of renewable energy 
in  gross  inland  consumption  by  2010.  In  1997,  in  the  EU15,  the  share  of  renewable  energy 
was 5.4%; by 2001 it had reached 6% (for comparison, oil contributes 40%, natural gas 23%, 
nuclear power 16% and solid fuels 15%). 

In addition to that, renewable energies contribute to improve air quality, innovative capacity, 
creation of new business, employment and rural development, in the context of strengthening 
the 3 pillars of sustainable development.  

At the global level, energy consumption is growing fast – by 15% over the decade 1990-2000. 
It is expected to grow even faster between 2000 and 2020. 

Fossil fuels (coal, gas and oil) account for about 80% of world energy consumption. Global 
consumption of fossil fuels grew in line with overall energy consumption during the 1990s. 
Fossil fuel use is expected to grow even faster than overall consumption in the period up to 
2020. 

Fossil fuels offer many advantages. They are relatively cheap to extract, convenient to use and 
widely  available.  The  infrastructure  to  deliver  them  is  in  place.  The  industries  that  supply 
them are well organised and offer supplies in most parts of the world. 

They have two main disadvantages. First, when they are burnt, they emit pollutants and the 
greenhouse  gases  that  are  causing  climate  change.  Second,  countries  without  adequate 
reserves  of  fossil  fuels  –  especially  oil  –  are  facing  increasing  risks  to  the  security  of  their 
energy  supplies.  Import  dependence  and  rising  import  ratios  may  lead  to  concern  about  the 
risk  of  interruption  to  or  difficulties  in  supply.  However,  security  of  supply  should  not  be 
conceived  as  merely  a  question  of  reducing  import  dependency  and  boosting  domestic 
production. Security of supply calls for a wide range of policy initiatives aimed at, inter alia, 
diversification of sources and technologies and without ignoring the geopolitical context and 
its implications. 

The  European  Commission  has  set  out  elsewhere  its  ideas  about  how  to  tackle  these 
problems,  notably  in  its  Green  Paper  on  security  of  energy  supply  (2000)1  and  its 
communication on Energy cooperation with the developing countries (2002).2  

1 
2 

“Towards a European strategy for the security of energy supply”, COM (2000) 769. 
“Energy cooperation with the developing countries”, COM (2002) 408. 

7 

 
 
  
 
                                                 
As  a  substitute  for  fossil  fuels,  renewable  energy  can  help  tackle  climate  change.  It  can 
improve the security of supply by boosting diversification of energy production. The case for 
renewable energy is strengthened by its effects in protecting air quality and creating new jobs 
and businesses – many of them in rural areas. 

Today,  investment  in  renewable  energy  is  generally  not  the  cheapest  way  to  reduce 
greenhouse gas emissions. It is cheaper to use energy more efficiently. However, investment 
in renewable energy is vital from a longer-term perspective. Experience in sectors like wind 
energy  has  shown  that  sustained  investment  leads  to  innovations  that  make  the  use  of 
renewable energy cheaper. By contrast, the cost of additional energy efficiency measures rises 
after the “low-hanging fruit” is harvested. Investment in both is needed. 

1.2. 

Europe’s role 

The European Union, even enlarged to 25 members, is expected to account for only 7% of the 
growth in global energy consumption between 2000 and 2020. More than a third is expected 
to come from China and India. Decisions here and in other industrialising countries will have 
an increasing influence on the level and pattern of world energy use.  

The  European  Union  and  other  OECD  countries  have  a  moral  and  practical  part  to  play  in 
making  it  possible  for  industrialising  countries  to  adopt  policies  that  will  help  secure  their 
energy supplies and hold climate change in check without jeopardizing their economy growth. 

The  average  citizen  of  the  EU25  consumes  about  five  times  as  much  fossil  energy  as  the 
average citizen of Asia, Africa and the Middle East (the same is true of citizens of the Japan-
Pacific region. Citizens of the United States consume nearly 12 times as much). If the richest 
countries  do  not  moderate  their  consumption  of  fossil  fuels,  they  have  little  prospect  of 
persuading  less  well-off  ones  to  do  so  –  especially  when  so  many  people  in  developing 
countries lack adequate energy services. 

The  European  Union  has  made  a  specific  practical  contribution  in  the  field  of  renewable 
energy,  namely  by  working  out  better  and  cheaper  technical  and  institutional  solutions. 
Europe is the pioneer in developing and implementing modern renewable energy techniques. 
Western Europe, with its 16% of world energy consumption, accounted for 31% of the world 
increase in electricity generation from biomass between 1990 and 2000; 48% of the increase 
in  small  hydropower;  and  79%  of  the  increase in  wind  power.  The  European  Union  and  its 
Member  States  have  pioneered  the  policy  and  regulatory  arrangements,  such  as  targets,  and 
the  financial  schemes  needed  to  drive  renewable  energy  forward.  European  companies  lead 
the world in renewable energy technology. 

If  Europe  is  to  continue  to  play  its  part,  it  must  not  be  complacent.  As  the  charts  show, 
renewable energy’s contribution in Europe still lags behind those of solid fuels, oil, gas and 
nuclear power. 

8 

 
 
  
 
 Gross inland energy consumption by fuel,  
EU 25, 2000 
other 0,3%   

renewable 
energy 5,8%

nuclear 
14,4% 

natural gas 
22,6% 

solid fuels
18,5% 

oil 38,4%

Electricity generation by fuel, EU25, 2000

other 2,2%

renewable 
energy 13,8%

solid fuels 
30,4%

nuclear 
31,5%

oil 6,1%

natural gas 
17,0%

The  European  Union  needs  affordable  renewable  energy  to  contribute  solving  its  own 
security  of  supply  problems  and  meeting  its  targets  for  reducing  greenhouse  gas 
emissions.  Recognising  the  wide  benefits  of  renewable  energy,  Europe  is  pushing  the 
development  of  technological  and  institutional  solutions  that  can  also  be  applied  on  a 
global scale. 

But while renewable energy has a significant part to play, it is important not to ignore certain 
difficulties. 

First,  there  are  technical  and  practical  limits  on  the  cost-effective  availability  of  renewable 
energy. There are major geographical variations in the incidence of wind and solar power. 

Biomass production must compete with other land uses, notably agriculture. There is a limit 
to  the  number  of  valleys  that  can  be  used  for  hydroelectric  power.  The  Commission  Staff 
Working  Document  that  is  published  alongside  this  communication  includes  a  careful 

9 

 
 
  
 
 
 
 
 
  
  
    
 
analysis of the potential of renewable energy in each Member State. More in-depth analysis is 
forthcoming as announced in this Communication 

Second,  renewable  energy  sources  need  conventional  energy  sources  as  back-up.  Wind  and 
solar power are intermittent and unpredictable. Climatic factors can produce big variations in 
the availability of biomass and hydropower from one year to the next. For these reasons, there 
are limits on the proportion of renewable energy that our present-day energy supply systems 
can absorb. This may give rise to a spare overcapacity of traditional sources entailing some 
additional costs. The development of renewable energy may also require new investments in 
existing energy systems, such as electricity grids. Energy policy needs the development of a 
range of different energy sources – having learnt the lesson of the need for diversification, this 
should not be forgotten. 

Finally, the development of a more diverse and secure energy system including a higher share 
of  renewable  energy  remains  today,  in  general,  a  policy  of  higher  costs.  It  is  true  that 
hydropower and traditional uses of wood are competitive with conventional forms of energy, 
and  that  wind  power  is  approaching  competitiveness  in  some  onshore  locations  with  high 
average wind speeds. Nevertheless, many forms of renewable energy – for example biomass 
electricity and biofuels – costs two or more times as much as their conventional alternatives if 
compared  on  an  individual  basis  without  considering  the  impact  of  the  total  energy  system 
cost. Others, such as photo-voltaic power, are more expensive still.3  

There therefore remain certain barriers to the development of renewable energies. Whilst the 
present  state  of  technological  development  prohibits  to  envisage  a  world  in  which 
conventional  energy  sources  are  totally  replaced  by  renewable  energy  a  more  step-wise 
approach can certainly be envisaged. 

Improved analytical and management tools are already emerging that should allow to develop 
a  proper  response  to  these  challenges  and  key  barriers.  These  include  more  sophisticated 
costing models that take account of the impact of increased shares of renewable energy on the 
total  energy  system  cost,  sophisticated  weather  forecast  tools  can  be  integrated  in  modern 
energy  management  systems  to  better  match  supply  with  demand.  Additional  analysis  is 
therefore set to take place in due course as announced later in this document. 

1.3. 

Scope of this Communication 

Since 1997, the Union has been working towards the general target of an increase to 12% in 
renewable energy’s share of gross inland energy consumption in the EU15 in 2010, compared 
with  5.2%  in  1995.  The  biggest  risk  for  the  achievement  of  this  target  is  the  imbalance 
between different countries’ levels of commitment to the development of renewable energy.  

3 

“Wind  energy  –  the  facts”  (European  Wind  Energy  Association,  2004)  gives  costs  for  the  best  wind 
power  generation  of  the  order  of  4  to  5  €-cents  per  kWh.  “Renewables  for  power  generation” 
(International Energy Agency, 2003) gives costs for photovoltaic power of at least 17 €-cents per kWh; 
and costs for biomass electricity plants of 7 €-cents per kWh or more. However costs can be reduced 
when biomass is used in combined heat and power plants (down to 5 to 6 €-cents per kWh) or for co-
firing with fossil fuels, where investment costs on the power cycle are avoided (down to 2-4 €-cents per 
kWh).  For  comparison,  the  wholesale  cost  of  electricity  produced  by  conventional  power  plants  is 
currently around 3 €-cents per kWh. The Commission’s communication on “Alternative fuels for road 
transportation and on a set of measures to promote the use of biofuels” (COM (2001) 547) quotes costs 
of the order of €500/1000 litres for biofuels, compared with €200-250/1000 litres for oil-based fuels at 
USD30/barrel. 

10 

 
 
  
 
                                                 
To  provide  a  focus  for  faster  progress,  the  European  Union  has  since  2000,  set  through 
legislation two indicative targets for renewable energy: 

- 

- 

an increase to 22% in the share of electricity generated by renewable energy in 2010 
for the EU15 (this compares with 14% in 2000);4 

an  increase  to  5.75%  in  the  share  of  biofuels  in  diesel  and  gasoline  used  for 
transport in 2010 (this compares with 0.6% in 2002).5 

The  Commission  has  also  proposed  a  considerable  number  of  new  legal  instruments  to 
promote  energy  efficiency.  The  European  Parliament  and  the  Council  have  adopted  the 
majority of these proposals and the remainder is at an advanced stage of the inter institutional 
process.  

This Communication serves three purposes: 

- 

- 

- 

The  formal  report  that  the  Commission  is  required  to  made  under  Article  3  of 
Directive 2001/77/EC, evaluating the progress made by the EU15 towards achieving 
national targets for 2010 for electricity from renewable energy sources; 

Assessment  of  the  prospects  for  achieving  the  target  of  a  12%  share  of  renewable 
energy  in  overall  energy  consumption  in  the  EU15  in  2010  (including  heating, 
electricity  and  transport),  taking  into  account  EU  legislation  since  2000  and  other 
measures in renewable energy and energy efficiency; 

Proposals  for  concrete  actions  at  national  and  Community  level  to  ensure  the 
achievement  of  EU  renewable  energy  targets  for  2010,  in  the  context  of  the  Bonn 
World  Renewable  Energy  Conference  (June  2004)  and,  building  on  this,  the 
approach to adopt for the 2020 scenario. 

1.4. 

New Member States 

The EU’s ten new Member States are subject to the requirements of Directive 2001/77/EC on 
electricity  from  renewable  energy  sources.  National  indicative  targets  for  the  share  of 
electricity  from  renewable  energy  in  each  new  Member  State  are  set  out  in  the  Accession 
Treaty. Taken together, these mean that the collective target for the EU25 is for the share of 
renewable energy to reach 21% in 2010. 

In the case of the EU15, the Directive requires the Commission to adopt a first progress report 
during  2004.  Chapter  2  of  this  communication  serves  that  function.  For  that  reason,  it 
concentrates on the EU15. In the case of the new Member States, the first progress report, on 
the  basis  of  national  reports  to  be  made  by  the  Member  States  in  question,  is  not  due  until 
2006.  Therefore,  their  position  is  not  assessed  in  Chapter  2.  However  the  chapter  cites,  for 
information,  some  examples  of  good  developments  in  the  generation  of  electricity  from 
renewable energy sources in the new Member States. 

4 

5 

Directive 2001/77/EC on the promotion of electricity produced from renewable energy sources in the 
internal market.  
Directive  2003/30/EC  on  the  promotion  of  the  use  of  biofuels  or  other  renewable  fuels  for  transport. 
The figures include the contribution of the 10 acceding countries. The EU15 figure in 2000 was 0.7%. 

11 

 
 
  
 
                                                 
The  new  Member  States  are  subject  to  the  requirements  of  the  biofuels  Directive 
(2003/30/EC). The Commission will make a first progress report on this directive in 2006. It 
will cover all 25 Member States. 

The  target  for  a  12%  share  of  renewable  energy  in  overall  energy  consumption  is  an  EU15 
target.  Progress  towards  this  target  is  assessed  in  Chapter  3  of  this  communication.  Like 
Chapter  2,  this  chapter  therefore  concentrates  on  the  Member  States  to  which  the  target 
applies.  Again,  it  cites  individual  examples  from  the  new  Member  States  for  illustrative 
purposes. 

Chapters 4 and 5 address future policies and actions. These concern the whole EU.  

The  Commission  Staff  Working  Document  that  is  published  alongside  this  communication 
covers all Member States. 

2. 

COMMISSION REPORT ON NATIONAL PROGRESS TOWARDS ELECTRICITY PRODUCED 
FROM RENEWABLE ENERGY SOURCES (RES-E) TARGETS  

2.1. 

Information sources used 

Under  article  3.4  of  Directive  2001/77/EC,  the  Commission  is  required  to  assess  to  what 
extent: 

“-  Member  States  have  made  progress  towards  achieving  their  national  indicative 
targets, 

-  the  national  indicative  targets  are  consistent  with  the  global  indicative  target  of 
12% of gross national energy consumption by 2010 and in particular with the 22.1% 
indicative  share  of  electricity  produced  from  renewable  energy  sources  in  total 
Community electricity consumption by 2010.” 

According to Articles 3.2 and 3.3 of the Directive, Member States must adopt national reports 
setting their national targets and analysing their success in meeting them. 

Reports on national targets were due in 2002. All EU15 Member States have adopted them.  

Reports on progress towards national targets were due by October 2003. All Member States 
except Finland,  Luxembourg and Italy have sent them to  the Commission  (see Commission 
Staff Working Document). 

The Commission has analysed these reports and commissioned several consultancies to make 
assessments  of  the  impact  of  the  measures  they  describe  (see  Commission  Staff  Working 
Document). 

2.2. 

The overall picture  

A  first  conclusion  is  that  the  target  adopted  by  each  Member  State  is  consistent  with  the 
national reference value listed in Annex I of Directive 2001/77/EC, although Sweden has used 

12 

 
 
  
 
a different method to fix a different value6. If Member States meet these national targets, the 
overall  share  of  renewable  electricity  in  the  EU15  will  achieve  the  target  of  about  22%  in 
2010, as required by the Directive. 

Unfortunately, the national policies, measures and achievements reported by Member States 
paint a less rosy picture. 

It should be underlined that it is difficult to predict exactly how measures now adopted will 
affect  the  share  of  electricity  from  renewable  sources  in  2010.  However,  the  extrapolation 
scenarios set out in the Commission Staff Working Document lead to the second conclusion 
that,  although  progress  towards  meeting  the  targets  has  begun,  the  2010  target  will  not  be 
achieved under current policies and measures, even under a scenario that builds in reductions 
in  total  electricity  demand  as  a  result  of  new  energy  efficiency  measures.  Instead,  currently 
implemented policies will probably result in a share of between 18% and 19% in 2010 (see 
charts). 

EU-15 Electricity 2001

Biogas

Solid biomass

15,2%

Biowaste

Geothermal electricity

Hydro large-scale

Hydro small-scale

Photovoltaics

Solar thermal electricity

Tide & wave

Wind onshore

Wind offshore

EU-15 national policies - 
Electricity 2010

18,3%

Biogas

Solid biomass

Biowaste

Geothermal electricity

Hydro large-scale

Hydro small-scale

Photovoltaics

Solar thermal electricity

Tide & wave

Wind onshore

Wind offshore

EU-15 Policy Scenario - Electricity 2010

22,1%

Biogas

Solid biomass

Biowaste

Geothermal electricity

Hydro large-scale

Hydro small-scale

Photovoltaics

Solar thermal electricity

Tide & wave

Wind onshore

Wind offshore

A third conclusion is that the main reason why the target is not being achieved is because the 
production of electricity from biomass has not been as high as initially previewed. The main 
difference  between  2nd  chart  (showing  the  effect  of  national  policies  and  measures  now  in 
place  or  recently  planned)  and  3rd  chart  (showing  a  practicable  scenario  for  achieving  the 
22.1% target set in the Directive) is the size of the biomass (green area) contribution.  

6 

Sweden has set a target for 2010 of an additional 10 TWh of electricity from renewable energy sources 
other than hydro, compared with 2002. The Swedish hydro figures are based on an average calculated 
on a 50 year base. This makes it difficult to convert the figures given by Sweden into a percentage. 

13 

 
 
  
 
 
 
                                                 
2.3. 

Assessment of progress at the national level 

Country reports indicate considerable differences between Member States. Figure 1, based on 
the detailed information in Commission Staff Working Document, arranges Member States in 
three groups according to the probability that, with the energy policies currently adopted, they 
will achieve their national targets. The first group (Germany, Denmark, Spain, Finland) is on 
track. The countries in the second group (Austria, Belgium, Ireland, the Netherlands, Sweden, 
the United Kingdom, France) have started to implement appropriate policies. For this group 
there is a mixture of positive and negative indications regarding the achievement of the 2010 
targets. The countries in the third group (Greece, Portugal) are not on track to achieve their 
national targets.  

Italy and Luxembourg adopted new laws in March 2004. It has not yet been possible to assess 
their  likely  effects.  However,  only  limited  progress  can  be  recorded  for  these  two  Member 
States during last 3 years. See Commission Staff Working Document for more details. 

On track:

DK, DE, ES, FI

About to be on track: 

NL, UK, SE, AUT, BE, IE, FR 

Not on track: 

L, I 

GR, PT 

Figure 1: Member States’ progress towards achieving their national indicative target by 2010 

On  track.  Denmark,  if  it  maintains  its  active  approach,  is  likely  to  achieve  the  2010  target 
(29%)  as  early  as  2005.  Denmark  has  increased  the  share  of  electricity  from  renewable 
sources from 8.9% in 1997 to 20% in 2002. Germany has increased the share from 4.5% in 
1997 to 8% in 2002 (national target of 12.5%) with wind generation growing from 3 TWh in 
1997 to 17 TWh in 2002 (equal to 3% of the total electricity consumption in 2002). Spain is 
the second European country for wind power although its biomass policy needs to be given 
higher priority. 

According to Finland’s national report, the contribution of electricity from renewable energy, 
passed from 7 TWh in 1997 to 10 TWh in 2002 excluding hydro. Although 2002 was a bad 
year for hydropower in Finland, the  evolution of biomass  has been impressive in the recent 
years. 

One of the drivers of success in all four countries was an attractive support system in a stable 
and long-term framework. 

About  to  be  on  track.  For  electricity  from  renewable  energy,  United  Kingdom  and 
Netherlands  have  actively  invested  in  a  new  policy  although  the  full  results  still  have  to 
materialise. Ireland has set up a support system through tendering but there are big difficulties 
in  connecting  wind  electricity  to  the  grid.  Since  2002,  Belgium  has  a  new  green  certificate 
system. For the moment this does not show visible results. 

14 

 
 
  
 
 
 
 
France recently put in place a new tariff system. The attractiveness of the tariffs is, however, 
reduced by the upper limit of 12 MW for each project. This particularly affects wind energy. 
In addition, long approval procedures and grid connection problems remain major obstacles.  

Sweden  implemented  a  green  certificate  system  in  May  2003.  Electricity  generation  from 
renewable energy rose hardly at all in Sweden between 1997 and 2002. But signals from 2003 
are much better. 

Austria  has  a  good  perspective  for  growth.  Such  a  development  is  facilitated  by  the  feed-in 
tariffs  introduced  in  January  2003,  however  not  excluding  a  streamlining  of  the  support 
scheme with additional efficiency requirements. 

Not  on  track.  So  far,  the  development  of  electricity  from  renewable  energy  has  been  held 
back in Greece. Administrative barriers prevent exploitation of the high potential that exists 
both in wind, biomass and solar. Portugal has increased its non-hydro production of electricity 
from  renewable  energy  by  only  1  TWh  since  1997.  A  further  14  TWh  are  still  needed  to 
achieve its national target. 

2.4. 

Practical requirements laid down in Directive 2001/77/EC  

In addition to the requirement for national indicative targets, the Directive lays down practical 
requirements for Member States in four areas. These are designed to ensure stable investment 
conditions for electricity from renewable energy:  

1) 

2) 

3) 

4) 

the  implementation  of  attractive  support  schemes,  which  should  be  as  efficient  as 
possible, 

the removal of administrative barriers, 

the guarantee of fair grid access, 

the issuing of a guarantee of origin. 

Most  Member  States  have  implemented  a  support  system  for  renewable  energy.  These  take 
the form of feed-in tariffs, quota obligations and/or green certificates.  

National reports show that appropriate financial mechanisms are not enough. In several cases, 
take-off  is  blocked  by  complex  licensing  procedures,  poor  integration  of  electricity  from 
renewable energy in regional and local planning and opaque grid-connection procedures. The 
table gives an overview of the situation in the Member States. 

15 

 
 
  
 
  ☺ = Good conditions 

  (cid:46) = Medium conditions 

  (cid:47) = Insufficient / strong barriers 

n.a. = information not available 

Member State 

Administrative 
barriers 

Grid 
barriers 

Austria  

Belgium  

Denmark 

Finland  

France  

Germany 

Greece 

Ireland 

Italy  

Luxembourg  

Portugal 

Spain 

Sweden  

The Netherlands  

United Kingdom  

☺ 

(cid:46) 

☺ 

☺ 

(cid:47) 

☺ 

(cid:47) 

☺ 

n.a. 

n.a. 

(cid:47) 

☺ 

☺ 

(cid:47) 

(cid:46) 

(cid:46) 

(cid:46) 

☺ 

☺ 

(cid:47) 

☺ 

(cid:47) 

(cid:47) 

n.a. 

n.a. 

(cid:47) 

☺ 

☺ 

☺ 

(cid:46) 

Table 1: Overview of Member States’s administrative and grid barriers 

In  accordance  with  the  Directive,  the  Commission  will  report  in  2005  on  support  systems 
(Article 4.2) and best practices in administrative procedures (Article 6.3). 

2.5. 

Guarantees of origin 

Article 5 of the Directive requires Member States to implement a system for a guarantee of 
origin by 27 October 2003.  

Implementation  is  in  several  stages.  The  most  important  of  these  are:  implementing 
legislation,  appointing  the  body  for  issuing  the  guarantees  of  origin  and  establishing  an 
accurate and reliable system including the preparation of documents and registries. 

Based on national reports and supplementary information, the situation in March 2004 is the 
following: 

Legislation 

Issuing bodies 

"Ready 
 to GO" 

16 

 
 
  
 
  
 
 
 
 
Austria 

Belgium, BR 

Belgium, Fl 

Belgium, W 

Denmark 

Finland 

France 

Germany 

Greece 

Ireland 

Italy 

Luxembourg 

Portugal 

Spain 

Sweden 

The Netherlands 

UK 

DSO 

Others 

Regulator 

Regulator 

TSO 

TSO 

Others 

Auditors 

completed 

under preparation 

not implemented 

DSO Distribution System Operator 

DSO and TSO   

TSO  Transmission System Operator 

Regulator 

TSO 

Regulator 

TSO 

Regulator 

TSO 

TSO 

Regulator 

Full implementation – 3 “completed” boxes – means that a guarantee of origin can actually be 
issued. Although the table shows more green than red, implementation is not yet complete.  

The  Commission  will  consider  the  practical  implementation  of  guarantees  of  origin  in  its 
report on support systems in 2005. It will look at the validity of guarantees and the need for 
redemption,  the  reliability  of  the  system,  and  the  inclusion  of  guarantees  of  origin  into  the 
different support schemes, as appropriate. 

In accordance with Article 5 of the Directive, the Commission will consider the desirability of 
proposing common rules for guarantees of origin. 

2.6. 

Clarification of the role of the guarantee of origin in the calculation of progress 
towards national targets 

In  the  Directive  (Article  3),  national  targets  are  defined  in  terms  of  the  consumption  of 
renewable  electricity  from  renewable  energy  sources  as  a  percentage  of  total  national 
electricity consumption. The consumption of electricity is defined as national production plus 
imports  minus  exports.  In  the  Directive’s  Annex  I,  reference  values  for  national  targets  are 
determined solely as percentages of national production.  

The question that arises is under what conditions can a Member State consider that imported 
renewable electricity is contributing to the achievement of its target under the Directive. 

17 

 
 
  
 
  
 
  
  
  
  
  
  
  
  
 
  
  
  
 
 
  
  
 
 
  
  
 
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
A Member State cannot meet its targets with imports from outside the EU. This is made clear 
in a footnote to the table in the Annex I, which states that in “…. the case of internal trade of 
RES-E (with recognised certification of origin registered) the calculation of these percentages 
will influence 2010 figures by Member States but not the Community total.”  

However, the situation is not so clear regarding imports from within the EU. 

The Commission acknowledges the need to clarify how progress towards national targets is to 
be calculated. In particular, it is important to define the role of guarantees of origin. 

The Commission has decided to apply the following principle in assessing the extent to which 
national targets are met: 

A Member State can only include a contribution from import from another Member 
State  if  the  exporting  state  has  accepted  explicitly,  and  stated  on  a  guarantee  of 
origin,  that  it  will  not  use  the  specified  amount  of  renewable  electricity  to  meet  its 
own target and thereby also accepted that this electricity can be counted towards the 
importing Member State’s target. 

It  should  be  emphasised  that  trade  in  renewable  electricity  should  occur.  Consumer 
preferences may in any case generate trade. However, in the absence of the agreement of the 
exporting country, the production will be counted towards the target of this exporting country. 

Exporting  Member  States  could  include  this  agreement  directly  in  guarantees  of  origin  for 
renewable  electricity  produced  on  their  territory.  If  they  do  not  do  so,  importing  Member 
States  could  ask  for  a  supplementary  approval  with  reference  to  the  guarantee  of  origin  in 
question.  

2.7. 

Infringement procedures 

The Commission will examine the transposition of the binding text of Directive 2001/77/EC, 
in particular regarding the practical requirements described above. It will take into account the 
national report and will take infringement action where appropriate. 

2.8. 

Development of electricity from wind, biomass and solar 

In  total,  renewable  energy  accounts  in  2002  for  about  15.2%  of  total  electricity  generation. 
Nuclear energy accounts for 33%. Fossil fuel thermal processes account for the remainder. 

The  EU15  is  using  nearly  all  its  large  hydro  potential.  The  contribution  of  this  renewable 
energy source is high but the total capacity will remain stable. The two technologies that can 
be expected to deliver most of the increase in electricity from renewable sources in EU15 for 
2010 are wind and biomass. However, in the new Member States – particularly in Slovenia, 
Hungary  and  Lithuania  –  there  is  still  an  important  potential  to  increase  hydro  energy 
generation.  

Output expectations from the different biomass uses need to be reassessed taking into account 
its  efficiency  and  availability.  Section  2.2  showed  clear  differences  in  their  growth  rates  of 
both  energy  sources.  In  addition,  for  strategic  reasons  on  a  medium  time  horizon  (towards 
2020 and beyond), solar energy is also observed. 

18 

 
 
  
 
2.8.1.  Wind energy 

The European wind industry has 90% of the world equipment market. Nine of the world’s ten 
largest wind turbine manufacturers are based in Europe. The industry employs 72,000 people, 
up from 25,000 in 1998. Costs per kWh have fallen by 50% over the last 15 years.  

Installed capacity in the EU15 grew by 23% in 2003, to a total of more than 28 GW (Figure 
2). In an average wind year this capacity can produce 60 TWh of electricity, approximately 
2.4% of EU electricity consumption. 

This  success  story  is  not  the  result  of  a  common  European  effort.  As  the  chart  shows, 
Germany, Spain and Denmark contribute 84% of total EU15 wind power capacity.  

30000

25000

20000

15000

10000

5000

0

1997

1998

1999

2000

2001

2002

2003

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

Figure 2: Wind energy capacity growth in EU15 1997-2003 – three leading markets 

In 1997 and as part of the 12% target, the Commission hoped to see 40 GW of wind power 
capacity installed by 2010. This will clearly be exceeded. Industry estimates now suggest that 
75 GW could be installed by 20107 (generating approximately 167 TWh per year).  

However, the final result for 2010 will depend on the efforts of those Member States where 
wind energy has not yet taken off.  

There  are  positive  signals  from  UK,  Austria,  the  Netherlands  and  Italy  due  to  an  improved 
policy framework. In other countries wind power is growing only slowly. In France, 91 MW 
was added in 2003 (as against 2.645 MW in Germany in the same year), with total capacity 
reaching  239  MW.  In  Greece  3.715  MW  had  been  given  first-step  approval  under  national 
administrative procedures by September 2003 – but installed capacity was only 375 MW. 

The  experience  of  the  three  leading  countries  suggests  that  successful  expansion  of  wind 
power benefits from: 

- 

- 

- 

an attractive long-term financial framework, 

removal  of  administrative  barriers  through  the  implementation  of  uniform  planning 
procedures and licensing systems, 

guarantee of a fair grid access and non-discriminatory tariffs, 

7 

Source: Wind energy –The Facts – March 2003. 

19 

 
 
  
 
 
                                                 
- 

least-cost network planning.  

The estimate of 75 GW of installed wind power capacity in 2010 includes 10 GW offshore. 
Offshore wind power will become more and more important as good wind sites on land are 
used up. Offshore wind power has several advantages. The wind is stronger and more reliable 
at sea (most marine sites in northern European waters are expected to deliver between 20% 
and  40%  more  wind  energy  than  good  shoreline  sites).  Neighbours  fearing  disturbance  are 
fewer.  However,  the  cost  of  generating  electricity  from  offshore  power  plants  is  currently 
higher than from onshore plants. 

Denmark,  with  the  highest  wind  power  share  of  any  Member  State,  is  pioneering  offshore 
wind power. The UK announced in July 2003 that it would sponsor offshore projects. These 
are positive developments which other Member States could follow. 

2.8.2.  Electricity from biomass 

Unfortunately, the success of the wind sector is not outweighing the slow growth of biomass 
electricity. 

Between 1997 and 2001, Finland, Denmark and the UK (mainly using biogas) were the only 
countries  in  which  biomass  electricity  grew  steadily.  In  some  countries  the  biomass 
contribution  grew  comparably  but  intermittently,  and  in  others  it  stayed  small.  In  general, 
coordinated policies are lacking and financial support is little. 

In  1997,  the  Commission  expected  that  68%  of  the  growth  in  electricity  from  renewable 
energy sources would come from biomass. 24% could come from wind power and 8% from a 
mixture of hydro, geothermal and photovoltaic power. 

Now, the strong growth of wind power means that it can be expected to contribute 50% of the 
increase needed to achieve the target set in the Directive. Hydro, geothermal and photovoltaic 
power can be expected to contribute 10%. Consequently, the target will only be achieved if 
biomass contributes the remaining 40%. It will need to grow from 43 TWh in 20028 to 162 
TWh. This will require biomass electricity to grow by 18% a year – compared with a rate of 
only 7% a year over the past 7 years (see chart).9 

In most of the new Member States there is an important potential for the use of biomass for 
both electricity and heat generation. This is particular true for the widely unexploited potential 
for  electricity  generation  in  Hungary,  the  Czech  Republic,  Slovakia,  Latvia,  Lithuania,  and 
Estonia. 

8 
9 

Source: Eurostat. Non-consolidated figures. 
The 22% objective does not detail the penetration of the different sources of RES-E. It is the Member 
States’  responsibility  to  detail  the  mix  of renewables. Therefore,  the sectoral breakdown of  the  target 
sketched here must be treated only as an estimate. 

20 

 
 
  
 
                                                 
Estimation of the Biomass electricity trend and 
comparison with the 22%  objective (TWh)

162

91

42

43

22% objective
fulfilled

Current trend

1997 1998 1999 2000 2001 2002 2010

180

160

140

120

100

80

60

40

20

0

This requirement should be seen in the context of the need for increased quantities of biomass 
not only for electricity generation, but also for heating and transport (see Chapter 3), and the 
biomass potential for cogeneration applications. 

2.8.3.  Electricity from solar photovoltaics 

In 2003, the photovoltaic industry produced some 740 MWp of photovoltaic modules world-
wide, and it has become a 4 bill. € business. In the past 5 years, the yearly growth rate was 
more than 30% on average. Besides the exponential increase of the world market, the faster 
increase of the Japanese production capacities is of particular European concern. 

Since the introduction of the German Feed-in Law in 1999 the European PV production grew 
in average by 50% /year and has reached 190 MW in 2003. Europe’s world market share rose 
in  the  same  time  from  20%  to  26%,  whereas  the  US  share  decreased  due  to  a  weak  home 
market and the Japanese share increased to 49%. European PV industry has to continue this 
growth over the next years in order to maintain its share. This however will only be possible, 
if reliable political framework conditions are created, in order to enable a return on investment 
for  the  PV  industry.  Besides  this  political  issue  targeted  improvements  of  the  solar  cell  and 
system technology are still required. 

Although PV output is still small, its EU growth rate curve quite exactly mirrors that of wind 
power,  with  a  delay  of  approximately  12  years.  European  installed  PV  capacity  doubled 
between 2001 and 2003, Germany accounting for more than 70% of the total. However, PV 
also doubled in Spain and Austria, whereas Luxembourg achieved the highest PV power per 
inhabitant:  8W  per  capita.  If  the  whole  EU  did  likewise,  it  would  produce  around  3.6 
TWh/annum on 3.6 GWp installed PV capacity. 

2.9. 

Conclusions on the development of electricity from renewable energy sources 

Directive  2001/77/EC  was  the  first  legislative  text  to  be  adopted  by  the  Council  and  the 
European Parliament explicitly aimed at the development of renewable energy. 

In  October  2002  Member  States  confirmed  their  national  targets.  Collectively,  Europe 
confirmed its intent to achieve a 22% share of electricity from renewable energy sources by 
2010. 

21 

 
 
  
 
 
October 2003 was the deadline for Member States to put in place the laws and administrative 
provisions necessary to comply with the Directive. All Member States have reported on their 
measures. 

During 2002 and 2003 nine Member States implemented a new policy for the promotion of 
electricity from renewable energy (see Commission Staff Working Document). Two countries 
already had active measures in place. Progress towards meeting the targets set in the Directive 
has begun. 

However, an analysis of national report shows that policies and measures currently in place 
will probably achieve a renewable energy share of only 18%-19% of the electricity market in 
2010. 

Administrative  barriers  such  as  long  and  complex  authorisation  procedures  persist  in  some 
Member  States  due  to  insufficient  coordination  between  different  administrative  bodies 
(Article 6). Current regulations on grid access do not guarantee a legal framework based on 
objective,  transparent  and  non-discriminatory  criteria  (Article  7).  Further  progress  in 
improving grid access for electricity from renewable energy is essential for stable growth. 

Slow  growth  in  the  biomass  sector  is  caused  by  inadequate  support  systems  and  a  lack  of 
coordinated policies. Support systems and policy refinements should be improved to enhance 
biomass energy use taking into account biomass potentials at regional and national levels. 

Wind energy has grown impressively in three Member States and this success story should be 
extended  to  other  Member  States,  implementing  the  success  factors  mentioned  in  Chapter 
2.8.1.  But  even  the  booming  of  wind  energy  will  not  be  enough  to  outweigh  the  slow 
development of biomass. 

Extra  efforts  are  needed,  notably  in  the  different  biomass  uses,  offshore  wind  and  financial 
support  in  general.  Support  also  needs  to  continue  for  geothermal,  mini-hydro  and 
photovoltaic power (Japan has overtaken Europe in this field). 

The  Commission  will  closely  monitor  the  situation  in  all  Member  States  and  the  full 
implementation of all requirements of the Directive in order to prepare follow-up actions. 

3. 

EFFORTS AND RESULTS FOR 2010 

3.1. 

The legislative framework developed since 2000 

Since  1997,  the  EU15  have  been  working  towards  the  general  target  of  an  increase  in 
renewable energy’s share of gross inland energy consumption to 12% in 2010, compared with 
5.2% in 1995. 

To achieve this target, the Commission has adopted and proposed a considerable number of 
new  legal  instruments  since  2000  aimed  at  promoting  renewable  energy  and  energy 
efficiency. The European Parliament and Council have adopted most of these proposals. The 
remainder are at an advanced stage of the inter-institutional process. 

The legal instruments that have been adopted into law are notably: 

- 

Directive  2001/77/EC  on  the  promotion  of  electricity  produced  from  renewable 
energy sources (OJ L283/33, 27.10.2001) 

22 

 
 
  
 
- 

- 

- 

- 

- 

- 

- 

- 

- 

Directive 2003/30/EC on the promotion of biofuels (OJ L123/42, 17.5.2003) 

Directive 2002/91/EC on energy performance of buildings (OJ L1/65, 4.1.2003) 

Directive 2004/8/EC on the promotion of cogeneration (OJ L52/50, 21.2.2004) 

Directive 2003/96/EC for the taxation of energy products and electricity (OJ 283/51, 
31.10.2003) 

Directive 2000/55/EC on energy efficiency requirements for ballasts for fluorescent 
lighting (OJ L279/33, 01.11.2000) 

Commission  Directive  2002/40/EC  on  labelling  of  electric  ovens  (OJ  L128/45, 
15.05.2002) 

Commission  Directive  2002/31/EC  on  labelling  of  airconditioners  (OJ  L86/26, 
03.04.2003) 

Commission  Directive  2003/66/EC  on  labelling  of  refrigerators  (OJ  L170/10, 
09.07.2003) 

Regulation 2422/2001/EC on Energy Star labelling for office equipment (OJ L332/1, 
15.12.2001) 

And the proposals: 

- 

- 

COM  (2003)453  of  01.08.2003  on  Eco  design  requirements  for  energy  using 
products 

COM (2003)739 of 10.12.2003 on energy efficiency and energy services 

The  impact  of  one  measure  –  Directive  2001/77/EC  –  was  analysed  above.  The  impact  of 
others  will  be  addressed  in  this  chapter.  Calculation  of  their  impact  is  possible  on  the 
assumption  of  full  compliance  and  rigid  implementation  by  national,  regional  and  local 
authorities. However, the example of Directive 2001/77/EC demonstrates that this should not 
be taken for granted. 

There is abroad consensus that the EU Emissions Trading Scheme (ETS) will have a positive 
effect of the renewable energy uptake in the EU from 2005 onwards. In addition, the recently 
agreed  Linking  Directive  will  have  a  similar  impact  on  the  uptake  of  these  technologies  in 
developing countries and in economies in transition The EU ETS will by itself not guarantee 
that  the  2010  target  renewable  targets  will  be  reached  as  the  scheme  only  covers  the 
greenhouse  gas  benefits  of  renewable  energies.  The  positive  effect  will  affect  the  2010 
extrapolations,  although  this  might  be  premature  as  the  allocation  of  allowance  has  not  yet 
been finalised.  

It  should  also  be  taken  into  account  that  several  measures,  especially  in  the  field  of  energy 
efficiency, will not have their full effect in the short or even the medium term (e.g. building 
improvements).  This  means  that  for  these  measures  extrapolation  of  current  trends  is  not 
possible and prognoses for 2010 can not yet include their full effect. 

23 

 
 
  
 
3.2.  Member State Actions 

Over the last  two years, Member States have been implementing new policies in renewable 
energy. Legal frameworks are more structured and financial conditions are clearer.  

But  the  overall  picture  is  not  so  positive.  There  exists  an  imbalance  between  different 
countries’ commitment to develop renewable energy. 

The situation would be very different if wind energy performed across the Community at the 
level  achieved  by  Denmark,  Germany  and  Spain  if  biomass  heating  was  as  dynamic 
everywhere  as  it  is  in  Finland  or  if  geothermal  energy  managed  the  level  of  development 
being achieved in Sweden and Italy. 

At  Community  level,  the  necessary  legal  and  policy  framework  has  been  put  in  place,  but 
responsibility for progress lies clearly with the Member States. Now is the time for Member 
States to step up their own action at local, regional and national level. 

Member  States  are  invited  to  maximise  the  use  of  the  funds  made  available  through  the 
Structural Funds, to promote actions in favour of the renewables. 

3.3. 

Community support instruments 

The Community has only limited means for funding renewable energies. It can only intervene 
as a catalyst and supporting actor. The following actions were undertaken. 

3.3.1.  Community support programmes 

Intelligent Energy – Europe programme (2003-2006)10 

The multiannual programme Intelligent Energy – Europe (EIE) adopted in June 2003 builds 
on the success of programmes Save and Altener which have supported actions in the fields of 
energy  efficiency  and  renewable  energy  since  the  early  1990s.  It  is  important  to  note  the 
growth of the Community budget allocated to action in Member States. The combined budget 
for  both  previous  programmes  in  the  decade  1993-2002  was  220  million  euros,  while  the 
budget allocated to the new programme for the period 2003-2006 is 250 million euros. 

EIE is intended to improve energy efficiency (Save actions), to promote new and renewable 
energy sources (Altener actions), to support initiatives tackling the energy aspects of transport 
(Steer)  and  to  promote  renewable  energy  and  energy  efficiency  in  developing  countries 
(Coopener). 

The  EIE  programme  supports  the  implementation  of  Community  legislation  by  catalysing 
national, regional and local efforts across the EU. It focuses on the removal of non-technical 
barriers, the creation of market opportunities, the drawing-up of standards and the setting up 
of  training  structures  as  well  as  on  the  development-planning  and  monitoring  tools.  It 
complements  the  RTD  programmes,  by  tackling  the  market  barriers  which  are  frequently 
identified  when  implementing  demonstration  projects.  It  also  encourages  actions  by  local 
communities and by municipal and regional administrations and agencies, which are vital to 
establish sustainable markets for renewable energy. 

10 

Decision No 1230/2003/EC of the European Parliament and the Council of 26 June 2003 concerning a 
multiannual programme for action in the field of energy, OJ L 176 of 15.7.2003, p 29.  

24 

 
 
  
 
                                                 
The increasing importance and volume of the Community support has lead to the creation of 
the Executive Agency for Intelligent Energy to assist the Commission in the implementation 
of the EIE programme.  

Research, Technological Development and Demonstration 

The  Sixth  RTD  Framework  Programme  (2002-2006)11  contributes  to  the  Union’s  efforts  to 
promote sustainable development and the knowledge-based economy. Priority 6 of the current 
programme  includes  Sustainable  Energy  Systems.  From  a  total  RTD  budget  of  €17.500 
million,  €810  million  have  been  allocated  to  Sustainable  Energy  Systems:  €405  million  for 
medium and long-term research and €405 million for medium and short-term demonstration. 

The short to medium term part of the programme concentrates on five research priorities: 

- 

- 

- 

- 

- 

cost-effective supply of renewable energies, 

large-scale integration of renewable energy, 

eco-buildings, 

polygeneration, 

alternative motor fuels. 

Within this part of the Programme the Commission has launched a major initiative – Concerto 
– which supports demonstration projects that  are  focused  on optimising the energy flows in 
local communities through innovative integration of renewable energy and energy efficiency 
technologies.  This  initiative  also  addresses  the  important  objective  of  involving  local 
communities in sustainable development activities. A similar initiative – Civitas – draws both 
on  transport  and  research  budgets  to  promote  sustainable  urban  transport,  including 
alternative motor fuels. The Commission has also launched several major initiatives including 
the Hydrogen and Photovoltaics Technology Platforms designed to provide a long-term vision 
and strategic roadmaps in these two key technologies. 

In relation to renewable energies, the medium to longer term research programme includes the 
following research priorities: 

- 

- 

- 

- 

new and advanced concepts in renewable energy technologies, 

new technologies for energy carriers/transport and storage, in particular hydrogen, 

fuel cells, including their applications, 

socio-economic, energy and environmental modelling. 

Besides, the Commission is launching two major  initiatives in the field of Land Use and of 
Agriculture,  which  seek  to  contribute  to  design  the  EU  Sustainable  Development  Strategy 
through the development of tools and methods for impact assessment of alternative policies. 

11 

Decision  No  1513/2002/EC  of  the  European  Parliament  and  the  Council  of  concerning  the  Sixth 
Framework  Programme  of  the  European  Community  for  research,  technological  development  and 
demonstration activities (2002-2006), OJ L232 , 29.08.2002 

25 

 
 
  
 
                                                 
Among the agricultural and forestry land uses that will be considered, attention will be given 
to  the  production  of  biomass  for  renewable  energy  purposes.  Finally,  under  the  umbrella  of 
the Environment Technologies Action Plan launched by the Directorate General for Research, 
renewable energy technologies will be analysed and promoted. 

3.3.2.  Dissemination – Public Awareness Campaigns 

The Campaign for Take-Off (2000-2003) 

The  Commission  launched  the  Campaign  for  Take-Off  (CTO)  for  Renewable  Energies12  in 
1999.  It  aimed  to  provide  quantitative  targets  for  8  renewable  energy  sectors,  serving  as 
benchmarks  for  decision  makers  and  planners  to  disseminate  successful  initiatives  and  to 
spread best practice and to raise the awareness of decision makers at local, regional, national 
and European level. 

More than 125 renewable energy programmes and projects involving more than 600 partner 
organisations  in  the  European  Union  –  municipalities,  agencies,  technological  institutes, 
regional authorities, national institutions, universities and enterprises – joined the Campaign 
as Renewable Energy Partners in 2000-2003. 

3.4. 

Achieving the 12% target – the impact of Community legislation 

3.4.1.  Energy efficiency legislation 

Energy efficiency is as important as renewable energy in increasing security of energy supply 
and reducing emissions of greenhouse gases. 

EU  energy  efficiency  policy  has  developed  in  a  different  way  from  policy  for  renewable 
energy.  

Renewable energy policy began with a general target (the “12% target”). Next came sectoral 
directives for electricity and transport. 

EU energy efficiency legislation dealt with individual products first. Before 2000, it covered 
minimum  energy  efficiency  and  labelling  requirements  for  a  variety  of  products  –  plus  a 
voluntary agreement with car makers (the “ACEA agreement”).13 

In  the  years  since  2000  the  Union  has  continued  with  energy  efficiency  legislation  for 
individual products, setting efficiency requirements for ballasts (a component of fluorescent 
lights)14  and  new  labelling  requirements  for  refrigerators,  freezers,  air-conditioners  and 
household electric ovens.15 

12 

13 

14 

15 

Commission staff working paper – Energy for the future: Renewable Sources of Energy (Community 
Strategy and Action Plan) – Campaign for Take-Off, SEC (1999) 504 
Although this agreement is expressed in terms of reductions in CO2 emissions, it is being implemented 
mainly through improvements to the energy efficiency of cars. 
Directive 2000/55/EC on energy efficiency requirements for ballasts for fluorescent lighting (OJ L279, 
01.11.2000) 
Directive  2003/66/EC  of  03.07.2003  amending  Directive  94/2/EC  implementing  Council  Directive 
92/75/EC  with  regard  to  energy  labelling  of  household  electric  refrigerators,  freezers  and  their 
combination, OJEU L170, 09.07.2003 

26 

 
 
  
 
                                                 
At the same time, the Union began to adopt legislation that addresses energy efficiency across 
whole sectors with directives covering energy efficiency in buildings, and combined heat and 
power.16  

In mid-2003 the Commission proposed a framework Directive on Ecodesign for energy using 
products  that  should  make  it  possible  to  set  active  minimum  efficiency  requirements  or  to 
promote the voluntary agreements in this field. 

Finally and most recently, the Commission has proposed establishing for the Union a general 
energy  efficiency  target  –  by  law.  The  Energy  Services  Directive  would  require  Member 
States to reduce the amount of energy distributed to final customers by 1% a year. 

The  European  Parliament  and  Council  are  currently  considering  Commission  proposals  for 
directives on Ecodesign and on Energy efficiency and energy services. 

Energy efficiency measures can make it easier to achieve the 12% target for renewable energy 
by reducing the total volume of energy consumption against which this share is calculated. 

The  table  shows  the  estimated  impact  of  the  adopted  energy  efficiency  legislation  on  total 
EU15 energy consumption by 2010. 

Buildings directive  

Cogeneration directive 

Ballasts directive  

Oven and air-conditioner 
labelling  

Refrigerator labelling  
Energy Star regulation17 

TOTAL 

Savings  in  primary  energy 
consumption (Mtoe) 

9 

10 

1 

<0.5 

1 

estimate: 1 

22 

The  Commission  predicts  that  as  a  result  of  this  new  legislation  total  EU15  energy 
consumption  in  2010  will  be  1556  Mtoe,  rather  than  1578  Mtoe  under  the  Commission’s 
baseline scenario. 

It  should  be  emphasised  that  this  estimate  is  not  a  full  assessment  of  the  impact  of  EU 
legislation because several measures will have their main impact only after 2010. 

Directive  2002/91/EC  on  energy  performance  of  buildings  addresses  the  household  and 
tertiary sector responsible for around 40% of the final energy demand in EU. The long term 
potential for energy savings is estimated at around 22%. The Directive introduces a common 
methodology for integrated energy performance standards for buildings, including integration 
of  renewable  energy  supply  and  cogeneration.  The  standards  are  applied  not  only  to  new 

16 

17 

Directive 2002/91/EC on the energy performance in buildings, OJ L1, 04.01.2003; Directive 2004/8/EC 
on the promotion of cogeneration, OJ L52, 21.02.2004 
Commission  endorsed  voluntary  programmes,  which  will  save  at  least  another  1  Mtoe:  GreenLight, 
Motor  Challenge,  the  standby-power  saving  agreements  for  Digital  TV  and  Power  Supplies,  and  the 
CEMEP motor Agreement. 

27 

 
 
  
 
 
                                                 
buildings but also in the event of the major renovation of large existing buildings. Buildings 
and dwellings must be certified when sold or rented out and energy saving measures must be 
identified. Boilers, heating and cooling installations must be inspected regularly and possible 
energy savings assessed. The Directive is to be transposed into Member States legislation at 
the latest in 2006. 

The impact by 2010 is estimated to be primary energy savings of 9 Mtoe and reduced CO2-
emissions  of  20  mtCO2.  This  estimate  is  based  on  a  model  in  which  a  fixed  amount  of 
improvement occurs each year, and this over a 6 year period. 

Directive 2004/8/EC on the promotion of cogeneration aims to increase the share of high-
efficiency cogeneration from the present level (2000) of 10% of all electricity consumption in 
EU. The Directive clarifies that good quality cogeneration of heat and power (CHP) saves at 
least  10%  of  primary  energy  consumption  compared  with  separate  production.  Average 
primary  energy  savings  are  likely  to  be  around  20-25%.  The  potential  share  that  can  be 
delivered by high-efficiency cogeneration has earlier been calculated at 18% in 2010, but this 
will be reconsidered in the light of the reports Member States are due to make in 2006 on their 
national  potential  for  high-efficiency  cogeneration.  Guaranteed  grid  access  on  fair  terms, 
streamlining of administrative procedures and a system offering a guarantee of origin to help 
operators to promote high-efficiency cogeneration are the other instruments in the Directive. 
The Directive is fuel-neutral. It will promote renewable energy cogeneration alongside fossil 
cogeneration. 

If the share of cogenerated electricity reaches 18% in 2010 this will result in primary energy 
savings of 18 Mtoe and a drop in CO2 emissions of 42 mtCO2 compared with a baseline of 
13% CHP. The half-way scenario (15.5% CHP), shown in the table above, leads to primary 
energy savings of 10 Mtoe and emission reductions of 24 mtCO2.  

Energy  efficiency  should  also  be  seen  in  a  broad  sense,  like  an  extensive  integration  of 
processes both on the side of generation and consumption. Town planners inter alia have to be 
made aware of the substantial benefits of energy efficiency. 

3.4.2.  Legislation on electricity from renewable energy source 

The generation of electricity accounts for about 45% of the energy consumed in the EU25.18 

Electricity  produced  from  renewable  energy  sources  amounted  to  384 TWh  in  the  EU15  in 
2001.  This  corresponds  to  a  share  of  15.2%  (consolidated  figures  for  2002  are  not  yet 
available). 

A  detailed  analysis  of  the  Directive  on  electricity  from  renewable  sources  has  already  been 
given in Chapter 2. 

3.4.3.  Biofuels 

By 2002, the market share of biofuels had peaked in France (1.3%). Across the whole EU15 
the share of biofuels was 0.6% of the petrol and diesel market. In the Czech Republic biofuels 
had already a share of 1.3% of all automotive fuels in 2001. Poland has also adopted a new 
law on the promotion of biofuels entered into force on 1 January 2004. 

18 

Substitution method; this is a share of gross consumption not final consumption; excluding non-energy 
uses. 

28 

 
 
  
 
                                                 
Biodiesel from oilseeds is the commonest biofuel. It is blended with diesel. Bioethanol, made 
from  sugarbeet  or  wheat,  comes  second  [and  is  growing  apace].  It  is  blended  with  petrol, 
partly in the form of alcohol, partly after transformation into ETBE. Other biofuels, derived 
from wastes and residues, account for only a small share. 

Biofuels are relatively expensive although the additional costs are justified by benefits across 
several policy fields. In particular, they would provide additional and alternative supplies for 
fuelling  the  transport  sector,  which  is  almost  completely  dependent  on  one  fuel  –  oil  –  and 
accounts for more than 30% of final energy consumption in the Community. Biofuels are at 
present  the  only  technically  viable  means  of  using  renewable  energy  to  replace  oil  as  a 
transport fuel. This means that biofuels offer particularly clear advantages in terms of security 
of supply. Some of these advantages could be derived from biofuel imports given that biofuel 
has a different geopolitical origin to oil. 

In addition, biofuels have a good employment balance – about 16 jobs per ktoe, nearly all in 
rural areas. 

Taking into account the advantages of biofuels in terms of climate change, security of supply 
and rural employment, in 2001 the Commission proposed legislation to set targets for the use 
of biofuels in transport. A second proposal allowed Member States to exempt biofuels from 
fuel taxation  without needing the  prior approval of the Commission. These proposals led in 
2003 to the adoption by the Council and European Parliament of the biofuels directive19 and a 
provision in the energy taxation directive.20  

The biofuels directive states that Member States “should ensure that a minimum proportion of 
biofuels  and  other  renewable  fuels  is  placed  on  their  markets,  and,  to  that  effect,  shall  set 
national indicative targets”. It sets reference values for these targets: 2% by the end of 2005 
and 5.75% by the end of 2010. Member States are to report to the Commission each year on 
the measures taken to promote biofuels and on the share of biofuels placed on the market in 
the  previous  year.  The  first  report,  due  by  the  end  of  June  2004,  must  contain  a  national 
indicative target for 2005. The report due in 2007 must do the same for 2010.  

The  Commission  is  required  to  report  on  progress  by  the  end  of  2006,  and  then  every  two 
years.  If  the  report  concludes  that  the  indicative  targets  are  not  likely  to  be  achieved  for 
reasons  that  are  unjustified,  the  Commission  should  make  proposals  that  “address  national 
targets, including possible mandatory targets, in the appropriate form”. 

The energy taxation directive states that – for as long as Community law does not lay down 
mandatory targets – Member States may exempt under fiscal control biofuels from fuel taxes, 
or apply a lower rate of tax. However, if Community  law would impose mandatory  targets, 
Member  States  could  continue  to  grant  tax  reductions/exemptions  in  favour  of  biofuels 
through  the  procedure  set  by  Article  19  of  the  Energy  Tax  Directive  (proposal  of  the 
Commission, authorising decision by the Council). The present situation (as of March 2004) 
is  that  seven  Member  States  have  partly  or  completely  detaxed  biofuels  (Austria,  France, 
Germany, Italy, Spain, Sweden and the United Kingdom). 

19 

20 

Directive 2003/30/EC of the European Parliament and of the Council of 08.05.2003 on the promotion of 
the use of the biofuels or other renewable fuels for transport, OJ L123, 17.05.2003 
Council Directive 2003/96/EC of 27.10.2003 restructuring the Community framework for the taxation 
of energy products and electricity, OJ L283, 31.10.2003 

29 

 
 
  
 
                                                 
If  the  objectives  set  in  the  biofuels  directive  are  achieved,  the  contribution  of  biofuels  will 
increase from 1.4 Mtoe in 2001 to 19 Mtoe in 2010 – an increase of 18 Mtoe. 

The  Commission  will  closely  follow  up  the  biofuels  market  and  the  transposition  of  the 
biofuels Directive, due for December 2004. 

The progress of biofuels up to 2010 and beyond will be strongly influenced by and depend on 
developments  in  fuel  quality  standards,  namely  the  competitiveness  of  biofuels,  the 
development of new biofuels technologies, and the sourcing of biomass for biofuels. 

3.5. 

Renewable energy for heat production 

Renewable energy in heating has grown slowly over the last seven years. The directive on the 
promotion of cogeneration (CHP directive) and the Building directive have a direct impact on 
efficient heat use. But there is no legislation in place addressing renewable heat production. It 
is still a sector dominated by traditional biomass use and a new dynamism is needed to deliver 
the  necessary  contribution  to  achieve  the  objective  of  a  12%  share  in  renewables  and  to 
develop the sound potential that exists in the new Member States. 

Heat  from  renewable  energy  sources  is  used  in  many  different  ways.  Heat  demand  for 
industrial  purposes  often  calls  for  high  temperatures  or  steam  at  high  pressure.  For  such 
requirements renewable heat will typically be provided via the combustion of biomass (wood 
or  industrial  waste  and  residues)  preferably  with  co-firing  of  fossil  fuels  in  boilers  or  CHP. 
When heat is needed for heating buildings and hot water, the demand can be met by a wider 
range of technologies and sources. For larger-scale demand such as district heating and major 
buildings  (commercial/public/residential),  centralised  supply  is  possible  and  economies  of 
scale  can  encourage  investment  in  technology  (large  boilers,  geothermal,  CHP).  Domestic 
heat demand and other small-scale demands can be met using other technologies such as solar 
panels, wood stoves, geothermal sources, etc.  

3.5.1.  The trend in geothermal 

Direct heat is the oldest and the commonest use to which geothermal energy is put. Space and 
district heating, agricultural applications and aquaculture and industrial uses are well known 
examples. 

Following  the  introduction  of  ground  coupled  heat  pumps,  space  heating  and  cooling  has 
expanded  considerably  over  recent  years.  Sweden  is  at  the  top  of  the  list  with  a  capacity 
estimated at 1 GWth for 176,000 units in 2002, representing one-third of all the heat pumps 
installed  in  Europe.  Germany  and  France  come  next.  Italy  is  the  leading  country  in  the 
European  Union  for  low-energy  applications  of  geothermal  energy  with  a  capacity  of  0.44 
GWth, followed by France and Germany.  

With  10%  annual  growth  for  heat  pumps  (the  2002/2001  growth  rate  was  14%),  the  target 
calculated in 1997 of 5 GWth to be achieved by 2010 would be exceeded by 60%.  

Geothermal energy is a well-developed energy source in Hungary where the amount of power 
installed  is  similar  to  France.  The  Czech  Republic,  Slovakia,  Slovenia  and  Poland  use  this 
renewable energy source mainly in the form of direct heat. 

30 

 
 
  
 
3.5.2. 

Solar thermal heat.  

Solar thermal energy has taken off only in Germany, Greece, Austria and Cyprus. At the end 
of 2002 the installed surface of solar collectors in the EU15 was nearly 12.8 million square 
metres, compared with around 11.8 at the end of 2001. This increase was led by the German 
market. In 2002, 80% of the total solar thermal capacity of the EU15 was installed in the three 
leader  countries.  Austria,  for  example,  has  9  times  more  thermal  collectors  than  Spain. 
Among  the  new  Member  States,  Cyprus  stands  out  with  about  600,000  square  metres 
installed. 

Solar  thermal  collectors  cover  two  thirds  of  the  warm  water  needs  of  Greek  households,  in 
Cyprus up to 90%, and nearly 10% in Austria. In Spain, Portugal and Italy only a marginal 
0.5% of warm water needs is covered. 

Solar thermal collector production has over the last four years grown at a rate of around 9%. 
However,  unless  far  more  significant  steps  are  taken,  the  1997  objective  of  installing  100 
million m² of solar collectors in the EU15 by 2010 will not be achieved. 

3.5.3.  Biogas 

Since  the  “environment”  has  become  a  full-fledged  economic  sector,  the  biogas  sector  has 
undergone constant development in most of the countries of the European Union. Biogas has 
the  dual  advantage  of  eliminating  pollution  while  producing  energy  at  the  same  time. 
Methanisation units have appeared across Europe. The biogas sector gives a value to different 
types of waste. This gas can be used to produce electricity, heat or as transport fuel. 60% of 
biogas is used in electricity production and 40% in heat production.  

In 2002, EU15 biogas production was 2.8 Mtoe – 10% higher than in 2001. This growth rate 
is too slow to achieve the 15 Mtoe proposed for 2010. 

Biogas production in EU-15 in 2002: total of 2,8 Mtoe 

7%

6%

7%

13%

28%

39%

UK

DE

FR

ES

IT

NL

31 

 
 
  
 
 
Number of crude biogas toe per 1.000 

inhabitants in 2002

IR 
DE 
NL 
DK 
SE 
UK 

0 

5 

10 

15

20

Biogas  development  needs  coordinated  policy  in  the  fields  of  energy,  environment  and 
agriculture (cattle manure is one source of biogas).  

3.5.4.  Woody Biomass 

Most of the biomass needed for heating is still, as it always was, wood – especially domestic 
use  of  wood.  The  biomass  market  for  space  heating  is  stagnant.  Significant  incentives  are 
needed to overcome this problem and to encourage more efficient wood-burning stoves and 
boilers. CHP generation is a good option for the industrial-scale use of wood. The mid-term 
potential  for  the  EU15  shows  a  more  balanced  split  between  the  three  technologies 
considered:  biomass  heat,  geothermal  heat  and  solar  thermal  installations  (geothermal  heat 
includes geothermal heat pumps). 

Other forms of biomass, such as purpose-grown energy crops have been well proven and the 
technology  and  logistics  to  use  them  have  been  developed.  They  should  be  encouraged  and 
significant incentives are initially necessary. 

RES Heat production in 2002: 42 Mtoe

Biomass Geothermal

solar thermal

Examples of good practice are the Austrian programme to commercialise the use of wood and 
the French “Plan du Bois” which promotes the installation of efficient individual stoves and 
communal heaters. All such means to disseminate the spread of efficient practices in the use 
of wood as a fuel are to be encouraged. 

32 

 
 
  
 
 
 
 
3.5.5. 

Summary 

There are some national success stories in woody biomass and solar heat. Geothermal heating 
is  growing  at  a  good  speed.  Nevertheless,  the  overall  development  of  renewable  energy  in 
heating  does  not  give  rise  to  optimism.  According  to  the  figures  shown  in  the  table  below, 
even if the targets for renewable electricity generation and biofuels are met, extra 29 Mtoe of 
renewable energy for heat production would still be needed to achieve the 12% objective by 
2010.  

RES Heat 
potential 

EU-15 

Biomass 

Geothermal 

Solar thermal 

1997  

2001 Results 

2002 Results 

2010 
Heat contribution to 12% 
target21 

38.7 Mtoe 

42.3 Mtoe 

43.3 Mtoe 

72 Mtoe 

38.04 

0.4 

0.26 

41.1 

0.7 

0.5 

42 

0.8 

0.5 

66 

4 

2 

3.6. 

Conclusion: Scenario for the renewable energy share in 2010 

The  trends  set  out  in  the  Commission  Staff  Working  Document  lead  to  the  conclusion  that, 
although progress towards meeting the targets has begun, the 2010 target will not be achieved 
under current policies and measures. 

There is a strong need for more political will to invest in the EU into renewables. 

- 

- 

- 

- 

The share of renewable energy increased from 5.4% in 1997 to 6% in 2001. 

If  present  trends  continue  in  heating,  and  if  Member  States  implement  the  national 
plans they have put in place in electricity and fulfil the requirements of the biofuels 
directive in transport, the share will reach 9% in 2010. 

In  addition,  if  Member  States  fulfil  in  full  the  requirements  of  the  directive  on 
electricity from renewable energy sources, the share will reach 10%. 

Fulfilment of the 12% target for 2010 will require a step change in national policies 
towards the use of renewable energy in heating. 

21 

The 72 Mtoe is the updated scenario. 

33 

 
 
  
 
                                                 
RES 
Electricity 
TWh 

RES Heat 
Production  

1997  
Results 

2001 
Results 

2002 
Results 

337 

384  Non 

consolidated 
figure 

The 12% target for 2010 

Trend I 

Trend II 

Trend III 

630 TWh22 
-666 TWh23 

84 Mtoe 
-93 Mtoe 
(22.1% achieved) 

70 
(18% achieved) 

70 
18% achieved) 

89 
(22.1% 
achieved) 

38.7 

42.3 

43.3 

68-77 Mtoe 

54  
(current heat 
trend) 

54 
(current heat 
trend) 

54 
(current heat 
trend) 

Biomass 

38.04 

41.1 

Geothermal 

Solar thermal 

Biofuels  

0.4 

0.26 

0.2 

0.7 

0.5 

0.3 

42 

0.8 

0.5 

0.8 

66 Mtoe 

4 Mtoe 

2 Mtoe 

19 (5.75% target achieved) 

10 
(3% achieved) 

1824 
(5.75% achieved) 

Total 

182 Mtoe (12% achieved) 

134 Mtoe 
(8%) 

142 Mtoe 
(9%) 

18 
(5.75% 
achieved) 

161 Mtoe 
(10%) 

4. 

CONCRETE ACTIONS  

4.1. 

New  initiatives  to  reinforce  the  financing  of  renewable  energy  –  action  by 
Member States  

Growth  in  the  use  of  renewable  energy  is  too  slow  to  give  confidence  that  the  European 
Union’s targets for 2010 will be met. 

In  electricity,  the  European  Council  and  Parliament  agreed  in  2001  to  aim  for  a  renewable 
energy share of 22.1% in the EU15 by 2010. National targets adopted in 2002 were consistent 
with this objective. But the practical measures that Member States have put in place so far are 
estimated to deliver a share of only 18-19%. 

In heating, most Member States have done little to stimulate new action. 

In  transport,  only  six  Member  States  have  made  a  start  on  the  production  of  biofuels. 
Prospects will be clearer early in 2005 following transposition of the biofuels directive. 

For  renewable  energy  as  a  whole,  the  Community  has  been  working  since  1997  towards  a 
renewable energy share of 12% by 2010. At best, with present trends and measures, the share 
achieved will be 10%. At worst, it will not rise above 8%. 

Renewable  energy’s  contribution  remains  marginal  in  most  Member  States,  apart  from  two 
old-established  uses:  electricity  from  hydropower  and  traditional  uses  of  wood  for  heating. 
However,  renewable  energy  has  begun  to  move  from  the  wings  to  centre  stage.  This  move 
must  gather  pace  if  the  Union  is  to  meet  its  objectives  for  sustainable  development  and 
security of energy supply. At Community level, the necessary legal and policy framework has 
been  put  in  place.  Now  it  is  time  for  Member  States  to  speed  up  their  own  action  at  local, 
regional and national level. 

One  important  aspect  is  the  financing  of  renewable  energy.  One  estimate  puts  the  gross 
investment  cost  for  the  EU15  to  achieve  the  12%  target  at  €10-15  billion  per  year.25  While 

22 
23 
24 

Under an efficient scenario for electricity consumption, this 630 TWh will be equivalent to 84 Mtoe 
Under a BAU scenario for electricity consumption, this 660 TWh will be equivalent to 93 Mtoe 
In the case of biofuels, the figure given is in final energy. 

34 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Community funding plays a crucial catalytic role (see next section), the Community has still 
limited means to support the real development of renewable energy. Member States and the 
energy industries themselves have the resources needed to deliver this level of investment. 

Over time, each energy source in turn has benefited from substantial public funding and 
risk support in its development. The established energy supply industries now have an 
income  of  over  €200  billion  a  year  in  the  EU15  alone.  For  the  support  of  renewable 
energy sources different means are available to be used by Member States, like feed-in 
tariffs, green certificates, market based mechanisms, tax exemptions… It is time for all 
Member  States  to  put  these  ideas  into  practice.  Member  States  need  to  create  a  level 
playing  field  in  the  energy  sector,  by  including  external  societal  benefit/costs  in  their 
energy policy framework. 

4.2. 

New initiatives to reinforce the renewable energy and energy efficiency – action 
at European level  

Clean energy policy shares fundamental goals with a wide range of such Community policies 
as  enhancing  competitiveness  and  cohesion  for  growth  and  employment,  ensuring  access  to 
basic  goods  and  services,  and  promoting  the  EU  as  a  sustainable  development  partner.26 
Renewable energies and energy efficiency can do a great deal to address the challenges that 
other policies face. A coordinated approach is needed across the range of Community policies 
that have energy impacts. 

The Union’s future financial framework for 2007-2013 should have explicit provisions so that 
clean and efficient energy concepts are a visible part of the Union’s priorities, strategies and 
commitments.  It  is  the  opportunity  for  the  enlarged  Union  to  express  its  political 
determination to change course and direct its efforts towards sustainable energy, by allocating 
adequate resources to boost its goals in this field. 

The  Community’s  main  financial  instruments  –  notably  the  future  structural  and  cohesion 
funds,  the  financial  support  made  available  through  the  Community’s  international  co-
operation programmes, and the Common Agricultural Policy – all need to be mobilised. 

In  this  respect,  it  is  important  to  note  that  in  February  2004  the  Commission  adopted  a 
Communication regarding the reform of structural funds for the period 2007-2013. This report 
highlights  the  development  and  use  of  renewable  energy,  energy  efficiency  measures,  the 
development  of  eco-industries,  cleaner  methods  of  transport  and  sustainable  urban  public 
transport as priority themes for future support. 

Supplementary action could be explored in four fronts.  

First, to bridge the gap between successful demonstration of innovative technologies and their 
effective  entrance  on  the  market  to  achieve  mass  deployment  and  to  boost  large-scale 
investment across the EU in new and best performing technologies. 

25 

26 

A.  Zervos,  “Updating  the  impact  of  the  Community  strategy  and  action  plan  for  renewable  energy 
sources”, draft final report, 2003 (based upon 2001 prices). 
Communication  from  the  Commission  to  the  Council  and  the  European  Parliament  “Building  our 
Common  Future:  Policy  challenges  and  Budgetary  means  of  the  Enlarged  Union  2007-2013”, 
COM(2004) 101 final of 10.2.2004 

35 

 
 
  
 
 
                                                                                                                                                         
To  achieve  this,  a  new  instrument  is  needed  that  operating  at  EU  level  could  be  tailored  to 
accommodate  the  diversity  and  specificity  of  the  renewables  and  energy  efficiency  sectors. 
This  instrument  should  support  the  first  market  replications  of  just-proven  technologies  of 
European relevance. In this way the Union will share the risk that is involved in the economic 
exploitation of RTD results.  

This new instrument could be the main component of the successor to the current “Intelligent 
Energy-Europe,  2003-2006”  programme.  It  would  ensure  better  exploitation  (through  large-
scale application across the Union and on export markets) of projects’ results and promote the 
substantial  stock  of  technologies  that  are  close  to  being  competitive.  Action  at  EU  level,  in 
concert  with  national  initiatives  and  with  action  by  international  financial  institutions,  is 
needed to tackle this task effectively.  

Second,  this  future  Community  programme  “Intelligent  Energy  Europe”  should  also 
strengthen support for action at local and regional level. The main aim is to enable citizens to 
make informed decisions about energy and help to remove non-technological barriers to clean 
energy  such  as  institutional  capacity,  public  awareness,  available  technology  at  affordable 
prices, well-trained specialists and effective mechanisms for the exchange of know-how and 
best practice. A better focus is also needed for sharing European experience and technologies 
with  third  countries.  This  future  programme  should  also  continue  to  support  the  EU  policy 
development and implementation in the renewables and energy efficiency fields. 

Third,  it  is  necessary  to  strengthen  support  and  accelerate  the  pace  of  public  support  for 
research, technological development and demonstration in renewables and energy efficiency 
in Europe. 

Fourth,  it  is  necessary  to  capitalise  on  the  important  role  that  energy  plays  in  sustainable 
development and share the responsibility with other Community policies. 

In  the  framework  of  the  reform  of  the  Common  Agricultural  Policy  a  new  aid  of  45  €  per 
hectare will be introduced for areas sown to energy crops. Furthermore, non-food production, 
for instance of energy crops will continue to be permitted on set-aside land. 

The  European  Investment  Bank  has  already  set  itself  the  target  of  increasing  the  share  of 
renewable energy in its loans for energy from 8% to 16%. It could contribute to the financing 
of  national,  regional  or  private  investment  funds  for  renewable  energy,  along  with 
contributions from other public sources at Community, national or regional level. 

4.3. 

Other measures 

4.3.1.  A Community plan for biomass 

In 2001 the EU15 used about 56 Mtoe of biomass for energy purposes. Achieving the Union’s 
renewable  energy  targets  for  2010  would  need  approximately  74  Mtoe  more  –  32  Mtoe  for 
electricity generation, about 18 in the form of biofuels and 24 for heating (total: 130 Mtoe) 

An  indicative  figure  on  the  biomass  availability  for  energy  purposes  at  EU15  level  is  150 
Mtoe (additional 32 Mtoe for EU-10 and Romania and Bulgaria).27 

27 

The  estimation  of  this  figure  considers  10%  of  the  arable  land  (half  for  biofuels  and  half  from  solid 
biomass), forest by-products, wet manure and organic waste. Source BTG Interim Report. 

36 

 
 
  
 
                                                 
The biomass potential needs further assessment, especially in terms of land availability, land 
use  for  different  renewable  biomass  applications  (heat,  electricity,  transport  biofuels,  and 
forest  products)  and  the  difference  in  benefits  these  various  applications  might  have,  for 
instance in terms of greenhouse gas emissions in a life cycle perspective. 

However, effective use of biomass for energy purposes depends on the market developments 
as well as on the interactions between public policy in the fields of energy, agricultural, waste, 
forestry, industry, rural development, environment and trade  policy. Community institutions 
play  a  key  role  in  all  these  policy  areas.  By  the  end  of  2005,  the  Commission  will  bring 
forward  a  coordinated  biomass  plan  with  a  clear  approach  to  securing  adequate  supplies  of 
biomass  through  European,  national  and  regional/local  action  across  them  all.  This  plan 
should  ensure  that  the  use  of  biomass  for  energy  purposes  does  not  lead  to  the  undue 
distortion  of  competition.  The  plan  will  orientate  and  optimise  Community  financial 
mechanisms, re-direct effort within the policies concerned and tackle the obstacles to biomass 
deployment  for  energy  purposes.  Specific  attention  will  be  paid  to  the  new  Member  States, 
taking into account the high and unexploited biomass potential that many of them have. 

4.3.2.  Developing renewable energy in heating 

Targets for renewable energy sources’ heating would be difficult to establish because there is 
no single “heating supply industry” to whom they could be addressed.  

Instead,  some  specific  initiative  linked  to  heating  and  cooling  applications  will  be  brought 
forward as a first step. 

The Community has already adopted directives on the energy performance of buildings28 and 
cogeneration29. These will encourage greater use of renewable energy in heating. There is a 
need for the buildings directive to be implemented in a way that stimulates the integration of 
efficient biomass systems, geothermal heat pumps and solar thermal heating in residential and 
tertiary-sector buildings. The decentralised energy supply based on renewable energy that is 
envisaged  under  the  Buildings  Directive  should  look  to  the  potential  of  using  renewable 
energy  for  heating  and  cooling,  in  particular  through  integrating  solar  heating  panels  in 
buildings. Micro-turbines fired by biomass are another possibility for using renewable energy 
in buildings. There is also a need to encourage a greater share of biomass in cogeneration and 
in district heating systems, especially where existing systems can be economically refurbished 
(which is the case in many of the new Member States). 

The Commission will bring forward further initiatives – if necessary, legislative proposals – 
to  accelerate  the  fulfilment  of  the  potential  of  three  key  technologies  –  modern  biomass 
heating, solar heating and geothermal heat. These initiatives could include targets for specific 
technologies, or requirements for suppliers of heating oil and gas to supply e.g. wood pellets 
and biogas. 

4.3.3.  Offshore wind policy  

To  give  legal  certainty  for  offshore  wind  development,  governments  will  need  to  establish 
legal regimes that give them relevant jurisdiction for the area outside the territorial seas (12 
nautical mile limit), and quick procedures for giving consent for development.  

28 
29 

Directive 2002/91/EC on the energy performance in buildings, OJ L1, 04.01.2003 
Directive 2004/8/EC on the promotion of cogeneration, OJ L52, 21.02.2004 

37 

 
 
  
 
                                                 
An off-shore wind policy for the EU will need to strengthen the necessary grid infrastructure. 
The Trans-European Energy Networks Programme has started to support investments for the 
grid adaptation and optimisation for the integration of off-shore projects. 

It  is  important  to  ensure  that  the  development  of  offshore  wind  is  not  stifled  by  a  false 
assessment of potential problems such as its coexistence with birds, trawling and shipping, the 
development  and  application  of  national  planning  rules,  the  source  of  funds  to  extend  and 
upgrade  the  grid,  the  availability  of  insurance  cover  and  the  provision  of  legal  protection 
against  damage  to  structures  outside  states’  territorial  waters.  The  Commission  will 
systematically  review  the  obstacles  and  objections  that  may  block  the  development  of 
offshore  wind,  the  environmental  requirements  that  need  to  be  met  and  will  develop 
guidelines for Member States, by offering proposals for legislation if necessary.  

The Commission will also support research and development support to improve turbines and 
installation technology for use at sea and to improve the stability of the grid for wind energy 
penetration above 20%. It will also encourage the coordination of research  being sponsored 
by  national  authorities  on  the  effects  of  wind  turbines  on  marine  life  and  the  marine 
environment.  

4.3.4.  Electricity from solar irradiation 

Contrary  to  Japan,  a  strategically  conscious  industry  policy,  systematically  developing 
towards  a  multi  10  billion  €  business  is  lacking  in  Europe.  Despite  the  growth  rate  of 
European production during the last years and the strong European RTD and innovation base 
available, Europe is still a net importer of photovoltaic cells. 

Continued,  but  evermore  targeted  RTD  funding  leads  to  new  developments  with  respect  to 
raw  material  use,  evermore  benign  production  technologies,  optimised,  often  building 
integrated device design, reliability and efficiency of PV systems. 

A  further  option  is  solar  thermal  electricity  production,  with  some  promising  pilot  projects 
just being launched in Southern Europe. This technology has the additional advantage that it 
can  be  cost-effectively  combined  with  modern  gas  turbines,  therefore  overcoming  the 
problem  of  intermittency  of  the  solar  irradiation  and  enabling  a  base  load  share  of  solar 
energy without storage technology. 

4.3.5.  Research and technological development 

Several renewable energy technologies that could make a big contribution by 2020 need more 
research  and  development.  The  European  Union  has  played  a  leading  role  in  renewable 
energy research, demonstration and dissemination for more than 20 years and will continue to 
do so.  

OECD  data  indicate  that  only  10%  of  government  energy  R&D  budgets  are  related  to 
renewable energy, in contrast with more than 50% for conventional (fossil fuel and nuclear) 
energy  technologies.  As  indicated  in  paragraph  4.2,  and  in  order  to  support  the  longer  term 
expectations  regarding  the  penetration  of  renewables,  it  is  therefore  necessary  to  strengthen 
support and accelerate the pace of public support for research, technological development and 
demonstration in renewables in Europe. 

Under the 6th Framework Programme, the Union is focussing on bringing costs down and on 
the large-scale integration of renewable energies in the energy supply system. For the short to 

38 

 
 
  
 
medium  term  the  programme  is  addressing  electricity  production  from  biomass,  wind, 
photovoltaic  power,  tidal  stream,  wave  and  other  renewable  sources,  heating  and  cooling 
technology,  and  the  production  and  processing  of  liquid  and  gaseous  biofuels.  Long-term 
research looks at how to achieve significant cost reductions in bio-energy, photovoltaics, and 
other renewable energies including wind, ocean, concentrated solar, and geothermal as well as 
improving the reliability, safety, availability and durability of renewable energy systems. The 
programme also addresses the issues of distributed electricity generation, hydrogen and fuel 
cells which have an impact on the further development of renewable energy systems.  

4.3.6.  Using major Community financing instruments 

The Commission intends from 2004 onwards to place special emphasis on the deployment of 
renewable energy and energy efficiency by using the structural and cohesion funds, and the 
EU development funds. Renewable energies could also play in the future an important role in 
the  further  evolution  of  the  relevant  rural  development  measures  (second  pillar  of  the 
Common Agricultural Policy). 

4.3.7.  Placing biofuels on the market 

The fuel quality directive30 lays down minimum specifications for gasoline and diesel. These 
limit  the  blending  of  biofuels.  Higher  blending  limits  would  make  it  easier  to  fulfil  and  go 
beyond  a  5.75%  share  for  biofuels.  The  scope  for  raising  these  limits  is  the  subject  of 
technical  debate.  The  Commission  is  evaluating  the  arguments.  It  will  bring  forward  new 
proposals, if necessary, by the end of 2005. 

Member  States  may  require  each  company  to  place  on  the  market  on  the  Member  State’s 
territory  a  given  quantity  of  biofuels,  but  may  not  require  that  all  fuel  sold  is  blended  with 
biofuels.  Alongside  its  review  of  fuel  quality  specifications  the  Commission  will  consider 
whether this needs to change. 

4.3.8.  Timely data 

Official European data on renewable energy sources’ contribution is currently available about 
18  months  after  the  end  of  the  calendar  year  in  question.  The  Commission  will  make  data 
available more quickly. It will examine how extrapolation from samples could give an earlier 
indication of progress and how data gathering could be linked to the certification of renewable 
energy, as well as techno-scientific efforts to identify and validate trends. 

5. 

INTERNATIONAL POLITICAL CONTEXT AND EU PERSPECTIVES BEYOND 2010 

5.1. 

The Lisbon process and the environmental dimension 

The  European  Council  of  Lisbon  of  March  2000  agreed  in  its  Conclusions  (5)  on  a  “new 
strategic goal for the next decade: to become the most competitive and dynamic knowledge-
based economy in the world, capable of sustainable economic growth with more and better 
jobs and greater social cohesion”.  

30 

Directive  98/70  of  13.10.1998  relating  to  the  quality  of  petrol  and  diesel  fuels  (OJ  L350/58, 
28.12.1998), amended by directive 2003/17 of 03.03.2003 (OJ L76/10, 22.03.2003) 

39 

 
 
  
 
                                                 
Increasing  the  share  of  renewable  energy  sources  in  the  energy  mix  contributes  to  the 
goal of the Lisbon process to become capable of sustainable economic growth. 

The wind industry currently employs 75 000 people in the EU15. The German Government 
has  confirmed  the  net  creation  of  135  000  jobs  through  its  national  policy  on  renewable 
energy up to 2003. Nearly 100% of renewable energy production uses European technology. 
Increasing the share of renewable energy sources creates new jobs – in research, industry and 
building  sectors,  agro  and  forest-based  industry,  waste  treatment  and  consulting  –  by 
developing  new  technologies  and  by  encouraging  research  and  technical  innovation.  It  is 
estimated  that  if  renewable  energy  supplies  12%  of  EU15  energy  consumption  in  2010,  the 
sector will employ between 500 000 and 650 000 people in serving this EU market. It is for 
Member  States  to  decide  to  put  in  place  an  energy  policy  that  can  deliver  significant 
employment benefits.  

European industry is the world leader in wind technology and holds a good position in hydro, 
photovoltaic  and  geothermal  power.  Export  markets  constitute  a  huge  potential  for  the 
European  renewable  energy  industry,  which  will  benefit  from  the  expertise  gained  in  the 
domestic market. Export of renewable energy technology will create a significant number of 
extra jobs.  

The  Göteborg  European  Council  of  June  2001  agreed  on  a  strategy  for  sustainable 
development and added an environmental dimension to the Lisbon process. In its Conclusions 
(21)  it  “invites  the  industry  to  take  part  in  the  development  and  wider  use  of  new 
environmentally friendly technologies in sectors such as energy and transport” and “stresses 
the importance of decoupling economic growth from resource use.”  

5.2. 

The Johannesburg conference and its follow-up 

The World Summit on Sustainable Development (WSSD) held in Johannesburg in September 
2002, addressed the broad aspects of sustainable development with a strong focus, on the need 
to alleviate poverty as a matter of urgency. One of the main outcomes of the WSSD, was the 
general  acceptance  that  energy,  and  in  particular  renewable  energy,  was  one  of  the  key 
priorities to alleviate poverty and to achieve long-term sustainable development. 

In Johannesburg, the EU committed itself to taking a lead through the EU Energy Initiative 
for  Poverty  Reduction  and  Sustainable  Development  (EUEI)  and  through  the  Johannesburg 
Renewable  Energy  Coalition  (JREC).  One  of  the  first  concrete  actions  taken  by  the 
Commission in support of the EUEI was to launch COOPENER within the Intelligent Energy 
– Europe programme,  to encourage the provision of sustainable energy services  for poverty 
alleviation in developing countries. 

The  support  to  the  provision  of  water  access  and  modern  energy  services  in  the 
framework of poverty eradication is now a commitment of European Development Aid 
entered at WSSD. Renewable energy deployment and technology transfers to developing 
countries contribute to poverty eradication and to raising the standards of living in the 
poorest countries.  

Since its launch, JREC developed its activities in close partnership and with the support of a 
broad stakeholder community, including business, NGOs and academia. JREC membership is 
nevertheless the privilege of national governments. As of March 2004, 87 countries joined the 
Coalition and more are expected to do so. 

40 

 
 
  
 
JREC  meetings  have  already  offered  a  unique platform  for  a  constructive  dialogue  between 
many governments from the Northern and Southern hemisphere. In this context, and based on 
discussion  amongst  JREC  Members  following  the  WSSD,  it  is  for  example  clearly 
acknowledged that the respective member-governments are best placed to develop and adopt 
ambitious national and regional time-bound targets. 

JREC Members are equally committed to identify and remove financing gaps and obstacles, 
including  obstacles  for  the  effective  delivery  of  existing  –  but  often  untapped  –  public  and 
private  resources  needed  to  develop  and  strengthen  renewable  energy  markets  with  a 
particular focus on the needs of developing country members. 

JREC priorities and actions have been developed during informal high-level conferences and 
meetings,  which  have  also  served  as  a  high-level  platform  to  increase  the  regional  and 
international  awareness  of  the  actions  undertaken  by  pro-active  governments  thereby  also 
assisting them in attracting interest from the finance and business community. 

The  International  Conference  for  Renewable  Energy,  to  be  held  in  Bonn  in  June  2004,  will 
follow  up  the  Johannesburg  conference.  It  aims  to  produce  a  strong  political  declaration 
together  with  an  ambitious  international  action  plan  accompanied  including  various 
commitments and guidance for good policy. 

In its capacity of hosting the JREC secretariat, the Commission started two key initiatives, to 
support the JREC and in particular the developing country members31, i.e.: 

- 

- 

A  global  on-line  renewable  energy  policy  and  measures  database  to  tackle  the 
significant  information  deficit  in  the  area  of  policy  design  and  implementation,  in 
particular at the level of non-OECD countries; 

A  feasibility  study  for  the  creation  a  public-private  fund-based  mechanism  for  the 
creation and delivery of “patient risk capital” to offer renewable energy business and 
project  developers  –  in  particular  in  developing  countries  and  economies  in 
transition,  increased  access  to  risk  capital  and  to  encourage  a  more  significant 
engagement  from  international  and  local  financial  intermediaries  and  corporate 
investors.32 

The  Commission  will  further  develop  these  cross-cutting  actions  with  interested  JREC 
members and other stakeholders. 

In January 2004, a European preparatory conference organised by the European Commission 
and held in Berlin concluded that:  

- 

31 

32 

Implementation of Community Directives in Member States should provide for long-
term  domestic  support  that  guarantees  stable  investment  conditions.  Administrative 

The  Commission  has  carefully  selected  and  developed  these  initiatives  in  view  of  the  developing 
country needs whilst also considering the need to complement existing and new instruments developed 
under the COOPENER, EU EI and other related programmes. 
This study is carried out by a consortium of financial engineers, private equity layers and technology 
consultants.  Provided  it  could  be  established,  patient  risk  capital  would  be  a  type  of  equity  or  quasi-
equity finance obtained from blending public and private sector investment resources and requirements. 
It would provide equity funding in the expectation of a return, but on a less demanding basis than pure 
market private equity capital. 

41 

 
 
  
 
                                                 
- 

- 

barriers  to  the  distribution  of  green  electricity  should  be  overcome  and  progress  is 
needed in the field of intelligent grid management.  

Progress achieved in Europe concerning renewable energy consumption reveals that, 
while  electricity  production,  mainly  from  wind,  is  increasing  dramatically,  biomass 
electricity  and  technologies  for  the  production  of  heat  and  cooling  are  not 
progressing  enough.  In  addition,  Member  States’  efforts  are  very  unbalanced.  The 
heating  and  cooling  sector  is  calling  on  the  Commission  to  propose  Community 
initiatives. 

Distortion  of  the  energy  market,  mainly  due  to  the  fact  that  energy  prices  do  not 
reflect the  full socio-economic  costs,  was highlighted as a barrier to create a level-
playing field. The principle “polluter-pays” should be applied to energy. 

Concerning renewable energy targets, there was a common understanding that the EU general 
renewable energy target for 2010 has been a driving force in the legislative and policy process 
at domestic and European levels. This long-term approach needs to be carried forward. The 
conference  noted  that  a  range  of  technical  studies  suggest  a  target  of  at  least  20%  of  gross 
inland consumption in 2020 for the enlarged EU25.33 

5.3. 

The role of targets at EU level 

Since 1997 EU policy has been guided by the objective of a 12% share of renewable energy. 
A  number  of  Member  States  have  set  national  targets  for  the  share  of  renewable  energy 
sources  in  their  national  energy  mix  and  this  should  be  encouraged.  The  Commission  has 
proposed and the Council and the European Parliament have adopted operational targets for 
2010  on  electricity  from  renewable  energy  sources  and  biofuels.  Moreover  a  large  range  of 
legal  measures  in  efficiency  and  support  measures  have  been  adopted  at  EU  level.  Because 
development  is  still  too  slow  to  reach  the  12%  objective,  the  present  Communication 
announces additional measures. It is now time for all Member States to use the legal tools that 
have been developed at Community level in order to deliver on these operational targets and 
to  increase  the  share  of  renewable  energy  sources  in  their  national  energy  mix  to  such  an 
extent that the 12% objective for the EU can be attained. 

In  April  2004,  the  European  Parliament  considered  the  recommendations  of  the  Berlin 
Conference.  It  urged  the  Commission  and  the  Council  to  start  a  political  process  of  setting 
ambitious,  time  tabled  targets  for  increasing  the  share  of  renewable  energy  in  final  energy 
consumption,  addressing  the  medium  and  long-term  time  frame  in  advance  of  the 
International Conference in Bonn, and called upon the Commission and the Council to make 
the  necessary  efforts  to  reach  a  target  of  20%  for  the  contribution  by  renewable  energy  to 
domestic energy consumption in the EU by 2020.34 

The  Commission  acknowledges  the  importance  of  providing  a  longer  term  perspective, 
considering  in  particular  the  infant  nature  of  the  renewable  energy  industry  and  the  need  to 

33 

34 

This  target  would  be  equivalent  to  about  23%  under  the  “substitution  approach”.  The  use  of  the 
substitution approach would have several advantages. It would give a more balanced reflection of the 
contribution of different forms of renewable energy, reflect the objectives of renewable energy policy in 
terms  of  substitutions  for  the  use  of  fossil  fuels  and  thus  reducing  CO2  emissions  and  improving 
security of supply and allow a clearer comparison between the effects of renewable energy and energy 
efficiency measures. 
P5_TA-PROV(2004)0276 International Conference on Renewable Energy (Bonn, June 2004) 

42 

 
 
  
 
                                                 
 
ensure  sufficient  investors’  security.  Acknowledging  the  outcome  of  the  currently  available 
feasibility studies, however, the Commission considers it necessary to more thoroughly assess 
the  impacts  of  RES  resources,  notably  with  regard  to  their  global  economic  effects  before 
deciding  on  adopting  targets  beyond  2010  and  before  taking  a  position  on  the  above-
mentioned 20% target for the share of renewable energy in 2020. 

The Commission will carry out regular reviews of progress in the development of renewable 
energy  sources,  with  the  aim  also  of  ensuring  compatibility  with  its  overall  sustainable 
development strategy. This will require an extended impact analysis of its policy. In the case 
of the economic dimension this will take into account the competitiveness of the EU economy 
on  the  one  hand,  and  the  security  of  supply  on  the  other  hand,  as  well  as  its  technical 
feasibility. In the case of the environmental dimension, the required contribution to EU goals 
on climate change and other environmental priorities will be addressed. Finally the potential 
for the development of renewable energy resources should also be taken into account. 

This review will be carried out for the first time not later than the end of October 2005 with a 
view to opening a debate in order to set in 2007 a target for the period after 2010.  

By  starting  the  process  for  establishing  a  longer  term  perspective  for  renewable  energy,  the 
European Commission wants to contribute to the continued leadership already shown by some 
JREC members, including some EU Member States. 

6. 

CONCLUSIONS 

Renewable energy has potential. This is important in a situation where the EU energy supply 
has structural weaknesses and geopolitical, social and environmental shortcomings, notably as 
regards  European  commitments  in  the  Kyoto  Protocol.  Developing  Europe’s  potential  for 
using renewable energy will contribute to security of energy supply, reduce fuel imports and 
dependency,  reduce  greenhouse  gas  emissions,  improve  environmental  protection,  decouple 
economic growth from resource use, create jobs and consolidate efforts towards a knowledge-
based society. Throughout the world, it is time to ensure that this potential is fulfilled in order 
to alleviate poverty and improve energy access for the poorest people. However, as far as the 
European  Union  is  concerned,  further  steps  need  to  be  taken  in  many  Member  States  to 
accelerate growth in the use of renewable energy and thereby ensure that the Union’s targets 
will be met. 

For  the  European  Union,  this  communication  provides  a  basis  to  report  on  developments 
achieved so far and draw conclusions, as follows:  

i) 

ii) 

iii) 

A comprehensive EU regulatory framework has been put in place over the last four 
years; 

EU  targets  for  2010  will  only  be  met  through  the  full  implementation  of  this  legal 
framework  by  Member  States  together  with  complementary  proactive  measures 
geared to national conditions; 

Additional  measures  –  notably  financial  as  mentioned  in  Chapters  2.9  and  4  –  are 
also needed at EU level; 

As  a  contribution  to  the  Bonn  Renewable  Energy  Conference  in  June  2004,  the 
Communication outlines the Commission’s approach to renewable energy policy. 

43