Special Report No 7/2008#Intelligent Energy 2003-2006
Date: 2008-09-04
Institutions: European Court of Auditors
Subjects: EU Member State, EU programme, action programme, available energy, energy demand, energy policy, opinion of the Court of Auditors, renewable energy

EUROPEAN COURT 
OF AUDITORS

INTELLIGENT ENERGY
20032006

8
0
0
2

7
o
N

t
r
o
p
e
R

l

a
i
c
e
p
S

EN

 
 
 
Special Report No 7  

 2008

INTELLIGENT ENERGY 
20032006

(pursuant to Article 248(4), second subparagraph, EC)

EUROPEAN COURT OF AUDITORS

2

EUROPEAN COURT OF AUDITORS
12, rue Alcide De Gasperi
L-1615 Luxembourg

Tel. (352) 43 98-45410
Fax (352) 43 98-46430
E-mail: euraud@eca.europa.eu
Internet: http://www.eca.europa.eu

Special Report No 7  

 2008

More information on the European Union is available on the Internet (http://europa.eu).

Cataloguing data can be found at the end of this publication.

Luxembourg: Office for Official Publications of the European Communities, 2008

ISBN 978-92-9207-050-2

DOI 10.2865/12922

© European Communities, 2008

Reproduction is authorised provided the source is acknowledged.

Printed in Belgium

CONTENTS

Paragraph 

IV  

17 

89 

1042 

1018 
1518  

1929 
2124 
2529 

3038 

3233 
34 
3536 
3738 

3942 

4354 

4345 

4651 

5254 

SUMMARY

INTRODUCTION

AUDIT APPROACH AND SCOPE

AUDIT FINDINGS

PROGRAMMING AND ALLOCATION OF FUNDS
STRENGTHS AND LIMITATIONS

MONITORING AND PROGRAMME EVALUATION
SUCCESSES AND LIMITATIONS
EVALUATION OF LOCAL ENERGY AGENCIES: A CASE STUDY

 ADMINISTRATIVE COSTS: PREPARING PROPOSALS, REPORTING ON PROJECTS 
AND PROGRAMME MANAGEMENT
COSTS BORNE BY PARTICIPANTS
COSTS INCURRED BY THE EXECUTIVE AGENCY
COSTS BORNE BY ENERGY AND TRANSPORT DG
TOTAL ADMINISTRATIVE COSTS

THE EXECUTIVE AGENCY: A BETTER MANAGER?

CONCLUSIONS AND RECOMMENDATIONS

PLANNING THE PROGRAMME

MONITORING AND EVALUATION

ADMINISTERING THE SCHEME

 ANNEX I

REPLIES OF THE COMMISSION

 
 
SUMMARY

I.
The  Intelligent  Energy  for  Europe  Programme 
(IEE)  seeks  to  promote  energy  efficiency,  the 
use  of  renewable  energy  sources  and  energy 
d i v e r s i f i c a t i o n .   I t s   a i m   i s   t o   c r e a t e   a   c l i m a t e 
in  which  there  is  wide  knowledge  of  relevant 
technologies and of their importance. 

II.
T h e   I E E   P r o g r a m m e   f o r   2 0 0 3 - 2 0 0 6   h a d   a 
b u d g e t   o f   2 5 0   m i l l i o n   e u r o .   T h e   m o n e y   w a s 
u s e d   t o   s u p p o r t   n e a r l y   4 5 0   p r o j e c t s .   M o r e 
than 1 700 bodies have participated in the pro-
gramme (including local authorities, research 
i n s t i t u t e s ,   r e g u l a t o r s ,   i n d u s t r y   a s s o c i a t i o n s , 
c h a m b e r s   o f   c r a f t s m e n ,   c o n s u l t a n c i e s   a n d 
manufacturers).

III.
The Court’s audit asked:

 –

how the Commission allocated IEE funds;

 –

 –

 –

h o w   t h e   C o m m i s s i o n   m o n i t o r e d   a n d   e v a l u -
ated the programme;

w h a t   w e r e   t h e   a d m i n i s t r a t i v e   c o s t s   o f   t h e 
programme;

what  difference  the  executive  agency  made 
to the management of the programme. 

5

SUMMARY 

V.
The  Court  recommends  a  number  of  possible 
improvements in the design and implementa-
tion of successor programmes to IEE (and other 
comparable programmes):

 –

 –

 –

 –

p r o g r a m m e   p r o p o s a l s   w h i c h   a r e   b a s e d   o n 
a n   e x p l i c i t   p o l i c y   m o d e l   a n d   r e f l e c t   t h e 
expected  link  between  expenditure,  output 
and impact;

m o n i t o r i n g   w h i c h   l o o k s   b e y o n d   i n d i v i d u a l 
p r o j e c t s   a n d   a s s i s t   i n   f o r m i n g   a   v i e w   o f   a 
programme  as  a  whole,  and  responds  to  the 
announced objective of the programme;

e v a l u a t i o n   o f   p r o g r a m m e s   i n   a   w a y   w h i c h 
maximises its usefulness as a source of “feed 
b a c k ”   i n f o r m a t i o n ,   p e r h a p s   i n c l u d i n g   m o r e 
u s e   o f   “ l o n g i t u d i n a l ”   e v a l u a t i o n   –   l o o k i n g 
a t   t h e   i m p a c t   o f   k e y   c a t e g o r i e s   o f   p r o j e c t s 
through successive spending frameworks;

m o r e   s y s t e m a t i c   r e c o r d i n g   a n d   a n a l y s i s   o f 
i n f o r m a t i o n   o n   t h e   a d m i n i s t r a t i v e   c o s t   o f 
programmes,  taking  account  of  costs  borne 
by beneficiaries, and use of this information 
to compare programmes and to identify and 
spread best practice.

IV.
The Court’s findings were as follows:

 –

 –

 –

T h e   C o m m i s s i o n   t r a n s l a t e d   t h e   o b j e c t i v e s 
o f   t h e   I E E   p r o g r a m m e   i n t o   a   d e t a i l e d   w o r k 
programme and made use of outside experts 
t o   a p p r a i s e   p r o p o s a l s .   O n   t h e   o t h e r   h a n d 
the  planning  of  the  programme  fell  short  of 
best practice, and the distribution of spend-
ing over many areas of activities limited the 
potential to achieve significant and verifiable 
progress in any particular area. IEE was not a 
clearly focused expenditure programme.

T h e   C o m m i s s i o n   m o n i t o r e d   p r o g r e s s   o n 
projects,  but  monitoring  and  evaluation  did 
n o t   m a k e   i t   p o s s i b l e   t o   f o r m   a   v i e w   o f   t h e 
overall quality and design of the programme. 
T h e   C o m m i s s i o n   w a s   n o t   i n   a   p o s i t i o n   t o 
a s s e s s   w h e t h e r   l o c a l   a n d   r e g i o n a l   e n e r g y 
a g e n c i e s   m a d e   a   s i g n i f i c a n t   i m p a c t ,   n o r   t o 
assess whether they improved the coordina-
tion  of  promotion  of  energy-efficient  tech-
n o l o g y .   E v a l u a t i o n   r e p o r t s   h a v e   n o t   b e e n 
a v a i l a b l e   i n   t i m e   t o   i n f l u e n c e   l e g i s l a t i v e 
discussions.

The  costs  of  preparing  proposals,  reporting 
o n   p r o j e c t s   a n d   p r o g r a m m e   m a n a g e m e n t 
( i n c l u d i n g   s u c h   c o s t s   b o r n e   b y   s u c c e s s f u l 
applicants)  are  estimated  to  be  equal  to  the 
amount disbursed over the period 2003-2006. 
T a k i n g   a c c o u n t   o f   f u t u r e   d i s b u r s e m e n t s 
t h e   t o t a l   c o s t s   o f   t h e s e   a c t i v i t i e s   c a n   b e 
e x p e c t e d   t o   b e   m o r e   t h a n   o n e - s i x t h   o f   t h e 
sums disbursed.

 –

T h e   E x e c u t i v e   A g e n c y   h a s   h a d   a   p o s i t i v e 
impact on client satisfaction.

INTRODUCTION

1. 

2. 

The European Union uses a range of instruments to pursue its energy policy 
objectives 1. They include:

 –
 –

 –
 –
 –
 –

international agreements;
support  for  Research  and  Development  in  energy  efficiency  and  renew-
able energy sources;
legislation to promote energy efficiency (such as the EU energy label);
promotion of demonstration projects;
structural funds spending on energy projects;
emissions trading.

The Intelligent Energy for Europe Programme (IEE) seeks to complement these 
instruments  by  promoting  energy  efficiency,  the  use  of  renewable  energy 
sources  and  energy  diversification.  Its  aim  is  to  create  a  climate  in  which 
there  is  wide  knowledge  of  relevant  technologies  and  of  their  importance. 
Inter alia the programme promotes exchanges of experience and know how, 
and encourages the spread of best practices and best available technologies, 
thus seeking to contribute to security of energy supply, competitiveness and 
e n v i r o n m e n t a l   p r o t e c t i o n .   T h e   p r o g r a m m e   d o e s   n o t   s u p p o r t   d i r e c t l y   t h e 
development of new technologies 2.

1  The EU has defined its objectives as

–  increasing security of supply;

–   ensuring the competitiveness 

of European economies and the 

availability of affordable energy;

–   promoting environmental 

sustainability and combating climate 

change.

Presidency conclusions, Brussels, 

March 2007 (Council Document 

7224/07).

2  Articles 1 and 2 of Decision 

No 1230/2003/EC of the European 

Parliament and of the Council (OJ L 176, 

15.7.2003, p. 29).

B O X   1

ENERGY INTELLIGENT EDUCATION FOR RETROFITTING OF SOCIAL HOUSES 
EIEDUCATION  A SAVE PROJECT

Objective:
To give social housing companies knowledge and tools to perform energy-effi  cient retrofi tting.
Duration:
01/2006 – 12/2006
Budget: 
457 291 euro (EU contribution: 50 %)

Th  e project set up an education programme and published a guidebook for social housing companies, munici-
palities and other housing stock owners to help them perform “energy intelligent retrofi tting” – meaning 
saving at least 30 % energy compared to the situation before the renovation.

 
 
7

IEE 20032006

3. 

4. 

The IEE Programme for 2003-2006 had a budget of 250 million euro in commit-
ment appropriations over the four years concerned. The money was used to 
support nearly 450 projects, involving consortia (with, on average, between 
seven and eight participants) across the Union, in other members of the Euro-
pean  Economic  Area  or  in  candidate  countries.  Participants  included  local 
authorities, research institutes, regulators, industry associations, chambers 
of craftsmen, consultancies and manufacturers. More than 1 700 bodies have 
participated in the programme. 

I n t e l l i g e n t   E n e r g y   f o r   E u r o p e   2 0 0 3 - 2 0 0 6   c o m p r i s e d   f o u r   “ v e r t i c a l ”   s u b 
programmes:

3  SAVE and Altener date from 1993 

and were previously funded through 

other programmes (see Special Report 

No 17/98 on support for renewable 

energy sources in the shared-

cost actions of the Joule-Thermie 

Programme and the pilot actions 

of the Altener Programme (OJ C 356, 

20.11.1998)).

 –
 –
 –
 –

SAVE: energy efficiency, notably in buildings and industry
Altener: new and renewable energy sources
STEER: energy aspects of transport;
Coopener: co-operation with developing countries;

3; 

3; 

and five “horizontal” activities combining several of the sub programmes men-
tioned above and/or relating to Community priorities. 

B O X   2

“GREENLODGES”  AN ALTENER PROJECT

Objective:
To promote and facilitate renewable and micro-CHP heat and electricity applications in remote rural hotels 
(lodges).
Duration:
01/01/2005 – 31/01/2007
Budget:
849 652 euro (EU contribution: 50 %)

Th  e project developed a guide that can be used by the owners/managers of rural hotels and similar accom-
modation for the implementation of renewable energy and micro co-generation systems, drawing on energy 
audits developed in “lodges” in diff erent part of the EU. Information was also disseminated by means of 
regional and national workshops.

 
 
 
 
8

5. 

The outturn for expenditure committed under the sub programmes (reflecting 
s i g n e d   g r a n t   a g r e e m e n t s   f o r   e a c h   s t r a n d )   a n d   f o r   o t h e r   c o s t s   i s   s h o w n   i n 
Table 1. Payments have been made at a much slower rate than commitments: 
at the end of 2006 payments to participants totalled 46,8 million euro.

B O X   3

EUROPEAN CAMPAIGN ON IMPROVING DRIVING BEHAVIOUR, ENERGY EFFICIENCY 
AND TRAFFIC SAFETY ECODRIVEN: A STEER PROJECT

Objective:
To promote an energy effi  cient and safer driving style-behaviour (Eco-Driving)
Duration:
01/2006 – 12/2008
Budget:
1 440 040 euro (EU contribution: 50 %)

Ecodriven was a European-wide ecodriving campaign aiming at drivers of passenger cars, delivery vans, 
lorries and buses in nine EU countries.

 
9

No of grant 
agreements 
signed

Mio EUR

T A B L E   1

EXPENDITURE COMMITTED 20032006

Projects by grants

Altener (Renewables)

SAVE (Energy Eﬃ  ciency)

STEER (Transport)

Horizontal actions

Speciﬁ c support for events

Coopener

TOTAL grant-funded projects

118

106

28

80

77

38

447

61,6

56,2

19,7

44,5

2,7

14,5

1  Public tender: contracts (mostly 

studies or IT services) initiated by the 

Commission.

199,2

2  Concerted actions: A Concerted 

action was launched on the 

28

2,2

2,5

8,9

transposition and implementation of 

the directive related to the Energy 

Performance of BuilDings (EPBD).

3  This total includes the EFTA 

Projects by public tender1

Project by concerted action2

Communication and support costs Energy and Transport DG

Running costs of the Executive Agency 

TOTAL3

240,8

contribution to IEE.

B O X   4

EUROPEAN PLATFORM FOR THE PROMOTION OF ENERGY PERFORMANCE 
CONTRACTING EUROCONTRACT: A “HORIZONTAL PROJECT” 

Objective:
To improve specifi cation of energy use in contracts
Duration:
01/2005 – 12/2007
Budget:
2 302 036 euro (EU contribution: 50 %) 

Under this project, model contracts, tender documents and quality standards for energy services were devel-
oped, leading to the production of guidebooks for use by municipalities, housing associations, and others 
involved in providing housing services.

10

BEFORE IEE 20032006...

6. 

SAVE and Altener, and some of the activities brought under Coopener in 2003, 
were previously funded under the 1998-2002 Energy Framework Programme. 
Key changes for the 2003-2006 programme were:

 –
 –

 –

the creation of an Executive Agency to run the programme;
grouping  community  support  for  those  energy  fields  that  contribute  to 
sustainable development in a single programme;
the  creation  of  a  specific  sub  programme  to  fund  activities  related  to 
transport.

... AND AFTER

7. 

The follow-up programme, IEE2, covering the period 2007-2013, incorporates 
the following changes:

 –
 –
 –

 –

ending specific support for small “stand alone” events;
moving Coopener out of the programme;
allowing market replication projects (promotion of innovatory techniques, 
processes  or  products  which  have  been  successfully  demonstrated  but 
have not penetrated the market); and
i n c r e a s i n g   t h e   m a x i m u m   E U   c o n t r i b u t i o n   t o   7 5  %   o f   c o s t s   a n d   t o 
250 000 euro for the creation of new local and regional energy agencies, 
and allowing proposals for the creation of energy agencies to be submit-
ted singly rather than as part of a consortium.

 
 
AUDIT APPROACH AND SCOPE

8. 

The Court considered whether the Commission took reasonable steps to ensure 
that the Intelligent Energy for Europe programme was designed and imple-
mented in an effective manner which added value at the European level. The 
audit asked:

 –
 –
 –
 –

how the Commission allocated funds;
how the Commission monitored and evaluated the programme;
what were the administrative costs of the programme;
what  difference  the  executive  agency  made  to  the  management  of  the 
programme.

9. 

The audit involved:

a) 

b) 

c) 

d) 
e) 
f) 
g) 

analysis  of  the  legal  basis  of  the  programme,  documents  related  to  the 
decision  process,  and  evaluations  of  IEE  and  of  previous  and  successor 
programmes;
a n a l y s i s   o f   r e p o r t i n g   a n d   m o n i t o r i n g   d o c u m e n t s   o f   t h e   E x e c u t i v e 
Agency;
interviews with staff from Directorate-General for Energy and Transport 
(Energy and Transport DG) and the Executive Agency;
analysis of calls for proposals;
review of 65 project files;
a survey which obtained data from 736 participants in the programme
analysis of the project database.

4; 

4  The survey questionnaire was sent 

in draft to the Commission services 

in November 2006. The survey was 

sent to all parties who had applied for 

funding by 7 November 2006. In total 

736 replies were received. The overall 

response rate to the survey was 29 %. 

Most of those who responded had 

participated in more than one project, 

thus providing a wide experience of 

the operation of the programme. For 

example half of the respondents were 

able to compare the experience of 

working with DG Energy and Transport 

and the Agency. The survey invited 

applicants to specify the costs of 

preparing their proposals and, in the 

case of successful applicants, the cost 

of reporting to Brussels. 

 
 
AUDIT FINDINGS

PROGRAMMING AND ALLOCATION OF FUNDS

10. 

11. 

Effective planning of public interventions requires a clear definition of objec-
tives,  an  understanding  of  the  way  the  instrument  is  expected  to  achieve 
these objectives; and clear criteria against which proposals are selected.

5  Decision No 1230/2003/EC, 

Article 4(1).

6  Decision No 1230/2003/EC, 

Community legislation provided that funding from IEE 2003-2006 should be 
available for projects which:

Article 4(2).

7  These work programmes were 

elaborated in consultation with 

representatives of all the participating 

countries.

a) 

b) 

c) 
d) 
e) 
f) 

promote  sustainable  development,  security  of  energy  supply,  competi-
tiveness or environmental protection;
create or develop structures and instruments for developing sustainable 
energy;
promote sustainable energy systems and equipment;
provide information, education and training;
monitor the implementation and impact of Community initiatives;
evaluate the impact of measures funded under the programme

5.

Financial assistance was to depend on the Community added value, benefit and 
impact of the action proposed 6.

12. 

The Commission put these principles into effect through:

 –

 –

 –

 –

a   g l o b a l   w o r k   p r o g r a m m e   f o r   2 0 0 3 - 2 0 0 6   w h i c h   e s t a b l i s h e d   1 7   “ k e y 
actions”, subdivided into 63 “target areas” (listed in Annex I);
annual work programmes setting out guidelines for the sub programmes 
and for “key actions” and selection criteria 7;
calls for proposals which set out eligibility and selection criteria leading 
to grant agreements, following negotiation between the Commission and 
the consortium concerned;
calls for tender, leading to service contracts.

 
 
 
 
 
13

13. 

14. 

15. 

16. 

17. 

Panels of experts were set up for key actions for each call for proposals (see 
Annex I). Members of the panels evaluated proposals under five headings:

8  See for example the recent analysis 

“A Cost curve for Greenhouse Gas 

Reduction”, McKinsey Quarterly, 2007.

 –
 –
 –
 –
 –

quality of action/agency/event;
quality of approach;
Community added value;
costs and benefits;
organisation of the team.

On the basis of the panel reports, an evaluation committee established a ranking 
list for approval. A proposal was only accepted if it had an overall score, and 
a  score  for  the  fifth  heading  (organisation  of  the  team),  of  70 %  or  higher 
of  available  marks,  with  no  scores  on  individual  headings  lower  than  50 %. 
Around 33 % of proposals received were accepted.

STRENGTHS AND LIMITATIONS

The Commission translated the objectives of the programme into specific actions. 
It  set  up  a  system  for  the  objective  evaluation  of  proposals,  and  award  of 
contracts. The experts evaluating and scoring proposals adequately justified 
and documented their evaluation and scoring of proposals.

The activities supported under this programme were largely inherited from pre-
vious programmes. Target areas eligible for support included raising aware-
ness  of  issues  such  as  fuel  efficiency  in  commercial  vehicles  and  insulation 
of  buildings  where  independent  expert  opinion  suggests  that  there  is  sig-
n i f i c a n t   p o t e n t i a l   f o r   c o s t - e f f e c t i v e   a d o p t i o n   o f   g r e e n h o u s e   g a s - e f f i c i e n t 
technologies 8.

On the other hand the designation of as many as 63 target areas for a relatively 
s m a l l   e x p e n d i t u r e   p r o g r a m m e   r e d u c e d   t h e   l i k e l i h o o d   o f   t h e   p r o g r a m m e 
achieving  a  significant  impact  in  any  individual  area.  IEE  was  not  a  clearly 
focused expenditure programme.

 
 
 
 
 
14

18. 

The conclusions of a report funded by the programme 9 provide a benchmark for 
the  assessment  of  the  arrangements  for  implementing  the  programme.The 
Commission’s work programme did not:

 –

 –
 –

“make  the  policy  model  explicit”  (i.e.  explain  how  the  provision  of  EU 
g r a n t s   w o u l d   a s s i s t   i n   r e m o v i n g   s p e c i f i c   o b s t a c l e s   t o   t h e   a d o p t i o n   o f 
energy efficient technology);
set specific measurable and time-related objectives for the programme;
provide an analysis of the most important market actors. (An analysis of 
market actors is provided in the Work Programme for the successor pro-
gramme, but this lists 41 “target groups” which are often broadly defined 
(“education system”, “craftsmen”, “media”, etc.)).

MONITORING AND PROGRAMME EVALUATION

The Financial Regulation 10 requires the Commission to set specific, measurable, 
achievable,  relevant  and  timed  objectives  for  all  sectors  of  the  budget  and 
to monitor their achievement through performance indicators. 

The Commission only established monitoring arrangements at the level of indi-
vidual projects, as folllows:

19. 

20. 

 –

 –

 –

 –
 –

the grant agreement described the content of the project and its imme-
d i a t e   p r o d u c t s   ( d e l i v e r a b l e s )   a s   w e l l   a s   t h e   p e r f o r m a n c e   i n d i c a t o r s 
agreed;
the  grant  agreement  also  covered  reporting  frequency  and  resulted  in 
three  to  four  reports  depending  on  the  project  duration  (small  events 
were reported once only);
each project was assigned to a project officer who monitored the delivery 
of reports and progress against the contract project description;
within the executive agency each unit monitored its project officers;
a n   o v e r v i e w   o f   t h i s   f o l l o w - u p   w a s   r e p o r t e d   t o   E n e r g y   a n d   T r a n s p o r t 
DG.

9  Under IEE, ECOFYS produced 

a report evaluating 20 energy 

efficiency instruments, of which 

17 were run within the Member 

States (“From Theory Based Policy 

Evaluation to SMART Policy Design” 

ECOFYS, april 2007 – http://

www.aid-ee.org/documents/

SummaryreportFinal.PDF?bcsi_

scan_522CC38ADEA72627=0&bcsi_

scan_filename=SummaryreportFinal.

PDF – 10th June 2008). This report 

provides a benchmark for good 

practice in designing and monitoring 

programmes in the energy efficiency 

area. Inter alia, the consultant’s report 

advised that an energy efficiency 

programm should:

–   involve an explicit policy model, 

(showing the expected link between 

expenditure, output and impact);

–   set specific targets to be achieved 

within specific time frames, and 

identify measurable indicators to be 

monitored;

–   estimate the possible impact 

of a possible package of policy 

instruments to achieve the targets 

set;

–   analyse relevant markets and sectors, 

identifying key market actors, 

disincentives, barriers and obstacles 

to energy efficiency and the likely 

effectiveness of policy instruments in 

overcoming these problems.

10 Article 27 of Council Regulation 

(EC, Euratom) No 1605/2002 

(OJ L 248, 16.9.2002, p. 1).

 
 
 
15

SUCCESSES AND LIMITATIONS

21. 

22. 

23. 

24. 

These arrangements were similar to those of other EU programmes and allowed 
the Commission to monitor activities undertaken within individual projects. 
On the other hand, the monitoring information requested and provided was 
not placed in the framework of a set of indicators to measure the success of 
the  programme  as  a  whole.  The  information  was  thus  of  limited  use  to  the 
Commission in forming a view on the extent to which the programme was a 
success,  and  on  whether  it,  or  project  requirements,  should  be  amended 11. 
There were no amendments to the criteria against which proposed projects 
were  assessed  over  the  course  of  Intelligent  Energy  for  Europe  (and  for  the 
SAVE and Altener components, these criteria were unchanged from previous 
programmes).

Useful evaluation of IEE was also handicapped by the rate of disbursement of 
funds 12. The mid-term evaluation of IEE was completed towards the end of the 
programme, in January 2006. However at this stage disbursements amounted 
to less than 5 % of total expenditure foreseen for the programme. The study 
team concluded that “it is still too early for evaluations to identify [projects’] 
l o n g - t e r m   i m p a c t s ” .   B y   t h e   e n d   o f   2 0 0 6 ,   t o t a l   p a y m e n t s   h a d   r i s e n   t o   j u s t 
46,8 million euro – indicating that 80 % of funds payable under the programme 
would be disbursed after the programme period. 

The Intelligent Energy for Europe programme assumed that imperfect information 
was a significant barrier to the uptake of energy efficient products, processes 
and  practices  and  to  the  use  of  renewable  energy  sources.  “Good  practice” 
p r o g r a m m e   m o n i t o r i n g   w o u l d   h a v e   i n c o r p o r a t e d   m e a s u r e s   o f   t h e   e x t e n t 
to  which  decision-makers  had  become  aware  of  relevant  information,  as  a 
result  of  the  programme.  The  Commission  did  not  obtain  such  information 
at programme level.

A key weakness of programme evaluation has been that evaluation reports have 
not been available in time to influence legislative discussions, and have not 
provided  meaningful  analysis  of  the  impact  of  the  programme.  Evaluation 
reports on the SAVE and Altener sub programmes were not available before 
IEE  was  adopted.  The  ex-ante  evaluation  of  IEE2,  which  succeeded  IEE,  was 
produced  before  any  information  from  IEE  was  available  (the  report 13  was 
issued in September 2004: the deadline for the first call for proposals for IEE 
was April 2004, and grant agreements under IEE 2003-2006 were only signed 
in the autumn of that year).

11 The consultant employed to perform 

an ex-ante evaluation for IEE2 reported 

that “The indicator system of the 

current IEE programme at this stage of 

development is restricted to the project 

level, where proposers are required to 

suggest indicators against which their 

project’s progress can be measured. 

However, there are no means of 

harmonising these indicators at the 

programme level. Consultations have 

revealed concern about this system. It 

is potentially confusing and prevents 

a meaningful impact monitoring as 

it encourages projects to measure 

different outputs, results and impacts. 

Under this arrangement it will be very 

difficult for any evaluation to measure 

the impact, and thus draw conclusions, 

on the success of the programme.” 

(Ex-ante evaluation of a renewed 

multiannual Community programme in 

the field of energy (2007-2013) ECOTEC 

Research and Consulting Limited, p. 38.

12 Mid Term Evaluation of the Multi-

annual Programme for Action in the 

field of Energy “Intelligent energy – 

Europe, 2003-2006”, ECOTEC Research 

& Consulting Limited, United Kingdom. 

http://ec.europa.eu/dgs/energy_

transport/evaluation/activites/doc/

reports/energie/no52_eie_midterm_

final_report.pdf

13 One factor in this was the timing of 

approval of the programme (see p. 2 of 

the report).

 
 
 
 
16

25. 

26. 

27. 

EVALUATION OF LOCAL ENERGY AGENCIES: A CASE STUDY

The EU has, under a series of programmes, co-financed the establishment of 
local  energy  agencies  (Box  5)  in  the  Member  States  over  the  last  15  years. 
Over this period, around 300 such agencies have been set up with EU support 
(with  a  maximum  EU  contribution  of  200 000  euro).  The  Commission  argues 
that agencies are “promoters and implementers” of EU energy policy at local 
level, and act as “energy experts” for other local or regional activities. 

Under IEE, any public authority or other body proposing the creation of a local/
regional  energy  agency  must  present  an  initial  work  programme.  This  work 
programme must contain a combination of local/regional activities and activi-
ties  with  an  EU  dimension.  It  should  also  demonstrate  that  local/regional 
activities will benefit from inputs to the new agency coming from other parts 
of the EU. 

The Global Work Programme for 2003-2006 promised a selective approach to 
supporting  the  creation  of  new  agencies  (where  they  were  “necessary  and 
convenient, and there is a clear commitment by the local authorities to sup-
port such infrastructure in the long run”). Priority was to be given to estab-
lishing  agencies  in  the  (then)  candidate  countries.  In  practice,  this  was  not 
achieved:  the  greatest  number  of  agencies  was  created  in  existing  Member 
States, and was concentrated in those Member States which already had the 
greatest number of local energy agencies.

B O X   5

LOCAL ENERGY AGENCIES 

Agencies are typically small bodies (from two to ten staff ) set up at the initiative of local authorities. Th  ey are 
headed by a Director who reports to a management committee which may include private sector representa-
tives, but will have a majority drawn from the public sector.

Th  e most commonly reported activity is the provision of advice (either to local decision-makers, or to 
consumers).

 
 
 
17

14 “Study of outputs, performance and 

future perspectives of SAVE energy 

agencies” Final Report ECUBA srl 2005.

28. 

29. 

The Commission has not obtained an independent assessment of the impact of 
local  energy  agencies.  It  did  obtain  a  study 14  on  the  outputs,  performance 
a n d   f u t u r e   p e r s p e c t i v e   o f   S A V E ’ s   e n e r g y   a g e n c i e s ,   b a s e d   o n   t h e   w o r k   o f 
experts drawn from energy agencies in the Czech Republic, France, Italy and 
the United Kingdom. This paid particular attention to the support provided 
to local energy agencies by the Commission, but also raised concerns about 
the  monitoring  of  agencies  and  their  coordination  with  private  sector  and 
public sector bodies in the field of energy efficiency.

Despite this IEE2 provides more support for the creation of new energy agencies: 
the maximum amount of funding rising to 250 000 euro (from 200 000 euro) 
and to 75 % of eligible costs (previously 50 %).

ENERGY AGENCIES SET UP UNDER SAVE II 19982004

 
 
18

ADMINISTRATIVE COSTS: PREPARING PROPOSALS, 
REPORTING ON PROJECTS AND PROGRAMME 
MANAGEMENT

30. 

Administrative costs related to the Intelligent Energy for Europe programme are 
incurred by:

15 The figure of 22 million euro 

represents 10 % of total grant 

applications awarded (199,2 million 

euro – see Table 1) plus 6 % of total 

payments made to beneficiaries in the 

period 2003-2006 (43,6 million euro). 

However, proposal costs will have 

also been incurred for unsuccessful 

proposals, and reporting costs will 

eventually relate to the whole amount 

paid to projects (likely to be close to 

200 million euro).

 –
 –

participants in the programme (and sometimes by their sponsors); 
s i n c e   2 0 0 6   b y   t h e   E x e c u t i v e   A g e n c y   s e t   u p   t o   r u n   t h e   p r o g r a m m e , 
a n d   b y   t h e   r e s p o n s i b l e   C o m m i s s i o n   s e r v i c e s   ( p r i n c i p a l l y   E n e r g y   a n d 
Transport DG). 

Administrative costs both for the Commission and participants should be com-
mensurate  with  the  scale  of  the  programme  and  no  higher  than  needed  for 
effective implementation of the programme.

The Commission does not have guidance or benchmarks, based for example on 
comparable programmes, on the cost of administration and does not collect 
comprehensive information on these costs.

COSTS BORNE BY PARTICIPANTS

The Court used a survey to obtain participants’ estimates of the cost of preparing 
proposals  and  project  reporting.  The  average  cost  of  submitting  and  nego-
tiating  a  proposal  reported  by  respondents  is  around  10 %  of  the  amount 
requested. Reporting costs are estimated as amounting to at least a further 
6 %  of  EU  funding  (these  costs  are  eligible  for  EU  support).  Applied  to  the 
programme as a whole this suggests a cost of a magnitude of 22 million euro 
incurred by successful applicants 15.

31. 

32. 

 
 
 
 
 
19

33. 

Figures 1 and 2 present the applicants’ estimates of the cost of making a proposal 
as a percentage of the funding requested. Figure 3 presents applicants’ esti-
mates  of  the  cost  of  reporting  as  a  percentage  of  funding 16.  More  than  half 
of  participants  thought  the  time  required  to  fill  in  an  application  was  fair, 
but this figure fell to 40 % for project coordinators. Similar concerns over the 
cost of preparing a proposal, and of negotiating with the Commission were 
reflected in the findings of the mid-term evaluation: “the contract negotia-
t i o n   p r o c e s s   w a s   h i g h l i g h t e d   a s   t a k i n g   u p   m o r e   a n d   m o r e   t i m e ,   w i t h   t h e 
applicant having to supply a large number of documents. The effort required 
pre-contracting can be very draining on resources for some organisations” 17. 
The mid-term evaluation made use of a similar survey approach to the Court, 
but  with  a  smaller  number  of  participants  contacted,  and  a  lower  response 
rate  (736  replies  and  a  29 %  response  rate  for  the  Court’s  survey;  82  replies 
and a 22 % response rate for the evaluators).

16 The Court surveyed applicants to 

the Intelligent Energy for Europe 

on the conduct of the programme. 

736 applicants replied to the 

questionnaire.

17 Mid Term Evaluation of the Multi-

annual Programme for Action in the 

field of Energy “Intelligent Energy – 

Europe, 2003-2006”, ECOTEC Research 

& Consulting Limited, United Kingdom. 

(p. 42). (http://ec.europa.eu/dgs/

energy_transport/evaluation/activites/

doc/reports/energie/no52_eie_

midterm_final_report.pdf)

F I G U R E   1

DISTRIBUTION OF REPLIES ON THE ESTIMATED COST OF MAKING A PROPOSAL 
AS A PERCENTAGE OF FUNDING REQUESTED 689 RESPONDENTS

above 20 %

below 5 %

16-20 %

11-15 %

6-10 %

 
20

F I G U R E   2

DISTRIBUTION OF REPLIES ON THE ESTIMATED COST FOR COORDINATORS 
OF MAKING A PROPOSAL AS A PERCENTAGE OF FUNDING REQUESTED 
121 COORDINATORS RESPONDING TO THE SURVEY

above 20 %

below 5 %

16-20 %

11-15 %

6-10 %

F I G U R E   3

DISTRIBUTION OF REPLIES ON REPORTING COSTS AS A PERCENTAGE 
OF FUNDING RECEIVED 529 RESPONDENTS

above 20 %

16-20 %

11-15 %

below 5 %

6-10 %

21

COSTS INCURRED BY THE EXECUTIVE AGENCY

34. 

An innovation of Intelligent Energy for Europe was the creation of an Executive 
Agency  (see  Box  6)  to  handle  the  administration  of  the  Programme 18.  The 
C o m m i s s i o n   c h a r g e d   8 , 5   m i l l i o n   e u r o   t o   t h e   I E E   b u d g e t   l i n e s   t o   f u n d   t h e 
Executive  Agency  in  2005  and  2006.  In  2006,  the  Agency’s  financial  state-
ments  show  expenditure  (on  an  accruals  basis)  of  4  million  euro 19  with  an 
accumulated  surplus  at  31  December  2006  of  0,9  million  euro.  The  cost  of 
running  the  agency  is  thus  assessed  at  7,6  million  euro  for  2005  and  2006. 
At  the  end  of  2006,  the  agency  had  41  staff,  of  whom  five  were  permanent 
officials  seconded  by  the  Commission,  11  temporary  staff  transferred  from 
the Commission, and 25 contractual staff.

B O X   6

CREATION OF THE INTELLIGENT ENERGY EXECUTIVE AGENCY

18 The Agency was solely involved in 

administering the Intelligent Energy 

for Europe programme, and was not 

involved in administering activities 

financed under previous programmes. 

From 2007, the replacement to IEE 

forms a part of the Competitiveness 

and Innovation Framework Programme. 

The Agency now manages other 

CIP activities as well as continuing 

activities under IEE.

19 Economic outturn account 2006. 
Report on the annual accounts of the 

Intelligent Energy Executive Agency 

for the financial year 2006 together 

with the Agency’s replies (OJ C 309, 

19.12.2007, p. 18). Staff expenses form 

66 % of the total. A significant share 

of other administrative expenses 

consisted of expenditure on experts 

and studies, and refunds to the 

Commission for the provision of 

accommodation and other services.

launching the annual calls for proposals, selecting, the proposals and contracting,
monitoring the projects (progress and fi nancial),
monitoring the actual eff ects of projects on the targetted area,
paying out the EU contibution following the contractual conditions,
communication and promotion of the programme and its projects.

Th  e Intelligent Energy Executive Agency is the fi rst Community executive agency and started operations 
in 2005. Its mission was to implement the main part of the Intelligent Energy for Europe (2003-2006) 
 programme. Practically this includes the following tasks:
Project cycle:
 –
 –
 –
 –
 –
Reporting back to the Commission:
 –
 –
 –
 –
The  agency  has  now  been  given  additional  tasks  (CIP),  its  name  changed  to  “Executive  Agency  for 
 Competitiveness and Innovation” and its duration extended to the end of 2015.

reporting on the execution of the programme,
feedback of information for future programme development and on national initiatives,
reporting on the running of the agency and its operational budget,
running and managing the agency (human ressources, fi nance …).

 
22

COSTS BORNE BY ENERGY AND TRANSPORT DG

35. 

36. 

Staff costs relevant to IEE borne by Energy and Transport DG are not separately 
disclosed in the Commission’s financial statements but costs can be estimated 
o n   t h e   b a s i s   o f   s t a f f   n u m b e r s .   T h e   C o m m i s s i o n   h a s   r e p o r t e d   t h a t   3 8   s t a f f 
were involved in administering the programme in 2003 [COM(2002) 162]. This 
figure fell to 20 after the agency became fully operational in 2006 (by which 
time 16 staff, had been seconded to the agency). Using the assumptions set 
out in the cost effectiveness assessment performed to justify setting up the 
Executive  Agency 20,  this  indicates  a  staff  cost  of  around  16  million  euro  for 
the period 2003 to 2006.

Expenditure on administrative management (essentially covering expenditure 
on studies, meetings information and publicity) amounted to 2 million euro 
for the period 2003-2006. 

20 Externalisation arrangements 

for “Intelligent Energy for Europe” 

Programme. A cost-effectiveness 

assessment, Eureval-C3E, 2002.

 
 
23

TOTAL ADMINISTRATIVE COSTS

37. 

The administrative costs of IEE borne by the European Union (including the cost 
o f   r u n n i n g   t h e   E x e c u t i v e   A g e n c y )   t h u s   a m o u n t   t o   a r o u n d   2 5   m i l l i o n   e u r o 
o v e r   t h e   p e r i o d   2 0 0 3   t o   2 0 0 6 .   A   s u r v e y   o f   p a r t i c i p a n t s   s u g g e s t s   a   c o s t   o f 
around  22  million  euro  for  preparing  proposals  and  reporting  on  projects. 
Total payments to participants amounted to 46,8 million euro by the end of 
2006. This suggests that during this period the Intelligent Energy for Europe 
programme’s costs for administration, for preparing proposals and for report-
ing  on  projects  was  of  the  same  order  as  was  paid  out  to  beneficiaries  for 
operational purposes.

38.  Many of these costs in a programme such as IEE are front-end loaded. Costs such 
as  those  involved  in  preparing  calls  for  proposals  are  necessarily  concen-
trated  in  the  early  period  of  the  programme,  and  the  relationship  between 
t h e   c o s t   o f   a d m i n i s t r a t i o n   a n d   o p e r a t i o n s   w i l l   c h a n g e   o v e r   t h e   c o u r s e   o f 
the  programme.  However  administrative  costs  plus  the  costs  of  preparing 
proposals  and  reporting  on  projects  already  incurred  are  estimated  to  be 
equal to more than a sixth of total commitments and further administrative 
costs will be incurred in the future, as the Executive Agency will continue to 
monitor  contracts,  and  will  be  increasingly  involved  in  checking  claims  for 
reimbursement, while beneficiaries will continue to incur reporting costs, and 
will devote increased resources to preparing cost statements and obtaining 
audit certificates.

 
 
24

THE EXECUTIVE AGENCY: A BETTER MANAGER?

39. 

The Court’s audit found that the Executive Agency had:

 –

 –
 –
 –

improved  programme  communication  (through  its  website,  streaming 
broadcasting and newsletter);
improved application documents;
reduced some of the administrative burdens on participants;
six  monthly  progress  and  financial  reporting  reduced  to  a  nine  months 
reporting with a single progress and financial report.

40. 

Changes to administrative procedures are reflected in the attitudes of benefi-
ciaries to the programme. On the criteria “assistance during the application 
procedure” and “duration of the procedure” (Figure 4), 10 % more applicants 
rated  the  service  provided  by  the  Executive  Agency  as  “good  or  excellent”, 
than rated the Commission in these categories. Differences were particularly 
marked in the “excellent” category. 

41.  While participants as a group showed a preference for dealing with the Execu-
tive Agency, around half saw little difference in the level of service provided. 
Project  coordinators  (who  have  more  contact  with  Brussels  than  do  other 
participants) expressed a higher level of satisfaction with the agency and a 
lower level of satisfaction with the Commission (Figures 5 and 6).

42. 

It is too soon to draw definitive conclusions on the performance of the agency, but 
the perception of programme participants is that it has made a good start.

F I G U R E   4

THE DURATION OF THE APPLICATION PROCESS

Views of respondents to survey on dealing with the…

… Executive Agency

… Commission

0 %

20 %

40 %

60 %

80 %

100 %

Excellent

Good

Satisfactory

Poor

No service

 
 
 
 
25

F I G U R E   5

VIEW OF ALL BENEFICIARIES ON DIFFERENCES IN QUALITY OF SERVICES PROVIDED 
BY THE COMMISSION AND THE EXECUTIVE AGENCY

180

160

140

120

100

80

60

40

20

0

equal

Agency

equal

equal

Agency

Agency

COM

COM

COM

The availability 
of information 
is better under

The application 
process goes 
faster under

The reporting 
process of ongoing 
projects is easier 
under

F I G U R E   6

VIEW OF COORDINATORS ON DIFFERENCES IN QUALITY OF SERVICES PROVIDED 
BY THE COMMISSION AND THE EXECUTIVE AGENCY

45

40

35

30

25

20

15

10

5

0

Agency

equal

equal Agency

Agency

equal

COM

COM

COM

The availability 
of information 
is better under

The application 
process goes 
faster under

The reporting process 
of ongoing projects 
is easier under

CONCLUSIONS 
AND RECOMMENDATIONS

43. 

44. 

45. 

PLANNING THE PROGRAMME

The Commission translated the objectives of the IEE programme into a detailed 
Work Programme and made use of outside experts to appraise proposals. In 
some  target  areas  for  IEE  action  there  appears  to  be  a  significant  potential 
for cost-effective adoption of greenhouse gas-efficient technologies.

On the other hand the planning of the programme fell short of best practice. The 
Commission did not:

 –
 –
 –

make its policy model explicit;
set specific and time related objectives;
provide an analysis of key market actors.

The distribution of spending over so many areas of activities necessarily limited 
the potential to achieve significant and verifiable progress in any particular 
area. IEE was not a clearly focused expenditure programme.

R E C O M M E N D A T I O N   1      P L A N N I N G

The Commission should ensure that programme proposals are based on an 
explicit policy model and reflect the expected link between expenditure, 
output and impact. 

 
 
 
27

21 It is notable, for example, that, using 

a different approach, policymakers 

in Member States have often focused 

upon utility companies as a suitable 

channel for providing advice on 

energy-saving technology. Such 

arrangements provide the advantage 

that utility companies have an 

established contact with energy users, 

and that they have the potential 

to measure impacts on energy 

consumption. It has the drawback that 

utilities have evident interest in the 

business, and this may not be optimal 

for fair and transparent advice.

MONITORING AND EVALUATION

46.  Monitoring and evaluation procedures did not provide an effective feedback 
mechanism. The Commission monitored projects but did not seek to monitor 
the  performance  of  the  programme  as  a  whole.  Evaluation  of  the  previous 
p r o g r a m m e   t o o k   p l a c e   t o o   l a t e   t o   i n f l u e n c e   t h e   d e s i g n   o f   t h e   I n t e l l i g e n t 
Energy  for  Europe,  and  the  successor  programme  was  agreed  before  Intel-
ligent  Energy  for  Europe  was  evaluated.  The  programme  was  evaluated  at 
“mid term” but evaluation was hampered because only 5 % of payments had 
been made at this point.

47. 

48. 

49. 

The monitoring and evaluation arrangements thus did not enable the Commis-
s i o n   t o   f o r m   a   v i e w   o f   t h e   o v e r a l l   q u a l i t y   a n d   d e s i g n   o f   t h e   p r o g r a m m e 
and judge whether, for example, a standard project-based approach was an 
appropriate  response  to  the  policy  aims 21;  or,  if  so,  whether  a  much  more 
focused programme would be more likely to achieve IEE’s objectives. In the 
case  of  Intelligent  Energy  for  Europe,  one  premise  of  the  programme  was 
that  imperfect  knowledge  was  preventing  decision  makers  from  adopting 
appropriate technology. Effective monitoring would asses whether decision 
makers were becoming better informed.

The Commission was not in a position to assess whether energy agencies made 
a significant impact, nor to assess whether they improved the coordination 
of promotion of energy-efficient technology. However changes made in the 
2007-2013 programme increased financial support for these bodies.

IEE was small in relation to the market (for energy) which it was intended to influ-
ence.  IEE  projects  provided  intermediate  outputs  (often  taking  the  form  of 
advice to policy makers, of participants in events, or of publicity material). It 
is difficult to determine whether these outputs lead to changed behaviour.

 
 
 
 
28

50. 

Likewise, there is an intrinsic problem in deciding when and how to evaluate 
multi-annual programmes which start slowly (or late) and whose expenditure 
consequences  extend  beyond  the  formal  programme  period.  As  the  Court 
pointed  out  in  its  report  on  the  structural  funds  “medium-term  processes” 
(Special  Report  No  1/2007),  evaluation  which  takes  place  early  enough  in  a 
programming period for its results to influence the design of a successor pro-
gramme will be based on evidence drawn from only a small part of planned 
spending. Evaluations based on a significant amount of expenditure on the 
other  hand  are  likely  to  be  carried  out  too  late  to  affect  the  design  of  any 
successor programmes.

51. 

These intrinsic difficulties make it more important for the Commission to imple-
m e n t   a   r o b u s t   a n d   c o m p r e h e n s i v e   s e t   o f   p e r f o r m a n c e   i n d i c a t o r s ,   a n d   t o 
ensure evaluation was optimally scheduled.

R E C O M M E N D A T I O N   2      M O N I T O R I N G

The  Commission  should  ensure  that  programmes  are  monitored  in  a  way 
that provides it, so far as possible, with useful information on their effects. 
S u c h   i n f o r m a t i o n   s h o u l d   l o o k   b e y o n d   i n d i v i d u a l   p r o j e c t s   a n d   a s s i s t   i n 
forming  a  view  of  a  programme  as  a  whole  in  a  way  which  takes  account 
of its announced objectives.

R E C O M M E N D A T I O N   3      E V A L U A T I O N

Evaluation  of  programmes  should  take  place  in  a  way  which  maximises 
its  usefulness  as  a  source  of  “feedback”  information  which  makes  it  pos-
sible to improve spending programmes. The Commission should consider 
making  more  use  of  “longitudinal”  evaluation  –  looking  at  the  impact  of 
key  categories  of  projects  through  successive  spending  frameworks.  The 
reports that the Commission has obtained on Member State programmes 
might form an appropriate framework for this.

 
 
29

ADMINISTERING THE SCHEME

52. 

53. 

The Court’s work suggests that total costs of preparing proposals, reporting on 
projects and of administration were equivalent to the total funds transferred 
to  projects  over  the  period  2003-2006.  Taking  account  of  future  disburse-
ments and administrative costs, the total of these three types of cost can be 
expected to be more than one-sixth of the sums disbursed.

Although the European Commission runs many schemes with a similar design to 
IEE, it does not have a framework for assessing their administrative costs. It 
is  not  therefore  possible  readily  to  compare  the  administrative  costs  of  IEE 
with those of other schemes. 

R E C O M M E N D A T I O N   4      M A N A G I N G   C O S T S

The Commission should more systematically record and analyse informa-
t i o n   o n   t h e   a d m i n i s t r a t i v e   c o s t   o f   p r o g r a m m e s   ( c o n s i d e r i n g   i n d i c a t o r s 
such as cost/euro disbursed, and cost/proposal appraised). “Cost” should 
include costs borne by beneficiaries, not just those borne by the Commis-
sion. The Commission should use this information to compare programmes 
and identify and spread best practice.

54. 

The Executive Agency has had a positive impact on client satisfaction: partici-
pants (and particularly, project coordinators) prefer dealing with the Agency 
to dealing with the Commission.

This report was adopted by the Court of auditors in Luxembourg at its meeting 
of 4 September 2008.

For the Court of Auditors

Vítor Manuel da Silva Caldeira

President

 
 
 
 
 
 
 
 
 
30

A N N E X   I

OVERVIEW OF THE VERTICAL KEY ACTIONS AND RELATED TARGET AREAS 
OF SAVE, ALTENER AND STEER

FIELD

VERTICAL KEY ACTIONS

TITLE

TARGET AREAS

TITLE

E
V
A
S

R
E
N
E
T
L
A

MULTIPLYING SUCCESS 
IN BUILDINGS

RETROFITTING OF SOCIAL HOUSES

INNOVATIVE APPROACHES 
IN INDUSTRY

ENERGY EFFICIENT EQUIPMENT 
AND PRODUCTS

RES-ELECTRICITY

RES-HEAT

SMALL SCALE RES APPLICATIONS

ALTERNATIVE VEHICLE PROPULSION

R
E
E
T
S

POLICY MEASUREMENT 
FOR AN EFFICIENT USE OF ENERGY 
IN TRANSPORT

Tools for the take-oﬀ  of the Buildings Directive

Schemes for implementation of energy services in 
buildings

Public buildings as shining examples

Promotion of best practice examples of high energy 
performance buildings

Awareness raising, education and training

Tailored ﬁ nancing schemes

Advanced integrated retroﬁ tting solutions

Legal and institutional changes

(Instruments for) Energy management

Energy services in SMEs

Polygeneration

Enforcing the application and enhancing the 
awareness of EU labels and minimum energy eﬃ  ciency 
standards

Technology procurement, buyer-initiatives and other 
approaches to accelerate the transformation of the 
market

Monitoring market transformation and preparing the 
ground for new policy initiatives

National indicative targets

Support schemes

Grid system issues

Green electricity

Distributed electricity generation

Legislation, fuel standards and norms

Supply chain and market structures

Speciﬁ c applications and building integration

Solar water and space heating and cooling

PV electricity generation

Biomass for domestic heating

Small scale CHP and heat pumps

Legislation, ﬁ scal regimes and fuels standards and 
norms

Supply chain and market structures for biofuels

Supply chain and market structures for alternative fuels 
requiring separate supply chains

Market demand for alternatively propelled vehicles

Accompanying measures

Reducing demand for transport

Enhancing energy eﬃ  ciency in a transport mode

Encouraging transfer to less energy intense modes

Economic instruments and incentives

Information and awareness and education

STRENGTHENING THE KNOWLEDGE 
OF LOCAL MANAGEMENT AGENCIES 
IN THE TRANSPORT FIELD

Training and education of local agencies in the eﬃ  cient 
use of energy and use of alternative fuels in transport

Fostering collaboration and partnership: Supporting 
local actors in programme and project participation

Source: Intelligent Energy – Europe 2003-2006 – Global Work Programme for the years 2003-2006.

31

OVERVIEW OF THE VERTICAL KEY ACTIONS AND THE RELATED TARGET AREAS 
OF COOPENER

FIELD

VERTICAL KEY ACTIONS

TITLE

TARGET AREAS

TITLE

R
E
N
E
P
O
O
C

ENERGY POLICIES, LEGISLATION 
AND MARKET CONDITIONS 
FOR ENABLING POVERTY 
ALLEVIATION IN DEVELOPING 
COUNTRIES

STRENGTHENING LOCAL ENERGY 
EXPERTISE IN DEVELOPING 
COUNTRIES

The energy policy chain, from development to promotion 
and implementation

Pro-poor energy regulations, addressing sustainability, 
targets, and decentralised generation

Energy planning for urban, peri-urban and rural areas

Financing, investments and support schemes for energy 
sector programmes and projects, with particular emphasis 
on SMEs

Promoting best practise in energy services to meet the 
needs of the poor

Training and networking for energy policy makers, 
regulators, and planners

Training, networking, mobility an study tours for energy 
professionals

Strengthening existing Energy Centres, Agencies and 
Industry Associations

Source: Intelligent Energy – Europe 2003-2006 – Global Work Programme for the years 2003-2006.

OVERVIEW OF THE HORIZONTAL KEY ACTIONS AND RELATED TARGET AREAS

FIELD

HORIZONTAL KEY ACTIONS

TITLE

TARGET AREAS

TITLE

SUSTAINABLE ENERGY 
COMMUNITIES

THINK GLOBALLY ACT LOCALLY

L
L
A

FINANCIAL MECHANISMS & 
INCENTIVES

MONITORING & EVALUATION

Promoting energy citizenship and mobilising local energy 
actors

Local community planning for the eﬃ  cient use of RES 
and conventional energy, demand side management and 
associated mobility

Establish favourable conditions for local energy markets and 
services to reach a critical mass

ManagEnergy: the facilitating instrument for local energy 
activities

Support for the creation of local and regional energy 
management agencies and for the operation of national 
associations of agencies

Think globally: Community added value (Reﬂ ection group)

Cross-country analysis of diﬀ erent ﬁ nancing mechanisms

Development and promotion of innovative ﬁ nancing 
mechanisms for RES & RUE investments

The right to a fair competition

Platform/Forum for exchange of experience on ﬁ nancial 
mechanisms & incentives

Monitoring and evaluation of diﬀ erent RES/RUE policies and 
measures

Methods, indicators and modelling of future trends ad 
policy impacts

Platform for exchange of experience on monitoring & 
evaluation

Dissemination of project results

Dissemination of sector best practice

DISSEMINATION & PROMOTION

Dissemination of the programme and its achievements

Public Awareness Campaign for an Energy Sustainable 
Europe

Source: Intelligent Energy – Europe 2003-2006 – Global Work Programme for the years 2003-2006.

REPLY 
OF THE COMMISSION 
TO THE SPECIAL 
REPORT OF THE 
COURT OF AUDITORS 
ON INTELLIGENT 
ENERGY 20032006

33

SUMMARY

I.
IEE is intended to support the European Union’s 
policies  in  the  field  of  energy  as  laid  down  in 
the Green Paper on Security of Energy Supply, 
the White Paper on Transport and other related 
Community legislation making a balanced con-
tribution  to  achieving  the  general  objectives 
of security of energy supply, competitiveness, 
a n d   e n v i r o n m e n t a l   p r o t e c t i o n   ( A r t .   1   o f   t h e 
programme Decision).

IV.
First indent
T h e   I E E   p r o g r a m m e ’ s   f u n c t i o n   i s   e s s e n t i a l l y 
a   c a t a l y t i c   o n e ,   w h e r e   c o m p a r a t i v e l y   s m a l l 
a m o u n t s   o f   f u n d i n g   a r e   p r o v i d e d   t o   t r i g g e r 
much larger investments in the future. 

T h e   s e l e c t i o n   o f   p r i o r i t y   a r e a s   i s   i n e v i t a b l e 
when dealing with a sector as wide as energy. 
T h e   s c o p e   a n d   o b j e c t i v e s   o f   t h e   I E E 1   P r o -
gramme  were  defined  by  the  Parliament  and 
the Council and structured on the basis of four 
specific fields. The decision on IEE1 refers to a 
number of specific communications relevant to 
each of the four programme fields, and each of 
these  documents  contains  a  list  of  important 
a r e a s   o f   a c t i o n 1.   T h e   C o m m i s s i o n   c o n s i d e r s 
that the planning of the programme, which was 
designed to address the policy areas defined in 
the legislation, represents an acceptably high 
standard  given  the  inherent  constraints  of  a 
policy instrument of this nature.

Second indent
I E E 1   i s   a   p r o g r a m m e   w i t h   a   w i d e   s c o p e   f o r 
a d d r e s s i n g   s u s t a i n a b l e   e n e r g y   i n   a l l   s e c t o r s 
o f   s o c i e t y   a s   d e f i n e d   i n   t h e   d e c i s i o n   o f   t h e 
Parliament and the Council. Monitoring of the 
programme is done on a project basis, allowing 
impacts  to  be  determined  with  regard  to  the 
projects’ objectives. The Commission considers 
that the monitoring scheme was appropriate.

It is hardly feasible to introduce monitoring at 
a higher aggregated level given the difficulty 
to isolate causal links between the programme 
results as catalyst and macro-economic trends 
such as the EU’s energy dependency. The Com-
mission  considers  that  this  does  not  compro-
mise  the  overall  quality  and  design  of  the  IEE 
programme.

The growth in demand for energy agencies and 
their long term financing by public authorities 
are strong indicators that such agencies make 
a significant impact. 

C o n c e r n i n g   t h e   t i m i n g   o f   p r o g r a m m e   e v a l u -
a t i o n s ,   t h e   I E E   i s   a   r o l l i n g   p r o g r a m m e ,   w i t h 
e x p e r i e n c e   f r o m   t h e   p a s t   p r o g r a m m e s   f e e d -
ing into subsequent ones. As such, evaluation 
results  are  used  systematically  in  the  design 
a n d   d r a f t i n g   o f   t h e   l e g i s l a t i v e   p r o p o s a l s   f o r 
subsequent programmes.

1   For example, the White paper for a Community Strategy and Action 
Plan [COM(1997) 599 final of 26/11/1997] contains four activity areas 
and 22 specific actions for the field renewable energies alone; the Com-
munication from the Commission, entitled: “Action Plan to improve 
energy efficiency in the European Community” [COM(2000) 247 of 
26/04/2000] puts forward actions in all sectors and in 15 main areas. 
In 2006, this approach was confirmed by the European Parliament’s 
Opinion on the Green Paper on Energy Efficiency which sets forth over 
100 recommendations (European Parliament Report P6_A(2006)0160 
of 03.05.2006 and Commission’s communication of 19 October 2006 on 
an Action Plan for Energy Efficiency which defines six areas, ten priori-
ties and 75 cost-effective actions chosen on the basis of an impact 
assessment).

34

Third indent
The Court adds costs incurred by the Commis-
sion  and  the  Executive  Agency  together  with 
a d d i t i o n a l   c o s t s   e s t i m a t e d   b y   b e n e f i c i a r i e s . 
These  last  costs  are  of  a  very  different  nature 
a n d   t h e r e f o r e   s h o u l d   b e   c o n s i d e r e d   s e p a -
rately:  Preparing  a  proposal  is  an  investment 
in  planning  a  sound  and  competitive  project. 
Project reporting is a co-financed contractual 
o b l i g a t i o n   w h i c h   p r o v i d e s   t h e   b a s i s   f o r   d i s -
s e m i n a t i n g   t h e   r e s u l t s   t o   s t a k e h o l d e r s .   P r o -
g r a m m e   m a n a g e m e n t   i s   c a r r i e d   o u t   o n l y   b y 
the Commission and Executive Agency. In the 
IEE  case,  programme  management  costs  also 
include investment in the establishment of an 
Executive Agency which will bring benefits and 
cost-savings  in  the  future.  With  regard  to  the 
d i s b u r s e m e n t   o f   t h e   p r o g r a m m e   g r a n t s ,   t h e 
Court  correctly  states  in  paragraph  38  that  in 
a programme such as IEE the costs of preparing 
p r o p o s a l s   a r e   f r o n t - e n d   l o a d e d .   I n   c o n t r a s t , 
t h e   p a y - o u t   t o   b e n e f i c i a r i e s   i s   l a r g e l y   b a c k -
end loaded. The participants’ costs of prepar-
ing proposals are estimated on the basis of an 
extrapolation from a survey. The Court’s survey 
d i d   n o t   d e f i n e   t h e   n a t u r e   o f   t h e   c o s t s   t o   b e 
taken into account, nor a method for determin-
ing  them  The  29 %  of  those  approached  who 
r e p l i e d   w e r e   n o t   a s k e d   t o   p r o v i d e   a c c o u n t -
ing  data,  and  their  replies  were  not  audited. 
The  replies  will  therefore  necessarily  be  very 
a p p r o x i m a t e   a n d   e x t r a p o l a t i o n s   f r o m   t h e m 
unreliable. 

V.
First indent
T h e   C o m m i s s i o n   c o n s i d e r s   t h a t   t h e   I E E   p r o -
gramme  clearly  focuses  on  the  main  priority 
o b j e c t i v e s   o f   E U   e n e r g y   p o l i c y ,   n a m e l y   ( 1 ) 
managing  demand  (decoupling  consumption 
f r o m   g r o w t h ) ,   a n d   ( 2 )   i n c r e a s i n g   t h e   s h a r e 
o f   r e n e w a b l e   e n e r g y   i n   t h e   E U   f i n a l   e n e r g y 
consumption.

The work programme was designed to address 
the  policy  areas  defined  in  the  legislation.  It 
is up to the proposers to convincingly predict 
their expected results, and up to the Commis-
sion to decide on the basis of the fully costed 
project proposal if the proposed approach and 
expected results fit in a cost effective manner 
with the Community’s policy objectives.

Second indent
M o n i t o r i n g   o f   t h e   p r o g r a m m e   i s   d o n e   o n   a 
p r o j e c t   b a s i s ,   a l l o w i n g   t h e i r   i m p a c t s   t o   b e 
determined with regard to their objectives. 

Monitoring costs should remain proportionate 
and  not  add  significantly  to  the  costs  of  run-
ning the programme.

Third indent
T h e   C o m m i s s i o n   i n t e n d s   t o   i m p l e m e n t   t h e 
recommendation  regarding  the  evaluation  of 
programmes. A new study is being launched as 
a Tender under the 2008 IEE Work Programme, 
and  this  will  be  carried  out  on  a  longitudinal 
basis.

35

AUDIT FINDINGS

17.
The programme’s function is essentially a cata-
lytic one, where comparatively small amounts 
o f   f u n d i n g   a r e   p r o v i d e d   t o   t r i g g e r   m u c h 
l a r g e r   i n v e s t m e n t s   i n   t h e   f u t u r e .   T h e   s c o p e 
a n d   o b j e c t i v e s   o f   t h e   I E E   1   P r o g r a m m e   w e r e 
defined by the Parliament and the Council and 
structured on the basis of four specific fields. 
The decision on IEE 1 is referring to a number 
of specific communications relevant to each of 
the  four  programme  fields,  and  each  of  these 
documents  contains  a  list  of  important  areas 
of action. 3

T h e   C o m m i s s i o n   c o n s i d e r s   t h a t   t h e   I E E   p r o -
gramme  clearly  focuses  on  the  main  priority 
o b j e c t i v e s   o f   E U   e n e r g y   p o l i c y ,   n a m e l y   ( 1 ) 
managing  demand  (decoupling  consumption 
f r o m   g r o w t h ) ,   a n d   ( 2 )   i n c r e a s i n g   t h e   s h a r e 
o f   r e n e w a b l e   e n e r g y   i n   t h e   E U   f i n a l   e n e r g y 
consumption.

18.
First indent
The work programme was designed to address 
the policy areas defined in the legislation.

It is up to the proposers to convincingly predict 
their expected results, and up to the Commis-
sion to decide on the basis of the fully costed 
project proposal if the proposed approach and 
expected results fit in a cost effective manner 
with  the  Community’s  policy  objectives.  The 
selection  procedure  provides  assurance  that 
t h e   s u p p o r t e d   p r o j e c t s   w i l l   c o n t r i b u t e   m o s t 
effectively to the policy objectives.

3  For example, the White paper for a Community Strategy and Action 
Plan [COM(1997) 599 final of 26/11/1997] contains four activity areas 
and 22 specific actions for the field renewable energies alone; the Com-
munication from the Commission, entitled: “Action Plan to improve 
energy efficiency in the European Community” [COM(2000) 247 of 
26/04/2000] puts forward actions in all sectors and in 15 main areas. 
In 2006, this approach was confirmed by the European Parliament’s 
Opinion on the Green Paper on Energy Efficiency which sets forth over 
100 recommendations (European Parliament Report P6_A(2006)0160 
of 03.05.2006 and Commission’s communication of 19 October 2006 on 
an Action Plan for Energy Efficiency which defines six areas, ten priori-
ties and 75 cost-effective actions chosen on the basis of an impact 
assessment).

Fourth indent
W o r k i n g   d o c u m e n t s   t o   t h e   p r e l i m i n a r y   d r a f t 
b u d g e t   e a c h   y e a r   p r o v i d e   b r e a k d o w n s   o f 
a d m i n i s t r a t i v e   c o s t s   o f   t h e   D i r e c t o r a t e   G e n -
eral’s activities and of each executive agency 2. 
Since the 2008 procedure, this document also 
includes  at  the  request  of  the  European  Par-
l i a m e n t   t h e   p e r c e n t a g e   o f   t h e   p r o g r a m m e s ’ 
b u d g e t   u s e d   b y   t h e   e x e c u t i v e   a g e n c y   t o 
operate.

For  those  executive  agencies  using  the  Com-
m i s s i o n ’ s   I T   a c c o u n t i n g   s y s t e m ,   A B A C ,   t o 
s u p p o r t   t h e i r   o w n   a c c o u n t i n g   s y s t e m s ,   t h e 
Commission  will  offer  a  facility  for  allocating 
the agency’s expenditure to each of its activi-
ties.  They  will  then  be  in  a  better  position  to 
report on costs, including those for administra-
tion. It is planned to offer this facility to certain 
agencies  as  from  the  2009  financial  year,  and 
to subsequently extend it to others.

The  Commission  does  not  consider  that  costs 
b o r n e   b y   p a r t i c i p a n t s   c a n   b e   a s s i m i l a t e d   t o 
administrative costs of programmes. The extra 
burden  on  both  beneficiary  and  Commission 
of collecting and checking information on the 
costs to the beneficiary of preparing proposals 
is currently not justified.

2  Working documents II, III and IV to the Preliminary Draft Budget.

36

Second indent
S p e c i f i c   m e a s u r a b l e   a n d   t i m e - r e l a t e d   o b j e c -
t i v e s   f o r   t h e   U n i o n   a s   a   w h o l e   a r e   s e t   i n   t h e 
decisions  of  the  Council  and  the  Parliament, 
for example in the renewable energy directives 
and in the Communications of the Commission, 
for  example  in  the  White  Paper  on  Transport 
a n d   i n   t h e   A c t i o n   P l a n   o n   e n e r g y   e f f i c i e n c y . 
The objectives of each project must be related 
t o   t h e   r e l e v a n t   C o m m u n i t y   o b j e c t i v e s   o n   a 
case-by-case basis. 

Third indent
F o r   I E E   1 ,   t a r g e t   g r o u p s   w e r e   i n d i c a t e d   i n   a 
separate document. The IEE is a programme for 
professionals, and they are required to present 
their  own  analyses  of  the  market  actors  that 
their projects are designed to address. 

21.
R e g a r d i n g   t h e   m o n i t o r i n g   a n d   i n d i c a t o r s   t o 
m e a s u r e   t h e   s u c c e s s   o f   t h e   p r o g r a m m e   a s   a 
whole, IEE1 is a programme with a wide scope 
for addressing sustainable energy in all sectors 
o f   s o c i e t y   a s   d e f i n e d   i n   t h e   d e c i s i o n   o f   t h e 
Parliament and the Council. In this context, the 
C o m m i s s i o n   r e m a i n s   o f   t h e   o p i n i o n   t h a t   t h e 
monitoring scheme was appropriate.

P r o j e c t   m o n i t o r i n g   h a s   p r o v i d e d   v a l u a b l e 
i n p u t s   t o   t h e   C o m m i s s i o n   a n d   t o   t h e   E x e c u -
t i v e   A g e n c y   i n   r e l a t i o n   t o   f u t u r e   p r o j e c t 
requirements. 

22. 
The  programme  began  once  the  Council  and 
Parliament Decision came into force in August 
2003. Furthermore, regarding the implementa-
t i o n   s c h e d u l e ,   o n e   a n d   a   h a l f   y e a r s   e l a p s e d 
between the adoption of the legal basis (Coun-
cil and Parliament Decision in June 2003) and 
the signature of the first grant agreements in 
late 2004. This is considered as normal taking 
into account the lead time for adoption of the 
work programme, launching of call for propos-
als, selection and contracting.

All  commitments  were  made  during  the  pro-
gramme  period.  The  duration  of  the  payment 
s c h e d u l e   i s   l i n k e d   t o   t h e   d u r a t i o n   o f   t h e 
i n d i v i d u a l   p r o j e c t s ,   m o s t   o f   w h i c h   c o n t i n u e 
after 2006.

23. 
The  Commission  did  both  request  and  obtain 
information  on  the  removal  of  barriers  to  the 
up-take  of  energy  efficiency,  notably  in  rela-
t i o n   t o   i m p e r f e c t   i n f o r m a t i o n .   T h i s   w a s   s p e -
c i f i c a l l y   r e q u e s t e d   a n d   p r o v i d e d   a s   p a r t   o f 
e a c h   p r o p o s e r ’ s   a s s e s s m e n t   o f   t h e   “ s t a t e   o f 
t h e   a r t ”   i n   p r o j e c t   p r o p o s a l s .   L a t e r ,   d u r i n g 
a n d   i n   t h e   r e p o r t s   f r o m   s u p p o r t e d   p r o j e c t s , 
updated information on such barriers and the 
extent to which they were removed, were both 
requested and provided. The Commission does 
a l s o   c o l l e c t   f e e d b a c k   o n   i n f o r m a t i o n   n e e d s , 
for example, in the public consultation on the 
Green Paper on Energy Efficiency which closed 
on 31/03/2006.

37

R e g u l a r   f e e d b a c k   t o   t h e   C o m m i s s i o n   o n   t h e 
activities of the agencies is collected via Mana-
genergy and its Reflection Group (MERG), which 
meets 2-3 times per year to discuss the needs, 
priorities and activities of local actors, notably 
t h e   e n e r g y   a g e n c i e s .   T h e   M a n a g e n e r g y   c o n -
sortium is keeping the agencies section of the 
Managenergy web site and the related agencies 
booklet  up  to  date  by  checking  on  an  annual 
basis that the agencies are still active. 

29. 
The Commission supports the energy agencies 
only in the start-up phase. The fact that most of 
the new agencies, which have been established 
w i t h   C o m m u n i t y   s u p p o r t ,   a r e   s t i l l   o p e r a t i n g 
d e m o n s t r a t e s   b o t h   a   d e m a n d   a n d   s u f f i c i e n t 
public use across Europe to justify the invest-
ment of public funds. 

31. 
The Commission has information on the costs 
incurred  by  the  Commission  and  the  Agency 
in programme management and does not nor-
m a l l y   i n c l u d e   c o s t s   i n c u r r e d   b y   t h e   p a r t i c i -
pants for preparing proposals as administrative 
costs.

24. 
C o n c e r n i n g   t h e   t i m i n g   o f   p r o g r a m m e   e v a l u -
a t i o n s ,   t h e   I E E   i s   a   r o l l i n g   p r o g r a m m e ,   w i t h 
e x p e r i e n c e   f r o m   t h e   p a s t   p r o g r a m m e s   f e e d -
ing into subsequent ones. As such, evaluation 
results  are  used  systematically  in  the  design 
a n d   d r a f t i n g   o f   t h e   l e g i s l a t i v e   p r o p o s a l s   f o r 
subsequent programmes.

25. 
An independent study of local energy agencies 
will  be  carried  out  under  a  tender  funded  by 
the IEE 2008 work programme. 

27. 
T h e   c r e a t i o n   o f   a g e n c i e s   d e p e n d s   m a i n l y   o n 
t h e   a v a i l a b i l i t y   o f   l o c a l   a n d   r e g i o n a l   s t r u c -
tures for co-financing and their committing to 
their  agency  in  the  long-run.  Acknowledging 
this  diversity,  the  Commission  encouraged  in 
particular  new  MS  to  take  up  the  concept  of 
energy  agencies  (e.g.  call  2004  gave  priority 
t o   t h e   c r e a t i o n   o f   a g e n c i e s   i n   n e w   M S ) .   T h i s 
helped to build momentum and influence the 
d e c i s i o n   m a k i n g   p r o c e s s   a t   l o c a l   l e v e l .   A s   a 
result, after a slow start, 16 new energy agen-
cies were established in the new Member States 
from 2005 to 2007. 

28. 
T h e   E C U B A   s t u d y ,   w h i c h   w a s   p e r f o r m e d   b y 
experts  closely  involved  with  the  work  of  the 
a g e n c i e s   ( b u t   i n d e p e n d e n t   o f   t h e   E u r o p e a n 
Commission), provided useful insights into the 
challenges associated with the management on 
energy agencies at local and regional level. A 
new study is being launched as a Tender under 
the 2008 IEE Work Programme, and this will be 
carried out by a consortium which has not been 
associated with local energy agencies before. 

38

32. 
T h e   p r e s e n t   l e g a l   b a s e   d o e s   n o t   d e f i n e 
“ c o s t s ”   i n c u r r e d   b y   a l l   a p p l i c a n t s ’   w h i l e   f i l l -
i n g   i n   t h e i r   p r o j e c t   p r o p o s a l s   a s   e l i g i b l e   f o r 
reimbursement. 

I n   t h e   C o m m i s s i o n ’ s   v i e w   s u c h   c o s t s   a r e 
incurred  for  a  necessary  step  of  the  project’s 
operations and cannot be defined as adminis-
trative  nor  can  reporting  costs  be  considered 
as purely administrative. It is the price partici-
pants  have  to  pay  in  any  kind  of  competitive 
p r o c e d u r e   ( A c c o r d i n g   t o   t h e   C o u r t ’ s   s u r v e y , 
almost  60 %  of  the  respondents  judged  these 
costs as “fair”). 

 –

 –

P r e p a r i n g   a   p r o p o s a l   i s   a n   i n v e s t m e n t   i n 
planning a sound and competitive project, 
and reporting is both a contractual and an 
operational obligation which provides the 
b a s i s   f o r   t h e   E x e c u t i v e   a g e n c y   a n d   C o m -
mission to disseminate the projects results 
to  stakeholders.  Such  publications  gener-
ate positive spill over effects and increase 
interest  in  the  programme,  thus  maximis-
ing  the  value  of  Community  funding,  and 
give credibility to the project owner.

T h e   c o s t s   e s t i m a t e s   o f   t h e   r e s p o n d e n t s ’ 
a r e ,   b y   n a t u r e ,   d i f f i c u l t   t o   q u a n t i f y   i n   a 
systematic manner. The Commission notes 
that the Court’s survey did not define in its 
q u e s t i o n n a i r e   t h e   n a t u r e   o f   t h e   c o s t s   t o 
be taken into account, nor a methodology 
f o r   e v a l u a t i n g   t h e m .   S u r v e y   p a r t i c i p a n t s 
were not asked to provide accounting data, 
a n d   t h e i r   r e p l i e s   w e r e   n o t   a u d i t e d .   T h e 
r e p l i e s   o f   t h e   2 9  %   o f   t h o s e   a p p r o a c h e d 
who  participated  in  the  survey  will  there-
fore necessarily be a subjective perception 
by  respondents  and  diverging  in  terms  of 
c o n t e n t   a n d   e x t r a p o l a t i o n s   f r o m   t h e m 
unreliable.

33.
S o m e   s t a k e h o l d e r s   c o m m e n t e d   t h a t   t h e 
a p p l i c a t i o n   p r o c e s s   h a d   b e c o m e   e a s i e r   a n d 
that  there  was  improved  clarity  surrounding 
t h e   p r o c e d u r e   a n d   t h e   e v a l u a t i o n   c r i t e r i a . 
T h e   C o m m i s s i o n   u n d e r s t a n d s   t h e r e f o r e   t h a t 
t h e   r e s p o n d e n t s   t o   t h e   e x t e r n a l   e v a l u a t i o n 
a s s e s s e d   p o s i t i v e l y   t h e   a p p l i c a t i o n   p r o c e s s , 
w h i c h   i s   r e l a t e d   w i t h   t h e   c o s t s   o f   p r e p a r i n g 
proposals  mentioned  by  the  Court.  The  “con-
tract negotiation process” that the Court men-
tions is not part of the proposal phase but very 
d i s t i n c t   f r o m   i t .   I t   a p p l i e s   o n l y   t o   p r o p o s a l s 
selected for funding and is designed to prepare 
the  grant  agreement  between  the  beneficiar-
i e s ’   c o n s o r t i u m   a n d   t h e   C o m m i s s i o n .   T h e r e -
fore, resources used for “contract negotiation” 
should be considered separately from the costs 
of writing a proposal.

37-38.
The Court adds costs incurred by the Commis-
sion  and  the  Executive  Agency  together  with 
“costs”  estimated  by  beneficiaries.  These  last 
costs are of a very different nature and there-
fore should be considered separately. Prepar-
ing  a  proposal  is  an  investment  in  planning  a 
sound and competitive project. Project report-
i n g   i s   a   c o - f i n a n c e d   c o n t r a c t u a l   o b l i g a t i o n 
which provides the basis for disseminating the 
results  to  stakeholders.  Programme  manage-
ment is carried out only by the Commission and 
Executive Agency. In the IEE case, programme 
m a n a g e m e n t   c o s t s   a l s o   i n c l u d e   i n v e s t m e n t 
in  the  establishment  of  an  Executive  Agency 
which  will  bring  benefits  and  cost-savings  in 
the future.

39

CONCLUSIONS 
AND RECOMMENDATIONS

44.
The  Commission  considers  that  the  planning 
o f   t h e   p r o g r a m m e   r e p r e s e n t s   a n   a c c e p t a b l y 
high  standard  given  the  inherent  constraints 
of a policy instrument of this nature. The work 
programme was designed to address the policy 
areas defined in the legislation.

See reply to paragraph 18.

45.
The programme’s function is essentially a cata-
lytic one, where comparatively small amounts 
o f   f u n d i n g   a r e   p r o v i d e d   t o   t r i g g e r   m u c h 
l a r g e r   i n v e s t m e n t s   i n   t h e   f u t u r e .   T h e   s c o p e 
a n d   o b j e c t i v e s   o f   t h e   I E E 1   P r o g r a m m e   w e r e 
defined by the Parliament and the Council and 
structured on the basis of four specific fields. 
The decision on IEE 1 is referring to a number 
of specific communications relevant to each of 
the  four  programme  fields,  and  each  of  these 
documents  contains  a  list  of  important  areas 
of action 4. 

As for the participants’ estimated costs of pre-
p a r i n g   p r o p o s a l s ,   a n d   r e p o r t i n g   o n   p r o j e c t s 
(22  million  euro  on  the  basis  of  a  survey  con-
ducted by the Court), and as replied to in par-
a g r a p h   3 2 ,   t h e   C o m m i s s i o n   n o t e s   t h a t   t h e s e 
a r e   o f   a   d i f f e r e n t   n a t u r e   a n d   i n c u r r e d   f o r   a 
necessary step of the project’s operations. Fur-
thermore, the Court’s survey did not define in 
its questionnaire the nature of the mentioned 
costs to be taken into account, nor a methodol-
ogy  for  evaluating  them.  Survey  participants 
w e r e   n o t   a s k e d   t o   p r o v i d e   a c c o u n t i n g   d a t a , 
and their replies were not audited. The replies 
from the 29 % of those approached who replied 
will therefore necessarily be very approximate 
and extrapolations from them unreliable. 

T h e   C o m m i s s i o n   d o e s   n o t   c o n s i d e r   t h a t   t h e 
costs  estimates  relating  to  preparing  propos-
a l s   a n d   r e p o r t i n g   b o r n e   b y   t h e   p a r t i c i p a n t s 
can be assimilated, added or compared to the 
administration costs incurred by the Commis-
sion and the Agency to manage the programme 
a s   t h e y   a r e   o f   d i f f e r e n t   n a t u r e .   W i t h   r e g a r d 
to  the  pay-out  of  the  programme  grants,  the 
Court correctly states in paragraph 38 that in a 
programme such as IEE the costs of preparing 
proposals  are  front-end  loaded.  At  the  same 
time,  the  pay-out  to  beneficiaries  is  typically 
back-end loaded.

4  For example, the White paper for a Community Strategy and Action 
Plan [COM(1997) 599 final of 26/11/1997] contains four activity areas 
and 22 specific actions for the field renewable energies alone; the Com-
munication from the Commission, entitled: “Action Plan to improve 
energy efficiency in the European Community” [COM(2000) 247 of 
26/04/2000] puts forward actions in all sectors and in 15 main areas. 
In 2006, this approach was confirmed by the European Parliament’s 
Opinion on the Green Paper on Energy Efficiency which sets forth over 
100 recommendations (European Parliament Report P6_A(2006)0160 
of 03.05.2006 and Commission’s communication of 19 October 2006 on 
an Action Plan for Energy Efficiency which defines six areas, ten priori-
ties and 75 cost-effective actions chosen on the basis of an impact 
assessment).

40

RECOMMENDATION 1 – PLANNING

See replies to paragraphs 17 & 18.

The  Commission  is  already  implementing  the 
C o u r t ’ s   r e c o m m e n d a t i o n   o n   p l a n n i n g .   T h e 
Commission has established an explicit policy 
model for IEE which reflects the expected link 
between  expenditure,  output  and  impact  on 
the level of each intervention area and this is 
monitored  concretely  on  a  project  by  project 
basis. 

46.
I E E 1   i s   a   p r o g r a m m e   w i t h   a   w i d e   s c o p e   f o r 
a d d r e s s i n g   s u s t a i n a b l e   e n e r g y   i n   a l l   s e c t o r s 
o f   s o c i e t y   a s   d e f i n e d   i n   t h e   d e c i s i o n   o f   t h e 
Parliament and the Council. In this context, the 
C o m m i s s i o n   r e m a i n s   o f   t h e   o p i n i o n   t h a t   t h e 
monitoring scheme was appropriate.

P r o j e c t   m o n i t o r i n g   h a s   p r o v i d e d   v a l u a b l e 
i n p u t s   t o   t h e   C o m m i s s i o n   a n d   t o   t h e   E x e c u -
t i v e   A g e n c y   i n   r e l a t i o n   t o   f u t u r e   p r o j e c t 
requirements.

T h e   I E E   i s   a   r o l l i n g   p r o g r a m m e ,   w i t h   e x p e r i -
ence  from  the  past  programmes  feeding  into 
subsequent  ones.  As  such,  evaluation  results 
are used systematically in the design and draft-
ing of the legislative proposals for subsequent 
programmes. 

47. 
M o n i t o r i n g   o f   t h e   p r o g r a m m e   i s   d o n e   o n   a 
project basis, allowing the impacts of the pro-
gramme  to  be  determined  with  regard  to  its 
o b j e c t i v e s .   I t   i s   h a r d l y   f e a s i b l e   t o   i n t r o d u c e 
monitoring at a higher aggregated level given 
the  difficulty  to  isolate  causal  links  between 
the programme results as catalyst and macro-
e c o n o m i c   t r e n d s   s u c h   a s   t h e   E U ’ s   e n e r g y 
dependency.  The  Commission  considers  that 
this  does  not  compromise  the  overall  quality 
and design of the IEE programme.

See also reply to paragraph 23.

48. 
Feedback from public authorities across the EU, 
as witnessed by the recent growth in demand 
f o r   s u c h   a g e n c i e s   f r o m   p u b l i c   a u t h o r i t i e s , 
confirms  that  they  believe  a  local  or  regional 
a g e n c y   m a k e s   a   s i g n i f i c a n t   i m p a c t .   T h e   f a c t 
that  each  public  authority  must  not  only  co-
finance during the first 3 years of IEE support 
but  must  also  ensure  the  continuation  of  the 
agency for a further 5 years afterwards confirms 
that local authorities are convinced about the 
value of having such an agency. See also reply 
to paragraph 28.

49. 
Change in behavior can only be estimated over 
the long term, using consolidated data such as 
those provided by EUROSTAT. Nevertheless the 
programme  has  had  a  positive  impact  on  the 
development of EU policy.

41

52. 
The Court adds costs incurred by the Commis-
sion  and  the  Executive  Agency  together  with 
“costs” estimated by beneficiaries. These costs 
a r e   o f   a   v e r y   d i f f e r e n t   n a t u r e   a n d   t h e r e f o r e 
should  be  considered  separately.  Preparing  a 
proposal is an investment in planning a sound 
and competitive project. Project reporting is a 
co-financed contractual obligation which pro-
vides the basis for disseminating the results to 
stakeholders.  Programme  management  costs 
are incurred only by the Commission and Exec-
utive  Agency  and,  for  the  period  in  question, 
i n c l u d e   i n v e s t m e n t s   i n   t h e   e s t a b l i s h m e n t   o f 
an Executive Agency which will bring benefits 
and cost-savings in the future.

50. 
Concerning the use of evaluation in the design 
of successor programmes, existing evaluation 
findings  (mid-term/final  evaluation  of  an  on-
g o i n g   p r o g r a m m e   a n d   e x   p o s t   e v a l u a t i o n   o f 
t h e   p r e v i o u s   p r o g r a m m e )   a r e   a   k e y   i n p u t   t o 
the  ex  ante  evaluation/Impact  Assessment  of 
the successor programme. 

I E E   i s   a   r o l l i n g   p r o g r a m m e   w i t h   e x p e r i e n c e 
from  the  past  programmes  feeding  into  sub-
sequent  ones.  As  such,  evaluation  results  are 
u s e d   s y s t e m a t i c a l l y   i n   t h e   d e s i g n   a n d   d r a f t -
ing of the legislative proposals for subsequent 
programmes. 

51. 
Regarding performance indicators, delegation 
of programme management to a full-time team 
o f   d e d i c a t e d   p r o f e s s i o n a l s   i n   a n   e x e c u t i v e 
agency  results  in  a  more  efficient  process  of 
continuous feedback, which permits the direc-
tion of the programme and its priorities to be 
adjusted  /  refocused  annually  in  response  to 
changes in the market as well as to the evolu-
tion of EU policy.

RECOMMENDATION 2 – MONITORING

M o n i t o r i n g   o f   t h e   p r o g r a m m e   i s   d o n e   o n   a 
p r o j e c t   b a s i s ,   a l l o w i n g   t h e i r   i m p a c t s   t o   b e 
determined with regard to their objectives. 

Monitoring costs should remain proportionate 
and  not  add  significantly  to  the  costs  of  run-
ning the programme.

RECOMMENDATION 3 – EVALUATION

T h e   C o m m i s s i o n   i n t e n d s   t o   i m p l e m e n t   t h e 
recommendation  regarding  the  evaluation  of 
programmes. A new study is being launched as 
a Tender under the 2008 IEE Work Programme, 
and  this  will  be  carried  out  on  a  longitudinal 
basis. 

42

RECOMMENDATION 4 – 
MANAGING COSTS

The Agencies using Commission’s IT accounting 
system will be offered a facility for allocating 
the agency’s expenditure to each of its activi-
ties. The extra control burden on both benefici-
ary and Commission of collecting information 
o n   t h e   c o s t s   t o   t h e   b e n e f i c i a r y   o f   p r e p a r i n g 
proposals  is  not  currently  justified.  The  Com-
mission  maintains  records  and  analysis  of  its 
programme management costs.

The Court’s survey did not define the nature of 
the costs to be taken into account, nor a method 
for determining them. Survey participants were 
not asked to provide accounting data, and the 
replies were not audited. The replies are there-
fore necessarily very approximate. 

W i t h   r e g a r d   t o   t h e   d i s b u r s e m e n t   o f   t h e   p r o -
gramme  grants,  the  Court  correctly  states  in 
paragraph 38 that in a programme such as IEE 
the costs of preparing proposals are front-end 
loaded. In contrast, the pay-out to beneficiar-
ies is largely back-end loaded.

53. 
W o r k i n g   d o c u m e n t s   t o   t h e   p r e l i m i n a r y   d r a f t 
b u d g e t   e a c h   y e a r   p r o v i d e   b r e a k d o w n s   o f 
a d m i n i s t r a t i v e   c o s t s   o f   t h e   D i r e c t o r a t e   G e n -
eral’s activities and of each executive agency 5. 
Since the 2008 procedure, this document also 
includes  at  the  request  of  the  European  Par-
l i a m e n t   t h e   p e r c e n t a g e   o f   t h e   p r o g r a m m e s ’ 
b u d g e t   u s e d   b y   t h e   e x e c u t i v e   a g e n c y   t o 
operate.

For  those  agencies  using  the  Commission’s  IT 
accounting system, ABAC, to support their own 
accounting systems, the Commission will offer 
a  facility  for  allocating  the  agency’s  expendi-
ture to each of its activities. They will then be 
in a better position to report on costs, includ-
ing  those  for  administration.  It  is  planned  to 
offer  this  facility  to  certain  agencies  as  from 
the  2009  financial  year,  and  to  subsequently 
extend it to others.

5  Working documents II, III and IV to the Preliminary Draft Budget.

43

ANNEX 1 

Extract of the: Mid Term Evaluation of the Multi-annual Programme for Action in the Field 
of Energy “Intelligent Energy for Europe, 2003-2006”,
ECOTEC Research & Consulting Limited, UK

Programme Added Value (page 58)

I n   t h e   v i e w   o f   t h e   e v a l u a t o r s   a n   i m p o r t a n t 
aspect of added value that the IEE programme 
brings  is  the  strength  of  the  synergy  between 
the fields. This can have the effect of bringing 
together actors in renewables, energy efficiency 
and transport. Evaluations of predecessor pro-
grammes  and  our  consultations  have  pointed 
out that the projects funded have inspired mem-

ber state policy changes and interventions. It is 
too early to say that this will occur as a result of 
the projects being currently funded. However, 
in  the  view  of  the  evaluators  as  the  projects 
are  of  the  same  nature  as  in  the  predecessor 
programmes it is reasonable to assume that this 
will occur. This aspect should be covered in the 
ex-post evaluation of the IEE programme.

European Court of Auditors

Special Report No 7/2008

Intelligent Energy 2003-2006

Luxembourg: Office for Official Publications of the European Communities

2008 — 43 pp. — 21 × 29.7 cm

ISBN 978-92-9207-050-2

DOI 10.2865/12922

How to obtain EU publications

Our priced publications are available from EU Bookshop (http://bookshop.europa.eu), 
where you can place an order with the sales agent of your choice.

The Publications Oﬃ  ce has a worldwide network of sales agents. You can obtain their 
contact details by sending a fax to (352) 29 29-42758.

Q
J
-
A
B
-
0
8
-
0
0
3
-
E
N

-
C

SPECIAL  REPOR T “INTELLIGENT  ENERGY  20032006” 

EXAMINES, IN TURN, THE USE MADE OF EU FUNDS, THE 

SUCCESSES  AND  LIMITATION  OF  MONITORING  AND 

EVALUATION, AND THE OVERHEAD COSTS FOR BOTH THE 

COMMISSION AND FOR PARTICIPANTS OF AN EU SCHEME 

AIMED AT PROMOTING ENERGY EFFICIENCY AND THE USE 

OF RENEWABLE ENERGY. THE REPORT MAKES A SERIES OF 

RECOMMENDATIONS AIMED AT IMPROVING THE DESIGN 

OF SIMILAR PROGRAMMES IN THE FUTURE, MAXIMISING 

THE  VALUE  OF  MONITORING  AND  EVALUATION,  AND 

CONTAINING OVERHEAD COSTS.

EUROPEAN COURT OF AUDITORS

ISBN 978-92-9207-050-2