The IPTS report. No. 31, February/1999.
Date: 2009-05-06
Institutions: Institute for Prospective Technological Studies, Joint Research Centre
Subjects: EU research policy, innovation, new technology, research and development, technological change

The ÌHE 

EDITED BY THE INSTITUTE FOR PROSPECTIVE T E C H N O L O G I C AL STUDIES (IPTS) 

A ND ISSUED IN C O O P E R A T I ON W I TH THE E U R O P E AN S&T O B S E R V A T O RY N E T W O RK 

February/99 

5 ECU 

REPORT 

6 ι-, Biotechnology for Environmentally 

ν Safe Agriculture 

'I /| Building Experience: Energy Efficient 
±~1 Buildings 

r\ ι \ Strategic Niche Management: a tool 
^j \J for the market introduction of new 

transport concepts and technologies 

/U Lower Oil Prices: Long-Term Concerns 

Cooperation between Southern-Eastern 
~~\ Π Mediterranean countries and the EU: 
% 

The renewable energy sector 

EUROPEAN COMMISSION 

Joint Research Centre 

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r he  IPTS  Report  was  launched  in  December  1995,  on  the  request  and  under  the  auspices of 

Commissioner Cresson. What seemed like a daunting  challenge in late 1995  how appears in  retrospect 

as a crucial galvaniser of the IPTS' energies and skills. 

The Report has published  articles in  numerous  areas,  maintaining  a  rough  balance  between  ¡hem. and 

exploiting interdisciplinari!}' asfar  as possible.  Articles are deemed prospectively relevant if they attempt to 

explore  issues  not  yet  on  the  policymakers  agenda  (but  projected  to  be  there  sooner  or  later), or 

underappreciated aspects of issues already on  the policymaker's  agenda.  Tlje long drafting  and redrafting 

process, based on a series of interactive consultations with outside experts,  guarantees quality control. 

The clearest indication  of the report's success is that it is being read. An  initial print  run of2000 for  the fust 

issue (00)  in  December 1995 looked optimistic at  the time, but  issue 00 has since  turned  into a  collectors 

item.  Total readership rose to around  10,000 in  1997, with readers continuing  to be drawn from  a  variety 

'  of backgrounds and  regions world-wide, and  in  1998 a shift in emphasis towards the electronic version mi 

the  Web has  begun. 

The laurels the publication  is reaping are  rendering it attractive for  authors from  outside the Commission. 

We have already published contributions by authors from  such renowned  institutions as the Dutch  TNO, the 

German  VDI,  the Italian ENEA and  the  US Council of Strategic and  International  Studies. 

Moreover,  the IPTS formally  collaborates on  the production  of  the  IPTS Report  with  a group  of prestigious 

European  institutions,  with  whom  the IPTS has formed  the European Science and  Technology  Observatory 

(ESTO),  an  important part  of the remit of the IPTS.  The IPTS Report is the most visible manifestation of this 

collaboration. 

The Report is produced  simultaneously  in four  languages  (English. French, German  and  Spanish)  by the 

IPTS;  to these one could  add  the Italian  translation  volunteered  by ENEA: yet  another sign  of the Report's 

increasing visibility.  The fact  that it is not only available in several languages, but also largely prepared and 

produced  on the Internet  World Wide Web.  makes it (¡itile an  uncommon  undertaking. 

We shall  continue  to  endeavour  to find  the  best  way  of fulfilling  the  expectations  of  our  quite diverse 

readership, avoiding oversimplification,  as well as encyclopaedic reviews and  the inaccessibility of academic 

journals.  The key is to remind ourselves,  as well as the readers,  that we cannot  be all things to all people,  that 

it  is  important  to  carve  out  our  niche  and  continue  optimally  exploring  and  exploiting  it.  hoping  to 

illuminate  topics under  a  new,  revealing light for  the benefit of  the  readers, in  order to prepare  them for 

managing  the challenges ahead. 

'IPTS-JRC  -Seville,  1999 

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P re  ƒ 

a ce 

Wo  m  e η 

ι  η  S  c  ι e  η  c  e 

omen 'd presence  in  most  of  the  economic,  socuxl  and  politicai 

spheres  of  today's  world  had  considerably 

increased  over  the 

yeard.  However,  women  are  dtill  underrepredented 

in 

the 

scientific 

research  and  technological  development  areas. 

The  reasons  for 

the  generally 

low  percentage  of  women  active 

in 

European  research  are  many  and  complex,  even  if  the  lack  of  statistical 

information  makes  precise  comparisons  difficult.  Women  scientistd, 

like 

all  women,  are faced  with  the  dilemma  of reconciling  working  and  private 

life,  career  and  family.  Professional  discrimination  between  male  and 

femaL·  dcientistd  manifests 

itself  in  vårhus  ways,  for  instance,  women 

rarely 

rise 

to  positions 

of  seniority, 

even 

in 

those  areas  where 

women  graduates  outnumber 

their  maL·  colUagues.  The 

unfortunate 

consequence  is  that  women  are  more  likely  to  leave  the  scientific  career 

for  other  professional  openings. 

The  European  Union  has  always  considered  equal  opportunity 

to  be one 

of  the  fundamental 

principles  of  European  democracy  and  a  major 

consideration 

in  all  its  policy-making. 

The  European  Commission 

is 

engaged  in  increasing 

the  involvement  of  women  scientistd 

in  ReJD 

activities 

conducted 

throughout 

the  EU.  This 

is  partly 

because 

they  are  under-represented,  but  abo  because 

they  bring  a  specific 

approach  and 

sensitivity. 

'IPTS-JRC  -Seville,  1999 

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The  5th  Framework  Programme 

is  the  occasion for  the  Commission 

to 

be positively  committed  towards  better  access for  women  to  the  European 

research  effort.  In  thui  context,  the  EC  has  prepared  a  Communication 

on  "Women  and  Science:  mobilLtbig  women  to  make  European  research 

ræber"  with 

the  objective  of  creating  opportunities 

for  a  greater 

participation  of  women  in  scientific  research.  This  is  our  real  chance  to 

give  a  new face  to research  in  the  next  millennium. 

©IPTS-JRC-  Seville,  1999 

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T HE 

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N 

N 

F E B R U A RY 

19  9  9 

EDITED BY THE INSTITUTE FOR PROSPECTIVE 
TECHNOLOGICAL STUDIES (IPTS) 
And issued in Cooperation with 
the European S&T Observatory Network 

PUBLISHED BY THE EUROPEAN COMMISSION 

Joint Research Centre 
ISSN: 1025-9384 
Catalogue Number  GK-AA-99-001-EN-C 
DEPOT LEGAL: SE-1937-95 

DIRECTOR 
Jean-Marie Cadiou 

EXECUTIVE EDITOR 
Dlmitris Kyhakou 

EDITORIAL BOARD 
G. Farrenkrog, P. Fleissner  J. Cavigan, 
M. González, H. Hernández. D. Kyriakou, I. Maghiros 
(Production Managen, P. Sørup, A. Soria, C. Tahir. 

PRODUCTION 

CINDOC-CSIC/CL SERVICIOS UNGÜISTICOS 

Editorial 

Life Sciences 

Biotechnology  f or  Environmentally  Safe  Agriculture 

Whilst  there  is mounting  evidence  about  the dangers  of  indiscriminate  use of  pesticides 

indiscriminate  application of the precautionary  principle  is creating obstacles for one of the 

main alternatives: biotechnology. 

Energy 

ία 

Building  Experience:  Energy  Efficient  Buildings 

Attempts  to  meet  international  agreements  on  C02-emission  reduction  targets  have 
concentrated on heavy industry and transport, neglecting buildings even though they account 

for around 50% of emissions. An effort to improve up-take of energy consumption  reduction 

measures in both  new and existing buildings  could  make a major  contribution to achieving 

emission goals. 

PRINT 

Graesal 

Transport 

TRANSLATION 
CINDOC-CSIC/CL SERVICIOS UNGÜISTICOS 

20  Strategic  Niche  Management:  a tool  for  the  market  introduction 

of  new  transport  concepts  and  technologies 

Strategic Niche Management facilitates the market introduction of new transport technologies 

and concepts by combining technical  improvements  with  taking user  requirements  and the 

socio-economic  context  into account 

Energy 

29 

Lower  Oil  Prices:  Long-Term  concerns 

Although  OPEC  is notorious  for  its internal  disagreements,  the threat  to the oil  market 

posed  by carbon  emission  agreements  and investment  in  alternative  energies  may have 

galvanized  it  into  long-term  strategic  thinking.  A downturn  in oil  prices  may hurt  large 

producers in the short term, but if they drive  higher cost producers out of the market  they 

can expect  long term gains. 

Regional  Development 

36  Cooperation  between  southern-Eastern  Mediterranean  countries 

and  the  EU: The  renewable  energy  sector 

The combination of appropriate climatic conditions and the need to extend electricity  supply 

in  order  to  support  economic  growth  make  renewable  energy  an  ideal  technology  for 

countries  on the south and east of the  Mediterranean.  Nevertheless, a number of obstacles 

have to date limited their  uptake and continued support  is  needed. 

COPYRIGHT 
The views expressed in this publication do not 
necessarily reflect those of the European Commission 
O  ECSC-EEC-EAEC Brussels-Luxembourg, 1997 
Reproduction  is authorised, except for commercial 
purposes, provided the source is acknowledged. 
The EC may not be held responsible for the use 
made of the information. 

THE  IPTS  REPORT 

is published in the first week of every month, except 
for the months of January and August. It is edited in 
English and is currently available at a price of 50 ECU 
per year, in four  languages: English, French. German 
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IPTS-JRC  -Seville,  1999 

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E D I T O R I AL 

D l m l t r ls  K y r i a k ou 

alluded 

In  last  July's  and  October's  editorials  we 

consequences  of actions  taken  by  economic 

to  different  ways  of  addressing 

agents  which  do  not  accrue 

to  the  agents 

'externalities' 

referring 

term 

to 

a 

- 

themselves,  but  to  others,  or  often,  to  society 

as a whole. 

transaction  costs. We  also  indicated  that  the  key 

issue  then  becomes  the  allocation  of  property 

rights, suggesting that  it  is not easy to  disentangle 

the  invisible  hand of the  market  from  the  hidden 

fist  of the state. 

We  also  presented  a  case  in  which  each 

economic  agent  has  its  own  preferred  level  of 

We  suggested 

that  one  solution,  often 

acceptable  pollution,  agents  are  mobile  across 

associated  with  the  British  economist  Pigou,  to 

jurisdictions,  and  there  are  pollution  spillover 

this  discrepancy  between  private  and  social 

effects -  all  quite  realistic  assumptions.  If in each 

preferences, 

is  to 

impose 

taxes/subsidies 

to 

jurisdiction,  the  enfranchised  group  decides  on 

bring  individual  preferences  in  line  with  social 

the  target  level  of  acceptable  pollution  -  and 

ones.  A  less  obvious  one,  dating  from  the  early 

concomitant  compensation 

- 

through  some 

sixties,  dubbed 

the  Coase  theorem  after 

its 

majority  rule  mechanism,  then  mobile  minorities 

inventor,  was 

largely  responsible  for  getting 

may  opt  to  move  into  jurisdictions  inhabited  by 

Ronald Coase the Nobel  award  in  Economics,  in 

agents  with  pollution  preferences  similar  to  their 

the early  nineties. The Coase theorem  states that 

own,  allowing  'pollution-lovers'  to  become  the 

for  two  economic  agents  A,  Β when  A's  actions 

majority  in  some  of  those  jurisdictions.  Through 

generate  a  negative  externality 

for  B,  and 

cross-jurisdictional  spillovers,  those  pollution 

transaction  costs  are  zero  for  both  parties,  it  is 

lovers  force  environmental  degradation  on  the 

optimal  in  terms  of  social  welfare  to  allow  the 

other  jurisdictions  as  well. 

two  agents to  negotiate  a payment to  resolve the 

issue - either  through  A's compensating  Β for  the 

We  suggested 

that  one  solution  would 

damage  A's  activity  inflicts  upon  B,  or  through 

call  for  the  inclusion  of  all  injured  parties  in 

B's  compensating  A  for  the  benefits  A  will 

the  decision-making  process,  enlarging 

the 

forego  by  discontinuing  the  activity. 

jurisdiction  and  enfranchising  all  those  affected 

by  pollution.  Enlarging  the  jurisdiction  and 

We  also  indicated  that  in  the  case of  positive 

enfranchising  all  those  affected  by  pollution, 

transaction  costs, 

the 

theorem  states 

that 

necessitates  their  being  represented  by 

their 

optimality  would  dictate  the  allocation  of  the 

government, which, if the jurisdiction  has grown 

property 

right 

to 

the  side  with 

the  higher 

sufficiently  in size through  the  inclusion process, 

IPTS -JRC -Seville, 1999 

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brings  us  back  to  the  Pigouvian  tax,  in  the  form 

causing  cross-border  pollution.  This  picture 

of  compensation  paid  by  polluter 

to 

injured 

is  reversed  if  'pollution-lovers'  happen  to  be  in 

party,  with  the  government  being  one  of  the 

the  majority  everywhere:  in  that  case  there  can 

parties  in  the transaction. 

be  no  safe-haven  created 

through  migration 

Government  cannot  be avoided  on  this  issue; 

for  'pollution-haters'. 

if  it  is  pushed  out  the  door,  it  comes  back  in 

The  perfect  immobility  assumption  in  effect 

through  the  window.  As the  desirable  size  of  the 

reduces the jurisdictions  to  monolithic  behaviour, 

jurisdiction  expands,  government  can  reappear 

and the analysis back to the original Coasian one. 

as  the  representative  of  the  population  of  the 

jurisdiction, and by revealing its Pigouvian  mantle 

Note  that  this  schematic  account  downplays 

underneath  the Coasian  one show  that  those  two 

interesting  questions  about  strategic  interactions 

can be viewed  as two  sides of the same coin. 

in  case there  is  mobility  (which  could  be  nicely 

Attentive  readers  have asked  how  the  analysis 

trembling-hand-perfect  equilibrium),  as  well  as 

may  change  if  we  relax  the  assumption  of  cross-

optimal  clustering  of 

islands  of 

'pollution-

jurisdictional  mobility. 

haters'  in  case  there  are  varying  degrees  of 

treated  in  a game  theoretic  model  -  e.g. using a 

'pollution-aversion'. 

Let us begin by assuming total  lack of  mobility 

across jurisdictions. In such a case in jurisdictions 

Finally, 

if  we  make 

the  more 

realistic 

in  which  'pollution-lovers'  are  in  the  majority 

assumption  that  there  is  mobility,  only  it  bears 

polluting  activities  will  be  concentrated.  Note 

high  (but  finite)  costs,  then  migration  will  be 

that  given 

the  existence  of  spillovers 

their 

observed  when 

the  damage 

inflicted  on  an 

neighbours  who  may  be  'pollution-haters'  in  the 

agent  due  to  pollution  rises  beyond  the  fixed 

majority  will  still  suffer 

from  cross-border 

costs of  migration. 

pollution.  If  'pollution-haters'  are  in  the  majority 

in all jurisdictions, pollution  will  not  be tolerated 

In 

this 

'costly-but-possible'  version  of 

anywhere,  and  the  absence  of  mobility  will 

mobility  the  analysis  we  made  for  the  case 

guarantee  there  will  be  no  reshuffling  allowing 

of  mobile  minorities  holds,  albeit  triggered  at 

the  formation  of  'pollution-loving'  majorities, 

higher  levels  of  pollution. 

'IPTS-JRC-  Seville, 1999 

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6 

ƒ 

Biotechnology  f or  Environmentally 
Safe  Agriculture 

M i g u el  V e g a, 

IPTS,  L a u r e nt  B o n t o u x,  DCXII  a nd  A n t o n io  L l o b e l l,  CSIC 

issue:  in  Europe  some  uses  of  biotechnology  are  meeting  vocal  opposition  f r om  certain 

quarters. Nevertheless, the  vast amount  of  knowledge  acquired  recently  in biology  can  be 

used  to  develop  and  apply  biotechnology 

for  an  environmentally 

safe  agriculture.  Public 

acceptance  and  a new  policy  impetus  can  serve  to  promote  the  introduction  of  safe  and 

competitive  agricultural  technologies  that  have  a minimum  environmental  impact. 

Relevance: increasing  long-term  health  and environmental  concerns  regarding  the  use  of 

standard  agrochemicals  (pesticides  and  fertilizers)  Is  leading  to  Increased  controls  and 

limitations  on  their  use. This  underscores  the  need  to  explore  alternatives,  including  the 

use  of  biotechnology,  and  to  weigh  up  options  in  a risk-assessment  structure. 

Agriculture  worldwide 
has become reliant on 
agrochemicals in order 
to achieve yield targets 
cost-effectively 

There is mounting 
concern about the 
effect  of  certain 
agrochemicals on the 
environment and 
human health 

introduction 

yield 

requirements 

A grochemicals play a major  role in  meeting 

production  cost-effectively.  However, 

concern  has arisen out of findings  relating 

to  human  health  and  environmental 

in  world 

them 

food 

on  baby  food,  passed  this  October,  requiring  that 

pesticide  residues  be kept  below  detection  limits. 

In the same vein,  the EU is studying the feasibility 

of  taxing  pesticides  in  an  attempt  to  reduce  their 

application.  This  situation  raises  an  important 

economic  question:  if  the  use  of  pesticides  is 

restricted  and  taxed, will  productivity  be  affected 

problems.  Some  pesticides  contain  active 

and  food  prices  increase? 

ingredients  that  have  been  shown  to  act  as 

hormone  disruptors  in  acute and  chronic  toxicity 

Agricultural  biotechnology  offers  a  possible 

studies,  possibly  causing 

loss  of 

fertility, 

alternative,  permitting  yield 

levels 

to  be 

carcinogenesis  and  mutagenesis.  Widespread 

maintained  without 

the 

intensive  use  of 

application  to  most  cash  crops  means  pesticides 

agrochemicals.  However,  biotechnology  is still at 

are present  in the  ecosystems, aquifers  and  water 

an  early  stage  of  development,  and 

further 

systems of the  EU's main  agricultural  areas. In the 

research  is  needed  into  its  impact  on  human 

long-term,  this could  have  repercussions  for  both 

beings and the  environment. 

the  natural  environment  and  human  health. 

These health concerns  have led to a tightening 

of  EU  regulations  on  pesticide  residues  entering 

The  most  common  way  for  pesticides  to enter 

the food chain. One example  is the new directive 

the food chain  is as chemical  traces on crops they 

Health risks related to pesticides 

IPTS - JRC - Seville, 1999 

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have  been  used  to  treat.  Nevertheless,  they  can 

At 

least  four  major  categories  of  adverse 

also  enter  the  food  chain  via  contaminated 

biological  effects  may  be  linked  to  exposure  to 

drinking  water or dietary  animal  fats and  fish. 

endocrine-disrupting  chemicals  (EDCs):  cancer, 

reproductive  and  developmental  alterations, 

Over  the  past  few  decades  many  pesticides 

neurological  and  immunological  effects. 

have been banned or otherwise  restricted because 

of  concern  over  their  carcinogenic  potential  or 

Suspected 

hormone 

disrupters 

include 

other  risk  to  human  health  or  the  environment. 

persistent  organohalogens,  synthetic  pesticides, 

Hazard  assessment  and  epidemiological  studies 

phthalates  and  heavy  metals.  Synthetic  pesticides 

of  pesticides  show  that  many,  if  not  all,  are 

suspected  of  having  reproductive  and  endocrine-

potentially  toxic  to  humans. At  lower  doses  they 

disrupting effects  include  insecticides,  herbicides, 

possibly  pose  a  risk  of  cancer,  neurological 

fungicides  and  nematicides.  Many  of 

these 

damage and  loss of fertility,  although these effects 

pesticides  enter  the  food  chain  in  the  form  of 

have yet to  be fully  quantified. 

chemical  traces  from  pesticide-treated  crops.  A 

major  question  to  be  addressed  is  whether  low 

It  has  become  increasingly  clear  that  cancer 

concentrations  of  pesticides  residues  in  the  food 

arises  as  a  result  of  genetic  alterations.  These 

chain  (chemical 

traces)  exert  any  endocrine 

may  be  inherited  or  a  result  of  the  mutation  of 

disrupting  effect  in  humans. 

somatic  cells.  To  be  more  explicit,  agents  that 

cause  DNA  damage or cell  replication  in  certain 

The  seriousness  of  the  endocrine  disrupter 

cell  populations  will  increase  cancer  risk.  This 

hypothesis  has  led  the  European  Parliament 

effect 

is  called  genotoxicity.  Although 

the 

to  pass  a  non-binding  resolution  calling  for 

genotoxicity  of  pesticides 

remains  poorly 

hormone-mimicking  substances to be phased out. 

defined,  some  substances  present  in  pesticide 

It  states  that,  with  little  scientific  evidence  about 

formulations  may  be  genotoxic  or  may  cause 

the possible dangers to human and animal  fertility 

indirectly  damage  to  DNA  by  promoting  the 

and  other  health  effects, 

the  precautionary 

formation  of  oxygen  free  radicals. 

principle  requires  the  substances  to  be  removed 

Apart  from  carcinogenesis,  recent  scientific 

studies  have  suggested 

that  some  synthetic 

compounds 

found 

in  pesticides  can  act  as 

Agricultural  biotechnology 

from the  market. 

hormone  disrupters. There  is now  evidence  that, 

Over the last few decades agriculture has grown 

in  some  cases,  wildlife  has  suffered  adverse 

increasingly  chemical-dependent.  Pesticides  have 

effects 

from  exposure 

to 

environmental 

come  to  play  an  important  role  in  meeting  world 

chemicals 

that 

interact  with 

the  endocrine 

food  needs.  Beyond  yield 

improvements,  the 

system  and  therefore  with  hormone  function.  In 

reliance  on  chemicals  has  underemphasized 

many  instances  the  specific  hormones  involved 

crop  protection.  The  chemical  dependency  of 

in  both  animals  and  humans  are  chemically 

agriculture  leads  many  to  think  that  there  is  no 

identical.  This  profound  similarity  suggests 

alternative to pesticides  in the short term. 

that  although  few  human  studies  have  been 

done,  endocrine-related  effects  first  observed 

However,  a  new  trend  is  opening  the  way 

in  animals  may  also  be  manifested 

in 

towards 

the 

reduction  of 

the 

reliance  on 

human  populations. 

chemicals:  the  use  of  biotechnology  and  the 

IPTS -  JRC -  Seville,  1999 

% 

\ 

Genotoxicity, or the 
ability to damage DNA, 
is a particular concern 
given its relationship to 
cancer and hereditary 
defects 

Pesticides suspected of 
having  reproductive 
and endocrine-
disrupting  effects 
include insecticides, 
herbicides, fungicides 
and nematicides 

The use of 
biotechnology  and the 
incorporation  of crop 
protection strategies 
within  plant  breeding 
programmes  may offer 
an alternative to 
reliance on chemicals 

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ƒ 
«f 

Biotechnology allows 
desirable traits to be 
incorporated  directly 
without the  limitations 
of selective  breeding 
in terms of  possible 
donors and time-
consuming trial 
and error 

incorporation  of  crop  protection  strategies  within 

The  application 

of 

biotechnology 

to 

plant  breeding  programmes.  This  trend  is  being 

agriculture  therefore  makes  available  a  series  of 

propelled  by  new  knowledge  of  molecular 

valuable  tools  with  which  to  fight  pests  and 

biology  and 

the  associated  biotechnology 

disease,  although  their  use  may  require  prior 

techniques.  These  include  recombinant  DNA 

research  on  the  organism's  vital  processes. Also, 

technologies  which  are a pool  of  techniques  that 

before  attempting  the  genetic  improvement  of 

allow  DNA  from  any  source  to  be  isolated  and 

crop  plants,  a  large  body  of  research  in  plant 

transferred  between  different  organisms. 

genetics  is  needed  (e.g. the  Arabidopsis  genome 

project).  The  outcome  of  this  research  will  be a 

The  two  main  biotechnology 

techniques 

better  understanding of genetic  mechanisms and a 

involved 

in  recent  developments  are  genetic 

greater  knowledge  of gene function. 

selection,  which  uses  biotechnology  to  enhance 

traditional  selective  breeding  techniques,  and 

genetic  modification, which  actually  changes  the 

organism's  DNA  so as to  introduce  new traits  in a 

Health and environmental concerns of 
agricultural biotechnology 

much  more  targeted  way.  This  allows  desired 

The  idea  of  releasing  genetically  modified 

traits  to  be  expressed  in  a  useful  plant  variety 

plants,  animals  or  microorganisms  (generically 

without  losing the plant's valuable characteristics. 

called 

"genetically  modified  organisms"  or 

Table 1 

Biotechnology practices for  pesticide substitution: 
Cenetic selection 

Practice 

Remarks and examples 

Improved plant varieties 

Use of map-based or marker based techniques for the  identification 
of  resistance  gene  -gene  loci-  for  subsequently  cross  breeding  to 
improve pest and pathogen resistance in commercial plant varieties. 

Biocontrol agents 

Biocides 

Selection  of  microorganisms  to  compete  in  agricultural  fields  with 
harmful organisms (insect, nematodes, virus, fungi and bacteria): 
-  Antagonistic  (competition)  microorganisms  such  as  Trichoderma 

and Clicocadium to reduce populations of fungal pathogens. 
-  Microorganisms  producing  antimicrobial  substances  such  as 

- 

Pseudomonas and Bacillus. 
Insect  parasites  such  as  entomopathogenic  fungi,  Bacillus 
Thuringensis and baculovirus. 

-  Other  strategies  are  insect  and  plant  pathogen  predators; 
nematode  pathogenic  bacteria  and  fungi;  and  sterile  mates  in 
insect population. 

Toxic  products  excreted  by  microorganisms  to  control  insects, 
weeds and plant pathogens. E.g. antimicrobial and other metabolites 
such as Strobilurins. 

Other sources of resistance 

Genomes  of  wild  plant  varieties  and  other  organisms  (specially 
biocontrol organisms) as sources of novel genes and compounds. 

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\ 

Table 2 

Biotechnology practices for  pesticide substitution: 
Genetic engineering 

Practice 

Remarks and examples 

Insect resistant plants 

Virus resistant plants 

Genetic  engineering  using endotoxin  coding  sequences  originating  from 
the bacterium  Bacillus  thuringiensis. 

Genetic  engineering  using plant-derived genes: 
-  Plant  genes encoding  enzyme  inhibitors  interfering  with  the  digestive 

process in insects such as proteinase and amylase inhibitors. 

-  Plant  genes encoding  toxic  substances  such  as lectins, chitinases  and 

alkaloids. 

Genetic  engineering  using pathogen-derived  genes. This strategy  is based 
on the phenomenon  that a pathogen's genome  is a source of resistance: 
-  Genetically engineering plants to express the coat protein of viruses. 
-  The  use of  viral  genes coding  for  proteins  involved  in  the  replication 

cycle and systemic transport of viruses within the plant. 

-  The use of interfering  RNA sequences such as satellite  RNAs as well as 

antisense and sense RNAs. 

Genetic  engineering using plant-derived genes: 
-  Genes  encoding  pathogenesis-related  proteins  (PR).  Triggering 
hypersensitive response (HR) and systemic acquired  resistance (SAR). 
-  Plant  genes encoding  anti-viral  proteins: ribosome-interactive  proteins 

(RIPs). 

-  Natural  host R  (resistance) genes. Cloning and  insertion of natural  anti 

viral  resistance genes in plants. 

Other sources of genes for engineering virus resistance crops: 
-  Mammalian  antibodies to confer disease resistance  in plants. 
-  The use of  interferon  system, a component  of  the mammalian  defence 

system. 

Bacterial  and fungal 
resistant plants 

Genetic engineering using pathogen-derived genes: 
-  Transgenic  approaches  leading to elicitation  of hypersensitive response 

(HR) and systemic acquired resistance (SAR). 

-  Plant  transformation  with  bacterial  genes that  confer  autoinmunity  to 

bacterial Phytotoxins. 

Genetic engineering using plant  and non-pathogenic  microbe genes: 
-  Genes  expressing  antipathogenic  proteins  such  as chitinases  and RIP 
(Ribosome Inhibiting Protein), normally  present in the seeds of barley. 
-  Transgenic  plants  expressing  small  antimicrobial  peptides  such  as 
lipid-transfer  proteins,  2S  albumins  andcysteine-rich 

thionons, 
antimicrobial  peptides. 

-  Transgenic  expression  of  antifungal  enzymes  with  fungal  cell  wall 

degrading activities  (chitinases, glucanases, proteases). 

-  Natural  host  R (resistance)  genes. Cloning,  insertion  and expression  of 

natural  anti-bacterial  and anti-fungal  resistance genes from plants. 

Genetic engineering to express avirulence  bacterial and fungal genes: 
-  Transgenic  plants  carrying  a  two-component  genetic  cassette  (sensor 
and  effector  genes)  -expressed  by  plant  promoter-  that  activates  HR 
(strategic  cell death). 

-  Transgenic  plants  expressing  constitutively  H202-generating  gene, 

which  is toxic  to microbes and can trigger HR. 

Transgenic  strains  of  microorganisms  expressing  genes  conferring  better 
biocontrol qualities: 
-  Field application  of microbes with  increased antagonistic  capacity. 
-  Fermentation  process for production  of  low  risk  compounds  (biocides) 

using transgenic  microorganisms  under confined conditions. 

Improved control agents 

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$ 

In general, fears 
surrounding the 
release of  genetically 
modified organisms, or 
CMOs are the result of 
misconceptions 

Risk assessment of 
GMOs needs to 
consider the  mobility 
of  inserted genes and 
their  effect on other 
natural resistance 
mechanisms 

GMOs)  into the environment  is currently  a matter 

nuclear  genome, 

the  chloroplast  or 

the 

of  debate.  The  most 

important  health  and 

mitochondria  genome 

is  not  normally 

environmental  concerns  are  direct 

toxicity 

transferred  by  pollen). 

(including  allergies), 

transfer  of  undesirable 

•  Antibiotic  resistance 

genetic  information  across the species barrier  and 

Most  gene  transfer  methods  rely  on  a  second 

increased  resistance  to  antibiotics.  Nevertheless, 

gene,  known  as a  marker  gene,  to  enable  the 

much  of  the  public  anxiety  stems  from  a  lack  of 

selection  of  transgenic  plants.  In  the  majority 

understanding  of  the  basic  science  involved  and 

of cases to date, this marker gene has been the 

confusion  with  other food-borne diseases. 

neomycin  phosphotransferase  (NPTII)  gene. 

NPTII  inactivates  and  provides  resistance  to 

There are a number of  reasons why these fears 

the  antibiotics  kanamycin  and  neomycin. 

are exaggerated: 

•  Toxicity 

Methods  have been devised to eliminate these 

marker genes from the crop  plant  if  necessary. 

The  human  gut  naturally  hosts  enormous 

It  might  also  be  worth  considering  that  as 

populations  of  microorganisms  and  has 

increasingly  desirable  traits  become  available 

evolved to cope with foreign nucleic  acids and 

for 

transformation, 

this  may 

become 

proteins,  such  that  there  is  no  risk  of  genetic 

almost  essential.  Use  of  a  marker  gene  in 

transfer from  ingested  matter. 

•  Crossing the species  barrier 

one 

transformation 

precludes 

its  use 

for  subsequent  modifications.  Thus  unless 

A  major  issue  associated  with  the  use  of  this 

markers  are  removed,  new  markers  will 

technology  is that it allows genetic  information 

continually  be  required  for  each  new  trait  to 

to  cross  the  species  barrier.  DNA  already 

be  inserted.  The  issue  is  being  addressed  at 

crosses  species  barriers 

in  nature. 

It 

is 

several  labs  (private  and  public)  and  in  the 

transferred  both  within  and  between  species, 

long run  no markers will  be needed. 

for example from viruses to bacteria, or viruses 

to  humans.  So  far,  however,  the  spontaneous 

transfer  of  DNA  from  plants  to  microbial  or 

Risk assessment 

animal  species  has never  been observed. 

Biotechnology 

risk  assessment  aims 

to 

•  Gene transfer  by  normal  means  in  pollen 

evaluate  hazards 

to  human  health  and 

the 

Gene  transfer  may  pose  a  threat 

to  the 

environment  resulting  from  the  application  of 

environment  by disturbing the existing balance 

biotechnology 

techniques.  One  of  the  most 

between  organisms.  However,  it  is  important 

important  tasks  concerning  safety  of  transgenic 

to  realize  that  any  genetic  balance 

is  a 

organisms  is  to  assess  long-term  effects.  This 

dynamic  one,  with  gene  mutations  and 

includes  overseeing  the  mobility  of  the  inserted 

rearrangements occurring frequently as normal 

genes and assessing the  continuous  expression  of 

events  in  all  living  organisms.  Nevertheless, 

resistant  genes,  as  these  may  affect  non-targeted 

solutions potentially able to reduce or suppress 

organisms  and  may  disrupt  or 

interrupt 

the 

gene transfer  have  been developed. These are 

evolution  of other  natural  resistance  mechanisms. 

the  use of  male  sterile clones  (when  the seeds 

are  not  the  required  product),  the  use  of 

The 

development 

of 

risk 

assessment 

hybrids  to  suppress  gene  transfer  by  pollen, 

procedures 

should 

include  a 

risk/benefit 

and 

transformation  of  mitochondria  and 

comparison  of  current  agrochemicals  and 

chloroplasts  (exploiting the fact that  unlike  the 

agricultural  biotechnology  so  as  to  quantify  and 

©IPTS-JRC  - Seville, 1999 

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compare  the  impact  that  both  chemical  and 

by  this  Directive  is  already  stricter  than  those 

biological  technologies  have  on  human  health 

applied  to  almost  any  other  area  of  human 

and  the  environment.  This  comparison  should 

activity  including  new  drug  discovery. 

seek  to  evaluate  the  broad  pros  and  cons  of  the 

•  Council  Regulation  (EC)  No  1139/98  of  26 

various  alternatives,  and  to  allow  citizens  and 

May  1998  Concerning 

the  Compulsory 

policy-makers  to  make  educated  choices  based 

Indication  of the Labelling of Certain  Foodstuff 

on  the estimated  risks and  benefits. 

Produced 

from  Genetically  Modified 

Regulatory framework 

Organisms:  part  of  the  scientific  community 

thinks  that  one  of  the  main  reasons  for 

opposition  to  GMOs  in  Europe  is  the  lack  of 

\ 

Scientific  findings  relating  pesticides  in  the 

enforcement of this regulation. The labelling of 

food  chain  to  human  diseases  is  encouraging 

GMOs  has 

taken  European 

food-control 

policy-makers  to  establish  regulatory  maximum 

bodies  by  surprise  and  they  are  having  some 

residue  limits  for  pesticides  in  foodstuffs.  At  the 

difficulty  implementing this regulation, e.g. the 

same  time,  an  increasingly  indiscriminate  use  of 

lack  of  reliable  identification  techniques.  In 

the  precautionary  principle 

is  hindering  the 

this  context,  the JRC (Joint  Research  Centre  of 

development  of  the  best  alternative  to  pesticides: 

the  European  Commission)  has 

recently 

biotechnology. 

validated  a  screening  method  that  permits 

detection of  GMOs  in  foodstuff. 

The challenge  today  is to develop  a  European 

•  Directive  on 

the  Legal  Protection  of 

policy  simultaneously  protecting  the  public  and 

Biotechnological 

Inventions 

(98/44/EEC) 

the  environment,  promoting 

research  and 

concerning  intellectual  property:  IP appears to 

fostering  the  competitiveness  of  the  agriculture 

be  a  very  delicate  issue.  On  the  one  hand,  it 

and  of 

the  biotechnology 

industry.  Today, 

allows  effort  and  invention  to  be  rewarded. 

the 

regulatory 

framework  on  agricultural 

Indeed,  this  is  important  as  many  SMEs  or 

biotechnology 

is  made  of  a  few  European 

public  groups  working  specifically  on 

Directives  and  Regulations. The main  ones are: 

identifying  resistance  genes  are  beginning  to 

•  Directive  on  the  Deliberate  Release 

into 

look  like  DNA-boutiques  for  large companies. 

the  Environment  of  Genetically  Modified 

On  the  other  hand,  given  the  high  costs 

Organisms 

(GMOs): 

The 

European 

of  producing  GMOs 

-including  patent 

Commission  recently  presented  a  proposal 

applications  and fulfilling regulations- together 

(COM/98/0085)  for  amending the  Directive so 

with  the  monopolistic  dominance  of  a  few 

as  to  harmonize  European  approaches  to  the 

groups  in  agricultural  biotechnology,  it  may 

issue.  Several  Member  States  have  refused  to 

discourage 

smaller 

organizations 

from 

approve  the  commercialization  of  GMOs 

producing  their  own  selected  or  engineered 

approved 

in  other  Member  States  in  their 

organisms.  It  also  may 

lead  to  alienating 

territories  and  others  have  called 

for  a 

producers and consumers from a few products. 

moratorium.  The  European  Parliament's 

Committee on the  Environment,  Public  Health 

and  Consumers  proposed  a  Europe-wide 

industrial issues 

moratorium  on  all  transgenic  crops  awaiting 

Today,  most  of  the  world  seed  business  is  in 

authorization  to  be  placed  in  the  market. The 

the  hand  of  5-6 

large  companies.  These 

monitoring  and  regulatory  system  laid  down 

companies,  such  as  Hoechst  or  Monsanto,  were 

'IPTS  -JRC  - S e v i l l e,  1999 

Whilst increasingly 
stringent  regulations 
are being imposed on 
pesticides, being 
indiscriminately 
overcautious is 
hindering  development 
of the  best alternative 
i.e.  biotechnology 

A tougher  regulatory 
atmosphere  is making 
it harder for  biotech 
SMEs to thrive the way 
they  have in the US 

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Biotechnology 
undoubtedly  has the 
potential to  make a 
contribution  to 
sustainable agriculture, 
but needs the 
understanding of  the 
public and policy 
makers in order 
to do so 

The safety 
standards applied to 
biotechnology should 
take the  precautionary 
principle into account, 
but should judge its 
safety relative to  the 
chemicals-based 
agriculture it aims 
to  replace 

traditionally 

large  chemical  companies 

that 

alternative 

is 

found  soon.  Although 

these 

appear  to  have  adopted  a  long-term  strategy  to 

restrictions  are  being  imposed  on  the  grounds  of 

move  into  life  sciences.  This  could  indicate  a 

better  food  quality  and environmental  protection, 

strong  shift  away  from  massive  use  of  agro 

agrochemicals  remain  the  main  form  of  crop 

chemicals.  These  companies  are  working  on 

protection  worldwide. 

alternative,  biotechnology  based  strategies 

coupled 

to  the  selective  use  of  chemicals. 

In  order  to  make  progress  towards  weaning 

Transgenic  plants  expressing  herbicide-resistance 

agriculture  off  chemicals  it  is  essential  that  the 

and  insect-resistance  genes  are  already  on  the 

emerging  contributions 

from  biotechnology 

market. 

Ironically 

though,  some  of  the  new 

be  better  understood  by  both 

the  public 

genetically  engineered  plant  varieties  such  as 

and  policy-makers. 

herbicide 

resistance  crops  depend  on 

the 

application  of  specific 

types  and  amounts  of 

Biotechnology  undoubtedly  has  the  potential 

chemicals to reach their  improved yields, possibly 

to  make  major  contributions  to  the  development 

compounding  public  concerns. 

of sustainable agriculture. The  main  advantage of 

agricultural  biotechnology  is  to  allow  farmers  to 

At  the  same  time,  there  is  an  obvious  lack  of 

reduce  their  reliance  on  agrochemicals  (both 

interest  by  these  same 

large  companies 

in 

pesticides  and  fertilizers)  to  achieve  the  desired 

biological  control,  perhaps  because  biocontrol 

yields.  If  properly  done,  this  will  deliver  the 

products  are limited  to  small  niche  markets.  R&D 

combined benefits of health  improvements  for the 

in  these  areas  is  mainly  led  by  small  companies 

consumer,  decreased  environmental  impacts  and 

and  research  groups  from  scientific  institutions. 

increased  competitiveness. 

Most of this research  is financed  by  public  funds. 

This  has  led  to  the  creation  of  a  strong  scientific 

While  it  is  essential  to  insist  on  obtaining  an 

base  but 

few  practical 

technologies  or 

ever  safer  use  of  biotechnology,  if  society  is  to 

economically  viable 

results. 

In 

the  US  an 

fully  benefit  from  its  potential  its  introduction 

increasing  number  of  SMEs,  research  institutes 

should  not  be  exclusively  based  on  its  intrinsic 

and  universities  are  developing  and  producing 

safety  profile  but  also  on  its  safety  relative  to  the 

biocontrol  products, while in the EU the  initiatives 

chemicals-based  agriculture  it  aims  to  replace. 

from the private sector in this field are scarce. One 

The  precautionary  principle  must  be  applied  but 

reason  for  this  situation  may  be  that  registration 

should  in  no  circumstance  become  a  barrier  for 

procedures 

and 

approval 

for  marketing 

innovation  nor  bar  our  society  from  gaining 

genetically  selected  microorganisms  or  derived-

access to significant  long-term environmental  and 

products  are not affordable  to SMEs. 

public  health  improvements. 

Conclusions 

Updated 

regulations 

and 

better 

communication 

to  the  public  are  essential 

if 

The  regulatory  trend towards  the  restriction  of 

Europe 

is 

to  avoid 

falling  behind 

in 

the 

pesticide use could significantly  increase the yield 

international  development  of  biotechnology 

for 

losses  due  to  plant  diseases  and  pests  if  no 

,7/i environmentally  safe agriculture.  ÊÊ 

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Keywords 
agrochemicals, GMOs, environmental impact, regulatory framework 

References 
• Vega, M. and Bontoux, L., Current activities and trends in plant biotechnology research in Europe. 

EUR 18074 EN. Office for Official Publications of the European Communities, 1998. 

• Ruedelsheim, P.L.J., European challenges for plant biotechnology. Brighton conference on crop 

protection. British Crop Protection Council, 1997. 

• Norton, G. Foster, Brough, J., E. Holdom, D., Integrating new biotechnology in crop protection. 

4th pacific rim conference. Australian Biotechnology Association. Feb. 1995. 

• Mannion, A.M., Can biotechnology contribute to sustainable agriculture?. Food product press, 1998. 

• Schell, J., Sterckx, S., Plant biotechnology and its future impact on science, agriculture and the 

environment. Aldershot; Ashdate 1997, Gent; Belgium, 1996. 

• Shah, D.H., Genetic Engineering for fungal and bacterial diseases. Vol 8 Number 2. 

Current Science LTD, 1997. 

• Kavanagh, T.A. and Spillance, C, Strategies for engineering virus-resistance in transgenic plants. 

Euphytica, 1995. 

• Panopoulos, N.J., Hatziloukas, E. and Affendra, A.S., Transgenic crop resistance to bacteria field 

crops research. Field Crop Research, 1996. 

• Jouanin, L. Bonade-Bottino, M. Girard, C. Ecile Morrot, G. Giband, M., Transgenic plants for insect 

resistance, Vol 131. Plant Science, 1998. 

Acknowledgements 
The authors would like to acknowledge the following persons for their fruitful comments: 

Dr Francois Lefort (University Of Crete), Professor Michael G. Palmgren (The Royal Veterinary and 

Agricultural University), Dr Mark Taylor (Scottish Crop Research Institute), Pr. Jean-Louis Prioul 

(Université de Paris-Sud), Dr Peter C. Sijmons (Inst Agrotechnological Research, Wageningen, 

Netherlands), Dr Yves Dessaux (ISV-CNRS), Professor Don Grierson (The University of Nottingham), 

Dr Steve Rawsthorne (John Innes Centre), Dr Wilco Jordi (DLO-lnstitute for Agrobiology and Soil 

Fertility), Dr Paul Hooykaas (Institute of Molecular Plant Science, Leiden), Pr. Alain-M. Boudet (UMR 

5546 CNRS - UPS, Université Paul Sabatier), Dr Genevieve Defago (Swiss Federal Institute of 

Technology) and Dr Bertrand Hirel (INRA). 

Contact 

Miguel Vega, IPTS 

Tel.: +34 95 448 82 11, fax: +34 95 448 83 39, e-mail: miguel.vega@jrc.es 

ι IPTS-JRC - S e v i l l e, 1 9 99 

About the authors % 
Miguel Vega holds a % 

Masters Degree in the Agro-
food Industry and 
graduated as an Agricultural 
Engineer from the 
Polytechnic University in 
Madrid. He is currently 
working as an Auxiliary 
Agent at the IPTS in issues 
concerning Life-sciences 
and was formerly a 
consultant for the Spanish 
Federation of Food and 
Beverages Industries. His 
research interests 
include the agro-food 
technologies under 
a safety and 
environmental context. 
Laurent Bontoux holds 
a diploma in food 
engineering from ENSIA 
(France) and a PhD in 
environmental engineering 
from the University of 
California at Berkeley (USA). 
He is currently working in 
DGXII at the European 
Commission. Previously he 
has worked at the IPTS as a 
scientific officer, and at 
Proctor & Gamble as a 
safety scientist. His 
expertise covers wastewater 
treatment, ecotoxicology, 
chemical safety, 
environmental management 
and waste management. 
Antonio Llobell is a 
Professor in the 
Department of Plant 
Biochemistry and Molecular 
Biology at the university of 
Seville and a member of the 
Instituto de Bioquímica 
Vegetal y Fotosíntesis, CSIC, 
in Seville, Spain. His research 
deals with biochemical 
applications in the biological 
control of plant pathogens. 

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Building  Experience:  Energy  Efficient 
Buildings 

£ 

T o n i no  A m o r e l l i,  CEST 

issue:  The  development  of 

large  commercial,  governmental  and  even 

residential 

buildings  which  take  advantage  of  energy  efficient  design  and  Incorporate  on-site 

renewable  energy  sources  could  have  a  major  impact  on  achieving  and  maintaining 

Kyoto  targets  on  reducing  carbon  dioxide  (CO2)  emissions  In  the  future.  Although 

demonstration  sites  across  Europe  have  been  built,  the 

lessons 

learnt 

In 

their 

development  and  subsequent  performance  have  not  penetrated  the  wider  marketplace. 

Relevance: Since  the  1997  Kyoto  agreement  renewed  attention  has  been  paid  to  carbon 

dioxide  emissions.  Heavy  industry  and transport  usually  bear  the  brunt  of  controls,  while 

buildings,  covering  all  sectors  Including  non-Industrial,  are  neglected.  With  many  major 

construction  activities  planned  years  in  advance  it  Is  Important  to  ensure  that  energy 

efficiency  considerations  are  a high  priority. 

Buildings may be 
responsible for as 
much as 50% of C02 
emissions, but so far 
have received little 
attention in attempts 
to  improve energy 
efficiency 

introduction 

efficiency,  energy  security  and  protection 

F or  a  number  of  years  questions  of  energy 

of  the  environment  have  been  the  top  of 

the  developed  world's  political  and 

economic  agenda.  Much  has  been  made  of  the 

taken  since  1970  to  clean  up  the  environment 

has 

led 

to  more 

jobs  and  a  diversifying 

economy",  emphasizing  the  opportunities  that 

can  arise  from  environmentally  sound  practices 

and  innovation. 

Until  recently,  however,  the  impact  of  one  of 

effects of  industrial  activity  and transport  in these 

the  major  net  contributors  to  C 02  emissions  -

areas.  After  the  Kyoto  round  of  discussions  on 

buildings-  has  been  virtually  ignored.  It  is  now 

global  climate  change  there  is  even  greater 

widely 

recognized 

that  buildings  contribute 

pressure on  developed  countries  to  renew  efforts 

almost  50%  of  all  C 02  emissions.  Yet,  despite 

to  minimize  emissions  and 

improve  energy 

this  alarming  estimate  there  has  been 

little 

efficiency  throughout  industry. The  concentration 

evidence of widespread  uptake of energy  efficient 

on  transport,  and  heavy  industry  has  already 

technologies  and  designs,  although  they  have 

started 

to 

bear 

fruit, 

and 

not 

only 

been  known  about  for  decades.  One  of the  main 

environmentally.  US  President,  Bill  Clinton 

deterrents  is  cost;  it  is  the  common  perception 

recently  stated  that,  "Every  action  the  US  has 

that  implementing  new  concepts  requires  large 

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investments.  The 

lack  of 

forward-looking 

Another  factor  currently  being  considered, 

companies, 

together  with 

capital  market 

although  we  will  not  look  at  it  here,  is  studying 

imperfections,  means that the long term  financial 

the  energy  efficiency  of  supplying 

the 

benefits of  reduced energy  consumption  tend  not 

raw  materials  by  a  complete  examination  of 

to  be fully  grasped. Moreover,  the  benefits  to  the 

their  life-cycle. 

workforce  from  improving  working  conditions 

and  reducing  possible  effects 

from  so-called 

In 

the  US  efforts  are  concentrating  on 

"sick-building  syndrome"  induced  by  artificial 

considering 

the  "whole  building".  From  an 

air-conditioning  systems  and  poor  material  use, 

engineering  perspective 

this  means  that 

the 

are  hard  to  quantify. 

building  should  be  viewed  as  an 

integrated 

systems  design 

rather 

than  a  number  of 

Buildings  are  by  their  nature  intended  to  be 

individual  components.  It  is easier  for  designs  of 

long  lasting,  so  relying  solely  on  new  building 

this  type  to  incorporate  new  technologies  and 

projects  cannot  be  the  only  solution.  It  is  also 

take  advantage  of  solar  and  other  renewable 

necessary  to  address  the  important 

issue  of 

energy  sources.  The  US  Department  of  Energy 

retrofitting  old  buildings.  This  would  not 

has  developed  a  modelling 

tool  which  can 

necessarily 

involve  a  complete  overhaul  of 

evaluate 

the  energy  performance  of  small 

existing  sites,  nor  would  this  be  practical,  but 

commercial  building  designs.  It  hopes  that  by 

some retrofitting could be accomplished stepwise. 

doing 

this, 

the  service  will  promote 

the 

However,  to  assess  which  option  -  retrofitting  or 

dissemination 

of 

experience, 

and 

help 

new  building  -  is  most  beneficial  "whole-life 

companies  to  understand  the  potential  benefits 

costs"  must be taken  into  account. 

of  utilizing  designs  of this  type. 

Design Capabilities 

Energy efficiency  trends for  a number  of years 

Experience with New and Older 
Buildings 

have  focused  on  electronic  equipment  such  as 

There  are  examples  of  where  energy  efficient 

low  energy  lighting  and  office  equipment.  There 

programmes  have  been  able  to  use  energy 

has  been 

less  emphasis  on 

the  building 

efficiency  technologies,  as seen  in  Table  2,  all  of 

envelope.  In particular  this  refers to: 

which  have  been  supported  by  the  THERMIE 

•  general  physical  attributes  -  roof,  walls, 

Programme. 

foundation,  insulation, seals, doors 

• 

fenestration  (design and placement of windows) 

This  demonstration  part  of 

the  JOULE-

•  movements  of  air  in  and  out  of  the  building 

THERMIE  programme  has  supported,  and 

(infiltration,  exfiltration) 

continues  to  part-fund,  projects  which  clearly 

•  heat  loss  and  gain  through  windows,  ceilings 

show 

the  benefits  of  new  energy  efficient 

floors and walls, and 

technologies  and  designs.  However,  the  question 

• 

internal  heat transfer  mechanisms. 

arises  as  to  why  the  dissemination  of  these 

practices 

is  so  limited,  despite  the  European 

Some of these aspects are described in Table 1. 

Commission's  efforts.  At  the  recent  Expo98  in 

Approaches  to energy efficiency  must adapt these 

Lisbon,  emphasis  was  placed  on  the  use  of 

factors  to  suit  the  climate  in  which  the  building 

existing,  but 

little  used,  technologies 

in  the 

project  is situated. 

building of the exhibition. What  was also stressed 

IPTS - JRC -  Seville,  1999 

15 

% 

The techniques 
applicable to  new and 
existing buildings differ, 
but  both need to  be 
addressed 

Concern for  efficient 
electrical systems 
needs to  be 
complemented  with 
appropriate design of 
the envelope to make 
the  most of  natural 
heat and light 

The 'whole building' 
approach views the 
building as an 
integrated  system 
rather than a collection 
of  individual 
components 

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J> 
<£ 

Dramatic energy cost 
savings are possible 
and cost effective 
technologies exist for 
both new buildings 
and refits 

Table 1. Building Envelope Considerations 

Fenestration 

For light, solar heating and natural ventilation 

Cold Climates 

• Large, south facing fenestration allows in light and heat and so reduces 

the need for "artificial" heating 

• Overhangs increase shade and reduce solar radiation in summer 

months, reducing the need for air­conditioning 

Warm Climates 

• North facing fenestration­ allows light while minimising solar 

radiation, so reducing the need for air­conditioning 

General 

• Poor frame design can affect performance ­ aluminium windows are 

good heat conductors and thus no good for cold climates 

• East­West facing windows ­ high heat gains in summer, high heat losses 

in winter. Small windows are required with internal or external shading 

General 

General 

Doors 

■ Insulated solid doors are best suited to reduce heat loss or gain 
ι Commercial glass doors must take into consideration the same factors 

described above for fenestration 

■ Frames should also be considered, as for fenestration 
i Heavily used commercial doors/entrances could be revolving or 

doubled to create "air buffers" and reduce excessive heat loss or gain 

Glass 

For windows or doors 

Coatings 
• allow/restrict daylight transmittance to increase/decrease solar heating 
respectively and subsequently reduce the need for heating or air­
conditioning 

• shading coefficients ­ allow/restrict heat transmittance with similar 

results to transmittance factors 

• low­emittance ­ reduces heat emitted from warm pane to cold, placed 
on the internal pane in cold climates, externally in warm climates 

Other aspects 

General 

Insulation 
• blankets, rigid board and loose­fill give good insulation properties to 

reduce excessive heat loss or gain 

Moisture and Air Leakage Control 
• reduces condensation and possible structural damage 
• vapour barriers reduce excessive heat loss or gain 
• avoidance of thermal bridges which add to heat loss or gain 

Adapted from: US DoE, Energy Efficiency and Renewable Energy Network 

was that no extra cost was involved. As regards 

In the UK, the Building Research Establishment 

housing, some French architects have claimed 

set up an Environmental Assessment Method 

that designing in energy saving features would 

(BREEAM) eight years ago, which aimed to get the 

add only 1% to their fees, but would reduce 

message over to developers and to gauge results. 

energy consumption by up to 30%. 

In the financial year to April 1997, the estimated 

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Table 2. Energy Efficiency Buildings Projects 

LOCATION DESIGN/TECHNOLOGY APPLIED 

Bournville House (Birmingham ­ UK) 

Transparent insulation applied to external walls 

Caja España (León ­ E) 

Power co­generation system 

Chamartín RENFE Station (Madrid ­ E) 

Power co­generation system 

Maison Pleiade (B) 

Home automation system to control comfort parameters 

The Green Building (Dublin ­ El) 

Natural ventilation and light 

ESTI Technology Hall (JRC­Ispra ­ I) 

Rational hot air distribution 

Self­sufficient Solar House (Freiburg ­ D) 

Solar energy and structural design 

Congress and Exhibition Hall (Linz­ A) 

Natural light and new window designs 

Anglia University (Chelmsford ­ UK) 

Natural ventilation and lighting 

Low Energy Office (Köln ­ D) 

Insulation, natural ventilation and lighting 

Leeds City Office Park (Leeds ­ UK) 

Natural ventilation and lighting 

Examples taken from "Energy­Conscious Building Approaches" DGJRC/DGXVII 

energy savings/benefits of their programme 

an example of this, but so far users are not 

totalled ECU615m, equivalent to an emission 

particularly familiar with it. 

reduction of 1.4 million tonnes of carbon. They 

themselves have recently moved into new offices 

There are considerable opportunities for 

which make use of many of the practices they 

improving energy efficiency and reducing 

promote and believe the result is 30% more 

subsequent emissions to be obtained by 

energy efficient than standard designs. 

refitting existing buildings. Stepwise approaches 
rather than complete overhaul1 could catalyse 

Many opportunities to innovate in the 

the market for better and more energy efficient 

construction sector are left to new developments. 

components. Increased demand could lead to 

More often than not the tailored solution to a 

reduced cost and so encourage greater uptake. 

problem is not immediately transferable to a 

second project, although there is a basis for some 

sort of standardization. Energy labelling offers a 

Location, location, location 

way of giving information about the energy­

In many cases it is not a simple matter of 

related properties of materials. The use of 

examining the application of materials and 

U­values ­ a measure of insulating ability (low 

structural design of the building itself. As we shall 

U­values means better insulating capacity) is 

describe, it is also necessary to assess the location 

'IPTS­JRC ­Seville, 1999 

In many cases it is 
not a simple matter 
of examining the 
application of materials 
and structural design 
of the building itself. It 
is also necessary to 
assess the location 
and situation of the 
construction site itself 

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'β 
<£" 

There is no shortage 
of design know-how, 
but cost is a limiting 
factor  in uptake 

Demonstration 
projects could play an 
Important role, but 
need to focus on 
applications  benefiting 
Europe's citizens 
directly 

and  situation  of the construction  site  itself.  These 

environmental 

factors  should  not  concentrate 

• 

• 

thick  walls  to  reduce  heat loss 

lighting 

control 

systems 

to  maximise 

only on climate considerations - i.e. cool  northern 

daylight  use 

Europe and warmer  southern  Europe,  but  also on 

the  scope  of  the  local  landscape  to  contribute  to 

The  site  is  an  excellent  example  of  how  the 

the  energy  needs  of  the  site.  There  may  be 

natural  environment  can  be  exploited  without 

opportunities  to  take  advantage  of  renewable 

negative  impacts, and  in fact, the building's  lower 

energy  sources  -wind  and  tidal  power  as well  as 

energy  requirements  mean  that  the  site  is  a  net 

solar.  In  many  cases  this  can  contribute 

to 

contributor  to the national  grid. 

national 

resources  as  well  as  meeting 

the 

building's  energy  needs. 

Conclusions 

Two  recent  designs  in  the  UK,  a  Sainsbury's 

The question of cost will  always be paramount 

supermarket  at 

the  Millennium  Village 

in 

in  the  minds  of  companies  planning  major,  or 

Greenwich,  London  and  Hyndburn  Council 

even  minor,  building  developments.  There  Is  no 

offices  in  Lancaster,  demonstrate  this  -  both  are 

shortage  of  design  know-how,  technologies  or 

currently  under construction  and both  involve the 

overall  experience, but  as is often the case for the 

regeneration  of a brown-field  site. 

acceptance  and  application  of  new  and 

innovative  technologies,  cost  is  very  much  the 

At the  London  site, Sainsbury's opted for 

limiting  factor. 

•  natural-ventilation  and  lighting 

•  underfloor  heating  using  waste  heat 

from 

However,  as  an  opportunity 

to  meet  new 

refrigerators 

environmental  controls  and  standards,  energy 

• 

thick  concrete  walls  and  floors  to  a store  heat 

efficient  construction  stands  out  as  a  possible 

energy  during the  day and release  it at  night 

solution 

to  the  growing  concerns  over  C 02 

•  earth  mounded  sides  to  reduce  heat  loss  in 

emissions.  The  combination  of  energy  efficient 

winter  and  heat  gain  in  summer.  This  will 

buildings  with  measures  affecting  electrical 

also  enable 

them 

to  absorb  noise 

from 

appliances  could  have  a  major  impact  and  is an 

delivery  lorries 

area which,  if targeted, could  have short and  long 

• 

renewable  energy  sources - wind  turbines  and 

term  benefits for  all concerned. 

solar cells 

At  a recent  conference  held  by  the  European 

The  Lancaster  council  project,  which  is  part-

Commission  in  Lisbon  there  again  was  a call  for 

funded  by Thermie  and touted  to  be the  UK's first 

support  for  research  and demonstration  projects. 

zero-energy  public  building, will  use, 

Funding  of  ECU300m  was  proposed.  However, 

• 

south  facing  orientation  to  make  best  use  of 

at  the  same  conference,  the  reasoning  behind 

sunlight 

• 

renewable  energy  sources 

•  wind  - a single  turbine 

this 

funding  was  questioned  because 

few 

"ordinary  people"  benefited  from  the  results. 

With 

the  Fifth  Framework  Programme  also 

• 

solar  cells  -  roof  mounted  and  providing 

dedicating  part  of 

its  work 

to  the  "city  of 

35MWh  a  year  (20%  of  the  site's  annual 

tomorrow"  and 

"energy  efficiency 

for  a 

requirement) 

competitive  Europe",  and  again 

looking 

for 

•  water - a water-to-water  heat  pump 

demonstration  projects, 

it 

is 

important 

to 

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promote  innovative  approaches  which  are  able 

regulation  at 

the  planning  stage.  A 

fuller 

to  benefit  Europe's  citizens  directly. 

understanding  of  the  cost/benefit  of  using  these 

alternatives  could  also  play  a  role,  as  could 

The  underlying  problem  is  that  whereas  the 

identifying  more  closely  at  which  stakeholders 

financial  means  exist 

for 

the  development 

in  the  decision  making  process  to  target  the 

exploitation  of  these  projects  in  demonstration 

relevant  information. 

projects,  there  is  little  effective  dissemination  of 

the  lessons  learned  to  the  wider-market  place. 

A  combination  of  these  efforts  could  have  a 

And  it  is  here where  a much  larger  impact  could 

significant 

impact  across  a  broad  range  of 

be  envisaged  environmentally,  economically 

industries.  Apart  from  creating  new  employment 

and  socially. 

Inertia  on  the  part  of 

industry 

opportunities  they  would  support  the  creation  of 

could  be  addressed  through  tax  incentives  for 

sustainable  cities  rather  than  providing  just  a 

the  application  of  the  technologies,  or  tighter 

small  number  of sustainable  buildings. 

Jf 

19 

% 

Keywords 
energy efficiency,  construction, renewable energy, best practice,  Kyoto 

Note 

1-  Recently  suggested by consultants  Oscar  Faber. 

References 

•  CO7 targets to drive  change in buildings'  energy efficiency,  ENDS Report  282, p.42, July  1998. 

•  Buildings  for  the 21st  Century,  US Department  of  Energy,  Energy  Efficiency  and  Renewable  Energy 

Network  -  http://www.eren.doe.gov/buildings/bldg21c/ 

•  Clean Sweep with  a Dream  Team,  Financial Times, Thursday June  11,1998. 

•  The Building  Blocks of Energy Efficiency,  Green  Futures, July/August,  1998. 

Contact 

Dr Tonino S. Amorelli, CEST 

Tel.: +44  171  354  9942, fax: +44  171  354 4301, e-mail: tamorelli@cest.org.uk 

About the author 
Tonino Amorelli  holds a 
BSc and PhD in Chemistry 
from  the  University  of 
Wales, College of  Cardiff, 
UK. Before joining  CEST he 
worked at the  IPTS as 
coordinator  of  the 
advanced materials  project. 
Previously  he spent  2 years 
researching  catalysis for 
automotive applications. His 
research  interests  include 
automotive  materials, 
composites,  biomedical 
materials  and general 
aspects of  technology 
transfer. 

IPTS-JRC  -Seville,  1999 

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Strategic  Niche  M a n a g e m e n t:  a  tool 
f or  t he  m a r k et  introduction  of  n ew 
transport  concepts  and  technologies 

/ 

Matthias  Weber  and  Andreas  Dorda,  IPTS 

issue: Transport  and  mobility  systems  are  confronting  severe  problems  of  congestion, 

pollution  and  resource  consumption.  While  many  promising  and  sustainable  new 

transport  technologies  and  mobility  concepts  have  been  developed  over  the  last 

decades, the  pace of  their  introduction  has been disappointingly  slow.  New  alternative 

options face a broad range of technical, social, economic  and Institutional  barriers. 

Relevance:  Traditional  technology-oriented  policy  measures  are  an  Important  tool  for 

the  R&D-phase.  but  do  not  deal  with  the  integration  of  new  technologies  into  the 

complex soclo-technical system of transport. A more comprehensive  strategy  Is needed 

which takes the  expectations  of  all  stakeholders  carefully  into  account,  expands  single 

experiments  to  market  niches, and  finally  enables  the  transformation  of  the  dominant 

technological  regime in a more sustainable direction. During this process, It is necessary 

to  find  an  appropriate  balance  between  the  necessary  protection  of  immature 

technology  competing  with  the  established technological  regime on the  one  hand and 

the  need to spur  improvements  by competition  on the  other. 

introduction 

and congestion it seems increasingly urgent 

In  view  of  traffic  related  pollution,  noise 

to  move  towards  sustainable  mobility. 

development  paths  of  our  transport  systems 

re-orientation  of 

long-term 

the 

A 

access  and  mobility.  Many  experiments  and 

demonstration  projects  have been set up  in this 

respect, e.g. with concepts such as: 

•  Electric vehicle schemes and other alternative 

propulsion  systems  with  zero-  or  ultra-low-

emissions (battery, hybrid and fuel-cell driven 

vehicles,  alternative  fuels  like  hydrogen, 

appears to be necessary. This calls for exploring 

methanol, CNG, LPG or DME). 

more radical changes than we have witnessed in 

• 

Individualized  and  demand-oriented  public 

recent years. 

transport striving for flexibility and privacy so 

as  to  compete  with  the  advantages  of 

The  introduction  of  radically  new  transport 

individual  transport.  Intermediate  schemes 

technologies and concepts is regarded as one of 

between  taxis  and  public  transport  have 

the  key  options  for  addressing  these  problems 

proved  to  be  economically  successful  in 

while  maintaining  the  current  possibilities  of 

off-peak  hours in public transport. 

ι  IPTS-JRC  -  Seville,  1999 

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21 

\ 

A wide range of 
technologies have 
been proposed as part 
of the solution to the 
problems of pollution, 
noise and congestion 
arising from current 
transport technologies 
and patterns 

Uptake, however, has 
been disappointing. 
Current habits and 
patterns of mobility 
behaviour create a 
powerful barrier to 
innovation 

• Car­sharing and car­pooling to use current 

approach towards a more diffusion and 

transportation capacities more efficiently by 

innovation­management oriented strategy seems 

using the same car simultaneously or 

appropriate. The interests of users and other 

alternately by different drivers. 

stakeholders, the continued improvements of the 

• Information, reservation and ticketing 

technology during market introduction, and the 

schemes to simplify access to public transport 

development of a supportive organisational and 

and facilitate the operation of ¡ntermodal 

policy framework should be co­ordinated in a 

transport chains. 

mutual learning and adjustment process. 

• Intelligent transport systems using advanced 

information and communication technologies 

Besides this "bottom­up" approach, 

to smooth traffic flows. 

management of demonstration projects is still 

• Telematic access control systems to reduce 

required as new technologies and concepts need 

pollution and secure sustainable mobility in 

protection in their early stages so as to improve 

ecologically and culturally sensitive areas. 

in readiness for competition. This should be 

complemented by a strategy to proceed from 

However, although many new alternatives 

isolated experiment to extended market niches, 

have been suggested, they often do not manage to 

e.g. in a country, and finally to a transformation of 

go beyond the experimental stage. Apparently, 

the dominant technological regime as a whole, if 

they all have potential benefits, but they come 

possible across Europe. 

into conflict with the dominant transport 

structures, organizations and institutions and 

Recent experience with the management of 

with general mobility behaviour (i.e. the 

experiments and demonstration projects involving 

so­called "technological regime"). Reliance on 

alternative transport technologies and concepts 

individual technological experiments and market 

have made it possible to identify several barriers 

mechanisms alone appears unlikely to change 

to their wider uptake. This experience will also 

these structural constraints and to trigger a long­

help develop a new strategy for facilitating the 

term change in the predominant transport regime. 

transition to a more sustainable transport system. 

Experience shows that innovations frequently 

succeed by achieving initial acceptance and 

improvements in "niches", protected areas of 

application especially suited for the emerging 

Recent experience: Where are the main 
barriers, trade-offs and dilemmas? 

technology. In passenger transport structural 

Beyond normal project management 

barriers are reinforced by the current patterns of 

problems, there are several typical reasons why 

individual mobility behaviour and by the 

seemingly promising experiments might fail 

complexity of interactions between technological 

during the process of niche development. Some of 

and social factors (e.g. current lifestyles and 

these are illustrated by the example of the electric 

housing patterns strongly favour the widespread 

vehicle niche described in Box 1. 

use of the private car). 

First of all, there is a lack of understanding 

The social acceptance and successful diffusion 

of the specific needs and Interests of all 

of new technologies are crucial, but often 

stakeholders. Frequently managers of 

neglected, elements of the innovation process. A 

implementation projects decide top­down and 

shift away from a technology­oriented policy 

fail to identify and involve supporters of the 

IPTS­JRC ­Seville, 1999 

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22 

/ 

The consideration of 
some important 
factors is necessary if a 
technology is to catch 
on: such as the needs 
and interests of all 
stakeholders, an 
appropriate protective 
environment, and 
realistic expectations 

Box 1. The electric vehicle niche in Europe 

Experiments with electric vehicles have been carried out in many European countries during the 

last ten years. These were initially not interconnected and were often based on quite distinct 

technologies. The Swiss light electric vehicle programme, which culminated recently in large­

scale test in Mendrisio, built on the earlier networks of alternative vehicle promoters. The 

programme made successful use of competitive mechanisms among different communities 

interested In hosting the large­scale experiment. Although only Mendrisio got the main 

programme, the other cities are still connected to each other and build on experiments 

elsewhere in Switzerland. 

France is the country where the strongest support was given to electric vehicles. Électricité de 

France and the main car manufacturers were involved in large experiments. Recently a very 

challenging experiment took place in St. Quentin­en­Yvelines ("Praxitèle"), combining up­to­date 

EV­technology with latest­generation telematics and smart­card technology. However, serious 

technical problems have been encountered. The city of La Rochelle has not only run several 

experiments with EVs since the early seventies, but has also attracted EV­related industries to set 

up nearby (e.g. control systems, batteries, etc.). The technology used in La Rochelle is far more 

conventional than in St. Quentin and relies on converted standard vehicles, but it has made it 

possible to learn a lot about user behaviour. 

Based on the La Rochelle experiment, Coventry has implemented a similar programme, although 

its aspirations are rather modest and have not lead to many new insights. 

The most important German EV experiment took place on the island of Rügen under very special 

and isolated conditions. The lack of industry backing meant it did not achieve any breakthroughs, 

but rather discredited EVs in Germany. 

In general, it needs to be taken into account that the framework conditions in the countries differ 

significantly. Clearly France, with Its large share of nuclear power, can see more potential in EVs 

than Germany with its coal­based power generation system. Switzerland has an excellent railway 

system for long­distance transport, which offers good opportunities for combination with EVs, 

which are by definition relatively short range. 

Source: Prätorius/Lehrach 1998, Lane 1998, Simon/Hoogma 1998, Simon 1998, Harms/Truffer 1998a 

project or to anticipate opposition and so 

Often, the protective measures and competitive 

prepare pre­emptive strategies to overcome it. 

incentives are inadequate. Experiments need to be 

The development of a support network of 

protected in their early development phase in order 

stakeholders and communication to a broader 

to enable learning processes and improvements. 

public are of decisive importance for a successful 

Inadequate protection of new technologies and 

experiment and niche­development process. 

concepts in the innovation process is a typical 

'IPTS­JRC ­Seville, 1999 

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reason why experiments fail. Too little protection or 

technologies are usually well adjusted to the 

phasing it out too soon might mean that the new 

framework conditions, and thus implicitly 

concept couldn't resist the pressure of the market. 

"protected". In the long run, new niche 

On the other hand competitive pressure is a strong 

technologies can only achieve a significant 

incentive for improvement. This implies that there 

market share and an economy of scale if 

should not be too much protection either, but 

unfavourable framework conditions are modified 

rather an intelligent balance between protective 

to facilitate their uptake. 

and competitive mechanisms during niche 

development. 

Strategic Niche Management 

Participants in an experiment often have 

Using experience gained through a number of 

unrealistic expectations about the potential of the 

demonstration projects, a new approach to the 

experiment and neglect important intermediate 

management of the process of introducing 

steps needed to adapt a technology to a market 

sustainable transport technology and concepts 

context. Experiments should neither pursue too 

has been developed recently under the 

ambitious goals nor insignificant achievements. 

name 'Strategic Niche Management' (SNM, 

Modular projects with consecutive development 

Kemp/Schot/Hoogma 1998). Although the focus is 

stages could be a promising strategy to 

here on the application of SNM to transport, it 

consolidate achievements and review/change the 

could obviously also be applied in other 

strategy in the light of experience gained. 

technological areas. 

Flexibility, willingness to learn from experience 

and to improve the technology or concept is 

necessary during the whole project. 

Strategic Niche Management addresses the 

introduction and diffusion process in terms of 

òofh its technological aspects and its socio­

Isolated experiments are repeatedly not 

economic context. Special attention is paid to the 

complemented by a strategy of expanding them 

building up of support networks; changes 

into market niches. The interconnection and 

required in the institutional framework for 

extension of experiments to niches is the crucial 

mobility provision; and, facilitating social and 

phase for a new technology as many conditions 

technological learning processes geared towards 

change relative to the original small­scale 

the needs of final users and the longer­term 

experiment. The requirements for the concept 

objectives for sustainable mobility. SNM aims to 

change as it moves from pioneer users to a wider 

incorporate the interests of all the different 

public with more rigorous demands. Structural 

stakeholders essential to the success of a niche 

incompatibilities with the institutional and political 

development process by development of a 

framework may also prevent wider uptake. 

network of supporting actors. Special attention is 

paid to the requirements of future users as the 

Sometimes the institutional and regulatory 

stakeholder group, which finally decides the 

framework is not modified to facilitate the 

success or failure of a technology. In addition, the 

diffusion of the new technology or concept. In 

opinion of indirectly involved groups is taken into 

many cases in the past innovative technological 

account to anticipate and abate opposition. 

solutions could not prevail as a result of 

Organized interaction, e.g. in the form of 

unfavourable institutional, political, social and 

workshops among all players, is a substantial 

economic framework conditions. The dominant 

component of SNM because it facilitates the 

© IPTS ­ JRC ­ Seville, 1999 

23 

\ 

Strategic Niche 
Management is a 
way of looking at 
technology uptake 
which addresses the 
introduction and 
diffusion process in 
terms of both its 
technological aspects 
and its socio­economic 
context 

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Strategic Niche 
Management can be 
described in terms of 
five overlapping phases 

SNM tries to  bring 
together the top 
down approach to 
the institutional and 
organizational 
framework  with 
bottom  up support 
for  technological 
innovation 

articulation  of  needs  and  interests,  and  thus 

technological  options  open  enough  to  avoid  an 

enables a learning  process to take  place.  Looking 

early  locking in on the wrong track and were able 

beyond  technological  improvements,  which  are 

to  stimulate  fruitful  competition  among  them 

only  one  of  a  number  of  factors  concerning 

within  the protected  environment  of  the  project. 

mobility-related  problems,  SNM  tries to  establish 

a  shared  understanding  of  the  expectations  of 

SNM  is  thus  neither  a  technology-push  nor  a 

stakeholders  and to  assess and  improve  the  long-

demand-pull  approach.  Rather 

it  suggests  a 

term  development  potential  of a new  technology. 

combined  strategy,  balancing  learning  about  user 

needs and technical  possibilities  on the one  hand 

Strategic  Niche Management  can be described 

with 

the  creation  of  support  and  structural 

in  terms  of  five  overlapping  phases,  all  of  which 

adaptations  on  the  other.  However,  it  is  often 

are crucial  to  the success of an  experiment-based 

difficult 

to  convince  decision-makers  of 

the 

niche  development  process  (Table  1).  These 

usefulness  of  changing  established 

framework 

phases  are  characterized  by  different  trade-offs 

conditions. 

If  an  experiment  proves 

to  be 

and  dilemmas  which  ought  to  be  taken  Into 

promising and finds widespread support, there can 

account  carefully  when  managing  a  niche 

indeed  be enough  pressure  to convince  decision 

development  process.  They  could  bring  a  new 

makers  to  attempt  changes  in  the  framework 

technology  or  concept 

from  an 

isolated 

conditions  and  thus  to  move  towards  a  more 

experiment  to the  level  of a significant  niche, and 

sustainable  transport  regime.  This  is  the  point  at 

in  the  longer  term  contribute  to  a  change  of  the 

which  public  policy-making comes  into play. 

dominant  paradigm of the transport system. 

Strategic  Niche  Management  views  the  uptake 

Policy conclusions 

of  new  technologies  as  requiring  more  than  just 

The  lessons  to  be  drawn  from  the  SNM-

top-down 

regulations  and  policies.  Nor  are 

perspective  and the underlying experiences can be 

networking  and 

learning  processes  always 

used 

first  of  all 

to  guide 

the  set-up  and 

sufficient 

to  bring  about  successful  market 

implementation  of  experiments.  They  are  thus  an 

introduction.  SNM 

relies  much  more 

than 

input  for  individuals  or  organizations  seeking  to 

traditional  technology  policy  on  a combination  of 

promote  the  uptake  of  new  technologies  (e.g. 

cooperative  support  strategies  for 

technology 

government agencies). But they can also be used by 

innovation  and  diffusion  processes  (the  "bottom-

industrial  or  private  actors  who  could  benefit  as 

up  element")  with  adjustments  of  the  institutional 

users  or  suppliers  of  the  new  technology.  The 

and  organizational 

framework 

for  mobility 

insights  from  SNM  can  also  help  optimize  the 

provision  (the "top-down  element"). 

design of programmes  for technology  development 

and diffusion, and help to adjust the regulatory and 

For  example,  the  very  successful  car-sharing 

policy framework to support the stabilization of new 

initiative 

in  Switzerland  was 

initially  a 

transport technology  niches. The advantage of SNM 

"grassroots"  movement,  but  it got  an  initial  major 

is that the concept can be applied beyond transport 

boost  by  the  establishment  of  a  professionalized 

to  any  process  of  technical  or  organizational 

carrier organization, and a second boost when the 

innovations.  SNM  is  therefore  of  equal  interest  to 

public  transport  operator  in  Zurich  agreed  to 

industry  introducing  new  products  on  the  market; 

cooperate with car-sharing (see Box 2). In the case 

technology  policy  makers  supporting  innovation 

of  the  Mendrisio  experiment  the  organizers  kept 

and  industrial  competitiveness;  transport  operators 

©IPTS-JRC  -Seville, 1999 

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Table 1. Overview of the dilemmas and trade-offs in the Strategic Niche 
Management process of mobility innovations 

Phases of an SNM-Process 

Basic dilemmas and trade-offs: Some key lessons 

(1)  Consider  technologies  or  concepts  which  are  as close as 
possible to the current regime, but which  offer the potential  to 
induce  more radical  changes  later on. 

(2)  Seek  to  keep  a  number  of  options  open; therefore  phase 
your  experiments  and  organize  them  in  modules  in  order  to 
avoid their  becoming too  complex. 

(3) Keep the experiment  sufficiently  broad  in terms of  partners 
(users, suppliers, government,  operators)  and  have  committed 
partners  in the team. 

(4)  A  successful  experiment  is  not  necessarily  conducive  to 
niche  formation;  a  failed  experiment  can  still  be  very 
instructive. 

(5)  Try  to  avoid  over-protection  and  explore  which  types  of 
market  pressure  could  already  be  implemented 
in  the 
experiment. 

(6) Create opportunities  for  the active  involvement  of  users in 
the experiment  to  learn about  their  needs. 

(7)  Create  opportunities 
experiment  with  indirectly  affected groups. 

for  discussing  results  of 

the 

(8)  Monitor  the  tacit  and  implicit  expectations  and  visions  of 
the participants  and try to articulate them  clearly. 

(9)  Seek  broad  coverage  of  opportunities  for  learning  about 
new  implications  of a technology. 

(10)  Think  about  currently  established  mobility  patterns  and 
the  changes  which  the  new  technology/concept  may  bring 
about. 

(11)  Be aware  of  changing  requirements  in  terms  of  network 
structure  in  the  course  of  the  progress  and  scaling-up  of  the 
experiment. 

(12)  Consider  which  kinds  of  complementary  policies  could 
be  conducive,  necessary  or  detrimental 
the  niche 
technology/concept. 

to 

(13)  Look  for  opportunities  to  replicate  an experiment  and try 
to keep the accumulated  experience  available  in the  network. 

(14)  The  technology  or  concept  needs to  be adapted  to  mass 
users when the  niche  is growing. 

(15) Seek to establish smart ways of protecting an experiment. 

(16) Seek to establish productive and smart ways of  protecting 
a niche within  the prevailing  transport  framework. 

(17)  When  phasing  out  a  niche  development  process,  try  to 
enlist  the  established  network  into  the  development  of  other 
options  for  addressing similar  problems. 

Identifying a new  concept 

Designing an  experiment 

Implementing  an  experiment 

Expanding  an  experiment 
a  niche 

to 

Review  of  the  protection  of  an 
experiment 

Source: Weber,  M. et  al. (1998) 

IPTS-JRC -Seville, 1999 

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SNM is applicable to 
other  technologies 
outside of the domain 
of transport and 
mobility 

aiming at innovative solutions; and, local authorities 

Protection  versus  competition.  The  right 

trying  to  move  the  transport  system  towards 

mixture  of  protective  mechanisms  and 

sustainable  mobility. 

competitive  pressure  is  the  key  for  successful 

market  introduction.  In  particular  the  phasing 

SNM  puts  emphasis  on  understanding  social 

out  of  support  at  the  end  of  the  market 

needs, 

bottom-up 

network 

development 

introduction  needs careful attention and a kind 

processes,  and 

learning 

from 

stakeholder 

of  exit  strategy  to  avoid  excessive  attachment 

feedback.  However, 

it  also  points  out  where 

to  an unsuccessful  technology. 

potential  points  of  intervention  for  policy  makers 

Top-down 

versus 

bottom-up 

project 

lie.  The  adjustment  of 

institutional,  political, 

management. 

Both  approaches 

should 

organizational 

and 

regulatory 

framework 

complement  and not compete with each other. 

conditions  to  guide  the  niche  expansion  of  new 

A  combination  of  bottom-up  assessment  of 

technologies  and concepts  clearly  falls within  the 

stakeholders'  needs  during  the  early  stages  of 

responsibilities  of  public  authorities.  By  funding 

innovation  with  more  top-down  management 

selected  technologies  in  their  R&D  stage,  policy 

of  the  later  stages  of  the  diffusion  process 

makers  also  cooperate  with 

industry  and 

(scaling  up  of  experiments  and  regime  shift) 

stakeholders  at the  level  of  experiments. 

seems appropriate. 

Incremental  versus  radical 

innovations.  A 

Policy  makers  are  generally  confronted 

in 

technology  deviating  too  much  from 

the 

SNM with the necessity to find a balance  between 

existing  regime  only  has  a  slim  chance  of 

different  alternatives. A balance  needs to be found 

being  successful  because  it  would  imply  too 

in the  following areas: 

radical  a  change  of  user  behaviour.  On  the 

Box 2. The car-sharing niche in Europe and the importance of organisational 
and institutional adjustments 

Car  sharing  initiatives  have  emerged  in  several  European  countries  in  the  last  years.  Originally 

regarded by  many as little  more than grassroots  movements, they  have  in some cases transformed 

themselves  into  highly  professionalized  services. Mobility,  the merger of the two older  car-sharing 

initiatives  in  Switzerland  is now  an organisation with  nearly  20,000  members  with  close to  1000 

cars. Its success was partly due to the foundation of a highly professionalized organization and the 

introduction  of  an electronic  reservation  system, but  in  the early  phase  of  development  it  relied 

heavily  of enthusiastic  support  by  its members, too. Since the quality  of car-sharing is now  widely 

recognized,  even  the  public  transport  operator  in  Zürich  has  entered  into  a  co-operation 

agreement  with  Mobility.  The  Swiss  example  has  recently  found  followers  in  Austria  where  a 

similar  organization  is being  set up.  In Germany,  car-sharing  initiatives are  more scattered across 

the  country,  but  in  Berlin  in  particular  a  successful  and  professional  scheme  has  emerged. The 

Dutch examples may be less advanced than in Switzerland, but it is also a quite successful service. 

Government  has  played  a  more  prominent  role  in  its  early  establishment  and  promoted  the 

creation of a carrier  organization. 

Source: Harms/Truffer  1998b 

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other  hand,  only  minor  modifications  cannot 

mean  demonstration  projects  have  to  be 

achieve  the  long-term  goal  of  sustainable 

selected  carefully.  SNM  cannot  replace  R&D 

mobility.  Even  in  the  case  of 

incremental 

activities,  but  rather  seeks  to  enhance  the 

changes  the  long  term  goal  of  sustainable 

efficiency  of  early  stages  of  the  diffusion 

mobility  has  to  be  kept 

in  mind  and  be 

process of  technologies. 

integrated  in  the policy  framework. 

Range of technical  alternatives  covered  by the 

In  general  terms,  transport  technology  policy 

experiment.  Focusing  efforts  on  one  option 

programmes  should  place  more  emphasis  on  the 

reduces  costs  and  increases  efficiency  but 

establishment  of  niches  in  the  early  diffusion 

entails  the  risk  of  getting  locked  in  on  the 

process  of  new  technologies  and  concepts  rather 

wrong  track.  A  broad  range  of  alternatives 

than to support  for  R&D  in the narrow  sense. This 

allows  flexible  adaptation  of  the  experiment 

does  not  negate  the  need  for  technical  research, 

but  endangers  it  by  complicated  organisation 

but  argues  for  closer  integration  of  development 

and  lack  of focus. 

work  and  social 

learning  until 

the  new 

Balance between  all  kinds  of options.  Support 

technologies  have  stabilized.  At  least,  this  would 

should  not  be  concentrated  only 

to 

reduce  the  risk  of  ending  up  with  technologies 

technological 

improvements.  Technological 

which  nobody  wants. 

and  complementary  organizational  and 

institutional  innovations  need to  be  combined 

These  issues  could  become  important  in  the 

in an  intelligent  way. 

implementation of the Fifth Framework Programme, 

Balance  between  R&D  funding  versus  support 

aiming as it does to establish a closer  link  between 

of  market  introduction 

(timing  of  support 

technical  and  socio-economic  research.  R&D 

measures).  The  rapid  pace  of  the  innovation 

projects could be exploited  more efficiently,  if they 

process  demands  prospective 

technology 

are  monitored  with  regard  to  the  associated 

support  be given  to  policy  makers so they  can 

social  and  networking  patterns  underlying  the 

foresee  emerging  technological  changes  and 

introduction  process of new transport  technologies 

perceive  the  right  moment  for  an  experiment. 

and  concepts. 

In  principle, 

technology-based 

Money  spent  for  the  market  introduction  of  a 

demonstration  projects  or  research  programmes 

technology  will  not  be  available  for  R&D  of 

could  even  be  evaluated  on  the  basis  of  criteria 

the  next  innovation  step.  Limited  resources 

derived from the SNM-perspective.  Jf 

27 

In general, transport 
technology  policy 
programmes should 
concentrate  not so 
much on the basic 
technology research 
as creating and 
developing niches in 
order for them  to 
gain a foothold 

IPTS-JRC  -Seville,  1999 

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Keywords 
strategic niche management, technology diffusion, sustainable mobility 

Endnote 
The perspective and findings reported here are based on work done under the DG Xll­co­funded project 

on "Strategic Niche Management as a Tool for Transition to a Sustainable Transportation System" and 

the associated ESTO­project on "Strategic Management of Sustainable Transport Innovations" 

(http://www.jrc.es/projects/snm). In June 1998, a conference was organized on this subject in Seville 

to discuss the concept of SNM with transport operators, manufacturers, researchers and policy­makers. 

The results of the conference have been integrated in the workbook on Strategic Niche Management 

(Weber ef al. 1998). 

References 
• Weber, M., Hoogma, R., Lane, B., Schot, )., Expanding technological niches... How to manage the 

experiments with sustainable transport technologies, Sevilla/Enschede, Research Report, 

forthcoming, 1998. 

• Harms, S., Truffer, Β., The Emergence of a Nation-wide Carsharing Co-operative in Switzerland, 

EAWAG: Zürich, 1998. 

• Harms, S., Truffer, Β., Stimulating the Market for Lightweight Electric Vehicles. The Experience of the 

Swiss Mendrisio Project, EAWAG: Zürich, 1998. 

• Simon, B., The Praxitèle Experiment of Self-service Rented Electric Vehicles, MERIT/CIRED: 

Maastricht/Paris, 1998. 

• Simon, B., Hoogma, R., The La Rochelle Experiment with Electric Vehicles, MERIT/CIRED: 

Maastricht/Paris, 1998. 

• Lane, B., Promoting Electric Vehicles in the United Kingdom. A Study of the Coventry Electric Vehicle 

Project, The Open University: Milton Keynes, 1998. 

• Prätorius, G., Lehrach, K.­H., Operation of Electric Road Vehicles in Germany. Investigation of 

Selected Examples, reson: Braunschweig, 1998. 

• Kemp, R., Schot, )., Hoogma, R., Regime Shifts to Sustainability Through Processes of Niche 

Formation: The Approach of Strategic Niche Management, Technology Analysis & Strategic 

Management, Vol. 10, No. 2, pp. 175­195, 1998. 

Acknowledgements 

A. Grablowitz (VDI), R. Kemp (Merit), B. Truffer (EAWAG), J. Schot & R. Hoogma (University of Twente), 

and two anonymous referees. 

Contacts 

Matthias Weber, IPTS 

Tel.: +34 95 448 83 36, fax: +34 95 448 83 26, e­mail: matthias.weber@jrc.es 

Andreas Dorda, IPTS 

Tel.: +34 95 448 83 56, fax: +34 95 448 83 39, e­mail: andreas.dorda@jrc.es 

28 

/ 

About the authors 
Matthias Weber holds 
degrees In process 
engineering and political 
sciences from the University 
of Stuttgart and is about to 
finish a PhD in Economics. He 
is currently working at IPTS on 
innovation and diffusion 
processes in large socio­
technical systems, especially 
in the areas of energy and 
transport, and on the 
relationship between new 
technology and employment. 
His areas of interest also cover 
the development and 
application of prospective 
methods at the interface 
between research and 
policy­making. 
Andreas Dorda studied 
Physical Chemistry at the 
University of Vienna. Before 
obtaining his PhD he worked 
at the University of 
California at Berkeley and in 
the industry in France, 
Austria, Switzerland and 
Argentina. Afterwards he 
was employed as assistant 
professor at the University 
of Vienna, at the Austrian 
Academy of Science and at 
the Austrian Ministry for 
Environment. His research 
interests are in transport 
technologies and trends in 
mobility patterns. Before 
joining the IPTS as a National 
Expert in the Transport and 
Mobility Department he 
worked on environment and 
mobility at the Austrian 
Ministry for Science and 
Transport. 

ι IPTS­JRC ­Seville, 1999 

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Lower  Oil  Prices: Long-Term  Concerns 

Balbino  U r i b e,  University 

of 

Granada. 

I r v i ng  Spiewak, 

IPTS  and 

A n t o n io  Soria,  IPTS 

29 

% 

issue: Since the  beginning  of  1998 price  volatility  of  a magnitude  unprecedented  since 

1986  (apart  from  the  Gulf  war  period)  has  been  apparent  in  world  oil  markets. These 

fluctuations have been accompanied by unusually low oil prices. As a result, incentives to 

Invest  in  alternatives  to  OPEC  oil  have  been  substantially  reduced,  and  the  risks  of 

reduced innovation  in energy technology  have been greatly increased. 

Relevance:  The  current  oil  market  tensions  were  apparently  triggered  by  an  OPEC 

decision to  increase  Its oil  production  ceiling. While it  is often argued that  competition 

is growing in the oil market, the recent developments  demonstrate that OPEC still holds 

a dominant  position. Oil Importing  countries  are realizing short-term  benefits from  the 

low  prices, but  should carefully  consider their  long-term  energy security  requirements, 

which include alternative fuels and more efficient  technologies. 

Introduction: long term pricing policies 
and short term volatility 

oil  has  transformed  it  into  negotiable 

T he  process  of  commoditization  of 

deal negotiation mechanisms. After  the collapse 

international  markets  and  sophisticated 

merchandise 

transparent 

within 

The  recent  sudden  changes  in  the  crude 

market are tied to the fall in prices triggered by a 

10%  rise  in  the  OPEC  production  ceiling.  It 

should be borne  in mind that  OPEC as a whole 

owns about 75% of the world's proven reserves, 

but holds only 40% of the market share. It is well 

known  that  the  commitment  of  some  of  the 

OPEC countries to the agreements on production 

of the crude market in 1986 official prices of the 

quotas  is  rather  weak.  However,  most  of  the 

producing  countries  were  replaced  by  linked 

large producing countries seem to be favourable 

prices tied, through differentials, to the prices of 

towards  restricting  their  production  in  order 

so-called  marker  crudes, particularly  North Sea 

to  support  prices.  Theirs  can  be  considered  a 

Brent  and  US  West  Texas  Intermediate.  The 

long-term perspective. 

international commodity markets are much more 

volatile than the previous official  pricing system. 

An  important  issue  is the wide  divergence  of 

But, their influence in the long run is not as large 

interests  among  oil  producers  both  within  and 

as might be thought. 

outside OPEC. Indeed, there is a difference of more 

ι IPTS-JRC  -Seville,  1999 

Since the collapse of 
official prices in 1986 
oil prices have been 
low, but recently, 
increasingly volatile 

Although OPEC 
accounts for  only 
40% of world  market 
share it owns 75% 
of  known reserves, 
and in particular, the 
cheapest oil to  extract 

T he 

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J 

OPEC has managed 
to  maintain prices 
relatively stable even 
during periods of 
turmoil thanks to  its 
idle capacity. It has 
now used part of 
this capacity to  up 
production ceilings 

OPEC needs to  hold 
prices artificially  high 
by setting quotas, but 
in so doing encourages 
other competitors  into 
the  market 

than  an  order  of  magnitude  between  the  ground 

(Subroto,  1994).  It  has  avoided  the  mistakes  of 

price  (determined  by  the  marginal  extraction 

the  70s  and  early  80s,  when 

tensions 

in 

costs  of  some  of  the  Gulf  countries,  about  0.3-

the  market  were  habitual.  The  commercial 

0.5  $/barrel)  and the marginal  costs of  competitive 

instruments  the  organization  uses  to  serve  its 

producers  (for example the North Sea producers, at 

stability  strategy  throughout  this  period  been  the 

around  $10/barrel).  Above  this  there  is  a  ceiling 

price 

link  (commoditization  of  oil)  and  the 

price, set by the cost of backstop technologies such 

maintenance  of considerable  idle capacity  by the 

as shale oil (above $30/barrel), coal liquefaction, or 

large producers (Yamani, 1992). This idle capacity 

renewables. (above 40 $/bbl). This is two orders of 

allows OPEC to achieve considerable  increases in 

magnitude above the ground  price. 

output  rapidly,  for  example  so  as to  compensate 

for  interruptions  in  supply  from  Kuwait  and  Iraq. 

Changing  expectations,  in  both  the  long  and 

Now 

this  spare  capacity  has  allowed 

the 

short  term,  may  induce  large  fluctuations  within 

organization's  ceiling  to  be increased. 

this price window. For example, the Kyoto climate 

change  agreement,  Asian  financial  turmoil,  and 

The  constancy  of  the  ceiling  for  five  years 

political  tensions  in  the  Gulf,  can  all  produce 

has  come 

to  conceal 

its 

importance  as  a 

dramatic  changes  in the  price expectations  of  the 

commercial  policy  instrument  and  has  induced 

oil  commodity  markets. 

doubts  about 

the  market  power  of  OPEC. 

Forecast  of 

its 

imminent  demise  has  been 

We  shall 

look  first  at  the  importance  of 

anticipated  by  some  (Berg  ef  al.,  1997).  OPEC 

collusive  agreements  for  the  oil  market  and  their 

member  countries  themselves  have  expressed 

role  in  the  stability  of  recent  years,  and  then 

surprise  and  concern  about  the  intensity  of  the 

analyse 

the  possible  future  development  of 

market  response  to  the  recent  change  to  the 

stability,  bearing  in  mind  that 

technological 

production  ceiling,  making  clear  the  structural 

advances  can  help  marginal  producers 

to 

importance  of  the  limit.  The  growth  of  non-

substantially 

reduce 

their  production  costs. 

OPEC producers  and their  advanced  technology 

Finally,  the  possible  technology  policies  of  oil 

currently  put  the  OPEC  member  states  in  a 

consuming  countries,  in  response  to  collusion 

difficult  position.  They  need  relatively  high  oil 

among the  large oil  producers, will  be discussed. 

prices  to  support  their  economies  In  the  near-

term,  but  good  prices  also  encourage 

their 

competitors  in  the  mid  to  long-term. 

Oligopoly, stability and price levels 

For  several  years  now,  the  popular  press  has 

In short,  in  terms of the  long-term evolution  of 

looked  only  at 

the  day-to-day 

functioning 

the crude  market, what  needs to  be underlined  is 

of  the  market,  disregarding  -without  apparent 

that  the  stability  of  recent  years can  be  attributed 

justification-  the  background  tendencies  of  the 

to 

the  presence, 

from 

the  supply  side,  of 

crude  oil  market.  The  market  stability  of  the  last 

significant 

idle  capacity  with  which 

to  face 

eleven  years,  only  Interrupted  during  the  Gulf 

situations  such  as  the  Gulf  War,  and  (and  this  is 

crisis, can  have  induced  such an attitude. 

equally  important)  to  the  maintain  quota/price 

ceilings within  OPEC. The existence of competing 

It  should  be  remembered 

that  since 

the 

producers  outside  of  OPEC,  and  political  and 

collapse  of  the  market 

in  1986,  OPEC  has 

security  considerations  (such as the  role of the US 

proclaimed  itself  to  be  the  protector  of  stability 

and 

Iraq  in  the  region)  mean  OPEC's  price 

©IPTS-JRC  -Seville, 1999 

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freedom  is more  limited  than  it  was  in the  70s. 

Figure  1 illustrates  how percentage  increases 

These  non-OPEC  countries  need  to  remain 

in  oil  production  since  1986  have  occurred 

competitive -  and this will  depend on their  use of 

largely  outside  of  OPEC  (in  the  competitive 

technology to offset  higher  extraction  costs. 

producers).  However,  a closer  look  at the figure 

World oil market polarization and 
technological change 

also  reveals  that  OPEC  has been  increasing its 

share  of  the world  market  during  the  reported 

period.  The  recent  downturn  In  the  oil  price 

could  spark  a considerable  increase  in demand, 

Oil  producers  have  become  more  or  less 

especially 

from 

the  developing  countries 

polarized  into two groups: the  I arge-reserve,  low-

(Amirahmadi,  1996).  This  is  building  up  huge, 

cost  producers  -mostly  within  OPEC-  and  the 

inflexible,  demand  for oil that  will,  at some  time 

competitive  producers  with  significantly  higher 

in  the future, be satisfied  primarily  by OPEC (at a 

costs  -including  producer  countries  In  the 

price  depending  on  ceiling 

imposed  by the 

OECD.  The  competitive 

producers,  and 

extraction  costs  faced  by  existing  or  emerging 

especially 

those  within  the  OECD,  require 

competitors).  In view  of  this  it  is clear  that the 

continually 

improved 

technology  to  maintain 

world  oil  market  cannot  be understood  without 

their  market  share. This  includes  better  tools for 

taking a long time  perspective. 

oil  exploration,  horizontal  drilling  of  wells, 

secondary  and  tertiary  recovery  techniques, and 

A crucial aspect of the energy policies of OECD 

deep-sea technology.  Of course, the  effectiveness 

countries  is mitigation  of their  vulnerability  to  oil 

of  this  improved  technology  is  limited  by the 

supply  fluctuations. The high price of crude during 

physical  availability  of  the oil  resource,  which 

the period  1973-1986  encouraged the  exploration 

has been depleted  in many of the older  fields. 

and  operation  of  high  cost  fields,  and therefore 

Figure 1. Time course of output from producers worldwide 

31 

t 

World oil production is 
now broadly split 
between  large,  low 
cost producers mostly 
within OPEC, and 
higher cost, high 
technology  producers 
outside 

O 

D 

WORLD 

OPEC 

Δ 
—*— 
- *-

OECD 

Saudi A. 

Norway 

o o 
νβ co 

τ~ 
II 

O-v 

400 

300 . 

200 . 

150 . 

100 . 

50 

1986  1987 1988 1989 1990 1991 1992 1993 1994 1995  1996  1997 

T 

τ 

~Γ 

τ 

τ 

Source:  Based on BP Statistics  (http://www.bp.com/bpstats/) 

year 

ι  I P T S - J RC  - S e v i l l e,  1 9 99 

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32 

4 

Expectations about 
future trends 
become self-fulfilling 
prophecies as 
producers let more 
or  less oil onto the 
market accordingly 

Large producers have 
several reasons to allow 
prices to drop in the 
medium term. Among 
these is defending 
the market for  oil 
against conservation 
technologies and 
energy  substitution 

increased the polarization  phenomenon.  It  Is clear 

climate  change  threat.  This  can  be  viewed  as an 

that  technological  advances  in  the  production  of 

opportunity  to  bring  energy  efficiency  closer  to 

oil  can  reduce  the  effects  of  this  polarization  (but 

long-term  economic  efficiency  (Gunn,  1997), and 

not  the  polarization  itself)  and, as a consequence, 

the  Kyoto  protocol  may  act  as a  stimulus  in  that 

the 

temporary  energy  dependency  of 

the 

direction. The internalization of the environmental 

industrialized countries. But, these advances finally 

costs of the  use of fossil  energy  would  reduce the 

create  a  disincentive  to  development 

in  other 

threat  of  the  oil  shocks,  since  it  can  promote 

technological  sectors,  particularly  for  substitution 

technological  advances  that  would  make  oil 

and  conservation  (Orasch  ef  al.,  1997).  In  fact, 

reserves  last  longer.  Energy  vulnerability  and 

there  is negative feedback  influencing the shape of 

climatic  vulnerability  can  both  be  reduced  by  the 

oil  prices over the long term (Uribe,  1997). 

same policies favouring alternative  technology. 

In the medium term, if the production  capacity 

is reduced  as consequence of technological  cycle 

Large producer collusive strategies 

exhaustion  (indeed, according  to  an  autonomous 

At  present,  the  relative  abundance  of  reserves 

technological evolution  model the fall  in  marginal 

and  the  diminishing  marginal  costs  induce  the 

costs  would  be  transient  (Campbell  ef  al.  1998), 

large  producers  to  let  prices  fall  so  as  to  avoid 

new supply  restriction shocks cannot  be ruled out 

long  term  penalties.  This  can  be  of  interest  to 

-  confirming  the  cyclical  movement  of  oil  prices 

them  for  several  reasons: (a) to  impose  discipline 

characteristic  of  their  history.  Moreover,  in  the 

within 

the  cartel  and  enforce  production 

case of a non-renewable, non-depreciable, single-

reduction  agreements  with  countries  outside  of 

use  resource,  such  as  oil,  the  development  of 

OPEC; (b) to  expel  part  of  the  production  of  high 

proven  reserves  are  influenced  via  positive, 

cost  countries  from  the  market;  (c)  to  encourage 

destabilizing  feedback  from  price  signals  and, 

substitution  of  other  energies  by  oil;  and  (d)  to 

particularly,  from  price  expectations.  Indeed,  if 

discourage 

technological 

investments 

in  oil 

lower  prices  are  expected,  production  will  be 

conservation and production of other  energies. As 

accelerated  in order to benefit  from  the (still)  high 

may  be  seen,  most  of  these  reasons  relate  to  a 

prices  and  anticipate  the  price  fall,  therefore 

long  term  policy,  and  one  which  is  especially 

flooding  the  market  and  Inducing  a  real  price 

valuable to the  large  producers. 

collapse. On the other  hand, if expectations are of 

higher  prices  in the future, the owners  of deposits 

The  strategic 

importance  climatic  change 

will  try  to  maintain  greater  reserve  volumes, 

avoidance  policies  for  the  future  course  of  oil 

waiting  for  higher  prices,  and  therefore  cause  a 

demand  is  not  lost  on  OPEC  leaders,  as  may  be 

supply  shortage  that  would  raise  prices.  In  one 

deduced  from  the  frequency  with  which  the 

way  or  another,  expectations  create  a  self-

subject 

comes  up 

in 

the  organization's 

fulfilling  prophecy,  unless  urgent,  short-term 

publications.  This  Issue  is  termed  demand safety 

financial  requirements  prevail.  These  trends  go 

(Yergin,  1992),  in  contrast  to  the  supply  safety, 

some  way  to  explaining  the  oscillating  and  at 

.that  OPEC  claims  to  have  guaranteed  since  the 

times convulsive  history  of oil  prices. 

end  of  the  oil  shock  years.  OPEC  complains 

that  carbon-taxes  could 

increase 

the 

fiscal 

At  the  present,  however,  there  is  a  major 

discrimination 

that  oil  suffers 

in  developed 

worldwide  issue  that  could  partially  mitigate  the 

countries  relative  to  other  fossil  energy  sources. 

consequences  of  the  polarization  process:  the 

The imminence of the Kyoto conference could  be 

© IPTS - JRC - Seville, 1999 

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33 

% 

Φ. 

A downturn in oil 
prices may hurt large 
producers In the short 
term,  but if they drive 
higher cost  producers 
out of the market they 
can expect long 
term gains 

one  of  the  reasons  for  the  increase  in  the  OPEC 

this downward  pressure on prices may (also in the 

production  ceiling  in  November  1997.  OPEC 

long  run),  reduce  the  operating  margin  of  high 

intended  to  show  the  difficulty  of  reducing  oil 

cost  fields  (typically  operated  in  the  competitive 

demand,  since  the  ceiling  increase can  make  the 

market 

fringe),  and 

therefore 

reinforce 

the 

price of oil very competitive compared with  other 

position  of  the  cartel, with  its  low  marginal  costs 

energies.  Although 

to  some  extent 

it  was 

and  large  reserves.  Indeed,  current  low  prices 

overtaken  by  events  in  both  Asia  and  the  Middle 

are  causing  problems  for  numerous  producer 

East,  we  should  not  underestimate  the  power  of 

countries,  which  are  experiencing  an  alarming 

these collusive  instruments. 

reduction  in their  oil  revenues. 

Oil  demand  exhibits  price  inelasticity  in  the 

Although  it may seem difficult  to  reconcile the 

short  term  (and  its  progressive  concentration  in 

objectives  of  different 

large  producers  within 

the transport  sector  means this  has not  decreased 

OPEC, this  has  in  fact  been possible, even  during 

in  the  recent  years  (Greene  ef  al.,  1988),  but 

times of tension  such as the Iran-Iraq war, though, 

considerable  price  elasticity  in  the  long  term 

again,  one  should  not  lose  sight  of  the  different 

(jones, 1996). This provides the basis for  collusive 

security  considerations  since the Gulf  war. 

agreements -  within  the  limits  set by demand and 

supply  from  the  competitive  fringe  (Figure  2).  In 

Obviously,  the  relationship  of  OPEC  with 

the  long  run,  however,  the  downward  pressure 

foreign  producers  also  varies.  Some  of  these 

on  prices  caused  by  shrinking  demand  and 

countries, such as Mexico, have been very close to 

technological  advances  in  the  conservation  and 

the  Organization  since  1986;  others  such  as 

the production of oil  can  lead (as they have done) 

Norway,  have  kept  their  distance.  However,  a 

to a loss of  market  share for  the countries  that are 

warning shot, such as raising the OPEC production 

a  party  to  the  collusive  agreement.  Nevertheless, 

ceiling,  is all  that  Is  needed  for  many  of  them  to 

Figure 2. Crude price formation in the short term 

i i 

\ 
D 

\ 

sf 

\ 

S 

c 

D  = World  d e r a nd 

Sf =  Competitive  fringe  supply 

S =  World  supply  =  Sf +  production  ceiling 

C  =  World  capacity 

Production 

w 

Source: Uribe, 1997 

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34 

The oil-sector  is still 
tightly  bound to 
geopolitical events and 
a long run of steady 
prices is no reason for 
complacency  about 
the possibility of 
future shocks 

About the  authors 
Balbino  uribe 
has a degree and 
doctorate in Economics 
(UNED, Spain) and a 
degree in mathematics 
(Complutense University, 
Spain). He is a lecturer in 
world economics at the 
University of  Granada (Spain) 
specializing in the economics 
of  energy. His research work 
centres on the world  petrol 
economy, the economics of 
climatic change and the 
mutual  relationship  between 
national energy systems 
and iCTs (Information 
and  Communication 
Technologies). 

accept the collusive  arrangements. The motive for 

producers, the agreement with  outside producers, 

limiting their  production  is that they are obliged to 

and -particularly  noteworthy- the discouragement 

do  so  in  order  to  avoid  more  serious  problems, 

of  investment  in technologies  for  oil  conservation 

such as a steep fall  in prices. Even Norway,  which 

and alternative  energies. 

is  strongly  opposed  to  these  agreements,  has 

sometimes  felt obliged  to acquiesce. 

The 

foreseeable 

exhaustion 

of 

the 

Conclusion 

technological  cycle, the  increase  in  demand  and 

its  inelasticity,  lead  one  to  think  that,  in  spite  of 

the  high  level  of  current  reserves, new  oil  shocks 

OPEC's  strategy  of  maintaining  stability  by 

can  not  be  ruled  out.  To  reinforce  this,  the 

means  of  significant 

Idle  capacity  and  a 

oil  sector  is  still  as  tightly  bound  as  ever  to 

production  ceiling  continues  to  dominate  the  oil 

geopolitical  events. 

market. The  power  of  these collusive  instruments 

was  demonstrated  by  the  tensions  that  were 

The  energy  diversification  policies  and  the 

generated  by  the  agreement  to 

increase  the 

collaboration  between  oil-related  sectors  in  the 

ceiling  last  November. 

producer and consumer  countries are advisable to 

prevent  future  shocks.  The  implementation  of 

For  several  years  now  decreasing  marginal 

policies 

to  combat  climate  change  are  also 

costs  worldwide  as  a  result  of 

technology 

especially  important  in this respect, by  its stimulus 

has 

limited  OPEC's  ability 

to  raise  prices. 

on  technological  change 

in  oil  conservation. 

Nevertheless, the extraordinary  distance  between 

What  is crucial  from  the  technological  viewpoint 

the  marginal  costs  of  OPEC  producers  and  the 

is (a) continued emphasis on arch into renewables, 

competing 

fringe  producers  should  not  be 

regardless  of  low  oil  prices; and  (b)  cost-reducing 

forgotten. The large OPEC producers seem willing 

innovation  for  non-OPEC  producers  (e.g.  for 

to  allow 

lower  prices 

in  the  expectation  of 

locating  and  extracting  reserves)  so  that  the costs 

advantages  in  the  long  run.  These  derive  from 

of entering and  leaving the market are reduced, in 

several  factors:  improved  discipline  within  the 

order  to  block  any  attempt  to  use  predatory 

cartel,  expulsion  from  the  market  of  high  cost 

pricing to exploit  cartel  positions, 

^φ 

©  IPTS-JRC  -Seville, 1999 

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Keywords 

oil prices, world oil market, energy security, climate change 

References 

• Amirahmadi, H., Oil at the Turn of the 21st-century, Futures, Vol 28, Issue 5, pp 433­452,1996. 

• Berg, E., Kvrndokk, S. and Rosenhall, K.E., Gains from cartelisation in the oil market, Energy Policy, 

Vol 25, No. 13, pp 1075­1091, 1997. 

• Campbell, C.J. and Laherrere, J.H., End of the Era of Cheap Petroleum, Scientific American, 

March 98 pp 66­71, 1998. 

• Greene, D.L., Jones, D.W. and Leiby, P.N., The outlook for US oil dependence, Energy Policy, Vol 26, 

No. 1, pp 55­69, 1988. 

• Gunn, C, Energy efficiency vs economic efficiency? New Zealand electricity sector reform in the 

context of the national energy policy objective, Energy Policy, Vol 25, No. 4, pp 445­458, 1997. 

• Jones, CT., A Pooled Dynamic Analysis of Interfuel Substitution in Industrial Energy Demand by the 

G-7 Countries, Applied Economics, Vol 28, Issue 7, pp 815­821, 1996. 

• Orasch, W. and Wirl, F., Technological efficiency and the demand for energy (road transport), Energy 

Policy, Vol 25, No. 14­15, pp 1129­1136, 1997. 

• Subroto, OPfC Viewpoint 1992-94, A selection of speeches by Dr Subroto, OPEC Secretariat, 

Vienna, 1994. 

• Uribe, B., El mercado mundial de crudo petrolífero, Editorial Universidad de Granada, Granada 

(Spain), 1997. 

• Yamani, S.A.Z., Oil Price Stability and Free Markets, Energy Policy, 20, 6, pp. 495­499, 1992. 

• Yergin, D., Assessing three key issues confronting the oil industry, OPEC Bulletin, july­Aug­92 

19­21,1992. 

Contacts 

Balbino Uribe, University of Granada (Spain) 

Tel.: +34 958 244180, fax: +34 958 244046, e­mail: buribe@goliat.ugr.es 

Irving Spiewak, IPTS 

Tel.: +34 95 448 83 86, fax: +34 95 448 83 39, e­mail: ¡rving.spiewak@jrc.es 

Antonio Soria, IPTS 

Tel.: +34 95 448 82 94, fax: +34 95 448 82 79, e­mail: antonio.soria@jrc.es 

IPTS­JRC ­Seville, 1999 

35 

% 

About the authors 
Irving Spiewak holds a 
Master of Science degree in 
Chem. Engineering, from 
the Massachusetts Institute 
of Technology. Before 
joining the IPTS as a Visiting 
Scientist, specializing in 
technology watch in solar 
thermal energy and other 
renewables he worked as a 
research scientist and 
program manager at Oak 
Ridge National Lab, USA, and 
a research scientist at the 
Weizmann Institute of 
Science, Israel. His research 
interests include the 
energy/environment field. 
Antonio Sorla holds 
degrees in Energy 
Engineering and Economic 
Science. He earned also his 
doctoral degree in Nuclear 
Engineering at the 
Universidad Politécnica de 
Madrid. Before joining the 
IPTS, he worked at the 
Spanish Ministry of 
industry's research centre 
ClEMAT, and then at the JRC 
Ispra site. His main areas of 
interest concern energy 
technologies, natural 
resource management and 
energy economics, as well 
as the environmental 
impact of energy 
transformation and use. 

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*eg 

Cooperation b e t w e en Southern-
Eastern Mediterranean countries and 
t he EU: The renewable energy sector 

Miguel A. A g u a d o ­ M o n s o n e t, IPTS 

issue: Renewable energy technologies are becoming more widespread in southern 

Mediterranean countries, thanks to developed countries' cooperation programmes and 

International aid. However, it is still not clear what is the best way for programmes to 

meet real renewable energy needs. 

Relevance: The European community Development Programme has begun to focus on 

the question of how it may develop after the year 2000. The outcome will depend 

particularly on two processes: the expiry of the Edinburgh principles on the EC budget 

(1999) and the revision of the Lomé Convention (February 2000). Decision makers need to 

be informed by considerations regarding the most effective cooperation strategies. 

The Mediterranean region and 
the European union 

the European Union (1997) In the SEM countries 

are summarized in Table 1. 

of trade, non­EU Mediterranean (SEM) 

A lthough not a major partner in terms 

countries are a priority target for 

around 25% of the total EU budget for 

cooperation programmes, absorbing 

cooperation programmes. 

Since 1995, Community cooperation 

with the Mediterranean region has been 

channelled within the framework of the 

Barcelona Declaration for a Euro­Mediterranean 

partnership. This defined the MEDA programme, 

which represents the starting point of the 

cooperation system with all south­eastern 

The main areas of cooperation with SEM 

Mediterranean (SEM) countries. The countries 

countries can be extracted from the Council 

included in that declaration, and consequently 

resolutions taken between 1992 and 1997. Listed 

that can access MEDA funds are Algeria, Cyprus, 

in order of importance, these are coordination 

Egypt, Israel, Jordan, Lebanon, Malta, Morocco, 

and coherence, health, food aid, the fight against 

Palestine, Syria, Tunisia and Turkey. 

poverty, population control, education, and 

social policy. In the same vein, the main areas 

The average annual commitment for the 

of cooperation identified by the World Bank, 

MEDA programme over the last years has been 

United Nation Development Programme, and 

800 millions ECU. However, the 1997 and 1998 

©IPTS­JRC ­Seville, 1999 

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Table 1. Main areas of cooperation  with  n on-EU  Mediterranean  countries 
(Cheru;  Worldbank) 

Country 

Priority  areas identified  for  international  cooperation 

Morocco 

Egypt 

Lebanon 

Syria 

Health, education, agriculture, water  and  sanitation,  National  Program  for 
Poverty  Reduction,  Education,  Representation,  Poverty  Alleviation,  Social 
Fund, Social  Welfare 

Economic  Reform/Management,  Public  Enterprises, Tourism 

Reform of the Ministry  of  Finance to  perform  its fiscal  policy  role 

Environment,  Supply-Side  Efficiency  and  Energy  Conservation  and 
Planning 

Mediterranean  region 

Reduce the effects of environmental  degradation 

Global  Program 

Water  and Sanitation  Program from GEF 

MEDA  budget  has  been 

increased  to  1,100 

between  Algeria  and  Spain  and  the  electrical 

MECU.  That  figure  has  been  only  surpassed  by 

connection  between  Morocco  and  Spain  are 

the cooperation  funds addressed to CEEC and CIS 

some  of  the  business-oriented  energy  projects 

countries.  The  financial  perspectives  of  external 

linking  both  sides  of 

the  Mediterranean. 

actions  for  this year  (EC budget)  and estimates  of 

However, 

there 

is  also  a  pressing  need  to 

appropriations  for  the  European  Development 

provide 

the  population 

in  SEM  countries 

Fund  (EDF)  are  expected  to  increase  for  the 

with  electricity. 

MEDA  programme. 

Table  1  would  seem 

to  suggest 

that 

cooperation  on energy  issues is not considered a 

Electricity  sector  in  southern-eastern 
Mediterranean  countries 

strategically 

Important  area,  and  the  same 

Electricity 

is  provided  by  a  state-owned 

phenomenon  can  be  detected  when  the  World 

monopoly 

in 

all 

of 

the 

south-eastern 

Bank and other  International  funds are analysed. 

Mediterranean  (SEM) countries, and  in each there 

The  cooperation  programmes  between 

the 

is  a  need  to  extend  the  network  to  reach  the 

SEM  and  the  EU-15  countries 

in  the  energy 

whole  population.  In  some  countries  the  rate 

field  normally 

take  the  form  of  commercial 

of  electrification  needs 

to  be  very  high 

transactions  between  the  energy  utilities  from 

if  governments  are  to  satisfy 

the 

increasing 

the  north  and 

the 

south.  The  energy 

electricity  demands  from  a  growing  population 

interconnection  between  the  two  sides  of  the 

and/or  to  increase  of  the  general  welfare  of  the 

Mediterranean  sea  has been  the  most  important 

population.  With  the  exception  of  Israel  and 

cooperation  issue  in  recent  years.  For  instance, 

Algeria,  a tremendous  economic  effort  is  needed 

the  projects 

for 

the  electrical  connection 

for 

these  countries 

to  bring  electricity 

to 

between  Greece-Turkey  and  Turkey-Israel, 

the  whole  population.  Turkey,  Lebanon,  Egypt 

the  electrical  connection  already  established 

and  Jordan  are  the  countries  that  need  to  make 

between 

Italy  and  Tunisia,  the  gas  pipeline 

the  greatest  economic  effort 

(in 

terms  of 

' I P T S - J R C-  Seville,  1999 

37 

Cooperation  on  energy 
issues with  countries 
on the  other  side of 
the  Mediterranean  may 
not  appear  high  on 
the  stated  list of EU 
priorities,  but a 
number  of  important 
projects  have  already 
been  undertaken 

Most  south-eastern 
Mediterranean  (SEM) 
countries  are facing 
pressing  needs  to 
extend  electricity 
supply  to  large  sections 
of  the  population 

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£# 
l'i 

&f 

Table 2. Current State of Electricity Supply and Predicted Future Demand 
in SEM Countries 

Morocco's  electricity  generating  capacity  in  1997  was  3,750  MW.  Analysts  predict  that  an 

additional  2,000  MW  capacity will  need to be installed by  2010. Morocco  is arguably the  leading 

SEM country  in  its commitment  to encouraging  private  power. 92% of the country's energy  supply 

has to be imported. The rural electrification  rate is low and a major programme (PERG) is underway 

to  rapidly  expand  rural  electrification. 

Algeria  is almost  alone  among SMC countries  in  that  its early  1998  generating  capacity  of  5,300 

MWprovided  it with a comfortable  generating surplus. In the  late  1980s and the  1990s this meant 

it  could  sell off  excess power  production  to Morocco  and Tunisia. This  being the case,  it  Is highly 

unlikely  that much new capacity will  be constructed  before 2000, even allowing for the  retirement 

of  several  hundred  megawatts  of  older  generating  plant.  The  current  mainstays  of  the  Algerian 

electricity  network  are gas-powered  power  plants. Although  Algeria  also  uses alternative  sources 

for generating  electricity. 

Egypt's  installed  electricity  generation  capacity  in  early  1998  stood  at  about  14,600  MW.  (20% 

Hydro). While supply was generally plentiful, planners still foresaw the need for annual  increments 

of  about  5%  in  supply  capacity  to  keep  up  with  demand  over  the  period  1998-2010.  Egypt  has 

traditionally  used a wide variety of methods to finance its new electricity  infrastructure.  Particularly 

in the  1980s  it  made  liberal  use of cheap financing  from  both  the World  Bank and  USAID.  It also 

borrowed  heavily  from  the  African  Development  Bank  and,  after  1989  (when  political  relations 

were  re-established  with  Saudi  Arabia),  it  used  Arab  development  funds  from  Gulf  countries. 

Finally,  Egypt was  also  able  to  call  upon  non-Arab  bilateral  development  funds, especially  those 

from Japan, Germany,  France and  the  UK. 

Due to a combination  of  historical  reasons and the absence of fossil  fuel  resources the Palestinian 

Authority  has to import energy from  Israel. According to the Palestine Energy Research Centre, per 

capita  electricity  consumption  will  increase  by  10%  per  year  after  1998.  The  annual  electricity 

demand  has  reached  the  1354  GWh.  About  140  villages  still  suffer  from  either  the  absence  of 

electrical services or interrupted supply. People living  in these villages account  for  13% of the total 

Palestinian  population  (4.5% are without  electricity  and 8.5%  have partial  electricity  (8 hours per 

day)  using small  Diesel  generators). 

Israeli  fossil  resources  are  fairly  scarce  and  almost  all  energy  supply  has  to  be  imported.  Solar 

energy in Israel is mostly used for residential water  heating, and is equivalent  to about  2-3% of total 

electricity  consumption. Wind  energy  resources  are very  limited. 

Turkish electricity  demand  rose by  11.8%  in  1996  compared  with  the  previous  year, the  highest 

growth  rate  in  the world. Turkey  is  likely  to  spend  about  $70bn  in  the  period  1998-2010  for  this 

infrastructure  -enough  to  triple  current  capacity.  An  important  question  facing  the  Turkish 

electricity 

industry 

in  early  1998  concerned 

the  prospects  for  electricity  privatisation.  If 

privatisation  legislation  were  passed,  incentives  for  locally  generated  investment  to  finance  new 

electricity  infrastructure  would  be  substantially  increased.  However,  for  political  reasons,  the 

chances  of  this  happening  at  any  time  before  the  end  of  the  decade  seem  remote.  BOT  (Build 

Operate  Transfer)  would  probably  remain  the  preferred  option  for  financing  new  electricity 

infrastructure  in  Turkey  over  the  period  1998-2010,  provided  that  the  prevailing  legislative 

obstacles are  removed. Turkey  has significant  hydraulic  resources. 

ι IPTS-JRC  -Seville, 1999 

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infrastructure  cost  for  the  electrification  divided 

Nevertheless, 

renewable  energies  have 

by  GNP)  to  build  new  electricity  infrastructure. 

not  generally  been 

taken 

into  account 

in 

Estimates from  the  World  Bank and  The Financial 

electrification  plans 

in 

these  countries.  RE 

Times show  that  around  110  billion  ECU  are 

technologies  are  considered  to  be  a  possible 

needed  for  the  next  ten  years  to  electrify  the 

solution  in  those  national  electrification  plans 

region.  Nevertheless,  as the  table  below  shows, 

where  the  electricity  grid  is  not  scheduled  to 

the  electricity  sector  is  not  the  same  situation  in 

reach  outlying  areas  within  the  next  ten  years. 

all  the SEM countries. 

In  those  cases,  renewable  energies  can  be 

Renewable energies in the non-European 
Mediterranean countries 

The  increasing  use  of  renewable  energies 

considered  as  an  option 

for  electrification. 

Table  3  summarizes  the  renewable  energy  plans 

implemented  or  to  be  implemented  in  the  near 

future  in  some SEM countries. 

(REs) 

in 

the  Mediterranean 

region 

is 

fully 

The  cooperation  projects  or  programmes 

consistent  with  most  scenarios  of  social  and 

between  the  EU  and  the  SEM  countries  in  the 

economic  development  in  the  region  and  this 

renewable  energies  sector  are  small  in  relation 

will  continue over the coming  decades. A  rapidly 

to 

the  potential  of 

the  region.  The  most 

expanding  energy  market  together  with  major 

widespread  technology  across the region  is solar 

changes  in  the  structure  of  the energy  sector  is a 

energy.  The  main  reason  for  this  is  that  it  is 

trend  that  can  only  continue  to 

increase  as 

modular  and  so  more  affordable 

for 

the 

European  Union  markets  and 

those  of 

the 

cooperation  funds.  Wind  energy  has  very  good 

southern  Mediterranean  become  more  and  more 

opportunities 

in  specific  locations  but  is  not 

integrated.  These  two  elements  offer  themselves 

widespread.  Biomass  and  solar 

thermal 

considerable  opportunities 

for 

renewable 

technologies  are  less  popular  as  a  result  of 

energies, and it will  be up to the  industry  to  seize 

technical  problems  or  difficulties  in  adapting 

them.  Using renewable  energy sources  has local, 

them  to  the  region.  However,  the  potential  for 

regional  and global  advantages. 

rural  electrification 

is  enormous  considering 

SEM countries  have the common  characteristic 

and  the  potential 

for 

increasing  the  welfare 

both  the  expected  increase  in  the  population 

levels  of  solar 

of  high 
to 
6  kWh/m2/day).  The  wind  resources  are  also 

radiation 

(4 

of  the  population. 

extensive,  sites  with  good  wind  resources  being 

Nevertheless,  the  record  of  disseminating RE 

available  in  almost  all  the  countries.  Thus,  given 

technologies  into  rural  areas  in  SEM  countries 

the  scarcity  of 

fossil  resources 

in  some  of 

has not been  particularly  good. The  main  reason 

the  SEM  countries,  and 

their  social  and 

has  been  the  lack  of  infrastructure  support,  as 

environmental  benefits,  renewable  energies  are 

the  systems  are  mainly  beyond  the  capabilities 

ideally  placed  to  meet  their  growing  demand  at 

of 

local  commercial  operators.  This  support 

local, regional  and  national  levels. Aware of these 

includes 

training 

local 

technicians 

and 

factors,  the  European  Commission  Is  promoting 

entrepreneurs,  research  and  development  of 

renewable 

technologies  strongly 

inside  and 

new  products,  marketing,  financing  and  credit 

outside  of  the  Union.  Both  UNESCO  and  the  EC 

schemes, education  and  networking. As a result, 

have detected a number of projects or  programmes 

it  has not  been possible to develop  well-targeted 

in the field applicable  to these countries. 

projects,  undertake  complementary  initiatives, 

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39 

χ 

Increasing  integration 
of energy  markets on 
both sides of  the 
Mediterranean will 
create  opportunities 
for  renewable energies 
as most SEM  offer 
optimal conditions 
for  them 

The spread of 
renewable energies 
into rural areas in SEM 
countries  has been 
held back by a lack of 
infrastructure  support 

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Table 3. Renewable Energy initiatives in the SEM Countries 

The  government  of  Algeria  has  implemented  a  photovoltaic  programme  to  install  solar  home 

systems  In  remote  villages. This  project  aims  to  electrify  1,000  households  located  in  20 villages. 

Other  projects  will  develop  PV  power  plants  to supply  electricity  to  isolated  networks  now  fed by 

diesel  plants. The solar plant, which opened at Melouka  in  1985, was reputed to be the largest such 

plant  in the world. 

A 50 MW  wind  power  plant  is under development  at Tetouan (Morocco) as an Independent  Power 

Project.  Biomass  has some potential  with  the  use of agricultural  waste and  more than 200 sites for 

minihydro  power  plants  (5 kW  to  200  kW)  have been  identified. A  solar  thermal  plant  near Jerada 

is under  study. The  rural  electrification  programme  promoted  by  the government  concerns  mainly 

the extension of the electrical  grid  but deals also with  decentralised  electrification  with  renewable 

energy systems for  small  and  dispersed villages  mainly  by photovoltaic  technology. 

In  1978 Tunisia launched a national  plan to promote renewable energies  (RE). A detailed  appraisal 

of the  RE resources  has been  carried  out; and  has been  identified  solar  and wind  resources  as the 

most  important. The electricity  actors and other organisations concerning  rural electrification  have 

carried out  several  projects  related to  rural  electrification  of  remote  houses with  PV. 

Since  1980,  the  Egyptian Ministry  of  Electricity  and  Energy  has formulated  a  national  strategy  for 

the development  of  renewable  energy  applications  and energy conservation  measures. The targets 

are  going  to  be  fulfilled  primarily  using  solar,  wind  and  biomass  technologies.  Up  to  2005  the 

programme  includes  400  MW  of  wind  farms  and  300  MW  of  integrated  solar  thermal  combined 

cycle  plants (with about  15% solar contribution). A 5MW-wind  farm  is currently  in operation  using 

locally-manufactured  turbines. The  solar  photovoltaic  programme  in  Egypt aims  to  accelerate  the 

introduction  of  photovoltaics  in small  villages  in  remote areas. 

Renewable  energy  activities  in  Palestine  are  few  and  far  between.  Some  cooperation  initiatives 

have begun to  establish  promotion  of  renewable energies  in the Palestinian  territory. 

Studies  are  underway  to  assess  wind  energy  potential  in  Turkey.  The  geothermal  resources  are 

located  in  the  Western  Anatolian  region  and  a  15  MW  geothermal  plant  is  in  operation.  The 

potential for small-scale  hydropower  is very important, the country  having installed capacity of 350 

MW.  The  contribution  of  renewable  energies  (excluding  hydro)  is estimated  to  reach  100 MW  in 

the year  2000  and  1,000  MW  in the year  2020. 

A single  5 MWe wind  farm  is operating at the north of Golan  Heights (Israel) and there  is a plan  to 

add  two  more  wind  farms.  Israel's  electrical  utility  is  considering  integrating  a  solar  power  plant 

with  the  local  grid when the technology  is economically  feasible. Meanwhile,  RE technologies are 

being  monitored  and field-tested  by  means of small  demonstration  plants. 

In  1983,  the  Renewable  Energy  Research  Centre  (RERC)  was  established  in  Jordan.  It  has  the 

capacity to  perform  conduct  research, development  and demonstration  projects. 

provide  close  continuous  support  and  respond 

companies.  These  initiatives  normally  reduce 

rapidly 

to  unexpected 

problems. 

Local 

the  costs  of  operation  and  administration, 

management  has  brought  a  number  of  benefits 

increase  the  payment  rates  and  involve  local 

when  compared  to  similar  projects  run  by  large 

industries. 

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41 

% 

The additional capital 
cost of  renewable 
energies compared 
with  conventional 
sources makes some 
form of  aid crucial if 
SEM countries are to 
adopt them. In 
addition, a multilateral 
approach can make 
more ambitious 
projects possible 

It  is  important  to  mention  that  renewable 

energy  technology  projects  is  vital  for  countries 

energy  technologies  are  not  market  competitive 

that are trying to create the infrastructure necessary 

with  conventional  energy  technologies.  Less 

to sustain economic  development. 

developed  countries  such  as  SEM  countries 

cannot  afford  the  extra  cost,  so  cooperation  aid 

Approaches  to  encouraging  the  widespread 

is  essential  if  these  technologies  are  to  become 

uptake  of 

renewable  energy  systems  vary 

widespread  in  SEM  countries.  Consequently,  if 

greatly  depending  upon  the  technology  and 

Europe  wants  to  reinforce  its  renewable  energy 

organizations 

involved.  But  from  the  lessons 

industry,  solve  environmental  problems  of  the 

learned  from  renewable  energy  projects  in  the 

Mediterranean  area  and  contribute  to  reducing 

region  we can  highlight  the following: 

the  carbon  emissions  of  SEM  countries,  the 

•  Stakeholder  participation 

is  beneficial 

in 

funds  to  promote  those  energies  need  to  be 

tailoring  a 

technology 

to 

the  demand 

increased.  Reinforcing  the  multilateral  approach 

environment. 

In  addition,  costs  may  be 

of  development  aid  against 

the  national 

reduced 

through  mobilization  of 

local 

approach  may  contribute  to  a  better-defined 

resources  and  expertise  and 

increasing 

strategy 

for 

the  diffusion  of 

this  kind  of 

participation  often 

raises 

local 

levels  of 

technology  in the  area. This type  of  cooperation 

responsibility  and  commitment. 

can  make  more  ambitious  projects  affordable 

•  Well-planned,  well-assessed  proposals  should 

and  help  make  planning  more  consistent.  This 

give  a  higher  project  success  rate,  encourage 

aid  Is  quite  crucial  for  the  development  of  a 

proposals of a similar calibre lower financial and 

strong  and  coherent  renewable  energy  market 

other  barriers. It Is also important  not to debase 

in  the  SEM countries. 

the delivered energy service by offering free gifts. 

Consumers  will  resist  purchasing  goods  when 

A  coherent  cooperation  programme 

is 

others have received theirs free, and the lack of 

essential 

for  a  coherent  RE  market 

in 

the 

intrinsic  value would  hamper the  establishment 

Mediterranean area. However, there are a number 

of important  second-hand markets. 

of  obstacles.  These  include  the  fact  that  Member 

•  Funding bodies may be bilateral or  multilateral 

States  keep  a  close  control  over  the  European 

aid  organizations.  Ideally,  their  programmes 

development  programme;  EC  budgets 

for 

need to be independent  of day-to-day  political 

Development  Aid  (ODA)  have  increased  rapidly 

involvement whilst  remaining compatible  with 

since 1990 and some management problems have 

relevant  government  strategy. 

appeared  as a  result;  the  overall  contributions  of 

•  Provision  of  basic  energy  services 

to 

EU  countries  to  multilateral  institutions  is  being 

communities  is a specific  niche energy market. 

reduced;  approximately  half  of  the  budgeted 

In  such  markets  a  classic  dilemma 

is  the 

funds 

for  development  cooperation  are  not 

competition  for  land to provide fuel for energy, 

actually  spent;  Member  States  do  not  seriously 

a  direct  cash  return,  and  food.  Such  conflicts 

engage  in a process to  improve  EU aid. 

make  it  difficult  to  establish  a sustainable  fuel 

Conclusions 

market.  Such schemes are  invariably  intended 

to  address  social  or  technology  transfer  rather 

than  economic  needs. Targeted  incentives  are 

Most southern-eastern Mediterranean countries 

probably  necessary  but  should  be planned  for 

are interested  in the  renewable energy  technology 

phase-out,  and  payment  schemes  need  to  suit 

sector.  Successful  implementation  of  renewable 

customer's  cash and credit  situations. 

M PTS - JRC -  Seville,  1999 

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42 

fi 

4: g 
4 

About the author 
Miquel A. 
Aguado-Monsonet  holds a 
doctorate  in Chemical 
Engineering from  the 
University  of  Barcelona, 
after  working as a professor 
of  Chemical and  Enviroment 
Engineering  he started work 
at IPTS on  projects  related 
with  renewable energies. His 
main research interests are 
in the fields  of 
Energy, and Chemical, 
Environment  and Food 
Engineering, and is 
currently  responsible for 
the  "Implementation  of 
Renewable Energy  in  the 
Southern  Mediterranean 
Countries"  Project. 

•  Rural  electrification  programmes,  which 

bigger projects and can focus better on the needs of 

encourage  development  beyond  simple 

the  countries.  The  budget  spent  in  multilateral 

provision  of  basic energy  services, are another 

cooperation  funds  are  discussed  more  thoroughly 

niche  market.  The  programme  should  also 

and  consequently  can  tackle  the  real  problems  of 

aim  to  encourage 

local  employment,  with 

those countries better. It is true that more discussion 

development  of  the  associated  education, 

can  result  in  longer  implementation  times, but  the 

training  and  infrastructure. 

outcome  is  usually  projects  for  which  there  is 

greater  agreement  between  donors  and  receivers. 

The cooperation  aid budget  in the EC has faced 

Another positive aspect is the possibility of defining 

a  number  of  problems.  Nevertheless,  this  aid  is 

a  strategy  for  the  Mediterranean  region. The  joint 

crucial 

for 

the  development  of  a  coherent 

implementation  of  energy  projects  in  the  SEM 

renewable  energy  market  in  the  SEM  countries. 

countries 

is  also  another  possibility  and  now 

More  emphasis  should  be  placed  on  EC 

seems  as  very  promising  strategy  for  increasing 

cooperation 

funds  than  on  national  (bilateral) 

commercial  exchanges  and 

involving 

the 

cooperation funds. Multilateral aid funds can afford 

Industry to cooperate.  _^ 

Keywords 

renewable energies, Mediterranean  countries,  cooperation 

References 

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Contact 

Miquel  A. Aguado-Monsonet,  Institute  for  Prospective Technological  Studies (IPTS) 

Tel.: +34  95  448  82 90, fax: +34  95 448  82  70, e-mail:  migueI.aguado@jrc.es 

M  m  m  m  m 
©IPTS-JRC  -Seville, 1999 

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a symposium  held  in  Brussels, 19  November  1996-EUR  17344 EN 

'IPTS - JRC - Seville, 1999 

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I P TS 

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A B O UT 

T HE 

I P TS 

The  IPTS is one of the eight  institutes of the Joint  Research Centre of the EU Commission.  Its  remit 

is  the  observation  and  follow-up  of  technological  change  in  its  broadest  sense,  in  order  to 

understand  better  its  links  with  economic  and  social  change.  The  Institute  carries  out  and  co 

ordinates  research  to  improve  our  understanding  of  the  impact  of  new  technologies,  and  their 

relationship  to their  socio-economic  context. 

The purpose of this work  is to  support  the decision-maker  in the  management  of change  pivotally 

anchored on S/T developments.  In this endeavour  IPTS enjoys a dual advantage: being a part of the 

Commission  IPTS shares EU goals and priorities; on the other  hand  it cherishes  its research  institute 

neutrality  and distance  from  the  intricacies  of  actual  policy-making.  This  combination  allows  the 

IPTS to  build  bridges  betwen  EU  undertakings,  contributing  to  and  co-ordinating  the  creation  of 

common  knowledge  bases  at  the  disposal  of  all  stake-holders.  Though  the  work  of  the  IPTS  is 

mainly  addressed  to  the  Commission,  it  also  works  with  decision-makers  in  the  European 

Parliament,  and agencies  and  institutions  in the  Member States. 

The  Institute's  main  activities, defined  in close cooperation  with  the decision-maker  are: 

1. Technology Watch. This activity aims to alert European decision-makers to the social,  economic 

and  political  consequences  of major  technological  issues and trends. This  is achieved  through  the 

European  Science  and  Technology  Observatory  (ESTO),  a  European-wide  network  of  nationally 

based organisations.  The  IPTS is the  central  node  of  ESTO, co-ordinating  technology  watch  'joint 

ventures'  with  the aim  of better  understanding technological  change. 

2. Technology, employment  &  competitiveness.  Given  the  significance  of  these  issues for  Europe 

and  the  EU  institutions,  the  technology-employment-competitiveness  relationship  is  the  driving 

force behind all  IPTS activities, focusing analysis on the potential of promising technologies  for  job 

creation,  economic  growth  and  social  welfare.  Such  analyses  may  be  linked  to  specific 

technologies,  technological  sectors, or  cross-sectoral  issues and themes. 

3. Support for policy-making. The IPTS also undertakes work to supports both Commission  services 

and  other  EU  institutions  in  response  to  specific  requests,  usually  as  a  direct  contribution  to 

decision-making  and/or  policy  implementation.  These tasks are fully  integrated  with,  and take  full 

advantage  of on-going  Technology Watch  activities. 

As well  as collaborating  directly  with  policy-makers  in order  to  obtain  first-hand  understanding  of 

their  concerns,  the  IPTS  draws  upon  sector  actors'  knowledge  and  promotes  dialogue  between 

them, whilst working in close co-operation  with  the scientific  community  so as to ensure technical 

accuracy. In addition to its flagship IPTS Report, the work of the IPTS is also presented in occasional 

prospective  notes, a series of dossiers, synthesis  reports and working  papers. 

IPTS-JRC -Seville, 1999 

Tfie IPTS Report ¡s published in the first week of every month, except for the months of January and August. It is edited in English 

and is currently available at a price of 50 ECU per year in four languages: English, French, German and Spanish. 

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The European Science and Technology Observatory Network (ESTO): 

IPTS ­ JRC ­ European Commission 

W.T.C., Isla de la Cartuja s/n, E­41092, Sevilla, Spain 

tel.: +34­95­448 82 97; fax: +34­95­448 82 93; e­mail: ipts_secr@¡rc.es 

ADIT  - Agence  pour  la  Diffusion  de l'Information  Technologique  - F 

CEST  -  Centre  for Exploitation  of  Science  and Technology  - UK 

COTEC  - Fundación para la Innovación Tecnológica ­ E 

DTU ­ University of Denmark, Unit of Technology Assessment ­ DK 

ENEA ­ Directorate Studies and Strategies ­ I 

INETI ­ Instituto Nacional de Engenharia e Technologia Industrial ­ Ρ 

ITAS ­ Institut für Technikfolgenabschätzung und Systemanalyse ­ D 

NUTEK ­ Department of Technology Policy Studies ­ S 

OST ­ Observatoire des Sciences et des Techniques ­ F 

SPRU ­ Science Policy Research Unit ­ UK 

T NO ­ Centre for Technology and Policy Studies ­ NL 

VDI­TZ ­ Technology Centre Future Technologies Division ­ D 

VITO ­ Flemish Institute for Technology Research ­ Β 

VTT ­ Group for Technology Studies ­ FIN