COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Energy Technologies and Innovation
Date: 2013-05-02
Institutions: European Commission
Subjects: EU programme, clean technology, innovation, new technology, public-private partnership, research and development, research programme, soft energy

EUROPEAN 
COMMISSION 

Brussels, 2.5.2013  
COM(2013) 253 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Energy Technologies and Innovation 

{SWD(2013) 157 final} 
{SWD(2013) 158 final} 

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COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Energy Technologies and Innovation 

1. 

INTRODUCTION 

Technology and innovation are crucial to all our energy challenges… 

The EU needs to do more to bring new, high performance low-cost, low-carbon sustainable 
energy technologies to the market. New technologies are vital to achieve all of the EU 2020 
objectives1  in  energy,  climate,  economic  and  social  policy,  as  well  as  those  for  2030  and 
2050.  The  EU  must  have  a  strong  and  dynamic  technology  and  innovation  strategy  both  to 
deliver its policy goals strengthen its competitiveness and to better coordinate investments. 

… complementing EU energy legislation 

EU  policies  on  the  internal  energy  market,  energy  efficiency  and  renewables  support 
technologies  onto  the  market,  from  Photovoltaic  (PV)  panels  to  efficient  appliances,  smart 
meters  or  home  automation.  The  EU  needs  to  further  reinforce  the  role  of  technology  and 
innovation  within  energy  policy,  not  just  with  specific  technologies,  but  also  by  triggering 
new  business  models,  market  and  social  adaptation  and  energy  system  improvements  that 
offer a longer term strategic perspective for investments.  

….in a constantly evolving energy landscape  

As  a  result  of  EU  policies,  global  investments  in  renewables  have  progressed  steadily 
requiring a greater flexibility and energy management. The phasing out of nuclear power in 
some  countries  and  the  rapid  expansion  of  unconventional  gas  production  is  changing  the 
economics  of  energy  worldwide.  To  support  European  industrial  competitiveness  the  EU’s 
energy  technology  and  innovation  policy  needs  to  deliver  on  reducing  costs  rapidly  and 
speeding  up  the  introduction  of  new  sustainable  technologies  to  the  market.  This  is 
particularly  important  in  a  time  of  economic  downturn  which  has  direct  consequences  on 
private investments and national budgets.  

2. 

WHAT HAS THE EU ACHIEVED?  

2.1. 

Legislation has pulled technology and innovation onto the market 

The EU internal energy market helps to create open and competitive markets where industry 
players  invest  in  new  and  innovative  technologies  and  services.  The  scale  of  the  internal 
energy  market  provides  the  space  for  market  forces  to  stimulate  technological  development 
and  innovation.  This  is  supported  by  efforts  to  modernise,  integrate  and  expand  grid 
infrastructure up to 2020 and beyond, notably for electricity. The EU has identified 12 priority 
corridors,  among  others  to  integrate  more  wind  and  solar  electricity  while  ensuring 
uninterrupted supply. The technical rules being developed for the internal market (i.e. network 
codes) focus on the integration of technologies in response to the changing energy system. As 
part  of  this  work  Transmission  System  Operators  (TSO)  are  developing  new  modelling 

1 

as stated in the Communication on SET Plan in 2007 (COM (2007) 723) and in the Communication on 
Investing in low carbon technologies in 2009 (COM (2009) 519)  

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methods and smarter grid operation tools. Making consumers active players in an integrated 
energy  market,  means  that  EU  policy  is  also  driving  the  development  of  "smart"  and  IT-
related  technologies,  such  as  smart  metering,  electric  cars,  demand  response,  micro-
generation and local storage technologies to allow for flexible demand and better control of 
consumption. 

To  meet  the  2020  goals,  EU  energy  policy  supports  a  shift  to  low  carbon  generation 
technologies. Spurred by the Renewable Energy Directive and support in Member States there 
has  been  a  strong  growth  in  renewables  and  significant  reductions  in  cost.  As  part  of  the 
transition to a low carbon energy system, EU policy has pushed Carbon Capture and Storage 
(CCS) technologies and a safer nuclear energy generation.  

Through  EU  energy  efficiency  policy  and  legislation,  including  the  Energy  Efficiency  and 
Eco-design Directives, technologies are being rolled out onto the market. In parallel, sectoral 
energy  efficiency  legislation  on  eco-design  is  pulling  the  development  and  deployment  of 
energy  efficient  appliances  (e.g.  boilers,  washing  machines,  TVs,  computers)  and  brings 
energy savings to consumers. In the buildings sector, EU legislation promotes energy efficient 
building  renovation  and  the  construction  of  nearly-zero  energy  buildings.  In  the  transport 
sector, low emission and electric vehicles are encouraged. 

The  EU  Emission  Trading  System  and  the  Effort  Sharing  Decision  have  made  the  Green 
House Gas (GHG) emissions price part of EU business operational and investment decisions 
and has contributed to substantial emissions reductions but it's role as a major driver towards 
long term low carbon investments is being questioned due to the low and volatile carbon price 
signal it has produced in response to the crisis.  

2.2. 

Improving framework conditions for research and innovation  

The  Innovation  Union  set  out  an  integrated  research  and  innovation  strategy,  improving 
public  funding  and  tackling  the  barriers  that  hold  back  private  investment.  Significant 
progress has been made to improve framework conditions, including unitary patent protection 
(dramatically  reducing  patent  costs),  an  effective  EU-wide  venture  capital  regime,  and 
modernising public procurement rules. The European Research Area is improving the impact 
of Member State research funding and the framework conditions for researchers, including by 
better  aligning  funding  from  different  Member  States,  improving  researchers’  careers  and 
mobility and giving researchers access to world-class scientific infrastructures. 

2.3. 

The SET Plan - driving the EU 7th Framework Programme for Research 

The EU's Strategic Energy Technology (SET) Plan was established in 2008 as the technology 
push  framework  of  the  EU's  energy  and  climate  policies.  It  is  based  on  a  three  pillar 
implementation  structure:  a  Steering  Group,  European  Industrial  Initiatives  (EIIs)  and  the 
European  Energy  Research  Alliance  (EERA)  and  is  supported  by  an  information  system 
(SETIS)  2.  The  Steering  Group  on  Strategic  Energy  Technologies  has  enabled  a  structured 

2 

The SET Plan Steering Group, composed of EU Member States, is mandated to conceive joint actions 
and  make  resource  available  for  the  implementation  of  the  SET  Plan.  The  EIIs  are  based  on  the 
European  Technology  Platforms,  and  propose  Technology  Roadmaps  to  align  the  efforts  of  the  EU, 
Member  States  and  industry  to  achieve  common  goals.  The  EERA  groups  the  leading  EU  energy 
research establishments and is mandated to implement joint programmes through the sharing of national 
capacities in Europe. The Smart Cities and Communities European Innovation Partnership started as the 
energy efficiency component of the SET Plan and now integrates at the level of cities and communities 
real scale applications of energy, transport and ICT innovative solutions. The Commission’s Strategic 
Energy Technologies Information System (SETIS) is led and coordinated by EC Joint Research Centre 
(JRC) 

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dialogue with Member States resulting in increased alignment of national energy research and 
innovation  policies  and  has  promoted  a  move  towards  joint  actions  to  deliver  common 
objectives with greater speed and effectiveness. 

The  SET  Plan  prioritised  those  technologies  most  relevant  to  the  energy  and  climate  policy 
objectives for 2020: wind, solar, electricity networks, CCS, bioenergy, nuclear, fuel cells and 
hydrogen,  energy  efficiency.  The  EIIs  set-up  for  all  these  sectors  have  defined  priority 
research and innovation areas through Technology Roadmaps including a dedicated roadmap 
on  materials3  and  focused  their  action  on  large  projects  of  European  value.  Through  the 
EERA  national  research  capacities  are  pooled  to  develop  new  solutions  that  will  impact 
beyond 2020. 
European  funds  have  been  made  available,  primarily  under  the  7th  Research  Framework 
Programme  (FP7)  through  the  mobilisation  of  different  parts  such  as  Energy  and  Key 
Enabling Technologies (e.g. ICT and Materials). From 2007 to 2012, the FP7 Energy Theme 
supported  with  some  €1.8  billion  about  350  proj ects.  FP7  has  also  provided  substantial 
support through public private partnerships and financial instruments (see below). In addition, 
support at the level of the EU has been provided through the European Institute of Innovation 
and  Technology  (EIT)  and  its  Knowledge  and  Innovation  Community  InnoEnergy. 
Substantial additional funding came from European Energy Programme for Recovery (EEPR) 
as  well  as  the  from  New  Entrance  Reserve  (NER)  300  Programme.  Public  and  private 
investments  in  technological  development  for  the  SET  Plan  sectors  increased  from  €  3.2 
billion  in  2007  to  €  5.4  billion  in  2010 4  (Figure1).  Today  industry  makes  about  70%  of  the 
total  research  and  innovation  investment  in  the  SET  Plan  priorities  while  Member  States 
account for about 20% and the European Commission for 10%.  

Figure  1  Estimate  of  public  and  corporate  R&D  investments  in  2010  by  technology  and  by  source 
(JRC/SETIS)5 

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SEC(2011)  1609  -  Commission  staff  working  document  "Materials  Roadmap  Enabling  Low  Carbon 
Energy Technologies" 
(COM  (2009) 519)  has  estimated  that  €8  billion  pe r  year are  needed  to effectively  move  forward  the 
SET-Plan actions  
For nuclear sector the spending regards Euratom 

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As a result of these efforts, important achievements in  technological developments  and  cost 
reduction have been made for SET Plan technologies.  

Over the last two decades Photovoltaic (PV) system prices have decreased all over the world, 
significantly  driven  by  technology  and  market  developments.  The  cost  of  PV  modules 
decreased sharply (by 3 times in two years)6. The SET Plan target of 1 €/kW 7 by 2030 may be 
a reality by 2020 thus significantly reducing the costs for society.  

Wind  power  (mainly  on-shore)  already  contributes  a  significant  share  of  energy  generation: 
106 GW of wind capacity installed at the end of 2012 generated 210 TWh or 7% of European 
electricity  production8.  Annual  turnover  of  major  wind  equipment  suppliers  reached  €20 
billion  in  2012.  Whilst  wind  is  a  global  market,  it  has  a  strong  local  influence:  turbine 
manufacturer’s  worldwide  market  share  depends  strongly  on  how  their  home  market 
performs.  EU  efforts  also  continue  with  offshore  wind  applications  where  the  technology  is 
still improving and cost are decreasing. 

In  the  transport  sector,  EU  efforts  focus  on  reaching  10%  of  energy  consumption  from 
renewables,  in  particular  through  alternative  fuels.  To  address  indirect  land  use  change 
(ILUC),  the  Commission  proposed  that  no  more  than  half  of  the  10%  target  should  be 
achieved with conventional biofuels, increasing the demand for advanced biofuels to 6 Mtoe 
or 15 plants, each with an annual capacity of 100 Ktoe. A positive start has been made with 
FP7 funding 9 large scale lignocelluloses biofuel demonstration projects with capacities of 40 
to 80 thousand tonnes per year.  

2.4. 

Intelligent Energy Europe (IEE) programme 

Since 2007, the innovation programme Intelligent Energy in Europe (IEE) has promoted the 
market  uptake  of  technologies  and  tackled  non-technological  barriers  (financial,  regulatory 
and  administrative).  The  programme  focused  on  energy  efficiency  and  renewable  energy.  It 
has, through more than 300 projects, triggered over €4 billion of related investment in all end-
use sectors, including transport. 

IEE  has  led  to  mainstreaming  new  business  models  that  leverage  private  financing.  An 
example of such business model is Energy Performance Contracting (EPC), where the initial 
investment  in  energy  saving  measures  is  re-paid  by  the  cost  savings  from  higher  energy 
efficiency. IEE has so far replicated this business model in 10 Member States including some 
where the concept was largely unknown.  

IEE  has  also  established  co-operation  with  financial  institutions  to  successfully  mobilise 
investments  of  around  €2  billi on  (with  €38  million  EU  funding)   into  sustainable  energy 
through its Project Development Assistance Facilities (ELENA9 and Mobilising Local Energy 
Investment). The programme has pioneered support to "energy transformation" actors such as 
local and regional authorities, schools, hospitals and social housing as well as addressing the 
needs of practitioners through training and information provision. Investments are expected to 
generate energy savings of more than 2000 GWh/year.  

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Staff Working Paper, Technology Assessment Figure 3.2 
1 €/kW for turnkey 100 kW systems by 2030 (expressed in 2011 prices, excluding VAT) 
JRC calculations based on a 23% capacity factor, which is the 2011 average figure for Europe  
The market replication ELENA Facility was launched by the Commission and the European Investment 
Bank  (EIB)  in  December  2009  to  support  investments  in  energy  efficiency  and  renewable  energy 
projects. Run by the EIB, KfW, CEB and EBRD, the ELENA Facility is funded through the European 
Commission’s IEE Programme. 

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Through  its  Build-up  Skills  initiative,  the  programme  is  addressing  practitioners'  needs  to 
build nearly zero-energy buildings across the EU. In the area of energy intensive industries, 
the  CARE+  project  mobilised  SMEs  in  the  chemical  industry  to  achieve  energy  savings  of 
between 10-20%.  

2.5. 

Public-Private Partnerships and Joint Undertaking  

Supported under FP7, the Fuel Cells and Hydrogen Joint Undertaking (FCH JU) has enabled 
the  implementation  of  an  industry-led  programme  of  research  and  demonstration  activities 
covering  both  transport  and  stationary  power  applications.  The  €380  million  in  grants 
allocated to date has brought closer to market a variety of applications (e.g. material handling 
vehicles, back-up power systems) while reducing costs and improving the efficiency and the 
lifetime of the applications.  

The  research  oriented  Public-Private  Partnerships  (PPPs)  on  energy  efficiency  in  buildings 
and on factories of the future, as well as on green cars, brought together the stakeholders in 
each  of  these  sectors  to  forge  a  common  agenda  and  channel  EU  funding  towards  their 
objectives. From 2009 to 2012, €1.6 billion was  committed by the EU, matched by a similar 
level  of  private  sector  investments.  The  PPPs  have  been  successful  in  attracting  strong 
participation of SMEs.  

2.6. 

Improving access to debt financing - Risk Sharing Finance Facility (RSFF) 

Under FP7, the RSFF is supporting the European Investment Bank (EIB) in providing some 
€10 billion of loan commitments (w ith €1 billion of EU contributio n) to attract more than €20 
billion  of  research  and  innovation  investments,  mainly  by  large  firms  and  mid-caps 
companies.  The  RSFF  encourages  project  promoters  to  undertake  research  and  innovation 
activities  associated  with  a  high  degree  of  risk.  From  2009  to  2012,  the  energy  sector  has 
accounted  for  14-18%  of  the  RSFF  portfolio,  including  major  first-of-a-kind  investments  in 
solar and wind and investments to improve energy efficiency, particularly in the automotive 
sector. 

2.7. 

Regional Dimension – support from cohesion policy 

Within the cohesion policy budget significant funding is dedicated to sustainable energy, with 
over  €  10  billion  planned  for  investment  in  energy  efficiency  and  renewables  in  the  2007-
2013  programming  period.  One  such  example  is  the  Wave  Hub  project  in  South  West 
England, aiming to create the world’s largest test site for devices that generate electricity from 
the  power  of  waves.  Another  example  is  the  Green  Buildings  Cluster  project  of  Lower 
Austria,  which  connects  construction  and  building  professionals  with  researchers  to  address 
challenges such as climate change and enables innovation through cooperation. 

2.8 

Assessment of EU the energy technology and innovation framework 

Europe is on the right track to foster the development of energy technologies and creating the 
right conditions for innovation, but much remains to be done.  

The rapidly evolving energy landscape requires a system approach and responsiveness to new 
developments.  Both  the  evaluation  of  the  SET  plan  implementation10  and  the  public 
consultation11 conducted in support of this Communication confirm that the SET Plan needs 
increased  focus  on  energy  system  integration,  integration  of  activities  along  the  innovation 

10 

11 

JRC/SETIS SET Plan Review is available at: http://setis.ec.europa.eu/set-plan-implementation/set-plan-
review-2010-2012 
Public consultation full report is available at: 
http://ec.europa.eu/energy/technology/consultations/20130315_technology_innovation_en.htm 

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chain,  and  increased  coordination  of  the  EIIs  and  EERA  to  support  this.  Further  industrial 
supply  chain  developments  need  to  increase,  while  a  stronger  coordination  of  actors  and 
investments along the research and innovation chain is needed to accelerate development and 
market uptake.  

In  addition,  although  Member  States  do  share  common  industrial  and  research  objectives, 
their  commitment  to  the  SET  Plan  is  currently  suboptimal.  Coordinated  and/or  joint 
investments between Member States and with the EU need to be fostered to leverage private 
sector  investments  in  support  of  the  EIIs  Technology  Roadmaps  and  the  EERA  Joint 
Programmes.  Similarly,  a  clear  commitment  from  industrial  partners  needs  to  be  ensured 
including  in  PPPs  based  on  a  shared  vision  and  clearly  defined  objectives,  while  research 
capacities  under  the  EERA  need  to  be  more  integrated  to  accelerate  the  delivery  of  results 
with stronger links to industry.  
An external evaluation of the IEE programme in 201112 concluded that it has a crucial role in 
developing  service  innovation,  knowledge  and  capacity  building  and  new  business  models 
that  leverage  private  financing  for  the  roll-out  of  energy  efficiency  and  renewable 
technologies to the market. Building upon this successful example, measures supporting the 
market  uptake  of  energy  innovation  need  to  be  expanded  to  other  energy  policy  areas  and 
should be more strongly linked to the Structural and Cohesion Funds.  
In a similar vein, the interim evaluation of the FCH JU13 recommended a stronger focus on 
applied research and larger-scale demonstration activities linked to energy system needs, such 
as the use of hydrogen to store renewable electricity. 

These  highlight  the  need  for  an  integrated  research  and  innovation  chain  at  EU  level  that 
spans from basic research to market roll-out.  

3. 

ENERGY  TECHNOLOGY  AND  INNOVATION  STRATEGY  TO  2020  AND 
BEYOND  

The  European  energy  technology  and  innovation  strategy  needs  to  accelerate  innovation  in 
cutting  edge  low  carbon  technologies  and  innovative  solutions,  and  bridge  the  gap  between 
research and the market. This is clearly recognised in the Commission's proposals for Horizon 
2020, which bring together EU support for research and innovation (including the successors 
to the current FP7 and IEEII programmes and further support to the EIT) under a simplified 
framework.  However,  EU  funding  remains  a  limited  part  of  the  overall  funding  across 
Europe, and the key principles and developments need to be reflected equally in private sector 
and  Member  State  investments.  Implementation  needs  to  be  increasingly  based  on 
partnerships that build the necessary scale and scope, and achieve greater impact from scarce 
public and private resources. 

3.1. 

Key principles  

Adding value at the EU level  

EU  intervention  needs  to  focus  on  where  it  can  really  add  value.  It  should  concentrate  on 
large-scale  efforts  which  go  beyond  what  Member  States  can  achieve  alone  or  bilaterally, 

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“Ex-ante  evaluation  of  a  successor  of  the  ‘Intelligent  Energy-  Europe  II’  (2007-2013)”,  available  at: 
http://ec.europa.eu/energy/intelligent/files/doc/2011_iee2_programme_ex_ante_en.pdf 
Available at: 
http://ec.europa.eu/research/evaluations/pdf/archive/other_reports_studies_and_documents/eval_fuel_ce
ll_hydro_report_2011.pdf 

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promoting  innovation  through  regulation  and  financing.  It  should  support  research  and 
innovation capacity building to accelerate developments, and generate economies of scale. 

Looking at the whole energy system when setting priorities 

The  development  of  energy  technologies  should  be  seen  from  the  perspective  of  delivering 
cost-effective  energy  services  to  final  customers:  light,  heat,  cooling,  clean  transport  etc. 
Individual technological developments should be assessed for their integration and impact on 
the whole energy system (production, transmission, distribution and use of energy). A system 
approach  means  going  beyond  the  existing  divisions  between  energy  sources  and  end  uses, 
and  should  therefore  exploit  synergies  between  sectors  (e.g.  energy,  ICT,  transport, 
agriculture), taking advantage of cross-sectoral complementarities and spill overs, as well as 
looking  for  life-cycle  based  solutions  that  reduce  the  overall  need  for  energy  by  reducing 
waste and re-using and recycling materials.  

Integrating actions along the energy innovation chain and strengthen the link with energy 
policy 

Support  for  innovation  cycle  from  basic  research  to  market  deployment  means  supporting 
market-uptake  measures  to  build  capacities,  proofing  of  concepts  for  next  generation 
technologies,  tackling  regulatory  barriers  ,  analysing  the  market  conditions  of  specific 
technologies  and  create  an  investment  climate  and  horizon  conducive  to  more  innovation 
investment. 

Pooling resources and using a portfolio of financial instruments  

The  energy  challenge  requires  investments  in  research  and  innovation  that  are  beyond  the 
reach of a single Member State or private actor. At a time when research-driven solutions are 
urgently  needed  and  public  resources  are  under  pressure,  there  is  a  need  to  leverage  the 
individual  investments  of  Member  States  to  support  industry  with  programmes  that  allow 
ambitious  and  comprehensive  industrial  developments,  and  indirectly  with  an  increased 
integration  of  national  institutional  funding  and  research  institutions  Different  stages  of 
innovation  and  deployment  require  proper  financing  mechanisms.  The  exploitation  of 
synergies  with  the  EU  Structural  and  Investments  Funds  especially  through  national  and/or 
regional research and innovation strategic policy frameworks for smart specialisation14 should 
be  strengthened.  Other  programmes  can  also  be  used  for  financing  innovation,  such  as  the 
Connecting  Europe  Facility  (smart  grids  and  electricity  highways)  or  financing  instruments 
such as those proposed in the Access to Risk Finance component of Horizon 2020 or directly 
deployed by the European Investment Bank. Additionally, ETS financing mechanisms similar 
to the "NER 300" Programme could be envisaged in the future.  

Keeping  options  open,  while  concentrating  on  the  most  promising  technologies  for  post 
2020  

Most  energy  technologies  have  long  lead-times  and  so  investment  decisions  now  will  have 
repercussions  well  beyond  2020.  As  a  result,  the  EU  needs  to  drive  the  development  of  a 
spectrum  of  technologies  which  may  only  reach  maturity  beyond  2020.  The  energy 
technology and innovation strategy puts in place a framework to deliver economic and viable 
energy technologies and solutions both in the short and long term, for the EU and the global 
market.  It  builds  on  the  European  Commission  Horizon  2020  proposal  currently  subject  to 
decision under the legislative process. It will also incorporate the results of the debate on the 
Green Paper on the 2030 framework for climate and energy policy. 

14 

In the proposal for 2014-2020 Regional Policy, Member States or regions are required to develop such 
strategies  

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3.2  Key developments that are needed 

Unlocking the full potential of energy efficiency, focusing on end use consumption 

Investing in energy efficiency brings savings to consumers and allows EU industries to be less 
dependent on energy prices, reduce their costs and increase their competitiveness.  

Buildings, with nearly 40% of final energy consumption, are a high priority for increasing the 
rate  of  energy  efficient  renovations  for  existing  buildings  and  making  new  buildings  nearly 
zero-energy ones. New building materials, designs for integrating renewables into buildings, 
and  new  concepts  and  business  models  for  energy  efficient  building  renovation,  need  to  be 
developed  and  demonstrated.  These  need  to  be  supported  by  convergence  between  national 
and  regional  regulatory  approaches  to  reduce  administrative  burdens,  establish  standard 
methodologies to measure the energy performance of buildings, and enable the single market. 

The  development  and  uptake  of  innovations  which  substantially  reduce  the  energy  costs  of 
industry must be prioritised, in particular for energy intensive industries and SMEs (e.g. the 
use  of  industrial  insulation  throughout  Europe  would  reduce  annual  energy  consumption  by 
4%). This includes support for developing skills to grasp energy efficiency savings in industry 
through training energy auditors and energy managers. 

Delivering competitive solutions for a clean, sustainable, secure and efficient energy system  

Innovations that ensure the flexibility and security of the European energy system will lower 
the costs of the whole energy infrastructure and prepare it for taking up much larger amounts 
of  renewable  energy.  Electricity  storage  technologies  will  be  important  at  transmission  and 
distribution level. 

Innovations are needed to ensure the continuity of electricity supply and rationalise demand 
for  infrastructures  through  cost-effective  balancing  of  renewable  electricity,  at  local  level 
through demand response and flexibility and at transmission level through innovation in long 
distance  electricity  transport  to  enable  balancing  between  multiple  renewable  energy  source 
locations, for example, for linking offshore wind. 

Technologies  that  enable  active  consumer  participation  will  allow  energy  efficiency 
improvements in networks, making more use of ICT. Innovation in distribution grids and the 
development  of  a  market  environment  that  empowers  consumers,  while  ensuring  adequate 
protection of the vulnerable ones, to profit from the best price and energy conditions and to 
produce and sell their own energy.  

Whilst a number of technologies have been successfully developed and brought to the market 
(onshore  wind  and  solar  photovoltaic)  thanks  to  deployment  support,  an  open  and  flexible 
approach  to  further  development  of  a  portfolio  of  cost-effective  and  sustainable  energy 
options is needed. Other promising renewable energy fields include floating and other deep-
sea  offshore  wind,  ocean  energy,  advances  in  concentrated  solar  power  and  novel 
photovoltaic  applications.  Further  focus  on  research  into  heating  and  cooling  technologies, 
hydrogen and fuel cells technologies is needed. Innovation is also required in new materials, 
key  enabling  technologies  such  as  ICT,  nanotechnology,  micro  and  nano-electronics, 
photonics,  biotechnology  and  advanced  manufacturing  processes  routes.  The  International 
Thermonuclear  Experimental  Reactor  (ITER)-project15  is  a  core  of  the  EU's  long-term 
research for fusion energy. 

Technological  development  is  needed  to  support  safe  operation  of  nuclear  systems, 
development  of  sustainable  solutions  for  the  management  of  radioactive  waste,  and  nuclear 

15 

developed jointly by Japan, China, India, South-Korea, Russia, the US and the EU.  

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competences. This should focus on the safety of existing nuclear plants, particularly in view 
of  the  extension  of  operating  lifetimes,  as  well  as  the  safety  of  future  nuclear  systems. 
Research must continue in the field of long-term solutions for the management of radioactive 
waste  in  Europe  through  development  of  geological  disposal.  These  efforts  should  be 
accompanied  by  multidisciplinary  research  on  the  risks  of  low  doses  of  radiation.  Next 
generation  nuclear  fission  reactors  such  as  "Generation  IV"  systems  are  the  potential  long 
term nuclear energy options.  

Deliver  sustainable  alternative  fuels  to  the  European  transport  fuel  mix,  in  line  with  the 
alternative fuels strategy16 for the long-term substitution of oil as energy source for all modes 
of transport, .This requires targeted development and cost reduction of the fuels (in particular 
advanced biofuels, bio-methane and hydrogen) and transport application technologies.  

Fostering innovation in real environments and through a market driven framework 

A  particular  focus  is  needed  on  cities  which  use  far  more  energy  than  they  are  able  to 
produce. Further integration and optimisation of the energy, information and transport flows 
at  the  level  of  districts,  cities  and  communities  is  needed  This  is  the  premise  of  the  Smart 
Cities and Communities European Innovation Partnership17: demonstrating commercial-scale 
smart  urban  solutions  based  on  the  use  of  ICT  in  the  energy  and  transport  sectors  that  can 
deliver cost effective solutions in European urban areas.  

Market  uptake  measures  are  needed  in  the  roll-out  of  all  innovative  energy  technologies  to 
allow scaling up investments in supply chains and to support policy implementation for grids, 
renewable energy and energy efficiency tackling non-technological barriers, including: 

• 

• 

building  the  capacity  of  market  actors  and  public  authorities  to  introduce  effective 
policies  and  measures,  which  draw  technologies  into  the  market.  This  includes 
continuous  development  of  practitioners  (e.g.  skills  developments  for  technicians, 
engineers); 
supporting  the  development  and  take-up  of  innovative  financing  solutions  for 
renewable energy and energy efficiency, including financing for their deployment.  

National and regional innovation strategies need to play a critical role in fostering innovation 
in real environments. They should be mobilised to support research and innovation capacities 
build-up  and  to  accelerate  the  exploitation  and  dissemination  of  research  and  innovation 
results  into  the  market,  with  particular  attention  to  creating  an  innovation-friendly  business 
environment  for  SMEs  and  regional  and  local  industry  including  improving  access  to  risk 
finance. 

4. 

IMPLEMENTING  THE  ENERGY  TECHNOLOGY  AND  INNOVATION 
STRATEGY  

The  SET  Plan  remains  the  core  instrument  to  deliver  on  the  challenges  addressed  above.  It 
provides  the  reference  point  for  EU,  national,  regional  and  private  investments  in  energy 
research and innovation.  

However, the SET Plan also needs reinforcing, to respond to the new challenges and to better 
consolidate research and innovation capacity and resources across Europe. For this purpose, 
the following changes are proposed: 

16 
17 

COM(2013) 17 final 
COM(2012) 4701 final 

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• 

• 

• 

• 

To address energy system and innovation chain integration, an Integrated Roadmap 
should  be  developed,  under  the  guidance  of  the  SET  Plan  Steering  Group, 
incorporating the key principles and measures identified in this Communication. This 
Integrated  Roadmap  should  consolidate  the  (up  dated)  technology  roadmaps  of  the 
SET  Plan  while  retaining  the  technology  specificities;  it  should  cover  the  entire 
research and innovation chain from basic research to demonstration and support for 
market  roll-out;  and  it  should  identify  clear  roles  and  tasks  for  the  various 
stakeholders such as the EERA, the EIIs, the EIT, relevant European PPPs and other 
stakeholders such as universities, investors and financiers while promoting synergies 
and interactions between them. The first Integrated Roadmap should be developed by 
the end of 2013. 

Based  on  the  Integrated  Roadmap,  the  Member  States  and  the  Commission  should 
develop  an  Action  Plan  that  lays  down  coordinated  and/or  joint  investments  by 
individual  Member  States,  between  Member  States  and  with  the  EU.  These 
investments  should  go  beyond  grant  programmes  and  include  financial  engineering 
instruments and procurements. The Action Plan will follow a flexible approach and 
contain different modes of implementation such as alignment of Member States and 
EC  funding  on  priorities  identified  in  the  integrated  roadmap  and  joint  investments 
between  Member  States  or/and  with  the  European  Union.  It  should  cover 
institutional  funding  and  research  capacities  of  EERA.  It  should  be  developed  by 
mid-2014 and be regularly up dated and supported by network(s) of funding bodies. 

A robust reporting system based on the Strategic Energy Technologies Information 
System (SETIS) of the SET Plan would monitor the implementation of the Integrated 
Roadmap  and  the  Action  Plan.  Drawing  on  the  data  supplied  by  Member  States, 
reporting on progress should be made annually to allow assessment of the impact on 
energy policy objectives and a better orientation of EU and national support.  

A coordination structure should be established under the Steering Group of the SET 
Plan  to  promote  investments  in  research  and  innovation  on  energy  efficiency.  This 
should cover the relevant EU Public and Private Partnerships in this area, the Smart 
Cities  and  Communities  European  Innovation  Partnership  and  other  initiatives  to 
facilitate  market  rollout.  This  structure  should  be  composed  of  the  research 
community, industry and market actors, public authorities and financiers. 

The membership, operation and mandate of the SET Plan Steering Group may therefore need 
to be strengthened to address the challenge of developing the Integrated Roadmap.  

Likewise, the European Industrial Initiatives and associated European Technology Platforms 
need  to  adjust  their  mandate,  structure  and  participation  including  through  a  stronger 
industrial  component  to  update  their  Technology  Roadmaps  and  to  contribute  to  the 
Integrated Roadmap. Emerging technologies and new developments need to be addressed in 
particular storage and ocean energy linking to the Blue Growth strategy. At the same time, the 
European Energy Research  Alliance needs to further integrate its research  capacities and to 
increase the market/commercial impact of its results, in close collaboration with the European 
Industrial Initiatives. 

In  all  these  structures,  new  stakeholders  need  to  be  brought  in  to  address  non-technological 
innovation  and  the  removal  of  regulatory,  financial,  market  and  behavioural  barriers  thus 
improving  market  preparedness.  This  includes  local  actors,  SMEs,  ICT,  regulators,  network 
operators, financiers and consumers.  

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The external dimension should strengthen the EU's excellence and attractiveness as a research 
partner. International R&D cooperation in line with the International Cooperation Strategy18 
and  under  Horizon  2020  should  be  focused  on  those  key  energy  research  and  innovation 
challenges to which it can bring added value and benefits for the EU. The external dimension 
of energy policy, including the bilateral Energy Dialogues19 and the Science and Technology 
Cooperation  Agreements  concluded  by  the  Commission  with  third  partner  countries,  should 
be  implemented  in  a  coordinated  and  mutually  reinforcing  way.  The  United  Nations 
Framework  Convention  on  Climate  Change  (UNFCCC),  which  provides  an  international 
framework  for  climate  and  energy  technologies,  is  also  an  important  partner.  With  its 
Technology  Mechanism,  the  global  market  for  technology  transfer  to  emerging  and 
developing countries is expected to grow 

Countries like the US, Japan and China are initiating and implementing ambitious low-carbon 
programmes,  which  represent  significant  research  and  innovation  cooperation  opportunities 
for the European research sector and market opportunities for industry, for instance on smart 
grids,  fuel  cell  and  hydrogen,  renewable  energy  or  nuclear  safety  and  nuclear  fusion. 
Multilateral cooperation between the EU, US and Japan on critical raw materials for energy 
must continue. The potential of solar energy should be further exploited in cooperation with 
the Mediterranean Partner Countries.  

5. 

CONCLUSIONS 

The EU energy technology and innovation strategy is an integral part of the EU energy policy. 
As  such,  it  must  complement  the  existing  regulatory  measures,  ensure  that  the  EU  is  at  the 
forefront  of  innovation  in  international  energy  markets,  as  well  as  address  the  challenges 
posed by the current economic situation. It must contribute to strengthening our energy cost-
competitiveness and reliability of supply. In this communication, the Commission has set out 
its strategy to ensure that the EU continues to have a world-class technology and innovation 
sector to tackle the challenges for 2020 and beyond.  

To support this approach, the Commission: 

• 

will: 

• 

• 

• 

• 

• 

ensure  the  development,  together  with  the  SET  Plan  stakeholders,  of  an 
Integrated  Roadmap  around  the  priorities  identified  in  the  EU  Energy 
technology and innovation strategy by the end of 2013.  

define, together with the Member States, an Action Plan of joint and individual 
investments in support of the Integrated Roadmap by mid 2014.  

strengthen  together  with  the  Member  States  the  reporting  system  for  the 
monitoring  of  the  Integrated  Roadmap  and  the  Action  Plan  based  on  the 
Strategic Energy Technologies Information System (SETIS) of the SET Plan.  

invite, together with the Member States in the context of the Steering Group, 
the  European  Industrial  Initiatives  and  associated  European  Technology 
Platforms  to  adjust  their  mandate,  structure  and  participation  to  update  their 
Technology Roadmaps and to contribute to the Integrated Roadmap. 

establish a coordination structure, under the Steering Group of the SET Plan, to 
promote investments in research and innovation on energy efficiency 

18 
19 

COM(2012) 497 final 
COM(2011) 539 final  

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• 

calls on the European Parliament and the Council to:  

– 

– 

– 

reaffirm their support to the SET Plan as part of Europe's Energy and Climate 
Change  policies  and  its  reinforcement  to  energy  technology  and  innovation 
development as set out in this Communication  

endorse  the  proposed  key  principles  and  developments  needed  for  energy 
technology and innovation across the EU; 

support  the  alignment  of  EU,  national,  regional  and  private  resources  to  this 
integrated research and innovation approach; 

• 

invites  Member  States  and  regions  to  support  the  implementation  of  the  Integrated 
Roadmap and the Action Plan through: 

– 

– 

– 

– 

enhanced coordination of their energy research and innovation programmes as 
well as through the use of EU Structural and Investment funds and of EU ETS 
auctioning revenues; 

increased  collaboration  through  joint  actions  and  clusters  on  projects  with  a 
European added value;; 

further  integration  of  national  institutional  funding  and  research  capacities 
through the European Energy Research Alliance. 

put  in  place  support  for  faster  market  roll-out  of  sustainable  energy 
technologies.  

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