CELEX: 51994PC0654
Language: en
Date: 1995-01-23
Title: Amended proposal for a COUNCIL REGULATION (EC) CONCERNING A COMMUNITY PROGRAMME PROVIDING FINANCIAL SUPPORT FOR THE PROMOTION OF EUROPEAN ENERGY TECHNOLOGY 1995-1998 ("THERMIE II")

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                      COM(94) 654   final
                                                      Brussels,   23.01.1995
                                                      94/  0063(CNS)
                                Amended p r o p o s a l for  a
                                COUNCIL REGULATION        (EC)
CONCERNING A COMMUNITY PROGRAMME PROVIDING FINANCIAL SUPPORT FOR THE PROMOTION OF
              EUROPEAN ENERGY TECHNOLOGY 1 9 9 5 - 1 9 9 8 ("THERMIE II")
              (presented by the Commission pursuant to Article 189 A (2)
                                   of the EC-Treaty)
 ---pagebreak---                                                  1-
                      EXPLANATORY                 MEMORANDUM                                    |
                   PROMOTION OF EUROPEAN ENERGY TECHNOLOGIES
  A COMMUNITY PROGRAMME PROVIDING FINANCIAL SUPPORT FOR THE PROMOTION OF
                EUROPEAN ENERGY TECHNOLOGY             1995-1998 ("THERMIE-II")
0    INTRODUCTION
0.1 The Energy situation in the Community as well as the necessity to contribute
     to the achievement of the goals of its economic and political integration as
     laid down in the Treaty establishing the European Union call for public action
     to promote European Energy Technologies on the market. The Community
     programme        "THERMIE",        decided     by  the    Council     of    Ministers  on
                      1
     29June1990           and    granting     financial  support     for   this    expires  on
     31 December 1994.
0.2 The Commission has charged experts to assess the results of the THERMIE
     programme and presents its reports on the implementation of the regulation
     and on the compatibility between national and Community action2.                      This
     report shows clearly that there is a certain need for specific support on a
     Community level.
0.3 Since the implementation of the Treaty of the European Union, an important
     part of promoting European Energy Technologies and concerning the
     demonstration of the technical feasibility of projects is covered under the
     provisions of articles 130f and followings.          The Commission has therefore
     integrated this part into its proposal for a 4th RDT framework programme3.
     The Commission has specified in annex III of the proposed Council decision
     for a 4th RDT framework programme under action 1 point 5 "Energy"4 as well
     as under action 2 "co-operation with Third Countries"5 and action 3
     "Dissemination and valorisation of results"6 the need for energy technology
     demonstration such as carried out by the THERMIE programme and its
1
    Council Regulation (EEC)n°2008/90, OJ n°L185/1 of 17.07.1990
2
    Ref. "Report on the implementation of Council Regulation n°2008/90 of 29 June 1990
    (THERMIE Programme)" COM(93) 642 final
3   Ref. proposal of a Council decision doc. COM(93)276 final of 16.06.1993 - p.4
4
    Ref. proposal of a Council decision doc. COM(93)276 final of 16.06.1993 - p.50
5   Ref. proposal of a Council decision doc. COM(93)276 final of 16.06.1993 - p.60 and 61
6
   Ref. proposal of a Council decision doc. COM(93)276 final of 16.06.1993 - p.63 and 64
 ---pagebreak---     Organisations for the Promotion of Energy Technologies as well as by its
    "Energy Centres" in Central and Eastern Europe.
0.4 THERMIE is supporting projects on the industrial viability of new technologies
    going beyond the pure technical feasibility. The promotion of European
    Energy Technologies by the demonstration of their economic viability as well
    as the promotion of results of similar projects financed by Member States
    programmes or by the industry alone and assistance to their penetration on
    markets of Third Countries through industrial co-operation cannot be
    included in the 4th framework programme and are therefore subject to the
    present proposal based on art.235 of the Treaty.
0.5 In the following chapters, the Commission specifies the justification for action
    at Community level, as well as the objectives of this new complementary
    programme ("THERMIE-H") and the orientations and structure of the new
    programme.
1   JUSTIFICATION FOR ACTION AT COMMUNITY LEVEL
    SUBSIDIARITY
1.1 What are the objectives of the proposed action in relation to the Community's
    obligations?
    The new Community instrument for providing financial support for the
    demonstration and dissemination of energy technology 1995/98 will take into
    account major energy policy objectives which are of vital importance for
    economic growth and sustainable economic and social development of the
    EU; such as:
           security of long term energy supply of the Community,
           rational management of energy resources,
           clean use of coal and other fossil fuels,
           diversification of energy supply,
           development of regional energy resources.
     Furthermore, the programme will contribute to other major Community's
     policy objectives due to the achievement of the internal market as well as in
 ---pagebreak---                                          -3-
      accordance to priorities laid down in the Treaty of the European Union and
      the 4th Framework Programme concerning increasing the competitiveness of
      European industry, improving living conditions in cities and rural areas,
      strengthening economic and social cohesion, and co-operation with Third
      Countries.
1.2   Does competence for the planned activity lie solely with the Community or is
      it shared with the Member States ?
      Competence is shared with Member States.
1.3   What is the Community dimension of the problem (for example, how many
      Member States are involved and what solution has been used up to now) ?
      The key objectives of the proposed programme affect all Member States and
      have pan-European implications - e.g. for the environment, competitivity,
      energy supply and international relations. The evaluation report of THERMIE
      and the appraisal of the Member States support programmes show clearly
      the necessity for Community action in energy technology demonstration and
      dissemination7. European industry is in many cases capable of developing
      innovative technologies and promoting their utilisation on its own , without
      public support. However, as in the USA, Japan and other major industrial
      competitors, industry (and this applies especially to SMEs) is not always in a
      position to succeed without the provision of public support, since technical or
      financial risks may be high, external costs are not included in energy
      production and consumption and market information may not be readily
      available or accessible.     There is also a significant need for financial
      assistance in the services, buildings, transport sectors, etc., particularly
      where they are publicly owned.         Up to now, Member States support
      programmes      have  been    complemented    by    a  series   of  Community
      demonstration programmes, the most recent of which is THERMIE.
1.4 What is the most effective solution taking into account the means available to
      the Community and those of the Member States ?
7 Ref. "Report on the implementation of Council Regulation n°2008/90 of 29 June 1990
    (THERMIE Programme)" COM(93) 642 final
 ---pagebreak---                                            4-
    Many Member States have important support programmes of their own, both
    on a national and a regional level, which may focus on specific energy
    sectors, technologies or end uses. These programmes have budgets roughly
    four times greater than the Community's programmes. There is therefore a
    need, before thinking of Community support, to consider making greater use
    of the results which are already available from these programmes.           This
    requires improved co-ordination between Community and Member States
    programmes, which the Community can help to provide. In certain Member
    States no programmes exist at all, or they may only cover certain specific
    sectors. Here again, the Community could fill in the gap which exists in some
    areas.    There is, of course, some need for re-orientatibn compared with
    previous Community energy technology programmes to ensure that the
    Community only acts insofar as the objectives of the action could not be
    adequately achieved by the Member States themselves and where, by virtue
    of scale or effects, the Community is able to achieve more effective results.
1.5 What real added value will the activity proposed by the Community provide
    and what would be the cost of inaction ?
    The added value would be to bridge the gap between energy technology
    development by industry and Member States on the one hand and promotion
    of its results for the benefit of the consumers and users (public or private) on
    the other. The cost of inaction could be poorer coordination, an absence of
    dissemination of vital technical information and distortions in technical
    development across the Community to the benefit of richer Member States
    and more powerful industrial interests.
1.6 What forms of action are available to the Community (recommendation,
    financial support, regulation, mutual recognition, etc.) ?
     It is considered that a regulation is the most effective means of achieving the
    objectives of the proposal by ensuring that all Member States adopt the same
    approach within the same structure, secure in the knowledge that a budget
     has been agreed for a pre-defined period of time.              A directive or
     recommendation would clearly be inadequate in achieving this framework of
    action.
 ---pagebreak---                                             5-
1.7  Is it necessary to have a uniform regulation or is a directive setting out the
     general objectives sufficient, leaving implementation at the level of the
     Member States ?
     A regulation actually makes it easier to run a consistent and fair programme
     and in this case does not affect Member States' powers to develop their own
     national programmes.
     COHERENCE WITH OTHER COMMUNITY ACTIONS
1.8  It is recognised that, in order to be effective, there should be complementarity
     and coherence with other Community instruments, in particular with
     Community programmes financed within the 4th RDT framework programme,
     the structural funds or external aid programmes. Clearly, the energy-policy
     related programmes for technology demonstration will operate downstream
     from RDT programmes; so, technology development would have to be fully
     completed and any risks would be limited to those related to the
     demonstration of economic viability or wider market penetration.
1.9 A Community programme which bridges the gap between energy technology
     development by industry and Member States on the one hand, and promotion
     of its results for the benefit of the consumers and users (public or private) on
     the other hand, must take into account advice from all interested institutions,
     industry, other companies, customers etc. This can be achieved by means of
     an Advisory Committee of Member State representatives, and also through
     advisory groups to the Commission representing professional associations,
     industry, the tertiary sector and any other relevant decision makers or
     customers. This would be important for both the decisions on the granting of
     financial support and for the implementation of support activities.
1.10 An important role in this context would be taken by the European network of
     Organisations for the Promotion of Energy Technology ("OPET-network") set
     up by the THERMIE Regulation, which brings together a large number of
     public and private organisations experienced in technology assessments,
     market penetration and dissemination activities. The role and structure of the
     network could easily be adapted in order to play an important role in a new
     "THERMIE" programme. Not only are most of the necessary skills available
     within this network, but it also respects the principle of subsidiarity, since
 ---pagebreak---                                           6-
    these organisations are operating at regional, national and Community level.
    The network would be supported by informal groups of professional and
    consumer associations, or regional or national agencies which would bring
    closer involvement with other relevant actions and would assist the
    Community in orienting the programme.
2   OBJECTIVES
2.1 Security of long term energy supply, the rational use of energy, the clean use
    of fossil fuels, the diversification of energy supply and the development of
    regional energy resources are key objectives of Community policy and it is
    vital for achieving economic growth. These goals will however only be
    achieved if European industry continues to develop innovative and efficient
    technologies for both energy production/transformation and for final
    consumption. But experience has shown that these technologies, once they
    have been developed, do not always succeed in penetrating the market
    without some public support; energy efficiency improvements in buildings,
    solar photovoltaics and IGCC are examples of this. These objectives
    therefore lie at the heart of the proposed instrument.
2.2 A major challenge for overcoming unemployment and for ensuring economic
    growth in the EU is maintaining the competitiveness of European industry.
    This will not be possible unless full use is made of innovative and efficient
    energy technologies. The position of European industry appears not at all as
    favourable as that of the USA and Japan; as pointed out in COM report
    (92)2000, the proportion of advanced technologies in European exports is
    actually decreasing, now being only at the level of 17%, compared with 27%
    for Japan and 31 % for the USA. It is recognised that the developing markets
    in Asia are large and would benefit from implementing European energy
    technology. Furthermore, European technologies could even increase their
    penetration of the USA and Japanese markets. An energy technology
    promotion programme would therefore be of valuable support for the
    European initiative in terms of economic growth.
2.3 The preservation of energy resources goes in hand with the protection of our
    environment. In fact, there is no way in which environmental goals will be
    achieved without widespread implementation of appropriate energy
    technologies. In the coming decade, technology development and utilisation
 ---pagebreak---     can reduce energy consumption significantly, in some cases by more than
    50% per unit of output, with a corresponding reduction in pollutant emissions
    such as C02, SO2, NOx. This is of vital importance, not only for the EU
    (meeting the CO2 stabilisation target), but also for its neighbours in Central
    and Eastern Europe, and even more for the developing countries who are in
    the process of dramatically increasing their economic growth.
2.4 Clearly the internal market offers significant new opportunities for Member
    State businesses. However, it also requires companies to be more
    competitive, and one important means of enhancing competitiveness is the
    implementation of better, more efficient energy technologies. Technologies
    successfully developed by companies, often with public support at national or
    regional level, would be taken up more easily and widely if economic and
    technical uncertainties and the lack of market transparency could be
    overcome by Community promotional support; this would in turn add value to
    the programmes administered by the Member States.
2.5 Community policy objectives to strengthen social and economic cohesion and
    agricultural policy are also met by energy technology promotion. The living
    conditions of European citizens, in particular in the less favoured regions,
    can be improved by the utilisation of efficient energy technologies.
    Improvements in public transport systems, private cars, heating and lighting
    systems can be achieved through more efficient energy use or through new
    means; although energy must always be realistically priced, efficient
    technologies can make energy available at more reasonable price levels to
    the less favoured regions and thus ensure that they are not excluded from
    access to these vital services. In fact, energy technology will have a
    significant impact on societal development and will be an important
    instrument for strengthening economic and social cohesion in the
    Community. There are similar considerations which apply to the increased
    use of modern energy technology in rural areas. Also, the recent reforms of
    the Common Agricultural Policy could be eased by associated measures,
    such as the utilisation of land for bio-fuel plantations (bio-methanol, rape-
    seed, wood, etc.), to provide fuels for use in the transport and buildings
    sector. Technologies are available now, but, if Europe's rural areas are not
    to be left out, they need a vigorous push for them to be taken up in the
    various sectors concerned.
 ---pagebreak--- 2.6 Finally, another major Community policy, external relations, would also
    benefit from a programme of energy technology promotion.              In fact, the
    international dimension of energy is greater than for any other commodity.
    Not only initiatives such as the EC-Energy Centres, but also international
    activity to decrease CO2 emissions (follow-up to the Rio conference) and
    help for developing countries to gain access to adequate and clean supplies
    of energy, would be greatly facilitated by the promotion of European energy
    technologies. Furthermore, the neighbouring countries of the EU are either
    significant energy suppliers (Russia, Poland, Norway, Algeria, Gulf etc.), or
    they have great potential for the utilisation of efficient technologies for energy
    consumption, transformation and production. The prospect of a number of
    Central and Northern European Countries joining the Community, and of
    association agreements with others (Mediterranean countries), increases the
    necessity for considering them as partners              in the new     Community
    programme.       THERMIE-II could contribute to successful co-operation in
    particular through its dissemination action implemented by its OPET-network.
2.7 These gualitative obiectives could be illustrated by some Quantitative targets
    which THERMIE-II would seek to achieve. For example: a decrease of 2% in
    the Community's energy imports, thus increasing the security of energy
    supply, a further increase in energy savings of 20Mt/y, a reduction of 2% in
    Community CO2 emissions, etc. These objectives would need to be defined
    in more detail and measurement criteria must be developed in parallel with
    the implementation of this new programme.
3   ORIENTATIONS - STRUCTURE OF THE PROGRAMME
3.1 In order to successfully meet the above objectives and to complete the
    demonstration action undertaken within the 4th RDT framework programme,
    the programme has to be adequately structured and to concentrate on
    priorities; furthermore it should be defined to face the problems relating to the
    utilisation of energy technologies, rather than simply the problems of
    particular individual energy sectors or technologies.         Thus the traditional
    sectoral approach
     • Rational use of energy
     • Renewable Energy Sources
     • Fossil Fuels (Solid Fuels and Hydrocarbons)
 ---pagebreak---                                           -9
    will be completed by one related to the use of a technology in order to match
    with energy policy related problems of the market.
    The specific content of the sectors of application will concentrate only on a
    limited number and follow closely the results of the evaluation of the previous
    and ongoing Community energy technology support programmes as well as
    the demonstration of technical feasibility undertaken within the 4th framework
    programme.       The organisation will take into account the basic principle of
    common       action   in  partnership    with  industry   and   Member    States
    administrations. A draft programme for the 3 sectors is attached.
3.2 The content of the programme would work across sectors and would promote
    technologies by demonstration and dissemination for a specific end-use.
    Actions eligible for support would be located in one or more of the following
    areas:
          industry (RUE and final consumption of fuels or energy sources, for
          heat, power, lighting, etc.);
          energy industry (production/transformation of fuels or energy sources,
          including exploration and demand-side management action on efficient
          electricity production and utilisation);
          tertiary sector : buildings and domestic sector (including services and
          administration: RUE, solar thermal, electricity, etc.), transport sector
          (RUE, bio-fuels, electricity, solar PV, etc.), urban energy systems (CHP,
          district heating, traditional energy sources combined with new ones -
          geothermal, biomass, wind, clean use of coal, gas, etc.);
          rural energy systems (biomass plantations), isolated areas (islands,
          mountains and peripheral regions: Renewable Energy Sources).
    Targeted projects and programmes with a Community-wide dimension would
    be a suitable instrument to assess economic viability and allow for major
    breakthroughs in the utilisation of advanced and efficient European energy
    technologies.      Likewise, THERMIE-II has to allow continuing support to
    SMEs, and would support small projects with good replication potential in the
    Community.
 ---pagebreak---                                         -10
3.3 The type of support would be granted accordingly to the need for public
    action:
          Support for demonstration projects: - to cover the risk of economic
          viability for the demonstration of a first commercial size project in a
          country or region or of a technology which has not yet been introduced
          on the market in the same economic conditions; dissemination through
          projects promoting energy technologies with a view to their broader
          utilisation-
          Measures for energy technology promotion (dissemination, technology
          transfer, market assessment, information, advice, etc.) in particular of
          results of Community or Member States' support programmes or of
          similar technologies developed by industry without public support and
          on the same state of insufficient market penetration.
          Energy technology transfer and industrial co-operation with Third
          Countries and international organisations.
          Horizontal support measures: Co-ordination of policies, evaluation of
          programmes and administrative support.
    The proportion of expenditure for these various types of support will be
    defined in consultation with the advisory committee and according to the
    annual budget provisions.
3.4 Projects should generally involve several companies from several Member
    States (except for certain specific cases, to be defined).
3.5 The amount of proiect support should be limited as in the past to 35% of the
    eligible costs. For Measures and co-operation with Third Countries, it would
    be between 50% and 100%. Costs for horizontal measures should be fully
    covered (100%).
3.6 Financial resources: the duration of the programme should be 4 years to be
    in line with the demonstration activity of the 4th framework programme and to
    allow time for results to come through, for a good and efficient organisation
    and for the programme's objectives to be achieved.         The level of finance
    foreseen for 1995 in the context of funds available under Heading 3, other
    than those allocated to the 4th Framework Programme RTD is 30 MECU.
    The level of finance for 1996-98 will be decided, outside the resources
 ---pagebreak---                                             11
    allocated to the 4th Framework Programme RTD, in the light of the revision of
    the budget estimates and defined in the framework of the annual budgetary
    procedure to an adequate extent to ensure that the programme is carried out
    in a coherent manner until its conclusion. The geographical coverage of the
    THERMIE-II programme would thus be focused on the Community's internal
    market, but would allow for a limited action to be implemented in
    neighbouring regions (Central and Eastern Europe, Northern Europe,
    candidate countries for EU membership, Southern Europe and the
    Mediterranean, as well as some specific actions for important Third Country
    markets).
3.7 Eligibility criteria for projects would be:
          existence of financial risks in demonstrating viability of a energy
          technology;
          no possibility of Member State sufficient financing and support;
          increase in security of long term energy supply of the Community;
          preservation of energy resources and of the environment;
          improved competitiveness of European industry.
    Additional criteria would be as in the existing THERMIE programme the
    "Community dimension" (several proposers from different countries), the size
    of undertakings (SMEs) and projects from regions whose development is
    lagging behind. Every year priorities would be defined by the Commission
    (assisted by the advisory groups) and in agreement with the Advisory
    Committee of Member State representatives.
3.8 If the programme is to be effectively organised and implemented and the
    objectives achieved, then there must be a careful examination of the
    complementarity of THERMIE-II with other Community financial instruments:
    those "upstream", for R&D and energy programming; those "downstream", for
    energy policy (SAVE, ALTENER), regional policy, external policy and co-
    operation (PHARE/TACIS, Co-operation agreements and EDF) and finally
    those of the European Investment Bank, other financial institutions (e.g.
     EBRD), other international organisations or instruments such as the
     European Energy Charter. Co-ordination with Member State programmes will
     be most effectively ensured, as up to now, through an Advisory Committee.
 ---pagebreak---                                             12
3.9 Organisational aspects. The projects will be selected following an annual call
      for proposals to be published in the Official Journal. Practicable procedures
      will be developed with assistance of Member States through the THERMIE
      Committee.
3.10 In order to facilitate the administration of the programme and to respect as far
     as possible the principle of subsidiarity, the Commission would continue to
     have recourse to public or private organisations involved in energy
     technology promotion in the Member States (OPET). The OPET-network
     would also play an increasing role in the organisation, preparation and
     management of promotional measures and as far as possible in projects.
     Professional associations would also be involved in these aspects on an
     informal basis and at low cost. All interested services of the Commission
     should assist in the decision-making process, depending on their interest and
     competencies. The potential involvement of the European Investment Bank in
     this programme should also be examined.
4    BUDGET - PROVISIONS
4.1 The budget will be determined by the budgetary authority in the light of
     available resources in the framework of Heading 3 of the budget.
     The indicative allocation of the amount between the different mechanisms of
     support as defined under point 3.3 will be
            project support in the EU
            promotional measures in the EU
            co-operation with Third Countries
            horizontal support measures
     This indicative allocation is based on the findings of the THERMIE evaluation
     report showing the need for wider replication of results of existing technology
     programmes as well as due to the fact that the closeness to the market of
     demonstration of economic viability calls for intensive promotional measures.
4.2 The annual allocation for the different fields and area of application will be
     fixed annually accordingly to the potential of proposals and in consultation
     with the Advisory Committee.
 ---pagebreak---                                               -13-
                                  COUNCIL REGULATION (EC) No.../..
                                            OF../../....
     CONCERNING A COMMUNITY PROGRAMME PROVIDING FINANCIAL SUPPORT FOR THE
       PROMOTION OF EUROPEAN ENERGY TECHNOLOGY 1995-1998 ("THERMIE-H")
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 235 thereof,
Having regard to the proposal from the Commission^),
Having regard to the opinion of the European Parliament^2),
Having regard to the opinion of the Economic and Social Committee(3),
Whereas pursuant to Article 3(t) of the Treaty the activity of the Community shall
include measures in the spheres of energy,
Whereas in its resolution of 16 September 1986 concerning new Community energy
policy objectives for 1995 and convergence of the policies of the Member StatesW
the Council stated that, possible short-term fluctuations on the energy market apart,
efforts made must be maintained and, if necessary, reinforced between now and
1995 and beyond that date in order to reduce to a minimum the risk of tension at a
later date on the market;
Whereas that same resolution states that one of the horizontal objectives of
Community energy policy is to encourage continuous and reasonably diversified
promotion of technological innovations and appropriate dissemination of the results
throughout the Community; whereas in spite of the present energy situation there
should be no relaxation of efforts to diversify the Community's energy supply and
improve energy efficiency; whereas the promotion of new technologies will help to
achieve these objectives and to ensure better protection of the environment from the
impact of energy technologies;
(1) COM(93) 642 def., of 9 December 1993.
(2)
(3)
(4) O J No C 24* ,25.09.1986, p. 1.
 ---pagebreak---                                          -14-
Whereas it is important to dovetail these efforts with the Community strategy for
science and technology and with the specific programmes in particular the activity
concerning demonstration of clean and efficient energy technologies defined in the
4th framework programme for Community activities in the field of research and
technological development, both in terms of programme execution and in terms of
the financial status of the programme in the financial perspective;
Whereas the resolution of 16 September 1986 also states that the Community
should search for balanced solutions as regards energy and the environment by
making use of the best available economically justified technologies;
whereas under Article 130r of the Treaty environmental protection requirements are
to be a component of the Community's other policies and action by the Community
relating to the environment must be designed to ensure a prudent and rational
utilisation of natural resources; whereas energy technology has a key role to play in
meeting the ecological challenge by increasing energy efficiency, developing new
and renewable sources and ensuring the clean use of solid fuels: whereas major
efforts in all these areas will be needed to face up to the threat of climatic change;
Whereas the promotion of projects for exploiting the indigenous energy potential of
the regions, particularly less-developed regions, will help to strengthen the
economic and social cohesion of the Community, an objective which, according to
Article 130b of the Treaty, should be taken into account when implementing common
 policies and the internal market;
Whereas support for the promotion of energy technologies will benefit economic and
social cohesion;
Whereas action to promote innovative technologies taken at Community level will
avoid the dissipation of resources and increase effectiveness;
Whereas this action should be co-ordinated with action being taken by the
Community within the framework of other specific programmes and which includes
the activities of demonstration of technical feasibility of projects, of the promotion of
co-operation with Third Countries and of dissemination and optimisation of results of
activities in Community RTD;
Whereas financial support should be granted in appropriate cases to projects for the
promotion of advanced technology in the field of energy;
 ---pagebreak---                                          15
Whereas it is appropriate to promote the market penetration of projects likely to be
rapidly absorbed by the market but also of projects - particularly in the field of
renewable energy - which, although they might have less rapid access to the market,
are of great interest in the long term in terms of energy supply, environmental
protection and employment;
Whereas, when selecting projects, equal preference should be given to projects
involving the association of independent undertakings established in different
Member States, in projects proposed by small and medium-sized enterprises and in
dissemination projects; whereas these projects, if selected, must benefit from
increased Community support;
Whereas the Commission must pursue its efforts to simplify and expedite tendering
and selection procedures and to make them more transparent, with a view to
furthering the implementation of the programme and easing the steps that must be
taken by undertakings, particularly SMEs, to participate in projects for the promotion
of energy technologies;
Whereas for reasons of effectiveness it is necessary to make provision for a
programme of four years duration with appropriate overall funding;
Whereas it is necessary to estimate the Community finance needed to implement
this programme; whereas that amount must be covered by the financial perspectives
defined by inter institutional agreements; whereas the appropriations actually
available will be determined under the budgetary procedure in compliance with the
said agreements;
Whereas the overall level of Community effort in the field of non-nuclear energies,
including measures falling within the scope of the fourth framework programme,
cannot be lower in real terms than it has been over the previous corresponding
period;
Whereas, notwithstanding the new' impetus that the promotion of innovative energy
technologies requires, the continuity of measure undertaken under promotional
schemes and demonstration projects and industrial pilot projects in the energy field
referred to by Regulation (EEC) No 2008/90( 5 ), 3640/85 and the programme of
(5) OJ No L 185,17.07.1990, p.1
 ---pagebreak---                                          -16-
support for technological development in the hydrocarbons sector referred to in
Regulation (EEC) No 3639/85 must be ensured in accordance with this Regulation;
whereas such continuity must be achieved on the one hand through the pursuit of
measures to promote and disseminate technologies that have received Community
support under such Regulations; whereas it may also be achieved through support
for the later stages of projects that have already received partial support under the
same Regulations; whereas it must be possible in certain cases to support projects
of the same sort as those covered by these Regulations provided they also fulfil the
requirements of this Regulation;
Whereas co-operation between undertakings in various Member States in the field
of energy technology must be maintained and encouraged;
Whereas technology transfer in the energy sector could contribute significantly to
more efficient energy production and the reduction of pollutant emissions in the less
favoured areas of the Community and in Third Countries;
Whereas such technology transfers should therefore be encouraged both within the
framework of existing Community programmes and by any other appropriate means;
Whereas the grant of Community support must not affect conditions of competition in
such way as to be incompatible with the competition provisions of the Treaty;
Whereas the present programme must be subjected to a mid-term review and a final
evaluation, to be conducted by independent experts;
Whereas this regulation is based on Article 235 of the Treaty;
Having regard to the Community's commitment under the International Convention
on Climate Change to participation in an international action to reduce the risks
attached to emissions of pollutants, particularly CO2;
Whereas, in order to meet these objectives, the Community must embark on a
vigorous plan of action involving co-operation with developing countries which lack
access to modern production and rational use of energy technologies;
Whereas, of these countries, it is now inter alia in those in the Pacific Rim and Latin
American countries that a rise in emissions will be inevitable unless preventive
action is taken;
 ---pagebreak---                                            -17
HAS ADOPTED THIS REGULATION:
                                         Article 1
The Community may, under the conditions laid down in this Regulation, grant
financial support for projects for the promotion of energy technology (THERMIE
1995-1998) in the fields of application referred to in Article 3 and undertake the
promotional activities referred to in Article 4.
                                         Article 2
1. For the purposes of this Regulation, 'projects for the promotion of energy
    technology', hereinafter referred to as 'projects', means projects which are not
    eligible for the specific programmes of the 4th Framework Programme and which
    are designed to advance, implement and/or promote innovative technologies in
    the field of energy, implementation of which entails a large element of economic
    risk, such that those projects would in all likelihood not be executed without
    Community financial support.
2. Community financial support may be granted for projects designed to promote
    with a view to their broader utilisation, either under different economic or
    geographical conditions or with technical modifications, innovatory techniques,
    processes or products which have already been applied once but, owing to
    residual risk, have not yet penetrated the market.
                                         Article 3
The fields of application of this Regulation are selected areas of:
 -   rational use of energy,
 -   renewable energy sources,
 -  clean combustion of solid fuels,
 -   hydrocarbons.
 ---pagebreak---                                            -18-
Annex I lists the sectors of application covered by each of these fields.           The
contents of this Annex may be amended to keep pace with technological
developments in accordance with the procedure defined in Article 9 paragraph 1, the
European Parliament and the Council being kept informed.
                                          Article 4
The Commission might undertake promotional actions, such as those defined in
Annex II, designed to encourage the application and market penetration of energy
technologies.     To that end the Community may provide technical and financial
support for bodies that promote innovative technologies in the Member States. A list
of these measures appears in Annex II, the contents of which may be amended in
accordance with the procedure defined in Article 9 paragraph 1.
These promotional actions may be carried out in Third Countries in so far as such
extension is in keeping with the objectives of this Regulation.
                                          Article 5
1. Any project within the meaning of Article 2 must meet the following conditions:
    (a) it must use, with a view to their implementation and propagation, innovatory
        techniques, processes or products, or a new application of established
        techniques, processes or products;
    (b) it must offer economically viable prospects of subsequent commercial
        exploitation of the relevant technology;
    (c) it must offer appropriate solutions compatible with safety and environmental
        protection requirements;
    (d) it must be difficult to finance because of major economic risks;
    (e) it must be proposed by natural or legal persons capable, in the case of the
        techniques, processes or products referred to in (a), of implementing and
        applying them, and of contributing to or assisting in the dissemination thereof;
 ---pagebreak---                                           -19-
    (f) in the case of any project of a total cost of ECU 2 million or more, it must be
        submitted by at least two independent promoters established in different
        Member States.
        However, exceptions may be agreed for projects submitted by a single
        promoter if their implementation would be of particular interest to the
        Community;
    (g) it must be carried our within the Community unless it is essential to the
        interests of the Community to have all or part of it carried out in an area
        outside the Community, in particular because of the special characteristics of
        the project.
    (h) it must be carried out outside the Community if such an action is necessary to
        meet the Community's commitments under the International Convention on
        Climate Change.
2. Additional conditions specific to the sectors of application are given in Annexes I
    and II.
3. When selecting projects, as an adjunct to the criteria laid down in paragraphs 1
    and 2, it shall take account of a preference to be given to projects with the
    following characteristics:
    (a) projects, other than those referred to in paragraph 1 (f), involving an
        association of a least two independent undertakings established in different
        Member States, provided that it is established that each undertaking can
        make an effective and significant contribution to canning out the project;
    (b) projects proposed by small and medium-sized undertakings or by an
        association of such undertakings;
    (c) projects which are to be implemented in regions whose development is
         lagging behind as defined by Article 8 of Regulation (EEC) No 2052/88( 6 ).
(6) OJ No L 185,15.07.1988, p.9.
 ---pagebreak---                                            -20-
                                         Article 6
1. Support for a project shall take the form of a financial contribution by the
   Community granted in accordance with the conditions set out in the paragraphs
   below and in Articles 7, 11 and 14.
2. Financial support may be granted for an entire project or for different stages of a
   project.    In the latter case, without prejudice to the responsibilities conferred
   upon the budgetary authority of the European Communities, financial support
   may continue to be granted for later stages of the same project provided that the
   eligibility criteria continue to be met and that the Commission is satisfied with the
   progress of the project.
3. Financial support may not exceed 35% of the eligible cost of the projects referred
   to in Article 2.
4. The amount of financial support shall be determined separately for each project.
   When determining the amount, one takes account of the element or proportion of
   the risk which will have to be borne directly by those responsible for the project
   and of other support received or expected, in such a way that the total amount of
   public support does not exceed 49% of the total cost of the project. To this end,
   the person responsible for the project shall be obliged to inform the Commission
   of any public aid expected or received.
5. Whenever specifically required, a decision could be made to set up other
   appropriate financial mechanisms according to the procedure referred to in
   Article 9 paragraph 1.
                                         Article 7
1. Projects shall be submitted by natural or legal persons established within the
   Community, whether individually or in the form of associations, following the
   publication of an invitation to submit projects in one or more of the fields of
   application referred to in Article 3 in the Official Journal of the European
   Communities, in accordance with this Regulation.          This invitation could be
   preceded by an invitation from the Commission encouraging or coordinating the
   launch of specific projects, called "targetted projects", whenever a technological
   gap exists in a specific area or significant progress could be achieved through
 ---pagebreak---                                           -21 -
   cooperation between individuals, companies or other bodies established in at
   least two different Member States.
2. In the invitations to submit projects, the Commission shall specify those sectors
   to be given priority when projects are selected; this list of priorities shall be
   drawn up in accordance with the procedure defined in Article 9 paragraph 1. The
   Commission shall also specify the information applicants will be required to
   supply for the purposes of the selection of projects.
                                         Article 8
1. The Commission shall be responsible for applying this Regulation.
2. The procedure referred to in Article 9 paragraph 1 applies to:
   (a) the amendment of the contents of Annexes I and II;
   (b) the establishment of priorities for invitations to submit projects;
   (c) the selection of projects, including the fixing of the rate of financial support,
       for every project or promotional action with a total cost exceeding
       ECU 500,000;
   (d) any institution of financing mechanisms in the sense of Article 6 paragraph 5.
3. The procedure referred to in Article 9 paragraph 2 applies to the selection of
   projects and promotional actions, and to the fixing of the rate of financial support
   for every project or promotional action, with a total cost exceeding ECU 100,000
   but not exceeding ECU 500,000.
                                         Article 9
1. In carrying out the tasks referred to in Article 8 paragraph 2, the Commission
   shall be assisted by a committee composed of the representatives of the Member
   States and chaired by the representative of the Commission.
 ---pagebreak---                                         - 22 -
The representative of the Commission shall submit to the committee a draft of the
measures to be taken. The committee shall deliver its opinion on the draft within
a time limit which the chairman may lay down according to the urgency of the
matter. The opinion shall be delivered by the majority laid down in Article 148(2)
of the Treaty in the case of decisions which the Council is required to adopt on a
proposalfrom the Commission. The votes of the representatives of the Member
States within the committee shall be weighted in the manner set out in that
Article. The chairman shall not vote.
The Commission shall adopt measures which shall apply immediately. However,
if these measures are not in accordance with the opinion of the committee, they
shall be communicated by the Commission to the Council forthwith.
In the event, the Commission shall defer application of the measures which it has
decided for a period of one month from the date of communication.
The Council, acting by a qualified majority, may take a different decision within
the time limit referred to in the previous paragraph.
In carrying out the tasks referred to in Article 8 paragraph 3, the Commission
shall be assisted by a committee composed of the representatives of the Member
States and chaired by the representative of the Commission.
The representative of the Commission shall submit to the committee a draft of the
measures to be taken. The committee shall deliver its opinion on the draft, within
a time limit which the chairman may lay down according to the urgency of the
matter, if necessary by taking a vote.
The opinion shall be recorded in the minutes; in addition, each Member State
shall have the right to ask to have its position recorded in the minutes.
The Commission shall take the utmost account of the opinion delivered by the
committee. It shall inform the committee of the manner in which its opinion has
been taken into account.
 ---pagebreak---                                             -23-
                                          Article 10
1, In the application of the current Regulation, the Commission ensures co-
    ordination with programmes implemented by the Community in the framework of
    other specific programmes and should include demonstration of the technical
    viability of projects, the promotion of co-operation with Third Countries, relevant
    activities of the EIB and EBRD as well as dissemination and optimisation of the
    results of activities in field of Community RTD.
2. In addition, it shall ensure closer co-ordination with national schemes in order to
    avoid duplication of similar projects.
                                         Article 11
1. The contractor responsible for carrying out a project receiving financial support
    from the Community shall undertake to use the successful technique, process or
    product or to facilitate its use, and to allow dissemination of the results obtained.
2. The Commission shall, in co-operation with the bodies responsible in the
    Member States, endeavour to ensure the dissemination and application of
    projects supported in accordance with this Regulation and to promote their
    exploitation.     It shall take appropriate steps to achieve this objective in
    connection with the promotional actions referred to in Article 4.
                                         Article 12
Contracts signed between the Community and the persons referred to in Article 14
for the implementation of the projects and promotional actions adopted under this
Regulation, shall govern the rights and obligations of each party, including the
methods of dissemination, protection exploitation of the results of the projects and
complete or partial repayment of the financial support in the event of non-
compliance with contractual obligations.
 ---pagebreak---                                           -24-
                                        Article 13
Subject to Article 11, the information obtained by the Commission under this
Regulation shall remain confidential.
                                        Article 14
Responsibility for any project shall lie with a physical or legal person constituted in
accordance with the law applicable in the Member States, or with an association of
such persons, within they are jointly and severally liable, in so far as the law
applicable in the Member State permits.
                                        Article 15
Financial support granted by the Community must not affect conditions of
competition in such a way as to be incompatible with the relevant provisions of the
Treaty.
                                        Article 16
Two years after the entry into force of this Regulation and also upon expiry thereof,
the Commission shall submit a report on the implementation of this Regulation, in
particular on the compatibility between national and Community action, to the
European Parliament and to the Council for the purposes of assessing the results
obtained, together with the external evaluation by independent experts on which it
will be based.
                                        Article 17
The appropriations necessary to the implementation of this Regulation shall be
entered each year in the general budget of the European Communities.
The appropriations shall cover the financial support to be granted to projects
referred to in Article 2, the financing of the actions referred to in Article 4 and other
expenditure necessary to the implementation of this Regulation.
 ---pagebreak---                                         - 25 -
                                      Article 18
Regulation 2008/90 shall continue to apply to projects and measures which support
has been granted pursuant to those Regulations.
                                      Article 19
The Regulation shall enter into force on 1 January 1995.
It shall apply until 31 December 1998.
This Regulation shall be binding in its entirely and directly applicable in all Member
States.
Done at...,
                                                                     For the Council
                                                                      The President
 ---pagebreak---                                           - 26 -
                                         ANNEX I
                         LIST OF SECTORS OF APPLICATION
The fields of application in Article 3 cover the sectors listed below.
1. RATIONAL USE OF ENERGY
   Financial support will focus on the following sectors of application:
   Transport;
   Building;
   Industry;
   Energy Industry.
   1.1 TRANSPORT
       Projects must lead to a substantial improvement on the overall efficiency as
       well as a reduction on emissions, CO2 and other atmospheric pollutants,
       through technical improvements on traffic conditions and vehicles.
       Preferences are given to fleets of vehicles for public transportation, including
       urban freight delivery vehicles.
       Two areas of projects can be considered:
       a) RUE applications:
           - Projects related to the promotion of innovative fleets of vehicles. (New
              designs, new fuels: CNG, LPG, biofuels, diesel-electric...)
       b) Energy substitution applications:
           - Projects related to the promotion of new fuels infrastructure and
              distribution systems. (Rapid and slow charging units, O+M special
              requirements)
           - Projects related to the technical adaptation of vehicles to new fuels.
 ---pagebreak---                                         -27-
1.2 BUILDINGS
    Projects must lead to a substantial reduction in energy consumption
    according to standards and substantial reduction of emissions and pollutants
    in building stocks through integrated technical and economic improvements.
    Preference will be given to projects with clear integration of design, materials
    and equipments with loads control and management.
    a) RUE applications:
        - Projects related to the promotion of rehabilitation of buildings.
        -   Projects related to the promotion of new integrated designs for new
           buildings.
        -   Projects related to the promotion of new cooling systems (without
           CFCs).
        -   Projects related to technologies outwith of combined production of heat
           and electrical power, for example fuel cells.
1.3 INDUSTRY
        Heat recovery using new heat exchanger concepts for high polluted
        exhausting gases or new kiln designs for a best use of heat in the
        chamber(s).      Combustion of exhausting gases with later use of heat
        produced can be also considered as well as CHP schemes improving the
        reliability of the equipment or incorporating new approaches for the use of
        the flue combustion gases.
        Technologies for the recovery of energy form industrial wastes through
        the production of by-products to be used as derivated fuel or direct
        energy      production.      Solutions   to  eliminate    possible   negative
        environmental impact have to be incorporated.
        Improvements        of  industrial  processes    reducing   specific   energy
        consumption, where this has an important weight in the total benefits of
        the project.
    -   Technical solutions for a best use of the electricity, especially in the peak
        load periods.      Automation of process could be also considered, using
 ---pagebreak---                                            -28-
           standard and modular solutions easily replicable or new approaches,
           such as predictable and adaptable systems.
   1.4 ENERGY INDUSTRY
       Advanced combustion burners, integrating solutions to save energy and
       reduce the environmental impact, as well as efficient cooling towers with
       lesser maintenance costs and reduced environmental impact.               These
       solutions should be mainly addressed to the re-powering of existing plants.
       Advanced systems to transport the heat produced in the District Heating
       schemes either to reduce the cost of the installation or to decrease the energy
       losses in the distribution or through the heat exchangers.
       Fuel cell stacks to provide electricity more efficiently and with less
       environmental damage.
       Technical solutions to reduce the electricity consumption in power plants, that
       could be also used to get a most flexible operation in hydro pump/turbine
       schemes. Reduction of losses and increase of quality in the transport and
       distribution of electricity should be also considered.
2. RENEWABLE ENERGY SOURCES
Financial support will focus on the following sectors of application-
Energy from biomass and waste;
Solar energy;
Wind energy;
Hydroelectric energy;
Geothermal.
   2.1 ENERGY FROM BIOMASS AND WASTE
       a)   Projects aiming at improving competitivity of biomass as fuel :
            - Activities aiming at improving the productivity of energy crops and
              harvesting and transformation technologies ;
 ---pagebreak---                                         -29-
       - activities aiming at improving and upgrading biomass conversion
           technologies for energy production and use (production and use of
           liquid, solid and gaseous fuels, production of heat and/or electricity) ;
       - , activities aiming at reducing the costs for providing the energy
           produced from biomass (reduction of specific investment costs,
           rationalisation of production technologies...).
    b) Projects aiming at the energy use of vegetal, animal, urban and industrial
       waste:
       - activities for the upgrading of waste which have a significant impact on
           the production, substitution of energies or on energy savings aiming at
           the reduction of the costs of the energy produced.
           Projects must comply with the guidelines of community environment
           and agricultural policies.
2.2 SOLAR ENERGY
    a) Photovoltaics
       Objectives:
       Dissemination of photovoltaics processes to supply electricity for :
       - groups of houses, villages ;
       - buildings, with architectural integration of PV modules into roofs and/or
           facades ;
       - means of telecommunication, warning, signalling, water pumping, water
           purification, desalination, etc... ;
       - distribution from PV central power stations.
    b) Thermal applications
       Objectives:
       Dissemination of techniques which relate to optimal technical and
       economic integration of active solar energy systems with efficient
       conventional systems, with guaranteed results for an overall improved
       reliability, used for :
 ---pagebreak---                                        -30-
        - production of large quantities of hot water (or other fluids) for heating
            and/or cooling applications ;
        - production of large quantities of hot air for ventilation or drying
            applications.
2.3 WIND ENERGY
    Objectives:
        Dissemination of the results obtained from previous R&D programmes, in
        order to assist market penetration, encourage European industry, and
        promote the transfer and broader use of advanced technology,
        particularly in the less developed countries of Europe.
        Dissemination and popularisation of the use of wind energy conversion
        systems tailored to the specific nature of the markets in the different
        Member States by wind turbines of a wide range of nominal capacity.
         Dissemination of techniques with minimum effect to the environment,
        namely reduced noise, minimum land use and improved aesthetic impact
        that will lead to an increased public acceptability.
2.4 HYDROELECTRIC ENERGY
    Objective:
    Dissemination of techniques aimed at the production of electricity for a public
    network or for private use in low-power plants.
    Fields of application :
         Projects (targeted) aimed to bring together industrial partners to carry out
         high quality, reliable and competitive standard equipment in order to
         promote the creation of, or the penetration into new markets.
         Projects (targeted) aimed to perfect simple, reliable and cheap techniques
        or technology, especially those adapted to the markets and needs of
        countries whose development is lagging behind.
         Rehabilitation or modernisation of abandoned sites or those which are
        approaching the end of their technical or administrative lives, by the use
        of high performance of State of the art technologies (best quality/price).
 ---pagebreak---                                           - 31 -
        All projects must take into consideration existing and foreseen environmental
        protection measures.
   2.5 GEOTHERMAL
        Objective:
        To promote, through dissemination actions, the utilisation of already located
        important geothermal resources, not yet exploited, bearing in mind economic
        and environmental aspects, and security of supply.
        Fields of application:
            techniques in the drilling sector, wellhead equipment, corrosion, scaling,
             automation and the treatment systems for brine waters ;
            exploitation of geothermal fields where the resources are proven, in order
            to reduce the mining risk;
             Development of geothermal applications in agriculture, aquaculture and
            water desalination, thus helping the regions affected by the modifications
             of the common agricultural policy.
3. CLEAN COMBUSTION OF SOLID FUELS
   All type of Fluidised Bed Combustion (FBC) should be now spread around in the
   Community: small and large FBC are now reaching the industrial maturity and it
   will be effective to use them more and more. They have not to be limited to a type
   of fuel. But on the contrary, their ability to use a wide range of fuel should be
   taken into account in order to disseminate this technology.       Therefore, use of
   bituminous coal, lignite, peat, rest coals, wastes, biomass, RDF, and all type of
   carbonaceous materials should be encouraged - alone or in mixture - to be
   burned in FBC.
   FBC should be promoted to produce electricity, and also to be used in CHP
   generation.
 ---pagebreak---                                            - 32 -
4. HYDROCARBONS
   Objectives:
   The programme should strengthen the industry capability to answer the short and
   long term requirements for the availability of efficient technologies in the field of
   oil and natural gas. The Community effort is therefore aiming at :
        the dissemination of technologies for assisting market penetration/Special
        attention (including co-operation projects) will be given to market penetration
        in the PECOs and CIS.
   Beneficiaries would be mainly oil and gas related companies which are
   developing and promoting innovative and effective technologies to improve the
   exploration, production, transportation and use of hydrocarbons, preference being
   given in the selection of projects to those proposed by SMEs.
   The fields of application in the upstream sector will be the dissemination of :
        tools and methods for enhancing exploration capability, particularly towards
        difficult and complex targets as the North Sea and for maximising recovery
        rate ;
        new technologies for marginal fields exploitation, notably for gas fields
        resulting in increased production from those reservoirs characterised by
        difficult economic conditions ;
        safety and the environmental          protection systems in exploration and
        production, particularly for the Offshore sector ;
        new and efficient LNG production and transport systems in view to diversify
        the supply.
 ---pagebreak---                                         -33-
                                      ANNEX II
           PROMOTIONAL ACTIONS FOR ENERGY TECHNOLOGIES
1. OBJECTIVES
   Encouraging the application and market penetration of energy technologies as
   referred to in Article 4 requires the undertaking of actions by the Community.
   Such actions are to be undertaken only in so far as market conditions require it
   and as they are in keeping with the objectives of this Regulation.
   Community support for actions may therefore be granted in order to meet
   energy policy and other related objectives set out by the Treaty on
   European Union, in particular concerning:
   •    Increased utilisation of the industrial potential of energy technology
        development and improving the technological base of European industry, in
        particular for SMEs;
   •    Encouraging European industry to become more competitive by exploiting
        technology development and market potential to the full;
   •    Protecting and improving the quality of the environment by the rational use
        of energy resources, the use of renewable energy sources and clean
        energy technologies and reducing harmful emissions;
   •    Technology transfer into less developed regions h Europe and exploitation
        of the local energy potential;
   •     Improved working conditions and employment opportunities by the use of
        innovative and efficient energy technologies developed and supplied within
        the Community;
   •     International cooperation facilitating economic and social development of
        developing countries
 ---pagebreak---                                          -34-
2. TYPE OF ACTIONS
   The actions referred to in Article 4 jnclude:
   2.1 COORDINATION with national schemes and other Community programmes
       related to energy technology in order to avoid duplication of similar actions
       and to ensure fully the application of the principle of subsidiarity for
       Community action, and in particular through:
       a.   Systematic exchange of information about national support schemes;
       b.   Programme evaluation activities carried out jointly;
       c.   Definition of objectives and implementation of strategies for energy
            technology promotion;
       d.   Monitoring the achievement of objectives.
   2.2 INSTRUMENTS of Community action:
       a.   Analysis of the features and evaluation of the potential of the market
            for the application of energy technologies and their market penetration
            (including technologies for demand side management,               sectoral
            diagnosis, feasibility studies).
       b.   The dissemination of information on European energy technologies,
            their further promotion and the dissemination of the results of public
            funded projects by the organisation of events (technical workshops,
            seminars, conferences, project site visits, exhibitions), participation in
            technical fairs, the production of documentary material etc., as far as
            the undertakings' contractual obligations do not provide for it or the
            undertakings concerned are not able to carry them out by themselves.
       c.   Advice and promotional activities to guide the development of actions
            undertaken,    ensure    the    wider penetration   of efficient   energy
            technologies and address barriers in the market.
       d.   Training of staff involved in management or technical applications of
            innovative energy technologies.
 ---pagebreak---                                      -35-
     e.   Development of appropriate financial mechanisms.
     The instruments detailed above will be structured in synergy with the
     corresponding instruments foreseen in the 'non-nuclear energy' programme
     of the fourth framework programme of research, technological development
     and demonstration, in the context of 'PLANS TO FACILITATE MARKET
     ACCESS' for the various technologies covered by the present programme.
2.3 Recourse to public or private Organisations cooperating in the above
     activities for the Promotion of Energy Technologies ("OPET") in particular
     by using the OPET Network.
2.4 Recourse to the above activities with a view to industrial cooperation with
     third countries, providing guidance for Community aid programmes and
     achieving optimal use of energy technologies inside and outside of the
     Community.
IMPLEMENTATION
As referred to in Article 9 of the Regulation, the implementation of the measures
will be carried out in close cooperation with Member States by the Committee
which will assist the Commission in the definition of the programme, the
establishment of the priorities for action, the decision of granting financial
support and the evaluation of results.
 ---pagebreak---                                         -36-
                                   ANNEX H (bis)
Without prejudice to the provisions of Article 3, the various sectors concerned will be
given support in the following proportions:
    rational energy use                                                     45 %
    renewable energy sources                                                 35%
    dean combustion of solid fuels                                           13 %
    hydrocarbons                                                              7%
 ---pagebreak---                                               -37-
                                     FINANCIAL STATEMENT
1. Title of operation Promotion of European Energy Technologies ("THERMIE-II")
2. Budget heading involved B.4.1000
3. Legal basis Council Regulation to be adopted in 1994
4. Description of operation
   4.1 General objectives: Financial support for promotional projects and measures for
         larger market penetration of energy technologies
   4.2 Period covered: 4 years, 01.01.1995 to 31.12.1998 (in parallel to the 4th
         Framework Programme)
5. Classification of expenditure or revenue
   5.1   Compulsory/Non-compulsory expenditure
   5.2 Differentiated/Non differentiated appropriations
   5.3   Type of revenue involved: No
6. Type of expenditure or revenue
   •      100% subsidy: for some associated measures to be carried out by independent
         experts (consultant firms)
         Subsidy for joint financing with other sources in the public and/or private sector:
         for all projects and most of the associated measures, in particular for those carried
         out in co-operation with Member States Agencies
   •      Interest subsidy: subject to further discussion in energy working group
   •      Other: some service contracts (in particular for some associated measures)
   •      Should the operation prove an economic success, is there provision for all or part
         of the Community contribution to be reimbursed?: No
   •      Will the proposed operation cause any change in the level of revenue?
         If so, what sort of change and what type of revenue is involved? No
7. Financial impact
   7.1 Method of calculating total cost of operation (definition of unit costs)
         The amount of 30 MECU for 1995 covers financial support for demonstration of
         economic risks of promotion of energy technologies as defined in art. 2 b) of
         Council regulation 2008/90 ("dissemination projects") as well as in its art. 5
         ("associated measures"). As this type of projects is closer to the market and
         subject of different economic or geographical conditions, it is in particular relevant
         for the sector of rational use of energy. The level of finance appropriate for 1996-
          1998 will be decided in the light of available funds in Heading 3 of the budget.
 ---pagebreak---                                                38-
       The experience made today through the THERMIE Programme shows that there is
       a need for support in the sectors in the following proportions:
            Rational Use of Energy                                                45%
            Renewable Energy Sources                                              35%
            Clean use of Solid Fuels                                              13%
            Hydrocarbons                                                           7%
       Again, as experience made with the THERMIE regulation shows, not only project
       support is required. In fact, many efficient technologies have been developed by
       the industry, whether with EC or MS support or not, and the aims of larger market
       penetration can most effectively be achieved by dissemination measures.
       Finally, around 13% of funding is necessary for economic analysis, evaluation of
       projects and support programmes, including those of the Member States in order
       to orientate the Community activity and to ensure subsidiarity of action, as well as
       for administrative support.
   7.2 Itemised breakdown of costs
                                    Breakdown           Budget
                                                        year 95
                               Projects                    11
                               Dissemination               15
                               measures
                               Strategy, Evaluation,        4
                              Administrative
                               Support
                               TOTAL                  I    30
   7.3 Indicative schedule of appropriations
        7.3.1 Schedule for proposed new operation
                                          1995       1996      1997    1998   TOTAL
                Commitment                 30        p.m.*     p.m.*   p.m.*   p.m.*
                appropriations
             f* pro memoria)
              The level of finance foreseen for 1995 in the context of funds available under
              Heading 3, other than those allocated to the 4th Framework Programme RTD is
              30 MECU. The level of finance for 1996-98 will be decided, outside the resources
              allocated to the 4th Framework Programme RTD, in the light of the revision of the
              budget estimates and defined in the framework of the annual budgetary procedure to
              an adequate extent to ensure that the programme is earned out in a coherent manner
              until its conclusion.
8. Fraud prevention measures; results of measures taken
9. Elements of cost-effectiveness analysis
   9.1 Specific and quantifiable objectives; target population
       - Specific objectives: links with general objective: Energy Policy, increase of
          Energy Supply Security and improved Energy Efficiency.
 ---pagebreak---                                          -39-
       Support of about 150 projects and 300 associated measures per year which,
       following the recent experience with the ongoing THERMIE Programme would
       produce the following results for each ECU spent on a project:
       • 425 kg of oil equivalent saved or substituted
       • 1650 kg avoided CC_ emissions
       • 12 kg avoided SO2 emissions
       • 4 ECU increase of the Community GDP
       (See also attachment).
     - Target population: distinguish as applicable for each objective; indicate the end-
       beneficiaries of the Community's financial contribution and the intermediaries
       involved: industry and other SMEs.
9.2 Grounds for the operation
     - Need for Community financial aid: many significant technology break through
       would not happen in the EC; some Member States have no similar programme.
     - Choice of ways and means
        • advantages over possible alternatives (comparative advantages): more
          immediate effect than regulatory measures, better effect than R&D measures.
       • explanatory reference to similar Community or national operations: THERMIE
          1990/94, UK Best Practice Programme, FR and DE Demonstration
          Programmes.
       • spin-off and multiplier effects expected:
          • Generation of potential investment of about 1,000 MECU in total, based on
            results of Cost Benefit Analysis of THERMIE 1990-1992.
          • Job creation potential of tens of thousands of jobs, depending on success of
            replication.
          • Promotion of European technologies on third country markets.
     - Main factors of uncertainty which could affect the specific results of the
       operation: the successful projects are generally replicated several times by
       industry or Member States Institutions. The associated measures contribute to a
       larger use by industry of technologies developed by industry or Member States
       programmes and which otherwise would not sufficiently penetrate the market.
9.3 Monitoring and evaluation of the operation
     - Performance indicators selected: achievement of technology improvements (e.g.
       tonnes of oil equivalent saved or substituted, tonnes of CO2 avoided, number of
       projects generated, etc.)
     - Details and frequency of planned evaluations: Yearly
     - Assessment of the results obtained: The Regulation foresees 2 exercises by
       independent evaluations examining project files, making project visits, controlling
       replications and assessing complementarity with Member State programmes,
       one two years after the entry into force, the other on expiry of the Regulation.
       The Commission will submit these reports to the European Parliament and the
       Council.
9.4  Coherence with financial programming
     - Is the operation incorporated in the DG's financial programming for the relevant
       years?: Yes, within Heading 3 Internal policies.
     - To which broader objective defined in the DG's financial prognamming does the
       objective of the proposed operation correspond?: Energy policy, increase of
       energy supply security and improved energy efficiency.
 ---pagebreak---                                             -40-
10. Administrative expenditure (part A of the budget)
    This section of the financial statement must be sent to DGs IX and XIX; DG IX will then
    forward it to DG XIX with its opinion.
    10.1 Will the proposed operation involve an increase in the number of Commission
         staff? If so, how many? No.
    10.2 Indicate the amount of administrative expenditure involved in the proposed
         operation. Explain the method of calculation:
         The amount of administrative expenditure necessary to carry out the programme
         will be in the order of 150,000 ecus for 1995. It is broken down as follows:
         - MEETING COST:
           Advisory committee of Member State representatives;
           three meetings per year with two delegates per
           Member State (one meeting of one day, two meetings
           of two days), based on the average of 658 ECU (only
           travel cost) - budget heading A251                                          48,000
           Expert committee of Member State representatives;
           two meetings per year with two delegates for one or
           several days, based on the average of 658 ECU (only
           travel cost) - budget heading A250                                          32,000
         - MISSIONS OF COMMISSION STAFF:                                               70,000
           TOTAL PER YEAR:                                                  ECU       150,000
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                                                              COM (94) 654 final
                                                      DOCUMENTS
EN                                                                         12 oi
                                 Catalogue number : CB-CO-94-672-EN-C
                                                             ISBN 92-77-83961-9
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