CELEX: 51997PC0550(03)
Language: en
Date: 1997-11-18
Title: Proposal for a Council Decision adopting a multiannual programme for the promotion of renewable energy sources in the Community - (1998-2002) - Altener II

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                                        COMMISSION OF THE EUROPEAN COMMUNITIES
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                                                                        Brussels, 18.11.1997
                                                                        COM(97) 550 final
                                                                        97/0302 (CNS)
- . . ' V v. '>'
                                                         Proposal for a
                                                     COUNCIL DECISION
                         adopting a multiannual framework programme for actions in the energy sector
                                                        (1998-2002) and
                                                 CONNECTED MEASURES
'y-^xAy.-."3
                                                 (presented by the Commission)
 ---pagebreak---  ---pagebreak--- EXPLANATORY MEMORANDUM
INTRODUCTION                                                                                         3
1. IMPROVING THE COHERENCE AND EFFECTIVENESS OF ENERGY POLICY                                         7
      1.1 Generallogic                                                                                7
              1.1.1 Horizontal actions                                                                7
              1.1.2 Thematic programmes                                                               7
              1.1.3 Co-ordination of energy components under other Community programmes
                         and policies                                                                 8
      1.2 Structure of the framework programme                                                        8
              1.2.1 Legislative basis                                                                 8
              1.2.2 Bodies                                                                            8
              1.2.3 Management and control                                                            9
      1.3 Actions and programmes                                                                     10
              1.3.1 Prospective analyses and market monitoring (cf.. Annex II)                       10
              1.3.2 International energy co-operation (cf. Annex III)                                12
              1.3.3 Promotion of renewable energy sources and implementation of a strategy and
                         Community action plan in this area (cf. Annex IV)                           14
              1.3.4 Encouragement of energy efficiency (see Annex V)                                 16
              1.3.5 Promotion of clean and efficient use of solid fuels (cf. Annex VI)               17
              1.3.6 Co-operation in the nuclear sector on safety, industrial collaboration with
                         Russia and the New Independent States, transport of radioactive
                         materials, including thefightagainst illicit trafficking) (cf. Annex VII)   18
      1.4 Co-ordination with energy components of other Community Programmes and Policies            21
              1.4.1 Support for research and technological development                               21
              1.4.2 Trans-European energy networks                                                 t 21
              1.4.3 Other policies or programmes                                                     22
       1.5 General financial elements                                                                22
 2. IMPROVING THE CO-ORDINATION OF THE ENERGY COMPONENTS OF THE
      VARIOUS COMMUNITY POLICIES                                                                     23
 CONCLUSIONS                                                                                         24
 ANNEXES
                                                        -2
 ---pagebreak---                        PROPOSAL FOR A COUNCIL DECISION
                                             adopting
         a multiannual framework programme for actions in the energy sector
                                           (1998 - 2002)
                                    and connected measures
                            EXPLANATORY MEMORANDUM
INTRODUCTION
Calls for the establishment of a framework programme for actions undertaken as part of
energy policy have been heard in the institutions on numerous occasions during
discussions on this sector, culminating in a formal request by the «Council.1 On the
occasion of their examination of the Commission communication on "An overall view of
energy policy and actions",2 the European Parliament3 and the Economic and Social
Committee4 expressed the same sentiment.
Developments related to energy - a vital sector for the economy of the Union and the
well-being of the European citizen - require a response with a suitable energy strategy:
The decision taken at the Denver Summit to convene a GS meeting in Moscow in the
spring of 1998 which is entirely devoted to energy confirms, if there were any doubt, the
importance that has to be attached to this sector and all the questions relating thereto.
The communication of 23 April 1997 on "An overall view of energy policy and actions",
drawn up at the express request of the Council, clearly outlined the following situation:
I.      The Union is, and will increasingly be, confronted with major challenges in terms
        of energy strategy:
        a) By 2020, the degree of external dependency for energy supplies, currently
           standing at 50%, could reach, if current trends continue and no measures are
           taken, 80% for coal, 70% for natural gas and 90% for oil, the latter two
1
    Council Resolution of 8 July 1996 on the White Paper "An energy policy for the European Union"
    (OJ No C 224, 1.8.1996) and Council Regulation (EC) No 701/97 adopting the SYNERGY
    programme (OJ No L 104, 22.4.1997).
2
     COM(97)167finalof23.4.1997.
3
    EP reference...
4
    EC reference...
 ---pagebreak---            remaining the two main sources of energy used in Europe for the foreseeable
           future; moreover, this dependency has to be seen in a geopolitical context
           whose development is very difficult to predict and it should be noted in this
           connection that the analysis and planning group of the Council (COPLA) has
           been instructed by the Political Committee of the CFSP to devote its work in
           the second half of 1997 to the importance of the new geopolitical energy
           situation for the European Union. A security of supply strategy based on
           diversification of sources, the promotion of renewable energy sources
           indigenous to the Union, combined with rational use of energy is required,
           supported by «greater international co-operation and the development of
           trans-European energy network infrastructures connecting the Union to
           external supplies.
        b) The need for vigorous action to improve the competitiveness            of Union
           businesses, which are too often handicapped by energy costs higher    than those
           borne by their non-European counterparts, particularly American       companies
           (for instance, it is estimated that in the chemical sector European   companies
           pay up to 45% more than their US counterparts).
        c) The need to ensure that the development of the energy market is compatible
           with environmental objectives, given the concerns expressed by European
           citizens and the international commitments of the Community. The alarming
           level of pollution at the very heart of European cities and the impact of climate
           change on the environment and public health give a sharp reminder to
           governments and citizens about the urgent and far-reaching measures to be
           taken in the field of energy choices. The current discussions in the context of
           the Climate Change Convention and the measures which will have to be taken
            after the Kyoto Conference put a particular stress on this necessity. These
            decisions imply a profound change in consumer culture to be brought about
           through a voluntarist policy on supply and demand.
II.     The Community is pursuing numerous actions in the energy field, but these are
        scattered:
        a) either between different energy policy programmes set up at different times
            and in different circumstances;5
        b) or over various Community policies, such as environment, taxation, external
            relations,6 internal market, structural policies, research or even agricultural
            policy.
This situation has arisen from the gradual development of the approach to energy
questions within the Community and the desire to deal with all aspects of this complex
question. The instruments established to this end have demonstrated their ability to
5
    SAVE,, ALTENER, SYNERGY, ....
6
    Including the energy parts of the PHARE and TACIS programmes.
 ---pagebreak--- respond and overall their operations may be considered satisfactory. Such a scattering of
actions does however have the following consequences:
      • some lack of transparency for the parties involved;
      • theriskof duplication;
      • a danger of inconsistency between the various actions;
      • management difficulties;
      • use of resources which is not always optimum;
      • missed opportunities for synergistic effects and for maximising complementarity
         of actions.
In order to respond effectively to the challenges and difficulties that have to be faced,
Community energy policy should be both more focused and more integrated. The
establishment of the internal market in gas and electricity in accordance with the principle
of competing, open markets is a key element in this respect.
At the level of the actions undertaken by the Community, the concentration of
operations is the primary condition for an effective policy. In the case of energy, it means
that efforts must be focused on the following three priority objectives:
      • security of supply;
      • competitiveness;
      • environmental protection.
Every energy related action, whether taken under the energy policy as such or under
another Community policy, will have to contribute to these objectives.
However, if each of these objectives is pursued in a purely "operational" way, the limits
would soon be reached and the objectives could even prove incompatible with each other.
The complexity of the situation in which energy policy operates makes it necessary,
perhaps more than in other fields, to strive for a satisfactory balance between the various
political, economic and social factors in play. Only a genuinely integrated approach can
take adequate account of all aspects of the problems to be solved, as has been shown for
instance by the strategy adopted for the implementation of the "auto oil" programme.
It is also particularly significant that Agenda 2000 mentions that "The external dimension
of Community policies- on the environment or energy, for instance - will more than
 before become an integral component of its external policy".
Energy policy needs to be given higher priority. In order to maximise the benefit from the
 support given by the Union, actions relating to energy policy will have to be implemented
 in accordance with the following guidelines;
                                                 -5-
 ---pagebreak---      • every Community action must contribute directly to the achievement of one or
         more of the abovementioned priority objectives;
     • significant improvement in co-ordination between all actions with an energy
         component;
     • greater co-operation between the various interested parties within the Community
         institutions and in the Member States, in full accordance with the principle of
         subsidiarity;
      • ability to respond quickly to developments;
      • clarification and simplification of procedures;
      • strengthening of actions on the basis of priorities and needs.
Finally, it is essential that this principle of coherence and co-ordination be applied at all
levels:
      • in Community energy policy itself: the "energy"frameworkprogramme has been
         established with this in view (cf. Chapter 1);
      • between the energy components found in a number of other Community policies
         which will be ensured by the establishment of an appropriate structure within the
         Commission (cf. Chapter 2); and the reinforcement of existing co-ordination.
      • with the Member States and the interested parties.7
Care will also be taken to ensure that the external image of the framework programme is a
coherent and integrated one. To this end, the Commission will identify key messages and
target groups for all the information and communication actions organised under the
programme. Actions aimed at the general public will also be organised, exploiting the
information networks available in the Member States.
    Co-operation with the Member States and interested parties is set to develop in the appropriate bodies
    provided for firstly by Commission Decision 96/642 of 8 November 1996 setting up an Energy
    Consultative Committee and secondly by the proposal for a Council Decision COM(97)436
    concerning the organisation of co-operation around agreed Community energy objectives.
                                                     -6-
 ---pagebreak--- 1.   IMPROVING THE COHERENCE AND EFFECTIVENESS OF ENERGY POLICY
   . 1.1   General logic
          The main aim of an Energy framework programme is to ensure the
           coherence and effectiveness of actions undertaken under energy policy; it
          will, then, be the effective instrument for rationalising the programmes
           stemming directly from that policy and obtaining the maximum benefit. As
          mentioned above, these programmes were drawn up and implemented at
           different times and in different circumstances: they now have to be
           incorporated into a more integrated, transparent and effective approach,
           established for a period of five years.
           The logic of this approach will be based on the links between horizontal
           actions and thematic actions or programmes. These two categories of
           actions, described in greater detail in - Section 1.3 below, will be
           complementary and organised so as to focus on the priority objectives which
           will remain the constant point of reference for any operation carried out.
           In terms of resources (cf. Section 1.5), the amounts allocated are determined
           by present financial perspectives. Beyond that period, reassessments and/or
           increases will have to be made on the basis of political requirements and
           priorities.
           1.1.1 Horizontal actions
           By their nature, these actions go beyond any specific programme, making a
           global contribution to the priority objectives. While they have their own
           purpose, they will also ensure that actions taken under the thematic
           programmes in the framework programme are co-ordinated and will
           contribute towards coherence with other Community policies. They cover:
           • Prospective analyses and market monitoring
           • International energy co-operation
           1.1.2 Thematic programmes
           These programmes correspond to specific priority themes under the Union's
           energy policy and are justified because they contribute to priority energy
           policy objectives, with a particular emphasis on the promotion of
            environmentally friendly technologies and sustainable development:
            1) Promotion of renewable energy sources and implementation of a
               Community strategy and action plan until 2010
            2) Promotion of energy efficiency and energy saving
            3) Promotion of clean and efficient solid fuels technologies
 ---pagebreak---     4) Nuclear sector co-operation on safety, industrial co-operation with NIS,
       transport of radioactive materials, including measures to combat illegal
       trafficking
    1.1.3    Co-ordination of energy components under other Community
            programmes and policies
    This particularly concerns two types of action which are very important for
    the energy sector, in terms of both content and the scale of the resources
    employed, but which fall within a specific procedural framework and are not
    therefore included as such in this framework programme :
    • Support for research and technological development (RTD)
    • Trans-European energy networks
    Attention will also be paid to improved co-ordination between all other
    policies or programmes whose area of activity include energy components,
    such as external relations (PHARE, TACIS, MEDA), structural fiinds or
    investment support.
1.2 Structure of the framework programme
    1.2.1    Legislative basis
    The implementation of the framework programme will be based on
    • a basic decision setting out the general framework, its duration, its
        main financial elements and the implementing bodies; the annex to this
        decision "          .. ., sets out on an indicative basis the spreading of
        resources between the different specific actions
    • where necessary, specific measures designed to specify the objectives,
        contents and details of each of the actions in question and which, where
        appropriate, will replace the corresponding acts currently in force or in
        the course of being adopted (cf. Annexes II to VII).
    The decision relating to the framework-programme itself will be based on
    Article 235 EC. Those specific actions whose particular focus is the
    promotion of environmental friendly technologies will be based on
    Article 130s, § 1, and the other ones will be based on Article 235. In order to
    maximise transparency and to ensure the degree of coherence necessary for
    the definition and implementation of the approach, it is important that these
    texts should be considered as a package.
     1.2.2   Bodies
     The guiding principle in the search for greater coherence is that particular
     care should be paid to the effectiveness of the decision-making process,
 ---pagebreak---             which itself is based on improved co-ordination,flexibilityand availability of
            information.
            The approach will be based on the setting-up of a single committee,
            consultative in nature, for the Energy framework programme (horizontal
            actions and thematic programmes). This single committee will cooperage
            with all the bodies involved, including the various committees mentioned
            below. It will actively contribute towards the co-ordination between energy
            measures undertaken under the various Community policies, and will
            examine the report drawn up periodically by the Commission on the co-
            ordination between actions.
            However, given the wide range of questions to be dealt with, and their
            technical complexity, the working methods and organisation must be as
            flexible as possible to ensure access to all the specialist skills required. It
            will be for the single committee to organise its working procedures
            accordingly.
            The establishment of this committee does not affect some of the bodies set up
            for a very specific purpose which will continue their work. This applies to,
            among others:
            - the Consultative Committee on Energy;8
            - the Committee for co-operation around agreed Community objectives;9
            - the Guidelines Committee (trans-European energy networks);
            - RTD management bodies set up in accordance with the procedures of the
               4th and 5th RTD framework programmes.
            1.2.3 Management and control
            By among other things avoiding duplication of effort, integration of the
            approach, instruments and bodies will ensure:
            • optimum management of resources, also guaranteed by recourse to
               costTbenefit analyses;
            • complete transparency for all the parties involved (institutions, Member
                States, companies).
            Systematic evaluation of the actions will be carried out at regular intervals.
            Every year, the Commission will review the implementation of the framework
8
  Commission Decision 96/ 642 of 8 November 1996 setting up an Energy Consultative Committee, OJ
  NoL 292, 15.11.1996.
9
  Proposal for a Council Decision COM(97)436 concerning the organisation of co-operation around
  agreed Community energy objectives.
                                                9-
 ---pagebreak---              programme and its specific parts, and make the appropriate changes in the
             implementation. In the third year of the framework programme and, in any
             event, before presenting its proposals modifying this framework programme
             or proposing subsequent programmes, the Commission will ask independent
             experts to carry out an overall external evaluation of the Community actions
             carried out under the Energy framework programme.
     1.3     Actions and programmes
             The implementation of the framework programme will rationalise to a
             significant extent all the actions and programmes referred to in points 1.1.1
             and 1.1.2 above and provide a further benefit in the shape of greater synergy
             and complementarity between these actions and programmes. The objective
             of this section is to describe these actions and/or programmes and identify
             developments or improvements which might be decided upon as policy
             requirements and priorities evolve. In accordance with the Commission's
             recommendations on reinforcing the pre-accession strategy as mentioned in
             Agenda 2000, candidate countries will be given the opportunity to participate
             in all the actions and programmes undertaken under this framework
             programme.
             Horizontal actions
             1.3.1 Prospective analyses and market monitoring (cf.. Annex 11)
             More than any other, energy policy cannot be conceived without taking
             account of the medium and long-term prospects. This need, underlined by
             the Commission in its Energy White Paper,10 was endorsed by the Council
             and the European Parliament in their examination of this document.
             The studies, analyses, forecasts and connected work (dissemination and
             discussion of results) already form part of the Commission's activities
             concerned with the formulation of energy policy. To do this, the Commission
             relies on the expertise that it has promoted at the most distinguished
             European centres in this field. This makes it possible to avoid duplication of
             effort and exploit at the lowest cost the results of the work and the
              knowledge gained, funded by the various departments of the Commission
              and/or the Member States.
             However, progress has to be made in the area of shared analyses:
              analysis in the energyfieldis currently in a transitional phase which makes it
              more difficult to carry out. The situation is changing in economic terms,
              given the gradual opening up of energy markets, the increasing importance
              of environmental constraints, and technological prospects calling for the
              development and application of new concepts and different methods taking
              into account work undertaken under the RTD Programme. As regards the
              framework programme, the new analysis must therefore go further,
10 « An energy  policy for the EU" COM(95)682 final, 13.12.1995.
                                                   -10-
 ---pagebreak---  strengthening co-operation between the Commission and the Member States
 on the forecasts and involving firms, academic circles and other sources of
knowledge or experience in the work. The fundamental aim of this
programme and of the actions proposed in response to this requirement is to
ensure that decisions at national and Community level on energy matters can
be taken on common analytical bases. The objective is clearly not to achieve
 standardisation but to align points of view so that those taking decisions have
 identical reference bases in terms of:
• economic studies and analyses;
• energy forecasts;
• the dynamics of energy systems.
In this context, particular attention should be paid to the effects of the
implementation of the Single Currency, considering the positive impact on
competitiveness which can be expected from "EURO-pricing" of oil.
This action, aimed at greater co-ordination of the factors to be taken into
account, will be based on the development of an effective partnership
between the Commission, the Member States and the other parties involved
in the energy field and will find expression in a work programme covering the
energy sector in the widest sense. The introduction of coherent analysis
procedures will make it easier to identify the main questions arising in
connection with the priority objectives of security of supply,
competitiveness and environmental protection.
In this connection, the main areas for actions covered by this programme are:
(a)   identification, at European level, of the major problems concerning
      future energy demand and production as well as energy policy, with
      special emphasis on:
      •       strategies for responding to the challenge of climate change in
             energy terms and more general questions relating to the
             environment (including an evaluation of the cost of possible
             responses);
      •      the dynamics of the opening up of energy markets and
             corresponding structures, particularly in terms of consequences
             for the future and behaviour of firms;
      •      world energy market trends and their influence on the external
             dependency of the European Union (in particular the anticipated
             significant increase in energy demand in Asia and Latin America);
(b) improved analytical capability so as to be able to identify energy trends
      and possible scenarios on a comparable basis in all Member States,
      having regard in particular to the evolution of market structures and the
      challenge posed by climate change.
                                     -11-
 ---pagebreak---  The need for action in this area is clearly in line with the priority objectives
 on energy matters, particularly as regards the environmental aspects
 (underlined again by the Council at its meeting on 27 May 1997) and the
 completion of the internal energy market, a key element for the
 competitiveness of European firms.
 The action will reinforce the achievement of the energy policy objectives as
 outlined in the White Paper and will build on the efforts already underway.
 The annual appropriations necessary to implement these actions are indicated
 in the financial statement in Annexe II.
1.3.2 International energy co-operation (cf. Annex III)
The international dimension is assuming increasing importance in
energy questions affecting the Union.
The increasing dependency of the Union on its external suppliers above all
raises the question of security of supply. The situation is moreover
complicated by the emergence of energy-hungry markets in the developing
countries, whereas the European market is expanding only slowly. The
competitiveness of European businesses in the face of these new markets is
also of paramount importance. The fact that the major environmental
problems connected with energy consumption now affect the whole planet
requires global co-operation which takes account ôf the circumstances of all
the parties involved, including %the role of energy as a key element of
sustainable economic development. Finally, steps should be taken now to
prepare for the changes that enlargement will inevitably bring for Union
energy policy.
SYNERGY represents the main external element of the Energy framework
programme. It constitutes the link between an internal policy and the
external actions of the Community and is one of the main supports for
penetration by Community firms of the major external markets. It is
important in this connection to emphasise that with the technologies
associated with renewable energy sources and the improvement in energy
efficiency, the Union has significant industrial and employment potential
which would be further strengthened if new outlets in third countries were
opened up to trade with the Member States.
Compared with other Community instruments which might bè involved in
external actions in the energy sector, SYNERGY will concentrate on the
achievement at international level of the three objectives of the framework
programme: global competitiveness, security of supply and environmental
protection. Moreover, SYNERGY will seek to improve co-ordination, in the
interests of greater efficiency, of the various international actions carried out
by the Community in the energy field and ensure greater coherence with the
work of international organisations in the sector.
Within a framework which takes greater account of all energy aspects on the
one hand and medium term strategy on the other SYNERGY will help to
                                     12-
 ---pagebreak---  fund co-operation on the formulation, preparation and implementation of
 energy policy in areas of mutual interest. However, SYNERGY does not
fund actions relating to research and technological development,
demonstration projects or energy infrastructure investment. Projects of this
type can be financed under other Community instruments. Similarly,
 SYNERGY is not an instrument for assistance to or economic co-operation
with third countries. SYNERGY actions mainly concern third countries
facing energy challenges, mainly those in Central and Eastern Europe, the
New Indépendant States, non-member countries in the Mediterranean basin,
Latin America and Asia and the African, Caribbean and Pacific signatories to
the Lomé Convention. SYNERGY can also cooperate with international
organisations engaged in this sector (e.g. International Energy Agency, the
Latin American Energy Organisation), international financial institutions
(EE3, World Bank, EBRD) or developed countries (USA, Japan, Norway
etc.) to initiate actions of mutual benefit in third countries. The programme
will be more clearly slanted in favour of Community interests. It will
therefore be possible for most actions to be initiated by the Union alone,
including those in the field of energy supply as well as demand.
On the basis of these guidelines, a multiannual programme of actions to be
initiated and a list of beneficiary countries are annexed to the decision
adopting the SYNERGY programme. Under this multiannual programme
specific action plans will then be established each year on the basis of:
• other Community programmes and instruments;
• actions carried out in certain third countries by the Member States;
• needs expressed by the national industries of the Member States;
• needs expressed by beneficiary countries.
To take account of the various complementary elements, these plans will be
drawn up in a process of consultation of the departments concerned within
the Commission then submitted to the single committee set up by the Council
Decision establishing the Energy framework programme. This committee
will also receive periodic reports on the implementation of the various
programmes.
The co-operation will take the form of:
• advice on energy policy;
• visits by experts to bodies in third countries;
• energy studies and forecasts;
•   assistance for international networks discussing and advising on energy
    policy;
    training actions (courses, seminars, technical missions);
                                   -13-
 ---pagebreak---              • co-ordination of the various Community instruments involved in
                 international actions in the energy sector;
             • dissemination of information, (brochures, newsletter);
             • promotion of dialogue and exchanges of information and experience
                 through conferences, seminars, etc.
             The funding provided by SYNERGY could cover the total requirement of a
             particular project where it is in the interests of the Community alone or take
             the form of cofunding with another partner.
             The total budget for this programme must be sufficient to contribute
             effectively to an improvement in the coherence and complementarity of the
             internal and external dimensions of Union policies, as stressed by the
             Commission in Agenda 2000. n The breakdown of the required funding is
            indicated in the Financial Statement in Annex III.
            Thematic programmes
            1.3.3 Promotion of renewable energy sources and implementation of a
                      strategy and Community action plan in this area (cf. Annex IV)
            Renewable energy sources (RES) help to protect the environment and ensure
            security of supply through diversification of sources. Their increased use
            will also help to achieve other Community objectives of major importance
            such as regional development, economic and social cohesion, employment
            and competitiveness.
            The aim of this action, which adopts the main elements of the proposal
            already presented by the Commission concerning the ALTENERII
            programme,12 is to help increase use of renewable energies and hence of
            their share in the Community's energy balance, including by facilitating the
            legal, socio-economic and administrative conditions required for the
            implementation of the White Paper and action plan for renewable energy
            sources up to 201013 being adopted by the Commission following the wide
            ranging discussions on the 1996 Green Paper.14
            Once these conditions have been determined, it will be easier to encourage
            private and public investment in the production and use of-energy from
            renewable sources. The economic penetration of renewable energy sources
11
   Agenda 2000, Vol. 1, Part 1, Section IV.2 "A strong and coherent Europe".
12
   COM(97) 87 final of 12.3.1997.
13
   COM(97)...
14
   "Energy for the future: renewable energy sources. Green Paper for a Community strategy",
   COM(96) 576 final of 20.11.1996.
                                                     14
 ---pagebreak--- will be helped by targeted actions aimed at increasing operator confidence
through assistance with the preparation and presentation of projects and
through the development of new funding possibilities (such as third party
financing).
Specific actions eligible for funding, which will involve the promotion of
market penetration of innovative environmentally friendly technologies, which
have proved their value and effectiveness will cover among other things:
• monitoring of the implementation of the strategy and action plan regarding
   RES, and evaluation of the measures to be taken under this programme;
• market penetration of RES by facilitating, among other things, access to
   specialist advice, analysis of market prospects,' choice of location of
   projects, drawing up of funding plans; the projects will cover, among other
   things, biomass and waste, photovoltaic and thermal solar systems, solar
   power in buildings, small-scale hydroelectric projects, wind power and
   geothermal energy;
• promotion of product and equipment standardisation;
• extension of infrastructures for the development of RES in local and
   regional planning, design and evaluation, information, education and
   training;
• circulation of information with a view to improved co-ordination between
   international, Community, national, regional and local activities, as well as
   the pooling of experience and know-how;
• studies or other work aimed at implementing or complementing
   Community measures taken to develop the potential of the various
   renewable energy sources.
The contribution of the renewable energies to the primary energy
requirements of the European Community is currently slightly below 6% and
represents some 70 million tpe. In its abovementioned Green Paper, the
Commission proposed a significant increase in the use of renewable energy
sources by the year 2010. The proposed indicative target of a doubling of the
share of renewable energies by 2010 has been confirmed during the
consultation process and integrated in the White Paper.
This programme is a fundamental element of the implementation of the
strategy and action plan for renewable energy sources which will give effect
to the Paper. The budget available for the actions must be sufficient to make
a significant contribution to the achievement of this Community objective.
Details are outlined in the Financial Statement in Annexe IV. The increase
proposed from 2000 onwards is aimed at taking full advantage, with the new
financial perspectives, of the White Paper and the action plan. It should also
be emphasised that the increased use of renewable energies will contribute to
economic and social cohesion, particularly through the exploitation of local
energy sources.
                                  -15-
 ---pagebreak---              1.3.4 Encouragement of energy efficiency (see Annex V)
             In the medium and long term, prudent and rational end use of energy
             resources is, in terms of cost effectiveness, the best available solution for
             reducing CO2 emissions.
             The programme SAVE II, adopted by the Council in December 1996,15 has
             proved its effectiveness as a non-technological programme in promoting the
             rational use of energy in all consumer sectors. The previous programme
             (SAVE I) had already made an important contribution towards the
             Community's energy objectives, implementing a wide range of measures such
             as legislative acts, practical pilot projects, studies, monitoring and evaluation
             of progress on energy efficiency, dissemination of information and innovative
             mechanisms for funding and awarding contracts.
             In connection with SAVE, the Council and the Commission have adopted
             nine directives on energy efficiency in domestic appliances, buildings and
             industry: This programme of legislation, as well as the other measures, will
             have to be continued.
             Electricity is of particular importance in the energy sector, since its
             production accounts for around 35% of primary energy consumption and
             30% of CO2 emissions. The end use of energy offers great potential for
             improving efficiency in all sectors of activity (domestic and industrial). The
             old PACE programme, a Community action programme to improve the
             efficiency of electricity use, adopted in 1989 by the Council, has been
             integrated in full into SAVE II. PACE provided for a range of measures to
             improve the energy efficiency of various types of equipment (domestic
             appliances, electric motors), to promote information for consumers on the
             purchase and use of efficient electrical equipment etc. ... These actions, which
             make a significant contribution to reducing CO2 emissions will have to be
             pursued under the new Energy framework programme. In this connection,
             particular attention could be paid to actions to promote energy management
             at regional and local level which could usefully be developed in conjunction
             with the City of the Future project.
             In the context of enlargement, the benefits of measures linked to energy
             efficiency will take on a new dimension when the pricing policies and
             metering practices used in the applicant countries are more in line with
             market-oriented mechanisms.
             If these objectives, which are particularly important given the priority
             accorded to environmental considerations, are to be achieved, the funds
             allocated for the SAVE II programme (whose period of application as
             currently fixed by the Decision of 16 December 1996 will be aligned with that
             of the Energy framework programme) will have to be increased accordingly
15 Council Decision of 16 December 1996 concerning a pluriannual programme for the promotion of
   energy efficiency in the Community (SAVE II), OJ No L 335 of 24.12.1996.
                                                   16
 ---pagebreak--- in line with the new financial perspectives. Details of the estimated financial
requirements are given in the Financial Statement in Annex V.
7.3.5 Promotion of clean and efficient use of solidfuels (cf. Annex VI)
Solid fuels play à considerable part in the energy balance of the Union, and
account for 30% of electricity generation. They play a major role in security
of supply and, as a key element in the establishment of the internal market,
effectively regulate the prices of other fuels such as natural gas. Maintaining
diversification of the energy balance and access to all sources is crucial to
security of supply but also to a balanced approach to the three priority
objectives of Union energy policy. However, a prerequisite to this is the
increased penetration of cleaner and more efficient technologies for solid
fuels, in order to reduce pollutant emissions.
Clean and efficient solid fuel combustion technologies are rich in potential in
terms of reducing emissions not only of CO2 but also SO2 and Nox, which
cause acidification. The action proposed under the Energy framework
programme (CARNOT) is intended to help achieve this objective. The
Community must play a role in promoting the market penetration of these
technologies, encouraging the companies in this sector to establish the
necessary long term strategies with a view to replacing the thermal power
stations currently in operation.
Encouraging the clean and efficient use of sold fuels is particularly urgent
with the prospect of enlargement. Most of the applicant countries are large
 scale producers and consumers of solid fuels: in Poland, coal and lignite
 account for 76% of primary energy consumption and 94% of electricity
generation. The corresponding figures for the Czech Republic are 62% and
76% respectively, and 19 and 27.5% for Hungary. In spite of the reforms
carried out by these countries with a view to greater diversification, it is likely
that a significant proportion of their production of solid fuels will continue.
Conversion of the plants using these fuels is of mutual interest to the
 applicant countries and the Union in both economic and environmental terms.
The experience of converting plants burning lignite in the new German
Lander provides a good example of the potential contribution of lignite from
the countries of Central and Eastern Europe to the energy supplies of an
 enlarged Europe. Technological co-operation on "clean coal" will help to
 integrate those countries into the European Union.
 The year 2002 will see the expiry of the ECSC Treaty which has made a
major contribution to economic and social expansion in Europe. The
 experience gained with the ECSC Treaty is an asset that the Community must
 exploit to the full. It is particularly important to ensure that the results of
 research already financed or currently under way under the ECSC are
 sufficiently exploited. This proposed action aims to bring new more
 environmentally friendly solid fuel technologies closer to the market.
 Actions to promote the clean and efficient use of solid fuels are in line with
the conclusions of the Amsterdam European Council on growth and
                                      17-
 ---pagebreak--- employment, which approved allocating financial resources from its reserves
to 'coal' and 'steel' research on expiry of the ECSC Treaty. The proposed
CARNOT action under the Energy framework programme will complement
this future research activity.
Finally, for the technologies in question, the growth prospects on external
markets such as China, ASEAN, India etc. are rich in potential for European
companies, while at the same time helping to reduce greenhouse gas
emissions, a problem affecting the whole world.
Details of the financing required for this programme are given in the Financial
 Statement in Annex VI.
 1.3.6   Co-operation in the nuclear sector on safety, industrial collaboration
         with Russia and the New Independent States, and the transport of
         radioactive materials, including the fight against illicit trafficking
         (cf. Annex VII)
The nuclear sector is the subject of a number of Commission action
programmes, mainly in the areas of research, technological development and
education, nuclear safety, health protection, technical assistance and co-
operation with the countries of Central and Eastern Europe and the New
Independent States, the transport of radioactive materials and the
implementation of safeguards. Although most of these operations do not fall
under energy policy in the strict sense, three actions (co-operation on
safeguards, industrial collaboration with the New Independent States
and the transport of radioactive materials, including the fight against
illicit trafficking) come directly under that policy and should therefore
constitute a specific part of the Energy framework programme.
Given the existing provisions in the Euratom Treaty, the implementation of
such action does not require the adoption of specific formal acts.
However, continued funding should be provided for these actions, the need
for which is beyond question.
Co-operation in relation tô the accounting and monitoring of nuclear
materials (safeguards) as part of technical assistance to the New
Independent States and Mongolia
The aim of these measures is to help to improve and computerise the system
of accounting and safeguards at all levels: installation (site), regional centres,
company headquarters and national systems.
In 1993, the Euratom Safeguards Directorate began to collaborate with
Russian officials with responsibility in this area and, since 1994, specific
projects have been drawn up. The results of this co-operation are certainly
encouraging but it will have to be pursued for some time still to achieve the
desired objectives. As regard Russian participation, apart from training and
familiarisation, seven inspections and two measurement workshops have been
organised. From these it emerges that the technical knowledge and
experience of Russians working in the field of nuclear technology is
                                   -18-
 ---pagebreak---            considerable but the training requirements in relation to modern methods of
           organisation, evaluation and logistics are still great. As regards systems
           design, seven Russian experts worked for a period of eight weeks each in
           Luxembourg from October Ï993 to March 1994. Each period was followed
           by an examination and evaluation of their contributions and conclusions.
           Two seminars were organised within the European Union and a conference
           on nuclear safeguards in St Petersburg.
           It is then useful to pursue measures relating to training and familiarisation in
           the techniques, methods, logistics and evaluation of modern nuclear safety.
           Co-operation should therefore continue between Russia and Euratom in this
           sector, particularly with a view to combating the illicit trafficking of
           radioactive materials. With the entry into force of the partnership and
           co-operation agreements with the New Indepedent States, these activities will
           be further extended.
           In budget terms, the actions in question are funded under TACIS, but as the
           Commission has decided16 that their management should be the responsibility
           of the services in charge of energy policy, it is proposed to examine
           transferring the corresponding appropriations to a budget heading specifically
           relating to energy policy.
           Industrial co-operation with Russia and the NIS:
           Nuclear energy now provides, with the required degree of security, a
            significant proportion of the electricity requirements of the Community, with
            significant environmental implications. The use of nuclear energy is however
           conceivable only if appropriate safety and industrial viability criteria are met.
           This is the case today in the Community, but it is reasonable to take a critical
           look at the situation in certain neighbouring countries, particularly Russia, the
           Ukraine and a number of others which have applied for membership, which
           may wish to expand their use of nuclear energy as their economies develop.
           It is therefore important to go beyond specific short term measures to
           improve the safety of nuclear plants in operation and examine ways of
            ensuring that in the longer term the use of nuclear energy is accompanied by
           all the necessary safety guarantees comparable to those used in the Union.
           For some years the Commission has been carrying out studies and conducting
           working groups with experts in the European nuclear industry, focusing
            mainly on Russia at this stage, in order to gain a better knowledge of the
           present state of the local nuclear industry and define a possible approach to
            achieve a fundamental improvement in safety. This approach is based on the
           concept of transferring the culture of safety through industrial co-operation,
           which is particularly attractive for a country which wishes to expand its use
            of nuclear energy. The Commission is currently studying with the Russian
           authorities the technical, financial and legal barriers to the establishment of
            co-operation schemes between businesses. This process should lead by the
16
   Commission Decision C(97)2879 of 24.9.1997 on the funding of Euratom nuclear safeguards.
                                                  19-
 ---pagebreak--- beginning of 1998 to the definition of courses of action and proposals which
it would be unwise not to pursue. This requires funding of more detailed
studies of particular problems (e.g. the conditions required for investment,
specific legal difficulties, etc.) and providing the means to solve generic
problems. The objective for the Commission is to help establish industrial co-
operation on the largest possible scale without becoming involved in carrying
out specific projects which is a matter for the operators concerned.
Transport of radioactive materials
The production of electricity by means of nuclear power and the increasing
use of radioactive materials in the health sector, industry or research requires
such materials to be transported under conditions which guarantee the safety
of the general population and workers in the industry; in order to take
account of developments in the transport of radioactive materials, progress of
technology and know-how and ever stricter obligations concerning
radiological protection, international, Community and national laws will have
to adapt to the new circumstances and requirements.
At the request of the European Parliament, the Commission set up in 1982 a
standing group of experts in the field of the transport of radioactive materials
to advise it on the studies and experiments to be carried out and the
legislation to be drawn up in this sector. The most recent recommendation of
this groups calls for the implementation of afive-yearmultiannual programme
with appropriate funding. This programme should revolve around six fields
of activity which would benefit from action at Community level:
• facilitating the functioning of the internal market by identifying the
   harmonisation measures that are required;
• contributing to the subsequent evolution of legislation through the
   development of experimentation and know-how;
• evaluating incidents occurring during transport and learning the lessons for
   the future;
• improving the coherence of emergency measures and the training of those
   involved;
• co-operating with the countries of Central and Eastern Europe "and the
   New Independent States to help them to improve the safety of transport in
   those countries;
• improving the public's knowledge, understanding and perception in this
   field.
The appropriation proposed for the various categories of nuclear action as
described above for the period in question is outlined in the Financial
Statement in Annex VII.
                                   -20-
 ---pagebreak---     1.4      Co-ordination with energy              components       of    other     Community
              programmes and policies
              1.4.1 Support for research and technological development
             Research and technological development, including demonstration, play an
              essential role in the elaboration of methods which offer high energy efficiency
              and new techniques for the exploitation of fossil, nuclear or renewable
              sources. In this connection, the Fourth Framework Programme for research
              and technological development, established by Articles 13 Of to 13 Op of the
              Treaty, includes for non-nuclear energies a research and energy development
              section (JOULE) and a "demonstration" section (THERMIE). These enable
              major projects in the field of new energy technologies to be carried out in
              conjunction with industry, research centres and universities in the
             Member States. An RTD programme in the field of nuclear safety and
              controlled thermonuclear fusion based on the Euratom Treaty has also been
              implemented with the participation of the Joint Research Centre. Given the
              context and specific structures in which these actions take place, their
              operating methods, bodies and implementing instruments will remain
              unchanged. It is however clear that there is a close link between energy RTD
              activities and the more market-oriented actions carried out under this
              framework programme. A special effort will therefore have to be made to
              improve co-ordination at the appropriate level between the Commission's
              departments and between the other parties involved. More specifically, a
              more formalised approach will be followed for increased co-operation and
              co-ordination between the Single Energy Committee and the equivalent
              structure which will be set up in the context of the Fifth RTD Framework
             Programme.
              1.4.2 Trans-European energy networks
              The trans-European networks are vital arteries for economic development,
             the working of the internal market and greater Community cohesion. Under
             the Treaty (Article 129b, c, d), the European Community has given itself
              powers relating to networks and, in the energy field, it has pursued a policy
              of developing these infrastructures in the electricity and natural gas sectors,
              on account also of the positive effects on security of Community energy
              supply and international co-operation. As regards Community cohesion in
              particular, the Commission is devoting a great deal of its attention to the
              energy problems arising from the special situation of the islands, archipelagos
              and extremely remote areas of the Community.17
              Given the context and specific structures in which this action is being carried
              out, its methods of operation, bodies and implementing instruments will
              remain unchanged, as with research. A special effort is underway to further
17
   Cf. for example the Report presented by the Commission on the progress achieved in implementing
   POSEIMA. COM(94)476 final of 09.12.1994.
                                                   21
 ---pagebreak---              improve co-ordination at the appropriate level between the Commission's
             departments and between the other parties involved.
             7.4.3 Other policies or programmes
             Some other policies, such as external relations (for instance in the context of
             the PHARE, TACIS or MEDA programmes), structural funds or investment
             support include in their area of activity important energy components.
             Special attention will then also be paid to improving co-operation and co-
             ordination between the Commission's departments in charge.
      1.5    General financial elements
             In absolute terms, the budget for energy policy as such is not large, not only
             in comparison with other chapters under heading 3 but also in relation to the
             sums set aside for energy measures undertaken under certain Community
             policies.
             The main purpose of developing an integrated approach to energy policy is
             the rationalisation and improved co-ordination of actions. The establishment
             of the multiannual framework programme focusing on the three major
             priority objectives will facilitate the management and more transparent and
             rigorous use of resources thus resulting in more effective actions on the
             existingfinancialbases.
             It is however essential that the Union should provide itself with sufficient
             resources to implement its policy priorities in the energy sector and that
             provision should therefore be made for certain increases in anticipation of the
             forthcoming financial perspective. This is moreover in line with the financial
             framework set out by the Commission in its memorandum on
             Agenda 2000,18 which in Part 3 makes express provision for the
             development of a number of internal policies intended to serve priority
             objectives shared by all the Member States and where there is an obvious
             added value and refers in this connection to certain priority programmes,
             particularly ones linked with enlargement, innovation and the introduction of
             environment-friendly technologies whose allocations may be increased faster
             than GNP growth.
             Given their potential not only in terms of environmental protection, of
             course, but also job creation, it is proposed to place particular emphasis on
             actions to promote renewable energies (ALTENER) and encourage energy
             efficiency (SAVE).
             The table below gives an indicative breakdown in million ECU, without
             prejudice to any priorities which may be adopted, between the various actions
             and programmes. The estimated budgets, are outlined in detail in the
             Financial Statements in the Annex;
18
   Agenda 2000, Vol. I, "The new financial framework".
                                                  -22-
 ---pagebreak---                                   1998    1999      2000       2001     2002      Total
            Energy markets        1.50     1.53      1.56      1.59      1.62      7.8
            analyses and
            monitoring
            International co-     7.00     7.14     7.28       7.42      7.57      36.4
            operation in the
            energy sector
            Renewable energy      14.4     15.6       17         17      17.1      81.1
            sources
            Energy efficiency     12.5     12.8      13.9       14.6     14.6      68.4
            Solid fuels sector    0.80     0.81      0.82      0.83      0.84      4.1
            Nuclear security       0.5     0.51      0.5?      0.53      0.54       2.6
            Total                 36.7    38.39     41.08     41.97     42.47     200.4
            Nuclear      security  2.5      2.5       2.5       2.5       2.5      12.5
            B7-535
2. IMPROVING THE CO-ORDINATION OF THE ENERGY COMPONENTS OF THE VARIOUS
   COMMUNITY POLICIES
   As stated in the introduction, the April 1997 communication on an overall view of
   energy policy and actions underlined the importance, including in terms of funding,
   of the energy component in a number of major Community policies. Co-ordination
   mechanisms already operate for example in relation to structural policies. Effective
   integration is not however possible without special attention being paid, to improving
   co-ordination between all the parties involved and the coherence of all actions,
   particularly within the Commission and its departments.
    1) In accordance with its internal procedures, the Commission has formally decided
       to set up a network of the Directors-General concerned which will have the
       task of ensuring that:
   • the policy or operational guidelines involving an energy dimension will be drawn
       up in accordance with the principles of consultation and transparency; -
   • the actions implementing these guidelines and the allocation of resources relating
       thereto will be co-ordinated on a constant basis and assessed in the light of their
       contribution to the priority objectives of energy policy.
   2) Each year, the network of Directors-General will draw up a summary of all the
       energy actions undertaken under the various Community policies. This report
       will be transmitted to the committee established under the Energy framework
       programme for its consideration, as well as to other interested committees, and
                                               23
 ---pagebreak---     will be made public thereafter. This will also ensure that the other European
    Institutions are kept informed.
A more formalised approach will be followed for increased co-operation and co-
ordination between all committees which deal with programmes and policies which
have an energy component. Automatic information exchange mechanisms will also be
introduced.
It is expected that the establishment of a single committee for energy actions and
programmes falling within the scope of this framework programme, will facilitate the
co-ordination and coherence of actions undertaken at Community level. It would be
important for Member States to undertake their own internal reviews of their system,
in order to improve the links between national and Community bodies.
CONCLUSIONS
The Commission communication on an overall view of energy policy and actions
represented a first step in response to the requests expressly made by the Council and
the Member States for an integrated approach to Community energy policy.
Given the vital importance of the sector for the economic and social development of
the Union and the high priority that should be attached to defining a coherent,
transparent and effective European energy policy, the Commission considers that the
introduction of the multiannual Energy framework programme along the lines
proposed will give practical effect to this approach and provide an appropriate
 response at operational level to the requirements ascertained by the institutions and
the Member States.
                             *)|c)|c)|<)|(*:|c:fc*>|t:|c)|c)|c:|c)ic>|e)|c)|(>|c>|c)|c:|c
                                                                 24
 ---pagebreak---      EUROPEAN COMMISSION
       PROPOSAL FOR A COUNCIL DECISION
                   adopting a
MULTIANNUAL FRAMEWORK PROGRAMME FOR
      ACTIONS IN THE ENERGY SECTOR
                 (1998-2002)
 ---pagebreak---      PROPOSAL FOR A COUNCIL DECISION ADOPTING A MULTIANNUAL
    FRAMEWORK PROGRAMME FOR ACTIONS IN THE ENERGY SECTOR
                                            (1998-2002)
                                                                               97/0302 (CNS)
 THE COUNCIL OF THE EUROPEAN UNION,
 Having regard to the Treaty establishing the European Community, in particular
 Article 235 thereof,
Having regard to the proposal from the Commission,1
Having regard to the opinion of the European Parliament,2
Having regard to the opinion of the Economic and Social Committee,3
Having regard to the opinion of the Committee of the Regions,4
Whereas the Commission communicated its views on the future of Community energy
 policy to the Council in its White Paper "An energy policy for the European Union" of
 13 December 1995;5
Whereas the Commission communicated to the Council in its White Paper of.... 1997 its
views on the implementation and monitoring of a Community strategy and action plan for
renewable energy sources to the year 2010 with the aid of new technologies;6
Whereas the Council adopted the SAVE II programme on 16 December 19967 to boost
energy efficiency initiatives in the Community with a view to reducing CO2 emissions;
Whereas the Council and the European Parliament adopted a decision on 26 April 1994
concerning the fourth framework programme of European Community activities in the
field of research, technological development and demonstration (1994-1998)8 and a
4
5
     COM(95) 682, 13.12.1995.
6
     COM(97)
7
     Decision 737/96/EC, OJ No L 335, 24.12.1996.
8
     Council and Parliament Decision 1110/94/EC, OJNoL 115, 6.5.1994, page 31.
                                                                                           26
 ---pagebreak--- decision of the same date concerning a framework programme of Community activities in
the field of research and training for the European Atomic Energy Community;9 whereas
the Commission adopted a proposal on the 5th framework programme of research and
technological development on 30 April 1997;10
Whereas the Commission adopted and transmitted to the Council a communication on the
energy dimension of climate change on 14 May 1997;11
Whereas the use of cleaner technologies contributes to the objectives of the Community
strategy to combat acidification;12
Whereas energy is a vital factor in the economic and social development of the
Community;
Whereas the Community's dependence on external energy supplies is set to increase
significantly in the years to come;
Whereas the competitiveness of European business is heavily influenced by the level of
energy costs;
Whereas it is necessary to the quality of life of citizens to ensure that the development of
energy production and consumption is compatible with environmental protection
objectives;
Whereas CO2 emissions must be reduced;
Whereas, particularly in view of the political uncertainties involved in the external supply
markets, the Community must implement a coherent, effective energy policy geared to the
medium and long-term prospects for economic development;
Whereas the actions taken under the energy policy should therefore be focused on specific
priority objectives;
Whereas, in view of the strategic challenges facing the Community, these objectives
should focus in particular on ensuring the security of supplies, completing the integration
of the energy markets, enhancing the competitiveness of European business and the quest
for environmentally sustainable economic development;
Whereas the balanced achievement of these objectives requires particular attention to be
devoted to the transparency, coherence and coordination of all of the energy actions taken
at Community level;
9
    Council Decision 268/94(Euratom), OJ No L 115, 6.5.1994, page 31.
10
    COM(97)142 final.
11
    COM(97)196 final.
12
    COM(97)88 final of 12.3.1997.
                                                                                             on
                                                  - 3-                                       <v <f
 ---pagebreak--- Whereas the Council stressed this need in its Resolution of 8 July 199613 on the White
Paper "An energy policy for the European Union";
Whereas the Council, when it adopted the Regulation adopting a programme to promote
international cooperation in the energy sector,14 considered that it would be opportune for
the Commission to present a communication on all the Community programmes with an
energy component, which could be followed by a proposal on the establishment of a
framework programme for energy;
Whereas the Commission presented a communication: "An overall view of energy policy
and actions",15 from which it emerges that the Community is pursuing a great many
actions, but that these are scattered either between different energy policy programmes or
various Community policies;
Whereas it is necessary to ensure the management, complementarity and optimum use of
budget resources;
Whereas only a truly integrated approach will enable proper account to be taken of all the
aspects of the problems to be resolved;
Whereas this coherent, coordinated approach must apply both to energy policy as such
and to the energy components of other Community policies;
Whereas it is therefore necessary to define and establish a multiannual framework
programme for the actions taken under the Community's energy policy;
Whereas this framework programme should be implemented in the form of horizontal
actions and thematic programmes;
Whereas the horizontal actions cover forward analyses, market monitoring and
international energy cooperation;
Whereas the thematic programmes concern the promotion of renewable energy sources
and the implementation of a Community strategy in this area, the promotion of energy
efficiency, promotion of solid fuels and the safe use of nuclear energy;
Whereas, in view of the context and the specific structures within which energy actions
relating to trans-European networks are conducted, the structures and the manner in
which such actions are implemented must be maintained in the appropriate framework;
Whereas in view of the context and the specific structures within which energy actions
relating to RTD are conducted, the structures and the manner in which such actions are
implemented will continue to conform with the arrangements and procedures of the RTD
13
    O J N o C 224, 1.8.1996.
14
     Council Regulation (EC) No 701/97, OJ No L 104, 22.4.1997.
15
    COM(97)167 final, 23.4.1997.
                                                                                            2H
 ---pagebreak--- framework programme; whereas, however, cooperation and coordination with the other
structures must be enhanced;
Whereas the actions or programmes referred to above should be implemented where
necessary by means of specific measures which, where appropriate, would replace the
corresponding instruments currently in force;
Whereas the principle of seeking the greatest possible coherence calls for the setting up of
a single committee of an advisory nature for the whole of the framework programme and
its constituent actions;
Whereas, in view of the variety and technical complexity of the questions to be addressed,
the single committee and the Commission should seek the assistance of appropriate
experts where necessary;
Whereas the single committee will assist the Commission in ensuring the greatest possible
transparency and the dissemination of information between all the parties concerned and
ensure greater consistency of the energy actions taken under the various Community
policies;
Whereas, notwithstanding a systematic, regular evaluation of the actions, the "energy"
framework programme and its specific programmes should be the subject of a mid-term
review by independent experts;
Whereas focusing the actions on the three major priority objectives of security of supply,
competitiveness and protection of the environment will facilitate a more transparent and
more efficient use of resources;
Whereas some additional funding could be decided in the light of the political choices and
 priorities adopted;
Whereas the funding of actions carried out in the priority areas of promotion of
 renewables (ALTENER programme) and energy efficiency (SAVE programme) in
 particular could be reviewed when the next financial perspective is drawn up;
 Whereas, in keeping with the subsidiarity principle and the principle of proportionality
 pursuant to Article 3b of the Treaty, the above priority objectives of energy policy and the
boosting and coordination of energy actions carried out under the energy policy proper
 and in the framework of other Community policies should, by their nature, be
 implemented at Community level; whereas this Decision is confined to the minimum
 required to achieve these goals;
 Whereas the Treaty does not provide powers for the adoption of this Decision, the
 purpose of which is the coordination of all aspects of energy policy, other than those in
 Article 235; whereas the specific programmes which will implement this framework
 programme will each be adopted on the appropriate legal basis, in particular where their
 objective is the prudent and rational utilisation of natural resources referred to in Article
  130r of the Treaty,
                                                  5-
                                                                                               29
 ---pagebreak--- HAS DECIDED AS FOLLOWS:
                                        Article 1
(lj  A multiannual framework programme for Community actions in the field of
     energy, hereinafter referred to as the "framework programme", is hereby adopted
     for the period 1998-2002.
(2)  The framework programme shall primarily contribute to the pursuit of the
     following priority objectives:
             to guarantee the security of energy supplies;
           . to ensure competitiveness;
             to promote the compatibility of the development of the energy market with
             environmental protection objectives.
(3)  The framework programme shall also contribute to greater transparency,
     coherence and coordination of all the Community's energy actions in the field of
     energy policy and ensure that they mesh effectively with the actions taken in the
     framework of other Community policies.
                                        Article 2
(1)  Notwithstanding the actions relating to energy conducted in the framework of
     research policy or trans-European networks respectively, the framework
     programme shall be implemented through six specific programmes of a horizontal
     or thematic nature corresponding to the following actions:
     (a)     development, in cooperation with the Member States, of a programme for
             regular monitoring of the evolution of the energy markets and trends, so
             that political decisions relating to energy can be taken on the basis of a
             joint analysis;
     (b)     reinforcement, within the area of competence of the framework
             programme, of international cooperation in the energy field in order to
             encourage, firstly, greater diversification of energy sources and, secondly,
             greater transparency and stability of the international gas and oil markets in
             particular;
     (c)     promotion of new and renewable energy sources and implementation of a
             Community strategy and action plan for renewable energy sources to the
             year 2010;
     (d)     encouragement of rational and efficient use of energy resources;
     (e)     regeneration of the coal sector, notably through the use of environmentally
             compatible technologies;
                                                                                            Q 0
 ---pagebreak---     (f)     safer use of nuclear energy.
(2) Each specific programme, the duration of which will coincide with the period of
    application of this framework programme, shall set out the arrangements for its
    implementation.
(3) Implementation of the framework programme may give rise, within its area of
    competence, to additional programmes and Community participation in
    programmes undertaken by several Member States. It may also lead to
    cooperation with third countries or international organizations.
                                       Article 3
(1) The annual appropriations shall be authorized by the budgetary authority within
    the constraints of thefinancialperspective.
(2) The detailed rules for financial participation by the Community in actions taken
    under the framework programme shall be laid down in accordance with the
    provisions of the Financial Regulation applicable to the general budget of the
    European Communities.
                                       Article 4
(1) The Commission shall be responsible for the implementation of the framework
    programme and for drafting guidelines applicable to the actions and measures to be
    taken under each of the specific programmes.
(2) The Commission shall be assisted in the management of the framework programme
    by a committee of an advisory nature composed of 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 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.
                                       Article 5
(1) The Commission shall examine each year the state of implementation of the
    framework programme and its specific programmes. It shall assess the overall
    effectiveness of the framework programme and its contribution to the objectives of
    Community policy. It shall also assess whether the objectives, priorities and
    financial resources are still appropriate to the changing situation. If necessary, it
                                                                                          31
 ---pagebreak---        shall submit proposals to adapt or supplement the framework programme and/or
       the specific programmes.
(2)    In the third year of the period of application of this framework programme and at
       all events before submitting its proposals for the establishment of a subsequent
       framework programme, the Commission shall have an external assessment
       conducted by independent experts of the overall implementation of the Community
       actions carried out under the framework programme. The Commission shall
       communicate the conclusions thereof, together with its comments, to the
       European Parliament, the Council, the Economic and Social Committee and the
       Committee of the Regions.
(3)    The independent experts referred to in the preceding paragraph shall be chosen by
       the Commission in a balanced fashion.
                                          Article 6
This Decision is addressed to the Member States.
Done at Brussels,                                             For the Council
                                                              The President
                                                                                         Ox*
 ---pagebreak---                               FINANCIAL STATEMENT
,1. TITLE OF OPERATION
    Proposal for a Decision defining and establishing a multiannual framework
    programme for actions in the energy sector (1998-2002).
 2. BUDGET HEADING INVOLVED
    B4-1 andB7-535inpart.
 3. LEGAL BASIS
    Article 130s or 235 of the EC Treaty (see individual decisions).
 4. DESCRIPTION OF OPERATION
    4.1     General objective
            Energy is a decisive factor in economic and social development. At present,
            the Community's energy actions are scattered between different programmes
            established at different times and in different contexts and between different
            Community policies, such as external relations, structural policies or research.
            This results in a lack of transparency and the risk of duplication or
            inconsistency of the actions.
            The development of an integrated approach, and in particular the
            establishment of a multiannual framework programme for actions by the
            Community in the energy sector, is designed to meet the need identified by
            Member States and within the Commission to improve the transparency,
            coordination and effectiveness of these actions. It will also be easier to
            identify the additional measures needed with regard to the priority
            objectives of security of supply, competitiveness and environmental
            protection.
            The framework programme will be the umbrella for the programmes and
            actions for which the Directorate-General for Energy is currently responsible.
            In legislative terms, it will take the form of a basic instrument setting out the
            general framework and specific instruments defining the content of and
            implementing the specific actions (see Annexes II to VII to this proposal and
            the corresponding financial statements). Furthermore, in order to ensure the
            necessary coherence between the energy components of the various
            Community policies, the Commission will set up a network of the
            Directorates-General concerned.
                                                 -9-
                                                                                              33
 ---pagebreak---    4.2      Period covered
             1998-2002.
            The arrangements for renewal of the action are indicated in Article 5 of the
            proposal for a decision.
5. CLASSIFICATION OF EXPENDITURE OR REVENUE
   5.1      Non-compulsory expenditure
   5.2      Differentiated appropriations
   5.3      Type of revenue involved
             Some associated countries will be able to contribute to the funding of the
            thematic programmes under the arrangements provided for in these
            programmes (see individual financial statements).
6. TYPE OF EXPENDITURE
   Apart from its participation in the energy-related activities carried out in the context
   of Community policies in the field of RTD, trans-European networks, etc., the
   European Community participates in the funding of activities concerning:
   - forward studies and monitoring of the energy markets;
   - international energy cooperation;
   - promotion of renewable energy sources and implementation of a Community
       strategy and action plan in this area;
   - promotion of energy efficiency;
   - promotion of the clean and efficient use of solid fuels;
   - nuclear sector (cooperation on safety, industrial cooperation with the NIS,
      transport of radioactive materials, including action to combat illegal trafficking).
   The arrangements for and rates of Community financial participation are described in
   detail in the financial statements for the individual actions.
7. FINANCIAL IMPACT
   7.1      Method of calculating total cost of operation
            The "energy" framework programme sets the maximum overall amount and
            its distribution between the various horizontal actions and thematic
            programmes. These amounts cover the funding of the actions as such and
            personnel and administrative expenses.
                                               -10-
                                                                                            34
 ---pagebreak---    7.2      Itemised breakdown in heading 3 (in million ECU)
    Analyses and monitoring of the energy        7.8
    markets
    International energy cooperation             36.4
    Promotion of renewables                      81.1
    Encouragement of energy efficiency           68.4
    Penetration of clean technologies for        4.1
    solid fuels
    Nuclear safety                               2.6
    TOTAL                                        200.4
    7.3     Indicative schedule of appropriations
            The effective implementation of the framework programme requires
            resources to be planned for the whole of the period covered.
            The development of an integrated approach to energy policy is primarily
            intended to streamline and improve the coordination of the measures. The
            establishment of the multiannual framework programme and its focus on
            three major priority objectives will facilitate the management and the more
            transparent, more rigorous use of resources, which in turn will contribute to
            greater efficiency of the actions on the basis of the available budget.
            However, the Union must procure the resources necessary to implement its
            political priorities in the energy sector and already make provision for
            certain increases when the next financial perspective is drawn up. This would
            be in line with the financial framework defined by the Commission in its
            communication Agenda 2000,16 which explicitly provides in heading 3 for
            the development of a number of internal policies intended to serve objectives
            shared by all the Member States and where there is an obvious added.value,
            and cites in this connection certain priority programmes related in particular
            to enlargement, innovation and the application of environment-friendly
            technologies which should see their allocation rise more rapidly than GNP.
             In view of their potential in partiuclar as regards environmental protection
             and job creation, it is proposed to place particular emphasis on actions to
16
   Agenda 2000, Volume I, "The new financial framework''
                                                  11 -
                                                                                           35
 ---pagebreak---                 promote renewable energy sources (ALTENER programme) and encourage
                energy efficiency (SAVE programme).
                       1998          1999       2000         2001         2002        Total
Analyses and            1.50         1.53        1.56        1.59         1.62          7.8
monitoring of the
energy markets
International           7.00         7.14        7.28        7.42         7.57         36.4
energy
cooperation
Renewable               14.4         15.6         17           17         17.1         81.1
energy sources
Energy efficiency       12.5         12.8        13.9        14.6         14.6         68.4
Solid fuels sector     0.80          0.81        0.82        0.83         0.84         4.1
Nuclear safety          0.5          0.51        0.52        0.53         0.54          7.6
Total                   36.7         38.9       41.08       41.97        42.27        200.4
Nuclear safety          2.5           2.5        2.5          2.5          2.5         12.5
B7-535
8.    FRAUD PREVENTION MEASURES
      Several financial and administrative fraud prevention measures are planned which are
      adapted to the specific nature of the individual actions. They operate throughout the
      process and include:
      Before contract signature:
      - qualitative and financial analysis of the bids, proposals or grant applications;.
      - involvement of the other Commission services concerned with a view to avoiding
          any duplication of effort.
      After contract signature:
      - examination of the schedules of expenditure before payment, on several levels
          (financial management, officials technically responsible) and consultation of the
          Commission departments concerned on the results;
                                                   12-
                                                                                            36
 ---pagebreak---    - payment of the work after acceptance on the basis of a percentage estimated
      before contract award, and in the light of a final financial report on the action.
      Supporting documentation may be required for travel and subsistence expenses;
   - internal audit by the financial controller;
   - local inspection to detect errors or other irregularities by examination of the
      supporting documentation.
   The single committee for the "energy" framework programme and the other bodies
   concerned will be fully informed of the results of the work.
9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS
   9.1     Objectives and target population
          The Union is increasingly facing major challenges in terms of energy strategy:
                • increasing dependence on external supplies, in a geopolitical context
                   whose development is unpredictable;
                • need to support the competitiveness of European industries;
                • need to ensure that the development of the energy market is
                   compatible with the environmental protection objectives.
           At present, the Community's energy actions are scattered:
                • between different Community policies;
                • or, in the case of the energy policy itself, between different
                   programmes established at different times and in different contexts.
           This dispersal of effort results in a lack of transparency, the risk of
           duplication and/or inconsistency of the various actions, management
           difficulties and a risk of non-optimum use of resources.
           The establishment of a multiannual framework programme in the energy
           sector is designed to:
           • improve the situation in order to provide a sound basis for responding to
               the problems and challenges facing Community energy policy;
           • reinforce and consolidate the action needed to implement a successful
               energy policy in the Union.
           These actions will be implemented in accordance with the following
           guidelines:
                                               -13
                                                                                         37
 ---pagebreak---        each Community action should contribute to the achievement of the
       priority objectives of security of supply, competitiveness and
       environmental protection;
    •  significant improvement in the coordination of all the actions with an
       energy component;
    • promotion of cooperation between the various actors in the Community
       institutions and the Member States;
    • clarification and simplification of procedures.
    This general improvement will benefit all the actors, from institutions and
    national and local administrations to businesses in the sector, many of whom
    are SMEs.
9.2 Grounds for the operation
    The assessments carried out in 1997 of all the energy programmes found that
    they had largely met their objectives. The aim of establishing the multiannual
    "energy" framework programme is to improve the coherence and
    effectiveness of the actions in view of the strategic importance of the
    challenges facing the Union in the energy sector, more particularly as regards
    environmental concerns. The follow-up to the Kyoto Conference on climate
    change and the implementation of the Community strategy and action plan for
    renewable energy sources to the year 2010 will be decisive in this respect.
9.3 Monitoring and evaluation of the operation
    The actions will be systematically reviewed. Each year the Commission will
    examine progress in implementing the framework programme and its specific
    programmes. Depending on the evolution of priorities, proposals may be
    presented to adjust or supplement the framework programme and/or the
    specific programmes. During the third year of application of the framework
    programme and, at all events, before presenting proposals on the
    establishment of a subsequent framework programme, the Commission will
    have independent experts carry out an overall external evaluation of progress
    in implementing the Community actions carried out under the framework
    programme.
                                       -14-
                                                                                   38
 ---pagebreak---       10.   ADMINISTRATIVE               EXPENDITURE
      (for details, please refer to the financial statements for each part of the programme)
      10.1 Impact on the number of staff
     Type of post               Staff to be assigned to                                   of whom                  duration
                            management of the action
                            permanent temporary                              existing resources         additional
                            staff                         staff               within the DG or           resources
                                                                             service concerned
 Officials        or A                     30.5                                          22                  8.54
 temporary            B                     10                                             7.5               2.5
 agents               C                     15                                           10                  5
 Other resources                                          Seconded                                                 5 years
                                                          national
                          : j | | | | | | | | | | l | | ; exp: 7                           5                 2
                                                          Exp: 6                           2                 4
                                                          Temp: 3                          2                 1.5
           Total                           55.5                  16                      48.5               16
Indicate when the additional resources will be required.
      • The necessary human and administrative resources will be mobilised on the basis of the
          annual Commission decision on the allocation of resources, in particular in the light of
          the staff and additional amounts to be granted by the budgetary authority.
      • One category A post has been entered in the preliminary draft budget for 1998.
       10.2 Overall financial impact of the additional human resources
                                                                                                        (ecus)
                                               Amounts                                    Calculation method
 Officials                                                     1 648 000 103 000 ecus x 16
 Temporary agents                                                         Sec. nat. exp.= 40 000 x 2
 Other      resources       (state                                        Service providers = 120 000 x 4
 budget heading)                                                          Temporary = 80 000 x 3
 OA 1520 sec. nat. exp.                                           80 000
 OA 1178 service providers                                      480 000
 OA 1175 temporary                                              240 000
                            Total 1                           2 448 000 |                              •
The amounts show the total cost of additional posts for the entire duration of the action where it is
specified andfor 12 months where it is indeterminate.
                                                                        -15-                                           39
 ---pagebreak---        10.3 Increase in other operating expenditure resulting from the operation
                                                                                     (ecus)
         Budget heading                     Amounts                        Calculation method
          (No and title)                 ;
 OA 1300 Missions                                        420 000 based on available statistics in 1996
 OA 25 committees, groups,                               366 200 and 1997
 invitation of experts
                '•        Total 1                        786 200 |
The amounts correspond to the total expenditure for the operation if its duration is fixed or to th
expenditure for 12 months if its duration is indeterminate.
                   Post                    Existing                New
                     A       B       C       A       B         C     A      B       c
 Observatory         2       1        1      2        1        1     0      0       0     1 sec nat exp
 Synergy             6       1       4       6        1        4     0      0       0     1 sec nat exp
 Altener             11      3       5       6       1.5       2    2.5     1      1.5    2 sec nat exp
 Save                10      3       5      6.5       2        3    1.5     1       1     3 sec nat exp
 Solid fuels          1     0.5      0       1      0.5        0     0      0       0
 Nuclear            0.5     1.5      0      0.5      1.5       0     0      0       0
 Total             30.5     10       15     22      7.5       10     4      2      2.5
      external
       1178 2 experts (Alt)                  2 experts (SAVE)
       1175 1 temporary (Alt)                 1.5 temporary (SAVE) +1.5 seconded nat. experts
            Missions                        0A 1B00                            Committees
 Observatory                                              50 000                                  20 000
 Synergy                                                 120 000                                  46 200
 Altener                                                 130 000                                 108 000
 Save                                                    100 000         .                       216 000
 Solid fuels                                              10 000                                        0
 Nuclear                                                   10 000                                       0^
                                1                        420 000 1                               390 200
                                                       -16                                               0
 ---pagebreak---    EUROPEAN COMMISSION
                            ANNEX II
                 Establishment of a
MULTIANNUAL PROGRAMME OF STUDIES,
  ANALYSES, FORECASTS AND OTHER
RELATED WORK IN THE ENERGY SECTOR
              (1998-2002)
                                     41
 ---pagebreak---                           FINANCIAL STATEMENT
1. TITLE OF OPERATION
   "European Energy Observatory" - Forward analysis, forecasting and observation
   of markets
2. BUDGET HEADING INVOLVED
   Item B4-1040
3. LEGAL BASIS
   Operation for which the amount is not significant.
4. DESCRIPTION OF OPERATION
   4.1    General objective
          To develop, in cooperation with the Member States, a programme of regular
          monitoring of market developments and energy trends in order that energy
          policy decisions can be taken on the basis of a shared analysis.
          As an indication, the following are among the main areas covered:
          1. identification and analysis of the main European problems as regards
              future energy demand and production and energy policy, focusing on:
                      (a) strategies for meeting the energy challenge posed by climate
                      change and respect for the environment;
                      (b) the dynamics of the opening-up of the energy markets and
                      the corresponding structures, particularly in terms of its
                      consequences for the future and the behaviour of firms in the
                      context of completion of the internal energy market, which
                      requires an effective mechanism for observing and monitoring the
                      markets;
                      (c) world energy market trends influencing external dependence
                      (particularly the considerable growth of energy demand expected
                      in Asia and South America);
          2. improvement of the analysis capability in order to be able to make
              comparative forecasts of energy trends and scenarios in all the Member
              States in the light of changes in market structures and of the challenge
              posed by climate change and the environmental imperatives.
                                                                                       40
 ---pagebreak---                 The action is intended to promote the formulation of new energy choices
                on the basis of medium and long-term forecasting analysis models with
                the aim of developing a Community Analysis Method which would better
                serve the European Union's information exchanges and analytical needs.
                The emphasis will be on:
           -    cooperation between the Commission and the Member States and on the
                involvement of the circles concerned, enterprises, academic circles and
                other sources of knowledge and experience;
           - complementarity of the work with similar work carried out by the Member
               States or international organisations such as the International Energy
               Agency.
                Particular attention will be given to consolidation of the internal energy
                market, security of supply, protection of the environment and the
                economic development of the energy industry.
                The analyses and forecasts concerning the Member States in the field of
                energy also cover the Central and Eastern European Countries that are in
                the process of joining.
   4.2     Period covered and arrangements for renewal or extension
           Selective programme of study and related work with the aim of developing a
           Community-level capability for analysis and forecasting of activities and
           problems in the field of energy, incorporated in the energy framework
           programme (1998-2002).
5. CLASSIFICATION OF EXPENDITURE
   NCE/DA
6. TYPE OF EXPENDITURE
   - Financing, part financing or subsidy of studies concerning the analysis of markets
      and their development, evaluation of the operation and new guidelines (the
       subsidised bodies may also purchase results of studies, surveys and analyses as
      well as software, including its development costs, etc.).
   - Financing, part financing or subsidy of expenditure on information and
      dissemination (conferences, seminars, publications including printing and
      translation costs, etc.).
   - Financing, part financing or subsidy of expenditure on informatics connected with
      the data necessary for carrying out additional energy analyses (in particular
      collection, database storage, statistical processing and presentation).
                                                                                           43
 ---pagebreak--- 7.  FINANCIAL IMPACT
7.1 Method of calculating the total cost of the operation (link between the costs of its
    individual components and the total cost). The nature of the work does not change
    from one year to the next. The studies are specified in accordance with the
    Commission's objectives in order to answer the policy questions put by the Member
    States, the Council and Parliament.
    • Analyses of European energy markets
       studies costing an average of ECU 50 000 x 11 x 5 years,
       including:
       studies and multi-client forecasts costing ECU 10 000-20 000,
       sectoral subject-related and/or fuel-related studies, ECU 40 000-300 000,
       e.g. liberalisation of gas and/or electricity, refining, prices and taxation;
    • World market analyses
       studies costing an average of ECU 50 000 x 10 x 5 years,
       including:
       studies and multi-client forecasts by region costing ECU 10 000-20 000,
       sectoral subject-related and fuel-related studies by region, ECU 40 000-300 000,
       e.g. security of supply, geopolitical strategy, consumer-producer dialogue;
                                                                     4 '
    • Financial support for economic analysis networks
       participation expenses averaging ECU 66 000 x 3 x 5 years,
      including:
       energy policy research centres,
      collaboration with industry at the European level (Eurogas, Eurelectric, Europia);
    • Other operational expenditure
      seminars or workshops costing ECU 80 000 x 1 x 5 years,
      conferences costing ECU 120 000 x 1 x 5 years,
      information and publications costing an average of ECU 50 000 x 2 x 5 years,
      including publication of the "Annual Energy Review".
                                                                                         44
 ---pagebreak---   7.2 Breakdown of the operation by individual components (in million ECU)
  Breakdown                             1998      1999         2000        2001        2002    Total
Analyses    of European      energy      0.5      0.53         0.56        0.59        0.62     2.8
markets
World market analyses                    0.5       0.5          0.5         0.5         0.5     2.5
Financial support for economic           0.2       0.2          0.2         0.2         0.2     1.0
analysis networks
Other operational expenditure            0.3       0.3          0.3         0.3         0.3     1.5
including overall evaluation of the
framework programme
TOTAL                                    1.5      1.53          1.56       1.59        1.62     7.8
  Comments:
  The nature of the work does not change so the budget resources are stable between 1999
  and 2002.
  7.3 Operational expenditure on studies, experts, etc., entered in part B of the budget
                                                       EC in million ECU (current prices)
                          1998      1999     2000         2001       2002       Total
  Conferences,
  workshops,
  information and          0.3       0.3      0.3          0.3        0.3         1.5
  publications
  7.4 Schedule of commitment appropriations
                          1998      1999     2000         2001       2002       Total
  Commitment               1.5      1.53      1.56         1.59       1.62       7.8
  appropriations
                                                                                            45
 ---pagebreak--- 8. FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN
   Before signing of contracts:
   - qualitative andfinancialanalysis of tenders, proposals or requests for subsidies;
   - involvement of other Commission departments concerned in order to avoid any
      duplication of effort.
   After signing of contracts:
   - examination of expenditure records before payment, at several levels (financial
      manager, technical managers), and consultation of Commission departments
      concerned on the results;
   - internal audit by the financial controller;
   - on-the-spot checks making it possible to find mistakes or irregularities by
      examining supporting documents;
   - notification of the committee referred to in Article 4 of the Decision adopting the
      multiannual framework programme on energy and of the Energy Consultative
      Committee set up by Commission Decision 96/642/EC of 8 November 1996.
9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS
   9.1     Specific and quantified objectives; target population
           Links with general objective
           The operation is designed to improve the European Union's energy balance,
           first of all by analysing the energy situation and preparing energy policy
           guidelines, particularly those responding to the challenges of climatic change
           and respect for the environment.
           Secondly the operation aims to improve forecasting of how the European
           Union's energy economy is going to develop in its international context. It
           will thus help to consolidate the internal energy market, manage the
           relationship between energy and the environment and develop cooperation on
           energy matters with third countries. By aggregation of the results obtained,
           the operation will give added value to the complementary analysis work being
           done in the Member States.
           Target population
           For observation of the energy markets: decision-making bodies at the
           Commission and in the Member States. As regards the production, transport
                                                                                       46
 ---pagebreak---     and consumption of energy: the whole population of the Community, the
    OECD and the world in general.
9.2 Grounds for the operation
    Section 86 of the Green Paper (COM(94) 659finalof 11 January 1995) says
    that convergence must start at the level of economic analysis. The sine qua
    non of an energy policy is the ability to accommodate market trends and to
    adapt immediately to any new developments. But these developments on the
    Community's internal market will be increasingly dependent on global trends
    in consumption, in production and in transport conditions. These analyses are
    made by companies and international organisations. Without duplicating this
    work and by using its results, it seems necessary to have at the Community
    level means of analysis which would enlighten the Community decision-
    making process. It is obvious that the application of the rules of operation of
    the internal market and the adjustment of priorities as regards research,
    environment, international cooperation, networks and economic and social
    cohesion have to rest on a consensual analysis of the problems and market
    trends. Involvement of academic circles, industries, consumers and the
    administrations in an open and transparent way would guarantee a coherent
    analysis on which to base the development of an energy policy.
    Point 6 of the Council Resolution (No 7802/95) on the Green Paper, of
     1 June 1995:
    "Considers that the operation of the internal market requires the
    strengthening of consultation and cooperation between the Member States
    within the Community and the development of Community methods of
    analysis, in particular with respect to the functioning of the market
    mechanisms, which could enlighten the Community decision-making
    process".
    The White Paper (COM(95) 682finalof 20 December 1995) recommends, in
    section 134:
    "In terms of immediate action the Commission intends to take the following
    initiatives in 1996 without prejudging the results of the forthcoming Inter-
    Governmental Conference: the establishment of a programme to -monitor
    energy trends, in cooperation with Member States, industry and other bodies,
    in order that political decisions related to energy can be made on the basis of
    a shared analysis".
    This proposal, based on the existing treaties, is necessary to meet the need for
    a more cooperative and transparent policy-making procedure.
    The operation is also justified by the fact that the analysis methods contribute:
                                                                                      47
 ---pagebreak---     to managing Community policies in such a way as to help in achieving
    common goals, in particular completion of the internal energy market,
    improvement of the quality of the environment, and security of supply;
    to the convergence of European policy by a better knowledge of the long-
    term development prospects of the world market;
    to securing added value for the studies and expert assessments carried out in
    the Member States by putting them into a common perspective.
    Carrying out studies and surveys of the energy market will make it possible to
    measure how far national policies and Community objectives coincide and to
    open up discussion of the long-term prospects.
    At the Community level the Commission will be undertaking additional
    analysis work to complement that being done in the Member States and
    aggregating the results obtained.
    Choice of instruments
    Depending on the nature of the activities planned or appearing to be in need
    of action, recourse will be had to calls for tender, calls for proposals or
    subsidies. Collaborative efforts will be strongly encouraged not only in order
    to take advantage of the complementarity, the multidisciplinary nature of
    expert studies and the resulting creativity, but also to foster a common
    approach and a common understanding.
9.3 Monitoring and evaluation of the operation
     The committee of the energy framework programme and the Energy
     Consultative Committee set up by Council Decision No 96/642/EC of
     8 November 1996 will be kept regularly informed of the results of the work.
     The two main recommendations of the recent evaluation of heading B4-1040
     for the period 1993-1995 are as follows:
     More use should be made of frame-contracts for recurring tasks such as data
     modelling and conference organisation.
     The Member States' energy ministries are currently playing a relatively
     passive role in European analysis and forecasting. To make full use of the
     added value at Community level, Member States should be encouraged to
     work more closely together, perhaps in small groups, to take on common
     sectoral problems. There should be more pooling and sharing of modelling
     and analysis of competence.
                                                                                 48
 ---pagebreak--- 10. COMPONENTS OF ADMINISTRATIVE EXPENDITURE
      Effective mobilisation of the necessary administrative resources will result from the
      Commission's annual decision on the allocation of resources, taking account in
      particular of the additional human and financial resources granted by the budgetary
      authority.
      10.1    Impact on the number of jobs
      Job type          Staff needed for managing the                of whom                Duration
                                   operation
                      permanent jobs temporary jobs      by using existing   by using
                                                         resources in DG     additional
                                                         or department       resources
                                                         concerned
Officials        A            2                                   2                        5 years
or temporary B                1                                    1
staff            C            1                                    1
Other resources                          1 seconded       1 seconded                       5 years
                                         national expert  national expert
Total                         4                  1                5
      10.2    Overall financial impact of additional human resources
              None.
                                                                                            49
 ---pagebreak---       10.3  Other annual operating expenditure arising out of the operation
Budget heading                 Amounts                      Calculation method
(number and title)
                         «
A-1300 Mission expenses,       50 000                       Missions connected with financial
travel expenses and incidental                              support,     conferences    and
expenditure                                                 workshops on basis of financial
                                                            year 1996
A-2500 Expenses of experts                                  One meeting of 15 experts from
                               20 00
in the Framework Programme           °                     the Member States + 5 from
Committee                                                   outside
                         Total 70 000
The appropriations shown are financed from within the existing allocations of the departments
managing the programme.
                                                                                       50
 ---pagebreak---       EUROPEAN COMMISSION
                              ANNEX III
          PROPOSAL FOR A COUNCIL REGULATION
                       adopting a
      MULTIANNUAL PROGRAMME TO PROMOTE
INTERNATIONAL COOPERATION IN THE ENERGY SECTOR
                     (1998-2002)
                                             51
 ---pagebreak--- PROPOSAL FOR A COUNCIL REGULATION ADOPTING A MULTIANNUAL PROGRAMME
TO PROMOTE INTERNATIONAL COOPERATION IN THE ENERGY SECTOR (SYNERGY
PROGRAMME) (1998-2002)
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 Commission1,
Having regard to the opinion of the European Parliament2,
Whereas, for reasons of the competitiveness of the Community's industries, security of
supply and protection of the environment, energy matters must be an important element in
the Community's international activities;
Whereas a multiannual framework programme for actions in the energy sector is being
implemented;
Whereas the Community's accession to the Energy Charter Treaty and the Convention on
Climate Change commits it to continue with international cooperation in the energy field;
Whereas the conclusions of the Council of Ministers for Development and Cooperation of
 18 November 1992 on the guidelines for cooperation with the developing countries for
clean and efficient energy technology stressed that an essential objective of energy
cooperation with all developing countries was the implementation of effective energy
policies;
Whereas, as stressed in the Council resolution of 8 July 1996 on the White Paper "An
energy policy for the European Union", energy developments in the Community are
increasingly influenced by external developments and efforts must therefore be made to
ensure that the Community develops a coherent and consistent approach to energy
matters with third countries;
Whereas the Community is engaged in international energy activities under various
programmes; whereas, to ensure that these activities are consistent, they should be
coordinated more closely;
Whereas coordination of the Community's other measures in the energy sector is
necessary; whereas there must therefore be no duplication with other programmes of the
Community, of the Member States or of third countries or international organisations in
the field of energy policy;
                                                                                          O A'.,
 ---pagebreak--- WThereas, by reason of their wide-ranging nature, the principal objectives of the
programme, particularly the coordination of the various programmes of international
measures, can be attained best at Community level;
Whereas it is necessary to establish a specific legal instrument for the Community's
international cooperation activities in thefieldof energy policy;
Whereas according to the Council resolution on the White Paper "An energy policy for
the European Union", political and trade relations are essential components of energy
policy and, accordingly, the Community's international energy cooperation measures
should be integrated more effectively in its external policy as a whole;
Whereas the objectives of energy cooperation pursuant to the programme should be to
improve the competitiveness of Community industries, to enhance security of supply, to
promote sustainable development and to improve energy efficiency; whereas such
cooperation may be put into effect by cooperating in and co-financing projects;
Whereas such cooperation should be anchored in an indicative programme and may be the
subject of agreements with the States concerned or with international networks of study
and research centres;
Whereas, since the cooperation in question is external cooperation, it is governed by the
special provisions laid down in Title IX of the Financial Regulation of 21 December 1977
applicable to the general budget of the European Communities,
HAS ADOPTED THIS REGULATION:
                                           Article 1
Within the framework programme for actions in the energy sector, a specific programme
of cooperation with third countries in fields of mutual benefit, hereinafter referred to as
"SYNERGY", shall be implemented by the Community.
This programme shall concern:
• aid with the definition, formulation and implementation of energy policy for third
   countries;
• promotion of industrial cooperation between the Community and third countries in the
   energy sector;
• closer coordination of the Community's external activities in the energy field.
                                           Article 2
SYNERGY shall be addressed to all States which are not members of the Community and
first and foremost those countries and regions considered priorities in the Community's
external relations in terms of its political and economic interests and security of energy
supply.
                                           Article 3
1.      Implementation of the SYNERGY programme shall start on 1 January 1998 and
        end on 31 December 2002.
                                                                                            53
 ---pagebreak--- 2. The annual appropriations shall be authorised by the budgetary authority within
   the limits of thefinancialperspectives.
                                       Article 4
1. The programme shall help achieve the Community's main energy objectives as
   described in the White Paper "An energy policy for the European Union". To the
   same end, the Community may also maintain relations with international energy
   organisations. The measures to implement the programme shall be adopted in
   accordance with the rules set out in Article 4 of the Decision adopting the
   multiannual framework programme for actions in the energy sector. No funding
   may be granted to research, development and demonstration projects.
2. In order to achieve these objectives, the Community shall contribute, in particular,
   to thefinancingof activities concerning:
            energy policy advice and training;
            energy analyses and forecasting;
            closer dialogue and exchanges of information on energy policy, notably by
            means of organisation of conferences and seminars;
            support to regional transboundary cooperation;
            improving the framework for industrial cooperation on energy;
            coordination of the Community instruments for international action in the
            energy sector and other similar international programmes.
3. The cooperation shall also cover costs related to the preparation, implementation,
   monitoring and evaluation of performance of these operations, as well as costs
   concerning information.
                                       Article 5
1. Community contributions may take the form of grants which shall be released in
   tranches as projects materialise.
2. SYNERGY programme funding shall be granted only after verification that the
   activities cannot qualify for financing from other programmes.
3. Financing decisions and any contracts resulting therefrom shall expressly provide,
   inter alia, for acceptance by the beneficiaries of supervision by the Commission
   and the Court of Auditors, which may be carried out on the spot if necessary.
                                       Article 6
1. An indicative programme covering the period referred to in Article 3 is established
   in the Annex. This programme defines the principal objectives, guidelines and
   priorities of Community cooperation in the indicative areas referred to in Article 4.
2. An action programme based on the indicative programme referred to in paragraph
   1 shall be adopted in accordance with the procedure provided for in Article 4 of
   the Council Decision adopting a framework programme for actions in the energy
   sector. This action programme shall include a list of the main projects to be
                                           3
                                                                                         54
 ---pagebreak---    financed within the indicative areas referred to in Article 4. The content of the
   programme shall be determined so as to provide Member States with the relevant
   information to enable the committee set up under the abovementioned procedure
   to give its opinion.
   Specific agreements may be concluded with third countries and international
   organisations, in the framework and for the duration of the indicative programme
   referred to in paragraph 1, in order to define the main lines of cooperation with the
   countries concerned and the consultation procedures regarding implementation of
   the programme.
   Contracts may also be concluded within the framework of the indicative
   programme referred to in paragraph 1 with international networks of study and
   research centres in order to define the contribution of these networks to
    achievement of the objectives described in the abovementioned indicative
   programme.
                                       Article 7
1.  The Commission shall implement operations in accordance with the action
    programme referred to in Article 6(2).
2.  Service contracts shall, as a general rule, be awarded by restricted invitations to
    tender in conformity with Article 118 of the Financial Regulation applicable to the
    general budget of the European Communities.
   Negotiated contracts may be awarded for operations involving an amount below
    ECU 50 000.
    Supply contracts, where needed to supplement service contracts and limited to the
    objectives of SYNERGY, shall be awarded by means of open invitations to tender,
    except in the cases provided for in Article 116 of the Financial Regulation.
    Participation in invitations to tender and contracts shall be open on equal terms to
    all natural and legal persons in the Member States and in the beneficiary States.
    Participation by natural and legal persons from other countries may be authorised
    by the Commission on a case-by-case basis if the programmes or projects
    concerned require specific forms of assistance specifically available in these
    countries.
3.  Taxes, duties and the purchase of immovable property shall not be funded by the
    Community.
4.  In the case of co-financing, the participation of enterprises from the third countries
    concerned in invitations to tender and contracts may be authorised by the
    Commission on a case-by-case basis. The Commission shall render account thereof
    in the report referred to in Article 9.
                                                                                           55
 ---pagebreak---                                            Article 8
1.      The Commission shall, together with the Member States, ensure effective
        coordination of the expert assistance provided in the beneficiary States by the
        Community and individual Member States on the basis of the information supplied
        by the Member States.
2.      Coordination and cooperation with the international financial institutions and other
        sources of funds shall be encouraged.
3.      The Commission shall examine ways of promoting co-financing by the SYNERGY
        programme, bilateral cooperation from the Member States, the programmes of
        other international organisations and other Community programmes. It shall, in
        particular, contribute to closer coordination and complementarity between the
        contributions made by SYNERGY and the other Community instruments for
        international energy cooperation in order to avoid duplication. It shall also ensure
        that duplication is avoided between the SYNERGY programme and any other
        programme or action of other international organisations in the field of energy.
                                           Article 9
1.      The Commission shall present a report by 31 December 2000 on the
        implementation of the specific programme in the two previous financial years,
        based on an external assessment by independent experts.
2.      The Commission shall present a report by 31 December 2002 on the
        implementation of the programme and the results obtained in third countries and
        Member States, accompanied by the external assessment by independent experts
        on which it is based.
3.      Each year the Commission shall present a report on the implementation of the
        external energy activities under the various Community instruments.
4.      These reports shall be addressed to the European Parliament and the Council.
                                          Article 10
This Regulation annuls and replaces Council Regulation (EC) No       /
This Regulation shall be binding in its entirety and directly applicable in all "Member
States.
Done at Brussels,                                                    For the Council
                                                                     The President
                                                                                             56
 ---pagebreak---                                                                                   Annex
INDICATIVE ACTION PROGRAMME
For the purposes of implementing the SYNERGY programme and drawing up the
action programme the following guidelines shall be taken into account.
The tasks of SYNERGY are to help achieve the Community's energy objectives as set
out in the Council's resolution on the White Paper "An energy policy for the European
Union":
        overall competitiveness,
        security of supply,
        environmental protection.
Each of these objectives has a sizeable external component, as is made clear in the
White Paper. SYNERGY will implement action in line with its objectives and ensure
closer coordination of international cooperation activities in the field of energy policy
being conducted elsewhere in the Community.
The SYNERGY guidelines have been drawn up on that basis.
I.      AREAS OF COOPERATION LINKED TO THE COMMUNITYS ENERGY
        OBJECTIVES
A)      Activities pursuant to all three objectives:
        advise third countries on energy policy;
        encourage energy efficiency in third countries;
        develop local and, in particular, renewable energy sources;
        encourage regional energy integration;
        promote consistency in the implementation of Community programmes in
        specific regions (e.g. the Black Sea, the Mediterranean and the Gulf).
B)      Overall competitiveness:
        support the development of cooperation designed to strengthen the presence of
        European players on key markets in the energy sector, in particular Asia and
        Latin America;
        advise third countries on organisation of the energy sector;
        support liberalisation and opening-up of the energy sector, helping third
        countries to draw up energy policies in this new situation, in particular in
        conformity with the Energy Charter Treaty;
        favour greater investment by European undertakings in the energy sector in
        third countries.
                                                                                          57
 ---pagebreak--- C)       Security of supply:
         dialogue with energy-producing and exporting countries: Gulf, Russia,
         producer countries in America, Asia and Africa;
         encouraging dialogue between the European Community and the countries
         which have signed the Energy Charter Treaty, in particular with the transit and
         energy-producing transit countries, by helping to implement the provisions of
         the Energy Charter Treaty;
         participation in and support for the work of international bodies in this sector:
         ministerial and producer/consumer conferences, International Energy Agency;
         support in creating a favourable environment for investment in third countries
         in the production and transit of energy, in conformity with international law,
         particularly the Energy Charter Treaty and the disciplines agreed within the
         WTO.
D)       Environment:
         training decision-makers and staff in the energy industry in third countries in
         environmental awareness;
         disseminating the Community's experience and information on energy and the
         environment;
         encouraging use of clean technology, in particular for the combustion of coal in
         major consumers like China, taking the implications for energy policy into
         account;
         strengthening and supporting efforts to have environmental aspects taken into
         account in third countries' energy policy and planning;
         encouraging and helping third countries to plan and implement national energy
         supply and use policies in keeping with each different environmental situation.
II.      GEOGRAPHICAL PRIORITIES AND CONSISTENCY WITH THE
         COMMUNITY'S INTERNATIONAL COOPERATION PROGRAMMES
A)       Role and priorities:
In international relations in the energy field SYNERGY:
- will promote energy cooperation vis-à-vis third countries;
- will aim at having its objectives taken into account in the external cooperation
activities carried out by other Community programmes;
- will facilitate the emergence of energy projects financed by other Community
cooperation instruments.
                                                                                           58
 ---pagebreak--- B)      Geographical priority areas
SYNERGY will concentrate on the geographical priorities in the Community's external
relations and will help achieve certain of those priorities.
The areas given priority by SYNERGY are:
        Central and Eastern Europe;
        New Independent States (NIS);
        Mediterranean third countries;
        Latin America: emphasis will be placed on Mercosur, Chile, Mexico and
        Venezuela;
        Asia: China, India and the Asean countries;
        Africa.
                                                                                    59
 ---pagebreak---                          FINANCIAL STATEMENT
ITEMB4-1041
1.   TITLE OF OPERATION
     Promotion of international cooperation in the energy sector - SYNERGY
     programme.
2.   BUDGET HEADING INVOLVED
     B4-1041
3.   LEGAL BASIS
     Council Regulation (EC) No 701/97 of 14 April 1997 adopting a programme to
     promote international cooperation in the energy sector - SYNERGY programme
     (OJNoL104, 22.4.1997, p. 1).
     Proposal for a Council Regulation (EC) extending the programme to promote
     international cooperation in the energy sector- SYNERGY programme - as
     established by Council Regulation (EC) No 701/97 of 14 April 1997.
     Proposal for a Council Decision adopting a framework programme for actions in
     the energy sector (1998-2002).
4.   DESCRIPTION OF OPERATION
4.1  General objective
     The need for an international cooperation programme at European level to
     complement the internal policies in this sector has been heightened by
     developments on the world energy scene in recent years:
     - Europe's growing dependence on outside energy sources;
     - extremely sharp increase in demand for energy in developing countries;
     - growing impact of environmental problems, particularly greenhouse gas
        emissions, on energy choices.
                                                                                   60
 ---pagebreak---     The objective is to promote cooperation in the field of formulation and
    implementation of energy policy in third countries to help achieve the objectives of
    the European Union's energy strategy, namely:
    - overall competitiveness;
    - security of energy supply for Europe;
    - environmental protection.
    This operation should help to attain these objectives by launching schemes aiming,
    in particular, at:
    - improving energy efficiency in third countries;
    - promoting use of clean technologies;
    - encouraging use of local and, in particular, renewable energy sources;
    - providing support for regional integration and opening-up of the energy sector
       in third countries;
    - fostering dialogue and contacts between Europe, third countries and, in
       particular, producer countries and international organisations in the energy
       field;
    - supporting penetration by European energy undertakings in third countries;
    - strengthening ties between experts and decision-makers in the energy sector
       within the Community and between the Community and third countries.
    The operation also provides support for the European Union's external relations
    policy and helps to establish frameworks for steering and preparing energy projects
    and to pave the way for the accession of Central and Eastern European countries.
    Formulation of the annual programme, in collaboration with other Commission
    departments and representatives of the Member States, will provide an opportunity
    to target SYNERGY on the priority issues, taking account of the annex to the
    Regulation, as proposed by the European Parliament.
4.2 Period covered
    Five years, from 1 January 1998 to 31 December 2002.
5.   CLASSIFICATION OF EXPENDITURE
    Non-compulsory expenditure/differentiated appropriations.
                                                                                         61
 ---pagebreak--- 6.    TYPE OF EXPENDITURE OR RE VENUE
      EXPENDITURE
      Financing of studies, technical assistance and advice through the possible
      intermediary of experts, training and promotion activities, dissemination of
      information, organisation of conferences, seminars, workshops, technical and
      educational visits, support for energy cooperation or energy policy institutions and
      other activities in support of energy policy.
      Expenditure on promotion of the programme, dissemination of the results and
      evaluation of the programme by outside experts and operating expenditure of
      bodies supporting cooperation in the energy field.
      Normally the Community will contribute not more than 50% of the total cost of
      the project and will fund projects jointly with third countries, the Member States
      or international organisations.
      In certain cases, however, the Community can contribute up to 100%: to finance
      experts seconded full time to the authorities in third countries or action solely in
      the interest of the Community (preliminary studies, reconnaissance missions,
      European energy centres, project evaluation, etc.).
      REVENUE
      Any revenue from repayments by States participating in the European Energy
      Charter is available for re-use in accordance with Article 27(2)(b) of the Financial
      Regulation of 21 December 1977 applicable to the general budget of the European
      Communities (OJ No L 356, 31.12.1977, p. 1), as last amended by Regulation
      (EC, Euratom, ECSC) No 2335/95 (OJNo L 240, 7.10.1995, p. 12).
7.    FINANCIAL IMPACT
7.1   Method of calculating total cost of operation (link between unit costs and total
      cost)
    • Horizontal measures
      Short-term missions by experts from Europe or third countries:
      transport, fees and daily allowances: 240 missions costing ECU 10 000 each
      One interim evaluation and one final evaluation of the programme costing an
      average of ECU 150 000 = ECU 300 000.
      Energy analyses
      Studies costing an average of ECU 100 000 x 64
      Cooperation in formulating energy policy in third countries
      Long-term (six-month) missions by experts costing an average of ECU 100 000
      per mission x 63
                                                                                           62
 ---pagebreak--- • Financial support for energy institutions
  Long-term (one-year) missions by experts costing an average of ECU 200 000 per
  mission x 30
  Technical visits and training in Europe for 25 citizens from third countries costing
  an average of ECU 20 000 x 150 visits
• Support for industrial cooperation
  Seminars costing an average of ECU 100 000 x 10
  Visits by European delegations to third countries costing an average of
  ECU 74 000x10
• Seminars, conferences and workshops
  Seminars or workshops costing an average of ECU 100 000 x 20
  Conferences costing an average of ECU 200 000 x 15
• Information and training
  (Grants and scholarships)
                                                                                       63
 ---pagebreak--- 7.2          Itemised breakdown of cost in ECU million
                Breakdown                 1998  1999    2000    2001    2002     Total
Horizontal measures                       0.5    0.5    0.58     0.5     0.62     2.7
Energy analyses                            1.2   1.3     1.3      1.3     1.3     6.4
Cooperation in formulating energy          1.2   1.2     1.3      1.3     1.3     6.3
policy in third countries
Support for industrial cooperation        0.3   0.34     0.3     0.4      0.4    1.74
Financial support for energy               1.8   1.8     1.8      1.8     1.8      9
institutions
Seminars, conferences and                   1     1       1        1       1       5
workshops
Information and training                    1     1       1      1.12    1.15    5.27
                             TOTAL=       7.00  7.14    7.28    7.42     7.57    36.4
Comments:
The increase in budgetary resources from 2000 on will be allocated to three types of
action:
- support for industrial cooperation to help European undertakings in this sector to
   penetrate markets in third countries;
- cooperation in formulating energy policy so that third countries take account of the
   Community's energy objectives;
- increased expenditure on evaluation and monitoring of the action envisaged (under
   "Horizontal measures").
7.3          Operating expenditure on studies, experts, etc. entered in Part B of the
             budget
                                                     EC in ECU million (current prices)
                                 1998    1999  2000    2001    2002     Total
Information and publications      0.2    0.2   0.2     0.2     0.2         1
                                                                                        64
 ---pagebreak--- 7.4      Indicative schedule of commitments and payments
The amount will be set annually by the budgetary authority.
The indicative commitment and payment appropriations (in ECU million) will be as
follows:
                                  1998     1999      2000    2001   2002    Total
Commitment                                 7.14      7.28    7.42   7.57    36.4
appropriations
Payment appropriations
1997                                                                          6
1998                                         6                                7
1999                                       1.14         6                   7.14
2000                                                  1.28     6            7.28
2001                                                         1.42    6.5    7.92
2002                                                                1.07    1.07
2003
Total                                      7.14      7.28    7.42   7.57    36.4
                               l_        I        I        1      I       I       I
Financial support for energy institutions in third countries should decrease as the
institutions become self-sufficient.
8.       FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN
The work is paid after its acceptance on the basis of a contribution rate set before award
of the contract, and in the light of afinalfinancial report on the operation. Documentary
proof of travel and subsistence expenses may be required. Checks on the documents and
on-the-spot inspections may be carried out.
9.       ELEMENTS OF COST-EFFECTIVENESS
         9.1     Specific objectives
         A distinction can be drawn between:
         •       the specific objectives to which SYNERGY contributes without bearing
                 sole responsibility for the results;
                                                                                           65
 ---pagebreak--- •        the direct objectives of the SYNERGY schemes.
9.1.1    Objectives of the programme
• To reduce the predicted increase in greenhouse gas emissions worldwide by
   means of measures to encourage energy efficiency, new technologies,
   renewable sources and energy planning.
• To increase energy investment and exports by European undertakings in third
   countries.
• To facilitate interconnection of the energy networks in third countries and
   between third countries and Europe.
• To prepare for accession of the associated countries by helping to bring their
   energy policies closer to EU energy policy.
• To maintain or increase the capacity for exporting energy from third countries
   to Europe, despite the growing demand in third countries.
9.1.2    Specific objectives of the schemes
In the case of seminars, conferences, workshops and financial support for
cooperation bodies:
• to strengthen ties between decision-makers in the public or private sectors in
   Europe and in third countries;
• to foster contacts between the authorities responsible in third countries;
• to help to implement other cooperation schemes between the Community and
   third countries;
• to disseminate information on the energy situation in Europe.
In the case of cooperation in formulating energy policy in third countries and
energy analyses:
• to make a European contribution to formulation of energy plans and regulations
   in third countries.
In the case of training and information:
• to train members of the profession in third countries and make them aware of
   European points of view.
Target population
States, public energy services, businesses, individuals from third countries and
from the European Community.
 ---pagebreak--- 9.2      Grounds for the operation
Action at Community level is justified for the following reasons:
• only the Community can support European interests and undertakings without
    favouring any particular Member State;
• the Community as such is designated as the intermediary with third countries in
    contexts such as the G-24 or agreements concluded with some third countries
    which explicitly include energy in their scope;
• action at Community level will make it possible to complete the measures taken
    at the level of Member States and to strengthen their impact;
• the European Community can represent better the interests of the Member
    States as a whole;
• action at European Community level will make it possible to use expertise
    scattered between several Member States.
Compared with the Community's other international cooperation programmes,
SYNERGY provides a means of taking account of the Community's energy
interests with the aim of closer coordination of the programmes covering different
regions of the world.
9.3      Monitoring and evaluation of the operation
First, the officials responsible for each geographical region already manage,
monitor and evaluate, at their level, each project of which they are in charge.
Performance indicators selected
As SYNERGY is a programme of cooperation in formulating energy policies, it is
difficult to determine quantitative indicators of its impact.
Furthermore, action relating to energy policy influences              production or
consumption figures only in the medium or long term.
Nevertheless, it is possible to apply indicators corresponding to the two types of
objective mentioned in Section 9.1.
In the case of the general objectives:
• comparison of greenhouse gas emission levels with forecasts;
• country-by-country trends in the energy efficiency index;
• increase in local production, particularly the share taken by renewable sources;
• amount of European energy investment and exports;
                                                                                   6
 ---pagebreak---     • growth in energy exports from third countries, in relation to their domestic
       demand trends;
    • investments in interconnections between third countries and between Europe
       and third countries.
    In the case of the specific objectives of the schemes:
    • number of participants at conferences or meetings organised by SYNERGY
       plus, possibly, number of business contacts made and of measures taken to
       follow up suchf meetings;
    • number of countries drawing on European experience to formulate their energy
        policy;
    • number of members of the profession trained;
    • number of people informed about the projects;
    • cooperation schemes to follow up a SYNERGY project.
    Details andfrequency of planned evaluations
    The proposal for a Council Regulation provides for two reports, based on an
    assessment by independent experts.
    The first, after two years' activity, will focus primarily on implementation of the
    programme.
    The second, at the end of the programme, will also examine the results of the
    programme in the countries concerned.
    The projects funded will also be audited by independent experts.
    9.3      Elements for evaluation of cost-effectiveness
    To compare the figures with other programmes, allowance must be made for the
    fact that the projects are managed and monitored directly by officials from the Unit
    and that these tasks are not farmed out. Moreover, SYNERGY takes the form of
    Community initiatives and action (such as the Euro-Mediterranean Forum) which
    provide results that can be used by other programmes. This calls for greater
    involvement by officials for identification and negotiation of the projects.
10. ADMINISTRATIVE EXPENDITURE
    The annual decisions taken by the Commission on allocation of resources will
    make sure that the administrative resources required are effectively made available,
                                                                                         68
 ---pagebreak---         taking account, in particular, of any extra staff and funds granted by the budgetary
        authority.
        10.1    Impact on the number of staff
 Post                    Staff to be assigned to of whom                            duration
                         management         of     the
                         operation
                         permanent      temporary       existing       additional
                         staff          staff           resources      resources
                                                        within the
                                                       DG         or
                                                        department
                                                        concerned
 Officials         A     2.5            0.5             3
 or temporary B          1                              1
 staff             C     2                              2
 Other resources                         1 seconded 1 seconded
                                        national        national
                                        expert          expert
 Total                   5.5             1.5            7
         10.2   Total financial impact of the human resources
        The total annual cost of administration of the programme can therefore be
        estimated at 7 x ECU 103 000 = ECU 721 000.
         10.3   Other operating expenditure
 Budget heading                              Amount Method of calculation
 A-130 Mission expenses, travel 120 000 Estimate based on expenditure in the
 expenses and incidental expenditure            first        nine months of 1997.
 A-2510 Meeting specifically on               46 200    Two meetings per year with two
 international cooperation within the                   representatives per Member State,
 Framework Programme Committee                          based on an average cost "of ECU
                                                        770. These meetings should be held in
                                                        common with the meetings on the
                                                        other specific programmes.
                   Total                     166 200
The appropriations indicated are funded from the existing amount allocated to the
departments running the programme.
                                                10                                            69
 ---pagebreak---   EUROPEAN COMMISSION
                                 ANNEX IV
   PROPOSAL FOR A COUNCIL DECISION
                  adopting a
       multiannual programme for
the promotion of renewable energy sources
            in the Community
                (1998-2002)
                                          70
 ---pagebreak---    PROPOSAL FOR A COUNCIL DECISION ADOPTING A MULTIANNUAL
PROGRAMME FOR THE PROMOTION OF RENEWABLE ENERGY SOURCES
                        IN THE COMMUNITY - ALTENER II
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 130s (1) thereof,
Having regard to the proposal from the Commission,1
Having regard to the opinion of the Economic and Social Committee,2
Having regard to the opinion of the Committee of the Regions,3
Acting in accordance with the procedure laid down in Article 189c of the Treaty, in
cooperation with the European Parliament,4
Whereas Article 13 Or of the Treaty lays down that one of the objectives of Community
action is to ensure prudent and rational utilization of natural resources;
Whereas Article 129 of the Treaty lays down that health protection requirements shall
form a constituent part of the Community's other policies; whereas this programme
contributes to health protection;
Whereas, at its meeting on 29 October 1990, the Council announced its objective of
stabilising total C02 emissions by 2000 at the 1990 level in the Community as a whole;
whereas at its meetings in March and June 1997, the Council adopted as a negotiating
position for the Kyoto meeting under the Convention on Climate Change a reduction
in greenhouse gas emissions of 7.5% by 2005 and 15% by 2010 compared with 1990
levels;
                                                                                     71
 ---pagebreak--- Whereas to achieve significant reductions in C02 emissions in the Community greater
efforts are required, particularly in view of the fact that C02 emissions from energy
consumption in the Community are likely to increase by between 5 and 8% between
1995 and 2000, assuming normal economic growth; whereas it is, therefore, essential
to adopt additional measures;
Whereas a mechanism for monitoring C02 and other greenhouse gas emissions was
established by Council Decision 93/398/EEC of 24 June 1993;5
Whereas, at its meeting on 25 and 26 June 1996, the Council noted that in the
framework of negotiations seeking a protocol according to the Berlin Mandate, the
Second Assessment Report of the Intergovernmental Panel on Climate Change
(SARIPCC) had concluded that the balance of evidence suggests that there is a
discernible human influence on global climate change and had stressed the need for
urgent action at the widest possible level, noted that significant 'no-regrets'
opportunities were available and requested the Commission to identify which measures
have to be taken at Community level;
Whereas with the Green Paper of 11 January 19956 and the White Paper of
13 December 19957 the Commission communicated to the European Parliament and
the Council its views on the future of energy policy in the Community and on the role
that renewable energy sources should play;
Whereas in its resolution of 4 July 19968 the European Parliament calls on the
Commission to implement a Community action plan to promote renewable energy
sources;
Whereas with the Green Paper of 20 November 1996,9 Energy for the Future:
Renewable sources of energy, the Commission started the process of the development
and subsequent implementation of a Community strategy and an action plan on
renewable energy sources (RES);
Whereas Article 130a of the Treaty provides that the Community shall develop and
pursue its actions leading to the strengthening of its economic and social cohesion and
that, in particular, it shall aim at reducing disparities between the various regions and
especially the backwardness of the least-favoured regions; whereas those actions cover
inter alia the energy sector;
5
         OJNoL167, 9. 7. 1993, p. 31.
6
         COM(94)649 of 11.01.1995.
7
         COM(95)682ofl3.12.1995.
8
         A4-0188/96-EP 251.039.
9
         COM(96)576 final of 20.11.1996.
                                                                                         7O
 ---pagebreak--- Whereas by Decision 93/500/EEC of 13 September 199410 the Council adopted a
Community programme for the promotion of renewable energy sources (ALTENER)
aimed at reducing C02 emissions by increasing the market share of renewable energy
sources and their contribution to overall primary energy production in the Community;
whereas that programme ends on 31 December 1997;
Whereas the Community has recognised that the ALTENER programme represents an
important element of the Community strategy for reducing C02 emissions;
Whereas the Commission has presented a proposal11 for a Council Decision adopting a
multiannual programme for the promotion of renewable energy sources in the
Community (ALTENER II);
Whereas a multiannual framework programme for actions in the energy sector has
been implemented;
Whereas European Parliament and Council Decision No 1110/94/EC of
26 April 199412 established a fourth framework programme for research, technological
development and demonstration projects; whereas policy in the field of renewable
energy sources is an important instrument for the use and promotion of the new energy
technologies that the framework programme will develop; whereas the ALTENER II
programme is an instrument which complements that programme;
Whereas the Commission has presented to the Council and the European Parliament its
proposals relating to the 5th RTD Framework Programme;13
Whereas the increased use of renewable energy sources will have a positive effect both
on the environment and on security of energy supplies; whereas a high degree of
international cooperation is desirable to achieve the best results;
Whereas a strengthened ALTENER II programme represents an essential instrument
for developing the potential of renewable energy sources;
Whereas in implementing the programme, there should be close cooperation with other
Community actions and programmes also concerned with promoting renewable energy
sources;
Whereas it is politically and economically desirable to open the ALTENER II
programme to the associated Central and East European countries in accordance with
the conclusions of the European Council meeting in Copenhagen in June 1994,14 and
10
        OJ No L 235, 18.09.1993.
11
        COM(97)87 final of 12.03.1997.
 12
        OJNoL 126, 18.05.1994.
 13
 14
                                                                                       73
 ---pagebreak--- as outlined in the communication on this subject presented to the Council by the
Commission in May 1994,15 and also to Cyprus,
HAS ADOPTED THIS DECISION:
                                        Article 1
 1.   A five-year programme of measures and actions to promote renewable energy
      sources in the Community, called ALTENER II, hereinafter referred to as 'the
      programme", shall be implemented.
      The objectives of the programme shall be to:
      (a) help create the necessary conditions for the implementation of a Community
           action plan for renewable energy sources, and in particular the legal,
           socioeconomic and administrative conditions, and to
      (b) encourage private and public investments in the production and use of
           energy from renewable sources.
      These two objectives contribute to achieving the overall Community objectives
      and concerns of limiting C02 emissions, increasing the share of renewable
      energy sources in the energy balance, reducing energy import dependence,
      ensuring the security of energy supply, and fostering economic development,
      economic and social cohesion and regional and local development.
2.    Community financial support shall be granted under the programme for actions
      meeting the objectives of this Decision.
3.    The ALTENER II programme shall begin on 1 January 1998 and end on 31
      December 2002.
4.    The annual appropriations for the implementation of the programme shall be
      authorized by the budgetary authority within the limits of the financial
      perspectives.
                                        Article 2
The following actions and measures relating to renewable energy sources shall be
financed under the programme:
(a)   Studies and other actions, intended to implement and complement Community
      measures taken to develop the potential of renewable energy sources. These
      include the development of sectoral and market strategies, the development of
      norms and standards, grouped procurement and the analysis of the legal,
      socioeconomic and administrative conditions which are more favourable to the
15
        COM
                                                                                     74
 ---pagebreak---      market penetration of renewable energies and the preparation of appropriate
     legislation;
(b)  Pilot actions aimed at creating or extending infrastructures and instruments for
     the development of renewable energy sources in:
           local and regional planning,
           the tools for planning, design and evaluation,
           newfinancialand market instruments,
           information,
           education and training;
(c)  Measures proposed by the Commission to encourage the exchange of experience
      and know-how aimed at improving coordination between international,
      Community, national, regional and local activities; establishment of a centralised
      system for collecting and circulating information and know-how on renewable
      energy sources;
(d)  Measures to encourage the exchange of experience and know-how, proposed by
      an entity other than the Commission;
(e)   Targeted actions facilitating the market penetration of renewable energy sources
      and encouraging investment, by assisting the preparation, presentation and
      implementation of projects.
The aim of these targeted actions is to facilitate and accelerate investment in new
operational capacity for the production of energy from renewable sources by providing
financial support in order to reduce the peripheral and services costs of renewable
energy projects, and thus overcome the non-technical obstacles present.
This action shall promote, inter alia: access to specialized advice, analysis of market
prospects, choice of location of projects, application for construction and operation
permits, establishment of financing plan, preparation of calls for tender, training of
operators, and plant commissioning.
The targeted actions shall concern projects carried out in the following areas:
      biomass, including energy crops, fire wood, residues from forestry and
      agriculture, municipal waste,16 liquid biofuels and biogas,
      thermal and photovoltaic solar systems,
      passive and active solar systems in buildings,
 16
        Communication from the Commission on the review of the Community strategy for waste
        management, COM(96)399 final of 30.07.1996.
                                                                                            75
 ---pagebreak---     small scale (< 10 MW) hydroelectric projects
    wind power
    geothermal energy.
(f) Actions intended to:
         monitor the implementation of the Community strategy and action plan for
         the development of renewable energy sources,
         support initiatives taken in implementing the action plan, particularly with a
         view to promoting better coordination and greater synergy between actions,
         including all Community funded activities,
         monitor the progress achieved by the Community and its Member States
         with regard to the development of renewable energy sources,
         evaluate the impact and cost effectiveness of measures undertaken under this
         programme. This evaluation shall also take into account the environmental
         and social aspects.
                                        Article 3
1.  All costs relating to the actions and measures referred to in points (a), (c) and (f)
    of Article 2 shall be borne by the Community.
2.  The level of funding under this programme for the actions and measures referred
    to in points (b) and (d) of Article 2 may not exceed 50% of their total cost, the
    balance being made up from either public or private sources or a combination of
    the two.
3.  The level of funding under this programme for the actions and measures referred
    to in Article 2(e) shall be established annually for each of the targeted actions in
    accordance with Article 4(2).
                                        Article 4
1.  The Commission shall be responsible for the implementation of the programme.
2.  The conditions and guidelines applicable to funding for the actions and measures
    referred to in Article 2 shall be defined annually, regard being had to:
    (a) the priorities set out by the Community and the Member States in their
         programmes for the promotion of renewable energy sources,
    (b) criteria relating to the profitability and development potential of renewable
         energy sources and their effects on employment and the,environment, in
         particular the reduction of C02 emissions;
                                                                                          76
 ---pagebreak---       (c) for the actions referred to in point (e) of Article 2, the relative cost of the
           assistance, the new production capacity expected to arise and the extent of
           transregional and/or transnational benefits;
      (d) the principles established in Article 92 of the Treaty and the relevant
           Community guidelines on State aid for environmental protection.
                                         Article 5
The Commission shall be assisted by the committee referred to in Article 4 of the
Council Decision adopting a multiannual framework programme for actions in the
energy sector.
                                         Article 6
1.    During the second year of the programme, the Commission shall present a report
      to the European Parliament, the Council, the Economic and Social Committee
      and the Committee of the Regions, on the measures taken to promote renewable
      energy sources at the level of the Community and of the Member States, with
      reference in particular to the objectives set out in Article 1. This report shall be
      accompanied by proposals for any amendments to the programme which may be
      necessary in the light of those results.
2.    On expiry of the programme, the Commission shall assess the results obtained
      from the application of this Decision and the consistency of national and
      Community actions. It shall present a report thereon to the European
      Parliament, the Council, the Economic and Social Committee and the Committee
      of the Regions.
                                         Article 7
The programme shall be open to participation by associated Central and Eastern
European countries (CEEC) in accordance with the conditions, including financial
provisions, laid down in the additional protocols to the Association Agreements, or in
the Association Agreements themselves, relating to participation in Community
programmes. The programme shall also be open to participation by Cyprus on the
basis of additional appropriations, under the same rules as those applied to EFTA/EEA
countries, in accordance with procedures to be agreed with those countries.
                                         Article 8
This Decision cancels and replaces Council Decision (EC) No
                                         Article 9
This Decision is addressed to the Member States.
Done at Brussels,                                       For the Council •
                                                        The President
                                                                                           77
 ---pagebreak--- FINANCIAL STATEMENT
1.  TITLE OF THE OPERATION
    Energy framework programme (1998-2002)
    ALTENER II. Multiannual programme for the promotion of renewable energy
     sources in the Community
2.  BUDGET HEADING
    B4.1030
3.  LEGAL BASIS
    Council Decision 93/500/CEE of 13 September 1993 (OJ No. L 235 of 18.9.93,
    p. 41). ALTENER I Programme.
    Proposal for a Council Decision, presented on 22 May 1997, concerning a
    multiannual programme for the promotion of renewable energy sources in the
    Community (ALTENER II) (OJNo C 192, 24.06.1997, p. 16).
    Proposal for a Council Decision adopting a framework programme for actions in the
    energy sector (1998-2002).
4.  DESCRIPTION OF THE OPERATION
    4.1.      General objective
    The Commission considers that a continuation of the ALTENER programme is
    necessary. It makes an essential contribution to an increased use of environmentally
    friendly renewable energies and is an important part of the Community's strategy to
    reduce CO2 emissions. This objective is in conformity with Articles 130r and 130s of
    the Treaty.
    Renewable energy's contribution to the primary energy needs of the European
    Community is presently just below 6% and amounts to about 70 Mtoe. In its
    Communication on "Energy for the Future : Renewable Energy Sources. Green
    Paper for a Community Strategy", the Commission proposes a significant increase in
    the use of renewables for the year 2010. An indicative target of a doubling of the
    share of renewable energies by 2010 was settled upon during the process of adopting
    the Green Paper. The Commission is preparing a proposal for a Communication on
    the White Paper. "Community strategy for renewable energy sources up to 2010",
    together with an action plan. ALTENER II has an important role to play in the
    implementation and follow-up of this strategy and its action plan.
    The purpose of the ALTENER programme is to make a meaningful contribution to
    the achievement of this Community objective. Increased use of renewable energies
    will also contribute to social cohesion within the Community, promote the
    valorisation of local energies and accelerate the penetration of new energy
                                                                               78
 ---pagebreak---    technologies (many of which have been developed with Community funding) into the
   marketplace.
   In the light of the considerations mentioned above, the Commission is proposing a
   continuation of the ALTENER programme which will embody many of the
   recommendations made by a team of independent experts and the conclusions of the
   ALTENER Conference as well as the experience gained by the Commission in the
   operation of the ALTENER programme and other energy actions.
   4.2.      Period covered and arrangements for renewal or extension
   The action covers a period offiveyears from 1 January 1998 to 31 December 2002.
5. CLASSIFICATION OF EXPENDITURE
   NCE/DA
6. TYPE OF EXPENDITURE OR REVENUE
   The budget proposed for ALTENER II is ECU 81.1 million.
   The budget for ALTENER I was originally ECU 40 million but the allocation was
   increased by the end of the programme to some ECU 46.4 million. 72% of the total
   budget was spent in the years 1994, 1995 and 1996. Year 1993 had in practice only
   four months - the programme was adopted on 18.09.1993 - and in 1997 the budget
   available is ECU 8.2 million.
   ALTENER II will be composed of six types of actions and measures concerning
   renewable energy sources:
   A. EXTENSION OF ALTENER I ACTIONS :
   (a) studies and other actions intended to implement and complement Community
        measures taken to develop the potential of renewable energy sources, such as
        sectoral and market strategies, the development of norms and standards,
        grouped procurement and legislation;
   (b) pilot actions aimed at creating or extending infrastructures and instruments for
        the development of renewable energy sources in:
        -  local and regional planning,
        -  the tools for planning, design and evaluation,
        -  new financial and market instruments,
        -   information,
        -  education and training;
    (c) measures proposed by the Commission to encourage exchanges of experience
        and knowhow; establishment of a centralised system. for collecting and
        circulating information on renewable energy sources;
                                                                                     79
 ---pagebreak--- (d) measures to encourage exchange of experience and knowhow proposed by an
     entity other than the Commission.
B. NEW ACTIONS TO PROMOTE PENETRATION OF RENEWABLES
(e) targeted actions facilitating the penetration of renewable energy sources and
     encouraging investment in the following areas:
     - biomass, including energy crops, fire wood, residues from forestry and
        agriculture, municipal waste, liquid biofuels and biogas,
     - thermal and photovoltaic solar systems,
     - passive and active solar systems in buildings,
     - small scale hydroelectric projects,
     - wind power,
     - geothermal energy.
C. NEW ACTIONS               IMPLEMENTING           THE     COMMUNITY       RES
     STRATEGY
(f) Actions intended to:
     - monitor the implementation of the Community strategy and action plan
        for the development of renewable energy sources;
     - support initiatives taken to implement the action plan particularly with a
        view to promoting greater synergy between actions;
     - monitor the progress achieved by the Community and its Member States
        with regard to the development of renewable energy sources;
     - evaluate measures taken under this programme.
Financial support will be:
     - up to 100% for the expenses relating to the actions described in
        paragraphs a), c) and f).
     - between 30% to 50% of the total cost for actions described in paragraphs
        (b) and (d), the remainder being borne by the Member States or by
        private companies.
The level of financial support for the various actions under Article 2(e) will be
defined annually.
The actions selected will be entered under an indicative programme with annual
fixing of priorities and guidelines.
Annual guidelines will be submitted for opinion to an advisory committee made
up of representatives of the Member States.
Any financing will be the subject of a contract between the Commission and the
person responsible or the coordinator of thefinancedaction.
                                      10
                                                                                  Ï0
 ---pagebreak--- 7. FINANCIAL IMPACT
   The annual appropriations for the implementation of the programme will be
   established by the budgetary authority within the limits of the financial
   perspectives. The amount will be fixed annually by the budgetary authority (see
   Table 7.2).
   The proposed indicative budget is ECU 81 100 000.
   The amounts proposed are subject to the limits of the financial perspectives
   currently in force. When the next financial perspectives are drawn up, the
   funding of priority actions to promote renewable energy sources could be
   reconsidered.
   7.1.      Method of calculating total cost of operation (definition of unit
             cost)
   The following detailed breakdown and explanation by action indicate how the
   total cost of the operation has been calculated.
   Actions under Art. 2a) Implementing and complementing Community
   measures taken to develop the potential of RES
   Sectoral studies: the past average cost has been taken as the basis considering,
   however, that all the studies have now to include all 15 Member States and the
   CEECs. (As regards the Member States, the studies were carried out on the
   basis of EUR-12 and have now to be extended to EUR-15).
   Harmonisation: same approach as for sectoral studies. The harmonisation of,
   among other things, authorisation procedures and conditions for connection to
   the grid as well as measures in force in the Member States is analysed on the
   basis of the projects in implementation of the strategy.
   Standards: the past average cost ~ ECU 500.000/mandate.
                                         H
                                                                                    81
 ---pagebreak---                                                                                 inkECU
Breakdown                  1998       1999       2000       2001      2002    I Total
Art. 2a) Implementing and complementing          Community measures taken to develop
            the potential of RES
* Studies on sectoral 500             500        1000       1000      1000       4 000
and market strategies
*      Background for 1000            500        1 500      1 500     1 500      6 000
harmonisation
* Development of 500                  1000       1 500      1 500     1 500      6 000
norms and standards
Subtotal Art. 2a           2 000      2 000      2 000      2 000     2 000      10 000
      Actions under Art. 2b) Infrastructures and instruments for the
      development of RES
      Infrastructures and planning: At least one project per year for 10 countries and 2
      for 5 countries in the three types of infrastructures. Local and regional planning
      and training and information infrastructures must be improved.
                                                                                inkECU
Breakdown                        1998      1999      2000      2001     2002 || Total
Art. 2b) Actions on infrastructures anc instruments for the development of RES
* Projects relating to 1 500               1 600     1 900     1900     1 900 8 800
planning and tools
* Projects developing tools 1 000          1 100     1 000     1000     1 000     5 100
for design, assessment and
evaluation
* Projects on new financial 1 000          1 100     1000      1 000    1 000     5 100
and market instruments
*       Infrastructures     for 1 000      1 100     1 100     1 100    1 100     5 400
information, education and
training
Subtotal Art. 2b                 4 500    4 900      5 000     5 000    5 000     24 400
      Actions under Art 2c) and Art. 2d) Dissemination of information
      Community events and publications: Four contractors' meetings on
      infrastructures and four on sectoral items. Promotional expenses, fact-sheets,
      brochures, etc. Promotion of the "campaign for take-off'.
      Temporary networks for specific tasks: In ALTENER I the three biomass
      networks were financed at only 30% and the cost was ECU 1.2 million in 95 and
      ECU 1 million in 96. The action has to be extended to other energy sources and
      the rate of funding increased.
      Centralised system for collecting and circulating information (creation of
      "Agores" virtual centre): Being a new action, estimated costs have been
                                            12
                                                                                         82
 ---pagebreak---      calculated from the experience of the EnR network on collecting and processing
     information from Member States for ALTENER and its cost, and extrapolating,
     taking into account the increased number of countries, tasks and items to be
     included. The action will gradually be developed and extended to other targeted
     countries and activities.
     Support to national, regional and local information actions in collaboration with
     Member States local authorities, etc.: Support to at least two national events per
     year (max. 50% funding).
     Support to existing networks, associations and other parties: Almost all sectoral
     associations or federations hold one event per year and, for some of them, a
     world event every two years. Financial support could be from 30.000 to
      100.000. Support to newsletters or information actions could also be given.
                                                                              inkECU
Breakdown                        1998     1999     2000      2001     2002     || Total
Art. 2c) + 2d) Dissemination of information, including co- inanced actions
* Community events and 500                400      500       500      500         2 400
publications, promotion of
"campaign for take-off'
* Temporary networks for 750              750      750       750      750         3 750
specific tasks on biomass,
waste, liquid, biofuels, solar
thermal, solar PV, buildings,
etc.
* Centralised system for 750              750      750       750      750         3 750
collecting and circulating
information
* Support to national, 500                500      500       500      500         2 500
regional       and        local
information      actions      in
collaboration with Member
States, local authorities,
including EEA, CEECs,
Cyprus
* Support        to    existing 500       400      500       500      500         2 400
networks, association and
other parties
Subtotal Art. 2c) and 2d)        3 000    2 800    3 000     3 000    3 000       14 800
     Actions under Art. 2e) Targeted actions promoting the penetration of RES
     and encouraging investment
     The financing will be for peripheral activities assisting the penetration of
     renewables and facilitating investments. The amounts proposed for this action
                                          13
                                                                                         83
 ---pagebreak---        have been based on the calculations provided by industry taking into account
       projections of development of the various sectors and estimates of the varying
       peripheral costs from industry. The contribution from this programme to these
       peripheral costs will be defined by the Commission during the call for tenders.
       This action has a very important role to play in the implementation of a
       "campaign for take-off' that the Commission is planning under the White Paper
       on renewables, one aim of which is to fill the gaps after the demonstration
       projects and encourage investment.
                                                                             inkECU
 Breakdown                        1998     1999     2000      2001   2002    | Total
  Art. 2e) Targeted actions promoting t  îe penetration of R ES
  * Launching annual calls for 100         100       100      100    100       500
 tender/proposals            and
  modifications               or
  reorientations
  * Targeted actions:
  -Area 1: biomass, biogas, 1 000          1000      1 500    1 500  1 500     6 500
 biofuels                        750       1000      1 500    1 500  1 500     6 250
  -Area 2: solar thermal and      500      1 000     1 100     1 100 1 200     4 900
 PV                               500      500      500       500    500       2 500
  -Area 3 : solar in buildings    500      500      500       500    500       2 500
  -Area 4: small hydroelectric 250         300      300       300    300       1 450
 -Area 5: wind
 -Area 6: geothermal
  Subtotal Art. 2e)              3 600    4 400     5 500     5 500  5 600     24 600
                                                                             inkECU
Breakdown                        1998     1999      2000      2001   2002 | Total
Art. 2f) Implementing Community strategy and action plan for the development of
RES
* Monitoring of Member 500                500       500       500    500       2 500
States and         Community
strategy measures; survey
on action plan progress
* Support for initiatives 250             450       450       450    450       2 050
taken to implement the
Action Plan
* Monitoring progress on 300              300       300       300    300       1 500
RES in the Community, in
Member         States       and
associated           countries;
statistics
* Ongoing evaluation and 250              250       250       250    250       1250
follow-up of the programme
TOTAL                            1 300    1 500     1 500     1 500  1 500     7 300
                                            14
                                                                                       84
 ---pagebreak---     7.2.         Itemised breakdown (commitment appropriations)
                                                                       inkECU
Breakdown                        1998   1999   2000   2001      2002    Total
art.2 a) Implementing and 2 000         2 000  2 000  2 000     2 000   10 000
complementing Community
measures taken to develop
the potential of RES
art.2       b)     Actions on 4 500     4 900  5 000  5 000     5 000   24 400
infrastructures             and
instruments          for     the
development of RES
art.2         c)        and   d) 3 000  2 800  3 000  3 000     3 000   14 800
Dissemination                 of
information
art.2 e) Targeted actions 3 600         4 400  5 500  5 500     5 600   24 600
facilitating penetration of
RES        and      encouraging
investment
art.2 f) - Monitoring of         1 300  1 500  1 500  1 500     1 500   7 300
strategy       and     progress;
evaluation and follow-up of
the programme and actions
Total                            14 400 15 600 17 000 17 000    17 100  81 100
                                          15
                                                                               85
 ---pagebreak--- Comparison investmentt/peripheral costs
 RES          Overall      • Peripheral Peripheral Estimate      Estimate     Installed
              unit cost     costs as costs in of eligible        of (non- capacity
                            %           ECU         peripheral   eligible)
                                                    costs on     investmefi
                                                    basis of     ts
                                                    planned
                                                    resources
              ECU/kW %                  ECU/kW MECU              MECU         MW
 Biomass      800           10          80           18          180          225
 Solar PV 4 000             20          800         6            30           7.5
 Solar        250/m2        10          25/m2       8            80           320 mio
 thermal      100           20          20          8            40           m2
 Solar in 1 100             25          275         4            14           400
 buildings    800           15          120         4            26.5         14.5
 Small        2 000         10          200         2            20           33.5
 hyrdo                                                                        10
 Wind
 Geotherm
 al
 TOTAL                                              50           392.5
      Actions under Art 2f) Implementation of the Community RES strategy and
      action plan
      Monitoring of Member States and Community strategy measures; survey on
      action plan progress: Monitoring mechanisms have to be built up on a
      progressive basis based on national institutions (Energy agencies) for which the
      cost could be estimated at ECU 200.000-300.000 per year. Surveys are
      calculated on an average ECU 15.000 per country and year basis. Gradual
      extension to CEECs.
      Support of initiatives under the action plan: The costs are calculated on average
      ECU 15,000 per country per year, plus ECU 25,000 for coordination. Gradual
      extension to CEECs.
      Monitoring progress in the Community and in Member States with regard to the
      development of RES: Surveys for statistical purposes have been calculated by
      the Statistical Office on a ECU 20.000 per country and year basis. Gradual
      extension to CEECs and to other sectors: employment, training, etc.
      Ongoing evaluation and follow-up of the programme: The costs are calculated
      on average ECU 15.000 per country per year, plus ECU 25.000 for
      coordination. Gradual extension to CEECs and increase as the programme and
      strategy progress.
                                            16
                                                                                        86
 ---pagebreak---       7.3.       Operating expenses for studies, experts, meetings, etc. included in
                 partB
                                                                                    inkECU
                               Breakdown                                              Budget
    - Studies                                                            50 000                             '
   *- Experts and evaluators meetings                                     25 000
    - Conferences and congresses                                         25 000
    - Information and publication
    TOTAL                                                                250 000
       7.4.      Schedule of commitment appropriations
                              1998          1999            2000      2001          2002        TOTAL
    Commitment                14 400        15 600          17 000    17 000         17 100     81 100
    appropriations
      FRAUD PREVENTION MEASURES; RESULTS OF MEASURES
       TAKEN
       The contracts awarded are paid on the basis of actual expenditure (except for
       study expenses which are flat-rate and paid on the basis of the accepted results).
      Most of the costs associated with the ALTENER projects are not linked to
       investments, so in most cases they are paid on the basis of accepted results.
       ELEMENTS OF COST-EFFECTIVENESS ANALYSIS
       9.1.      Specific objectives of the action to be taken under ALTENER II
       The Community will implement a five-year programme of measures and actions
       to promote renewable energy sources in the Community. The objectives of this
       programme will be to:
       Specific Objectives                       Means                       Target Population
Implement and complement           Sectoral market strategies        Decision makers, industry, promoters
Community measures to develop
the potential of RES
Harmonise the RES market           Development of norms and          Industry, producers, users
                                   standards and harmonisation of
                                   legal,     socio-economic     and
                                   administrative conditions
Increase confidence and RES National, regional and local             National, regional and local authorities,
market penetration, and improve planning                             decision makers
the sectors global maturity and
competitiveness by supporting Development of planning, design,       Decision makers, promoters, industry,
infrastructures                    assessment and evaluation tools   producers
                                   and methodologies
                                              17
                                                                                                  87
 ---pagebreak---                                      Development of new financial and     Financial institutions, promoters,
                                     market instruments                   investors, producers, users
                                     Information infrastructures          Decision makers, users
                                     Education        and        training University and technical students,
Increase confidence and RES infrastructures.                              retraining courses for workers,
market penetration by improving                                           technicians, architects, engineers,
dissemination and co-ordination                                           schools, users
between               international, Community, national and regional
Community, national, regional and events and publications                 Decision makers, industry, promoters,
local experiences and activities                                          developers, producers, users
                                     Temporary and specific networks Promoters, developers
                                     for exchanging know-how
                                     Centralised system for collecting International, national, regional and
                                     and circulating information          local authorities, policy and decision
Accelerate      investment       by                                       makers,        industry,       promoters,
increasing operational capacity for                                       developers, producers, users
the production of energy from RES
                                     Support to existing networks         Industry,     producers     and    users
Implement      Community        RES                                       associations
strategy                             Financial support for projects in
                                     order to reduce peripheral and       Public and private promoters, investors,
                                     service costs                        producers and users
                                     - Assessment of Member States
                                     and Community strategy measures      Community institutions, Member States
                                     and surveys on action plan           authorities, policy and decision makers
                                     progress
                                     - Implementation of the Action       Community institutions, Member States
                                     Plan, particularly with a view to    authorities
                                     promoting synergy with other
                                     Community and Member States          Member States authorities, policy and
                                     actions.                             decision makers, industry, promoters,
                                           - Monitoring of progress on    producers and users
                                     RES in the Community and
                                     Member States
      9.2.      Grounds for the operation
      Costs
      If we are to achieve a significant improvement in the share of RES in gross
      internal energy consumption, the supplementary investments necessary as
      estimated in the TERES II report could be ECU 180 billion up to 2020.
      Financing of such levels from the budgets of the European Union and from the
      Member States is excluded. The only possibility is independent financing by all
      the economic operators acting in a Community framework. The Commission
      intervenes by creating harmonized market conditions and supporting actions
      where additionality is clearly established or which have a multiplier effect.
                                                 18
                                                                                                        88
 ---pagebreak---  The expected results are:
      Improvement in the quality of RES in the market
      Increase in confidence of promoters and investors in RES
      Increase in confidence in RES for users and consumers
      Appropriate solutions related to specific conditions and adequate
      infrastructures
      Adequate access to RES in the market
      Implementation of large-scale RES projects
      Effective monitoring of RES strategies in place
      Better complementarity between actions
 9.3.      Monitoring and evaluation of the action
 For the purposes of evaluation and establishment of selection criteria for the
 projects, the Commission is assisted by an Advisory Committee composed of
 representatives of the Member States and national experts. For actions under
 Article 2(e) a technical group derived from the Advisory Committee will meet
 annually.
 Selected performance indicators:
Global indicators:
      reduction of CO2 emissions;
      increase in the share of renewable energies in the gross domestic
      consumption of the Community
      increase in energy production capacity from renewable sources
      progress on the implementation of the Community RES strategy and action
       plan in the EC and in Member States.
 Specific indicators:
       number of norms and standards developed (art. 2a)
       number and scope of financial and market instruments that increase
       confidence (art 2a and b)
       number and scope of dissemination products and activities that increase
       confidence (art. 2c and d)
       number and type of infrastructures operating (art. 2b) (by survey)
       number and scope of local, regional and national plans (art. 2b)
       scope and groups targeted by promotion campaigns or information
       activities (art 2c and d) (by survey)
       new capacities established (art 2e) (see point 7.1 art. 2e)
       success rate of targeted projects (art. 2e).
       rates of SMEs involved in the projects (art. 2e)
       measures implemented in Member States (art 2f).
                                        19
                                                                               89
 ---pagebreak---     A monitoring system will be designed which will indicate how data on the listed
    indicators will be gathered and how the results will be verified.
    *     The peripheral costs vary according to the technologies. The level of
    Community support for eligible costs connected with targeted actions (art. 2) is
    determined annually for each technology in accordance with art. 3.3 and 4.2.
    Methods and periodicity of the evaluation envisaged.
    The Commission continuously assesses the development of renewable energy in
    the Member States and submits a report periodically to Council and Parliament.
    In addition, the Commission will make regular reports to the ALTENER
    Advisory Committee which is made up of representatives of the Member States
    and which meets three or four times a year.
    The Commission engaged a team of independent consultants to carry out an
    evaluation of the ALTENER I programme. The new ALTENER II programme
    incorporates a large number of the recommendations put forward by this group
    of experts. The Commission also established a report on the results achieved at
    the end of the third year of the ALTENER programme. This report will be
    forwarded to the Council and to the European Parliament, in accordance with
    Article 8 of the Council Decision of 13 September 1993 (93/500/EEC).
    During the second year of ALTENER II an evaluation of the programme will be
    initiated so that an interim report on the results achieved can be presented before
    a new budgetary framework is proposed.
10. ADMINISTRATIVE IMPACT
    The effective mobilisation of the necessary administrative resources will result
    from the annual Commission decision on the allocation of resources, taking into
    account in particular manpower and the additional amounts which will be
    granted by the budgetary authority.
     10.1     Impact on staff requirements
    The ALTENER programme develops Community strategy for renewable energy
    sources and is the only Community programme dedicated solely to promoting
    the penetration of renewable energy sources. The administrators responsible for
    the technical management of the contracts concerning pilot projects, studies,
    standards, dissemination of information and monitoring of specific networks are
    at the same time in charge of preparing Commission communications, legislative
    proposals to promote the penetration of renewable energy sources and the
     preparation, follow up and monitoring of Community strategy and the action
     plan. The procedures and discussions leading to the legislative proposals
     presented to the other institutions of the Union may be seen as a laborious
     exercise taking up around 30% of staff working time. The remaining 70% is
     spent on the technical management of projects funded under the ALTENER
     programme (in October 1997, the number of contracts under way was around
     190). ALTENER activities concern seven major energy sectors - biomass, small
                                           20
                                                                                        O
                                                                                          0
 ---pagebreak---       hydroelectric wind power, solar thermal, solar PV, passive solar in buildings and
      geothermal - and four areas for pilot projects - local and regional planning,
      infrastructures for information, education and training, new financial and market
      instruments and the development of tools for the design and follow up of the
      evaluation.
      For the sound management of the ALTENER programme, it is essential that at
      least one person should be responsible for each sector in order to be able to
      develop sectoral strategies properly and have an overview of all activities.
Types of post            Manpower to                     of which                       duration
                         be assigned to
                         the
                         management
                         of the action
                         Permanent        Temporary     by the use of   by recourse to
                         posts            posts         the existing    additional
                                                        resources       resources    or
                                                        within    the   within the DG
                                                        DG
Officials      or A      8.5                            6               2.5
temporary          B     2.5                            1.5             1
staff              C     4.5                            2               1.5
Other                                     2 END                         2 END           5 years
resources                                 2 experts     2 interim       2 experts
                                          2 interim
       10.2      Overall financial impact of the additional human resources
      The additional overall cost for administering the programme may therefore be
      estimated at:
      Officials:
       5 x 5 years x ECU 103 000 x 0.70 (see point 10.1) =        ECU 1 802 500
      Experts: (AO-1178)
       2 x 5 years x ECU 120 000 =                                ECU 1 200 000
       END: (AO-1520)
       2 x 5 yearsxECU40 000 =                                    ECU 400 000
       TOTAL =                                                    ECU 3 402 500
                                            21
                                                                                        31
 ---pagebreak---      10.3     Other operating expenditure arising from the action
Budget heading               Annual amounts               Method of calculation
(no title)
A-1300 Mission expenses, ECU 130 000                      Meetings of contractors
travel expenses and                                       for each part of the
incidental expenditure                                    actions,   follow-up    of
                                                          projects
A-2510 Specific meetings     ECU 108 000                  ECU 900 x 30 persons x
for renewal of members of                                 four meetings
framework programme
committee (four times a
year)
Total                        ECU 238 000
     The total cost for the entire duration of the programme will be 238 000 x 5 =
     ECU1 190 000.
                                                      #
     The appropriations indicated are financed from the existing allocations for the
     departments administering the programme.
                                          22                                         32
 ---pagebreak--- EUROPEAN COMMISSION
                            ANNEX V
  PROPOSAL FOR A COUNCIL DECISION
              adopting a
   MULTIANNUAL PROGRAMME
    FOR THE PROMOTION OF
      ENERGY EFFICIENCY
            (1998-2002)
 ---pagebreak--- THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 130s(l) thereof,
Having regard to the proposal from the Commission,1
Having regard to the opinion of the Economic and Social Committee,2
Having regard to the opinion of the Committee of the Regions,3
Acting in accordance with the procedure laid down in Article 189c of the Treaty,4 in
cooperation with the European Parliament,
Whereas Article 13 Or of the Treaty states that one objective of the Community policy on
the environment shall be to ensure a prudent and rational utilisation of natural resources;
Having regard to Council Decision No. 736/97 of 16 December 1996 concerning a
multiannual programme for the promotion of energy efficiency in thé Community -
SAVE II;5
Whereas at its meeting on 29 October 1990 the Council set an objective of stabilising total
CO2 emissions by the year 2000 at the 1990 level in the Community as a whole; whereas
at its meetings in March and June 1997 the Council adopted as its negotiating position for
the Kyoto meeting under the Convention on Climate Change a 7.5% reduction in
greenhouse gas emissions by 2005 and a 15% reduction by 2010 in relation to 1990 levels;
Whereas to achieve significant reductions in Community CO2 emissions further efforts will
have to be made, particularly since CO2 emissions due to energy consumption are
expected to increase by 5 to 8% between 1995 and 2000, assuming normal economic
growth; whereas, therefore, additional measures are indispensable;
Whereas Decision 93/389/EEC6 established a monitoring mechanism of Community C02
and other greenhouse gas emissions;
Whereas the Commission, in its communication of 8 February 1990 on energy and the
environment, highlighted energy efficiency as the cornerstone of. future efforts to reduce
the negative impact of energy on the environment;
5
     OJL 335, 24.12.1996
6
     OJL 167, 9.7.1993, p.31.
                                                                                            94
 ---pagebreak--- Whereas improvement in the management of energy is urgently needed in order to
contribute to the protection of the environment, to a better security of energy supply and
to sustainable development;
Whereas the Commission has communicated to the Council and the European Parliament,
by means of the Green paper of 11 January 1995 and the White Paper of 13 December
1995, its views on the future of energy policy in the Community, and the role of energy-
saving and energy efficiency measures;
Whereas Article 130a of the Treaty provides that the Community should develop and
pursue its actions leading to the strengthening of its economic and social cohesion, and
that it should, in particular, reduce disparities between the levels of development of the
various regions and the backwardness of the least-favoured regions; whereas energy
should be integrated into that effort;
Whereas, by Decision 91/565/EEC,7 the Council adopted a Community energy efficiency
programme (SAVE) aimed at strengthening energy efficiency infrastructures within the
Community; whereas that programme expired on 31 December 1995;
Whereas the Community recognised the SAVE programme as an important element of the
Community's C02 reduction strategy; whereas the communication of the Commission of 8
May 1991 on the European Community's energy programming activities at regional level,
the conclusion of the Council on this communication, and the Resolution of the European
Parliament of 16 July 1993 stated that those activities should be pursued, amplified and
utilised as a support for the energy strategy of the Community; whereas this initiative for
regional actions should now be totally incorporated into a new SAVE II programme;
Whereas, by Decision No 1110/94/EC of the European Parliament and of the Council,8 a
fourth framework programme for actions in technological research, development and
demonstration was established; whereas energy efficiency policy constitutes an important
instrument for the use and promotion of the new energy technologies that the framework
programme will establish; whereas the SAVE II programme represents a policy instrument
which complements this programme;
Whereas the Commission has presented to the European Parliament and the Council its
proposals for the 5th RTD Framework Programme;9
Whereas the SAVE II programme aims at improving energy intensity of final consumption
by a further one percentage point per annum over that which would have been otherwise
attained;
Whereas at its meeting on 15 on 16 December 1994 the Council stated that the target of
stabilising C02 emissions can only be achieved by a co-ordinated package of measures to
import energy efficiency and the rational use of energy which are based on supply and
demand at all levels of energy production, conversion, transport and consumption and to
7
     OJL 307, 8.11.1991, p.34.
8
     OJL 126, 18.5.1994, p.l
9
     COM(97)
                                                                                            95
 ---pagebreak--- exploit renewable energies, and that local energy management programmes are amongst
these measures;
Whereas, in its opinion on the Commission's Green Paper on energy policy, the European
Parliament called for the formulation of objectives and a common programme for energy
efficiency and savings compatible with the objectives concerning the emissions of
greenhouse gases as agreed in Rio de Janeiro (1992) and Berlin (1995), called for a SAVE
II programme and requested that the Commission clarify the role which it intends to play
in energy savings and efficiency by creating practical projects;
Whereas improved energy efficiency will have a positive impact on both the environment
and the security of energy supplies which are global in nature; whereas a high level of
international cooperation is needed to produce the most positive results;
Whereas between 180 and 200 million tonnes of C02 emissions could be avoided by the
year 2000 by an improvement of 5 % in the energy intensity of final demand additional to
the conventional expectations;
Whereas the SAVE II programme is an important and necessary instrument for promoting
increased energy efficiency;
Whereas in order to prevent duplication and to achieve synergy, care should be taken in
implementing the programme to ensure close cooperation with other Community
programmes linked directly with energy efficiency promotion;
Whereas it is politically and economically desirable to open the SAVE II programme to
the associated Central and Eastern European Countries in accordance with the
conclusions of the European Council meeting in Copenhagen in June 1994 and as outlined
in the Commission communication to the Council on the subject in May 1994, and to the
associated Mediterranean Countries and Cyprus;
Whereas, in order to ensure that Community aid is used efficiently, the Commission must
ensure that projects are subject to thorough prior appraisal and shall systematically
monitor and evaluate the progress and results of supported projects;
Whereas a multiannual programme of action in the energy sector is being implemented,
HAS ADOPTED THIS DECISION:
                                           Article 1
 1.      The Community shall implement, within the Energy Framework Programme, a
 multiannual specific programme for the preparation and implementation of schemes and
 measures in a cost-effective manner in order to promote energy efficiency within the
 Community. The general overall objectives of this programme shall be:
 (a)     to stimulate energy efficiency measures in all sectors;
 (b)     to encourage investments in energy conservation by private and public consumers
         and by industry;
 (c)     to create the conditions for improving the energy intensity of final consumption.
                                                                                           36
 ---pagebreak--- 2.       Community financing shall be provided under the 'SAVE II programme to
promote energy efficiency in the Community', hereafter referred to as 'the programme',
for actions which fall within the objectives of this Decision.
                                            Article 2
Under the programme, financing shall be provided for the following categories of energy
efficiency schemes and measures:
(a)      studies and other related measures designed to implement and supplement
Community schemes (such as voluntary agreements, mandates to standardisation bodies,
cooperative procurements and legislation) for improving energy efficiency, studies
concerning the effects of energy pricing on energy efficiency, and studies with a view to
establishing energy efficiency as a criterion within Community programmes;
(b)      targeted sectoral pilot schemes aimed at speeding up investment in energy
efficiency and/or improving energy use patterns, to be carried out by public and private
firms or organisations and by existing Community-wide networks or temporary
Community-wide groupings of organisations and/or firms set up to carry out these
schemes;
(c)      measures proposed by the Commission for fostering exchanges of experience
aimed at improving coordination between international, Community, national, regional
and local activities, using appropriate means of disseminating information;
(d)      measures such as those described in (c) above but proposed by entities other than
the Commission;
(e)      monitoring energy efficiency progress in the Community and in each Member
 State; ongoing evaluation and monitoring of the schemes and measures carried out under
the Programme;
 (f)     specific measures to improve energy management at regional and urban level with
 a view to achieving greater cohesion between Member States and regions in the field of
 energy efficiency.
                                            Article 3
 1.      All the costs relating to the schemes and measures referred to in Article 2 (a), (c)
 and (e) shall be borne by the general budget of the European Communities.
 2.      The level of funding for the schemes and measures referred to in Article 2 (b), (d)
 and (f) shall be set at a maximum of 50 % of their total cost.
 3.      The balance of the funding of the schemes and measures referred to in Article 2
 (b), (d) and (f) may be made up from either public or private sources or from a
 combination of the two.
                                            Article 4
 1.      Implementation of the programme shall begin on 1 January 1998 and terminate on
          31 December 2002.
                                                                                          37
 ---pagebreak--- 2.       The annual appropriations shall be authorised by the budgetary authority within
         the limits of the financial perspectives.
                                               Article 5
 1.      The Commission shall be responsible for the financial execution and
implementation of the programme. The Commission shall also ensure that action under
this programme is subject to prior appraisal, monitoring and subsequent evaluation, which,
on completion of the project, shall include assessment of impact, implementation and
whether their original objectives have been achieved.
                              «
2.       The selected beneficiaries shall submit reports to the Commission on a six-monthly
basis and on completion.
3.       The conditions and guidelines to be applied for the support of all actions and
measures referred to in Article 2 shall be defined each year taking into account:
         the cost effectiveness criteria, the savings potential and environmental impact, in
particular the reduction of CO2 emissions,
         the list of priorities referred to in Article 7,
         the cohesion of Member States in the field of energy efficiency.
The Committee referred to in Article 6 shall assist the Commission in defining these
conditions and guidelines.
                                               Article 6
The Commission shall be assisted, for the purposes of implementing the programme, by
the Committee referred to in Article 4 of the Council Decision concerning a multiannual
framework programme for action in the energy sector.
                                               Article 7
The Commission shall draw up annually a list of priorities for funding under the
programme. This list shall take into account complementarity between the SAVE II
programme and the national programmes on the basis of annual information in a summary
form supplied by each Member State. Priority shall be given to those areas where such
complementarity is greatest.
The committee referred to in Article 6 shall assist the Commission in defining the list of
priorities.
                                               Article 8
1.       After each year of the programme, the Commission shall present to the European
Parliament and to the Council a progress report together with proposals concerning any
changes in the guidelines, defined in accordance with Article 5(3), which may prove
necessary in the light of the previous year's results.
2.       After the third year of the programme, the Commission shall present a report to
the European Parliament and to the Council on the energy efficiency measures taken at
Community and Member State level and on the results achieved, with particular reference
                                                                                             38
 ---pagebreak--- to the objectives outlined in Article 1. The report shall be accompanied by proposals for
any amendments to the programme which may prove necessary in the light of those
results.
3.       On expiry of the programme, the Commission shall make an overall assessment of
the results achieved by applying this Decision, and of the coherence between national and
Community measures. It shall present a report thereon to the European Parliament, the
Council, the Economic and Social Committee and the Committee of the Regions, stating
in particular how far the objective outlined in Article 1 has been achieved.
                                           Article 9
The programme shall be open to the participation of associated Central and Eastern
European countries in accordance with the conditions, including financial arrangements,
agreed to in the Additional Protocols to the association Agreements, concerning
participation in Community programmes. This programme shall be open to the
participation of Cyprus on the basis of additional appropriations in accordance with the
same rules as apply to the EFTA countries following procedures to be agreed with the
countries in question.
                                          Article 10
This Decision cancels and replaces Council Decision (EC) No. 736/97 of 16 December
 1996.
                                          Article 11
This Decision is addressed to the Member States,
Done at Brussels,                                                     For the Council
                                                                      The President
                                                                                          39
 ---pagebreak---                           FINANCIAL STATEMENT
1. TITLE OF OPERATION
   Energy Efficiency SAVE - Renewed efforts to achieve greater energy efficiency in the
   European Union.
2. BUDGET HEADINGJNVOLVED
   B4.1031
3. LEGAL BASIS
      Article 130s(l) of the EC Treaty.
      Council Decision 91/565/EC of 29 October 1991 (OJ L 307, 8/11/1991, p.34).
       SAVE I Programme.
      Council Decision 96/737/EC of 16 December 1996 (OJ L 335, 24/12/1996, p.50).
       SAVE II Programme.
      Proposal for a Council Decision concerning a framework programme for action in
      the energy sector (1998-2002).
4. DESCRIPTION OF OPERATION
    4.1    General objective
           The general objective is to give added force to the Member States' energy
           efficiency schemes with a view to achieving - by 2010 - final energy savings
           of 100 Mtoe/year. In relation to the 1990 figures, this represents a reduction
           of 12% in final energy consumption and of more than 15% in CO2 emissions.
           In the absence of an appropriate fiscal measure adopted at EU level, the
           Energy Efficiency SAVE Programme (part of the Framework Programme)
           remains one of the few Community instruments which can still significantly
           help cut CO2 emissions by 2010. Its contribution will depend directly on the
           vigour with which the programme is implemented. As, moreover, the
           regulations introduced under the SAVE Programme will be kept to an
           essential minimum, other types of measure under the Programme will have to
           be given added force. For these reasons, and in view of the EU's
           forthcoming enlargement, a significantly greater budget must be allocated to
           achieving the Programme's objectives.
           Implementation of SAVE I and II has shown that the effectiveness of these
           measures increased with their proximity to the consumer.
                                                                                          100
 ---pagebreak---    4.2    Period covered
          Five years, from 1 January 1998 to 31 December 2002.
5. CLASSIFICATION OF EXPENDITURE OR REVENUE
    DNO/CD
6. TYPE OF EXPENDITURE OR REVENUE
   The programme will consist of six types of measure:
   (a)       studies and other related measures designed to implement and supplement
             Community schemes (such as voluntary agreements, mandates given to
             standardisation bodies, cooperative procurements and legislation) for
             improving energy efficiency; studies concerning the effects of energy
             pricing on energy efficiency; studies with a view to establishing energy
             efficiency as a criterion within Community programmes;
   (b)       targeted sectoral pilot schemes aimed at speeding up investment in energy
             efficiency and/or improving energy use patterns, to be carried out by public
             and private firms or organisations and by existing Community-wide
             networks or temporary Community-wide groupings of organisations
             and/orfirmsset up to carry out these schemes;
   (c)       measures proposed by the Commission for fostering exchanges of
             experience aimed at improving coordination between international,
             Community, national, regional and local activities, using appropriate means
             of disseminating information;
   (d)       measures such as those described in (c) above but proposed by entities
             other than the Commission, e.g. universities, public and private bodies,
             energy agencies, consultants, etc.;
   (e)       monitoring energy efficiency progress in the Community and in each
             Member State; ongoing evaluation and monitoring of the schemes and
             measures carried out under the Programme;
   (f)       specific measures to improve energy management at regional and urban
             level with a view to achieving greater cohesion between Member States
             and regions in thefieldof energy efficiency.
   100% subsidies for the costs of the measures described in paragraphs 4(a), (c) and
   (e).
   Cofinancing contributions ranging from 30% to 50% for measures to support the
   Member States as described in paragraphs 4(b), (d) and (f).
   The measures concerned will be covered by a multiannual indicative programme
   under which priorities and action plans will be decided annually.
                                                                                          01
 ---pagebreak---      The plans will be submitted to an advisory committee made up of representatives of
     the Member States.
     All financing will be the subject of a contract between the Commission and the co-
     ordinator or person responsible for the measure being financed.
7.   FINANCIAL IMPACT
The proposed amounts will be subject to the limits set by the financial perspective
currently in force. When the next financial perspective is drawn up, the financing of
priority measures to promote energy efficiency might be reconsidered.
The proposed indicative budget is 68.4 MECU.
7.1     Method used to calculate the cost of the measure
Global climate change poses a major challenge to us all. In preparation for the 3rd
Conference of the Parties in Framework Convention of the United Nations on Climate
Change in Kyoto in December 1997, the Council adopted a negotiating position for
industrialised countries for a 15% reduction in emissions of the principal greenhouse gases
by the year 2010 and at least 7.5% by the year 2005 compared with 1990 levels. The
present trend in emissions, based on the application of current policies and measures,
indicates an increase in CO2 emissions of approximately 8% by 2010, which means that a
reduction in real terms of 23 % may well be required. Major effort in several policy areas
will be needed, in particular as regards energy production and use, as outlined in a recent
Commission Communication on Climate Change - The EU Approach for Kyoto. SAVE II
stands for Specific Actions for Vigorous Energy Efficiency. It was approved by the
European Council on December 16, 1996 (96/73 7/EEC) as one of the three main Union-
wide programmes to promote energy efficiency. The other two programmes, JOULE and
THERMIE, are technology-oriented, representing the spectrum from research through to
demonstration and dissemination of energy technologies, of which energy efficiency is but
one of the technology areas promoted. SAVE is the only Community programme solely
dedicated to improving energy efficiency.
        7.1.1. Studies and other related measures designed to implement and supplement
                Community schemes (such as voluntary agreements, mandates to
                standardisation bodies, cooperative procurements and legislation) for
                improving energy efficiency, studies concerning the effects of energy
                pricing on energy efficiency, and studies with a view to establishing energy
                efficiency as a criterion within Community programmes.
                Studies are required to prepare the technical dossiers which are necessary
                for developing effective energy efficiency standards and legislative activity,
                if appropriate. A certain amount of ongoing work in the area of labelling
                and equipment standards has been completed but the effort should be
                continued. The savings arising from the Boiler Directive (92/42/EEC)
                alone could be as much as ECU 1 billion per year (with annual energy
                savings of over 11 million tonnes of oil equivalent to the year 2010 for the
                twelve Member States). The budget amounts given in the table below are
                estimations based on the experience of recent years. It is estimated that 30
                studies, each costing ECU 200 000 on average, are needed to continue
                SAVE activities in the following areas:
                                                                                               102
 ---pagebreak---                • Buildings, Transport, Demand side Management
               • Combined Heat and Power
               • Appliance labelling and European Community energy end-use efficiency
                   standards.
               • Voluntary Agreements.
               • International energy end-use efficiency standards .
               • Studies leading to other legislative measures
               • Measures aimed at establishing energy efficiency as a criterion within
                   existing EU strategic programmes.
This is an activity which has evolved as the Community's programmes have evolved.
Programmes such as VALOREN (now included within INTERREG) which was funded
by the European Development Fund have an enormous potential of energy efficiency as an
engine for regional development. This very positive experience should be built upon.
        7.1.2. Targeted sectoral pilot schemes.
               By the end of 1997, SAVE will have supported approximately 350
               sectoral pilot schemes. The main areas of interest were education and
               training, information, integrated resource planning, transport, buildings,
               cogeneration and monitoring and targeting. This activity will include more
               international projects where several Member States will be involved. As the
               annual budget of SAVE is limited, experience shows that despite their
               good quality only 20% of the proposals are likely to be approved each
               year. The average cost of a pilot scheme, based on the experience of the
               last six years, is ECU 100 000. For targeted schemes in which more than
               one Member State participates, this cost will be increased: the average cost
               of each project is expected to be ECU 200 000. For a total five-year
               budget of ECU 28 million, 140 schemes may be supported in all Member
                States or 9 pilot schemes per Member State.
        7.1.3. Dissemination of information.
               Information to the consumer is an important element in raising awareness
                of improvements in energy consumption behaviour. Although most SAVE
                projects are included to the CORDIS database which is open, free of
                charge, through the world wide web to the general public, more
                information activities should be undertaken to improve dissemination of the
                results of programme activities and to make Member States more aware of
                energy efficiency issues. This action would be closely co-ordinated with
                the results of all the initiatives developed under the SAVE programme. In
                the light of the experience gained in previous years and the need for
                dissemination and information activities in all Member States, the estimated
                budget is ECU 9.1 million, of which roughly 45% is for activities proposed
                by the Commission (conferences, web sites, databases, contractors
                meetings, publications etc.) and 55% for information activities proposed
                                                                                             103
 ---pagebreak---         and co-financed by third parties such as national energy agencies,
        consultants, universities etc.
7.1.4. Monitoring energy efficiency progress at national and EU level and
        ongoing evaluation and monitoring of the schemes and measures carried
        out under the programme.
        A number of important analytical tools have been developed under SAVE .
        These include energy indicators (useful for comparing the Member States'
        energy efficiency in different sectors), the extension of the MURE II model
        to policy measures in the field of energy efficiency, a database on the
        SAVE and Member State initiatives and a user-friendly method of
        disaggregating energy intensity information in such a way as to highlight
        the advances attributable to energy efficiency alone. All these activities
        should be continued and expanded to include the Central and Eastern
        European countries and Cyprus with a view to monitoring the progress of
        energy efficiency in Europe. This will be very important in the context of
        the EU1 s environmental commitments. The evaluation of SAVE pilot
        schemes and of the programme as a whole must be given priority over the
        next few years in order to satisfy requirements of the other EU bodies.
        Further development and updating of the above tools will cost about
        ECU 200 000 per year, to which should be added the cost of monitoring
        energy efficiency progress in the third countries awaiting accession. This
        monitoring of energy efficiency progress together with the evaluation of all
        SAVE activities is expected to cost ECU 2.5 million over the next five
        years.
7.1.5. Specific measures to improve energy management at regional and urban
        level and to promote greater cohesion between Member States and regions
        in the field of energy efficiency.
        This scheme is designed to assist local authorities in regions, islands and
        urban areas in setting up energy management agencies whose main role will
        be to implement regional and local policies for optimum energy use. The
        programme thus helps integrate energy policy into local plans for
        sustainable development and contributes to local and regional
        environmental efforts. Action to set up local energy agencies and to
        improve collaboration between local, regional and national authorities on
        energy issues should be continued in order to make local authorities more
        aware of these issues and to improve the link between energy efficiency
        and environmental protection. Experience in previous years indicates that
        it will cost about ECU 175 000 to maintain a local energy agency for three
        years. This means that, with a budget of ECU 22.8 million, 130 new local
        agencies will be created - an average of 9 local agencies per Member State.
        There is potential in the European Union for setting up 1 600 local energy
        management agencies in administrative units with a population of over
         100 000. To date the Commission has contributed to the creation of 140
        such agencies. This phase should be considered as a pilot phase: the local
        benefits are already starting to be acknowledged, and increasing numbers
      . of local authorities are keen to set up their own local energy management
        agency.
                                                                                    104
 ---pagebreak--- 7.2      Breakdown of the costs (ECU million)
The amount will be fixed annually by the budgetary authority.
      Art. 2 activities                            1998 1999   2000    2001     2002      Total
 1    studies and other measures designed to        1.0    1.0    1.4       1.3      1.3    6.0
      implement and supplement Community
      schemes for improving efficiency
 2    targeted sectoral pilot schemes               5.0   5.0     5.5      6.2       6.3    28.0
 3    dissemination of information (proposed by     1.0    1.0     1.0     0.6       0.5     4.1
      the Commission)
 4    dissemination of information (proposed by     1.0    1.0    1.0    • 1.0       1.0     5.0
      third parties)
 5    monitoring energy efficiency progress in the  0.5   0.5     0.5      0.5       0.5     2.5
      Community and in each Member State;
      ongoing monitoring and evaluation of the
      schemes and measures carried out under the
      Programme
 6    specific measures to improve energy           4.0   4.3     4.5      5.0       5.0    22.8
      management at regional and urban level with
      a view to achieving greater coherence
      between Member States and regions in the
      field of energy efficiency
 7    Total                                          12   12.8    13.9     14.6     14.6    68.4
                                                    ,.5
      7.3.         Operational expenses for studies, experts, meetings etc. included in part B
                                                                                      ECU million
                             Breakdown                                       Budget
 - Studies                                                                                 0.050
  (specified in Article 2(a) )*
 - Meetings of experts and assessors (for all measures                                     0.025
 under Article 2)                                                                          0.025
 - Conferences and seminars                                                                0.150
  (measures specified by...)
 - Information and publications
 TOTAL                                                                                     0.250
      7.4.         Schedule of appropriations for commitments
                                                                                      ECU million
1998               1999              2000          2001          20002               TOTAL
12.5               12.8               13.9         14.6          14.6                68.4
                                                                                                  05
 ---pagebreak--- 8. ANTI-FRAUD MEASURES PROVIDED FOR (AND RESULTS OF THEIR
   IMPLEMENTATION
   The contracts awarded are paid for on the basis of actual expenditure and after
   verification (except for study fees, where a fixed amount is paid on the basis of the
   accepted results).
9. COST-EFFECTIVENESS ANALYSIS
   9.1      Specific aims of the action to be taken under the Energy Framework
            Programme (1998-2002) : Energy efficiency SAVE
            The SAVE Programme aims at improving energy intensity of final
            consumption in the EU by a further one percentage point per annum over that
            which would have been otherwise attained;
            Who is affected by this action
            Public and private bodies; universities; national, regional and urban agencies
            and bodies for promoting energy efficiency; all sectors involved in promoting
            energy efficiency (e.g. consultants, manufacturers of household electrical
            appliances, central heating suppliers, architects) and, by extension, the entire
            population of the EU.
   9.2      Justification for the action
      Costs
      In order to achieve permanent annual energy savings of 1 tonne oil equivalent
      (toe) an average capital outlay of ECU 1 000 is required. To save 100 Mtoe/year
      will thus require an investment of ECU 100 billion. Financing such an amount
      from the budget of the EU and its Member States is out of the question. The only
      solution is joint financing by all the economic operators acting within a
      Community framework. The Commission will cofinance only those schemes
      which clearly show evidence of additionality.
     Derived effects
      To be supported by SAVE, projects must:
              help improve energy intensity;
              make a significant contribution to protecting the environment and
              combating the greenhouse effect;
              have a stabilising effect on world energy prices;
              improve the EU's balance of payments;
              make EU industry more competitive on the world market;
              improve the EU's security of supply and reduce its vulnerability to energy
              market disturbances;
                                                                                           106
 ---pagebreak---            help complete the internal market and increase economic and social
           cohesion.
   Furthermore, the availability of highly energy-efficient technologies means this
   technology can be transferred to third countries, thus helping improve the
   management of resources and provide better protection for the world
   environment.
   The legislative and regulatory approach yields the greatest multiplier effect. A
   large multiplier effect is also achieved by the introduction of performance
   standards. In the case of other jointly financed measures, the multiplier effect is at
   least 2 or 3.
9.3 Monitoring and evaluation
Selected performance indicators
           Reduction in CO2 emissions,
         Improved energy intensity in the Community,
         The number of measures proposed, accepted and translated into action at
         national level,
         The number of man days per year allocated to training,
         The number of software packages and data bases pooled,
         The number of conferences, seminars, newsletters and other publications.
Assessment procedures and schedule
         The Commission will constantly monitor the changes in energy intensity in
         the Member States and report regularly to the Council.
         The Commission will also refer constantly to the SAVE Advisory Committee,
         which will be made up of representatives of the Member States and meet
         three or four times a year.
         The Commission will have an assessment drawn up by a team of outside
         experts. Their report will be sent to the Council and European Parliament, in
         accordance with Article 7 of the attached proposal for a Council Decision.
         The assessment must also consider:
                    the past and present Programme guidelines, with a view to
                    identifying any scope for improvement;
                    the relationships between the means deployed and the results
                    obtained;
                                                                                          107
 ---pagebreak---                           the actual and potential complementarities between these
                          programmes and the other instruments available.
  10. ADMINISTRATIVE EXPENDITURE
          The actual mobilisation of the necessary administrative resources will be triggered
           by the annual Commission Decision on the allocation of resources, taking account
           of such factors as staffing levels and any additional financing granted by the
           budgetary authority.
       10.1 Impact on the number of jobs
           SAVE is a programme dealing with the EU's energy efficiency strategy, and it is
          the only Community programme solely dedicated to improving energy efficiency.
          Officials handling contracts for pilot schemes or studies will, at the same time, be
          drafting communications and legislative proposals concerning the energy efficiency
          of household appliances and boilers, Integrated Resource Planning, Combined
          Heat and Power etc. These procedures and the discussion of legislative proposals
          within all EU institutions take time: it is estimated that 30% of the time is spent on
          drafting and following up the above measures, while the remaining 70% is spent
          managing SAVE contracts (in October 1997 there were 162 current contracts).
           SAVE has activities in ten sectors: buildings, transport, industry, information,
          training, Demand Side Management, Third Party Financing, household appliances,
          Combined Heat and Power and energy efficiency policy. There should be one
          person dealing with each sector and responsible for energy efficiency strategy and
          for following up the related activities.
   Type of post         Staff to be employed in                     of which             Duration
                        managing the measure
                     permanent     temporary           using the existing using
                     posts         posts               resources of the additional
                                                       DG/department         resources
                                                       concerned
Officials or    A        8.0                                    6.5                 1.5  5 years
temporary        B       3.0                                    2.0                 1.0
staff            C       4.0                                    3.0                 1.0
Other resources                      3.0 seconded         3.0 seconded           2.0     5 years
                                      nat. experts       national experts      experts
                                      2.0 experts            1.5 temp.        1.5 temp.
                                       3.0 temp.
                                                                                                 108
 ---pagebreak---         10.2     Overall financial impact of additional human resources
        The total additional cost of administering the Programme would thus be:
                                                                      ECU
        Officials:
        3.5 x 5 years x ECU 103 000 x 0,70 (see par. 10.1) =         1 261 750
        Experts (A0-1178):
        2 x 5 years x ECU 120 000 =                                  1 200 000
        Temp.(A0-1175):
           1.5x5 years x ECU 80 000 =                                  600 000
                   Total                                             3 061 750
    10.3 Other operational expenses arising from the measure
Budget heading                    Amounts per year               Method of calculation
(N° and title)                    (ECU million)
A-1300 Mission and travel 0.100                                  Following up contracts*,
expenses and other incidental                                    local agencies**,
expenditure
                                                                 contractors'         meetings,
A-2510 Special meetings on                                       participation in information
"energy efficiency"        (four                                 activities organised by SAVE
times a year) and meetings of                                    etc.***
the "labelling" committee
(four times a year) within the                                   ECU 900 per person x 30
Framework          Programme                                     persons x 8 meetings
Committee
                                  0.216
Total                             0.316 MECU
* In October 1997 there were 162 current SAVE contracts.
** Up to October 1997, 140 local agencies were subsidised by SAVE
*** SAVE must inform interested parties as to the legislative measures adopted
concerning energy efficiency (Directives on labelling, the energy efficiency of household
appliances, the new strategy on CHP, etc.)
The total cost for the entire duration of the Programme will be 0.316 x 5 yrs =
ECU 1.58 milliion
The amounts indicated are to be financed from the budget already allocated to the
departments managing the programme.
                                                                                           109
 ---pagebreak---   EUROPEAN COMMISSION
                         ANNEX VI
      PROPOSAL FOR A COUNCIL DECISION
                 adopting a
     MULTIANNUAL PROGRAMME OF
TECHNOLOGICAL ACTIONS PROMOTING THE
        CLEAN AND EFFICIENT USE
             OF SOLID FUELS
                (1998-2002)
                                      110
 ---pagebreak--- 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 Commission1;
Having regard to the opinion of the European Parliament2
Having regard to the opinion of the Economic and Social Committee;
Having regard to the opinion of the European Coal and Steel Community Consultative Committee;
Having regard to the opinion of the Committee of the Regions;
Having regard to the White Paper on Energy indicating the energy policy objectives of economic
competitiveness, environmental control, security of supply and maintenance of employment;
Whereas solid fuels are available in the Community and the ready, abundant, diverse sources of hard
coal traded world-wide ensure that such fuels are and will remain a low-cost energy source;
Whereas the promotion of clean and efficient technologies for solid fuels contributes to the
diversification of primary energy resources and to the balance of Community energy policy
objectives;
Whereas solid fuels will be increasingly utilised both in developed and emerging areas of the world,
thereby contributing to emissions of pollutants and C02; whereas every effort should be made to
ameliorate such emissions by the promotion of clean and efficient technologies and the application of
BAT (Best Available Technologies) to existing and new plant using solid fuels;
Whereas the manufacture and supply of equipment for the clean utilisation of coal, lignite and other
forms of solid fuels, for use both within and outside the European Community, can contribute to the
maintenance of employment;
Whereas, pursuant to Article 13 Or of the Treaty on the European Union, action by the Community
relating to the environment should improve the quality of the environment and ensure a prudent and
rational utilization of natural resources, objectives which are furthered by the implementation of
clean coal technologies;
Whereas the promotion of more efficient clean solid fuel technologies can make a significant
contribution to the reduction of polluting emissions arising from the traditional use of fossil fuels at
European Union level; whereas use of cleaner technologies contributes to the objectives of the
Community strategy to combat acidification ;3
 1
     OJNo
2
    OJNo
3
    COM(97)88 final, 12.3.97
                                                                                                111
 ---pagebreak--- Whereas the promotion of more efficient clean solid fuel technologies will contribute to the reduction
of greenhouse gases and the danger of global climate change; whereas wide-ranging co-operation is
therefore desirable in order to obtain significant results;
Whereas, since the Treaty establishing the European Economic Community does not provide for
other powers to cover the energy aspects of the programme referred to in Article 2 below, Article
235 of the Treaty should be invoked;
Whereas Council has adopted a White Paper defining the main lines of new Community energy
policy objectives for coherence and convergence of the policies of the Member States; whereas this
White Paper states that the contribution of new clean solid fuel technologies can enhance the use of a
wide variety of fuels, so that they can continue to play a significant part in the overall energy balance
sheet but with an improved environmental image;
Whereas the promotion and exploitation of clean solid fuel technologies offers economic advantages
in terms of employment opportunities with companies in the Union operating on a world-wide basis;
Whereas to sustain a cleaner, environment, advanced clean solid fuel technologies should be
developed to achieve improved BAT (Best Available Technologies) at costs which can be afforded;
Whereas certain countries which are expected to become members of the European Union in the
coming years are very strongly dependent on the production and use of solid fuels to meet their
energy requirements; whereas those countries will need to modernise and improve their energy
technologies in order to comply with European Union legislation relating to the protection of the
environment;
Whereas a number of Member States have their own clean solid fuel technology programmes;
whereas there should be an opportunity for those programmes to co-ordinate with each other and
with the relevant European Union programmes;
Whereas it is also important to promote the uptake of technologies developed with financing from
the specific Research and Technical Development non-nuclear energy programme;
Whereas a multiannual Framework Programme for Actions in the energy field has been established;
Whereas the European Parliament and EU industry have indicated their keen interest in pursuing a
policy of developing clean coal technologies for use in the Union and elsewhere in the world;
Whereas the Amsterdam European Council highlighted the importance of solid fuel Research and
Development by its request that the research in that field currently supported under the Treaty
establishing the European Coal and Steel Community should be continued after the* expiry of the
Treaty in 2002;
                                                                         i
Whereas there is a need to transfer to the industry the results of the research funded under the
European Coal and Steel Community, the need for whose continuation has been acknowledged by
the Amsterdam European Council;
     The term 'solid fuels' covers anthracite, coal, lignite, peat, emulsion and the heavy fraction of petroleum products.
                                                               2
                                                                                                                 119
                                                                                                                 JL JL A_<
 ---pagebreak--- Whereas the promotion, demonstration and exploitation of clean solid fuel technologies throughout
the Community are likely to strengthen its economic and social cohesion, as called for by Article
130a of the Treaty;
Whereas, to this end, it is appropriate to take account of the Community's indicative objectives and
make provision for resources to further the attainment of those objectives, taking into consideration
the particular conditions in each Member State;
Whereas provision should be made for a five-year programme;
HAS ADOPTED THIS DECISION:
                                                Article 1
Member States shall endeavour to contribute in their energy policies to the promotion of clean solid
fuel technologies, where appropriate, so as to ensure that the best available technologies (BAT) are
used in order to limit emissions from solid fuel use, including carbon dioxide emissions. Account
shall be taken of the Community's indicative objectives relating to clean "coal technologies. These
objectives are to be reviewed with the Energy Committee (see Article 7.2) on a year by year basis.
                                                Article 2
Within the Framework Programme for Energy, the Community shall support a series of actions to
promote the exploitation of clean solid fuel technologies within the context of the specific
programme CARNOT (actions for greater penetration and exploitation of clean solid fuel
technologies), hereinafter referred to as 'the programme'
The programme shall last for five years, from 1 January 1998 to 31 December 2002
The annual appropriations are authorised by the budgetary authority within the ceiling of the financial
perspectives.
                                                Article 3
Two categories of actions on clean solid fuel technologies shall be financed under the programme,
namely:
a)      Measures to foster the creation of an information network aimed at promoting better market
and technical information between national, Community and international activities through the
establishment of appropriate means for exchanging information, helping to remove barriers and
evaluating the impact of the various actions provided for in this article:
b)      Measures to foster industrial strategic cooperation, such as business workshops and seminars,
industrial on-site visits, studies, evaluations and concertation groupings, aimed at promoting the
                                                                                                113
 ---pagebreak--- industrial exploitation of clean technologies for energy purposes, in particular heat and power
production. This will include the promotion of exports of European clean solid fuel technology.
                                                 Article 4
All costs relating to the actions referred to in Article 3 a) shall be borne by the Community.
The level of funding for the actions referred to in Article 3 b) shall be between 30 and 50% of their
total cost.
The balance of the funding of the actions referred to in Article 3 b) may be made up from either
public or private sources or from a combination of the two.
                                                 Article 5
The Commission shall establish guidelines for the support measures referred to in Article 3 b) each
year, in consultation with the committee provided for in Article 7.1.
The proposed initiatives referred to in Article 3 and the list of bodies which are to implement them
shall be submitted annually by the Member States to the Commission, which shall decide on the level
and conditions of Community funding according to the procedure provided for in Article 7. The
Commission shall sign contracts relating to the support measures with those bodies.
                                                 Article 6
The Commission shall be responsible for the implementation of the programme.
For the implementation of the actions referred to in Article 3 a) and b) the Commission shall apply
the procedure laid down in Article 7.
                                                  Article 7
The Commission shall be assisted by the Committee referred to in article 4 of the Council decision
setting up a multiannual Energy Framework Programme.
                                                  Article 8
 1.     During the third year of the programme, the Commission shall present a report to the
European Parliament and to the Council on the results achieved. The report shall be accompanied by
proposals for any amendments which might be necessary in the light of these results.
2.      On expiry of the programme, the Commission shall assess the results obtained, the
application of this Decision and the consistency of national and Community actions. It shall present a
report thereon to the European Parliament, the Council, the Economic and Social Committee and the
Committee of the Regions.
                                                                                                 114
 ---pagebreak---                                               Article 9
The programme shall be open to associated Central and East European countries in accordance with
the conditions, including financial arrangements, agreed on in the Additional Protocols to the
Association Agreements, for participation in Community programmes. The programme shall be open
to Cyprus on the basis of additional appropriations in accordance with the same rules as those
applied to the EFTA countries following procedures to be agreed on with the countries concerned.
                                             Article 10
This Decision is addressed to the Member States
Done at Brussels,
                                                                                          115
 ---pagebreak---                                FINANCIAL STATEMENT
1. Title of the operation
   Programme of technological actions promoting the clean use of solid fuels.4
2. Budget heading
   B4-1004
3. Legal basis
   Proposal for a Council Decision adopting a framework programme for actions in the energy
   sector (1998-2002).
4. Description of the action
    4.1.    General objective
            Actions to promote the industrial penetration of clean and efficient technologies for
            coal utilisation are the means whereby coal can make an important contribution to the
            objectives of EU energy policy.
            - through its contribution to security of supply and the competitiveness at European
               level of a primary energy source which accounts for 30% of electricity production,
               and diversification of resources at low and stable prices;
            - through the established potential of a 25% reduction in CO2 emissions from power
               stations through increased efficiency;
            - through its contribution to Community action to combat acidification and other
               pollutants.
            A Community action to promote clean coal will complement the incorporation into the
            Treaties of the specific coal provisions of the ECSC Treaty and help the CEEC
            applicants to adapt to the environmental standards of the Union.
            This action will also enable the results of RTD supported by the European Coal and
            Steel Community (ECSC) technical research programme or by national RTD
            programmes to be applied in industry. The new programme does hot provide for any
            RTD actions as such, as these are already covered by the abovementioned programmes.
    4.2     Period covered
            5 years from 1 January 1998 to 31 December 2002.
5. Classification of expenditure
   NCE/DA
                                                                                            116
 ---pagebreak--- 6. Type of expenditure or revenue
   The programme will be made up of two categories of actions:
   a) Measures leading to the creation of an information network aimed at promoting commercial
      opportunities and technical information among national, Community or international
      activities.
   b) Measures to foster industrial strategic cooperation, such as business workshops and
      seminars, industrial on-site visits, studies, evaluations and concertation groupings, aiming at
      promoting the industrial exploitation of clean coal technologies, including the promotion of
      exports of European technology.
   100% funding for actions described in point a).
   Up to 50% for cofiinding for actions in point b).
7. Financial impact
   7.1 Method of calculating total cost of operation
        The amount will be fixed annually by the budgetary authority.
        The proposed amount is ECU 4.10 million for the entire programme.
        It breaks down as follows:
        Horizontal actions
           measures to stimulate the creation of an information network with the aim       ECU 1.54 million
           of obtaining better information on the market and technologies. The
           necessary information could be incorporated into data bases which will be
           available for example on the Internet. Consideration will be given to one
           member of the network per Member State, which at the same time would
           play the role of server for the network and disseminate the information.
           This network would be coordinated with other existing networks, such as
           the Relay Centres or the OPET.
           measures such as the organisation of workshops, conferences on the              ECU 2.56 million
           funding of clean coal technologies and conferences whose aim is to
           disseminate information on such technologies. Consideration will be given
           to ten market studies (for the following technologies:                  GICC,
           Ultrasupercritique, NOx systems, SOx systems, atmospheric circulating
           fluidised bed, pressurised circulating fluidised bed, pressurised stationary
           fluidised bed, low-cost pulverised coal, among others) as well as eight
           business workshops of a technical, economic and financial nature to
           facilitate the use of the technologies. Also, the possibility of supporting 15
           feasibility studies for various specific projects of the type mentioned above
           is being kept open. In all these actions, the "market in third countries"
           element will be a priority factor.
           actions to promote exports of clean coal combustion technologies. These
           actions could cover activities such as those described above as well as,
           workshops aimed at identifying opportunities for international cooperation
           and possible obstacles to investments in advanced technologies, at the level
                                                   7
                                                                                              117
 ---pagebreak---              of both energy efficiency and control of emissions. Consideration will be
             given to 4 and 7 industrial missions in third countries and the EU
             respectively. For each of these missions, some 30 businessmen will
             establish contact and visit existing installations, thus facilitating
             professional relations and the decision-making process. The actions
             mentioned here will cover all coordination expenses as well as, in the case
             of third country missions in the EU, a part Of the cost of travelling on
             Community territory.
   7.2    Itemised breakdown Tin million ECU)
                                        1998      1999    2000      2001       2002      Total
         Measures leading to the         0.3      0.31    0.31       0.31      0.31       1.54
         creation          of      an
         information network
         Promotion measures             0.50     .0.51    0.51      0.52       0.53      2.56
         TOTAL                          0.80      0.81    0.82      0.83       0.84      4.10
8. Fraud prevention measures; results of measures taken             *
   The contracts awarded are paid on the basis of actual expenditure and after verification (with the
   exception of study costs which are flat-rate and paid on the basis of the results accepted).
9. Elements of cost-effectiveness analysis
   9.1.      Specific objectives of the action to be carried out under the Energy Framework
             Programme (1998-2002)
   To complement action by the Member States and industry so as help achieve the Community
   objective of reducing greenhouse gas emissions by 15% compared with 1990 levels, and to
   combat acidification. Contribution to a reduction in CO2 emissions throughout the world
   through the transfer of technology.
             Target population
             - National, regional and urban European agencies and bodies promoting clean and
                efficient technologies;
             - Electricity industry and manufacturers of coal combustion installations in the
                European Union;
             - Agencies, governments and industry in third countries, mainly China, India, Asia and
                other regions which are expected to be major coal consumers.
                                                                                                 \ 9
                                                                                                 JLO
 ---pagebreak--- 9.2. Grounds for the operation
     Costs
     According to the studies available to the Commission, for the period covered by the
     programme, an investment potential of ECU 15 800 million has been identified for new
     clean coal installations in the European Union. This amount will be used mainly to
     upgrade indigenous coal and lignite produced under satisfactory economic conditions.
     When EU dependency on energy imports is expected to rise to 70% in 2020, economic
     upgrading of Community resources is very important.
     It costs ECU 500 to remove a tonne of SO2. If one considers that the Community
     strategy against acidification calls for a reduction in annual SO2 emissions from
     combustion plants of around 9 million tonnes (between 1990 and 2010), the potential
     benefit of the application of clean coal technology merely in terms of a reduction in
     SO2, would be around ECU 4 500 million per year. The benefits in terms of a
     reduction in NOx are even greater.
     In terms of CO2, a 5% improvement in the efficiency of electricity generation from coal
     in the European Union would produce a reduction in CO2 of some 100 million tonnes
     per year.
     Spin-off effects
     The actions supported under this programme will meet the following criteria:
     - make a significant contribution to environmental protection and control of the
         greenhouse effect,
     - exercise a stabilising effect on energy prices at world level,
     - improve the balance of payments of the European Union,
     - make European industry more competitive on the world market,
     - improve security of supply for the European Union and make it less vulnerable to
         disruption in the energy market,
     - help to achieve the internal market and economic and social cohesion.
     Moreover, the availability of high efficiency energy technologies makes it possible to
     transfer technology to third countries and thus contributes to better resource
     management and environmental protection at world level.
9.3. Monitoring and evaluation of the operation
     Performance indicators selected
          reduction of C0 2 emissions,
          number of initiatives proposed, accepted and adopted by industry,
          private investments intthe promoted projects,
          number of conferences, seminars, newsletters and other publications,
          degree of use of the information network created.
                                                                                      119
 ---pagebreak---              Details and frequency of planned evaluations
             Moreover, the Commission will report on a regular basis to the Programme Committee
             made up of representatives of the Member States meeting in accordance with the
             procedure.
             This report will be sent to the Council and the European Parliament in accordance with
             Article 7 of the attached proposal for a Council decision.
             The evaluation must also examine:
                 past and present guidelines for the programme in a search for possible
                 improvements,
                 the relationships between the resources employed and the results obtained,
                 actual and potential ways in which these programmes complement other existing
                 instruments.
10. Administrative expenditure
    The necessary resources are funded from the existing appropriations of the services managing
    the programme.
                                                   10
                                                                                            1 90
 ---pagebreak---         Table of financial considerations
                                                                          Budget (million ECU)
                                                   •venge unit
Activities Article 3                  Number
                                                   cost          1998     1999      2000      2001   2002    Total
                                      factions
                'ECU):
a) Measures to stimulate the creation
of an information network on the
market and technologies
- cost associated with network 1                           0.20                                               0,20
hardware
- cost of servers (private or public)          155         0.02              0.21     0.21      0.21  0.21    0.84
- costs associated with the operation of                             0.10    0.10 *    0.10     0.10  0.10    0.50
the network and the creation of a
database
SUB-TOTAL                                        -            -      0.30    0.31      0.31     0.31  0.31    1.54
b) Marketing, feasibility studies and
other investment incentives
- Market studies                                 1         0.20      0.20                                     0.20
- "Business workshops"                          10         0.10      0.10    0.20      0.21     0.22  0.23    1.96
c) Promoting exports of clean coal
technologies to third countries
- Industrial missions by European               2          0.30              0.30               0.30          0.60
businessmen in third countries
- Industrial missions by third countries                   0.30      0.20              0.30           0.30    0.80
in the EU
SUB-TOTAL                                        -            -      0.50    0.50      0.51     0.52  0.53    2.56
GRAND TOTAL                                      -             -      0,8    0.81      0.82     0.83  0.84    4.10
        Number of servers.
                                                                  11
                                                                                                          121
 ---pagebreak---    EUROPEAN COMMISSION
                          ANNEX VII
                    Introduction
OF MULTIANNUAL ACTIONS CONCERNING NUCLEAR
        SAFEGUARDS AND TRANSPORT OF
            RADIOACTIVE MATERIALS
                   (1998 - 2002)
                                          199
                                          X /w A-»
 ---pagebreak---                               FINANCIAL STATEMENT
1. TITLE OF OPERATION
a.     Nuclear industry cooperation and transport of radioactive materials
       - Transport of radioactive materials: problems of safeguards, health protection and nuclear
       safety technologies.
       - Industrial cooperation in the civil nuclear sector with the Central and East European
       Countries (CEEC), Russia and the Ukraine.
b.     Training safeguards experts from the CEEC and the New Independent States (NIS) -
       Establishing afissilematerials compatibility and control system in Russia.
2. BUDGET HEADING INVOLVED
a.     B4-1020 of the General Budget of the European Communities (Nuclear industry
       cooperation and transport of radioactive material)
b.     B7-535 of the General Budget of the European Communities (Training and implementation
       of safeguards).
3. LEGAL BASIS
Chapters EI and X of the EAEC Treaty (Euratom Treaty), plus:
a.     Article 75 of the EC Treaty (common transport policy) and the
       Council Resolution of 22 July 1996 on technological problems connected with nuclear
       safety (JO No C 185 of 14 August 1996, p. 1).
       Council Resolution of 22 July 1996 on technological problems connected with nuclear
       safety (JO No C 185 of 14 August 1996, p. 1), and Resolution 16 in EP document
       217.774/final of 11 July 1996 "East-West cooperation activities in energy and nuclear
       security".
b.     European Parliament Resolution of 9 April 1992 on nuclear safety in the countries of
       Central and Eastern Europe and the Commonwealth of Independent States (JO No C 125
       of 18 May 1992, p. 244) and the European Parliament Resolution of 29 September 1994
       (PE-B4-00621) on illicit trafficking in nuclear materials and
       Commission communication of 19 April 1996 on illicit trafficking in nuclear materials
       and radioactive substances (COM (96) 171 final).
                                                                                              123
 ---pagebreak--- 4. DESCRIPTION OF OPERATION
4.1. General objective
The objectives of the action programme are to improve nuclear safety and safeguards.
a.      Improving nuclear safety in general, particularly by working to improve:
        - the transport of radioactive materials by:
        • facilitating the operation of the internal market by identifying justifiable
           harmonisation measures
        • helping improve legislation further by developing experimentation and know-how
        • evaluating incidents which have occurred during transport and learning lessons for
           the future
        • making emergency procedures more consistent and giving those involved more
           training
        • cooperating with CEEC and NIS to help them improve transport safety in their own
           countries
        • improving public information, comprehension and awareness in this area.
        - Long-term nuclear safety in Eastern Europe, Russia and Ukraine. These countries fully
           intend to continue to use nuclear power as a major source of energy. In addition to
           short-term measures carried out under assistance programmes designed to solve specific
           problems, these countries must be helped to develop a quality and safety approach to the
           whole of the nuclear industry. This is a long-term measure which will be possible only
           through close cooperation between industry in the EU and in Eastern Europe. As a
           means of encouraging cooperation, the Commission should help to identify general
           (industrial,financialand legal) barriers and support pilot ventures where appropriate.
b.      Helping to establish a system of effective and reliable safeguards in the NIS and CEEC
        through cooperation in the following areas:
        - training and retaining of nuclear safeguards experts
        - establishing a fissile materials compatibility and control system in Russia
        - installing control equipment under (b).
4.2. Period covered
Five years. The operation should begin in 1998 and continue until 2002.
5. CLASSIFICATION OF EXPENDITURE
Non-compulsory expenditure
                                                                                                  124
 ---pagebreak--- 6. TYPE OF EXPENDITURE
a.    Subsidies for jointfinancingwith other sources in the private and/or private sectors. In
      some cases, the Commission of the European Communities could fund up to 100% of
      proposals which it considers to be of extreme interest but which cannot befinancedjointly
      by other sources (e.g. cooperation with East European countries).
b.    Subsidies/financing for:
      - vocational training classes and courses for safeguards experts in the European
         Union and/or in the NIS and CEEC, including their costs (travel, daily allowance,
         etc.)
      - seminars for experts in the EU and/or the NIS
      - visits by experts to nuclear plants in the European Union and/or NIS
      - the necessary equipment, logistical and DP support
      - translation and interpreting costs
      - travel expenses of the ESD staff and EU experts chosen to carry out the above
         activities
       - taking, transporting and analysing samples, including samples taken in the context
         of illicit trafficking in nuclear materials.
7. FINANCIAL IMPACT
7.1. Method of calculating total cost of operation (link between unit costs and total cost)
The following amounts should be earmarked to cover the objectives of this multiannual
programme:
a.     B4-1020           Implementation of the programme for the period from 1998 to 2002.
       - some ECU 0.5 million a year for transport of radioactive materials. Financing
          requirements were put at ECU 2 million a year (exceeding current forecasts) by the
          Permanent Working Party for the Transport of Radioactive Materials at its meeting
          on 23 September 1997 in Brussels, on the basis of the work already done on the
          budget for 1996 and 1997 and all the measures to be carried out in 1998 and 1999.
 ---pagebreak---         - some ECU 0.1 million a year as of 2000 for nuclear industry cooperation with
            Eastern Europe. These requirements were worked out at ECU 0.5 million a year on
            the basis of the results of a study on industrial cooperation being conducted with
            Russia.
b.      B7-535          Implementation of the programme for the period from 1998 to 2002.
        - The cost of this action has been put at ECU 2.5 million a year, on the basis of the
            resources used up to now for assistance on safeguards given to the CEEC and NIS
            and the objectives still to be achieved, which means that the total cost should be
            ECU 12.5 million.
7.2. Itemised breakdown of cost
        Nuclear industry cooperation and transport of radioactive materials
        (B4-1020)
                                                       EC in ECU million (at current prices)
                    Breakdown                        1998    1999   2000     2001    2002
Transport of nuclear materials
Operation of the single market and harmonisation    0.2     0.2    0.2      0.1     0.1
Studies on incidents and accidents during           0.2     0.2    0.1      0.1     0.1
transport - Emergency measures
Assistance to CEEC and NIS                          0.1     0.1    0.1      0.1     0.1
Public awareness                                    0.0     0.0    0.0      0.1     0.1
                      Sub-total                     0.5     0.5    0.4      0.4     0.4
Industrial cooperation
       Evaluation of the situation in the NIS       p.m.    0.01   0.02     0.03    0.04
           Bringing industrialists together         p.m.    p.m.   0.1      0.1     0.1
                      Sub-total                     p.m.    0.01   0.12     0.13    0.14
                      TOTAL                         0.5     0.51   0.52     0.53    0.54
                                                                                     foLG
 ---pagebreak--- b.      Training experts and implementing safeguards (CEEC and NIS)
        (B7-535)
                                                       EC in ECU million (at current prices)
                    Breakdown                       1998 1999 2000 2001                   2002
                Safeguards training                0.75 0.75          0.75      0.75     0.75
      Approximation to the Euratom system          0.75 0.75          0.75      0.75     0.75
                 Illicit trafficking               0.50 0.50          0.50      0.50     0.50
               Improving legislation               0.50 0.50          0.50      0.50     0.50
                      TOTAL                        2.5       2.5      2.5       2.5      2.5
7.3. Operational expenditure on studies, experts, etc. included in part B of the budget
a.      Nuclear industry cooperation and transport of radioactive materials
        (B4-1020)
                                                       EC in ECU million (at current prices)
                                             1998       1999        2000       2001       2002
   Studies - experiments                  0.4        0.41         0.32        0.33       0.34
   Support for pilot ventures                            0.0      0.1            0.1     0.1
   Meetings of experts-                   0.1            0.1      0.1            0.1     0.1
                 Total                    0.5         0.51        5.2         0.53       0.54
b.      Training experts and implementing safeguards (CEEC and NIS)
        (B7-535)
                                                       EC in ECU million (at current prices)
                                           1998    1999       2000       2001         2002
-  Specialised training classes and
   courses                                0.75    0.75       0.75      0.75        0.75
-  Seminars                               0.50    0.50       0.50      0.50        0.50
-  Visits by experts to nuclear plants in
   the EU                                 0.15     0.15 0.15             0.15      0.15
-  Equipment, logistical and DP
   support                                0.8       0.8      0.8          0.8      0.8
-  Travel expenses of officials on the
   spot (including help for operators in
   their own plants)
                                          0.2       0.2      0.2          0.2      0.2
                 Total                    2.5     2.5        2.5       2.5         2.5
                                                                                               1 on
                                                                                               J- /-v a'
 ---pagebreak--- 7.4. Schedule: commitments and payments in ECU
a.     Nuclear industry cooperation and transport of radioactive materials
       (B4-1020)
                                                            EC in]ECUmilli on
                                         1998     1999    2000      2001     2002     2003
Appropriations for commitment          0.5       0.51    0.52      0.53     0.54
Appropriations for payment
                1998                   0.8       0.15
                1999                             0.36    0.15
                2000                                     0.37      0.15
                2001                                               0.38     0.15
                2002                                                        0.39    0.15
                2003
                                       0.8       0.51    0.52      0.53     0.54    0.15
b.     Training experts and implementing safeguards (CEEC and NIS)
       (B7-535)
                                                            EC in]ECU million
                                         1998     1999     2000     2001     2002     2003
Appropriations for commitment          2.0       2.0     2.0       2.0      2.0     2.0
Appropriations for payment
                1998                    1.5
                1999                             2.5
                2000                                     2.5
                2001                                               2.5
                2002                                                        2.5      1.0
                2003
                                        1.5      2.5     2.5       2.5      2.5      1.0
8. FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN
a.     Call for proposals each year during the period from 1998 to 2002. Evaluation and
       selection of proposals by a Commission committee of experts in this field on the basis
       of:
       -   technical scientific merit
       -   an analysis of thefinancialdata on each proposer.
                                                                                           128
 ---pagebreak---         After signature of the contract:
        • scrutiny of statements of expenditure before payment at various levels (financial
           manager, scientific manager);
        • internal audit by the financial controller;
        • continual on-the-spot inspections, checking supporting documents, checking for
           errors or other irregularities.
        Checking invoices against expenditure actually incurred and against the guide to
        missions for the duty travel expenses of officials and experts, costs of meetings and
        costs of conferences.
9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS
9.1. Specific and quantified objectives, target population
9.1.1. Specific and quantified objectives.
a.      Nuclear industry cooperation and transport of radioactive materials
        Transport of radioactive materials
        - Facilitating the operation of the internal market by identifying justifiable harmonisation
           measures:
        • harmonising methods for evaluating conditioning safety in accordance with the
           regulations;
        • harmonising conditioning standards and of the level of intrinsic safety of materials.
        -  Helping to improve legislation further by developing experiments and know-how.
        -  Evaluating incidents which occurred during transport and learning lessons for the future.
        -  Making emergency procedures more consistent and giving those involved more training.
        -  Cooperating with CEEC and NIS to help them improve transport safety in their own
           countries (some of them will be negotiating accession to the Community).
        - Improving public information, comprehension and awareness in this area.
        Nuclear industry cooperation
        - Identifying specific barriers to cooperation between industries, within the context of
           existing industrial, financial and legal structures, with a view to establishing a
           market-orientated approach in the East; proposing ways of facilitating cooperation.
        - Establishing an information/contact network between industrialists in the EU and in
           Eastern Europe.
                                                                                              129
 ---pagebreak--- b.       Training experts and implementing safeguards (CEEC and NIS)
         Following the political upheavals in the Eastern bloc and in view of cases of illicit
         trafficking in nuclear and radioactive materials from the East, it is essential, in
         accordance with the resolutions of the European Parliament and the policy of the
         Council and the Commission, to provide for the on-going training of local operators to
         control nuclear materials in the power plants of these countries. It is also necessary to
         set up an effective nuclear materials control and compatibility system.
         The aim of the programme, which already started between 1993 and 1996 (budget
         heading B4-2001), will be to continue with and to develop on-the-spot actions in close
         cooperation with the operators. The proposed actions will concern the compatibility
         of nuclear materials, physical inventory-taking procedures, computerised nuclear
         material accounting by the plant and the central control body, the organisation of an
         independent inspectorate and the establishment of monitoring and measurement
         systems.
         The Commission considers that the scope of the problem justifies continuing this
         action since the work already done has given encouraging results.
9.1.2. Target population
All citizens of the EU, CEEC and NIS.
Transporters of radioactive materials.
Those in the nuclear industry.
National safety and safeguards authorities.
Nuclear safety safeguards, control experts from the CIS and the nuclear plants of these
countries.
International organisations concerned with nuclear safety and safeguards.
9.2. Grounds for the operation
9.2.1. Needfor Community financial aid
a.       Nuclear industry cooperation and transport of radioactive materials
         Transport of radioactive materials
                                                                                            130
 ---pagebreak---   In order to support these activities and at the request of the European Parliament,1 the
  Commission in 1982 established a Permanent Working Party of national experts
  technically responsible for the safe transport of radioactive materials. The Working
  Party organised exchanges of information on the application of regulations on the
  international transport of radioactive materials between Member States and outside the
  European Union. The Working Party proposed guidelines for an action programme on
  this subject to be prepared by the Commission, with the aim of providing the basic
  knowledge required to improve international regulations.
  The Commission was also asked to provide the European Parliament and the Council
  with regular information on new developments in the transport of radioactive
  materials, and on the recommendations prepared by the Working Party.
  In 1996 the European Parliament reinstated the budget heading on the transport of
  radioactive materials.2 The heading was allocated ECU 2 million in appropriations for
  commitment for 1996, and for 1997 was allocated ECU 0.7 million.
  The total amount committed for 1996-97 was ECU 2 661 971 (98.59% of the
  resources available).
  At its last meeting in Brussels on 23 September 1997, the Working Party
  re-emphasised the importance of implementing a multiannual programme (over five
  years) in this sensitive area with substantial funding (ECU 2 million a year).
  Nuclear industry cooperation
  To date the Commission has been concentrating on short-term measures to improve
  nuclear safety problems in the East. Action has been focused primarily on those power
  plants still operating, in terms of analysing safety, providing operational support
  (operational safety) and purchasing equipment from the West. Since these countries
  intend to continue to use nuclear power in the long term, the processes for
  manufacturing parts and equipment locally must be improved in order to provide
  components whose quality is a guarantee of safety. One way of doing this is to
  improve cooperation between the industry in the Union and in the East, by overcoming
  the barriers to this cooperation. The Commission can play a guiding role by helping
  with general analysis, contacts and information, and even by supporting pilot ventures.
1
   European Parliament Resolution published in OJ No C40 of 15.2.1982, p. 43.
2
  General Budget of the European Communities for 1996 - budget heading No B4-1020.
                                                                                     1^1
                                                                                     J- ^ -L.
 ---pagebreak--- b.     • Training experts and implementing safeguards (CEEC and NIS)
         This is one of the key elements for achieving the objectives established by the Essen
         European Council, in accordance with the European Parliament Resolution and the
         Commission Communication. It also ties in perfectly with the general objectives of the
         Union to improve the operating conditions of nuclear plants in Eastern Europe.
         Moreover, the problems of improving the control of nuclear materials and, by
         extension, reducing illicit trafficking in nuclear materials were the subject of an
         important declaration by the G8 countries at the Moscow Summit in April 1996.
         In addition, informal procedures have been established for achieving complementarity
         between activities organised by third countries (USA and Japan), the Member States
         (UK, France, Sweden and Finland) and the IAEA, and those organised through Phare
         and Tacis.
         It is important to make it clear that, unlike with Phare and Tacis, the training of experts
         and the implementation of projects is essentially the task of the Euratom inspectors,
         who have the requisite experience. Proper monitoring requires frequent visits to sites,
         the routing of equipment and the ability to adapt swiftly to needs as they arise. It is
         essential to act quickly and very flexibly.
9.2.2. Choice of ways and means
This project will be financed by subsidies and financial aid.
9.3. Monitoring and evaluation of the operation
a.       Nuclear industry cooperation and transport of radioactive materials
         Transport of radioactive materials
         This action should make it possible to check whether existing regulations are being
         correctly applied, to determine the need to improve them and to help to establish the
         internal market. If necessary, this action should result in further measures by the
         Commission to harmonise legislation or practices concerning the transport of
         radioactive materials in the EU.
         To help Central and East European Countries and the CIS and those joining the
         Community or operating in its territory.
         One objective still to be achieved is to improve information to the public on the
         transport of radioactive materials..
                                                   10
                                                                                             1 °,^
                                                                                             JL xJ fj
 ---pagebreak---       Nuclear industry cooperation
      Fuller understanding of local industrial problems and support for a market approach
      should generally help to improve economic development in Eastern Europe, which is
      also in the interests of the Union.
b.    Training experts and implementing safeguards (CEEC and NIS)
      Performance indicators:
      If this action is successful it should ensure that in Eastern Europe nuclear materials will
      be subject to more rigorous control, as in the European Union. The best indicator of
      success will be that nuclear energy is used only for peaceful purposes.
      Measuring the activities used:
      To give some idea, in 1995 the Safeguards Directorate launched 27 activities, ten in
      Russian territory and 17 within the European Union, chiefly in Luxembourg, with 103
      experts from Eastern Europe participating in one or more of these activities for a total
      of 850 man-days. To this total should be added the number of days spent by Euratom
      staff on these various activities.
10. Administrative expenditure
a.    Nuclear industry cooperation and transport of radioactive materials
      The proposed annual commitments are less than the level of commitments in 1996. The
      human resources allocated to them in 1996 and 1997 correspond to 1.5 B officials and
      0.25 A officials. Thus no additional resources will be required.
b.    Training experts and implementing safeguards (CEEC and NIS)
      Between 1993 and 1996 the Commission was able to manage and absorb the activities
      provided for in heading B4-2001 without requiring any additional staff and despite the
      workload arising from the obligations in Chapter 7 of the Euratom Treaty. To date, no
      additional resources have been requested.
                                                 11
                                                                                                13
                                                                                               XJ
 ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(97) 550 final
                                              DOCUMENTS
EN                                                                    12 01
                                    Catalogue number : CB-CO-97-643-EN-C
                                                             ISBN 92-78-28180-8
Office for Qfficial Publications of the European Communities
L-2985 Luxembourg
                                                                               1 A
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