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ERENE – EUROPEAN COMMUNITY FOR RENEWABLE

ENERGY

Dr Michaele Schreyer, born in Cologne in 1951, is an economist. She received her doctorate in econo-

mics in 1983. In 1989/1990 Dr Schreyer was Senator for Urban Development and Environmental

Protection to the regional government of Berlin. In 1991 she became a member of the Berlin regional

parliament. From 1999 to 2004 she was Member of the European Commission responsible for the EU

budget and combating fraud. She has since worked as a guest lecturer at the Free University of Berlin

as well as at the Hertie School of Governance (Berlin). She holds numerous honorary offices, including

that of Vice-President of the European Movement in Germany as well as member of the supervisory

committee of the Heinrich Böll Foundation, the Foundation Council of the European University

Viadrina and the advisory council of Transparency International in Germany.

Dr Lutz Mez, born in 1944, has worked at the Otto Suhr Institute of the Free University of Berlin since 1982 and is Managing Director of the Research Institute for Environmental Policy. From 1993 to 1994

he was a Visiting Professor at the Department of Environment, Technology and Social Studies of the

Roskilde University Centre in Denmark. His main research interest is the energy and environmental

policies of industrialised countries, with particular reference to nuclear power, climate protection and

electricity policies. He is co-editor of the Journal of Trans-Disciplinary Environmental Studies as well as European Environment: The Journal of European Environmental Policy.

This publication has been produced with the support of the European Union, programme “Europe for

Citizens: Structural Support for Civil Society Organisations at the European Level”

ERENE – European Community for Renewable Energy

Volume 3 (english edition) in the publication series on Europe

A feasibility study by Michaele Schreyer and Lutz Mez

Commissioned and published by the Heinrich Böll Foundation

© Heinrich-Böll-Stiftung 2008

All rights reserved

Layout: Graphic Syndicate Michael Pickardt (based on a design by blotto Design, Berlin)

Printed by: Agitdruck

ISBN 978-3-927760-94-3

This publication can be ordered from Heinrich-Böll-Stiftung, Schumannstr. 8, D-10117 Berlin

T +49 30 28534-0 F +49 30 28534-109 E info@boell.de W www.boell.de

PUBLICATION SERIES ON EUROPE

VOLUME 3

ERENE

European Community for Renewable

Energy

A feasibility study by Michaele Schreyer and Lutz Mez

in collaboration with David Jacobs

Commissioned and published by the

Heinrich Böll Foundation

TABLE OF CONTENTS

Preface

7

Executive Summary

9

Introduction

13

1 The Vision of a European Community for Renewable Energy in the Context

of the Past, Present and Future of European Integration

16

1.1 European Energy Communities in the History of the EU: Reasons for Their

Establishment, Goals and Instruments

16

1.2 Today’s Climate and Energy Challenges for the EU

19

1.3 The Contribution of a New European Community for Renewable Energy

to a Sustainable European Energy System

22

2 The Potential for Green Electricity within the EU

28

2.1 EU Renewable Energy Potentials and their Regional Distribution

28

2.2 Current Use of Renewable Energy Sources for Electricity Generation in the EU

39

2.3 Obstacles to and Conditions for an Increased Use of Europe’s

Renewable Energy Sources

42

3 A European Community for Renewable Energy: Objectives, Tasks,

Instruments, Legal and Institutional Foundations

47

3.1 Objectives and Tasks of ERENE

48

3.2 Competencies and Instruments of ERENE

55

3.3 Financing the Activities of ERENE

69

3.4 Legal and Institutional Basis of ERENE

73

4 A Roadmap for ERENE

79

Appendix 1

85

Appendix 2

87

List of Abbreviations

89

Sources and References

91

PREFACE

Why a European Community for

Renewable Energy (ERENE)?

The European Union must set itself ambitious goals if it wants to maintain its

political dynamic and the support of the people of Europe. An 80–90% reduction of

European carbon dioxide emissions by the middle of this century should therefore

be a core project of the EU. Through this the EU would make a major contribution

to the protection of the global climate while simultaneously guiding the European

economy on to sustainable routes, creating hundreds of thousands of new jobs. This

would call for nothing less than a new industrial revolution with a huge increase in

the efficiency of the use of resources and the coverage of the bulk of energy demands

with renewable energy as its central theme.

A first step in this direction was taken by the European Council in March 2007 by

setting the targets for reducing carbon dioxide emissions in the EU and increasing

the share of renewable energies by 20% by the year 2020. It is doubtful whether these

targets, which are only minimum requirements, can be achieved with existing instru-

ments and strategies. This is even more uncertain for the more ambitious aim to cover

the European electricity demand exclusively with renewable energies by the middle

of this century. There is a large wind, solar, biomass, geothermal and hydroelec tric

potential in Europe, although it is unevenly distributed across the EU. In the EU as a

whole, only about one-tenth of that potential is currently being used for the genera-

tion of electricity from renewable energy sources.

In order to exploit this potential, to speed up the development of renewable

energy and to encourage co-operation within the EU, new instruments are needed.

ERENE (European Community for Renewable Energy) aims to become such an

instrument.

The European Coal and Steel Community, which had the security of energy

supplies for Member States as a central goal, was at the origin of European unifi-

cation. The next European Community initiative in the field of energy policy was

EURATOM (European Atomic Energy Community), which was intended to promote

the use of nuclear energy and thereby reduce Europe’s dependency on imported

energy. In the meantime, however, this supposed “industry of the future” has proven

itself to be a billion-dollar grave.

ERENE will go in another direction, avoiding the risks of nuclear energy and

making Europe a pioneer of modern energy supply for the 21st century by covering

its energy needs from renewable energy sources. Analogously to EURATOM, ERENE

could be a new community founded on its own treaty, or could be established by a

Council decision under the umbrella of the EU.

Alongside its other mainstays – namely energy savings and the more efficient use

of energy – we see this proposal as part of an integrated European strategy. ERENE

refaceP

should concentrate on increasing the use of renewable energy sources in the EU by

7

common action and networks. Transnational programmes and projects should create

a win-win situation for Member States by taking advantage of economies of scale, a

common market for renewable energy and by sharing costs.

The principle of subsidiarity should likewise apply to ERENE, which means that

actions shall only being taken at a European level when the objectives cannot be

attained fully at the local or national levels, or can only be attained under unfavour-

able conditions. Therefore, ERENE should be given the following competencies in

order to carry out its mission:

To support transnational research in renewable energy. Especially when

comparing the resources assigned to nuclear research, there is a lot of catching up to

do;

To promote innovation through the establishment of demonstration facilities;

To contribute to the creation of an intelligent European electricity grid to include

a large number of different decentralised renewable energy sources, which are crucial

to the development of sustainable energy supply;

To support investment in electricity generation from renewable energy sources;

To contribute to the functioning of a single European electricity market based on

renewable energy;

To promote co-operation with other countries on renewable energy sources, in

particular with Mediterranean countries because of their enormous solar energy

potential.

We wish to thank the authors of this study, Michaele Schreyer and Lutz Mez, as well

as David Jacobs for his collaboration. Without their extensive knowledge and insti-

tutional experience in the complex area of European energy and other policies, we

would have been unable to complete this project so successfully; we hope that the

study will attract the attention of the public and of policymakers, which it deserves.

Berlin, May 2008

Ralf Fücks

Executive Board, Heinrich Böll Foundation

enewable Energy

European Community for R

ERENE

8

ExECUTIVE SUMMARY

Alongside the twin pillars of improving energy efficiency and energy savings, renew-

able energy plays a key role in any sustainable European energy policy. It contrib-

utes to the fight against climate change. It lowers the European Union’s (EU) import

dependency, thereby increasing security of supply and decreasing reliance on volatile

oil, gas and uranium prices. The EU’s international competitiveness is also boosted

by technological developments in this up-and-coming industry.

By virtue of its geological, climatic and hydrological conditions, Europe has every

available renewable energy source at its disposal. Hydro, wind, solar thermal, photo-

voltaic, geothermal, wave and tidal sources, as well as biomass, can all be used for

power generation, albeit not in every European country or region. Estimates show

that EU Member States, Norway, Iceland, Switzerland and the EU candidate countries

Croatia and Turkey, as well as the western Balkan countries, possess a combined

economic potential for “green electricity” production that far surpasses current and

future projections of electricity demand.

Currently, however, Europe uses only a fraction of its green electricity potential.

In the European Economic Area (EEA), only Iceland and Norway completely cover

their electricity demand with energy generated from renewable sources, while the

rest of Europe taps this potential to a limited extent only, if at all. The considerable

capacity of renewable sources other than hydro power to generate electricity remains

underutilised in most European countries. In the west of the EU – Ireland, the United

Kingdom and France, for example – fail to use their great potential for wind power. In

the north, the Scandinavian states have more biomass, hydro and wind power capac-

ities than they currently use. In central and eastern Europe, Poland alone has more

than 100 TWh of green electricity potential, which currently goes unused. Germany’s

renewable electricity potential is six times higher than that produced at present. The

EU’s potential to generate electricity from wind is estimated to be 20 times higher

than the amount produced in 2005. In addition, solar thermal power plants situated

in such Member States and candidate countries in or near the Earth’s sunbelt could

supply almost half of the EU’s electricity needs.

The exploitation of renewable energy in Europe is still in its infancy.

enewable Energy

While the European Union has set the target to generate 20% of its overall final energy

consumption from renewable sources by 2020, the benefits that the EU can provide

as a community for common action are not being fully taken advantage of. Member

States have differentiable national targets, to be pursued via individual national

y

action plans. In comparison with the formative years of the European Community,

with the European Coal and Steel Community (ECSC) and the European Atomic

European Community for R

Energy Community (EURATOM), two of three founding treaties pursued energy-ori-

ented goals – it is clear that today there is a profound lack of determination to use

ERENE

Executive Summar

common action in order to force the expansion and use of renewable energy.

9

Common action in the area of renewable energy could offer a scenario that

many Member States could otherwise only dream of. A new “European Commu-

nity for Renewable Energy” (ERENE) would bring this to fruition. The task of ERENE

should be to look beyond the national frameworks to develop and put into practice

a Community Strategy designed to facilitate a complete shift to renewable energy for

the electricity sector.

The principle aim of ERENE would be to provide the conditions necessary to take full

advantage of the EU’s climatic, geological and hydrological diversity. While certain

EU countries enjoy a much greater economic potential for the production of green

electricity than is necessary to cover their own electricity demand, at least one-third

of the Member States are in the opposite position. It would be difficult, if not impos-

sible, for them to completely shift to green electricity with a renewable energy strategy

focussing solely on the sources within their own borders.

It is clear that a strategy that combines the use of regional renewable sources

with a transnational grid for a European internal market for green electricity will

create new opportunities both for the sustainable modernisation of the electricity

sector and for the eventual coverage of the EU’s total electricity demand by renew-

able energy sources.

ERENE does not aim to compete with the European Commission’s January 2008

proposal for the Directive on the promotion of the use of energy from renewable

sources. The implementation of this Directive would certainly be a great step forward

in the EU’s energy policy. Instead, ERENE should offer ambitious Member States the

opportunity to develop a strategy that goes beyond the EU Directive through common

action, forming an avant garde for the shift from electricity production from fossil

and nuclear energy to renewable sources. Additionally, it would strengthen European

integration and emphasise the value of common action in coping with the challenges

of the future.

ERENE could be founded either as a Community for enhanced co-operation

between Member States under the aegis of the EU, or as a Community on the basis

of a separate treaty. Establishing it as a Community for enhanced co-operation

would emphasise that it is a new and relevant integration project for the EU, even

if – as with the Economic and Monetary Union – not all Member States would join

immediately. Establishing it on the basis of a new separate treaty, such as ECSC and

EURATOM, would herald an historic move away from the age of fossil fuels and

nuclear power to one of renewable energy. Furthermore, it would demonstrate that

the European Union, 50 years after its founding as a Community, remains devoted

enewable Energy

to the goal of establishing an environmentally friendly and secure energy supply for

Europe.

In order to achieve these goals, ERENE’s competencies should be as follows:

To conduct the necessary research, support the dissemination of new technol-

ogies and facilitate innovation through the establishment of pilot projects. ERENE

European Community for R

should have the possibility to lead common research programmes; establish and run

common research institutions; set up demonstration plants for the production and

ERENE

10

transmission of energy from renewable sources; and support training programmes,

including the promotion of research fellowships and exchange schemes.

To contribute to the creation of a European electricity grid via participation in the

building and maintenance of transnational interconnectors as well as grid connec-

tions to demonstration plants, in addition to promoting the development of smart

grids for the systemic integration of renewable energy.

To establish joint undertakings.

To facilitate and promote investment in renewable energy through a common

support scheme for electricity trade from renewable energy. A price-based, technol-

ogy-specific support scheme for renewable electricity imports in ERENE Member

States is proposed alongside the national support schemes.

To further co-operation with other states in the area of renewable energy.

ERENE’s expenditure shall be financed by the participating Member States using

the revenue from the European emissions trading scheme. The majority of ERENE’s

actions shall be financed in accordance with the principle of “geographical return”,

that is, that the value of projects, investments and electricity-supply agreements are

distributed according to individual Member States’ financial contributions.

What are the necessary steps to establish a “European Community for Renewable

Energy” as the next great European integration project?

The year 2008 should be used for consultations on the proposal for the creation

of ERENE. The UN Climate Conference in Poznan, Poland, in December 2008 is a

particularly important date in this context.

European Parliament elections in the first half of 2009 could provide a platform to

bring ERENE onto the European agenda.

After the Lisbon Treaty comes into force, the ERENE proposal could be put on

the European Commission’s agenda via the newly created “citizens initiative”. The

second half of 2009 could then be used to concretise the proposal at the national and

European levels, particularly in view of the UN Climate Conference at the end of 2009

in Copenhagen, Denmark.

In early 2010, the Spanish Presidency could prepare a mandate for establishing

ERENE – whether through a separate treaty or as a project of enhanced co-operation

in the EU.

That same year, 60 years after the Schuman Plan, which provided the basis for

establishing the first European Community, the ECSC, a decision could then be taken

on founding a “European Community for Renewable Energy”.

enewable Energy

ERENE could, after the creation of the common internal market and the common

currency, be a great new project for Europe, accentuating the vital importance of

common action for Europe’s future.

y

European Community for R

ERENE

Executive Summar

11

INTRODUCTION

Climate and energy policy is at the very top of the European Union’s political agenda.

A sustainable energy policy, the fight against climate change and the security of

energy supply are among the key terms characterising today’s political debates and

action plans. There is a large consensus among the European population that these

issues will determine our future to a significant extent.

At the Spring Summit in March 2007, the European Council – once more alarmed

by the report of the Intergovernmental Panel on Climate Change (IPCC) as well as

the Stern Report – urged and backed by the European Parliament, and following

proposals from the European Commission, agreed on the following noteworthy goals:

to reduce its greenhouse gas emissions by 20% – or even 30% in the case of an inter-

national climate agreement – by 2020, in addition to increasing energy efficiency by

20% as well as achieving a 20% share of renewable energies in total energy consump-

tion during the same period.

The European Commission has, with these targets, introduced an extensive

package of proposals – including a draft Directive for the promotion of the use of

energy from renewable sources – which was presented on 23 January 2008. It envisions

individual targets for Member States as part of a burden-sharing system in order to

reach the overall 20% targets for the European Union. If this package of proposals is

implemented, EU energy policy will change profoundly in the next decade.

But do the package of proposals and the Renewable Energy Roadmap proposed

by the European Commission in January 2007 offer a long-term vision for the future

of energy supply in the EU? Does the renewable energy Directive offer European

citizens a vision with which they can identify? Does the 20% target and its distribu-

tion among the individual Member States make it sufficiently clear to citizens what

the EU wants to achieve as a community and that the uniqueness of those targets lies

in the fact that they have been decided upon not under the aegis of an international

agreement or as a purely national aim, but specifically by the European Union itself?

Are the advantages that the European Union offers actually being used to realise a

vision, which for individual Member States alone might be pure utopia, but which,

through joint efforts, can become reality?

The advantages of the EU are manifold. When it comes to a sustainable energy

policy, one of the main advantages is the fact that forces and resources can be pooled

together. Others are the common market and the EU’s natural diversity: the different

geological, climatic and hydrological conditions and the resulting diversity of renew-

able energy sources in the EU, the surface area of which today encompasses over 35

degrees of latitude and over 40 degrees of longitude – counting Cyprus even more

than 45 – and in which approximately 500 million people live. It is these advantages of

common action that a European Community for Renewable Energy (ERENE) intends

to fully exploit. Seeing the potential of renewable energy sources not just within a

Introduction

national framework but also developing and using it as part of a common strategy

13

should be the aim of this joint project. ERENE stands for the vision that one of the

leading economic regions in the world can take a qualitative step forward towards

a modern, sustainable energy policy and increasingly cover its energy consumption

with renewable energy sources.

This study does not deal with all sectors of energy consumption, but concentrates

primarily on the electricity sector and the corresponding tasks which should be taken

on by ERENE as well as the instruments it should have at its disposal. It is in this

sector – as the renewable energy-potential analysis clearly demonstrates – that the

vision of a complete supply from renewable energies and the end of the dependency

on fossil fuels and nuclear energy could be realised the fastest via common action.

The intention of this study is not to be an alternative to the directives proposed

by the European Commission in January 2008. It would also be a misunderstanding

to see the study as a call to add a few percentage points on top of the 20% target

for the share of renewable energies in energy consumption in 2020. The study aims

to go much further than that aiming to show the feasibility of the long-term vision

of covering the energy demand in the electricity sector increasingly with renewable

energy sources.

Of course, as the EU’s 20% target enshrined in the draft Directive is a minimum

value, each Member State is free to direct its policy towards reaching a higher share

of renewable energy in 2020. It is also to be expected that the EU will establish further

targets for the period after 2020. However, it cannot be assumed that all Member

States will be able to agree on further targets in the near future, nor reach a consensus

on replacing fossil fuels and nuclear energy sources in electricity production with

renewable energies as soon as possible and joining forces to do so. But what possi-

bilities do EU Member States who wish to use the present schedule have in order to

reach this targeted development, not only through national efforts, but also via joint

action? The creation of ERENE as a community within the EU and an avant garde for

a sustainable European energy supply shall offer such a possibility.

The present study sets out the circumstances and options for the implementa-

tion of such a community. To this end, it describes the diversity of the EU’s potential

for electricity generation from renewable energy sources and its regional distribution

across the EU, and identifies the conditions necessary to make better use of these

potentials. The study examines in which areas enhanced joint action could lead to a

faster development towards an electricity supply based on renewable energy sources,

which instruments ERENE would need to have at its disposal and which legal and

institutional form ERENE could be based on.

This study does not develop its own scenario with different steps and degrees of

fulfilment of targets at each point in time. Instead, it uses to a great extent findings

from different scientific studies, in which scenarios for the use of renewable energy

enewable Energy

in Europe have been developed. In many aspects it is based on the “vision scenario”

of the Öko-Institut in Freiburg, the study on the potential of renewable energies by

the German Aerospace Center as well as on papers and studies commissioned and

developed by the European Commission.

In addition, this study is embedded in a political context, in which numerous

civil society networks for the development of solar energy have been created over

European Community for R

the years – EUROSOLAR can be mentioned as an excellent representative example

here – as well as parliamentary networks for European initiatives for the development

ERENE

14

and use of the renewable energy potential. We would like to make special mention

of EUFORES – the European Forum for Renewable Energy Sources – and the inter-

parliamentary network EUrenew, the latter of which was created to support the call

for a European treaty on renewable energy sources, because the vision concretised

in this study is closely related to ideas, demands and proposals from these networks

and the people behind them. The vision of a complete electricity supply from renew-

able energy sources and the end of the dependency on fossil fuels and nuclear energy

sources will become a reality sooner and in a more cost-efficient and environmen-

tally friendly way if, at the same time, the other pillars of a sustainable European

energy policy, namely energy savings and energy efficiency, are utilised. The proposal

for a Community for Renewable Energy would be completely misunderstood if it

were thought to be a reflection of political or economic priority being given to the

development of renewable energy sources over the above-mentioned pillars of a

sustainable energy policy. The increase of energy efficiency and measures for energy

savings must also occupy a central position. This, however, should not stop us from

seizing the chance to develop a new initiative that offers the possibility of using the

natural diversity in the EU to safeguard the climate, increase energy-supply security,

modernise the energy supply and bring forth a new integration project.

Following the creation of the single European market and the common currency,

ERENE could be a big new project for Europe and clearly demonstrate the impor-

tance of joint action for Europe’s sustainable future.

enewable Energy

European Community for R

ERENE

Introduction

15

1

The Vision of a European Community for

Renewable Energy in the Context of the Past,

Present and Future of European Integration

1.1 European Energy Communities in the History of the EU: Reasons for Their

Establishment, Goals and Instruments

Questions concerning security of energy supply were on the table at the very begin-

ning of European integration. The Schuman plan of 9 May 1950, signed in Paris on

18 April 1951, formed the basis of the Treaty establishing the European Coal and

Steel Community (ECSC Treaty). With it, the foundations for the building of the

EU had been laid. The reason for the creation of the ECSC was mainly the polit-

ical view that common management of the coal and steel sectors, which form the

basis of the armaments industry, would render any future war between France and

Germany materially impossible. But the conviction that joint efforts would help to

reach economic targets, including a secure energy supply, faster and better than with

national efforts alone was also a driving force behind European integration from the

very start.

These reasons also played a decisive role in the creation of the European Atomic

Energy Community (EURATOM). The development of nuclear energy was intended

to increase energy production and, according to the conviction of the founding

members at that time, lead to a reduced dependency on imports for the Commu-

nity’s energy supply. As the costs involved in the development of nuclear energy were

considered too high for one country to bear alone, they set out on a joint path. But,

here as well, the aspect of joint control of potential war technology, which now had

to be used for peaceful purposes, was of great importance. Thus, on 25 March 1957,

the EURATOM Treaty, together with the Treaty establishing the European Economic

Community (EEC), was signed in Rome (Treaty of Rome) and entered into force on 1

January 1958.

In other words: two of the three treaties on which the EU was founded pursued

goals which were in part – or even primarily – related to energy policy. The ECSC

Treaty was limited to 50 years and expired on 23 July 2002. The EURATOM Treaty, on

the other hand, was signed for an indefinite period of time and continues to exist to

enewable Energy

this day. Thus, even after the coming into effect of the new Lisbon Treaty, EURATOM

will continue to exist side-by-side with the EU as a European community to which all

EU Member States belong. Moreover, since the 1965 Merger Treaty, which joined the

institutions of all three communities existing at the time, the community institutions

are also responsible for EURATOM, although different rules for decision-making were

kept.

European Community for R

What responsibilities and aims did or do these European energy policy-related

communities have, and what instruments have been put at their disposal in order

ERENE

16

for them to carry out these tasks? Such questions are of interest here in light of the

possible conclusions that can be drawn for a stronger European promotion of renew-

able energies, and hence for the creation of – and definition of tasks and competen-

cies for – ERENE (see chapter 3).

The ECSC was responsible for ensuring an orderly coal and steel supply for the

common market as well as safeguarding equal access for its Member States and

their respective companies to the means of production. Moreover, the ECSC had to

supervise the lowering of prices, boost the expansion of the production potential and

modernise production itself. In addition, it had responsibilities related to labour and

social policy with respect to the workers in the coal and steel sectors. For the fulfil-

ment of its mandate, the ECSC had, among other means, financial instruments at its

disposal. This, for instance, allowed it to engage in research activities and to support

business investment by making loans and extending guarantees. In addition, it could

use instruments of direct market intervention. In the event of a fall in demand for

coal and steel, it could set production quotas, and in the case of excessive demand –

that is to say during periods of scarcity – it could set up a coal and steel product distri-

bution system. Under certain conditions, it could also fix maximum and minimum

prices and had the right to control freight tariffs in order to avoid discrimination.

The ECSC had its own budget and collected its own revenue. To finance the costs

of administration as well as the expenditure for subsidies for research and adapta-

tion, the companies producing the coal and steel were charged according to their

production value.

As such, the ECSC had some very powerful instruments for intervention and

support. The same has applied to EURATOM from then on.

uture of European Integration

EURATOM’s main task – besides the supervision of the use of nuclear fuels within

the Community and compliance with common safety regulations – is to promote the

development of the nuclear industry. To this end, the Community was granted exten-

resent and F

sive powers and given a variety of instruments. EURATOM’s tasks and competencies

ast, P

include:

The promotion of research. EURATOM supports research in Member States by

granting financial aid, organising joint financing and co-ordinating research in order

to avoid part of the work being repeated or dismissed. With the creation of EURATOM,

a common research and training programme was decided on. For the execution of

this programme, a joint nuclear research centre was created at the supranational

level. The personnel needed for this joint research centre was estimated at 1,000 at

the moment of its creation. The first common facilities were located in Ispra (Italy).

After that, nuclear research centres in Geel (Belgium), Petten (the Netherlands) and

enewable Energy in the Context of the P

Karlsruhe (Germany) followed. The centres, today called Joint Research Centre (JRC),

enewable Energy

continue to carry out direct measures from the Research and Training Programme

regarding nuclear energy in the framework of EURATOM;

The dissemination of technical know-how. EURATOM has the ability to grant

licences for Community rights and, if necessary, to grant licences officially;

Establishing reporting obligations for investments. In order to facilitate the

co-ordination of development and research, illustrative programmes are published;

European Community for R

The creation of a common market for certain substances and tools. This compe-

tency was especially relevant in the period up to the creation of the single European

The Vision of a European Community for R

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1

market;

17

The common ownership of fissionable material by the Community;

The creation of a supply agency (today named the European Supply Agency) to

secure a supply free from discrimination and to provide equal access to certain raw

materials. An obligation to offer these substances to the agency was incorporated

into the EURATOM Treaty;

The setting up of joint undertakings. These enterprises can also have a purely

private legal status. EURATOM can participate in these businesses financially. The

joint undertakings can be supported through the use of national expropriation

procedures for the acquisition of land for the construction of facilities for the nuclear

industry, the obtaining of licences, and exemption from taxes and contributions for

the establishment of the enterprise and for the acquisition of the land, as well as from

those on property and income.

After its creation, EURATOM was allocated its own budget, which was financed by

contributions from the Member States. In 1968 this budget was integrated into the

overall EEC budget. EURATOM can also enter into loans to support investment in the

area of nuclear energy.

The budget figures for the first years of European integration reflect the impor-

tance of both energy communities – ECSC and EURATOM – at the time. For instance,

in 1965 the EEC budget amounted to 77 million UA (Units of Account), the ECSC

budget to 36 million UA and the EURATOM budget to 120 million UA. Thus, 40% of

the total budget for the three communities went to EURATOM.

With hindsight, it can be seen that the ECSC truly fulfilled its political function.

This, among other things, was to lay the foundations on which peace was to be

guaranteed between former enemies through co-operation and the establishment

of common supranational institutions. The ECSC was also very important because

it benefited economic reconstruction in the member countries via steel production

and the energy supply from coal. The negative environmental consequences of the

coal mining industry and the use of coal, on the other hand, were regarded as merely

local or regional problems and dealt with accordingly for decades. However, from the

current perspective, and with a view to the future, it is clear that an energy commu-

nity based on coal cannot ensure a sustainable energy supply, not only due to the

exhaustibility of the resource, but mainly due to the climatic consequences of coal

burning.

The second European energy community, EURATOM, also had a strong impact on

European integration. From an energy policy point of view, however, with hindsight it

must be considered a mistake. The question of the disposal of nuclear waste remains

entirely unsolved. Europe depends on the import of uranium, so nuclear technology

does not eliminate the dependency problem. But, above all, with the spread of this

enewable Energy

technology, the safety risks – not only those derived from the individual power plants

but also those derived from its dual-use nature, that is, the potential use for the

manufacture of nuclear weapons – have grown steadily. It is a technology which can

solve neither global climate nor energy problems.

Nevertheless, the EURATOM Treaty remains in force. In this vein, five Member

States – Germany, Ireland, Hungary, Austria and Sweden – have expressed their view

European Community for R

in a declaration on the Lisbon Treaty (Declaration No. 44) that the provisions of the

EURATOM Treaty since their entering into force have not been substantially changed

ERENE

18

and need to be updated, and that they therefore support the idea of an Intergov-

ernmental Conference on the modification of this treaty, which they say should be

convened as soon as possible. However, it is still unclear whether it will come to such

an Intergovernmental Conference in the near future, and, if so, with what aim. Regard-

less of such an Intergovernmental Conference, under the new revised provisions of

the Lisbon Treaty, the government of any Member State, the European Parliament or

the European Commission can present proposals for the modification of the Treaty

on European Union (TEU) and the Treaty on the Functioning of the EU (formerly EC

Treaty (Art. 23 TEU)). Although the EURATOM Treaty is not included in this revision

clause, in theory each of the mentioned actors can present a proposal to include the

safety provisions of the EURATOM Treaty in the Treaty on the Functioning of the

EU and to abandon the provisions regarding the promotion of the nuclear industry.

However, to bring such a proposal for the cancellation of the EURATOM Treaty into

force, consensus and ratification in all Member States is needed.

ECSC and EURATOM demonstrate the determination of the Member States in

the founding years of the European Community to achieve a secure and independent

energy supply through joint efforts. The promotion of renewable energy, on the other

hand, is only explicitly included in the responsibilities of the EU with the Lisbon

Treaty. Today, we know that it is impossible to obtain a sustainable energy system

either on the basis of fossil energy sources alone, or through nuclear power, and that

renewable energy plays a key role in securing a sustainable energy system. Neverthe-

less, a fierce determination at the European level – as was present with the ECSC and

EURATOM – to stimulate the expansion of the use of renewable energies via joint

action is still missing.

uture of European Integration

Thus, establishing a European Community for Renewable Energy has – in addition to

the aim of moving away from the fossil and nuclear era and entering into an era of

resent and F

renewable energy – the strong symbolic-political value that the European Community,

ast, P

more than 50 years after its creation, is again dedicating itself with renewed common

efforts to a goal that it has until now not achieved: to bring about an environmentally

friendly and safe energy supply in Europe.

1.2 Today’s Climate and Energy Challenges for the EU

The challenges facing the EU in relation to its energy policy have become increasingly

complex and urgent. The Member States are therefore more and more prepared to

accept a common European energy strategy. Although with the ECSC and EURATOM

enewable Energy in the Context of the P

two special communities were created for coal and nuclear energy, questions related

enewable Energy

to energy policy per se were not considered issues of common interest for many years.

It was only with the first steps towards the liberalisation of the electricity and natural

gas sectors, the new concern about security of supply and, especially, the threat of

climate change that this has changed.

Today, it is clear that climate and energy policy are two sides of the same coin. In the

industrialised and in the emerging countries, the energy sector is responsible for most

European Community for R

of the greenhouse gas emissions – 70% of the climate-damaging CO2 emissions are

generated by the production and use of energy. During the past 650,000 years, green-

The Vision of a European Community for R

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1

house gas concentrations in the atmosphere were never as high as they are today.

19

Currently, the EU is responsible for one-sixth of all CO2 emissions worldwide

and one-fifth of all greenhouse gases from industrialised countries. In 2005, the

total greenhouse gas emissions of the EU-27 amounted to 5,177 Mt CO2 equiva-

lent. In comparison with the reference year, 1990, this represents a 7.9% reduction.

However, for the EU-15, the reduction is only 2%. The Kyoto target for the EU-15 of

an 8% reduction for the first period, 2008–2012, can now only be reached if all avail-

able mechanisms for the reduction of greenhouse gases – including lowering carbon

emissions and so-called flexible mechanisms – are used. If no additional measures

for the reduction of greenhouse gases were to be taken until 2020, emissions in the

EU in the year 2012 would be only 6% below those of the reference year, 1990. At the

same time, energy consumption, and hence greenhouse gas emissions, is increasing

steadily in large emerging countries such as China, India, Brazil and South Africa

as a result of their fast economic growth. If no countermeasures are taken, global

energy consumption will go up by roughly 70% over the next two decades, leading to

a further rapid increase in CO2 concentrations in the earth’s atmosphere.

Rising CO2 concentrations not only raise the average temperature of the earth,

but at some point they also trigger other catastrophic effects. Hence, the aim of the

EU is to limit global warming to a maximum of 2°C above the pre-industrial value,

as once this threshold value is exceeded, there might be irreversible and possibly

disastrous changes. At present, the EU is keen to oblige all industrialised countries

to lower greenhouse gas emissions. As such, the EU imposed the obligation on itself

to reduce greenhouse gas emissions by 20% by 2020. If the other industrialised

countries participate, the reduction target will be raised to 30%. Furthermore, the

European Council said at its March 2007 summit that the industrialised countries

should focus on the target of jointly reducing emissions by 60–80% by 2050 compared

to 1990.

Global energy consumption will continue to increase. According to the latest

forecast of the International Energy Agency (IEA) (“World Energy Outlook 2007”),

global energy consumption in the year 2030 will be 55% higher than it is today. The

Energy Information Administration (EIA) of the US Department of Energy reaches a

similar conclusion in its reference case, with a 57% increase by 2030. According to an

estimate by Shell, global energy consumption could even triple by 2050. The main

factors contributing to this increase are said to be the increase in the world popula-

tion – from the current ~6 billion people today to ~10 billion people by 2050 – and the

clearing of the economic backlog by emerging and developing countries, with 70% of

the additional energy consumption attributable to countries outside the Organisation

for Economic Co-operation and Development. In the developing countries, the per

capita consumption of the growing population will continue to increase in parallel

with their economic development, while industrialised countries could balance their

enewable Energy

increase in energy demand due to economic growth by saving energy and enhancing

energy efficiency.

The increase in the world population, worldwide economic growth and rising

prosperity in industrialised and developing countries and the resulting higher energy

consumption, on the one hand, and the limited fossil resources together with the

environmental consequences of the use of these energy sources for the global climate,

European Community for R

on the other, lead to key questions regarding the world’s future: How can energy and

resources be used sparingly and efficiently? And how can scarce resources be distrib-

ERENE

20

uted so that economic development becomes possible for a larger number of people

without further damaging the environment?

The rising global energy demand, the competition for fossil energy, the regional

concentration of part of these resources in politically unstable countries, and the

experience that the presence of gas and oil is synonymous with potential geopolitical

power have not only raised concerns regarding energy-supply security among EU

political actors, but also among the population in general.

Some 52% of the EU-27’s energy supply is covered by imports. According to

“business-as-usual” scenarios, the EU’s import dependency will reach 65% by 2030.

According to information provided by the Öko-Institut, the dependency ratio is

already at ~60% if – unlike in most statistics – one does not regard nuclear electricity

production as 100% national, but takes into account that only approximately 2% of

the uranium used in the EU actually comes from EU mines. Based on this calculation,

the EU’s dependency on imports for its energy supply would even rise to over 70%

over the next two decades.

When comparing the individual EU Member States, import dependency varies

strongly (see Appendix 1). Cyprus, for instance, was completely dependent on imports

in 2005. Its own energy production – from renewable energy sources – was limited to

4% of its total consumption in 2005. At the other end of the spectrum is Denmark,

which is currently the only net exporter of energy sources in the EU.

As a result of the regional concentration of resources, the high costs involved

in the building of pipelines and also political reasons, there are only very few third

countries covering the EU’s energy import demand. In the case of natural gas, for

example, half of the EU’s imports are covered by only three countries (Russia,

uture of European Integration

Norway, Algeria), while for nuclear fuels, the EURATOM Supply Agency states in its

2006 annual report that: “[d]ue to a low number of major players at the various stages

of the fuel cycle, supply constraints can happen at any stage.”

resent and F

Various developments in the energy markets have led to sharp price increases.

ast, P

When oil prices (and linked to them gas prices) – after a dramatic fall to the “historic”

value of 9.50 USD per barrel (195 litres) in 1998 – started rising again, it was an

expected development for volatile energy prices. But the price continued to increase.

In the year 2000, the oil price had already more than tripled, and in 2002 the next

dramatic price increase occurred, with the barrel price reaching 78.40 USD in July

2006 and crossing the 100 USD threshold in January 2008.

This increase in oil prices has been the result of a number of short- and long-

term factors. In the United States, oil refineries saw up to one-third of their capacity

disappear as a result of retrofitting for environmental reasons, and US oil compa-

enewable Energy in the Context of the P

nies therefore started buying up mineral oil products worldwide. The demand from

enewable Energy

emerging countries such as China and India is growing considerably and conflicts

(or crises) and natural disasters (e.g., Hurricane Katrina) have also caused produc-

tion losses. Moreover, energy markets are also stimulated by speculation from diverse

financial players who have switched from the battered credit market to the booming

raw materials and currency markets. For consumers, the soaring global energy prices

represent a new inflation risk. Those most affected by this development are the

European Community for R

world’s poorest.

But the current climate and energy challenges affect many other aspects of

The Vision of a European Community for R

ERENE

1

individual and society life. The report of the second working group of the IPCC

21

described the effects of climate change on living conditions, including economic

consequences for each continent. Climate change raises new questions about

justice, both between North and South and within each society. A further reduc-

tion in available food due to climate factors will affect the least developed countries

(LDCs) most. At present, one-fifth of the world’s population lives in coastal areas, so

the imminent loss of living space as a result of rising sea levels will lead to huge flows

of refugees.

Climate change also raises new questions regarding international security. The

potential for resource-related conflicts is increasing. The expansion of the use of

nuclear energy for the production of electricity could lead to new risks of prolifer-

ation in the face of the already volatile non-proliferation regime. The proliferation

risk of nuclear technology, which can be used for military purposes by “civil” nuclear

energy programmes, exists mainly in politically unstable countries. These are a few of

the problems which the EU High Representative for Common Foreign and Security

Policy, Javier Solana, and the European Commission list in their joint paper “Climate

Change and International Security” published in March 2008. The paper concludes

that the effects of climate change on international security are not a future problem,

but one which can already be felt today and will require our long-term attention.

It is therefore high time that Europe starts using all its power and potential to find

answers to these challenges.

1.3 The Contribution of a New European Community for Renewable Energy to a

Sustainable European Energy System

A sustainable energy system has to find answers to the challenges of climate change

and to the global economic and social questions around energy supply. In 2006 the

Öko-Institut carried out a scenario analysis of a sustainable European climate and

energy policy for the Greens and the European Free Alliance in the European Parlia-

ment. The vision scenario developed in the study is based on two main tenets:

1. By 2020, compared to the reference year, 1990, emissions in the EU should

decrease by 30% if all non-controversial options for the reduction of greenhouse

gases are implemented.

2. As a result of the nuclear “phasing-out” policy of different EU Member States

and the technical limitation of the 40-year lifecycle of nuclear power plants, such

plants should disappear, and no new ones should be built.

According to the vision scenario, all greenhouse gas emissions in the EU could be

reduced 31% by 2020 and 40% by 2030. CO2 accounts for the biggest emission reduc-

tion. According to individual sectors, the vision scenario mentions the following

enewable Energy

emission reductions:

In the electricity sector – the main source of CO2 emissions in the EU – a total

reduction of 36% can be achieved by 2030 via measures such as combined heat and

power (CHP), the switch from coal to gas, and the use of renewable energy sources as

well as a more efficient use of electricity in other sectors.

The transport sector – including air transport – can contribute with a reduction in

European Community for R

greenhouse gases of up to around 20% by 2030.

Private homes can achieve a total greenhouse gas reduction of 15.5%.

ERENE

22

In the case of non-CO2 greenhouse gases, different measures can lead to a 14%

reduction by 2030.

Greenhouse gas emissions can be reduced by 8% in the production sector and 7%

in the services sector. If carbon capture and storage power plants were feasible on a

large scale from 2020 onwards, the emission reduction could be another 100 million

tonnes of CO2 higher by 2030, or 5% of total emission reductions.

The most significant individual contribution comes from renewable energy sources:

24% of emission reductions is attributable to these energy sources. The increased use

of CHP, and the fuel switch for electricity production account for an 11% reduction

by 2030, a more sparing use of electricity for 12%, more efficient heating and cooling

for 21%, and the measures taken in the transport sector for 17% of total emission

reductions.

According to the Öko-Institut’s vision scenario, the share of renewable energies in

electricity production in the EU in 2020 will be around 44% and rise to 59% by 2030,

while in the business-as-usual scenario it is only 26%. On one hand, the higher share

in the vision scenario is a result of the assumption that electricity consumption rises

more slowly than in the comparative scenario due to energy savings and increased

efficiency, and on the other because it is based on a greater use of renewable energy

sources.

This clearly shows that a sustainable climate and energy policy should be based

on the three pillars: energy savings, energy efficiency and renewable energies. An

efficiency and savings strategy alone is not a sufficient answer to the challenges, both

at the European level and globally. An increased use of renewable energy sources is

uture of European Integration

necessary as well. Conversely, a strategy aimed at an increase in the energy supply

from renewable energies alone is not enough to achieve an energy system that fulfils

the criteria of sustainability.

resent and F

The decisions of the European Council and the proposals the European Commis-

ast, P

sion presented in January 2008 rightly establish a close connection between climate

and energy policy. They are based on the twin strategy of improving energy efficiency

and increasing the use of renewable energy sources. In view of the urgency of the

tasks, this strategy requires a dramatic increase in energy efficiency and the replace-

ment of fossil and nuclear energy sources with renewables. Both strategies also

counteract an increased dependency of the EU on energy imports.

As such, the EU has set itself the goal to increase its energy efficiency 20% by the

year 2020. This goal can only be reached with a package of measures in all sectors,

with the biggest savings potential in the construction sector. In energy production,

enewable Energy in the Context of the P

almost half of the primary energy used can be saved via CHP. In the transport sector,

enewable Energy

the significant efficiency potential can only be realised in a short period of time if

consumption is reduced in all market sectors. Comprehensive measures are also

necessary in the industry and in the area of consumer goods. Here, following the

Japanese example, a European “top-runner programme” based on the Eco-Design

Directive can ensure that the most efficient technologies penetrate the market the

fastest.

European Community for R

Important recent steps taken by the EU with a view to increasing energy efficiency

and reducing energy consumption included the approval of the Eco-Design Direc-

The Vision of a European Community for R

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1

tive for Energy-using Products 2005, the Directive on Energy Efficiency and Energy

23

Services, and especially the approval of the Action Plan for the increase of energy

efficiency in the year 2006. In 2007, the proposal for a regulation on new emission

standards for passenger cars was presented, and it is vital that the initiatives the

Commission has announced for 2008 and 2009 – including the amendment of the

Directive on total energy efficiency of buildings – are adopted and implemented

urgently in order to reach the 20% efficiency target.

The most important instrument of the EU to reduce CO2 emissions, however,

is the European Emissions Trading Scheme (EU ETS), where the Commission has

already put forth a reform proposal into the legislative process within the framework

of its Energy and Climate Package.

In January 2007, the EU Commission proposed the “Energy and Climate Change

Package” for an enhanced use of renewable energy sources and outlined a related

“roadmap”. On this basis, the European Council agreed in March 2007 for the first

time on legally binding targets for the use of renewable energy. By 2020 the share of

renewable energy should be increased to 20% of total EU energy consumption. This

means a 150% increase in comparison with the current situation.

The draft Directive on the promotion of the use of energy from renewable sources

launched by the European Commission on 23 January 2008 should implement the

aforementioned 20% target. To this end, differentiated national targets have been

defined for each Member State as part of a “target-sharing” strategy (table 1). These

are calculated on the basis of a “fair and adequate” distribution that takes into account

the different national situations and economic possibilities, plus a fixed increase of

that share, which is the same for all countries. These national target values become

binding as a result of the Directive. Each Member State has to draw up national

action plans which should ensure that both the final and interim targets are met. The

European Commission will be in charge of supervising these plans.

The proposal for the Directive does not contain any sector-specific targets for

electricity, heating and cooling. According to the subsidiarity principle, the Member

States should be responsible for deciding in which areas they want to promote the use

of renewable energy sources in order to reach the overall national target. For reasons

of the internal market, the draft Directive does propose a common sector-specific

target for the fuel sector, according to which the share of biofuels should reach 10%.

However, this provision is attracting criticism due to the possible consequences for

food production and its ecological effects, although the draft Directive contains strict

provisions on production conditions.

As a result of the Directive for the promotion of electricity produced from renew-

able energy sources, which has been in force since 2001, there is a European target

for the electricity sector, according to which 21% of the electricity production should

stem from renewable energy sources by 2010. However, the targets for the individual

enewable Energy

EU-15 Member States contained in this Directive and the target values for the new

Member States – which were incorporated into the accession treaties – are only indica-

tive, not legally binding. Based on the current situation, the share of renewable energy

in electricity production in the year 2010 for the whole EU-25 could be only 19%, with

very different contributions from the individual Member States. Nine countries are

on the way to reaching their national targets (Denmark, Germany, Hungary, Finland,

European Community for R

Ireland, Luxembourg, Spain, Sweden and the Netherlands). However, 16 countries

are still lagging behind.

ERENE

24

Table 1: National targets for the share of renewable energy in final energy consump-

tion in 2020

Share of renewable

Binding target value

Member State

energy in final energy

Increase of

for 2020

consumption

Sweden

39.8%

49.0%

8.2%

Latvia

34.9%

42.0%

7.0%

Finland

28.5%

38.0%

9.5%

Austria

23.3%

34.0%

10.7%

Portugal

20.5%

31.0%

10.5%

Denmark

17.0%

30.0%

13.0%

Estonia

18.0%

25.0%

7.0%

Slovenia

16.0%

25.0%

9.0%

Romania

17.8%

24.0%

6.2%

France

10.3%

23.0%

12.7%

Lithuania

15.0%

23.0%

8.0%

Spain

8.7%

20.0%

11.3%

EU

8.3%

20.0%

11.7%

Germany

5.8%

18.0%

12.2%

Greece

6.9%

18.0%

11.1%

Italy

5.2%

17.0%

11.8%

Bulgaria

9.4%

16.0%

6.6%

Ireland

3.1%

16.0%

12.9%

Poland

7.2%

15.0%

7.8%

Great Britain

1.3%

15.0%

13.7%

Netherlands

2.4%

14.0%

11.6%

uture of European Integration

Slovak Republic

6.7%

14.0%

7.3%

Belgium

2.2%

13.0%

10.8%

Czech Republic

6.1%

13.0%

6.9%

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Hungary

4.3%

13.0%

8.7%

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Cyprus

2.9%

13.0%

10.1%

Luxembourg

0.9%

11.0%

10.1%

Malta

0.0%

10.0%

10.0%

Source: EU Commission 2008

On the whole, it can be said that there is basically a consensus within the EU on the

key role played by renewable energy in a sustainable energy strategy. They contribute

to climate protection, they reduce the EU’s dependency on energy imports as they are

enewable Energy in the Context of the P

domestic energy sources, consequently increasing the security of the supply. Economi-

enewable Energy

cally speaking, they offer various advantages such as reducing dependency on volatile

oil, gas and uranium prices, which have risen sharply in recent years. The technological

development in this up-and-coming industry enhances the EU’s competitiveness. Even

now, this economic sector already provides employment for 350,000 people inside the

European Union.

European Community for R

For these reasons, it is highly significant that the EU Member States already agreed in

March 2007 to increase the share of renewable energies in total energy consumption

The Vision of a European Community for R

ERENE

1

at least 20% by 2020, and it is to be welcomed that there is also agreement on the fact

25

that the new Directive on Renewable Energy should be approved by the Council and

the European Parliament (EP) at least by the beginning of 2009.

Nevertheless, we should already start looking further than 2020. The replace-

ment of coal or nuclear power plants with facilities using renewable energies will take

several decades, and decisions in the energy sector on investments worth billions of

euros are to be taken in the coming years. Due to the long operating life of energy

plants – for power plants this is 40 years on average – the investment decisions of the

coming years will set the course for the energy supply-structure until the middle of

the 21st century. Therefore, we should not only focus on achieving the targets for the

year 2020, but it would also be desirable to have a broader European vision for the

use of renewable energy sources, and to work on the realisation of that vision.

The binding targets for each Member State contained in the Directive are

minimum targets for the year 2020. Today, it is hard to predict whether and when

these individual targets, which are to be achieved via National Action Plans (NAP),

will be updated. In any case, it is not the aim of this study to propose other targets for

the NAPs, nor propose that higher target values are already determined today for the

next decade.

It is rather about the contribution of the European dimension itself. What vision

does the EU have for the use of its domestic and diverse renewable energy sources?

What could that vision look like? What measures can we take as a community, at the

supranational level, in order to realise that vision? Given the significance of renew-

able energies, there should be an action plan at the European level as well, aimed at

a steady increase in the use of domestic renewable energy sources in order to ensure

the Community’s energy supply, while at the same time protecting the climate and

enhancing the EU’s competitiveness. The proposal to create a European Community

for Renewable Energy represents such a European action plan.

Just as the Member States dedicated themselves with great determination to a

common energy policy strategy with the establishment of the ECSC and EURATOM,

it is now time to develop and implement, with the same determination, a vision for

Europe for the use of its domestic renewable energy sources. This should be the task

of a European Community for Renewable Energy (ERENE).

The creation of a Community for Renewable Energy would reinforce one of the

pillars of the strategy for a sustainable energy policy. This should not be understood

as a prioritisation to the detriment of the other pillars – energy savings and energy

efficiency – but as a concretisation of one pillar: the renewable energy pillar.

This concretisation is focussed on the electricity sector. ERENE should pursue

the goal of replacing fossil and nuclear energy sources in electricity production with

renewable energies as soon as possible. Once again, it should be emphasised that

the focus on the electricity sector does not imply an underestimation of the other

enewable Energy

sectors of energy consumption. But for the transport sector, with a change in modal

split and a radical improvement of efficiency in the automobile industry, different

concrete steps need to be taken in order to provide an answer to climate and energy

challenges. Also, the question of the role renewable energies could and should play

in the transport sector requires different research and political answers than in the

case of electricity production. This also applies to the heating and cooling sector. The

European Community for R

package of tasks proposed here for ERENE should therefore not be understood as an

exclusion of certain sectors but rather as a concretisation of one specific sector.

ERENE

26

The creation of ERENE would constitute an important step forward in a strategy for

a sustainable European energy policy. With ERENE the possibilities and advantages

of common action at the European level can be used in order to make better use of

the great variety of the European renewable energy potential. The aim of ERENE

is to realise the vision of increasingly – and ultimately entirely – covering the EU’s

electricity needs with renewable energy sources. ERENE would reinforce European

integration and show its value for coping with the tasks of the future.

uture of European Integration

resent and F

ast, P

enewable Energy in the Context of the P

enewable Energy

European Community for R

The Vision of a European Community for R

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The Potential for Green Electricity within the EU

Which renewable energy sources are available in the EU? What are their poten-

tials? How are those potentials distributed across the different regions of the EU?

Is ERENE’s target of increasingly covering Europe’s electricity demands with power

produced from renewable sources a quixotic utopia or a vision that can be realised?

What share of that potential is being used today, and what obstacles hinder further

development?

To answer these questions, this study is primarily based on the results of two

studies: the German Aerospace Center’s TRANS-CSP study, which was commissioned

by the German government, and the international GreenNet EU-27 study project,

conducted by the Technical University of Vienna at the request of the European

Commission, the results of which were incorporated in its Technology Map.

2.1 EU Renewable Energy Potentials and their Regional Distribution

Thanks to its geological, climatic and hydrological conditions and diversity, Europe

is in a very good position to obtain a balanced energy supply based on renewable

energy. Renewable energy technologies – hydropower, wind energy, solar thermal

energy, photovoltaics, geothermal power, wave and tidal power, and biomass energy

– can all be developed and used on the European continent, although not in all

countries or regions.

When considering the potential for renewable energy sources, a distinction

must be made between theoretical, technical and economic potentials. The theoret-

ical potential refers to the maximum amount of physical energy resources available,

while the technical potential is a reduced amount because the given or assumed

advance of technology in the timeframe in question and structural and ecological

restrictions on exploitation and use are taken into account. The economic poten-

tial involves a further restriction and encompasses only the share of the technical

potential which is economically competitive according to certain assumptions and

excludes the share which is used by competing sectors. The technical potential of

renewable energy available in the EU, the Candidate States, the EEA and Switzer-

enewable Energy

land together is generally estimated at 40,000 PJ/a (petajoules per annum). This

figure represents approximately 60% of the EU’s current primary energy consump-

tion (BMU 2006: 26; DLR 2006). However, only around 12% is actually being used.

Only the hydropower potential has been extensively exploited, with a use of 80%

(BMU 2006: 26). For biomass around 50% of the estimated potential is being used

(see Fig. 1).

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Fig. 1: Technical potential for renewable energy in Europe (see country list table 1) and shares currently used

Source: BMU 2006: 26; Basis of data: DLR 2006

From a long-term perspective, there are additional large-scale potentials, namely

the further expansion of offshore wind and geothermal energy and also the import of

solar power from non-European countries in the sunbelt region around the Mediter-

ranean Sea. There is no doubt that Europe has the potential to direct its energy mix

increasingly towards renewable energy sources. To what degree Europe will make use

of this potential in the future depends on a variety of factors, about which different

assumptions are made in different scenarios. One scenario for the increased use of

this potential in the framework of a sustainability strategy is shown in Fig. 2. According

to this scenario, half of the primary energy consumption in Europe could come from

renewable sources by the year 2050.

If one looks specifically at the electricity sector, the analyses show that Europe

has the potential, in the long-term, to increasingly – and finally, completely – switch

to renewable sources for its electricity supply. The study from the German Aerospace

Center states that the EU, the EEA Member States, Switzerland, the Candidate States

Croatia and Turkey and the states in the western Balkan countries together have an

economic potential for regenerative power of around 5,780 TWh/a (Terawatt hours

per year). The current electricity consumption of the EU-27 is around 3,310 TWh/a

(2005), and for 2050 the German Aerospace Centre’s estimate of the demand for all

countries involved amounts to 4,000 TWh/a. The sum of the energy potentials for the

enewable Energy

production of green power in Europe is thus considerably higher than the current

and the estimated future demand.

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otential for Green Electricity within the EU

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Fig. 2: Possible expansion of renewable energy in Europe

Source: BMU 2006: 49

However, the potential for power generation from renewable energy sources are

evidently not distributed uniformly across all regions. As a result of different climatic,

hydrological and geological conditions, the various renewable energy sources have

different geographical distribution patterns. On the “country maps” taken from the

German Aerospace Centre study (Fig. 3), these regional clusters or regional concen-

trations for renewable energy sources are clearly visible.

Fig. 3: Regional distribution of the potentials for the production of electricity from renewable energy

sources

enewable Energy

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Source: DLR 2006: 5; the more intense the colour in a tone, the greater the potential

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The maps show that the potential for hydropower is the highest in Scandinavia

and the central Alpine countries. The solar energy potential is concentrated in the

Mediterranean countries. A large part of the geothermal potential can be found in

south-east Europe. Great Britain and Ireland and the Atlantic coast have high wind

energy potential, and the biomass potential is abundant in the north and the north-

east of Europe.

On the other hand, the maps also show that in most regions in Europe there

is a mix of renewable energy potentials. Therefore, a strategy for the development

of renewable energies in Europe cannot focus solely on the exploitation of the

geographically concentrated sources through a pan-European grid. Such a strategy

would neither be quantitatively sufficient, nor would it take advantage of the decen-

tralised supply of renewable energy. Conversely, a strategy which is based exclusively

on the use of the renewable energy sources available in a given region – especially

if “regional” is not defined according to natural conditions but according to politi-

cal-administrative borders – will hamper the switch to renewable energies and, at

the same time, leave high potentials in other regions – especially in certain regional

clusters – unexploited.

The variety of available types of renewable energy in the different European

countries and the regional clusters for the different renewable energy sources are

shown in table 2, which lists the economic potential for regenerative electricity from

each individual source by country.

The following graphs clearly illustrate the different geographical distributions of

the potential for electricity production from hydropower, wind energy, geothermal

energy, biomass, concentrated solar power plants, photovoltaics and wave and tidal

power. In these graphs the countries are listed in a regional order, and the shares

corresponding to the EU on the one hand and to countries which are not (yet) EU

members on the other hand can be easily seen.

The potential for electricity generation from concentrated solar power plants,

geothermal energy and from wave and tidal power display a particular geographical

concentration, while potentials for electricity generation from wind energy, photo-

voltaics and biomass are spread more evenly across the EU.

enewable Energy

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otential for Green Electricity within the EU

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Table 2: Long-term economic potential for renewable energy in the EU, Norway, Iceland, Switzerland,

Candidate States and western Balkans (in TWh)

Photo-

Wave and

Hydro

Geo

Biomass

Solar

Wind

Total

voltaic

tidal

Belgium

0.5

no entry

7.3

no entry

13.0

2.1

0.2

23.2

Bulgaria

12.0

0.8

7.7

no entry

8.9

2.0

no entry

31.4

Czech Republic

3.0

no entry

20

no entry

5.8

1.1

no entry

29.9

Denmark

0.0

no entry

6.6

no entry

55.0

1.3

2.2

65.1

Germany

26.0

28.2

87

no entry

262.0

23.4

7.0

433.6

Estonia

0.4

no entry

10.5

no entry

3.0 no entry

no entry

13.9

Ireland

1.3

no entry

6.2

no entry

55.0

1.1

4.0

67.9

Greece

12.0

9.4

7.2

4

49.0

3.9

4.0

89.5

Spain

41.0

28.2

40.4

1278

93.0

19.5

13.0

1531.1

France

72.0

14.1

79.1

no entry

129.0

23.4

12.0

329.7

Italy

65.0

19.6

46.1

7

79.0

17.6

3.0

237.2

Cyprus

1.0

no entry

0.6

20

6.0

0.1

0.2

27.9

Latvia

4.0

no entry

4.6

no entry

1.3 no entry

no entry

8.6

Lithuania

1.5

0.8

12.5

no entry

0.9 no entry

no entry

15.7

Luxembourg

1.0

no entry

0.4

no entry

0.0

0.8

no entry

2.2

Hungary

4.0

51.9

11.3

no entry

1.3

2.0

no entry

70.5

Malta

no entry

no entry

0.1

2

0.2

0.1

0.1

2.3

Netherlands

0.1

1.3

9.6

no entry

40.0

4.3

1.0

56.3

Austria

56.0

4.1

30.6

no entry

3.0

2.9

--¬

96.6

Poland

7.0

1.7

52.1

no entry

65.0

3.1

1.0

129.9

Portugal

20.0

14.1

15.2

142

18.0

3.9

7.0

220.1

Romania

18.0

1

40.9

no entry

7.9

2.0

no entry

69.8

Slovenia

8.0

0.4

6.3

no entry

0.3

1.0

no entry

16.0

Slovakia

6.0

3.1

10.7

no entry

0.7

2.0

no entry

22.5

Finland

20.0

no entry

53.7

no entry

27.0

1.7

2.0

104.4

Sweden

90.0

1.3

80.4

no entry

63.5

3.7

2.0

240.9

United Kingdom

8.0

0.3

30.7

no entry

344.0

7.8

60.0

450.8

EU Countries

477.8

180.3

677.8

1453.0

1331.8

130.8

118.7

4370.2

Switzerland

38.3

no entry

8.0

no entry

0.0

3.7

no entry

50.0

Turkey

122.0

300.1

44.7

131

110.0

15.6

no entry

723.4

Macedonia

4.0

no entry

2.6

no entry

0.1

0.6

no entry

7.3

Croatia

8.0

1.1

8.9

no entry

2.6

0.8

3.0

24.4

Serbia &

27.0

4.1

14.3

no entry

0.3

1.0

2.0

48.7

enewable Energy

Montenegro

Bosnia-

19.0

no entry

9.5

no entry

0.1

0.6

no entry

29.2

Herzegovina

Iceland

40.0

182.4

0.1

no entry

1.0

0.3

10.0

233.8

Norway

178.0

no entry

25.8

no entry

76.0

1.0

10.0

290.7

Total

914.1

668.0

791.7

1584.0

1521.9

154.4

143.7

5777.8

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Source: Representation according to DLR 2006: 43, as well as EBRD 2005.

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Iceland

Norway

Sweden

Finland

Denmark

Great Britain

Ireland

Netherlands

Belgium

Luxembourg

France

Spain

Portugal

Italia

Chart 1

Malta

Potential of electricity

Germany

from hydropower

Czech Republic

Slovak Republic

Austria

Hungary

Slovenia

Poland

Lithuania

Latvia

Estonia

Romania

Bulgaria

Greece

Cyprus

Croatia

Turkey

Switzerland

Chart 2

Potential of electricity

from geothermal

enewable Energy

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Chart 3

otential for Green Electricity within the EU

Potential of electricity

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from biomass

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Iceland

Norway

Sweden

Finland

Denmark

Great Britain

Ireland

Netherlands

Belgium

Luxembourg

France

Spain

Portugal

Italia

Chart 4

Malta

Potential of electricity

Germany

from concentrated solar

Czech Republic

Slovak Republic

Austria

Hungary

Slovenia

Poland

Lithuania

Latvia

Estonia

Romania

Bulgaria

Greece

Cyprus

Croatia

Turkey

Switzerland

Chart 5

Potential of electricity

from wind power

enewable Energy

Chart 6

European Community for R

Potentials of electricity

from photovoltaic

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Iceland

Norway

Sweden

Finland

Denmark

Great Britain

Ireland

Netherlands

Belgium

Luxembourg

France

Spain

Portugal

Chart 7

Italia

Potential of electricity

Malta

from wave and tidal

Germany

power

Czech Republic

Slovak Republic

Austria

Hungary

Slovenia

Poland

Lithuania

Latvia

Estonia

Romania

Bulgaria

Greece

Cyprus

Croatia

Turkey

Chart 8

Switzerland

Potential for total

electricity from

renewable energy

enewable Energy

Chart 9

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Electricity consumption

otential for Green Electricity within the EU

2005 (excluding the

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western Balkans)

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When comparing charts 8 and 9, it can be seen that the potential for green

electricity is distributed in such a way across the countries that some countries

have surplus potential while others, according to current estimates, have a national

economic potential of renewable energy that is insufficient to cover their entire

electricity demand.

The fluctuating availability of renewables over the course of a day or year plays

an important role for a strategy aiming to base electricity production increasingly

on renewable energy sources. Electricity generation from wind energy and photo-

voltaics is subject to stronger fluctuations than electricity production from biomass,

hydropower or geothermal power, for example, which can be produced on demand.

For electricity generation by concentrated solar power plants, a consistent supply

security is also assumed, depending on the location of the plant, storage technology

and the possibility of hybrid production in combination with gas. For a consistent

capacity on demand, including peak demand, a well-balanced mix of renewable

energies is therefore important. For this reason, it is absolutely essential for a green

electricity strategy to develop all kinds of renewable energy technologies.

A complete switch to electricity generated from renewables will only – or at least

more easily – be possible for the EU as a whole if the use of the renewable sources

available locally is combined with a transregional and transnational grid, which

allows an optimal mix of renewable energy using the natural diversity of Europe with

its variety of renewable energy sources.

What share of the potential for generating green electricity will be used in the

future depends on a number of factors. As a result, different scenarios present different

conclusions. In addition, the exploitation of the renewable sources not only requires

a cost-effectiveness analysis, but also, for example, an ecological impact assessment,

from which further limitations for the use may occur. In this vein, the estimate of the

hydropower potential for eastern Turkey, for example, can be questioned.

On the other hand, there are potential estimates for individual countries or

individual energy sources which are, in part, considerably higher than the values from

the German Aerospace Center study. The European Wind Energy Association estimates

that by 2020, around 930 TWh/a could be produced by onshore wind power plants and

foresees the long-term potential of offshore wind energy at 3,000 TWh/a (EWEA 2002).

The Universidad Pontificia Comillas, by order of Greenpeace Spain, has calcu-

lated the technical potential of renewable energy in Spain for the year 2050 (García

Ortega and Cantero 2005). The conclusion of this study is that by 2050, a multiple of

the estimated energy demand could be covered by renewable energy. In 2050, Spain

is estimated to have an electricity demand of 280 TWh/a and a total energy demand

of 1,525 TWh/a. The technical potential of solar energy (solar thermal energy and

photovoltaics) is estimated at 8 times the total energy demand, that of wind energy at

enewable Energy

1.7 times the total demand and the potential for wave power is estimated at one-fifth

of the total energy demand.

The European Renewable Energy Council’s (EREC) energy scenario (EREC 2007:

86), like the TRANS-CSP study, comes to the conclusion that in 2050, around 80%

of the electricity supply in the EU and the other European countries included in

the scenario could be generated from renewable energy sources, a part of which –

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15% according to the German Aerospace Center study – would be imports from the

southern neighbouring countries bordering the Mediterranean Sea. According to

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this scenario, it is assumed that the oil price of 25 USD per barrel in 2000 will rise

to 80 USD by the year 2050 – a value which has long been surpassed, which is why a

much faster and more extensive development of installations for the use of renew-

able energies should be assumed.

For the expansion of currently installed green power production capacity, the

European Commission’s Technology Plan suggests that the installed capacity between

2005 and 2030 could be increased:

6 times for wind energy;

100 to 200 times for photovoltaics;

Solar thermal power plants from a capacity of less than 100 MW to 4.6 GWe.

As the energy from some resources can also be used for purposes other than the

production of electricity, these alternate uses should also be taken into account in

a strategy for the switch towards renewable electricity production. Geothermal and

solar energy, for example, can also be used in the heating and cooling sector and

biomass is suitable for all three areas of application – electricity, heating/cooling and

transport fuel. The optimal use of these energies for a sustainable energy system can

only be determined after considering the different regional conditions in order to take

advantage of the decentralised availability of renewable energy sources, especially for

the purpose of heating and cooling.

The potential for the use of renewable energy for heating and cooling, in partic-

ular, is considerable. EREC’s “energy (r)evolution scenario”, for example, comes to

the conclusion that by 2050, half of the demand for heating in the EU – which could

be reduced by 50% compared to today via saving measures – could be covered with

renewable energy.

Biogas supply strategy

By order of the German parliamentary group Bündnis 90/Die Grünen, the

“Institut für Energetik und Umwelt” has analysed the possibilities for a European

biogas supply strategy (Thrän et al. 2007). On the premise of complete food

self-sufficiency, the present and future bio-methane potentials were calculated.

According to this, the calculated biogas potential from 2005 to 2020 could be

increased from 300 bn m³N/a to 500 bn m³N/a. As a result, in the medium term

the natural gas currently used could be replaced completely. For this calcula-

tion, the study takes into account only the existing gas grid, which is technically

suitable for the conveyance of bio-methane. However, a full coverage of demand

with renewable energy in the gas sector is also only possible if energy efficiency

and energy-saving measures are implemented at the same time. The substitution

enewable Energy

potential would only be sufficient if there were a permanent reduction in the final

gas consumption (Thrän et al. 2007: 28).

The question concerning advantages and disadvantages of the production of fuels

from renewable resources, on the other hand, is currently under discussion because

of the possible ecological impact and particularly because of possible competition

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with the food sector. In the Directive proposed by the European Commission in

otential for Green Electricity within the EU

January 2008, which contains very detailed standards for the certification of biofuels,

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a binding minimum share of biofuel in the transport sector of 10% is suggested.

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However, there is a growing body of opinion demanding a revision of this target. This

discussion is beyond the scope of this study. Nevertheless, other uses of biomass were

taken into account in the estimates of the potential for the electricity sector.

To what extent and under what conditions the economical potential for green

electricity is finally used to cover the EU’s electricity demand depends on the future

evolution of that demand. In the years 1990 to 2005, the net electricity generation

in the EU-25 rose by around 30%, 11% of which corresponds to the last five years.

According to a business-as-usual scenario, the electricity demand in the EU could

rise 50% by 2030. According to the Öko-Institut’s vision scenario, on the other hand,

consumption could stabilise at an only slightly higher level (a 7% rise) (Matthes et al.

2006: 9). The European Commission’s energy efficiency scenario also assumes that

an increased electricity demand by 2020 could first be counteracted by increased

energy efficiency and the development of combined heat and power (CHP) installa-

tions (Mantzos 2006: 18). Today, the share of CHP in the electricity production of the

EU-27, with an installed capacity of 95 GWe, represents around 11% of the electricity

demand. According to estimates of the European Commission, the installed CHP

capacity could be around 235 GWe in 2030 at best, which would cover 21% of the

expected electricity demand (EC 2007e: 24).

However, in the context of a forced climate protection policy, the share of CHP

should be increased, especially via the building and operation of CHP installations

with renewable energy (biomass). According to GEMIS, biogas-fuelled CHP plants

represent the most environmentally friendly power station technology (GEMIS 2006).

As a result of the combined production of heat and power with biogas, these plants

even have negative CO2 emissions.

A strategy for the improvement of energy efficiency should also encompass

conversion. Up to now, the biggest conversion losses have occurred in the electricity

sector. While the long-term goal is to switch electricity production to renewable

energy sources, the current energy policy should also aim to improve fuel flexibility

and the energy efficiency of power plants based on coal, natural gas and biomass.

Moreover, the substitution of fossil and nuclear energy sources with renewable

energy sources will be all the faster if it is combined with the greening of the energy

services demanded by the consumer, including measures concerning energy trans-

ducers and consumer behaviour.

A sustainable energy policy must implement strategies for energy savings, energy

efficiency and the switch to renewable energy at all political levels. The EU has the

potential to direct its energy mix increasingly towards renewable energy. Estimates,

such as the one from the German Aerospace Center, show that the EU, the EEA

Member States, Switzerland, the Candidate States Croatia and Turkey and the states

enewable Energy

in the western Balkans have a combined economic potential for the generation of

green electricity, which is considerably higher than the current and future electricity

demand. That potential is, due to different climatic, hydrological and geological

conditions, distributed unevenly across the different regions. Therefore, the complete

switch to regenerative power for the EU as a whole will become a reality much sooner

if the use of locally available renewable energy sources is combined with a transna-

European Community for R

tional European grid in order to take full advantage of the natural diversity of the

renewable energy resources in Europe.

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2.2 Current Use of Renewable Energy Sources for Electricity Generation in the

EU

How much green electricity is currently being produced in the EU? What is its share

of total electricity production? What is the percentage in the individual Member

States and how is regenerative power production distributed between the individual

Member States? Which renewable energy sources are being used and to what extent?

What are the “exploitation ratios” in the individual Member States?

Today, the energy sector with the biggest share produced from renewable energy

in the EU is the electricity sector. To a considerable extent, this can be attributed

to Directive 2001/77/EC for the promotion of electricity production from renew-

able energy sources. Following this Directive, the Commission regularly reports on

whether the common EU target of a 21% share of regenerative power by 2010 and the

indicative targets for the individual Member States are being achieved. In the year

2005, green power’s share of gross electricity production in the EU-25 was around

14%. In its 2007 report, the Commission assumes that by 2010 the share of regenera-

tive power will not reach the 21% target, but represent only 19%. While some Member

States have achieved positive results, others have even seen a drop in the share of

regenerative power in recent years.

According to the Commission’s report, only three countries will achieve the

indicative target without problems (Denmark, Germany and Hungary). The Commis-

sion mentions good performances for six other countries (Finland, Ireland, Luxem-

bourg, Spain, Sweden, the Netherlands). With additional efforts, five more countries

could achieve their respective targets (Czech Republic, Lithuania, Poland, Slovenia,

Great Britain), while intensive additional efforts are required from three countries

(Belgium, Greece and Portugal), and eight countries were in 2005 very far from

reaching their targets (Austria, Cyprus, Estonia, France, Italy, Latvia, Malta and the

Slovak Republic).

In 2005 the generation of green electricity amounted to 464 TWh in the EU-27

according to Eurostat data (deviations from the figures in the Commission report are

due to the fact that the latter uses provisional figures). The production of regenerative

electricity has increased by 50% since 1990, 10% of which occurred between 2000 and

2005. In spite of this increase, however, the share of green electricity in total electricity

consumption has increased only slightly, as power consumption rose sharply over

the same period. The share of electricity from renewables was around 11.8% in 1990,

around 13.9% in 2000 and – as already mentioned – around 14% in 2005. On the other

hand, its share would have dropped below 7% without the strong increase in the

generation of green electricity over the period in question.

enewable Energy

An important point to be highlighted here is the change in the structure of the renew-

able energy sources used. While electricity production from hydropower declined,

“new” renewable energies gained importance. The following growth rates for

electricity production are especially significant:

Photovoltaics: In 1990 there was a generation of 5 GWh, in 2000 around 117 GWh,

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and five years later generation had increased more than tenfold to 1490 GWh;

otential for Green Electricity within the EU

Biomass: Production rose from 17 TWh to 40 TWh in 10 years, and then doubled

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over the past five years;

39

Fig. 4: Share of renewable energy in gross electricity consumption in the EU 2005 (in %)

Source: European Commission – http://ec.europa.eu/energy/res/index_en.htm

Wind energy: In the period between 1990 and 2000 generation rose from 0.7 TWh

to 22.3 TWh and after that it increased with average annual growth rates of more than

25% to over 70 TWh in 2005.

In 2005, shares in the EU’s green electricity generation were the following:

Hydropower 66.1%

Photovoltaics 0.3%

Wind 15.2%

Biomass 17.2%

Geothermal energy 1.2%

How is the amount of regenerative electricity generated in the EU distributed region-

ally? The shares of the individual Member States in the total amount as well as in

the amount of electricity generated from the individual renewable sources are quite

different. For instance, 1.28 TWh of the total 1.49 TWh produced by photovoltaic

installations in the EU were generated in Germany. The electricity from geothermal

installations was almost exclusively produced in Italy. Nearly two-thirds of the

electricity from hydropower came from France, Italy, Austria and Sweden. Concerning

enewable Energy

biomass-produced electricity, only 5% came from the new Member States, and more

than three-quarters of electricity from wind energy was produced in Denmark,

Germany and Spain.

These numbers clearly show that countries’ production shares are not only

determined by their respective renewable energy potentials, but that political and

economic conditions in the individual Member States also play an important role. If

European Community for R

one looks at the total amount of green electricity produced, the following distribu-

tion can be found: 23% of production was concentrated in the north of the EU in

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Sweden and Finland; Ireland and Great Britain only accounted for 4%; the Benelux

countries and France accounted for 15%; the share of the Iberian peninsula was 11%

as well as for Italy; 16% was produced in Denmark and Germany; over 9% in Austria

and Slovenia; Bulgaria and Romania accounted for 5%; the other central and eastern

European countries which joined the EU only produced 4% and Greece, Malta and

Cyprus produced only 1% of the total amount. In 2005, the Candidate Countries

Turkey and Croatia together produced 46 TWh of electricity from renewable energy

sources – this equals 10% of the amount produced in the EU – and Norway produced

137 TWh, an amount that exceeds that produced in Sweden, Finland, Denmark and

the United Kingdom and Ireland together. The distribution reflects, on one hand, the

dominance up to now of hydropower in the renewable energy mix and, on the other,

that different importance is attached to the use of renewable energy on the national

level.

Chart 10 shows the regional distribution of the total amount of 687 TWh of regen-

erative power produced in the aforementioned countries in 2005. In comparison,

chart 11 clearly shows that the spatial distribution of the amount of green electricity

produced does not correspond to the spatial distribution of the corresponding poten-

tials. If one compares, in a simplified manner, the amount of electricity produced from

renewable energy sources in 2005 to the estimated economic potential contained in

the German Aerospace Center study, it becomes apparent how small a part of the

potential is actually being exploited (cf. tables in Appendix).

In 2005, the EU exploited the economic potential from renewables for electricity

production as follows:

Geothermal energy 3%

Biomass 12%

Photovoltaics 1%

Wind energy 5%

For hydropower the exploitation rate was around 64%.

Electricity generation from wave and tidal power does not yet have a market

share. Concentrated solar power plant technology is currently being used in the first

commercial installations.

Overall, only a small share of the potential for electricity production from renewable

energy sources available in the EU – little more than one-tenth – is currently being

used. Even when Iceland and Norway – who cover their total electricity consump-

tion from renewable energy sources – Switzerland, Croatia and Turkey are included

in these calculations, the overall exploitation ratio of the economic potential is still

enewable Energy

only around 12%. Only in Austria, Norway and Switzerland is more than 40% of the

economic potential used. Today, in the west, south and east of the EU, the possibility

for a switch to green electricity is taken only to a very low degree, in some areas even

not at all. Europe is only at the beginning of the development of its own renewable

energy sources.

European Community for R

otential for Green Electricity within the EU

The P

ERENE

2

41

Iceland

Norway

Sweden

Finland

Denmark

Great Britain

Ireland

Netherlands

Belgium

Luxembourg

France

Spain

Portugal

Chart 10

Italia

Amount of electricity

Malta

generated from

Germany

renewable energies in

Czech Republic

2005 (687 TWh)

Slovak Republic

Source: Eurostat

Austria

Hungary

Slovenia

Poland

Lithuania

Latvia

Estonia

Romania

Bulgaria

Greece

Cyprus

Croatia

Turkey

Switzerland

Chart 11

Total potentials for

regenerative electricity

(5778 TWh)

Source: GSA

2.3 Obstacles to and Conditions for an Increased Use of Europe’s Renewable

Energy Sources

Why have renewable energy sources hitherto been used so little in the EU? The

reasons for this are manifold, and are the subject of extensive research, discussion

and documentation in the worlds of science, politics and business. In this chapter

enewable Energy

only a concise summary of those reasons will be given to highlight the scope of tasks

a policy strategy aiming to increase the use of renewables is facing. The analysis will

focus on the electricity sector and on the obstacles and possible actions from the

European perspective (see also Appendix 2 for a list of obstacles to their use and

necessary measures; source: EC 2007e, Technology Map).

From the economic point of view, the question of the competitiveness of

European Community for R

regenerative electricity and the structure of the electricity market are prima-

rily responsible for the limited use (with the exception of the larger hydropower

ERENE

42

plants) of renewable energy sources for electricity production. The production

costs of electricity are only one aspect, albeit an essential one. Low oil prices and

high investment costs for the installations to generate green electricity have led to

a competitive disadvantage for energy from renewables in the past. However, due

to global changes on the energy markets, the times of low oil prices are definitely

over. The developments on the energy market are now defined by rising oil prices

and falling investment costs for renewable energy installations. For photovoltaic

installations, for instance, the Commission expects 50% cost-reductions by 2020.

The result of this development is that, on the whole, a change in the energy mix

in favour of renewable sources will lower costs. However, the generation costs for

regenerative electricity will be different, depending on the technology and the

location-specific conditions.

Competition between the individual energy sources is structurally distorted for

several reasons. A very basic structural distortion of the competitiveness of renew-

able energy occurs when the external costs of electricity production from fossil and

nuclear energy sources are not taken into account. A decisive step towards an inter-

nalisation of the costs in terms of climate damage through CO2 emissions was taken

with setting up the European Emissions Trading Scheme. Full auctioning of emissions

certificates – as proposed by the Commission – will lead to a permanent evolution

of production costs of coal power, which will favour renewable power. However, a

further EU-wide measure for the adequate internalisation of the costs generated by

nuclear electricity is still to be taken. The European Commission’s impact assess-

ment of the draft Directive for the promotion of the use of renewable energy sources

demonstrates how the development of oil prices and the Emissions Trading Scheme

will tip the profitability balance in favour of renewable energy.

The competition on the electricity market is also heavily distorted by the subsi-

dies allocated in the past decades – and still continuing today – to coal and nuclear

power. These originated, to a large extent, in the special treaties on which the

ECSC and EURATOM were founded. To bring renewable energies into the distorted

market, support schemes are necessary. The European Commission has recognised

this in its state-aid guidelines. Feed-in tariffs have proved to be the most effec-

tive and cost-efficient way of promoting the generation of green electricity. These

feed-in tariffs are ordinarily not state aids, but they guarantee electricity suppliers

the purchase at a fixed price. The costs are passed on to the price of electricity. Up

to now, the support schemes for electricity from renewable energy sources have

only been organised at the national level and the financial support is limited to the

renewable electricity generated within the national borders. In the draft Directive

of January 2008, the Commission does not propose a full or a partial harmonisa-

enewable Energy

tion of the support schemes with binding minimum requirements based on best

practices.

However, measures taken for improving the competitiveness of green electricity

will have limited effect as long as no real market with competition exists in the

electricity sector (as in the gas sector) at the national level, and even less at the

European level. The main reasons that no EU-wide competitive electricity market

European Community for R

exists are the domination of the market by a few companies, the high degree of

otential for Green Electricity within the EU

vertical integration between production and network operation and distribution, and

The P

ERENE

2

the lack of grid infrastructure for cross-border electricity trade.

43

Therefore, in September 2007 the European Commission presented a third legis-

lative package for the creation of an internal European electricity market (EC 2007d).

This package contains measures for:

separating production and supply from the operation of the transmission and

distribution networks, because vertically integrated companies use those networks

as market-entry barriers for competitors, in particular for the many decentralised

producers of green electricity, in spite of their right to network access and priority

feed-in;

enhancing the competencies and independence of the National Energy Regula-

tors;

creating a European agency with binding decision-making powers for the co-op-

eration between the National Energy Regulators;

efficient co-operation between transmission system operators, which should

provide a framework for the planning, financing and management of research and

innovation activities and for the co-ordinated planning of network investments,

including the supervision of the grid development;

improving transparency concerning grid capacities;

the gradual creation of a European end-user market.

This legislative package will be crucial for the enhanced use of Europe’s renewable

energy sources in the electricity sector and for the ERENE project.

Concerning technology, there have clearly been a number of essential develop-

ments in the area of renewable energies over the past few years. However, the need

for further research and development to promote the use of all kinds of renewable

energy sources, increase efficiency and lower costs remains significant. Research and

development is particularly needed in turbines and platforms for the installation of

offshore wind parks, and in storage technologies, which are of great importance for

an increased market penetration of renewable energy.

A particular problem for the switch to renewable energy sources is the current

network infrastructure. This is oriented to electricity generation based on fossil

and nuclear in large and centralised power plants, to which fuels are conveyed over

a transport infrastructure which has often been built specifically for this purpose

(i.e., pipelines). Moreover, most grid systems are still limited to the national

territories. For a switch to green electricity, there would be different needs. For

instance, decentralised and often small production units must be connected,

which means that electricity needs to be collected at the locations of the renew-

able energy source; completely new locations with high potentials for electricity

generation (e.g., offshore wind parks) must be connected; electricity from fluctu-

ating resources must be integrated into the system; and for an internal European

enewable Energy

market, many more interconnections between the Member States need to be

established.

Although the Member States of the EU agreed already in 2002 to increase the

minimum degree of connection between themselves to at least 10% of their national

energy demand, nine Member States have not yet reached that target. As a result,

the electricity networks in the EU allow only for a very limited amount of cross-

European Community for R

border electricity trade. Over 60% of the projects declared of European interest by

the Council and the European Parliament have suffered considerable delays in their

ERENE

44

realisation, and each year only 200 million EUR are invested in cross-border networks

in the whole of the EU. Therefore, the Commission is warning that if investments in

infrastructure continue according to a business-as-usual scenario, the EU will not

be in a position to create a real internal market and it will not be able to answer the

increased need for electricity production from renewable energy sources (Com SEC

2006: 1715; EC 2007b: 12).

With regards to the systemic integration of renewable energy, important improve-

ments can be observed. For instance, in some EU countries the forecasting methods

for the feed-in of wind and solar energy have improved considerably, and modern

wind energy installations are now feasible to be operated remotely on demand. Also,

so-called overhead line monitoring enables optimal charging of the available network

infrastructure. Nevertheless, considerable further research and development efforts

are needed, particularly in intelligent-demand management and the use of commu-

nication technologies to connect different electricity generation installations to form

virtual combined power plants. Through that, the required amount of electricity from

renewable energies can be supplied on demand. The Commission’s Technology Plan

contains a list of research needs, and the EU continues to support such developments

through such projects as GreenNet.

Nevertheless, it is not only in the area of research and development that increased

attention should be directed at renewable energy requirements. Professional training

and degrees in engineering need to be promoted. Rapid market penetration often

fails to materialise due to the lack of specialists present to give consultations and

install renewable energy facilities. And, last but not least, administrative processes

also often constitute an obstacle for renewable energy.

Such administrative obstacles have been described, analysed and assessed by

the OPTRES project (Assessment and optimisation of renewable support schemes in

the European electricity market) (cf. Coenraads et al. 2006), and, on the basis of this

project, addressed by the European Commission in its draft Directive for the promo-

tion of the use of renewable energy sources. The fundamental administrative obsta-

cles include:

high number of administrations involved in the approval of installations and also

in relation to support-schemes;

a long approval procedure, which creates uncertainty among investors;

insufficient consideration for the possible use of renewable energy sources in

urban and regional planning;

a lack of transparent network access conditions;

the high costs of connection to the grid.

enewable Energy

Both the third legislative package for an internal electricity market and the energy

and climate package propose measures to reduce or abandon these obstacles, which

should be included in Member States’ respective renewable energy action plans.

The reasons why renewable energy sources have so far been only marginally employed

in the EU are manifold. They are both economic – caused by the distortion of compe-

European Community for R

tition in favour of electricity from coal and nuclear plants, by the externalisation of

otential for Green Electricity within the EU

environmental damage costs and risks, and by subsidies – and technical, especially in

The P

ERENE

2

relation to the lack of adaptation of the network infrastructure to the requirements

45

of the use of renewable energy sources. Research and development are not yet suffi-

ciently directed at the utilisation of renewable energy sources, and the use of avail-

able technologies is hampered by over-burdening administrative procedures. All levels

within the EU’s multi-level system must be engaged in abandoning these obstacles in

order to achieve a sustainable energy policy within a relatively short timeframe. At the

European level, the main task is to take measures to improve the competitiveness of

renewable energy and create the conditions necessary for an internal market for green

power. In some areas, there are already European regulations; in others, legislation

has been presented. Even so, further measures must be taken in order to develop and

use Europe’s sizeable renewable energy potential.

enewable Energy

European Community for R

ERENE

46

3

A European Community for Renewable Energy:

Objectives, Tasks, Instruments, Legal and

Institutional Foundations

Renewable energies are of central importance for combating climate change,

ensuring security of energy supply and strengthening the EU’s competitiveness.

However, the abundant and multifaceted potential of renewable energies of the EU

is currently used only to a very low extent. As such, the fact that the EU Member

States were able to unite towards a common goal in 2007 – namely the 20% renew-

able energy target by 2020 – is a great step forward when considering that there are

tremendous differences in the energy mix by Member States and different percep-

tions concerning the future role of nuclear power. The draft Directive on the promo-

tion of the use of renewable energy sources, submitted by the European Commis-

sion in January 2008, takes into account the national specificities of individual

Member States by allocating differentiated national targets in line with the respec-

tive national economic conditions. These national targets are then to be achieved by

oundations

way of National Action Plans (NAP).

Naturally, every Member State is free to pursue its energy policy in such a manner

that by 2020, a greater share of renewable energy will be achieved than prescribed

by the Directive, which ultimately only sets a binding minimum target. It is also to

be expected that at some time the EU will put forth objectives for the period after

2020. However, it is extremely uncertain that the EU as a whole will be able to agree

on measures that go beyond the targets of the Directive already in the near future.

uments, Legal and Institutional F

The crucial question then is: Which options are available to those Member States that

wish to utilise the current timeframe in order to pursue a more long-term path of

development, not only by action at the national level, but also by common action at

asks, Instr

the European level?

Establishing a European Community for Renewable Energy (ERENE) would

provide such an option. A Community of ambitious renewable energy front-run-

ners could either be created as a new community based on a separate treaty, like

EURATOM, or as a group for enhanced co-operation between some of the Member

enewable Energy

States through a decision of the Council under the aegis of the EU.

enewable Energy: Objectives, T

The following sections will first define the objectives and tasks of ERENE aiming to

make better use of the renewable energy potential. The focus will be on the electricity

sector. For the definition of the tasks of ERENE, the subsidiarity principle should be

respected and attention should be paid to the fact that some energy-related political

measures should be applied to the EU as a whole – particularly when it comes to

European Community for R

regulations touching the internal market.

Which instruments should ERENE have at its disposal in order to fulfil its respon-

A European Community for R

ERENE

3

sibilities? The proposals made in this study will draw inspiration from the instru-

47

ments and financial mechanisms already in use at a European level and within the

framework of the EURATOM Treaty in particular. Renewable energies have such an

importance for the future of the EU and offer so many chances for sustainable devel-

opment that measures to promote their development and use should be taken on

the EU level, if – as we witness in other policy areas – common action is superior to

individual state action.

Lastly, the legal and institutional foundations of such a Community on the

European level – which must not include all the Member States of the EU from the

beginning, but shall be open for all of them – will be discussed. In this context, we will

assume that the new Treaty of Lisbon with its amendments to the current Treaties will

be in force.

3.1 Objectives and Tasks of ERENE

The economic potential of renewable energies in the EU far surpasses its current

utilisation. Europe is still at an early stage in the development of its own renewable

energy sources. Therefore, the following objective is proposed for ERENE:

The European Community for Renewable Energy (ERENE) shall contribute to the

protection of the environment, the security of energy supply and the competitiveness

of the European Union by increasing its use of renewable energy sources.

This objective, as explained in chapter 1 of this study, is one pillar in a strategy for

a sustainable energy policy, which – together with those of energy efficiency and

energy savings – should be the leading principles for a common energy policy within

the EU as well as for its foreign energy policy. As regulations concerning the improve-

ment of energy efficiency often have a direct impact on the competitiveness in the

internal market, such measures should apply to the entire EU. That is the reason why

in this study it is not proposed that ERENE should be assigned regulatory compe-

tency in this area. However, the Member States of ERENE should commonly commit

themselves to push the EU to take strong decisions for higher energy efficiency and

more energy savings.

ERENE’s responsibility should be to promote the development and use of renew-

able energy sources by common actions. ERENE’s task should therefore not consist

of determining higher national targets for the use of renewable energy sources –

as they are defined by the EU Directive for the promotion of the use of renewable

energy sources – nor to set other specifications for the National Action Plans. Instead,

ERENE’s task should be to take common actions at the supranational level, in order to

take advantage of economies of scale, burden-sharing and in particular the common

enewable Energy

market. In this sense it is a community programme that paves the way for a develop-

ment which goes beyond the targets of the Directive and provides the conditions for

the increased use of renewable energy sources, which cannot – or only less efficiently

– be achieved by national action only.

Defining the tasks of ERENE, the subsidiarity principle should be respected,

according to which action shall be taken on the supranational level only in cases

European Community for R

where action at a local, regional or national level is insufficient or the task cannot be

fulfilled or only under less advantageous conditions.

ERENE

48

In energy policy the subsidiarity principle is closely related to the principle of

decentralisation in energy production and supply. Renewable energies better enable

a realisation of this principle than is the case in a supply structure based on fossil

fuels and nuclear energy. This change is one of the significant social and economic

advantages of a renewable energy supply-structure and is applicable in a European

as well as in a global context, particularly in developing countries that urgently need

an improvement of their energy supply.

Growing use of renewable energy will increase the degree of decentralisation of

energy supply for heating and cooling as well as for the electricity sector, on which the

tasks of ERENE shall be concentrated. Due to the settlement structure in the EU, and

due to the geographical distribution of renewable energy sources and their poten-

tial across the EU, it is obvious that to enable the shift in electricity production to

renewable sources, a combination of decentralised supply-structures with common

measures on a regional and transnational level will achieve better results than each

of the strategies alone.

The study’s analysis of the EU’s renewable energy potentials (see chapter 2)

shows that a complete switch from fossil fuels and nuclear power to electricity gener-

ated from renewable energy sources is not an unachievable utopia. The potential for

generation of green electricity is currently only used to a very modest degree in the

EU. Table 3 compares the amount of electricity generated from renewables in 2005

in the EU Member States, Norway, Iceland, Switzerland and the Candidate Countries

with the potential green energy that could be generated. This provides a simple

picture of the share of the renewable electricity potential currently used.

oundations

Table 3 shows that there is by far enough economic potential for electricity from

renewable sources, which was estimated for the year 2050, to completely cover the

electricity demand in the EU. If in addition the significant potential of Turkey and

Norway as well as the Balkan States is taken into account, the excess of the economic

potential for generating green electricity compared to the current production in the

EU and the other countries included is even greater.

Table 3 clearly emphasises that the use of renewable energy sources is still in its

uments, Legal and Institutional F

infancy in the EU. Currently, only around 10% of the potential for electricity produc-

tion from renewable energy sources is exploited. Even in a country like Austria, which

already covers more than half of its electricity demand with electricity from renewa-

asks, Instr

bles (primarily hydropower), the economic potential of the renewable energy sources

to generate electricity is double the amount currently produced. Apart from Austria,

Sweden is the only other country in the EU that already makes use of more than

one-third of its estimated long-term potential. In Switzerland as well as in Norway,

half of their respective electricity production is generated from hydropower.

enewable Energy

The significant potential from renewable energy sources other than hydropower,

enewable Energy: Objectives, T

remains, for the most part, in some countries even fully unused (see detailed table on

the calculated utilisation quotas by energy source and by countries in the Appendix).

In the west of the EU, Ireland and the United Kingdom as well as France still fail to

use their significant wind energy potential. In the north, Norway’s and the other

Scandinavian countries’ potential for electricity generation from hydropower, wind

European Community for R

power and biomass could be further tapped. In the east, Poland alone fails to employ

a biomass electricity potential of more than 100 TWh. In central Europe, Germany

A European Community for R

ERENE

3

could generate more than six times its current amount of green electricity. The poten-

49

Table 3: Electricity generation from renewable sources in 2005 and the economic potential for regene-

rative electricity – by country

Renewable electricity

Share of renewable

Economic potential for Utilisation of potential

State

production in 2005

electricity in 2005 in % renewable electricity

2005 in %

in TWh

of demand

in TWh

EU-27

464.3

14.0

4377.0

10.6

BE

2.63

2.8

23.2

11.3

BG

4.34

11.8

31.4

13.8

CZ

3.14

4.5

29.9

10.5

DK

10.61

28.2

65.1

16.3

DE

64.66

10.5

433.6

14.9

EE

0.097

1.1

14.0

1.0

IE

1.87

6.8

67.9

2.8

EL

6.41

10.0

89.5

7.2

ES

43.96

15.0

1513.1

2.9

FR

58.44

11.3

329.7

17.7

IT

49.75

14.1

237.2

20.9

CY

0.001

0

27.9

0

LV

3.41

48.4

9.0

40.0

LT

0.46

3.9

16.0

3.0

LU

0.24

3.2

2.2

10.9

HU

1.93

4.6

70.5

2.7

MT

2.3

NL

8.92

7.5

56.3

15.8

AT

39.25

57.4

96.6

40.6

PL

4.17

2.9

129.9

3.2

PT

8.56

16.0

220.1

3.9

RO

20.21

35.8

69.8

29.0

SI

3.58

24.2

16.0

22.3

SK

4.65

16.5

22.5

20.6

FI

23.56

26.9

104.3

22.6

SE

82.05

54.3

240.9

34.1

UK

17.48

4.3

450.8

3.9

HR

6.35

36.1

24.4

26.0

MK

7.3

TR

39.75

24.7

723.4

5.5

IS

8.68

99.9

233.8

3.7

enewable Energy

NO

136.68

108.4

290.7

47.0

CH

31.23

47.4

50.0

62.5

Source: Eurostat; DLR 2006

tial of wind energy alone is estimated to be ten times higher than the amount gener-

ated in 2005. Last but not least, the EU Member States and Candidate States in or

European Community for R

near the earth’s sunbelt have the potential to cover half of the EU’s electricity demand

from renewable sources.

ERENE

50

The GreenNet study ordered by the Commission also estimates the additional

potential for green electricity generation in the individual Member States of the EU

(see Fig. 5), although only that which could be activated by 2020. According to this

study, the main source of domestic renewable energy currently wasted, in the sense

that it is used to a low degree only, in Belgium, the Netherlands, Denmark, Germany,

Ireland and the United Kingdom is wind energy. Italy, Spain, Portugal and Greece

have large unused potential for solar power. The Czech Republic, Hungary, Poland,

Slovakia, Romania and the Baltic States are only partially utilising their potential for

electricity generation from biomass. In Slovenia and Bulgaria the potential of hydro-

power is not fully used to date, and for Ireland, the United Kingdom and Portugal,

wave energy could play a significant role in electricity generation.

The differences in the amounts and the composition of renewable energy sources

available in the individual Member States reflect the EU’s climatic, geological and

hydrological diversity. Some countries have a “surplus potential”, meaning that their

economic potential for renewable electricity production exceeds their current and future

electricity demand, while for other countries a complete shift from fossil and nuclear

power to electricity generated from renewable sources can only be realised if they have

the possibility to import green electricity. In a European internal market for regenerative

electricity, such needs for imports could be met with intra-European electricity trade.

Fig. 5: Potential for green electricity generation in the individual Member States of the EU

oundations

uments, Legal and Institutional F

asks, Instr

enewable Energy

enewable Energy: Objectives, T

European Community for R

A European Community for R

ERENE

3

Source: GreenNet study

51

Iceland

227

Norway

178

Sweden

87

United Kingdom

Denmark

Ireland

(Great Britain)

14

34

0

Netherlands

-60

Germany

Poland

-115

-61

Belgium

-44

Luxembourg

-9

Czech

France

Republic

-96

Slovak

-22

Republic

-7

Switzerland

Austria

11

48

Hungary

27

Slovenia

7

Croatia

4

Portugal

158

Bosnia-

Herzegovina

Spain

11

1193

Italy

-73

Serbia (with

Montenegro)

0

Malta

0

52

.swisseduc.ch

www

Finland

28

Sweden

87

Poland

-61

Slovak

Republic

-7

Hungary

27

Romania

-26

Bosnia-

Herzegovina

11

Bulgaria

5

Serbia (with

Montenegro)

Macedonia

0

-4

Turkey

Net balance

229

of renewable

electricity

Greece

potential

27

compared

to electricity

Cyprus

23

demand

(rounded)

53

Table 4 (DLR study) shows a country-by-country comparison of the estimated

electricity demand by 2050 with the economic potential for regenerative electricity

production and the resulting “potential coverage quotas” with green electricity.

The map below shows that the highest long-term export potential for regenerative

electricity in absolute numbers can be found in Sweden, Portugal and Spain. Austria,

Denmark, Finland, Ireland, Hungary and Greece could also become exporters of

regenerative power, and Turkey and Norway could also increase exports significantly.

The islands of Malta and Cyprus have sufficient potential to cover their electricity

demand with power generated from their own renewable sources, with Cyprus in

particular possessing an economic potential which significantly exceeds its current

Table 4: Estimated electricity demand in 2050 compared to the total economic renewable electricity

potential by country. RED indicates the countries where the domestic renewable electricity potential is

less than the estimated demand

In terawatt hours per year

Estimated electricity

Potential regenerative

Potential share of

demand 2050

electricity

coverage

Belgium

67.0

23.2

35%

Bosnia-Herzegovina

17.8

29.2

164%

Bulgaria

26.5

31.4

119%

Denmark

51.1

65.1

127%

Germany

548.8

433.6

79%

Finland

76.4

104.3

137%

France

426.0

329.7

77%

Greece

62.1

89.5

144%

United Kingdom

451.2

450.8

100%

Ireland

34.0

67.6

199%

Iceland

6.6

233.8

3,567%

Italy

310.6

237.2

76%

Croatia

20.3

24.4

120%

Luxemburg

10.9

2.2

20%

Malta

2.4

2.3

95%

Macedonia

11.5

7.3

63%

Netherlands

116.0

56.3

48%

Norway

112.0

290.7

259%

Austria

49.0

96.6

197%

Poland

190.9

129.9

68%

Portugal

62.0

220.1

355%

Romania

96.1

69.8

73%

Sweden

153.7

240.9

157%

Switzerland

39.4

50.0

127%

Serbia (with Montenegro)

49.2

48.8

99%

enewable Energy

Slovakia

29.5

22.5

76%

Slovenia

9.3

16.0

171%

Spain

320.1

1513.1

473%

Turkey

494.1

723.4

146%

Czech Republic

51.7

29.9

58%

Hungary

43.9

70.5

161%

Cyprus

5.0

27.9

558%

European Community for R

Total

3,945

5,738

145%

Source: DRL 2006: 59

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54

electricity demand. On the other hand, there would be countries that need to import

in order to completely cover their electricity demand with green power. France,

Germany, Poland and Italy would be the countries with the biggest import demands

in absolute terms. The Czech Republic, Belgium, Luxemburg, the Netherlands and

Slovakia could also be import countries in a European market for green electricity.

The above table clearly illustrates that for at least one-third of the EU Member

States, it would be difficult or even impossible to make the complete switch to green

electricity with a strategy that is limited to the use of renewable energy sources

located and available only within their national boundaries, while in other countries

huge potentials would remain unused due to such a purely national strategy. It is

apparent that a strategy combining the use of electricity generated from local sources

with a strategy to create a European, internal green electricity market based on an

integrated network for green electricity is not only a question of solidarity, but also

offers new opportunities for an ecological modernisation of the electricity sector and

for the realisation of the vision to cover the EU’s total electricity demand with renew-

able energy.

In order to utilise Europe’s significant renewable energy potential, it should be

ERENE’s task to contribute to the provisions that are necessary for an increased use of

renewable energy and for the creation of an internal market for green electricity.

ERENE shall contribute to create the conditions for increasing the use of renewable

energy sources for electricity generation. In order to perform its task, the Community

shall:

oundations

promote research and development and ensure the dissemination of know-how;

support innovation by setting up demonstration plants;

contribute to the development of a European electricity grid;

support investments in electricity generation from renewable energy sources;

contribute to the functioning of a common market for green electricity;

promote co-operation with other countries in the area of renewable energy.

uments, Legal and Institutional F

3.2 Competencies and Instruments of ERENE

a) Support of Research, Dissemination of Know-How, Establishment and Operation of

asks, Instr

Demonstration Plants

In its Communication “A European Strategic Energy Technology Plan (SET Plan)”,

dated November 2007 (EC 2007f,: 723), the Commission stated: “In the longer term,

new generations of technologies have to be developed through breakthroughs in

enewable Energy

research if we are to meet the greater ambition of reducing greenhouse gas emissions

enewable Energy: Objectives, T

by 60–70% by 2050.”

Although significant progress has been made in recent years in technologies for

the use of renewable energy of the so-called second generation, there is an urgent

need for further research in order to accelerate the development of new technologies,

to bring them to the market, and to lower the costs. The Commission lists the key tasks

European Community for R

for research and development: further improvement of wind turbine technologies –

especially for offshore facilities – photovoltaics, and the development of cost-efficient

A European Community for R

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3

energy storage technologies. Most important, however, is to “enable a single, smart

55

European electricity grid able to accommodate the massive integration of renewable

and decentralised energy sources.” Wave and tidal energy plants are further topics of

research for renewable energy technologies of the third generation.

Today, there is a clear mismatch between the magnitude of the energy and

climate-change challenge and the current level of research on energy, as the Commis-

sion has stated while drawing attention to both on the European level as well as in

many individual Member States. According to the Commission, the situation is as

follows: “If EU governments were investing today at the same rates as in 1980, the

total EU public expenditure for the development of energy technologies would be

four times the current level of investment of around 2.5 billion euros per year,” (EC

2007f: 3).

In the EU budget, there is an annual average of 886 million EUR for the period

2007–2013 dedicated to energy research within the 7th Research Framework

Programme. However, most of this money is allocated to the EURATOM programme.

For the period 2007–2011, an average of 550 million EUR per year is dedicated to

nuclear energy research. For another EU programme, “Intelligent Energy – Europe”,

the budget for the seven-year period amounts to 730 million EUR – an annual average

of only 104 million EUR. As this budget is intended for all energy-related issues, only

a part of it will end up flowing into renewable energy programmes.

Looking at the figures of the 7th Research Framework Programme, it becomes

clear that nuclear energy research is favoured and that there is a heavy imbalance

in the allocation of funding to the disadvantage of research on renewable energy.

The dominance of nuclear energy research is characteristic of the entire history of

common European research. The main reason for that imbalance can be seen in the

existence of EURATOM as a special community for the development of the nuclear

industry.

It is therefore worthwhile to look into the EURATOM Treaty when defining

the instruments that ERENE should have at its disposal for promoting research,

the dissemination of know-how and setting up pilot plants. In the light of today’s

political climate – in which political intervention into the market is often seen very

critical and in which the subsidiarity principle is always stressed in order to keep the

supranational competencies limited – the competencies and instruments given to

EURATOM to develop the nuclear industry look very strong and far-reaching, That

makes it obvious that the energy sector is really not a “level playing field” with equal

competition. As such, the competitive disadvantages that renewable energy faced

over decades and up to the present day must at least be balanced for reasons of fair

competition.

According to the EURATOM Treaty, not only research and training programmes

should be implemented for the nuclear industry; EURATOM also established from

enewable Energy

the outset a special common research institute on the supranational level, namely

the Joint Nuclear Research Centre. Meanwhile, this Joint Nuclear Research Centre has

been converted into the Joint Research Centre (JRC), with a significantly expanded

spectrum of research. Today its tasks also include research on renewable energies.

The JRC now includes seven institutes. One is the Institute for Environment and

Sustainability, located in Ispra, Italy, with 474 staff (for research and administration;

European Community for R

more than one-third is visiting staff). One of its seven units is specialised on renew-

able energy, and its work is important not only because of its own research activi-

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56

ties, but also for its documentation of developments in renewable energy technolo-

gies. However, nuclear research is still a core business of the JRC. This is the case, for

example, for the Institute for Transuranium Elements in Karlsruhe, Germany, and the

Institute for Energy in Petten, The Netherlands.

According to its founding treaty, EURATOM also has the competency to set up

schools for the training of specialists within the framework of the Joint Nuclear

Research Centre, and to establish an institution with university status. So far, however,

no use has been made of the latter competency.

It is of particular interest that the EURATOM Treaty provides for the possibility

that “undertakings, which are of fundamental importance to the development of the

nuclear industry in the Community may be established as Joint Undertakings,” – as is

the case for the ITER project, for example.

ITER

The Council again made use of the provision of the EURATOM Treaty to establish

a joint undertaking in its decision of 27 March 2007 “establishing the European

Joint Undertaking for ITER (International Thermonuclear Experimental Reactor)

and the Development of Fusion Energy.” This joint undertaking is the EURATOM

contribution to the ITER organisation, to which six other parties belong. Its tasks

include the construction, operation, utilisation and finally the decommissioning

of the ITER facilities.

The joint undertaking, headquartered in Barcelona, was established for a

period of 35 years, that is, until 2041. The joint undertaking is awarded advan-

oundations

tages such as exemption from VAT. It has its own budget (with its own financial

regulation), financed by contributions from EURATOM, the ITER host state

(France), the annual membership contributions and voluntary contributions.

The total resources required are estimated at 9.6 billion EUR with a contribution

from EURATOM (from the EU budget) estimated at 7.6 billion EUR.

The ITER project underlines the discrepancy between nuclear and renewable energy

uments, Legal and Institutional F

research efforts at the European level. The European Commission has announced

various initiatives in the SET plan for 2008 to promote the development of technology

for renewables. Thus, in addition to creating a European Energy Technology Informa-

asks, Instr

tion System, various European Industrial Initiatives are intended to be implemented

in order to align the research and development activities of the EU, Member States and

industry. The initiatives announced are the European Wind Initiative, Solar Europe,

Bioenergy Europe, and the European Electricity Grid Initiative with the creation of a

European Centre to implement a research programme for the European transmission

enewable Energy

network. In addition, it is proposed to initiate in 2008 an action on “European energy

enewable Energy: Objectives, T

infrastructure networks and systems transition planning”.

The initiatives announced by the Commission are to be appreciated. However,

the problem remains that for actions that go beyond the finances dedicated in the

7th Research Framework Programme to direct and indirect research projects and to

research co-ordination on renewable energy, no further financial resources are avail-

European Community for R

able in the multi-annual financial framework of 2007–2013, for example for setting

up large-scale demonstration plants. That means essential time for further devel-

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3

oping renewable energy technologies and maintaining the current European lead in

57

technological development in the continually growing world market for renewable

energy technologies is insufficiently used on the Community level. The Commission

has therefore announced a “Communication on financing low carbon technologies”

for the end of 2008, in which – among other questions – the pros and cons of “creating

a new European mechanism/fund for the industrial-scale demonstration and market

replication of advanced low carbon technologies” will be examined. Although the

Environment Council welcomed the announcement of such a Communication in

February 2008, its consequences on the promotion of research are uncertain.

Following the example of EURATOM, ERENE should be equipped with sufficient

and effective instruments to promote joint research in the field of renewable energies

more strongly than is currently the case at the EU level. In particular, the competency

to establish and operate demonstration plants should be conferred upon ERENE in

order to answer further research questions and to accelerate market penetration of

new technologies – be these plants for offshore wind power, wave and tidal energy,

or solar energy.

ERENE Member States should provide ERENE with the necessary competencies to:

implement joint research programmes;

establish and operate joint research institutes;

establish demonstration facilities for the generation and distribution of energy

from renewable sources;

support training programmes through the promotion of university chairs, fellow-

ships or exchange programmes.

b) Development of a Trans-European Grid for Electricity from Renewables

The existing network infrastructure forms one of the major technical-economic

obstacles to an increased use of renewable energy sources (see chapter 2.3). It is

completely directed to the carbon economy and nuclear power. This is also the case

for the majority of new investments, such as the construction of liquefied natural gas

(LNG) terminals or new pipelines.

Major problems arise from this centralised structure of the transmission and

distribution infrastructure for the integration of decentralised power plants for renew-

ables into the grid, while at the same time the alignment of the national networks to

the national territories inhibits co-operation between Member States and effectively

impedes the creation of a European internal market for electricity from renewables.

This alignment of the networks to the national territories, on the one hand, is also

an obstacle for the optimal use of renewables, as renewable resources, on the other

hand, are not aligned to political or administrative borders. In a European context,

enewable Energy

the existing network infrastructure therefore does not allow for taking full advantage

of the natural diversity of Europe with its different potentials for renewable energy

sources in the individual regions.

The natural diversity is to be seen as an additional potential value in the context

that some renewable energy sources are fluctuating resources and in the context of

an integrated system (see chapter 2). Having a mix of renewable energy sources avail-

European Community for R

able and successfully integrated will improve the conditions to achieve the goal of a

full replacement of fossil fuel and nuclear power with renewable energy electricity.

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58

The diversity of Europe’s climatic, hydrological and geological conditions is also

mirrored by different resource-specific generation costs, depending on the geograph-

ical location of the power plant. Cost efficiency will play an increased role within a

perspective of the complete shift to renewable energy. Figure 6 shows the range of

the technology-specific marginal costs of electricity generation in the EU in 2005.

With the further development of the technologies and their market penetration,

these marginal costs will generally decrease, but regional differences will stay due to

different natural conditions. A European regenerative electricity market would there-

fore be much more cost-efficient than a strategy attempting to create a 100% green

electricity supply based purely on the renewable energy sources available within the

national boundaries.

Fig. 6: Range of marginal costs of electricity generation from various technologies in the EU in 2005

oundations

uments, Legal and Institutional F

asks, Instr

Source: OPTRES

A trans-European electricity network is vital for the better utilisation of the high

renewable energy potential, the optimisation of the energy mix and a cost-effi-

cient transition to green electricity. For a rapid growth of the share of regenerative

electricity, the question of trans-European trade with green electricity will play an

enewable Energy

incrementally decisive role. For example, it is assumed in the lead study on “A strategy

enewable Energy: Objectives, T

to increase the use of renewable energy” for Germany (Nitsch 2007) that from the

year 2018 onwards, imports through a trans-European electricity network for renew-

able energy will play an increased role, and that by 2050 such imports could cover

25% of the regenerative electricity demand in Germany.

However, for network operators that are also electricity producers, there are no

European Community for R

incentives to invest in interconnections of the transmission grids, since this would

allow more competition on the electricity market. This explains why investment in

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3

the EU in cross-border infrastructure has previously been extraordinarily low (see

59

chapter 2.3), and why not even the minimum electricity interconnection capacity of

10%, which was agreed upon in the EU, has been achieved in all Member State. As a

result, cross-border electricity trade is very low in the EU (Fig. 7).

Fig. 7: Electricity consumption and exchanges in regions in Europe in 2005

Source: EC 2007c,

http://ec.europa.eu/ten/energy/documentation/doc/2007_03_30_ten_e_infoday_presentation_en.pdf

The Commission has therefore come to an alarming conclusion: “If the EU continues

on its present infrastructure course, none of the energy policy for Europe objectives

will be met. The development of renewable energy sources will be hampered by the

lack of network transmission capacities either within or between Member States,”

(EC 2007b).

To change this situation, the proposals of the Commission in the so-called third

internal market package are extremely important. They aim to achieve unbundling of

electricity production from network operations, and new arrangements for the co-or-

dination of network investments and between the regulatory authorities.

Recognising the importance of trans-European networks for a functional internal

enewable Energy

market, the Member States have long since given the EU the task of contributing to

the establishment and development of trans-European networks in the areas of trans-

portation, telecommunications and energy infrastructures (Art. 170 TFEU, ex-Art.

154 TEC). The actions by the EU “shall aim at promoting the interconnection and the

interoperability of national networks as well as access to such networks.”

A key instrument to meet this task is the Trans-European Networks (TEN)

European Community for R

programme, according to which financial support can be granted from the EU

budget. However, the amount available for the development of trans-European

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60

energy networks is limited to an annual average of 20 million EUR until 2013. With

this amount of money, studies and co-operation can be promoted, but for the co-fi-

nancing of the technical infrastructure the budget is insufficient. However, according

to the Community Strategic Guidelines on Cohesion 2007–2013, the relevant

European funds can be used by the Member States also for the improvement of the

integrated electricity networks.

Nevertheless, the Commission rightly states that it should be seriously considered

whether the current amount of EU financing for the energy policy goals for Europe

is sufficient.

For ERENE, of paramount importance is an intelligent trans-European grid which

is capable of integrating a large number of diverse, decentralised renewable energy

sources and which can enable the creation of a European internal market for renew-

able energies.

The participating Member States should confer the necessary competencies and

financial resources upon ERENE to contribute through direct participation in the

construction and operation of interconnectors between Member States and in joint

pilot projects toward the development of a trans-European electricity network that is

capable of creating a European internal market for green electricity.

This recommendation for a direct involvement in the construction and operation

of technical facilities and the infrastructure follows a recent example of EU policy,

namely the Galileo project – the European Satellite Navigation System.

oundations

Galileo – European Satellite Navigation System

The project is seen as an “indispensable infrastructure investment” for the EU’s

economy (EC 2007f: 534). After failing to find private investors in the current

phase of the project, the EU decided in 2007 to finance the total costs of the satel-

lite navigation system from the EU budget. In the period from 2007–2013, a total

of 3.4 billion EUR will be available for financing Galileo up to its full operability.

uments, Legal and Institutional F

The public financing from the EU budget includes the satellites, the rockets as

well as the necessary infrastructure on the ground. The EU is the owner of all

assets.

asks, Instr

c) Establishment of Joint Undertakings for the Development of Renewable Energies

To meet its tasks, ERENE should have the competency to establish joint undertak-

enewable Energy

ings.

enewable Energy: Objectives, T

The establishment of joint undertakings is provided for in the EURATOM Treaty –

for example, ITER – as well as in the Treaty on the Functioning of the EU (the former

TEC) – for example, Galileo. Article 187 (ex-Art. 171) of this Treaty states: “The Union

may set up joint undertakings or any other structure for the efficient execution of

Union research, technological development and demonstration programmes.” The

European Community for R

Treaty does not contain more detailed provisions, except for stating that these provi-

sions are adopted by the Council with qualified majority voting on a proposal of the

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3

Commission and after consulting the EP. Even though the purpose of such a joint

61

undertaking must be related to research and development, the Galileo example does

show how broad this provision can be interpreted. In any case, on that legal base,

the EU would have the option to establish a joint undertaking to build and operate

demonstration plants for the use of renewables energy sources, including its connec-

tion with the grid.

According to the EURATOM Treaty, the establishment of joint undertakings in the

area of nuclear energy is not limited to research purposes or demonstration facilities.

In general, undertakings which are “of fundamental importance to the development

of the nuclear industry in the Community” can also be established as joint undertak-

ings. This status can and is granted also to purely private companies active in the

nuclear sector, which may provide them with relevant tax privileges, which can be

granted on the basis of the EURATOM Treaty.

ERENE should have the competency to establish joint undertakings for:

the construction and operation of demonstration facilities;

the establishment of grid interconnectors between Member States;

the development of smart grids for the connection and system integration of

renewable energies.

Use should be made of this option in case the necessary investments are not provided

by the private energy sector. Joint undertakings should have the option to partici-

pate in consortia together with private companies. Participation in a company for a

trans-European electricity network should also not be excluded. In addition, there

should be the option that only some of ERENE’s Member States participate in the

joint undertaking.

d) Support of Investments in Generating Electricity from Renewable Energy Sources

Even though there has been a heavy drop in the costs of technologies for green

electricity production in recent years, while the prices for gas, oil and uranium

exploded, there is no level playing for electricity based on renewable energy sources

on the one hand – with the general exception of large hydropower plants – and

electricity based on fossil fuels or nuclear power on the other hand. This is the result

of several distortions of competition.

For instance, prices for products of the carbon economy do not currently include

the external costs resulting from Co2 emissions. The European emissions trading

system is an important step towards their internalisation, if the emissions allowances

are no longer allocated for free, but auctioned, and their numbers steadily reduced.

The price for electricity from nuclear power does not include the de facto inestimable

enewable Energy

cost of the final storage of the radioactive waste for millennia. In addition, compe-

tition on the energy markets is distorted by actors dominating the market, and by

various public subsidies in favour of coal-based and nuclear-based electricity produc-

tion. The European Commission has estimated that state aid granted to the energy

sector in the EU-15 in 2001 totalled 15 billion EUR, of which only 19% went to renew-

able energy. Furthermore, competition is distorted by European law itself, namely the

European Community for R

EURATOM Treaty and its promotion of the nuclear industry. Also of importance is the

fact that the technical infrastructure for energy supply is one-sided and aligned to the

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62

carbon economy and nuclear power. Together with other conditions, that works as a

market entry barrier for undertakings in the renewable energy sector. In addition, the

costs for generating electricity from renewable energy sources are dominated by the

investment costs for the installations, while the costs for electricity from fossil fuels

are mainly determined by the prices for these fuels. For producers of green electricity,

the capital risk is therefore concentrated on the risk of investing in the installations.

That is why the willingness to invest in renewable energy plants significantly depends

on the question of long-term purchase commitments for green electricity.

For all these reasons, support measures for investments in renewable energy are

needed to promote their development in order to pursue the objectives of protecting

the climate, securing energy supply and strengthening Europe’s competitiveness.

This is also acknowledged in the Community Guidelines on State Aid for Environ-

mental Protection. Support schemes for renewable energy can balance the existing

disadvantages in competition and stimulate their market penetration.

On the national level, state aid may thus be granted by the Member States for

promoting investments in renewable energy to the extent that it is compatible

with the Community Guidelines on State Aid for Environmental Protection. On the

European level, money from the funds for the cohesion policy can be used for energy-

related projects. Pursuant to the information from the European Commission (EC

2008c, IP/08/267), the operational programmes for cohesion policy for 2007–2013

submitted by the beneficiary regions include investments totalling 9 billion EUR for

energy-related projects, of which 4.8 billion EUR are foreseen for renewable energy,

and 4.2 billion EUR for energy efficiency and energy management measures.

oundations

The breakdown of the money allocated to projects in regenerative energy by the

different renewable energy sources is as follows:

1.8 billion EUR biomass

1.1 billion EUR solar

1.1 billion EUR hydro, geothermic and other sources

0.8 billion EUR wind

uments, Legal and Institutional F

In this way, the EU budget is providing an important contribution to regional projects

in order to support the Member States in reaching their targets for the share of

renewable energy by 2020. It is of particular interest to compare the priorities of the

asks, Instr

Member States for the projected spending of the funds. Figure 8 shows the absolute

amounts from the European Fund for Regional Development (EFRD), which the

individual Member States have dedicated in their programmes to renewable energy

projects, since the overall amount of funding from the EFRD that each Member State

will receive differs considerably due to the eligibility criteria. Figure 8 also highlights

enewable Energy

the respective share of the total EFRD funds allocated to a Member States that will be

enewable Energy: Objectives, T

spent for renewable energy projects.

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3

63

Fig. 8: Projected investments of funds from the European Fund for Regional Development in renewable

energy (2007-2013; in Mio EUR)

Source: EC 2008c, IP/08/267

Besides the national state-aid for investments and the subsidies financed from EU

cohesion policy funds, specific support schemes for electricity from renewable

sources are of particular importance. All Member States have put in place such

support schemes in recent years – not least triggered by the relevant EU directive

of 2001 – in order to provide investors with long-term investment security and

compensate for the current higher costs of electricity production from renewable

sources. Most of the Member Sates have established price-related support schemes

with feed-in tariffs, although there are considerable differences regarding the level

of feed-in tariff, the duration of the support and the differentiation between various

technologies. However, the same provision applies or will apply to all countries by

existing or proposed EU Directives with regard to priority access to the grid for green

electricity.

At the request of the Commission, the OPTRES study was carried out comparing

the effectiveness and efficiency of the national support systems and examining the

effects of an EU-wide harmonisation of these systems. In the comparison of the

national systems, the study comes to the conclusion that the price-related support

systems – the feed-in tariffs – have advantages compared to the quantity-related

systems – the quota-systems – for the supply or the demand of electricity form

enewable Energy

renewables with respect to effectiveness as well as to cost-efficiency. The analysis

also reveals that it is of great importance for the overall technological development to

include all electricity-generating technologies from renewable energies in the support

scheme. In order to put the most cost-efficient support scheme in place, technology-

specific tariffs should be used.

The simulation of a harmonisation of the support schemes at the European level

European Community for R

comes to a clear ranking. To achieve a certain development in the production of

electricity from renewable sources by 2020, a harmonised technology-specific support

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64

scheme with feed-in tariffs would be the most cost-efficient way. The second-best

solution would be with national support schemes that are continually improved via

best-practice sharing. The difference in cost-efficiency between these two solutions

lies in the fact that with the continuation of national support systems, the cost advan-

tages resulting from different marginal generation costs of green electricity across the

EU cannot fully be realised. The most expensive regime for consumers would be a

non-technology-specific harmonised support scheme based on quotas, as it would

generate high “windfall profits”.

For ERENE no harmonisation of the national support schemes for electricity

from renewable energies is proposed. The main reason for this is that ERENE is not to

be established as an alternative to the legislative package submitted by the Commis-

sion in January 2008, according to which Member States must assure the achieve-

ment of their individual targets for renewable energy by 2020 through National

Action Plans (NAP). ERENE should rather concentrate on joint actions of the partici-

pating Member States in order to establish a common market for renewable energy,

enabling a sustainable development in electricity supply that goes beyond the target

agreed by the entire EU. In this sense the difference between the two approaches can

be described as follows: while the NAPs shall promote the creation of stable national

markets for renewable energy, the aim of ERENE is oriented towards establishing a

stable European market for renewable energy. These developments should not occur

in succession, but rather at the same time. Therefore, ERENE should concentrate on

the support of cross-border trade in green electricity.

According to the national alignment of the support schemes in Member States,

oundations

only green electricity energy produced in the national territories is eligible for the

support system (with the short-term exception in The Netherlands). This results in

there being no incentives to produce green electricity for the transnational European

electricity market.

ERENE shall provide a uniform support scheme for cross-border trade in electricity

from renewable energy sources between the participating States. A price-related

uments, Legal and Institutional F

support scheme for imports of renewable electricity in and from the ERENE Member

States is proposed with a uniform, but technology-specific premium to be paid to the

producer of green electricity for the supply placed on the market of another Member

asks, Instr

State.

The additional costs of this joint support scheme would be the same for all consumers

in the ERENE Community, although the final power prices paid by the consumers will

be different, as well as the final price paid to the producers due to the various price

enewable Energy

levels in the different markets.

enewable Energy: Objectives, T

To achieve an electricity supply from renewable energy that goes beyond the

horizon of the respective draft Directive of 2008, two further provisions for the

proposed two-tiered support scheme should be put in place:

Firstly, the producers of green electricity should have the right to choose between

European Community for R

the national and the supranational support scheme. They should have the option to be

supported according to the national scheme or the joint support scheme of ERENE.

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3

Also for the joint support system, there should be a right of priority feed-in of green

65

electricity. Secondly, the imported green electricity, for which a premium is paid

according to the joint support scheme, shall not be counted towards the national

binding minimum targets set by the EU Directive. This will underline the aim of

ERENE to come to a development beyond these national minimum targets and to use

today’s timeframe not only for national but for joint efforts to switch to an energy

system based on renewable energy sources.

It should be stressed that this is not a proposal on cross-border trade with certificates

counting towards the national binding targets, but on physical trade in electricity

generated from renewable sources. The option for producers of regenerative electricity

to offer their product either on the national market or for cross-border trade may

force improvements of the national support schemes to offer sufficient incentives in

order to reach the national binding target for the share of renewable energy in final

energy consumption levels. This combination of national and ERENE-wide support

schemes may be able to stimulate a development creating stable national markets as

well as a stable export market for green electricity. Such a combined system will gain

importance with the availability of a trans-European grid and with a rising number of

Member States integrated in the European grid and joining ERENE.

e) Promotion of a Common Market for Renewable Energy by Reducing Administrative

Barriers

The development of renewable energy is not only constrained by distortions in

competition and insufficient grid infrastructure, but also by disproportionate admin-

istrative procedures and regulations. According to the draft Directive, Member States

must assure that these types of barriers and constraints for the use of renewable

energy sources are diminished (see chapter 2.3).

ERENE should have the competency to enact administrative regulations, for example

concerning the authorisation procedure for permits.

However, there are too few comparative studies and reports available outside of the

OPTRES study to propose a harmonisation based on best practice. The action plans

that the Member States must submit in the future will enable new insights, as they

will also indicate if there is a convergence in the improvement in the procedural and

administrative provisions in the Member States, which would make a harmonisation

superfluous.

The ERENE Member States should commit themselves to co-operate for the improve-

enewable Energy

ment of administrative procedures and provisions for renewable energy and to quickly

implement such improvements.

f) Promotion of Co-operation with Third Countries in the Field of Renewable Energy

A future-oriented European energy policy must look beyond the borders of the EU.

European Community for R

International co-operation is a prerequisite for the chance to mitigate global climate

change, and economic co-operation plays a key role in the success story of the EU

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66

to assure good neighbourhood relations and political stability in Europe. ERENE

should therefore not only be open to all EU Member States, but also have the right to

sign agreements with third countries on co-operation in its field of competency. This

should apply with regard to the countries of the European Economic Area (EEA) –

Iceland, Norway, Liechtenstein – to Switzerland, to the Candidate Countries – Croatia

and Turkey – as well as to the western Balkan States.

Some of the aforementioned countries already cover a significant part of their

electricity demand with renewable energy or are even net exporters, with some of

them using exclusively hydropower – with the exemption of Iceland. The share of

renewable energy in final electricity consumption in 2005 was 36% in Croatia, 25% in

Turkey, 100% in Iceland, 108% in Norway and 47% in Switzerland (data: Eurostat).

The DLR study shows that the potential for renewable electricity in the states

listed is significant and – as shown in Figure 9 – is currently far from being fully

exploited. Norway and Iceland have significant export potential, and in Turkey, too,

the economic potential for renewable electricity production exceeds future expecta-

tions, in comparison to its significantly rising electricity demand today.

Fig. 9: Potential for electricity from renewable energy sources

Surplus Potential

Wa/Ti

PV

Croatia

Wind

CSP

Bio

Turkey

Geo

oundations

Hydro

Switzerland

Iceland

Norway

uments, Legal and Institutional F

asks, Instr

Source: GSA 2006

ERENE should also be open to co-operation with third countries in the neighbour-

hood of the EU. There are concrete proposals for co-operation with the Mediterra-

nean countries with their great potential for concentrated solar power. Proposals

on the options and conditions for such a co-operation, which have already been

enewable Energy

proposed in 2003 by the German Advisory Council on Global Change to the Federal

enewable Energy: Objectives, T

Government (WBGU 2003), are now available in very detailed form and are in the

meantime well known under the name “DESERTEC” project. Based on the DLR

studies, a scenario has already been designed for an integrated grid between the EU

and the non-European Mediterranean states – called EU-MENA. The proposal is to

use the high solar energy potential of these states in concentrated solar power plants

European Community for R

(CSP) for the coverage of the increased electricity demands of this region, primarily

due to the need for seawater desalination plants, as well as for export of electricity to

A European Community for R

ERENE

3

Europe. The electricity from renewable energy should be sent to Europe via HVDC

67

Transmission (High Voltage Direct Current Transmission), which has relatively low

transmission losses also over long distances. Regarding the political preconditions,

this co-operation should be enabled by a free trade zone for renewable energy.

This project should also be seen in the context of the offensive for exporting

nuclear power plants to North African states, which is supported by France despite

the proliferation and technology risks as well as the high investment costs. The

DESERTEC project, in contrast, meets the criteria of a sustainable energy policy,

and is therefore particularly suitable as a project for EU-Mediterranean co-opera-

tion. Such co-operation serves the economic and technological development of the

southern neighbouring states of the EU and is also in the political interests of the EU,

not only in terms of the climate and energy policy.

The DESERTEC project proposes the import of solar power from the EU-MENA

co-operation as a supplement to the use of renewable energy sources on the

European continent. The scenario envisaged by the DLR TRANS-CSP study suggests

that in 2050, approximately 20% of the EU’s electricity demand could be covered by

“electricity from the desert”. As a result of the favourable climatic conditions for solar

energy in the Mediterranean States, this co-operation would have the advantage for

the EU of stabilising the supply of electricity generated from renewable sources and

of reducing electricity prices due to the low production costs. For the North African

states, the advantage lies in technology transfer and in the trade with renewable

electricity generated from plants that also serve the African states themselves for

drinking water abstraction through seawater desalination.

Fig. 10: Synergy potential

enewable Energy

Despite the goal of reducing the EU’s energy-import dependency by developing

its own domestic energy sources, and despite the fact that the economic potential

for renewable energy in the EU, the European Economic Area, and the Candidate

European Community for R

Countries is sufficient to fully cover their electricity demand, and despite the advan-

tages of decentralised energy supply compared to the current centralised supply

ERENE

68

structures, the economic and political benefits of co-operation like the DESERTEC

project should be considered and realised. It is therefore very positive that this project

will be taken up for the EU-Mediterranean co-operation within the framework of the

European Neighbourhood Policy. ERENE, too, should have the option to make agree-

ments with third countries in order to enhance or concretise co-operation in the area

of renewable energy.

The treaty or the decision for establishing ERENE should allow this Community – in

co-ordination with the EU – to make agreements with third countries on the co-opera-

tion in research, the installation of demonstration facilities, promotion of investment

in the production of regenerative electricity and interconnections to the European

grid, and on import of green electricity.

3.3 Financing the Activities of ERENE

Climate protection and a sustainable energy policy are two of the political priorities

of the EU. However, these priorities are not mirrored in the EU budget.

The overall budget available for energy research was increased in the multi-an-

nual financial framework for the period 2007–2013, agreed by the Council, Parlia-

ment and the Commission in 2006, but the major share of this money is still flowing

to nuclear research. Financing a development project in renewable energy from the

EU budget, with costs similar to the cost of the ITER project, is thus excluded by lack

of resources. The “Intelligent Energy – Europe” programme, in which renewable

oundations

energies are a priority, cannot offset this imbalance with its average annual budget

of 104 million EUR.

However, it should be mentioned that Member States can now use money from

the EU funds for cohesion policy for funding of infrastructure projects in the energy

sector. According to the Commission, Member States intend to spent 4.8 billion

EUR from the funds allocated to them in the framework of the cohesion policy in

the period up to 2013 for renewable energies projects. The Community programme

uments, Legal and Institutional F

“Trans-European Networks”, on the other hand, will not be able to provide funding

for large-scale infrastructure investments due to the limited amount available from

an annual average of 20 million EUR dedicated to energy projects.

asks, Instr

Sustainable energy also plays an important role in foreign policy funding

programmes, for example in the European Neighbourhood Policy Instrument (ENP).

The financial resources available allow for funding of some individual projects and

initiatives, but for large-scale investments in energy infrastructure, the EU can

only offer the lending capabilities of the European Investment Bank (EIB) and the

enewable Energy

European Bank for Reconstruction and Development (EBRD).

enewable Energy: Objectives, T

When the heads of state and government determined their positions in 2005 on

the EU’s multi-annual financial framework for the period up to 2013, they could not

agree on a higher Community budget for joint measures in the energy sector – as

the Commission has proposed for Trans-European Networks or for research. This

reluctance is surprising when considering the determination in other policy areas

European Community for R

with which the EU in the past and today has tried to achieve common goals through

spending considerable amounts of public money. Reference to EURATOM has already

A European Community for R

ERENE

3

been made in this context. Since its foundation, EURATOM has been granted signifi-

69

cant financial resources. Another example is agricultural policy, to which significant

resources are allocated in order to assure common goals. The former price-related

intervention system in agriculture, which provided the farmers with take-off guaran-

tees for their products at a minimum price, shows some similarities to the support

system of feed-in tariffs for electricity generated from renewable energy; although

due to the specific conditions in the agriculture sector, the subsidies were not directly

passed on to consumer prices, but ran through the public budget. In agricultural

policy, the purpose of the subsidies was to boost production through financial incen-

tives and income security for the producers in order to guarantee the security of food

supply for the population in the EU through domestic production that covers all

European demand. This objective continues to play an important role for the polit-

ical legitimacy of agricultural subsidies.

How can one explain the hesitation of the Member States to provide more finan-

cial resources for a sustainable European energy policy – and in particular for the

promotion of the use of renewable energy sources – which shall play an important

role for security of energy supply in the EU?

One reason is that the decision on the multi-annual financial framework of

the EU requires consensus in the European Council. That is the reason why the

acceptance of financial support for new policy areas and a change in the priorities

of EU expenditure comes only step by step. Even the change of the current multi-

annual financial framework in order to finance the total cost of the Galileo Project

from the EU budget, which was decided at the end of 2007, would have failed if

the EP had not successfully negotiated that a qualified majority in the Council is

sufficient for a revision of the financial framework in the case that this revision

does not exceed a certain amount. In the coming years, it will not be excluded to

use this revision clause for the financial framework once again to the advantage of

funding common measures at the EU level to promote the development of renew-

able energy.

The hesitation to provide more financial resources from the EU budget for joint

actions in the energy area is also an indicator that many Member States consider

energy policy still to be a matter of the national policy domain – with the exception of

issues covered by ECSC or EURATOM. It is only the Treaty of Lisbon that will provide

a specific legal base for a European energy policy, while in the past, common actions

of the EU concerning energy were legally based on the EU’s competencies in environ-

mental policy and for the internal market.

A further aspect should be mentioned in that context: the principle of “juste

retour”. According this principle, Member States try “to get their money back”, which

means that they try to receive the same amount of money from the EU budget as they

have paid to the budget. In this view, the benefits which the EU as a whole and the

enewable Energy

individual Members States gain from EU policies are neglected, or at least underesti-

mated, because benefits are defined in an accounting exercise only in terms of money

that beneficiaries in the individual countries receive from the EU budget. Even the

aspect of higher cost-efficiency of common action is systematically underestimated

in this view.

Can it be expected that those Member States that wish to achieve a sustainable

European Community for R

energy supply faster than is currently envisaged, through common action and co-op-

eration, for the use of the manifold potential of renewable energy sources in Europe

ERENE

70

think any differently? Hardly. Therefore, ERENE should take up the aspect of “juste

retour” or “allocated return” in a positive way for setting up the regime of financing

ERENE’s activities.

An example of a financing mechanism, in which the principle of “geographical

return” applies for funding activities, is the European Space Agency.

ESA

The European Space Agency (ESA) was established by a Convention in 1975. Not

all EU (then EEC) Member States signed the Convention, and not all ESA parties

are Member States of the EU (Norway, Switzerland). Thus ESA is not based on EU

treaties and is not an organisation of the EU, but an international organisation

based on a convention. ESA is a legal entity and owner of the assets. It is granted

tax privileges in all ESA Member States. ESA’s activities are divided into manda-

tory activities – such as research – and optional programmes, which include, for

example, the development, construction and operation of rockets and satellites.

In the optional programmes, not all ESA Member States are involved, but only

those interested in the programme. The expenditures are financed by contribu-

tions from the ESA Member States and levied proportionally to their national

incomes. New Member States must pay a special contribution in accordance

to the capital value of ESA when joining the organisation. For contracting the

optional programmes, the Agency shall apply the principle of “geographical

return”, according to which, for each individual participating Member State the

percentage share of the total value of all contracts awarded among all countries

oundations

shall be equal to its share in total contributions for the financing of the optional

programmes. The geographical total return coefficient should ideally be 1 for

each of the participating Member States. Because this cannot always be assured,

there is a minimum of 0.8. For the purpose of calculating the return coeffi-

cients, weighting factors are applied to the value of the contracts according to

their technological importance. In 2006 ESA had 1,900 staff and expenditures

amounted to 2.9 billion EUR – of which 2.58 billion EUR were financed by contri-

uments, Legal and Institutional F

butions from its Member States, 734 million EUR of which were used for manda-

tory activities and 1.78 billion EUR for optional programmes.

asks, Instr

The following mechanism is proposed for financing of ERENE’s activities:

Expenditures of ERENE will be financed by the participating Member States. The

financing shall be based on the revenue from the European Emissions Trading System

(EU ETS). The financing share of the individual Member States will be calculated on

enewable Energy

the basis of its share in total revenue from the ETS.

enewable Energy: Objectives, T

In the draft Directive to improve the greenhouse gas emissions-allowances trading-

system of January 2008, the European Commission proposed that the revenue gener-

ated through auctioning the emission allowances – which shall be fully obligatory as

of 2013 – will flow into the public budgets of the Member States. It will be obligatory

European Community for R

for only 20% of these proceeds to be used for the financing of measures designed to

advance a sustainable energy policy. The total amount of revenue from auctioning the

A European Community for R

ERENE

3

allowances are estimated at 75 billion EUR for 2020 if additional economic sectors are

71

included in the ETS. This amount represents some 0.5% of the EU’s gross domestic

product and corresponds to half of the current EU budget.

The proposal that the revenue from the ETS will go to the Member States’ budgets

and not to the Community budget can be viewed critically, given the fact that this

financial resource was created by European common policy – namely the establish-

ment of a new market for emission certificates. These financial resources are in this

sense European ones, similar to customs duties, and is assigned to the EU as its own

resource. In addition, the correlation between the revenue a country gains from the

ETS and the amount of its given emissions allowances, despite some corrections in

the Commissions’ proposal, is not without problems regarding aspects of environ-

ment and justice. Various aspects, therefore, call for the common use of at least a part

of these revenues.

For all these reasons it is proposed in this study to use a part of the revenues from

the emissions trading system as a resource for funding the activities of ERENE, not

in the sense of ERENE’s own exclusive resource, but a resource resulting from the

Member States’ contributions. An additional reason for this funding proposal is the

consideration that the revenue from the ETS is a new financial resource assigned to

the Member States and that, therefore, the contributions to the ERENE budget will

not draw from the national public budgets, which might enhance the political feasi-

bility of the proposal. Last but not least, as the revenues from the emissions trading

system will increase over time, it might improve the chances of increasing resources

dedicated to ERENE activities.

The distribution of funding among the participating Member States should corre-

spond to the distribution of revenue generated through auctioning of the emissions

allowances. In principle, the same percentage should be levied on the revenue from

the ETS in all Member States of ERENE. However, the redistributional element in

the Commission’s proposal in favour of the less prosperous Member Sates should be

taken into account.

In addition, the principle of “geographical return” is proposed to be applied in

the financial regime for ERENE:

Expenditure of ERENE shall be differentiated into mandatory expenditure – for

general research activities on renewable energy – and for optional programmes.

The principle of “geographical return” shall apply to the optional programmes. The

optional programmes include investments in demonstration plants and network access

and interconnections. The awarding of contracts as well as the location of the invest-

ments should be included in the calculation of the “geographical return”. Accordingly,

the value of a facility would be (partially) assigned to the country on whose territory

the facility is established. For balancing the return coefficients among Member States

enewable Energy

with a positive and those with a negative coefficient, buying options for electricity

generated from renewable energy should be introduced.

Calculating the return coefficients, the value of fixed assets – for example, demonstra-

tion plants – should be allocated to the country where the facility is located because it

will later be given over to the ownership of that country. As it would be rather unwise

European Community for R

to come to a decision on facility locations or the awarding of contracts solely based on

the criterion of a return quota of 1 for all participating states, buying options for green

ERENE

72

electricity should be introduced in order to ensure a balancing of return coefficients

between the states. Countries whose return quota is less than 1 would receive buying

options for regenerative electricity from countries with return quotas exceeding 1,

whereby the exporting countries could, for example, balance out return quotas

financially by paying the proposed premium for regenerative-electricity cross-border

trade. Through such buying options, the advantage of, for example, ERENE’s invest-

ments in a trans-European grid for green electricity would also benefit countries that

neither had companies involved in ERENE contracts nor ERENE facilities on their

national territories.

Such a mechanism of “geographical return” could assure the interests of many

Member States in helping to decide to join ERENE – it may be that they have strongly

competitive companies in the business area of renewable energy or that a demon-

stration plant for generating green electricity is built on their territory, which other-

wise would have needed national funding, or that they are interested in the buying

option for green electricity.

3.4 Legal and Institutional Basis of ERENE

In principle it would be best if ERENE becomes a big and visionary project of the EU

as a whole, with all Member States sharing the goal of realising the technological,

economic and ecologically feasible switch from fossil and nuclear fuels to electricity

generated from renewable energy sources, and to provide the necessary conditions

for this change. Can the EU take a decision to establish ERENE as a new common

oundations

project for the EU as a whole on the basis of the treaties on which the EU is founded

and in the new version of the Lisbon Treaty?

In principle, yes, because the Treaty of Lisbon includes, for the first time, a special

chapter on energy policy, by which competencies in this policy field are conferred

upon the EU (Article 194 TFEU). This new chapter is very relevant for European

energy policy. Besides the provisions in the special treaties ECSC and EURATOM, it

is now also accepted in the general Treaty, on which the EU is founded, that energy

uments, Legal and Institutional F

policy is no longer a political domain only of the nation-state, but that competencies

on the supranational level are also needed to take common action.

The new provisions on energy policy are added to those on environmental policy,

asks, Instr

which, until the Treaty of Lisbon, served as the legal basis for directives in the area of

renewable energy (Article 192 TFEU (ex-Article 175)).

According to the new article in the Lisbon Treaty, “Union policy on energy shall

aim, in a spirit of solidarity between Member States, to:

Ensure the functioning of the energy market;

enewable Energy

Ensure security of energy supply in the Union;

enewable Energy: Objectives, T

Promote energy efficiency and energy savings and the development of new and

renewable forms of energy;

Promote the interconnection of energy networks.”

These objectives are very similar to those of ERENE. Therefore, it would be conceiv-

European Community for R

able to establish ERENE as a new, large Community project for the entire EU.

However, considering ERENE’s ambition to increasingly and, ultimately,

A European Community for R

ERENE

3

completely replace fossil and nuclear fuels with renewable energy sources, a further

73

provision of the Treaty must be taken into account. According to the Treaty provi-

sions, action taken on the EU level shall not affect the right of a Member State to

choose between different energy sources and determine the composition of its energy

mix (Article 194, par 2 TFEU). For such European measures that significantly affect

the energy mix, unanimity vote in the Council is required (Article 192, par 2 TFEU,

ex-Article 175, par 2 TEC). In its legislative proposal of January 2008 on setting the

20% renewable energy target, the Commission argues that this target will not signifi-

cantly affect the energy mix. Therefore, the proposal is based on Article 174, par. 1

TEC, according to which qualified majority voting in the Council is sufficient and the

EP is involved by co-decision procedure. However, since ERENE has the explicit goal

of changing the energy mix for electricity generation completely towards renewable

energy, unanimity in the Council will be required to take the relevant decisions.

It can, however, hardly be assumed that all Member States would be able to agree

on a further target for renewable energy, in the short-term after they have managed

to agree on the legislative package proposed by the Commission in January 2008 after

difficult negotiations. That is why it should be considered on which legal and insti-

tutional basis ERENE could be established as a partial Community of the EU, as an

avant garde in European energy policy.

Two options will be discussed:

a) Establishing ERENE on the basis of the existing treaties as a project of enhanced

co-operation between some of the Member States of the EU;

b) Establishing ERENE on the basis of a new, separate treaty. ERENE would then be

a new Community existing alongside the EU and EURATOM.

A third way, namely converting the EURATOM Treaty into an ERENE treaty, is

currently not a realistic option, because this would require consensus of all Member

States to abandon nuclear power, and this change could only come into force after

ratification by all Member States. Another way, the integration of the ERENE idea

into the EURATOM Treaty, presupposes a consensus on a co-existence of nuclear

power and renewable energy as a long-term perspective. This consensus, too, will

not be achieved and such an option would also contradict the essential objectives of

ERENE.

The following questions will be discussed in order to evaluate the two options for

the establishment of ERENE:

Which legal options exist for the establishment of a Community to which not all

EU Member States belong?

Can the EU institutions be used for this new Community?

Can ERENE be provided with the necessary instruments to meet its tasks?

enewable Energy

Is democratic control ensured?

Which procedures, with their corresponding advantages and disadvantages, can

be used for establishing ERENE?

a) ERENE as a Community for Enhanced Co-operation within the EU

European Community for R

The establishment of ERENE as an EU project based on current EU treaties must not

necessarily fail for the reason that unanimity in the Council is required for taking

ERENE

74

decisions that significantly change the energy mix. For cases where a political goal

cannot be achieved “within a reasonable period” by the EU as a whole, the TEU

provides the option to establish “enhanced co-operation” between some of the

Member States as a last resort (Article 20 TEU). This option exists for political areas

which do not fall under the exclusive competency of the EU, such as energy policy. To

establish an “enhanced co-operation”, the following conditions must be met:

A minimum number of nine Member States must participate;

The enhanced co-operation shall be open at any time to all Member States;

Enhanced co-operation shall not undermine the internal market or the economic,

social and territorial cohesion of the Union (Article 326 TFEU).

As ERENE is striving for a common market for renewable energy and for more

co-operation between Member States in the energy sector, and as it shall try to include

as many Member States as possible, there is no impediment seen in these conditions

for establishing ERENE within the EU as a Community for enhanced co-operation.

Establishing ERENE on such a basis would stress its aim of deepening the political

integration in Europe.

In case of establishing ERENE as such a Community of enhanced co-operation,

use can be made of the EU institutions (Article 10 TEU). No new institutions need to

be established, although an agency for executing ERENE’s tasks and supporting the

European Commission could be set up.

All provisions of the EU treaties on the competencies of the EU, the goals and

tasks in the individual political areas and the decision-making procedures would

apply to ERENE in the case where ERENE is established as a group for enhanced

oundations

co-operation. Would this limit the scope of possible activities of ERENE compared to

the tasks and instruments proposed in chapter 3? This might not be the case, since the

new Treaty provisions on energy policy related to the internal energy market, security

of supply, interconnection of networks, etc., are very broadly defined, and examples

like Galileo show that the legal base of the TEC allows for establishing joint under-

takings for the construction and operation of new technology facilities – to mention

only one example of the proposed activities of ERENE. Neither would the proposed

uments, Legal and Institutional F

common premium system for regenerative electricity-trade between Member States

infringe upon the internal market rules, as national support systems for renewable

energy that apply only to green electricity generated on the national territory are also

asks, Instr

not seen as infringements.

According to the Treaty (TFEU), the expenditures resulting from activities of

enhanced co-operation shall be borne by the participating Member States – with the

exception of the administrative costs resulting from using the EU institutions. There

is no further elaboration in the Treaty whether the administrative costs would fall

enewable Energy

within the EU budget, but it can be assumed that this is the intention of the provi-

enewable Energy: Objectives, T

sion. The Council can unanimously decide otherwise.

Neither the financial resource and the distribution key of burden-sharing for the

operative costs resulting from enhanced co-operation, nor the applying of decision-

making procedures is ruled out in the Treaty. As these expenditures are not expen-

ditures of the EU, the Treaty provisions for the EU budget do not apply – unless the

European Community for R

Council decides this with unanimity and the approval of the EP. From this it follows

that the participating Member States would be free to decide on its own financing

A European Community for R

ERENE

3

mechanism. The financing mechanism for ERENE, proposed in this study, would

75

be an option. However, it should be emphasised that there is so far no experience

with the mentioned provisions for enhanced co-operation. Also, with regard to the

questions of financing, the EU institutions must find a common understanding of the

new Treaty provisions.

Regarding democratic control by the Parliament and its participation in the

decision-making, all general provisions of the EU treaties apply to enhanced co-op-

eration. The involvement of the EP in decisions concerning ERENE’s activities would

accordingly be ensured. However, two aspects are particularly noteworthy:

Firstly, as noted above, for decisions on measures significantly affecting the

energy mix, the Treaty calls for unanimity in the Council, with the EP only playing a

consultative role. This provision also applies to enhanced co-operation. Therefore,

for decisions on activities of ERENE, unanimity in the Council would be required –

although between the participating Member States only – and the EP would only be

consulted. The participating Member States could, however, unanimously decide

to use the ordinary legislative procedure with co-decision of the EP and qualified

majority voting in the Council.

Secondly, the following difficult rule also applies: While in the Council, only the

Member States participating in the enhanced co-operation have a vote; in the Parlia-

ment, all members are entitled to vote on the issues of enhanced co-operation. There-

fore, if decisions are to be taken in a co-decision procedure and only a few Member

States are participating in the enhanced co-operation, it is questionable whether the

majority in the EP could be achieved. Therefore, it is very unlikely that the Member

States participating in enhanced co-operation would make use of the “passarelle”

clause, according to which they can opt for the ordinary legislative procedure instead

of the specific procedure with unanimity in the Council and only a consultative role

of the EP.

In the Convention for the Future of Europe, which drafted the Treaty establishing

a Constitution for Europe, the question was intensively discussed whether in analogy

to the Council, only those members should have a vote in the EP on matters regarding

enhanced co-operation who were elected in the participating Member States. The

EP members in the Convention have declined this for the important reason of legal

unity and because the EP is not an assembly of national parliamentarians at the EU

level. Enhanced co-operation shall be limited also through this difficulty and be used

only as the last resort out of situations in which any progress in European politics is

blocked due to the unanimity requirement in the Council.

In order to establish ERENE as a project of enhanced co-operation, the interested

Member States would have to address a request to the Commission. ERENE could

then be established in accordance with the provisions of Article 329 TFEU by the

authorisation granted by the Council to the proposal of the Commission and after

enewable Energy

obtaining the consent of the EP.

In summary, it can be concluded that establishing ERENE as a Community of

enhanced co-operation would have the following advantages: that no new primary

legal basis would have to be created, that the existing European institutions could be

used and that the involvement of the EP in the decisions-making process is defined

by the EU treaties. The asymmetry in the decision-making procedures resulting from

European Community for R

the provision that in the Council only the Member States participating in enhanced

co-operation have a vote – while in the EP all Members are entitled to vote – could

ERENE

76

create specific problems. Regarding the tasks of ERENE and the instruments at its

disposal, some restrictions could follow from the EU treaties, however not for its

core activities. An important advantage of this option is that it would make clear that

ERENE is a new integration project and not an alternative to EU policy. On the other

hand, it is a political disadvantage that establishing ERENE in this way would be less

visible than setting up a new Community based on a new treaty.

b) ERENE as a New Community based on a New Treaty

In principle, each EU Member State is free to make bilateral or multilateral agree-

ments with other Member Sates for intergovernmental co-operation. It can also set

up an organisation with other Member States or with third countries, upon which

they can confer responsibilities to achieve political objectives which cannot or not

sufficiently be realised by EU policies on the basis of the current EU treaties. This

option was taken, for example, in 1975 with the establishment of the European Space

Agency (ESA). Thus, ERENE could also be established on the basis of a new treaty.

While the creation of new institutions could certainly be determined in such a

treaty, it is harder to say whether the new Community could make use of the existing

EU institutions. For each of the Communities, the ECSC, EURATOM as well as for

the EEC, separate institutions were created in the founding years. With the fusion

Treaty of 1965, these separate institutions were then integrated. Thus, the activities

of EURATOM are still today decided and administered through the EU institutions.

In this context, it should be reiterated that all EU Member States are also members

oundations

of EURATOM. Nevertheless, it seems not to be ruled out that ERENE – as a Commu-

nity that would initially not include all EU Member States – could make use of the

EU institutions. This would, however, require the approval of both the institutions

themselves and the individual Member States. It could also be determined that –

similar to the provisions for enhanced co-operation – only the participating Member

States would be entitled to vote in the Council, but that all Council members could

have a consultative role. Theoretically, it is also conceivable for the EP to meet as a

uments, Legal and Institutional F

parliamentary assembly for ERENE, composed only of EP members elected in the

countries which joined ERENE. It should be mentioned that this could change the

majority in the assembly due to the principle of degressive proportionality, which

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applies to the composition of the EP. Whether the EP would generally accept such a

provision cannot be answered here.

In any case, a new treaty for the establishment of ERENE should – in contrast

to EURATOM – provide for full parliamentary control and involvement in the

decisions.

enewable Energy

An important advantage of establishing ERENE through an individual treaty

enewable Energy: Objectives, T

would be that the participating Member States would be free in defining the tasks of

ERENE, in conferring the relevant responsibilities upon it and in providing it with the

necessary instruments and means to meet its tasks, including granting ownership

rights to the Community and the resources for the financing of joint actions.

Some kind of a convention on energy policy could be convened for the elabora-

European Community for R

tion of a draft treaty for ERENE. After agreement on the treaty by the participating

Member States, a ratification process in these countries must follow. There could

A European Community for R

ERENE

3

be the provision from the outset in the ERENE treaty that, in the event of failure of

77

the ratification in one State, the other States could still establish the Community for

Renewable Energy.

The establishment of ERENE based on an independent treaty would probably

take more time than through a project for enhanced co-operation. However, such

a process would not only ensure a higher level of visibility, but could also give

momentum to political mobilisation with in-depth debates in the political arena,

and in particular in the public, on the pros and cons of joining such a Community

shaping the future.

Both options for the establishment of ERENE are possible and each has relative advan-

tages and disadvantages. The establishment as a project of enhanced co-operation

clearly emphasises that this is a new, large integration project for the EU, even if not

all Member States would initially belong to it – a situation comparable to the Monetary

Union. Establishment of ERENE as a new Community based on its own treaty would

be a stronger symbolic political signal that the Community is moving out of the fossil

and nuclear fuels era, marked by the ECSC and EURATOM, towards the use of renew-

able energy. That would make obvious that the Member States of ERENE – more than

50 years since the founding of the first European Community again, but with new joint

efforts – are dedicated to the objective of ensuring an environmentally friendly and

secure energy supply for Europe.

enewable Energy

European Community for R

ERENE

78

4

A Roadmap for ERENE

Which steps should be taken in order to establish a European Community for Renew-

able Energy as Europe’s new big integration project? Which questions need further

clarifications and which alternatives should be discussed? Who are the actors able

to set this idea on the European political agenda, to prepare decisions and who can

ultimately take the decision for establishing such a Community? And what is the

conceivable schedule?

a) Consultation Process, Open Questions, Need for Clarification and Discussion

Without a doubt the EU possesses the potential to cover its energy needs increas-

ingly from its domestic renewable energy sources due to its geological, climatic and

hydrological diversity. The available analyses and estimates also make it clear that the

concrete objective of ERENE to move towards supplying electricity primarily from

renewable sources is not a utopia, but an attainable vision. This is even more the case

if the current Candidate States, the members of the EEA and Switzerland are included

in the project and if the option of importing green power from third countries, such

as solar energy from North Africa, is considered.

However, the potential for electricity from wind, solar, geothermal, and hydro

power, as well as from biomass, is unequally spread across the different regions in

Europe. Therefore, in a purely national approach, some states will use only parts

of their potential, because that will already be sufficient to cover their electricity

demand. For other states, there will be the situation that they cannot fully utilise their

entire renewable energy potential, because of the fluctuating character of the energy

source – such as wind power. That may set limits to the conversion strategy from

fossil and nuclear power to electricity from renewable energy sources. In other states,

the economic potential for electricity from domestic renewable energy sources will

not be sufficient to completely cover the electricity demand. However, a comprehen-

sive common approach can achieve other results: Following from the diversity of

the sources, the mix of renewables can be optimised and also the renewable energy

enewable Energy

potential can be better exploited. As the boundaries of political and administrative

entities are not ordinarily congruent with either the spatial distribution of renew-

able energy sources or an optimal resource mix, co-operation offers economic and

ecological advantages. The ERENE project has the task of realising these advantages

of a common approach compared to purely national strategies.

In the EU, the national targets for the share of renewable energies, proposed in

European Community for R

the draft Directive, will be negotiated in 2008, and their achievement must be ensured

oadmap for ERENE

by 2020 via National Action Plans. It is desirable that the decision on the Directive will

ERENE

4 A R

be taken at the beginning of 2009 at the latest. Undesirable would be, however, that

79

the Member States direct their actions exclusively to achieving their minimum targets

by 2020, and do not include an additional long-term perspective in their strategy

planning. An advanced conversion of electricity production to renewable energy

beyond the targets of the Directive should not be limited by national boundaries or

to the use of renewable sources on the national territories alone, as a pan-European

approach will open up new chances and opportunities.

Therefore, the economic and technical questions of a common approach should

be further clarified and discussed so that individual countries can ascertain how the

regenerative electricity potential can be utilised beyond the minimum targets through

co-operation and joint action. Such questions include: Which investment decisions

would be promotive, which obstructive to co-operation and which opportunities

could ERENE provide for the individual countries? For some of these questions,

detailed analysis is available which refer to the EU as a whole. Other questions should

be clarified by studies dealing with the Community, others through analysis at a

national level.

A second area for deeper analysis and discussion concerns the tasks, competen-

cies and instruments proposed for ERENE in this study. Are they sufficient? Are they

the right instruments to support Europe’s transition to green electricity in an effec-

tive and efficient manner? Should, for example, the national support schemes for

regenerative electricity be supplemented by a premium system for trade with green

electricity between the States? Or is a harmonisation of feed-in tariffs to be favoured

on the basis of best practice? What are the preconditions for an internal market for

green electricity? Is it sufficient for ERENE to plan and co-finance the construction

of interconnectors in order to achieve a Europe-wide integrated network? Or should

a European grid company be set up that would also be responsible for the construc-

tion of high-voltage direct-current transmission lines between North Africa and the

EU in order to accelerate the transition from coal and nuclear energy to green energy

through the import of “power from the deserts”? In this context, an impact assess-

ment would be a useful approach in order to determine the most effective and most

efficient instruments for ERENE.

Which institutional form should ERENE take, and what should be its legal basis?

Both options – either establishment as a project of enhanced co-operation within the

EU or establishment as a new Community based on its own treaty – require further

discussions that consider both political and legal aspects. If established as a project

of enhanced co-operation, it should be clarified whether from the provisions of the

treaties some legal limitations of ERENE’s options for future action could follow. Each

option sends out different signals, which are of political relevance. The establish-

ment of a new Community based on its own treaty analogous to EURATOM would

emphasise that the future does not belong to a Community for the nuclear industry,

enewable Energy

but rather to renewable energy. While ERENE as a project of enhanced co-operation

would instead send the message that the EU has embarked on a new integration

project. ERENE’s visibility would not necessarily suffer from the fact that no new

treaty is created, just as the Monetary Union is not lacking in visibility because it is

founded on the basis of the existing European treaties. The question of which option

will be taken should, however, not be seen as an ideological one, as the two options

European Community for R

are also not irreconcilably opposed. The path that is to be chosen should be the one

with the greatest chance of realisation.

ERENE

80

The present study represents a kind of Green Paper for the proposal of the ERENE

project. Therefore, the roadmap for ERENE should provide, as the first step, an open

consultation process on the proposal.

b) Agenda Setting, Decision Preparation, Actors

How can the proposal for the establishment of ERENE be put on the EU’s political

agenda? The level of acceptance of such a policy and the expectations of the popula-

tion towards the EU are both of great importance in this context.

Eurobarometer surveys show that renewable energy is overwhelmingly supported

by the EU population. Approval of a further expansion of renewable energies ranges

from 94% in Ireland to 50% in Latvia (survey carried out in February 2007). Rejec-

tion of an expansion of nuclear power is also unequivocal, with 61% of those persons

questioned in the EU wishing the share of nuclear power to be reduced. Only in

Bulgaria and the Czech Republic are more people in favour of an increase than of

a reduction in the share of nuclear energy. At the same time, the majority believes

the most suitable approach to energy issues to be a common EU strategy instead

of separate national strategies. Approval of this course of action is the lowest in the

Czech Republic and the highest in Spain. It can therefore be assumed that ERENE

would enjoy a chorus of approval in wide sections of the EU population.

EU citizens will soon have the opportunity to put proposals on the agenda of

the European Commission through the Treaty of Lisbon. The new instrument of a

“Citizens’ Initiative” can, with 1 million signatures , ask the European Commission to

put forth a draft proposal for measures in a particular policy field (i.e., energy). It is

to be expected that the Council and the Parliament will decide the necessary regula-

tion on the citizens’ initiative – ruling out details, for example, on the question of how

many Member States the supporters must come from – very soon after the Lisbon

Treaty comes into force. In this context, it may be possible to bring a Citizens’ Initia-

tive in support of ERENE as early as 2009.

Civil society is an influential actor for agenda-setting on the EU level. Support of

the ERENE proposal, in particular by organisations that are dedicated to similar ideas

and call for more joint action on the EU level to promote renewable energy, would be

an important step in bringing the proposal into the political decision-making arena.

The consultation should therefore focus particularly on including these actors.

In the decision procedure on the establishment of ERENE, all three European

institutions would be involved: the Council, the Parliament and the Commission. The

decision procedure and the involvement of the EP would, however, be different for

each of the two options for the establishment of ERENE.

enewable Energy

National parliaments are also important actors for the realisation of the project –

on one hand by the control of their governments, and on the other by the new clause

on subsidiarity control in the Lisbon Treaty. Above all, a new separate treaty for the

establishment of a new Community would require ratification in each of the partici-

pating Member States, and thus the national parliaments would ultimately decide

whether a country belongs to ERENE or not.

European Community for R

All three European institutions – the Council, EP and Commission – can put ideas

oadmap for ERENE

on the European political agenda. Irrespective of the question of formal initiative

ERENE

4 A R

rights, the EP has various ways of bringing an issue into the European debate. For

81

ERENE as a pan-European project, it would be very supportive if it were taken up

by a European political party and promoted in the electoral campaign for the next

European parliamentary elections in June 2009 as a project for the next legislative

period.

As it is the task of the European Commission to promote European integration

and to take initiatives for new European political actions – if joint actions are more

effective and efficient than individual actions on the national level – the Commission

has already announced further proposals for the promotion of renewable energy,

supplementary to the climate and energy package submitted in January 2008. For

the various reasons addressed in chapter 3, these proposals will most likely not be

as far-reaching as the measures proposed for ERENE and will thus not visualise as

strongly a visionary common goal. Nevertheless, it is certain that energy and climate

protection will remain on top of the Commission’s agenda, providing opportuni-

ties to discuss the ERENE project in the political and public arenas, thus preparing

the establishment of ERENE. The Commission could then submit a proposal in the

next term which would ultimately lead to the establishment of ERENE as a project of

enhanced co-operation.

As the Council plays the key role in both options for the establishment of ERENE,

it is imperative to find Member States that will promote the proposal. After achieving

an agreement on the Directive for the promotion of the use of renewable energy

sources, some Member States may not be ready to take further steps, whereas it

should not be speculated here which Member State might take what position. Thus,

it is important to make obvious the advantages resulting from ERENE and to demon-

strate that joint action is in the national interest of the Member States. ERENE offers

new export chances on the European electricity market for those countries that have

an excess potential for renewable electricity due to their natural conditions. For

other countries it offers the chance of using their own renewable energy sources to

a larger extent than in a national strategy because, with an integrated joint grid, the

fluctuations in the energy supply from renewable sources can better be balanced.

For countries with high technological capabilities in the area of renewable energy,

ERENE will create new market opportunities, and will offer countries with high

dependency on imports from third-party states a greater degree of supply-security

through European solidarity. All countries will benefit because CO2 emissions will be

reduced, the risk-prone nuclear power will become superfluous, supply security will

be strengthened and renewable energy will, as is partly the case already, in the long-

term, be a much cheaper source of energy.

In order to increase the likelihood that a proposal will be approved in the Council,

it is particularly important that a Council Presidency assumes “ownership” of the

proposal and make it a central project of its Presidency. Looking at the calendar of the

enewable Energy

Council Presidencies, it quickly becomes clear that the first half of 2010 – when Spain

will have the Presidency – should be an essential step of the roadmap for ERENE.

Spain has successfully promoted an expansion of the use of renewable energy for

some years now. The country has a significant renewable energy potential – particu-

larly from solar-thermal energy plants – by which Spain could become an exporter

of green electricity if a European integrated grid were to be established. Spain is

European Community for R

passionate about Europe and has prior experience of running a successful Council

Presidency.

ERENE

82

Therefore, the schedule for ERENE should aim to take a decision for the estab-

lishment of ERENE in the first six months of 2010.

c) The Schedule

A change in climate and energy policy is urgently needed. The IPCC report leaves no

doubt about that. The growing demand for energy and the rapidly increasing price of

fossil energies make the search for alternatives imperative. Nuclear power is unsuit-

able as a result of the risks involved and unresolved questions of final disposal of the

nuclear waste. Energy efficiency, energy savings and renewable energy are the three

necessary pillars of a sustainable energy policy. The use of renewable energy sources

must be massively enhanced. There is no time to move step-by-step. The EU cannot

wait until the national minimum targets for the use of renewable energy sources have

been achieved by 2020 before it takes further steps to develop Europe’s potential for

renewable energy through the expansion of an internal energy market.

In addition, many investment decisions for the renewal and expansion of power

plants are to be made now and in the coming years, and the Member States have

to draft their National Action Plans for the expansion of renewable energy in the

near future. The focus should not, therefore, be exclusively on 2020, nor should it be

limited to the national sphere. Instead, it should now include the expanded opportu-

nities that a Community for Renewable Energy has to offer.

2008 should be used for consultations – in discussions and with the electronic

media – on the proposal for the establishment of ERENE. The UN Climate Conference

in December 2008 in Poznan is an important date in this context.

In the first six months of 2009, the European parliamentary elections offer a good

opportunity to introduce the proposal into the public sphere.

After the Treaty of Lisbon comes into force, the new “Citizens’ Initiative” could

help to put the proposal on the agenda of the Commission. The proposal could be

further developed at both the national and European levels during the second half of

2009. Of particular importance in this regard will be the UN Climate Conference in

Copenhagen at the end of that year.

At the beginning of 2010, a mandate for the preparation of the establishment of

ERENE could be established under the Spanish Council Presidency – either for the

drafting of a new treaty or deciding on a project of enhanced co-operation in the EU.

Then, in 2010, 60 years after the Schuman Plan, which resulted in the establish-

ment of the first European Community – the ECSC – the historic decision could be

made to establish ERENE, the European Community for Renewable Energy.

enewable Energy

European Community for R

oadmap for ERENE

ERENE

4 A R

83

APPENDIx 1

Table 5: Energy import dependency 2005 in %

BE

BG

CZ

DK

DE

EE

IE

EL

ES

FR

79.6

47.1

27.4

-51.6

61.6

25.8

89.5

68.5

81.2

51.6

IT

CY

LV

LT

LU

HU

MT

NL

AT

PL

84.4

100.7

56.1

58.4

98.0

62.9

37.8

71.8

18.0

PT

RO

SI

SK

FI

SE

UK

EU-27

EU-25

88.2

27.4

52.2

64.6

54.7

37.2

13.8

52.4

53.0

HR

TR

IS

NO

CH

58.8

71.9

28.8

-609.1

60.3

Definition: Import dependency = Net imports/gross domestic energy consumption. Nuclear energy is

counted as domestic energy production in this statistic.

Source: Eurostat, Pocket book “Energy and Transport in Figures” 2007,

http://ec.europa.eu/dgs/energy_transport/figures/pocketbook/2007_en.htm

Appendix

85

Table 6: Electricity generation from renewable sources in 2005 compared to the economic potential – by

country

Country

Wind

Wind

Wind

Biomass

Biomass

Biomass

Solar

Solar

Solar

Power

Power

Power

Energy

Energy

Energy

Power

Power

Power

in GWh Potential

2005 in

2005 in

Potential

2005

(Photo-

(PV+CSP)

2005

2005

in TWh

% of

GWh

in TWH

in % of

voltaic)

Potential

in % of

Potential

Potential

2005 in

in TWh

Potential

GWh

EU-27

70482

80042

1490

EU-25

70480

80036

1490

BE

227

13

1.75%

2114

7.3

28.96%

1

BG

2

8.9

0.02%

7.7

CZ

22

5.8

0.38%

739

20

3.70%

DK

6614

55

12.03%

3982

6.6

60.33%

DE

27229

226

12.05%

16570

87

19.05%

1282

EE

54

21

IE

1112

55

2.02%

130

6.2

2.10%

EL

1266

49

2.58%

122

7.2

1.69%

1

7.9

0.013%

ES

21219

93

22.82%

3114

40.4

7.71%

78

1297.5

0.006%

FR

963

129

0.75%

5181

79.1

6.55%

15

IT

2344

79

2.97%

5985

46.1

12.98%

31

24.6

0.126%

CY

6

0.6

1

20.1

0.005%

LV

47

42

LT

7

LU

53

0

75

0.4

18.75%

18

HU

10

1.3

0.77%

1716

11.3

15.19%

MT

0.2

0.1

2.1

NL

2067

40

5.17%

6729

9.6

70.09%

34

AT

1328

3

44.27%

2034

30.6

6.65%

15

PL

135

65

0.21%

1830

52.1

3.51%

PT

1773

18

9.85%

1977

15.2

13.01%

3

145.9

0.002%

Ro

7.9

6

40.9

0.01%

9.9

SI

0.3

114

6.3

1.81%

SK

7

0.7

1.00%

10.7

FI

170

27

0.63%

9607

53.7

17.89%

3

SE

936

63.5

1.47%

8301

80.4

10.32%

UK

2904

344

0.84%

9646

30.7

31.42%

8

enewable Energy

HR

2.6

14

8.9

0.16%

MK

2.6

TR

59

110

0.05%

34

44.7

0.08%

146.6

IS

1

4

0.1

4.00%

NO

506

76

0.67%

379

25.8

1.47%

European Community for R

CH

8

0

8

ERENE

86

APPENDIx 2

Impediments to the use of renewable energy sources and necessary actions for the activation of the

potentials.

Technology

Barriers

Needs

Wind Power

– Inflexible grid infrastructure

– Modernisation of the network infrastructure

– lack Insufficient testing procedures for large

and the EU provisions for network integration

facilities

– Tests and research and development (R&D) for

– Insufficient storage systems

large-format facilities

– Insufficient financial support

– Better co-ordination of facilitation

– Lack of social acceptance

programmes within the EU

– Lack of trained specialised personnel

– Special training programmes

– Support for innovations in the area of small to

mid-sized companies

Solar Photovoltaic

– High energy costs

– R&D

– Techno-economic subjects

– Development of a liberalised market

– Expansion of integration

– Financial incentives

– Lack of specialist personnel

– Measures for export facilitation

– Network access

– Regulations and administration

Concentrated

– High energy costs

– Expansion of CSP feed-in tariffs within the EU

Solar Power (CSP)

– Insufficient feed-in options in most of the EU

– Risk equalisation financing mechanisms for

countries

large-format demonstration and commercial

– Lack of resources for financing of first

projects

projects

– R&D and demonstration facilities

– Investment in the network infrastructure

– open EU market for CSP imports

– Investment in a trans-European and a trans-

Mediterranean super network

– Construction plan for a global market

Solar Heating and

– Heat storage

– R&D in the areas of energy storage and

Cooling

– Lack of financial incentives

material research

– System integration

– Financial incentives for the implementation of

– Lack of specialist personnel

technology

– Regulations and administration

Hydropower

– Lack of institutional support

– More public support for R&D and

Generation

– Complex regulations and administration

demonstration facilities

(large HPP)

– Insufficient support for R&D and

– Focussed and co-ordinated R&D and

demonstration facilities

demonstration programmes on the EI level.

– Lack of resources for R&D and demonstration – Coherent, harmonised and required EU-wide

facilities

regulations and administrative guidelines

enewable Energy

– Social acceptance

Hydropower

– Lack of institutional support

– More public support for R&D and

Generation

– Complex regulations and administration

demonstration facilities

(small HPP)

– Insufficient support for R&D and

– Focussed and co-ordinated R&D and

demonstration facilities

demonstration programmes on the EU level

– Lack of resources for R&D and demonstration – Coherent, harmonised and required EU-wide

facilities

regulations and administrative guidelines

European Community for R

– Social acceptance

ERENE

Appendix

87

Technology

Barriers

Needs

Geothermal

– Lack of suitable legislation

– Coherent financial facilitative mechanisms

– Lack of financial incentives

– Additional incentives

– Insufficient clarity in administrative

– Suitable regulations, standards and

procedure/long-term authorisation

authorisation processes

– Lack of specialist personnel

– R&D support

– Insufficient social acceptance

– International co-operation and alignment of

– Fragmentation of existing knowledge

the current standard of knowledge

– Training and continuing education

programmes

Ocean Wave Power – Competitive ability of tidal power plants

– R&D and demonstration facilities

– High training costs for the technology

– Co-ordinated proposal on the EU level

– Insufficient capacity regarding engineers and – Long-term feed-in tariffs and support for

private investors

investments

– Costs of offshore networks and lacking

– Coast management on the EU level

onshore networks

– Laws and ordinances regarding the use of

coastal areas

Electricity

– Unclarified definition/distribution of extension – EU Member States must invest a total of at

Networks

and connection costs between the participants

least 400-450 billion EUR into transmission

(Smart Grids)

– Regulatory framework

and distribution infrastructures over the next

– Social resistance

three decades

– Insufficiently co-ordinated research efforts

– Depending upon distance between new

production sources (such as offshore wind or

solar-thermic power plants) and the existing

power network, further connection costs

may emerge in the amount of 10-25% of the

worldwide investments in the power network

– Joint design for the integration of new

generation technologies

– Information and communication technology

for control and monitoring

– Standard rules and guidelines

Biofuels

– No structural barriers

– Reinforced and focussed public support for

– Biomass availability and sustainability

R&D on the national and EU levels

(including the distribution between the energy – Financing mechanisms for large

sectors and the competition from the non-

demonstration facilities

energy sector)

– Harmonisation of the markets, regulations

and policy on the EU level

Arrangement pursuant to: EC 2007e, Technology Map:

http://ec.europa.eu/energy/res/setplan/doc/com_2007/2007_technology_map_en.pd

enewable Energy

European Community for R

ERENE

88

LIST OF ABBREVIATIONS

CHP

Combined Heat and Power

CSP

Concentrated Solar Power

EBRD

European Bank for Reconstruction and Development

ECSC

European Community for Steel and Coal

EEA

European Economic Area

EFRD

European Fund for Regional Development

EP

European Parliament

EREC

European Renewable Energy Council

ERENE

European Community for Renewable Energy

EU ETS

European Emissions Trading Scheme

EURATOM European Atomic Energy Community

IPCC

Intergovernmental Panel on Climate Change

JRC

Joint Research Centre

JRI

Joint Research Institute

NAP

National Action Plan

OPTRES

Assessment and optimisation of renewable support schemes in the

European electricity market

TEN

Trans-European Networks

TEU

Treaty on the European Union (Treaty of Maastricht)

TFEU

Treaty on the Functioning of the European Union (Treaty of Lisbon)

TWh

Terawatt hour (= 1 billion KWh)

Country Abbreviations

BE

Belgium

BG

Bulgaria

CZ

Czech Republic

DK

Denmark

DE

Germany

EE

Estonia

IE

Ireland

enewable Energy

EL

Greece

ES

Spain

FR

France

IT

Italy

CY

Cyprus

LV

Latvia

European Community for R

LT

Lithuania

LU

Luxembourg

ERENE

List of Abbreviations

HU

Hungary

89

MT

Malta

NL

Netherlands

AT

Austria

PL

Poland

PT

Portugal

RO

Romania

SI

Slovenia

SK

Slovak Republic

FI

Finland

SE

Sweden

UK

United Kingdom (Great Britain)

HR

Croatia

MK

Macedonia

TR

Turkey

IS

Iceland

NO

Norway

CH

Switzerland

enewable Energy

European Community for R

ERENE

90

SOURCES AND REFERENCES

European Treaties: Treaty on European Union; Treaty on the Functioning of the European Union;

Treaty establishing the European Coal and Steel Community; Treaty establishing the European

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Berger, H. 2007. Sonnenkraft aus der Sahara? Kommune. Forum für Politik, Ökonomie, Kultur 3 (2007).

http://www.oeko-net.de/kommune/kommune03-07/aberger.htm

Bohlmann, J. 2006. Biokraftstoffe der zweiten Generation: Herstellungsoptionen, Stand der Technik,

Effizienz, Kosten. Tagung “Mobil mit Biomasse”. 27 September, Stuttgart.

Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit (BMU) (Federal Ministry for the

Environment, Nature Conversation and Nuclear Safety). 2006. Renewable energies – innovations

for the future. April, Berlin.

http://www.bmu.de/files/english/renewable_energy/downloads/application/pdf/broschuere_

ee_innovation_eng.pdf

——. 2007. Erneuerbare-Energien-Gesetz 2007 (EEG-Erfahrungsbericht), ( Renewable Energy Sources

Act (EEG), Progress Report 2007). November, Berlin.

http://www.bmu.de/files/pdfs/allgemein/application/pdf/erfahrungsbericht_eeg_2007.pdf

English version: http://www.bmu.de/files/pdfs/allgemein/application/pdf/erfahrungsbericht_

eeg_2007_zf_en.pdf

Coenraads, R., M. Voogt, and A. Morotz. 2006. Analysis of barriers for the development of electricity

generation from renewable energy sources in the EU-25. OPTRES report (D8 report). May, Utrecht,

Netherlands.

Council of the European Union. 2007. European Council Action Plan (2007–2009): Energy policy for

Europe, Presidency conclusions. 8/9 March, Annex 1.

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