FAQ on EU's Strategic Energy Technology Plan

October 29, 2008 // Published as a news service by IHS

What is the European Strategic Energy Technology Plan?
The SET Plan was proposed by the European Commission (EC) to accelerate the availability of new energy technologies. Its aim is to create a long-term EU framework for energy technology development, which will be a key element of Europe's plans to reduce its greenhouse gas emissions and move towards a low-carbon future (see IP/07/1750, MEMO/07/494).

The SET Plan brings together the coordination of the EC, the research capacities of the major European institutes and universities, the engagement of European industry and the commitment of EU member states. The actions will be based on reliable information about technology and capacity.

The SET plan should help the EU position itself to develop the technologies it needs to meet its political objectives and at the same time ensure its companies can benefit from the opportunities of a new approach to energy (see MEMO/07/493 for details).

What legislation has the SET Plan led to?
In January, 2008 the EC passed a comprehensive energy and climate package, which contains ambitious targets for 2020:

• Reducing greenhouse gas emissions by 20% compared to 1990 levels.
• Reducing primary energy use by 20% (through energy efficiency).
• Increasing the level of renewable energy in the EU's overall final energy consumption to 20%, with a minimum target for renewables in transport of 10%.

Who is participating in the SET Plan?
Several groups are participating in the SET Plan, with different levels and objectives, including:

Coordination: European Commission
Better EU coordination is required to benefit from the economies of scale of national energy R&D efforts. Recent EC initiatives, such as the ERA-NETs and the technology platforms, are an important step towards mobilizing pan-European cooperation.

The EC has already implemented important initiatives that can serve as illustrative examples:

• The European fusion research program and its flagship, ITER.
• The Single European Sky air traffic management research program, SESAR.
• The Joint Technology Initiative on Fuel Cells and Hydrogen to mass market more efficient energy conversion and end-use devices and systems in buildings, transport and industry, such as poly-generation and fuel cells.
• The Clean Sky Joint Technology Initiative on the environmental impacts of aviation.

Research: The European Energy Research Alliance
The European Energy Research Alliance, a cooperation of major national research institutes will move from today's model of collaborating on projects towards a new paradigm of jointly implementing programs.

The alliance will be able to cover the multitude of scientific disciplines that have an impact on the development of energy technologies. For details, see IP/08/1587.

Industry: The European Industrial Initiatives
Six new European Industrial Initiatives are planned in the areas of wind power; solar energy; bio-energy; CO2 capture, transport and storage; electricity grids; and nuclear fission.

These new initiatives will strengthen energy research and innovation by bringing together appropriate resources and actors in each industrial sector.

Member states: The Steering Group on Strategic Energy Technologies
EU member states will steer the implementation of the SET Plan. The Steering Group on Strategic Energy Technologies is composed of high-level government representatives, chaired by the EC.

It will reinforce the coherence between national, European and international efforts. It allows member states and the EC to plan joint actions and coordinate policies and programs.

Information: The Strategic Energy Technologies Information System
The EC will establish and run a regularly updated information system, open to all, that will map technologies and provide information on the latest situation, barriers to technological uptake and potential of existing technologies.

The Strategic Energy Technologies Information System will also provide up-to-date information on financial and human resources. Such a system will allow rigorous monitoring of progress in the development of European energy technologies and provide useful support to policy-making.

How much money does Europe invest in the development of energy technologies?
At this stage, it is difficult to quantify the exact amount of investment in energy technologies. The EU's Seventh Framework Programme for Research (2007-2013) has an average annual budget of about €886 million devoted directly to energy research.

Member states' budgets vary. Non-nuclear research mounts up to €2.35 billion (2007-2013). For Euratom, the budget is €2.751 billion (2007-2011) - mostly for the international ITER project on fusion (€1.94 billion).

Will more money go to energy research from the EU budget?
First, the EU needs to use better available resources. The implementation of the SET Plan will help overcome the fragmentation of the European innovation base, leading to a better overall balance between cooperation and competition.

Encouraging more focus and coordination between different funding schemes and sources will help to optimize investment, build capacity and ensure a continuity of funding for technologies in different phases of development.

However, the challenge of mobilizing additional financial resources has to be addressed. The resources needed to accelerate the development of new energy technologies are difficult to estimate, as they depend on the evolution of the market price of current resources and the results of ongoing and future research. But, they are certainly larger than the current level of investment.

Recent studies (such as the Stern Report, the Intergovernmental Panel on Climate Change reports and the International Energy Agency reports) confirm that increased energy research investment, to at least double the current levels, will deliver substantial benefits.

Equally, the Stern Report recommends an increase in deployment incentives by two to five times to realize learning benefits (leading to cost reductions of new technologies).

Early in 2009, the EC intends to present a communication on financing low-carbon technologies that will address resource needs and sources and propose potential avenues to leverage private investment, enhance coordination between funding sources and raise additional funds.

What are the six European Industrial Initiatives?
In 2008, the EC proposes to launch six new European Industrial Initiatives that will target sectors for which working at the European Community level will add most value - technologies for which the barriers, the scale of the investment and risk involved can be better tackled collectively.

The initiatives are as follows:

• European Wind Initiative - This focuses on large turbines and large systems validation and demonstration. It aims to double the power generation capacity of the largest wind turbines, with offshore wind as the lead application.

• Solar Europe Initiative - This focuses on large-scale demonstration for photovoltaics and concentrated solar power. It aims to demonstrate the commercial readiness of these technologies.

• Bio-energy Europe Initiative - This focuses on next-generation biofuels within the context of an overall bio-energy use strategy. It also aims to make second-generation biofuels competitive alternatives to fossil fuels, while respecting the sustainability of their production.

• European CO2 capture, transport and storage initiative - This focuses on whole system requirements, including efficiency, safety and public acceptance, to prove the viability of zero-emission fossil fuel power plants at an industrial scale. It aims to enable commercial use of these technologies through large-scale demonstration projects, including whole system efficiency and advanced research.

• European electricity grid initiative - This focuses on the development of the smart electricity system, including storage, and on the creation of a European center to implement a research program for the European transmission network. It aims to enable a single, smart European electricity grid able to accommodate the massive integration of renewable and decentralized energy sources.

• Sustainable nuclear fission initiative - This focuses on the development of generation-IV technologies. It aims to maintain competitiveness in fission technologies, together with long-term waste management solutions.

What is planned for the future?
Major next steps will be to continue the implementation of all the initiatives and entities established so far, and also include the following new ventures:

• European Energy Research Alliance - Leading EU research institutes are currently planning this new initiative to foster "green" energy technologies.
• European Energy Technology Summit - To review progress, in 2009, a European Energy Technology Summit will be organized to bring together stakeholders in the entire system, from industry to customers, as well as representatives of the European institutions, the financial community and international partners.
• Planning the transition of European energy infrastructure networks and systems - The EC will launch a call for a coordination action in 2009.

Source: European Commission.