Energy Tech & Innovation

An integrated roadmap to address Europe’s future energy needs is required in order to accelerate innovation in cutting edge low-carbon technologies, believes the European Commission.

This is one of the measures proposed in a new strategy set out in a Commission Communication, which aims to establish Europe as a centre of world-class technology and innovation.

The EU believes that Member States are limited in what they can achieve on their own. A strategy that links various economic sectors such as energy, ICT, transport and agriculture on a Europe-wide scale is therefore needed, according to the Commission.

Context

In order to meet its objectives for 2020, EU energy policy supports a shift to low carbon generation technologies. The EU is also driving the development of "smart" and IT-related technologies. Furthermore, the Innovation Union has set out an integrated research and innovation strategy, improving public funding and tackling the barriers that hold back private investment.

Existing Measures

The EU's Strategic Energy Technology (SET) Plan, established in 2008, aims to push the technological side of the EU's energy and climate policies. It involves European Industrial Initiatives (EIIs) and the European Energy Research Alliance (EERA), and is supported by an information system (SETIS).

Since 2007, the innovation programme Intelligent Energy in Europe (IEE) has promoted the market uptake of technologies and tackled non-technological barriers (financial, regulatory and administrative). The programme focuses on energy efficiency and renewable energy.

The RSFF encourages project promoters to undertake research and innovation activities associated with a high degree of risk, offering loan commitments. From 2009 to 2012, the energy sector has accounted for 14-18% of the RSFF portfolio.

The Strategy

The European energy technology and innovation strategy aims to accelerate innovation in cutting edge low carbon technologies and innovative solutions, and bridge the gap between research and the market. This is recognised in the Commission's proposals for Horizon 2020, which bring together EU support for research and innovation under a simplified framework.

Implementation, says the Commission, needs to be increasingly based on partnerships that build the necessary scale and scope, and achieve greater impact from scarce public and private resources.

Key Principles

Adding value at the EU level:


EU intervention should focus on large-scale efforts, which go beyond what Member States can achieve alone in order to promote innovation through regulation and financing.

Looking at the whole energy system when setting priorities:

A system approach is needed, which means going beyond the existing divisions between energy sources and end uses. Cooperation between sectors needs to be encouraged.

Integrating actions along the energy innovation chain to strengthen links with energy policy:

Support for the innovation cycle - from basic research to market deployment - means supporting market-uptake measures, tackling regulatory barriers, analysing market conditions and creating an investment climate conducive to more innovation investment.

Pooling resources and using a portfolio of financial instruments:

Research-driven solutions are needed and so are proper financing mechanisms. There is a need to leverage individual Member State investments to support industry. Greater use of European funds should be encouraged.

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

Most energy technologies have long lead-times, which means that investment decisions now will have repercussions well beyond 2020. As a result, the EU needs to drive the development of a spectrum of technologies which may only reach maturity beyond 2020.

Key Developments

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

Investing in energy efficiency brings savings to consumers and allows European industries to be less dependent on energy prices. This in turn can reduce their costs and increase their competitiveness. Buildings, with nearly 40% of final energy consumption, are a high priority. The development and uptake of innovations that can substantially reduce industry energy costs are also a priority, in particular for energy intensive industries and SMEs.

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

 Innovations that ensure the flexibility and security of the European energy system can lower the costs of the whole energy infrastructure and prepare it for taking up much larger amounts of renewable energy.

Fostering innovation in real environments and through a market driven framework:

A particular focus is needed on cities that use far more energy than they are able to produce. Further integration and optimisation of the energy, information and transport flows at the level of districts, cities and communities is needed. Market uptake measures are needed in the roll-out of all innovative energy technologies to allow scaling up investments in supply chains and to support policy implementation for grids, renewable energy and energy efficiency tackling non-technological barriers.

Implementation

The SET Plan remains the core instrument to deliver on the challenges addressed above. However, the SET Plan also needs reinforcing, to respond to the new challenges and to better consolidate research and innovation capacity and resources across Europe. For this purpose, the following changes are proposed:
• An Integrated Roadmap should be developed, under the guidance of the SET Plan Steering Group, incorporating the key principles and measures identified in this Communication.
• Based on the Integrated Roadmap, the Member States and the Commission should develop an Action Plan that lays down coordinated and/or joint investments by individual Member States, between Member States and with the EU. These investments should go beyond grant programmes and include financial engineering instruments and procurements.
• A robust reporting system based on the Strategic Energy Technologies Information System (SETIS) of the SET Plan would monitor the implementation of the Integrated Roadmap and the Action Plan.
• A coordination structure should be established under the Steering Group of the SET Plan to promote investments in research and innovation on energy efficiency.

Next steps

The Commission calls on the European Parliament and the Council to reaffirm their support to the SET Plan and its reinforcement to energy technology and innovation development as set out in the Communication, and to endorse the proposed key principles and developments needed for energy technology and innovation across the EU.

The Commission also invites Member States and regions to support the implementation of the Integrated Roadmap and the Action Plan through enhanced coordination of their energy research and innovation programmes.

The first Integrated Roadmap should be developed by the end of 2013. Based on this, Member States and the Commission should develop an Action Plan by mid-2014.