The EU executive calls for the energy research budget to be increased by €50 billion over the next ten years. This would require yearly flows from both the public and private sectors to jump from their current €3bn to €8bn, it calculated.
The Communication on Financing the Development of Low-Carbon Technologies sets out how this money should be divided between key low-carbon technologies that can move Europe from 80% dependence on fossil fuels to 80% emissions cuts by 2050. The research priorities were identified in the 2007 Strategic Energy Technology Plan (SET-Plan) that intended to reassert Europe's competitiveness by putting declining EU energy research budgets back on track (EurActiv 09/07/09).
The financing plan, which was originally due out last year, was partly delayed due to the financial crisis, which required new thinking on how to reactivate growth, Energy Commissioner Andris Piebalgs told journalists. Furthermore, drawing up roadmaps for the various technologies took time, he added.
The final plan earmarks €6bn for research into wind energy, which the Commission believes could produce a fifth of the EU's electricity by 2020. The money would help to fund developments offshore, where winds are stronger, by investing in next-generation turbines and new structures.
Solar energy would get €16bn for developing new photovoltaic concepts and large industrial concentrating solar power (CSP) installations to contribute 15% of EU electricity in ten years' time. Bioenergy research would also get €9bn so that it could provide 14% of EU energy while respecting sustainability criteria.
In order to integrate renewables and implement the internal energy market, electricity grids would get €2 billion so that half of the networks can operate along a "smart grid" principle.
Apart from renewables, carbon capture and storage (CCS) is set to receive €13bn for up to 12 demonstration projects. Nuclear research would also get €7bn for putting the fourth generation into operation.
The financing proposal also foresees €11bn for a 'Smart Cities' programme, in order to counter criticism that the SET-Plan disregards energy efficiency. Between 25 and 30 cities are to be upgraded with low-carbon houses and transport so that they emit 40% less greenhouse gas emissions in 2020 than they did in 1990.
In addition, the Commission is calling for more money for future breakthrough technologies, such as motors fuelled directly by sunlight or batteries which store power at ten times their current density.
Public partnering with private money
The Commission believes that public-private partnerships are the most credible way to go about funding energy research. However, it did not spell out how the financial burden should be shared between the two.
Currently, energy research funding is 70% private and 30% public, excluding nuclear research. The EU executive argues that a "significant rise" in the public share will be necessary in the short term to give businesses incentives to work towards public climate and energy supply goals at a time of recession.
In projects where the risks are higher, public funding should assume a greater role, the Commission says.
To optimise the level of intervention, it advocates the use of European programmes, particularly where there is a clear added value of EU-level action, for example in the case of programmes that are too expensive for a single member state to fund. Currently, 80% of public investment in non-nuclear energy research is made at national level.
Although the communication does not announce any new EU funds, it argues that "an increase in the proportion of the public investment at Community level may need to be one of the options explored in the budget review".
Janez Potočnik, EU commissioner for science and research, pointed out that while the Commission had provided the guidelines for investment, it would primarily be up to businesses and member states to deliver the increased sums.
"It would be an overestimation to say that the major answer lies on the budget of the European Union," he said. He added nevertheless that the EU already has many financial instruments that can support low-carbon technologies.
The 300 million allowances set aside for the 'new entrants reserve', part of the EU's emissions trading scheme (EU ETS; see EurActiv LinksDossier), will be at the disposal of member states to help commercialise CCS and innovative renewables technologies, the communication points out.
Moreover, Community programmes such as European Energy Programme for Recovery and the 7th Framework Programme (FP7) can be used to offset technological risks, it says, adding that these will nevertheless need to be scaled up.