This article is part of our special report Rural Energy.
The EU's bid for leadership in green technologies will focus on developing a network of "smart cities" to demonstrate renewable and other low-carbon energies in Europe, according to draft European Commission proposals seen by EURACTIV.
The recommendations are featured in a draft communication setting out funding for the EU's Strategic Energy Technology Plan (SET Plan).
The EU executive is concerned that Europe is investing four times less in energy research and technology development than it did in the 1980s when faced with the oil crisis. It hopes that long-awaited funding proposals for the SET Plan will speed up the market uptake of low-carbon technologies that already exist, but are still too expensive to compete with fossil fuels.
The Commission argues that billions will need to be invested in basic research over the next decade to get the Union back up to speed with the US, which has dedicated around €555 million to energy research for the next five years.
"Without a similar effort, Europe will eventually fall behind as new discoveries overtake current technologies," the communication says.
One of the biggest investments that the Commission wants to make is to select 25 to 30 European cities to pioneer green technologies by 2020.
"These 'Smart Cities' will be the nuclei from which smart networks, a new generation of buildings and alternative transport means, will develop into Europe-wide realities that will transform our energy system," the document states.
The cities would become champions of energy efficiency and renewable energy, where electric cars are fuelled with renewables produced in the buildings for their electricity needs. The Commission hopes to start with "low-carbon zones" and move onto low-carbon cities and regions.
Moreover, the proposal foresees large-scale development of other low-carbon technologies.
The EU should build 5-10 new testing facilities for new wind turbine components and up to 10 demonstration projects of next generation turbines, the draft states. This would aid the necessary move to offshore wind energy production, helping the bloc to produce up to a fifth of its electricity needs from wind in 2020, it says.
To tap into unlimited solar energy resources, the Commission foresees five pilot photovoltaic plants and 10 "first-of-a-kind" concentrated solar power plants to bring down costs and improve efficiencies.
Moreover, the plan foresees large-scale demonstration of carbon capture and storage (CCS) technology, up to 30 bioenergy plants and deployment of new generation of nuclear reactors in Europe.
The publication of the funding plan has been postponed several times (EURACTIV 09/07/09), but sources expect it to be unveiled around the SET Plan summit organised by the Swedish EU Presidency on 21-22 October in Stockholm.
Source of funding
Officials in the Commission's transport and energy DG are still discussing exact figures, but the draft estimates that additional money needed to pay for the programme would be above €50 billion over the next decade. This would require almost tripling annual investment from the current €3 billion.
The Commission foresees splitting the costs between the public and private sectors. Action at EU level could be particularly relevant for long-term programmes where risks and costs are high.
The draft communication presents an array of existing Community funding instruments for research that could be beefed up to provide additional funding.
Member states could tap into the revenues from the EU's emissions trading scheme (EU ETS; see EURACTIV LinksDossier) to re-invest them in clean technology development, the Commission says. It adds that 300 million EU allowances have been set aside to support CCS and innovative renewables.
Moreover, the Commission proposes to use any unspent funds from the money allocated to energy projects under the recovery programme to pay for the initial costs of the Smart Cities initiative in 2011-2013 and to support other renewable energy technologies.
The European Parliament lobbied hard to have these included in a list of recovery projects funded last spring (EURACTIV 07/05/09). It eventually received the concession that money left from priority CCS and grid connection projects would be directed to renewables and urban energy-efficiency schemes.