Environmentalists are unhappy with drafts of a European Commission communication on the financing of low carbon technologies. The communication is long overdue. When presenting the November 2007 Strategic Energy Technology (SET) Plan, the Commission had promised to present a communication on financing low carbon technologies before the end of that year. The document is to address resource needs and sources, examining potential avenues to leverage private investment, including private equity and venture capital, enhance coordination between funding sources and raise additional funds. It is now finally scheduled for adoption by the Commission, on 6 October, following internal dissension between DG Energy, DG Envi and the Secretariat-General. At one point, sources close to Energy Commissioner Andris Piebalgs’ cabinet were even noting early next year as a publication date.

Environmentalists accuse the Commission of concentrating on centralised expensive technologies, such as nuclear and carbon capture and storage (CCS), to the detriment of renewables. The European Geothermal Energy Council (EGEC), for instance, criticises drafts now circulating for excluding geothermal power. According to EGEC, geothermal is essential to reaching the EU’s 2020 target of 20% of energy coming from renewables. The association notes that geothermal energy is available day and night and can be converted into electricity at very competitive price (€0.05/kWh). Currently, some 10 GWe of geothermal power plants are installed worldwide. This figure, says EGEC, is expected to double to 20 GWe over the next seven years. The association bemoans the fact that the relevant resources are not being fully developed in Europe.

“The fact that the document is almost a year late shows how much DG TREN and the Commission have been hesitating over this issue,” said one environmentalist. “I got bored of waiting,” admitted another. According to one cabinet source, Copenhagen has been “poisoning” everything. International negotiations moving at a snails’ pace have combined with domestic infighting for reappointments to put EU policy making on the hold.

“This will be one of those documents where the real news is buried in the details,” believes Mark Johnston from the WWF. “In itself, the communication does not propose new money. But the document will feed into other things regulating major investment in the energy sectors. It will feed in, for example, to the budget review and future revision of the Emission Trading Scheme (ETS),” said Johnston. “The document will kick off an important debate.” Latest versions of the draft no longer specify the amount of money individual technologies could receive in brackets.

“We are not happy because the Commission is not being consistent,” added another environmentalist. “On the one hand, they talk about promoting decentralised energies, such as renewables, energy efficiency and smart grids. But on the other hand, they are promoting centralised and rigid technologies, like nuclear and CCS. These are large scale, centralised and inflexible. That’s a conflict.”

INDUSTRY WARY

“Unless there is some kind of commitment for funding, I think this financing plan will also be on life support,” said one electricity industry representative. It is seen as a sad continuation of the SET plan. “No one took the SET plan further. Once it came out it was on life support. We are not actively doing something with it.”

The industry source admits that despite the benefits, the SET plan and a specific EU solution for financing energy research has not been a major area of focus for industry. “To be honest, there has been too much other legislation. Besides, this was never going to be an instrument to outline money. It is just an interesting collection of views on possible sources with no decisions attached to it. That’s the shortcoming.”

Others criticise the division of financing outlined by the Commission (albeit in brackets in drafts). According to one source, it would be “great” if there were €13 billion for carbon capture and storage (CCS). “But solar power getting €16 billion is not in line with reality. Is it really useful to put that much money into solar power?”

Other sums quoted, for instance, wind being earmarked €5.5 billion appear to reflect the more mature nature of the technology. Very little, though, is earmarked by the Commission for the most crucial element in the move to renewables: the electricity grids. Research on a European electricity grid is earmarked only €2 billion. “That’s very little,” said an electricity source.

Is it really useful to put so much money into solar power?