For almost 20 years, the European Renewable Energy Centres Agency (EUREC) has called for strengthened and more rationalised European research into all renewable energy technologies.Europolitics spoke to Greg Arrowsmith from the agency as to whether Europe is going in the right direction ⁽¹⁾.

Isn’t energy research best left to the private sector? Why do we need European programmes?

European governments consider it of strategic importance to be able to produce and commercialise new knowledge faster than other regions. But the private sector - except for very large companies - does not have the money to do this kind of R&D, so public money is needed. A by-product of publicly funding research is that the results, especially of fundamental R&D work, can be put into the public domain, enabling as many companies that want to to take the work further.

Why is the Commission so late with the communication on financing the SET? Does this indicate a lack of commitment?

This may have something to do with the sheer amount of work involved. Assessment of public and private energy R&D spending is no easy task and takes time. This is also true for consulting with experts on the size and scope of European industrial initiatives, and so on. Many of the ideas, such as the involvement of the European Investment Bank (EIB), still seem to be at a very early stage of gestation. It can’t have been easy reaching the decision, expressed in some of the drafts, to open up a debate on the financial perspectives to 2013.

Are you happy with the sums the Commission comes up with for financing the SET plan?

The figure circulating is of some additional €50 billion being spent on energy R&D in the period to 2020 on top of a business as usual scenario. This figure is then broken down into budgets for different energy technologies. The estimates for renewable energy technologies are broadly consistent with what the renewable energy sectors have put forward for their European industrial initiatives.

Are there specific concerns as to the funding proposed?

The €2 billion proposed for the Smart Grids Initiative seems rather little. By 2020, we might, on average across Europe, have over 30% of our electricity from renewable sources. Smart grids could be a relatively low cost option for accommodating this decentralised and often fluctuating supply. Furthermore, smart grids should be deployed no later than the time when electric cars start appearing in significant numbers on our roads. If everyone charged their car during times of peak load in the absence of technology to steer them towards charging them at off-peak times, they would bring online the dirtiest and most expensive forms of marginal generating capacity.

What future do you see for the SET plan?

References to the SET plan in relation to energy technology will become as commonplace as references to the Lisbon strategy were a few years ago for general policy making. The fact that the development of energy technology now has its own policy label elevates it politically. It also implies the need to achieve progress in this area conscientiously and coherently.

The original Commission communication, the SET plan proper, is very short. It is not immutable, and many new documents and appendices have sprung from it and will continue to do so. The precise strategy will evolve. In the future, I hope that renewable energy heating and cooling technologies and high temperature geothermal energy for electricity generation will come to be regarded as ‘part of the SET plan’. Very soon, a European strategy for ensuring an abundant supply of technicians, engineers, and research scientists for these new energy industries will be needed.

Are you confident that ‘innovative’ renewables will get funding under the New Entrants Reserve?

We have to make significant advances in renewable energy technology in the next decade to stand a chance of reaching our 2020 targets. The renewable energy industry will have to continue to bring down the cost per MWh of all of its various technologies and it is under pressure to do this faster than so far. The 300 million allowances under the Emission Trading Scheme’s New Entrants Reserve (ETS NER) are intended for test installations of new technology. This will encourage manufacturers to speed up the development of their products, and if allowances are disbursed so that they cover the capital costs of a project, third-party investors will gain the confidence to offer co-finance alongside an ETS NER grant. It would be poor policy making indeed if the ETS NER neglected renewables.

⁽¹⁾  On October 21-22, the Swedish Energy Agency, together with the European Commission, will organise a high-level conference in Stockholm on the EU’s Strategic Energy Technology (SET) Plan and its financing. Further information is available at https://www.respoint.se/itp/event/setplanconference/8708.