Coordination Time for EU policies on Energy Technologies and Innovation - New Communication from the Commission

On 2 May 2013, the European Commission published yet another communication aimed to draw the lines of the future European low carbon strategy in the time-frame 2030/2050. Entitled Energy Technologies and Innovation (COM(2013) 253 final), this Communication looks at the manner the EU should coordinate its technology and innovation strategy in order to reach energy and climate goals.

The need for new technologies

The first question addressed by the Communication relates to the need for new technologies. The Communication starts with a straight YES, we do need new technologies because they are "vital to achieve all of the EU 2020 objectives in energy, climate, economic and social policy" (p.2). It reiterates here stances taken in two previous communications in 2007 and 2009, namely: Communication on SET Plan (COM(2007) 723) and Communication on Investing in low carbon technologies (COM(2009) 519).

Although the need for technological innovation is continuous, some believe that we primarily need to deploy further the technologies we already have and which will suffice to reach the targets. The diffusion of green technologies - like any diffusion of innovation (see works by E. Rogers) - is as much a question of competitiveness, financing, support to commercialisation, foreign investment policy, patents than absorption capacity and infrastructures. Therefore innovation policy should not be thought in an isolated way, but as part of an industrial and growth strategy. The Communication tends to do so, but could have gone a step further in developing a holistic approach. See for example p. 2: "The EU needs to further reinforce the role of technology and innovation within the energy policy, not just with specific technologies, but also by triggering new business models, market and social adaptation and energy system improvements..."

To put things into a global perspective, the Communication could also have referred to the definition given in Agenda 21, Chapter 34 of "environmentally sound technologies" which "protect the environment, are less polluting, use all resources in a more sustainable manner, recycle more of their wastes and products, and handle residual wastes in a more acceptable manner than the technologies for which they were substitutes." Instead, the Communication refers to "new, high performance low-cost, low-carbon sustainable energy technologies," which could be explained by a clear on energy technologies more than environmental technologies in a broad sense.

The role of the EU in energy technology and innovation

A second question raised relates to the role and ultimately competence of the EU in acting on innovation for achieving energy goals. This is dealt in relation to the completing role that an EU technology strategy has in addition to the EU legislation already in place. This position is probably the most ambitious in the Communication, referring to an "EU's energy technology and innovation policy" and which refers itself to issues of competences of the EU in areas of innovation and research. This is not explained further in the Communication, but one can refer to the call made by the European Council in 2008 for a European Plan for Innovation (cf. para. 18 of the Conclusions).

Combined together, the two questions make it wonder what will be the purpose of the "EU's energy technology and innovation policy". Is it to help developing new technologies, "reducing costs" or "speeding up the introduction of new sustainable technologies to the market". These are different policy orientations. The answer given by the Communication is that it should be all of this concomitantly, answering "the need for an integrated research and innovation chain at EU level that spans from basic research to market roll-out" (p.7).

A "European energy technology and innovation strategy" to 2020 and beyond, a definition

Part 3 of the Communication recalls this plural goal that the strategy should pursue:

1. accelerate innovation in cutting edge low carbon technologies and innovative solutions

2. bridge the gap between research and the market

The "Key principles" are further defined as follows:

• Adding value at the EU level
• Looking at the whole energy system when setting priorities
• Integrating actions along the energy innovation chain and strengthen the link with energy policy
• Pooling resources and using a portfolio of financial instruments
• Keeping options open, while concentrating on the most promising technologies for post 2020

The way forward: proposed implementing measures

An Integrated Roadmap will be the central instrument in addressing energy system and innovation chain integration. It should "cover the entire research and innovation chain from basic research to demonstration and support for market roll-out." It should fall under the guidance of the SET Plan Steering Group and incorporate the key principles and measures described in the Communication. The first Integrated Roadmap should be developed by the end of 2013. The SET Plan will itself remain the central implementation instrument to address the identified challenges, but it needs to be reinforced and adapted to changing needs, as other initiatives like the European Industrial Initiatives and the European Technology Platforms.

An Action Plan should be developed by the Member States and the Commission on the basis of the Integrated Roadmap. It should define coordinated and/or joint investments by individual Member States, between Member States and with the EU. The Communication stresses several times the difficulties encountered by both national budgets and private investments, and proposes to better coordinate investments between the two. It also proposes to "go beyond grant programmes and include financial engineering instruments and procurements." The Action Plan should be developed by mid-2014.

The implementation of the Integrated Roadmap and the Action Plan should be monitored through the Strategic Energy Technologies Information System (SETIS), created under the SET Plan and based on a system of data reporting.

A coordinated structure under the responsibility of the Steering Group of the SET Plan should ensure the promotion of investments in research and innovation on energy efficiency.

Other areas of improvement are identified. Of particular interest is the manner EU's external action should reflect and "strengthen" the "EU's excellence and attractiveness as a research partner" (p.12).

What is already in place at EU level

The first part of the Communication describes the measures already adopted by the EU in the matter of technology and innovation applied to the energy sector. Among them are:

- EUs energy legislation - It concerns first the completion of the internal energy market, where new technologies and services will find open and competitive conditions, with renewed energy infrastructures in need of new technologies the integration of which is supported by the network codes currently under adoption and a flexible consumer market (IT-technologies, smart metering, energy efficiency, etc.). It covers also support to technologies within the sector of renewable energy, low carbon and safer nuclear energy.

- EUs action in setting framework conditions for research and innovation, through the initiative Innovation Union  (A Europe 2020 flagship initiative) and  the European Research Area;

- EU's Strategic Energy Technology (SET) Plan, notably defining priorities in European research, in accordance with policy goals, and supporting financially the selected projects under the 7th Research Framework Programme (FP7).

- Intelligent Energy Europe (IEE) Programme, focusing on "market update of technologies and ... non-technological barriers (financial, regulatory and administrative)", in particular in the sectors of energy efficiency and renewable energy.

- Public-Private Partnerships and Joint Undertaking

- Risk Sharing Finance Facility (RSFF) for improving access to debt financing

- Regional and Cohesion policy, contributing to building a regional approach for investment in energy efficiency and renewable energy (e.g., the Wave Hub in South West England or the Green Building Cluster in Lower Austria);

Find out "a system approach"

Based on the review of both the existing mechanisms and initiatives, and the proposed new measures, the Commission seems to propose mostly transitory solutions and guidance instruments on the background of a much more ambitious inspiration towards an EU energy technology and innovation strategy. The Commission calls itself upon the definition of "a system approach" which may need further adjustments if the Member States backs this high ambition level.

Photo credits: European Union (c) 2013 . European Commissioner for Research, Innovation and Science, Maire Geoghegan-Quinn, visiting organic solar films manufacturer in Germany, December 2012.