The Strategic Energy Plan (SET), the EU?s blueprint for building-up Europe?s use of renewable energies

The Strategic Energy Plan (SET) is the EU’s blueprint for building-up Europe’s use of renewable energies. It sets out plans to develop the technologies needed to meet the EU’s objective of raising the amount of renewable energy in the EU’s energy mix to 20% by 2020. Wind power, as the leading green energy technology in Europe, will play a huge part in reaching the target.

To get to that point, the European Commission, with the help of industry experts, has drawn-up several tools. One of those is the wind energy roadmap. This map outlines research and development goals in the wind industry for the coming decade. It aims to see the building of extensive testing facilities for turbines – areas where manufacturers can test the strength of the latest blade designs to the limits. As well as next-generation turbines that could have an energy production capacity of 10-20 megawatts.

But, as with any initiative, the roadmap needs financing. That’s where the Commission’s recently published communication on low carbon financing comes in. Overall, the Commission is proposing that €50 billion should be spent on financing the planned growth in renewable energies. The proportion allocated to wind alone is €6 billion.

The wind industry is more than ready to implement the roadmap; it just needs more detail on the funding plan – where exactly will the funding come from? In fact, failing to identify specific funding sources could quickly generate a loss of momentum for the wind roadmap and, hence, the goals set out in the SET plan and, as a knock-on effect, the EU’s 2020 targets.

Funding is not the only short-coming of the Commission’s wind energy roadmap – there’s a lack of coordination between all the renewable energy sectors regarding another of the Commission’s tools – the electricity grids roadmap. All renewable energies need an upgraded grid so that power can flow from its sources to the consumer. For wind, where some sources could be far offshore in the wind-swept North Sea, upgrading Europe’s ageing electricity grids to allow large amounts of renewable energy to reach consumers is imperative.

Wind power, as an expanding industry, will also rely on skilled people, that’s why the wind industry is calling on the Commission to create training initiatives so that we can start giving people the skills we need to build a greener future.

A strong wind energy sector not only means reduced CO2, cleaner air and more secure biodiversity. It can also provide sustainable economic growth, reduced energy import dependence, high quality jobs, technology development, global competitiveness and European industrial and research leadership. Wind energy can make a significant contribution towards achieving the whole range of goals set out in the Lisbon Strategy, aiming to make Europe the world’s most dynamic and competitive knowledge-based economy.

Despite the huge progress made in the past 25 years, wind energy has a long way to go before it reaches its full potential in terms of the large-scale supply of electricity. While it can already be cost-competitive, with newly built conventional plants at sites with good wind speeds, significant further cost reductions are necessary through market development and R&D.

Continued emphasis on wind energy R&D, both in the long term to generate new knowledge, and in the short term to ensure it can be applied in today’s electricity systems, is of paramount importance. Through R&D and market measures, the cost of wind energy will be reduced to the same as, or less than, that of its cheapest competitors. At the same time, it will provide secure and reliable power at nearly zero cost to the environment and ensure European technology leadership, increased employment and economic growth.

In order for wind power to become fully competitive with conventional power generating technologies, even without internalisation of external costs to society or reform of the very large subsidies they receive, it is up to the wind energy sector to make further cost reductions.

Some 60% of cost reductions in the last two decades are estimated to be the result of economies of scale brought about by increased market volume, being the result of market volume in a handful of Member States. The remaining 40% of cost reductions can be directly attributed to research and development (R&D). Thus R&D is a direct driver towards the achievement of Union targets for renewable energy market penetration.

Since the Barcelona European Council of 2002, which set the objective of increasing the European R&D effort to 3% of its GDP by 2010 (with two thirds of new investments coming from the private sector), the support of research and innovation actions became a key priority for the EU.

This objective was defined in order to implement the so-called "Lisbon Strategy", an action plan adopted during the Lisbon European Council of 2000 and aiming at making the EU "the most dynamic and competitive knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion and respect for the environment by 2010".

Unfortunately, the European Union is still struggling to meet its 3% of GDP objective.

Nevertheless, even with the current difficulties, the EU and Member States remain crucial for the support of R&D in all sectors, including wind energy. The main tools for the support of R&D at EU level are the multi-annual "Framework programmes for R&D", managed by the European Commission through DG Research. At present, the 7th Framework Programme (FP7) (period 2007 – 2013) counts on a budget line partially devoted to renewable energy. The total budget allocated to FP7 is €50.521 billion (current prices). €2.35 billion is dedicated to non-nuclear energy (€335 million per year), out of which at least 50% will be dedicated to renewable energy and energy efficiency in the period 2007-2013 (€167 million per year). Nuclear fusion and fission energy will receive €550 million per year in research funding under the FP7 Euratom Research Framework in 2007-2011.

What is more, according to the IEA (Renewable Energy, Market & Policy Trends; 2004), out of the total energy research budget of IEA countries between 1974 and 2002, 291 billion USD, only 8% (24 billion USD) was spent on renewable energy (click here for an overview of all the incentives dedicated to the renewable energy sector worldwide). Merely 1% of the total research budget (3 billion USD) was dedicated to wind energy, whereas 47% (138 billion USD) was spent on nuclear fusion and 13% (37 billion USD) on fossil fuels.

The European Wind Energy Association believes that this is unacceptable, also in view of the approval, on December the 9th, 2008, of the new RES Directive, which binds the EU to increase the share of renewables in its energy mix to 20% by 2020.

In order to meet this objective, wind energy is going to play a key role, since its technology is already viable. Providing support to R&D projects in the wind energy sector could therefore help the EU to fulfil both its Lisbon goal (i.e. increasing R&D spending to 3% of its GDP by 2010) and its new RES target.

This should therefore be reflected in the allocations of the FP7 and should be stressed in its mid-term review (which will take place in 2010): renewable energy sources should receive a fair share of the budget in European and National R&D programmes.

Effective cost reduction of renewable energy technologies must be achieved through a balanced combination of implementation and innovation. Without R&D, the learning experiences gained from implementation will not be fully exploited, and vice-versa. Adequate R&D budgets and efforts should be guaranteed and go hand-in-hand with a stable implementation policy, in order to reap economies of scale.

In its "Strategic Research Agenda / Market Deployment Strategy" (SRA / MDS), published in July 2008, the wind energy industry has identified the main areas for future development. This should be used as a basis, alongside similar documents for other renewable technologies, when deciding where to allocate existing funds among different priorities.

As for the SRA / MDS budget expectations, they were developed on the basis of the model identified during the Barcelona European Council, which would require R&D spending to be at least 3% of the sector annual turnover, with two thirds of the funds coming from the private sector. This would mean that the R&D effort of the wind energy sector should be an average of € 430 m per year, with public support reaching € 143 m per year.

Considering that 50% of public funds should come from Member States, the average effort for the European Commission should be € 72 m per year (if this target is confronted with the current level of support provided under the FP7, a total gap of € 450 m in EC funds for the period 2007-2013 can be estimated).

In its Strategic Energy Technology Plan (SET-Plan), the European Commission identifies wind energy as a Strategic Priority for meeting the 2020 target on Renewable Energy. The SET-Plan proposes some key technologies to build European Industrial Initiatives, such as a European Wind Initiative. The SET-Plan underlines the need to increase significantly R&D budgets.

The technology platforms that have been created for various technologies, including wind, will also play an important role in the identification and development of joint R&D efforts. Such platforms require a patent support from the European Commission, which should regard them as an opportunity to guide the research process in a direction that reflects the research needs of the industry. Synergies among such platforms have to be exploited, although it is clear that, at this stage, the problems they tackle are very different and thus, they should remain independent.

The scarcity of public R&D funds available for the wind industry, together with the strategic nature of the companies in this sector, are the reasons behind the launch of the European Wind Energy Technology Platform (TPWind) in October 2006. TPWind is an indispensable forum for the clarification of policy and technology research, and development pathways for the wind energy sector. It also is a new opportunity for informal collaboration among Member States, including those less developed in terms of wind energy.

The overarching objective of TPWind is to drive wind power cost reductions, bringing them to a level equal with currently cheaper alternatives. This does not take into account the external costs of conventional power generation, or the huge subsidies granted to these technologies, which are estimated to be in the region of USD 250-300 billion per annum, globally.

Apart from managing the TPWind secretariat, EWEA has been very active in the discussion and negotiation of the different European Commission framework programmes for R&D, and participates in several projects that are of strategic importance to the sector. EWEA, and many of its member organisations, are also closely involved in TPWind, which has published its Strategic Research Agenda in July 2008 and is now moving towards its implementation.