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SET-Plan for the development of low carbon technologies
Following on from the Communication - A European strategic energy technology plan (SET-Plan) - Towards a low carbon future, this Communication sets out the different types of initiative that the European Union (EU) should put in place in order to steer the current energy system towards a low carbon model. It also proposes methods of funding for these initiatives.
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Investing in the Development of Low Carbon Technologies (SET-Plan) [COM(2009) 519 final - Not published in the Official Journal].
This Communication sets out the strategic energy technology plan (SET-Plan), the main aim of which is to develop low carbon technologies and to make them competitive. In order to meet that objective, the Plan proposes various European Industrial Initiatives and a risk sharing approach.
Which European initiatives are proposed?
Through the SET-Plan, the European Commission proposes to develop clean energy technologies and to put in place specific actions to establish a low carbon industry. The Commission therefore proposes to act in the fields of:
- wind energy: the Commission wishes to build testing facilities and to set up demonstration projects. As a result of these projects, wind energy would contribute up to 33 % of electricity by 2030 and more than 250 000 skilled jobs could be created. The cost of these investments is estimated as EUR 6 billion.
- solar energy: the implementation of the SET-Plan should equip the EU with a long-term research programme focused on advanced photovoltaic systems. In particular, the Commission proposes to create pilot plants for automated mass production and a portfolio of demonstration projects for both centralised and decentralised photovoltaic power production. These projects should allow 15 % of electricity to be generated by solar power in 2020 and create 200 000 skilled jobs. The cost of these investments is estimated as EUR 16 billion.
- the electricity grid: the aim is to establish a sound basis for creating a real internal market, to increase the share of intermittent energy sources in total energy production, and to manage complex interactions between suppliers and customers. The goal is to connect 50 % of traditional electricity networks to plants generating renewable energy by 2020. It is estimated that EUR 2 billion will be needed to finance these networks.
- sustainable bio-energy: there are several technologies. In order to enable them to be marketed, their effectiveness will have to be demonstrated. To do this, the Commission wishes to set up several such plants across Europe. The contribution made by these energies to the energy mix would be 14 % and 200 000 local jobs could be created. EUR 9 billion are needed to set up these projects.
- CO2 capture, transport and storage: the development of these techniques should be encouraged in order to achieve low carbon electricity generation. Consequently, an increase in research in this field is planned. EUR 13 billion would need to be invested.
- sustainable nuclear fission: a new generation of reactor type (Generation-IV) should be deployed by 2040 in order to reduce radioactive waste and proliferation risks. Work has to start now in order to meet that deadline. The cost of these investments is estimated as EUR 7 billion. In the long term, fusion also represents a promising source of energy.
- fuel cells and hydrogen: this sector is already included in the Joint Technology Initiative (JTI) for 2008-2013, which has a budget of EUR 470 million. However, larger scale initiatives are still required.
- energy efficiency: the Smart Cities Initiative aims at promoting the creation of market opportunities for energy efficiency technologies. Through an investment of EUR 11 billion, this initiative should make it possible, by 2020, to establish cities as nuclei from which energy efficiency technologies will spread. Smart networks, a new generation of buildings and low carbon transport solutions will be developed. The aim of these Smart Cities is to transform the energy system.
- poles of science and research: the European Energy Research Alliance (EERA) should strengthen cooperation between research institutes in the context of joint research programmes. These research programmes should allow the challenges of the SET-Plan to be addressed.
- international cooperation at the level of the G20 or bilateral agreements, such as the EU-China Near Zero Emissions Coal (NZEC) project.
How are these initiatives to be implemented?
The Commission estimates the investment required to apply the proposed initiatives at between EUR 3 and 8 billion. In the field of non-nuclear energy, the bulk of the funds (70 %) came from the private sector in 2007. It is now necessary to increase substantially the share of total investment coming from the public sector at national level and from the EU at European level.
In addition, banks and private investors should invest heavily in the companies which encourage their transition to a low carbon economy.
How can public funding for the implementation of these initiatives be obtained?
Several sources of public funding can support the development of the SET-Plan initiatives:
- the emission allowance trading scheme which should generate income from 2013;
- Community programmes such as the Framework Programme for Research, the Intelligent Energy - Europe programme and the European Energy Programme for Recovery;
- lending by the European Investment Bank (EIB).
The SET programme contributes to the energy and climate targets for 2020 and the longer term. It seeks to reverse the present trend in primary energy supply in the EU, which is currently 80 % dependent on fossil fuels.