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Assessment of Potential and Promotion of New Generation of Renewable Technologies ____________________________________________________________________________________________ The central instrument which the EU possesses to finance this endeavour, namely the EU budget, is not in a condition to increase such funding. This is due to its inefficiencies, the encroached interests of specific groups and the reluctance of member states to allow it to reach the ceiling of 1.24% GNI, despite there is theoretically a margin available of €28 billion, or 0.24% of EU GNI. It is thus necessary to review the options for the funding of the R&D efforts. Basically the options open are to increase the size of the EU budget, to redistribute amongst headings and priorities, and if possible, link the expenditures on climate related issues, such as R&D for the SET-Plan or external action for adaptation to a tax levied on emissions. This can be the ETS or a new fuel tax. The ETS also fulfils very closely the criteria of the EU budget for own resources, but it is still collected and used domestically which is not correct from an allocation efficiency point of view, especially if funds are to be used to curb emissions or for adaptation. A fuel tax could also be envisaged. This could be a good candidate as a new resource in theory, but which may result to be too controversial due to its regressiveness as poorer member states are also more energy intensive. Those revenues would require a reform of the Own Resources, which would only happen for the next Financial Perspective starting in 2014, requiring some intermediate solution until then, but an own resource reform is long overdue and this could be one of the elements. 4.2.3. From R&D to deployment of new technologies The EU budget and the EIB have the potential to assist in the deployment of new technologies. In fact, a lot could be gained from a better coordination between the numerous initiatives, funds and the R&D efforts under the SET-Plan. There is, however, a very strong case to reform considerably the EU budget operations, in particular those for the structural funds. Not only those are still not integrating appropriately the climate considerations in the programmes, but they are not strategically structured. It would be very important to incorporate the necessary tools into the European Union Cohesion Policy the potential to devise integrated strategies, allowing for example the deployment of new technologies at regional level with the structural funds providing assistance for the necessary infrastructure. This would allow regions under the EU’s convergence programme to develop into low carbon economies and be a showcase for new technologies. For many of the regions, the opportunity costs of replacing energy systems and testing new technologies are lower, due to the existing need to modernise their infrastructures. Similarly, the rural development policy should facilitate the deployment of new bioenergy technologies. For the moment the use of EU funds for integrated regional low carbon strategies is inexistent, but could be very important. It requires, however, regions able to develop such strategies and willing to accept a considerable and complex process of change. Another central need is the completion of the single market for energy, i.e. create the interconnectivity necessary to ensure that Europe has an integrated grid. As the share of renewable energies increases, the only way to manage efficiently the fluctuation in energy supply is by having a large grid in Europe. Without a large grid the benefits of renewable energy are partly lost due to the need of backup energy. According to studies in the area, offshore wind farms and large solar installations in the south need to be linked by HVDC lines to counterbalance the different supply fluctuations and also to send excess energy to areas of demand. There is a need for the EU to promote the building of the necessary interconnectors, and for this the EU TEN-E funding may be required. IP/A/ITRE/ST/2009-11 & 12 115 PE 440.278PDF Image | Policy Department Renewable Technologies
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