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European Commission's promotion campaign requires deep pockets

In a determined effort to focus the attention of the European public, its industry and its financial institutions on renewable energy, the European Commission is launching a campaign aimed at catalysing the investment needed for a massive wave of renewables development, including 10,000 MW of wind power. Whether the money will be forthcoming remains to be seen.

The European Commission has unveiled an ambitious EUR 30 billion plan to kick-start its renewable energy strategy via a rapid increase in renewable energy penetration. The "campaign for take-off" was originally proposed under the EC's White Paper on renewables released in November 1997. It is now revealed in more detail in a working paper published on April 9 by the directorate general for energy, DGXVII.

In the original policy paper the EU adopted a goal of 12% for European primary energy consumption to come from renewables by 2010. The campaign for take off-referred to in Europe-speak as the CTO-aims to stimulate large scale projects in a few mature technologies considered key to achieving the 12% target, to improve their market penetration with the knock-on effects of developing economies of scale and reducing costs.

Three key sectors-wind, solar and biomass-were identified in the White Paper, but after feedback from community institutions and member states, these were enlarged or modified to incorporate seven key actions. Focusing on these actions, the campaign sets out a framework for encouraging the private sector investment needed to make up the lion's share of the EUR 30 billion of required capital.

The CTO document sets out goals for renewables penetration by 2003 as a large step towards achieving the White Paper's overall 2010 targets. By 2003 each key sector is expected to have increased its capacity to between 15% and 25% of the 2010 goals for each technology. The share takes account of the present stage of development of each sector. Wind, the most mature technology, is given the highest interim target of 25% of the feasible wind energy penetration.

Correspondingly, wind is earmarked as needing the largest share of the investment sum the EC hopes to squeeze out of the private and public sectors of member states-EUR 10.1 billion to support a program for installation of 10,000 MW of wind turbines. In particular, the campaign seeks to encourage projects that would otherwise have to bear higher costs because of their location-which may be remote, on islands, in very cold, hot, or even dusty climates, or have low wind speeds. Offshore, in particular, is expected to be boosted considerably by the campaign, if it gets off the ground. All these areas will have to be used to achieve large-scale penetration of wind in Europe, says the CTO paper.

Not the private sector

The bulk of the proposed 10,000 MW of wind is envisaged as large wind farms of 5 MW to 100 MW. Nearly half the total capacity-around 4500 MW-is projected to be in the form of commercial wind farms built by independent power producers and installed either offshore, in hostile sites, far from the grid or in low wind regions. A further 3000 MW of large wind farms are expected to be utility owned, mostly offshore, but also some in hostile and low wind sites. Small commercial wind farms of less than 5 MW are allocated public support for 1000 MW of capacity, concentrating on projects by investment groups, co-operatives, and industrial factories. Privately owned wind turbines are allocated 450 MW, while the remaining 1000 MW of capacity will be for niche markets covering small stand alone installations in rural areas as well as special applications such as wind-desalination, wind-diesel, water pumping and telecommunications.

Technology breakthroughs

The campaign also hopes to support European manufacturers in new wind turbine development-especially of multi-megawatt machines, lightweight/flexible turbines and specific designs for low or high wind speeds or offshore. Another goal of the CTO is its "100 communities" program to identify a number of pilot communities-in regions, cities or islands-which could aim at 100% power supply from a mix of renewables.

Most of the responsibility for implementing the CTO will rest with member states, who will be expected to promote the aims of the campaign and co-ordinate the key actions at national level. But the document suggests mobilising various "renewable energy partnerships" to push renewables and promote investment in the key sectors. These partnerships could involve the Commission, national and local government, renewable energy developers, industry, environmentalists, NGOs and many other bodies.

The working paper estimates that 75-80% of the huge EUR 30 billion needed for the CTO will come from private investment in renewable energy projects. It leaves, however, a hefty EUR 7 billion to be found out of the public purse. This will be provided under public programs and schemes triggering the private investment and promoting the CTO. Most of this public sourcing would come from national funds, states the document. It points to an analysis of national programs which shows that member states' funding for renewable energy is increasing year by year and is currently running at a minimum of EUR 1.2 billion a year. On this basis, it expects national funding for the CTO to total EUR 6044 million from 1999 to 2003-which would require member states to allocate 75% of their national renewable energy support budgets to the campaign.

The remaining public funds will come from community support programs. Structural funds could supply EUR 487 million, while a further EUR 500 million could be provided through research, technological development and demonstration activities. The EU's ALTENER II program-a support program for renewables shortly to become part of Europe's Energy Framework Program V-will monitor the campaign and channel most of the Community funding for promotional activities.

The campaign kicks off on May 26-27 with a conference in Amsterdam to discuss the objectives.

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