European energy technologies - THERMIE Programme

by Michael GOWEN

For the past decade the Energy Directorate-General of the Commission of the EC has operated energy demonstration and hydrocarbons technology programmes as an integral component of its energy policy. Demonstration is the essential link between research and commercialisation. The aims of the demonstration programme were to support the initial commercial-scale use of innovative technologies where the inherent risks were perceived as being too high for commercial entrepreneurs, and thus to promote the widespread use of successful technologies in the market. The aims of the hydrocarbons technology programme were to enhance the development of technologies in order to reinforce oil and gas supply security for the EC.

During the course of these two programmes, EC financial support of more than ECU 1450 million was offered to 2 500 demonstration and hydrocarbons technology projects.

These programmes need to be seen in the wider context of the achievement of the Community’s energy policy objectives. The most recent Community energy objectives were adopted in 1986 to cover the decade to 1995 and envisage, among other things, continuous promotion of technological innovation. Encouraged by the progress in energy efficiency which had already been made, the goal was set of improving the efficiency of final energy demand by a further 20 % during this 1 0-year period. However, since then two critical new factors have radically changed the European (and world) energy situation. Firstly, the much lower level of oil prices in the second half of the 1980s, together with the decline in the value of the US$, has considerably reduced the financial incentive to conserve energy. For example, EC energy consumption actually began to increase again between 1984 and 1987 (by 7 %) after a substantial period of decline.

The second factor is public concern over environmental issues - acid rain, global warming, the greenhouse effect, depletion of the ozone layer and the growing awareness of the major role played by energy consumption, production and transformation. This has given fresh impetus to the development of new, efficient, environmentally sensitive energy technologies, over and above the purely financial benefits of such developments.

Much remains to be achieved in relation to the implementation of new energy technologies in the Community. In anticipation of the expiry of both programmes at the end of 1989, the Commission had independent evaluations conducted on them. The conclusions from these evaluations reinforced the Commission’s view that a further initiative should be taken in this area, and the Commission therefore proposed to the Council a new single programme for European energy technologies: THERMIE, to run for the five-year period 1 990-94.

Why a new energy technology programme?

The movement towards the Single European Market has now become irreversible, but to take full advantage of it, Community industry must have access to secure and competitive energy supplies. Despite the present rather relaxed state of world energy markets (3), the Community’s energy situation remains inherently vulnerable, with over half of its energy requirements presently being imported (70 % in the case of oil), with a particular sensitivity to political tensions in areas of major oil production, to the public acceptability of nuclear power and to growing environmental constraints on the use of coal. To underpin the achievements of the Single Market, it is vital that the implementation of new energy technology be stimulated, in order to develop indigenous energy resources, improve energy efficiency and diversify energy supplies

The need stated in the Single European Act to strengthen the technological basis of Community industry, applies in the energy field as much as in any other area. If industry is to c gain maximum benefit from the Single Market, there must be free transfer of technology throughout the Community. In the case of energy technology, however, this is often not happening. It is necessary therefore to take an initiative to stimulate such energy technology transfer, especially across national boundaries, thus helping to remove trade barriers and to facilitate European integration. This technology transfer should also be extended to the Community’s Third World trading partners, to help in resolving the serious energy and environmental problems which they face, and to the countries of Central and Eastern Europe which are emerging towards democracy, since their generally inadequate energy infrastructure is a major handicap to economic and industrial growth.

Energy technology also has a key role to play in meeting the environmental challenges, which have lately become of such concern worldwide. Almost 95% of air pollution comes from thermal combustion, and a substantial part of thermal pollution is created by energy consumption, production and transformation. Development of energy technology can play an important role in improving the quality of our environment, for example, by increasing energy efficiency and thus reducing SO2, NOx and CO2 emissions; by developing non-pollutant new and renewable energy sources such as wind, solar, hydro and geothermal; and by reducing emission levels through fuel substitution (e.g. nuclear or gas). In this way the Community’s energy objective, calling for balanced solutions as regards energy and the environment, and the requirement of Article 130 R of the Single European Act to ensure a prudent and rational utilisation of natural resources, can be achieved.

The development and dissemination of energy technology also has an important role to play in strengthening economic and social cohesion within the Community, which is essential to ensure that all the regions share in the benefits of the single market. The new THERMIE initiative will help in transfering technology to the more disadvantaged regions, thus encouraging economic growth and confidence in these areas, increasing the efficiency of their energy use, and enabling them to exploit their own local energy sources, particularly the renewable sources which are often readily available in such areas.

Social benefits can also be obtained from the implementation of new energy technologies, in particular in the energy efficiency field by, for example, improving the thermal insulation of buildings occupied by low-income households. Furthermore, it has been estimated that increased efforts to save energy and to use waste heat and renewable energy sources could lead to the creation of as many as 530 000 supplementary jobs by the year 2000.

The scope of the new energy technology programme

It is clear that there are substantial benefits to be obtained from a new programme which promotes European energy technologies. The independent evaluations referred to above confirm the continuing need for such a programme at Community level.

The Commission accepted the conclusions of the evaluations, which indicated that a new programme should concentrate not only on promoting innovative technological development, but also on the dissemination of such technologies throughout the Community and beyond, encouraging investment in technologies which have been successfully demonstrated and publicising their results. In this way the new programme will reinforce other Community activities, such as those carried out under the SPRINT and VALUE programmes. The proposal therefore incorporates the following features:

(i) Innovatory projects to demonstrate for the first time that new technologies can be successfully exploited on a commercial basis.

(ii) Dissemination projects to encourage the wider use in the Community of new technologies which have already been successfully demonstrated.

Moreover, if the Commission establishes that there is a particular need for action in certain areas (e.g. where there are bottlenecks), it could itself instigate targeted projects seeking companies willing and able to carry out specific projects in these areas. This would be particularly appropriate for large projects involving a multidisciplinary approach and large sums of money; in all such cases these projects must involve cooperation between companies from two or more Member States.

The new proposal also enables the Commission to undertake “ associated measures”, to encourage the application and marketing of energy technologies. These could be carried out both within the Community and outside, with a view to industrial cooperation with third countries. As far as possible they would be carried out in collaboration with national, regional or local bodies.

They include:

- evaluation and analysis of market features and potential;
- circulation of information on the evaluation of energy technologies and the results of projects for wider dissemination;
- monitoring and evaluation of projects;
- encouraging greater exploitation of databases;
- organisation of technical seminars, workshops and conferences;
- provision of documentary and video material.

The THERMIE programme covers the following fields:

(a) Rational use of energy, in particular in:

- buildings;
- industry;
- transport and urban infrastructure.

(b) Renewable energy sources, in particular:

- solar energy, including both thermal and photovoltaic applications;
- energy from biomass and waste;
- geothermal energy;
- hydroelectric energy;
- wind energy.

(c) Solid fuels, in particular:

- clean combustion;
- conversion into gas or liquid energy products;
- waste treatment and usage;
- gasification integrated with a combined gas/steam cycle.

(d) Hydrocarbons, in particular exploration, production, storage and transportation technologies.

Preference will be given to projects which are joint ventures involving undertakings from at least two Member States: to small and medium-sized enterprises; and to the less prosperous regions of the Community. Financial support from the Community will cover up to 40 % of the cost of innovatory and targeted projects and up to 35 % of dissemination project costs.

In order to be eligible for the THERMIE programme, projects must:

- have a strong innovatory element;
- offer prospects of technical and economic viability and subsequent commercial application (in the case of success);
- offer appropriate solutions compatible with safety and environmental protection requirements;
- be difficult to finance because of major technical and economic risks;
- be proposed by persons or companies who are able to actively assist in disseminating the results of the project;
- be submitted by at least two independent promoters established in different Member States, for projects over ECU 6 million;
- in general be carried out within the Community.

All the technical aspects of the programme have been agreed by the Council of Energy Ministers and a positive opinion has been given by the European Parliament and the Economic and Social Committee. The only matter remaining to be resolved is the financial envelope for the five years of the programme - the Commission proposed an indicative figure of ECU 700 million for this period, but the precise delineation must await the revision of the financial perspectives for 1991 and 1992.

M.G.