R&D in energy is about to get a fresh push from Brussels through a new EU-wide Strategic Energy Technology (SET) Plan that is supposed to harness the combined power of public and private research in different Member States. But to what extent will Member States agree to align their national research agendas? And around what common goals? The Commission believes energy R&D should be structured around “the consumer” and “the energy system as a whole” (not individual technologies). But beyond that there is little agreement on priorities.

For years the EU has aimed to spend 3% of GDP on research. The goal stems from 2000, when the EU set itself the goal of becoming “the most competitive and dynamic knowledge-based economy in the world” (the “Lisbon strategy”). But Europe has never met its own target. In 2013, the most recent year for which an official Eurostat estimate is available, it spent 2.02%.

Today there is a fresh push for R&D, innovation and competitiveness in the field of energy through the Energy Union strategy. “A new strategy for research and innovation (R&I) must be at the very heart of the Energy Union,” the European Commission wrote in its Energy Union proposals on 25 February.

To this end, the Commission is working on an update to the 2007 Strategic Energy Technology (SET) Plan, which has served as the science and technology pillar of the EU’s 2020 climate and energy policy. In its Energy Union strategy, the Commission promises to publish an “upgraded” SET Plan with “a limited number of essential priorities and clear objectives” in 2015-16.

Marie Donnelly, Director for renewables, research and innovation, and energy efficiency at the Commission, tells Energy Post that she expects to present the new SET Plan in the fall. She says it “should provide a new holistic approach to energy R&I that does not only focus on individual technologies but that addresses the challenges of the energy system.” We spoke with Donnelly at the annual congress of the European Energy Research Alliance (EERA), which took place in Brussels at the end of April. EERA, which brings together universities and research institutes, represents the public sector in the SET Plan.

“Most first-of-a-kind commercial demonstration projects call for new business models that require an evolution of the energy market that as of yet has not taken place”

An important step towards the new Plan was an “Integrated Roadmap” published by the Commission in December 2014. But at the EERA conference, another Commission official, Paul Verhoef, Head of Unit for renewable energy sources at the Commission’s Research and Innovation department , emphasised that the report was entitled “Towards an Integrated Roadmap”. And for a good reason – there is no agreement on priorities just yet. “The SET Plan is still under development. We have in reality not yet agreed on what the priorities should be or what should be delivered by when. It is still a bit of a shopping list.”

Herein lies the crux of the problem. In its Energy Union proposals, the Commission admitted: “We are still a long way from fully coordinated and focused research, effectively combining EU and Member State programmes around common goals and deliverables.” The first SET Plan was an attempt to get Member States to pool their resources around a limited number of European energy R&D priorities. It helped advance certain technologies such as solar, wind and bio-energy, but it did not create a truly European research agenda for energy. Yet this is what Europe needs, the Commission believes, to “accelerate energy system transformation” and deliver growth and jobs. The question is what should be Europe’s energy R&D priorities?

Going shopping

For the Commission, the biggest change in the European energy market between now and 2035 is likely to be the role of the consumer, said Donnelly at the EERA conference. Citizens will become ever more involved and empowered when it comes to energy choices and decisions. As a consequence, for the Commission, the two big energy R&D areas going forward are energy efficiency and renewables.

The Commission’s goal is to use less energy in heating and cooling – currently about half of all energy consumption in Europe – keep it roughly the same for transport, and grow it for electricity, Donnelly explained. She looks to R&D to help deliver on these goals. Other delegates pointed to the need for more research into “breakthrough technologies” to deliver industrial energy efficiency. The remaining scope for incremental energy efficiency improvements in European steel production is just 5-15%, said Jean-Pierre Birat, representing the industry in SPIRE, the Sustainable Process Industry through Resource and Energy Efficiency public-private partnership. EERA’s newest research programme is entitled “Energy Efficiency in Industrial Processes”.

R&D priorities for the Energy Union In its Energy Union proposals, the Commission identifies four R&D priorities: being the world leader in developing next generation renewable energy technologies (including biomass and biofuels, and energy storage)

smart grids, smart home appliances, smart cities and home automation systems

efficient energy systems and making the building stock more energy neutral

more sustainable transport systems (more efficient and with lower greenhouse gas emissions) Two other research priorities that “merit a much greater level of collaboration between the Commission and those Member States who want to use these technologies” are: carbon capture and storage (CCS) and nuclear energy (including ITER).

Meanwhile, the growing presence of renewables is creating a more decentralised energy system where “we will shift away from more efficient use of fuels to more intelligent use of assets,” Donnelly said. How to integrate renewables into the electricity system – especially increasing system flexibility – is a key R&D priority going forward, agreed experts at the conference. “There should be no [system] limit for renewables,” clarified Thong Vu Van from ENTSO-E, representing transmission grid operators. ENTSO-E is working on market design (e.g. designs to unlock demand response) as well as technological innovations for the grid. The Commission plans to propose a new electricity market design before the summer. Like the research dimension however, Donnelly warned that this would be a long-term process, rather than quick-fix: “We may go through more-than-one iteration [of market design],” she suggested, dimming hopes of a rapid system transformation.

“We need in the next decade to create a truly European research and innovation ecosystem that builds on national capacities”

For transport, renewables are a particularly important area of research because there is limited scope for energy efficiency – the Commission sees a very close connection between energy consumption and GDP, Donnelly explained. In practice, the Commission is focusing on “alternative fuels including biofuels”. The roll-out of electric vehicles will probably only really start in the middle of the next decade, Donnelly said.

But there are other ideas too over what Europe’s R&D priorities should include. There are advocates for more carbon capture and storage (CCS) research for example, as an indispensable tool to combat climate change. On the one hand, the priority is to build large-scale demonstration plants, said Gustaaf Boon from Engie (formerly GDF Suez) at the EERA conference. On the other hand, evaluating the potential for CO2 storage (and improved monitoring technologies e.g. to guard against leakage) is a big part of the research that still needs to be done, said Jonathan Pearce from the British Geological Survey. There is also an emerging field of research into potential “subsurface competition” between CCS and geothermal energy for example.

One area that many delegates at the conference highlighted as an R&D priority is citizen engagement. This goes back to the central role of the consumer and indeed potential blocking by consumers of projects such as grid expansion – alongside more system flexibility seen as key to enabling greater quantities of renewables. One route to citizen engagement is citizen involvement and work is ongoing to map out local/cooperative energy projects, said Daniela Velte from applied research company Tecnalia in Spain. She leads an EERA research programme on the “Economic, Environmental and Social Impacts of Energy Policies and Technologies”. Going forward, she imagines more research into why people engage (or don’t), social innovation and how energy can function as an enabler of social and economic progress.

Innovative financing

“We need an appropriate balance between blue-sky research that will deliver breakthrough solutions in the future and the actions to demonstrate and promote the roll-out into the market of those solutions that we are already developing in Europe,” says Donnelly. To help with the latter, the Commission has launched a new study on “Innovative Financial Instruments for first-of-a-kind demonstration projects in the field of Energy”. CCS springs to mind. The study was launched in March, together with the European Investment Bank (EIB), and final results are due in early 2016.

“It might imply that certain countries give up certain research topics to focus on their strengths”

András Siegler, Director for energy at the Commission’s Research and Innovation department, explains: “First-of-a-kind demonstration projects face significant obstacles, notably a lack of financing for high risk/return projects due to their large size, pre-commercial development stage and the unproven nature of the technologies concerned at industrial scale. In addition, most first-of-a-kind commercial demonstration projects call for new business models that require an evolution of the energy market that as of yet has not taken place.” The study follows up on an earlier report which recommended changes to existing financial instruments.

New too, is the €300bn Juncker investment plan that “will not be for infrastructure projects alone”, Siegler emphasises. “It will be for research and innovation projects… that would not be funded by Horizon 2020 [the EU’s public research budget for 2014-20]”. The Commission has actually proposed using some Horizon 2020 money to feed the new fund (although the European Parliament is fighting this). It argues that together, the EU’s €80bn Horizon 2020 programme, €300bn Juncker fund and €325bn in regional development funds (so-called structural funds), will allow policymakers to support a much wider array of R&I projects going forward.

Deciding on a new plan

The new SET Plan that is supposed to get Member States to better coordinate their R&I investments (representing about half of all the money spent on energy research in Europe), is being developed by the Commission in tandem with national governments. Following on from the December roadmap, Member States are currently mapping out their R&I projects, saying which matter most, and spelling out how much money they are putting into each, explained William Christensen, a member of the SET Plan Steering Group and Deputy Director General for climate, industry and technology at the Norwegian Ministry of Petroleum and Energy, at the EERA conference.

Next up will be to identify common interests and priorities so that countries can come together and identify joint actions. This is also where EERA comes in. “The Commission wants EERA to be an engine for pan-European research, jointly performed by research organisations and universities, which brings energy technologies to the required level of maturity to trigger industry-driven research,” says Siegler. “Much R&D capacity is still anchored and organised at national level. This leads to inefficiencies and duplications. We need in the next decade to create a truly European research and innovation ecosystem that builds on national capacities.”

First and foremost, the Commission is looking for integration – of the work on individual technologies (from wind to bioenergy) and of the technological, economic and social dimensions of innovation. But tensions between Brussels and Member States – with EERA caught in the middle – prevail. “Our ambition remains to guide and advise European policies, to work to align national programmes and to be a European research performer,” said EERA Chairman Hervé Bernard. “The most complex task is aligning national energy research agendas. It’s easier to align research policies for a specific domain (e.g. nuclear fusion – ITER) and to tackle barriers in specific fields.”

But the greatest challenge will be jointly defining and implementing research priorities “including sharing responsibilities and perhaps geographical specialisation”. Bernard spells out the difficult conclusion: “It might imply that certain countries give up certain research topics to focus on their strengths.”

What is certain at this point is that the new SET Plan will not just look at individual technologies, but will for the first time focus on the energy system as a whole. Tellingly, EERA will launch a new research programme on energy system integration in June. Some, such as Christian Egenhofer, Head of the Energy Climate and Environment Programme at think tank the Centre for European Policy Studies (CEPS), believe that integration must go beyond energy to look to bring together separate infrastructures, perhaps most obviously energy and broadband, but why not also water and other resource flows to create “smart cities”.

The next milestone then for the SET Plan will be a dedicated conference in Luxembourg on 21-22 September, held back-to-back with the Luxembourg EU Presidency’s informal energy ministerial, co-organised by the incoming Presidency and the Commission. The Commission hopes to have its revised SET Plan out by then for discussion. If Brussels wants to deliver on an Energy Union for Europe – with all the benefits for growth, jobs and competitiveness – it will have to deliver an Energy Union (of sorts) in research.