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    12 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    12 STEPS TO GETTING MORE

    EFFECTIVE, MORE EFFICIENT

    ENERGY R&D POLICY

    Report of a Science|Business symposium

    The Energy Dierence

    Supported by

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    Hosted by

    Representation of the State ofBaden-Wrttemberg to the EU

    Supported by

    Words

    David Pringle

    Design

    Peter Koekoek

    Ed pdu

    Gail Edmondson

    Photography

    Bernard De Keyzer

    Science Business Publishing Ltd 2011

    www.sciencebusiness.net

    Figure 1 IEA data and analysis

    Figure 2 Global Wind Energy Council (GWEC) and country submission

    Figure 3 Country submissions, Kempener et al, 2010

    At the rst in a series of three high-level academic policydebates on the energy R&D challenge, The Energy

    D, twelve key ideas and recommendaons have

    emerged to beer leverage Europes research potenal and

    speed the development of new energy technologies.

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    12 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    The global energy system is changing. Governments around

    the world are seng ambious targets to reduce carbon

    emissions and shi to new sources of energy by 2050 to

    avert climate change and develop a secure energy supply.

    But will the billions of euros being channelled into energy

    research and development actually deliver new technologies

    and will the market embrace them? Only if policy makers

    understand what makes energy R&D dierent and what

    it will take to unlock a far-greater commitment by private

    industry to co-fund energy innovaon.

    On March 11, Science|Business held the rst in a series of

    three high-level academic policy symposia focused on theenergy R&D challenge, The Energy Dierence. It addressed

    the policy implicaons of the unique characteriscs of the

    energy market. The aim of the series, which is supported by

    BP, is to drive new thinking about how to speed new energy

    technologies to market.

    Most governments rely on the same policy toolkits for energy

    R&D as they do for computers, drugs or missiles. Thats a

    problem. Energy research is expensive, long-term and big-

    scale. And despite the risk and big investments in innovave

    new sources of energy, the nal product is a commodity, and

    markets are highly regulated.

    No maer how innovave the technology used to produce

    energy, the end result is the same. Unlike a ground-breaking

    semiconductor or soware applicaon, new energy sources

    cant aract a premium without ubiquitous carbon pricing.

    A new type of solar panel must produce electricity at a cost

    that is compeve with the massive installed base of fossil

    fuel plants.

    Without greater promise of market take-up and nancial

    reward, companies have lile incenve to pour billions into

    new energy technologies. The market structure is skewed

    against them. Its not simply a queson of rolling out a

    technology and leng the market adopt it, Philip Lowe,

    Director General for Energy at the European Commission, said

    in a keynote presentaon at the symposium. The market

    wont adopt it unless they have seen it reach levels of large-

    scale operaon at a compeve cost.

    This report summarizes the half-day of debate at the

    symposium and 12 key ideas and recommendaons to make

    energy R&D more eecve and to unlock the innovaonchain. While we quote some of our 40 roundtable guests in

    this report, we do not wish to imply they endorse all or any

    of the individual suggesons for change that we present

    here. Our list of recommendaons emerged from their lively

    engagement and the force of their ideas. The symposium took

    place in Brussels, at the EU Representaon of the German

    state of Baden-Wremberg.

    This series of energy symposia is taking place at a crical

    juncture. To execute its new Strategic Energy Technology (SET)

    Plan, the European Commission will need to nd fresh resources

    and channel them expertly. But public funds are scarce. AsPhilip Lowe, Director General for Energy at the European

    Commission, acknowledged in a keynote presentaon, the

    only thing missing from the SET Plan is where the money is

    coming from. This report aims to help policy makers answer

    that queson and the many others slowing the development

    of low-carbon technologies and alternave energy.

    12 STEPS TO GETTING MORE EFFECTIVE,

    MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    Report of a Science|Business symposium

    Figure 1 Incremental total primary energy supply in CEM and the world, 2000-08

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    412 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    Part 1 Mastering the complexity

    Adopt an integrated energy system modelling approach to inform the EU strategic choices

    Develop a systems approach to R&D policy that targets supply, distribuon and demand

    Conduct R&D on the best way to transion society to a more sustainable energy future

    Part 2 Removing the unseen barriers to investment

    Make carefully targeted intervenons to remove the specic barriers to each new

    technology

    Ensure that bureaucracy and overly complex rules do not block alternave energy opons

    Engage the highest-levels of government on how to transion Europe to a more

    sustainable energy economy

    Set an appropriate price for carbon emissions in the European Union Emissions Trading

    Scheme

    Give the private sector as much regulatory certainty and clarity as possible

    Part 3 Creang public-private partnerships that work

    Encourage policy-makers, businesses and universies to work together to develop

    naonal energy plans

    Streamline and simplify the processes around EU support for energy R&D

    Part 4 Finding new sources to fund energy R&D

    Consider funding new energy technologies through more innovave nancial instruments,

    such as debt-nancing and long-term venture capital

    Focus the EU on R&D projects that are too big and too risky for naon-states or

    companies, and enable the development of interconnected infrastructure and standards

    CONTENTS

    5

    8

    14

    17

    TWELVE STEPS TO A MORE EFFECTIVE EU ENERGY R&D POLICYConclusions of the Science|Business symposium

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    512 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    Build an integrated energy system model for Europe through 2050

    Building a comprehensive model for a transformed future energy economy is vital

    to making the right R&D investments. It also gives private companies greater clarity

    and incenve to pursue new technologies. Brish policy makers and industry

    execuves at the UK Energy Technologies Instute (ETI) gained important insights

    from a detailed modelling of the UK energy market which revealed, for example,

    that biomass could be crical to meeng the countrys emission reducon goals.

    The ETI, a partnership between internaonal companies and the UK governmentto accelerate the development of new energy technologies, is reviewing its

    investment strategy to reect the model results.

    Some 175 energy technologies and 20 major distribuon nodes were built into

    the ETIs model, which started with the premise of 80% lower emissions by 2050

    and worked backwards. A similar Europe-wide model could enable policy makers

    to cut through the complexity and gure out which alternave sources of energy

    to priorize. The European Commission has already started drawing a roadmap

    to 2050 including an energy-migraon strategy, which should be completed by

    year end. The next step would be connecng that strategy to detailed R&D in

    the Commissions next, mul-annual funding iniave, the successor to the 7th

    Framework Programme.

    Idea

    1

    Part I Mastering the Complexity

    The European energy market is tremendously complex. So

    complex, in fact, that even experts dont fully understand how

    it works. That makes it tough for policy makers to gure out

    which levers will be the most eecve in achieving the EU goal

    of reducing greenhouse gas emissions by 80 per cent between

    1990 and 2050.

    New energy technologies, parcularly those based on

    renewables with inherent variability in supply, add to the

    complexity and are likely to require new market mechanisms.

    The design of these mechanisms will require considerable

    research.

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    12 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    Develop a systems approach to R&D

    Now that the EU has determined its energy technology priories, policy makers

    should take a systems perspecve. That means considering how the power,

    heat and transport sectors interact, and within this energy ecosystem, how the

    supply, distribuon and demand factors interact. They then need to come up with

    appropriate incenves and rules to move the whole system in the right direcon.

    Systems thinking also requires policy-makers to implement energy policies in a

    coherent way across all branches of government. On the demand side, for example,electricity regulators could do more to set taris and rules that encourage electricity

    companies to tap new sources of energy, rather than just the cheapest. On the supply

    side, governments may need to change their planning regulaons. Much more work

    is required to address the demand side, which remains relavely unexplored in an

    energy context.

    From the symposium discussion:

    Richard Templer, Hofmann Professor of Chemistry, and

    D P Isu Susb B

    Research at Imperial College London; Director of UK Co-

    C Cm KIC, Eup Isu

    I d T: Frankly Europe needs to raise

    the level of investment and lower the bureaucrac hurdles

    to trialing and implemenng new technologies.

    Tim Foxon, UK Research Councils Academic Research

    Fw Susb Rs Isu, Us

    of Leeds: Policy makers need to consider carefully how the

    forces of supply and demand interact. Although the early

    decarbonisaon of the electricity sector, for example, is

    key to enabling the deployment of low-emission electrictransport, the electricity sector has tradionally oered

    low returns on investment, so there is lile incenve to

    invest in risky R&D.

    Cdu R&D bs w s s

    energies

    One of the biggest challenges faced by some low-carbon technologies is social

    acceptance. Even so-called clean technologies face vocal opposion. In some

    European countries, wind farms have been blocked by rural communies protesng

    about the aesthec impact of towering turbines on the landscape. The commercial

    deployment of promising new energy technologies in democrac countries risks

    being delayed for years by public consultaon and legal wrangles over the locaon

    of the necessary infrastructure. So, governments need to gure out how to convince

    their cizens to accept the need for new energy sources.

    Europe needs a clear and tangible vision of its energy future which cizens can

    believe in and rally around. A comprehensive model would help overcome naonal

    and local resistance to renewable energies. At present, cizens do not see a coherent

    vision of Europes energy future, but a piecemeal view of an uncoordinated future.

    Idea

    2

    Idea

    3

    Richard Templer, Imperial College London/EIT

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    12 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    From the symposium discussion:

    Gerhard Stryi-Hipp, head of energy policy and group leader of

    s m s d pps, Fu Isu

    Solar Energy Systems: We dont just need R&D in technology. We

    also have to do R&D on the transion itself, as it is a huge challenge

    we face to have the transion of our energy systemwe have to

    work on planning, risk scenarios, social acceptance and develop

    business models to make this happen.

    Gerhard Stryi-Hipp, Fraunhofer Instute for Solar Energy Systems

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    812 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    Governments need to nd a way to channel limited public

    funds into energy technologies that hold the greatest promise,

    and, at the same me, encourage private industry to co-

    invest. Leng governments pick winners is controversial.

    Billions in taxpayer money has been wasted propping up

    uncompeve industrial sectors or companies over the years.

    But most experts believe some form of public sector intervenon

    Mk u d s m sp bs d b pms

    new technology

    Although Europe is awash with grants and subsidies designed to encourage the development and usage of

    renewable energy, these intervenons need to be much more precise and focused. In essence, public money

    should be used to remove a clearly-dened and specic barrier, rather than to provide life-support to unviable

    technologies.

    Ideally, policy makers responsible for choosing which new technologies receive public funding should tap expert

    knowledge from academia, research and business. One way the EU is aempng to do that is through the

    European Instute of Innovaon and Technology, which is rolling out Knowledge and Innovaon Communies

    (KICs) to bring together actors from R&D, industry and educaon. The KIC InnoEnergy, launched in December

    2009, has projects running across a wide range of alternave energies.

    Funded by the UK government, the Carbon Trust provides specialist support to business and the public sector to

    help cut carbon emissions, save energy, and commercialise low-carbon technologies. It works to open markets forlow-carbon technologies, leads industry collaboraons to commercialise technologies, and invests in early-stage

    low-carbon companies.

    is the only way to make new sources of power compeve

    with that generated by exisng fossil-fuel driven power plants.

    Moreover, the complexity of the energy industry, combined

    with the uncertainty surrounding many new technologies,

    means that it is dicult to get clear signals from the market

    about which new sources of power hold the most long-term

    promise.

    Idea

    1

    Part 2 Removing the unseen barriers to investment

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    12 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    From the symposium discussion:

    Pu Jss, d p, BP up s d p

    team: What many support mechanisms have failed to do is

    to dierenate between the barriers dierent technologies

    faceWe need to be more discriminang about the way

    in which we deploy innovaon subsidies. Very highly-

    targeted, dierenated technology accelerators can be fast

    and cost-eecve.

    Philip Lowe, Director General, DG Energy, European

    Commission: Because of the catch-up need for investment,

    it looks inevitable that governments will be tempted and will

    be pushed by their industries into providing, at least in the

    short-term, either some explicit subsidy, as in renewables,

    or implicit subsidy, such as long-term regulated prices, to

    suppliers in order for them to start invesng. But there

    is a danger in the longer-term because if governments

    repossess the control of the wholesale market in energy,

    they will, in the end, kill the goose that is laying the golden

    eggNormally speaking, when you have a market failureand you need to correct it, you do so by giving a short-term

    window of support and then closing it when you believe

    you are on the way to achieving the objecve.

    K-Fd Z, m, Gm C-

    C Kwd d I Cmmu (KIC)

    InnoEnergy; and programme manager, renewable

    s d , Ksu Isu Technology: We do work on photovoltaic panels, smart

    grids, clean coal, on the convergence of nuclear and

    renewable energies, on chemical fuels. We feel there is a

    huge opportunity to secure energy from chemical fuels:

    whether these chemical fuels are based on biomass,

    we have the storage and the distribuon capacity for

    chemical fuels all over Europe, as we have good exisng

    infrastructure the gas grid, for example.

    Philip Lowe, European Commission

    Karl-Friedrich Ziegahn, Karlsruhe Instute of Technology

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    12 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    From the symposium discussion:

    Reinhilde Veugelers, professor of economics at KU

    Leuven and a research fellow at Bruegel: Europe isnt a

    global leader in renewable energy research. The EU is not

    a frontrunner, with the excepon of Germany, which is the

    strongest player, along with the US and Japan. China and

    Korea are making big jumps too, she said.

    David Eyton, group head of research and technology

    at BP: There is compeon between the major trading

    blocks in the worldAnd I would characterise, to date,

    the complexity of trying to do R&D under the European

    Framework Programme as having been something of a

    block for BP to invest.

    Ensure that bureaucracy and a labyrinth of rules are not blocking investments in

    R&D

    One of the reasons that Europe lags behind the US and parts of Asia in the development of alternave energies

    is the complexity of doing business in the EU. While alternave energy investors in Europe may need to navigate

    their way through EU, naonal and regional regulaons, some Asian countries have a highly-centralised approach,

    enabling the fast deployment of both demonstraon and commercial power plants. China is moving quickly to

    deploy alternave energy technologies, enabling it to massively expand its wind power capacity, for example, in

    the past three years.

    Idea

    2

    Figure 2 China and Indias growth in wind power capacity

    David Eyton, BP

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    12 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    From the symposium discussion:

    Tom Kerr, senior energy analyst at the IEA: We need

    to move away from the noon in this area that there

    is this invisible hand of the market that will take care

    of it, he said. Energy policy needs to be driven by

    the highest levels of government and be based on a

    strategic plan developed in partnership with business

    sing as equals at the table.

    S Z, pss u mms dsss, H-W Us: There is presently

    insucient economic incenve to invest rapidly in the

    technologies required for clean energy. This is because

    the benets of such do not accrue to those required

    to make the investments. The natural economic

    mechanism is a suciently high carbon price, but

    this, or other equivalent economic incenves, require

    internaonal agreement, making it dicult to formulate

    European policy without such agreement.

    Psud s s m mp

    energy R&D

    Bringing about the massive changes required to transform the energy landscape

    depends on presidents and prime ministers expending polical capital to champion

    those changes. The Internaonal Energy Agency, for example, blames the slow progress

    towards a low-carbon economy partly on a lack of polical leadership worldwide.

    Idea

    3

    Set a higher price for carbon emissions in the European Unions Emis-

    sion Trading Scheme

    Launched in 2005, the European Union Emission Trading Scheme is designed to reduce

    Europes use of fossil fuels by seng a cap on overall CO emissions. Under the scheme,

    large emiers such as power plants and carbon-intensive factories must obtain permits

    to emit each tonne of CO. Companies lacking sucient permits can either reduce

    emissions or trade with other companies that have an excess allowance, seng a

    market price for carbon. But the scheme has been cricised for handing out overly-

    generous free permits, and seng emissions limits too high, resulng in the carbonprice being too low to encourage big emiers to switch to cleaner energy sources.

    In addion, economic recession has reduced emissions, resulng in a lower carbon

    market price than is needed to make many renewable energy sources cost compeve.

    Responding to these cricisms, the EU lowered the ETS Phase II emissions cap by 6 per

    cent for the trading period 2008-2012. The Commission is planning addional changes

    with the launch of ETS Phase III in 2013, when 60% of the permits will be auconed,

    compared with less than 4 per cent today.

    Idea

    4

    Tom Kerr, IEA

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    12 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    From the symposium discussion:

    Reinhilde Veugelers, professor of economics at KU

    Leuven and a research fellow at Bruegel: The European

    Union Emissions Trading Scheme is a ground-breaking

    instrument. But the scheme needs to put a signicantly

    higher price on carbon to incenvise more research.

    The amount of money required for grants and

    subsidies would be much smaller with a strong carbon

    price.

    Give the private sector as much certainty and clarity as possible

    As it can take a decade to get a major new power plant up and running, energy

    investors have to make long-term bets, which involve signicant risks. The higher

    the risk, the greater the return investors expect. One of the most signicant risks

    in the energy market is the danger that government policies will change, making

    specic energy sources more or less compeve. For that reason, policy makers

    need to make clear long-term commitments to alternave energy that will lower

    the risks and the returns threshold for investment by the private sector.

    Idea

    5

    Reinhilde Veugelers, KU Leuven/Bruegel

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    The Energy Dierence

    From the symposium discussion:

    Philip Lowe, Director General, DG Energy, European

    Commission:The Commissions roadmap to 2050 is designed

    to give industry a clearer view of what lies ahead and reduce

    uncertainty. Uncertaines both in Europe and globally have

    meant that there has been an underinvestment both in

    energy generaon and networks.

    Gerhard Stryi-Hipp, head of energy policy and group leader

    s m s d pps, Fu

    Isu S E Ssms: World-class R&Drequires connuity in working on specic topics and can

    only be achieved if R&D programmes are predictable and

    dedicated to specic R&D topics. Stop-and-go support

    policy and constantly changing priories inhibit Europes

    R&D capacity.

    Philip Lowe, European Commission

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    1412 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    The EU Framework Research programme has been widely

    cricised for creang unwieldy public-private consora. Will

    the European Commissions Strategic Energy Technology Plan

    take a smarter approach? The SET Plan envisions naonal

    governments and companies teaming up in industry-led

    consora (European Industrial Iniaves) to nance large-

    scale demonstraon projects of next-generaon technologies

    in solar energy, biofuels, wind energy, smart grids (including

    energy storage technologies) and carbon capture and storage.Realiscally, given the crippling budget decits of many

    European governments, the private sector, and in parcular

    From the symposium discussion:

    Luc Soete, director of UNU-MERIT and professor of inter-

    ms Fu Ems d Bus-

    ss Adms, Ms Us: Most of the re-

    search outcomes have probably been realised rst outside of

    Europe, despite the fact that the research was carried out inEurope. Developing countries, such as China, India and Bra-

    zil, are sll building out their energy infrastructure, so their

    energy policies are not as constrained as those in Europe by

    large sunk costs.

    large energy companies, will be vital to funding the SET Plans

    ambious demonstraon projects. That puts an even larger

    burden on policy makers to ensure that the new public-private

    model ences industry.

    For now, symposium parcipants noted, the energy R&D

    landscape in Europe remains less aracve for private

    companies than that in Asia and the US. Although many global

    energy companies carry out large-scale research, experts saythey are invesng the lions share of that money outside the EU.

    Part 3 Creang public-private partnerships that work

    Luc Soete, UNU-MERIT/Maastricht University

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    1512 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    Encourage policy makers and businesses to work together as

    qus dp ps

    Ambious new naonal energy plans developed without the knowledge and

    experience of the private sector are unlikely to work. Governments need to nd

    ways to movate companies to lend their experse and provide meaningful

    input. Experts say the best way to do that is to treat business as an equal partner,

    in non-bureaucrac structures, so interacons between the private and public

    sectors are both fast and ecient.

    Idea

    1

    From the symposium discussion:

    Matjaz Malgaj, deputy head of cabinet for Janez

    Pk, Cmmss Em, Eup-

    an Commission: The SET plan is a response to the way

    research is organized in the EU and its member states

    which was not up to addressing the big energy chal-

    lengeSET is a very open model. It is not a Soviet plan.It is based on cooperaon and compeon.

    Streamline and simplify the processes around EU support for

    energy R&D

    One major obstacle for any new technology is aracng nancial backing

    during the so-called valley of death between fundamental research and the

    launch of commercial products. Experts say the EU, in parcular, doesnt have a

    strong track record in commercialising its energy research. Entrepreneurs oen

    complain that the connents venture capital industry is sub-scale and short-

    term, while public money requires applicants to jump through lots of hoops and

    comes with endless strings aached.

    The Commission is trying to help tackle this perennial problem by bringing its

    programmes supporng research and innovaon together under a Common

    Strategic Framework, so that applicants for EU funding face less bureaucracy

    and can nd support at each stage of the innovaon cycle. The EUs new SET Plan

    and its cornerstone European Industrial Iniaves programme was designed

    to address this problem and ensure innovave new energy technologies are

    brought successfully from laboratory to market.

    Idea

    2

    Matjaz Malgaj, European Commission

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    12 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    David Eyton, group head of research and

    technology at BP: While Europe has made good

    progress in some areas of energy research, such

    as nuclear technology, the complexity of trying to

    do R&D in Europe can be too great. It is highly

    compeve in Americawhile the Chinese can

    experiment at scale fairly cheaply and very quickly,so if you are looking for pace and cost-eecveness,

    China is very compeve.

    Gerhard Stryi-Hipp, head of energy policy and

    group leader of solar thermal collectors and

    pps, Fu Isu S

    Energy Systems: Reduce the process me from

    applicaon to the start of R&D projects. Innovaon

    needs exibility and quick reacons. To develop

    solid proposals for project applicaons needs me

    and the process must be transparent and fair.

    But sll there is room to accelerate the process

    between proposal submission and project start.

    The European Research Councils processes could

    serve as an example.

    From the symposium discussion:

    Marie C. Donnelly, director of new and renewable ener-

    s d , DG E, Eup Cmmss:

    The Commissions research and innovaon programmes

    are being streamlined and simplied to speed up the pro-

    cess of securing funding. At the moment, you have to go

    through three dierent programmes and this doesnt make

    sense. We have to have connuity from blue-skies research

    to delivery. However, it isnt the role of the public sector

    to actually commercialize research.

    Raymond Schonfeld, managing director Single Market

    Ventures: The Key Enabling Technologies (KET) pro-

    gramme of the European Commission, which contains

    explicit linkages to the energy sector, has idened the

    valley of death as potenally the most important single

    obstacle to wide-ranging EU-level progress in advanced

    technologies. Public policy has a role to play in what the

    KET programme High-Level Group dened as bridging the

    valley .

    Marie C. Donnelly, European Commission

    David Eyton, BP

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    The Energy Dierence

    Part 4 Finding new sources of funding for energy R&D

    At a me when public money is in short supply, how will Europe

    fund the R&D required to hit the EUs emission reducon

    targets? The Internaonal Energy Agency esmates that $10

    billion a year is currently spent on energy R&D worldwide by

    governments and companies, but that gure needs to rise to

    between $40 billion to $90 billion a year to hit the 2050 goals.

    The agency believes governments will have to stump up about

    half of this cash.

    Europes SET Plan calls for an addional 50 billion to be

    invested in R&D and related technology demonstraon over the

    next decade. In its roadmap seng out how to achieve the 80%

    goal, published in March 2011, the Commission argued that full

    implementaon of SET is indispensable. But concrete funding

    for the ambious plan has not yet materialised.

    Figure 3 Pub spd wb RD&D (2010 USD m)

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    1812 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    From the symposium discussion:

    Lu S, d UNU-MERIT d pss m s Fu Ems d

    Busss Adms, Ms Us: One of the specialisaons of Europe, one of our characteriscs, one of

    our endowments, is the enormously large savings our ageing populaons are pung together, he, pointed out. Thank

    God there is a need for a trillion dollars investment in energy infrastructure, which is beer than invesng in sub-prime

    mortgages in the US. The fundamental challenge is: how do we re-allocate this huge amount of savings into investments?

    Csd ud R&D u m

    sums

    Policy makers need to look beyond subsidies and grants to more

    innovave nancial instruments, such as debt-nancing and long-

    term venture capital, to support the development of alternave

    energy. Such instruments could be used to harness a greater

    proporon of the substanal savings of Europes ageing populaon.

    Idea

    1

    Anil Sethi, CEO of Switzerlands Flisom, a start-up which

    dps xb s ps: We are in clean energy and

    venture capitalists dont really understand how to support

    start-ups like oursIt is in commercializing the research

    where [Europe] gets stuck.

    Philip Lowe, Director General, DG Energy, European

    Commission: The only thing missing from the SET plan is the

    source of funding. We have a fairly good idea of where the

    money is coming from for 2011 and 2012, but we have gotto go further than that to look see what kind of commitment

    we can make beyond 2013...Im disappointed to see the

    US, China and even India, on various indices, spending

    more in some areas of energy research than the European

    Union over the past few yearsThe SET plan needs to

    aract, not just the very small amount of EU money (from

    the Framework Programme), but also greater focus from

    naonal research organisaons. I think that is possible, but

    it remains a challenge, he added.

    Anil Sethi, Flisom

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    19

    12 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    Focus the EU on R&D projects that are too big and too risky for

    individual member states or companies

    How much energy R&D should be done at the EU level? Europes diverse geography

    means that few alternave energy sources can be deployed across the connent.

    While Denmark and Scotland might want EU funds devoted to R&D into improving

    wind turbines, Greece and Portugal would probably prefer EU money to be spent

    on nding ways to make solar panels more ecient. Moreover, some European

    countries, notably Germany, are already carrying out their own large-scale R&D.

    So, is it me for the EU to take a step back? The EU instuons could concentrate

    solely on those projects that are too big and too risky to be undertaken by any

    one country or company alone, such as nuclear R&D and carbon capture and

    storage demonstraon projects, and those which enable the development of

    interconnected infrastructure. EU policy makers should also look for opportunies

    to harmonise policies around Europe and standardise key technologies, such as

    power standards, to help generate scale and eciency. In this way, the EU could

    help shape the alternave energy market in the same way it guided the early

    development of the highly-successful GSM mobile phone networks.

    One of the primary roles of EU policy makers is framing the big picture. The role of

    the EU instuons is to draw up a clear policy framework that will give the energyindustry the long-term certainty and connuity it needs to invest in alternave

    sources of energy, which can take decades to deploy.

    Idea

    2

    Bruno Schmitz, head of unit, new and renewable energy

    sus DG Rs d I, Eup

    Commission: Successful EU intervenons under the SET

    Plan include pushing for a step change in technological

    development, for example, persuading the wind industryto shi o-shore. There are a number of issues that go

    beyond what companies can do and this is what we would

    like to put under the SET umbrella, he added. But we

    need to nd money to fund some of these acvies or we

    risk losing momentum.

    Bruno Schmitz, European Commission

    The next Energy Dierence symposium takes place June 28 in Brussels: The

    E R&D Rdmp: T Cs Nx-G Bus. Send an email to

    [email protected] if you would like a copy of the resulng report emailed to

    you.

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    20

    12 STEPS TO GETTING MORE EFFECTIVE, MORE EFFICIENT ENERGY R&D

    The Energy Dierence

    Greg Arrowsmith, Policy Ocer, European Renewable Energy Centres Agency

    Henrik Bindslev,Chairman, European Energy Research Alliance; and Directorof the Naonal Laboratory for Sustainable Energy,

    Technical University of DenmarkHoward Chase, Director, European Government Aairs, BP

    Frank Convery, Heritage Trust Professor, Environmental Policy; and Director, Urban Instute Ireland, University College Dublin

    Lauren Culver, Energy ocer, United States Mission to the European UnionWW

    Tom De Rybel, Post-Doctoral Fellow, K.U. Leuven

    Marie Donnelly, Director, New and Renewable Sources of Energy, Energy Eciency and Innovaon, DG Energy, European

    Commission

    Gail Edmondson, Editorial Director, Science|Business

    David Eyton, Group Head, Research and Technology, BP

    Tim Foxon, Research Councils UK Academic Research Fellow, Sustainability Research Instute, University of Leeds

    Thomas Hringer, Deputy Director, Permanent Representaon of the State of Baden-Wremberg to the European Union

    Meryl Hicks, Execuve Assistant to Group Head of Research and Technology, BP

    Richard L. Hudson, CEO & Editor, Science|Business

    Pu Jss, Head of Policy, BP Group Strategy and Policy Team, BP

    Tom Kerr, Senior Energy Analyst, Internaonal Energy Agency; and author of recent book, Gaps in Clean Energy R&D

    Hubert Lemmens, Chief Ocer, Grid Services, Elia Group; and Coordinator, European Wind Integraon Study

    Philip Lowe, Director-General, DG Energy, European Commission

    Matjaz Malgaj, Deputy Head, Cabinet of Janez Potonik, Commissioner for the Environment, European Commission

    Francis McGowan, Senior Lecturer, Polics, Sussex Energy Group, University of Sussex

    Andrew Mennear, Director, Polical Analysis & Trade, Group Strategy & Policy, BP

    Joerg Nellen, EU Representave for Energy, German Aerospace Centre

    David Pringle, Correspondent (and Rapporteur), Science|Business

    Wiktor Raldow, Head of Unit, Energy Conversion and Distribuon Systems, DG Research, European Commission

    Jens Rostrup-Nielsen, Member, Scienc Council, European Research Council Execuve Agency

    Bruno Schmitz, Head of Unit New and Renewable Energy Resources, DG Research, European Commission

    Raymond Schonfeld, Managing Director, Single Market Ventures

    Koen Schoots, Researcher, Policy Studies Unit, Energy Research Centre of the Netherlands (ECN)

    Anil Sethi, CEO, Flisom

    Luc Soete, Director, UNU-MERIT; and Professor of Internaonal Economics, Faculty of Economics and Business Administraon,Maastricht University; and Member of the European Research Area Board

    Robert Sorrell, Vice-President for Public Partnerships, Research & Technology, BP

    Gerhard Stryi-Hipp, Head, Energy Policy, Fraunhofer Instute for Solar Energy Systems; and President of the European

    Technology Plaorm on Renewable Heang and Cooling

    Richard Templer, Hofmann Chair, Chemistry; and Director of the Porter Instute for Sustainable Bioenergy Research at Imperial

    College London; Director of UK Co-locaon Centre for Climate KIC, European Instute of Innovaon and Technology

    Sinan Tumer, Head of Internaonal Research Policy, SAP Research

    Reinhilde Veugelers, Professor, Economics, KU Leuven; and Senior Fellow, Breugel

    Stan Zachary, Professor, Department of Actuarial Mathemacs and Stascs, Heriot-Wa University

    Nicolai Zarganis, Director, Danish Energy Agency; and Chairman of the Board, Nordic Energy Research

    Karl-Friedrich Ziegahn, Programme Manager, Renewable Energies and Ecient Energy, Karlsruhe Instute of Technology; and

    Chairman, KIC InnoEnergy, European Instute of Innovaon and Technology

    The Energy Difference - Accelerating Energy Innovation

    Pps S|Busss smpsum

    11 M 2011, Rps S Bd-Wmb EU

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