Europe plans to boost competitiveness

EUROPE: A ten-year, EUR6 billion research and development (R&D) roadmap designed to help Europe's wind industry maintain a competitive edge has been launched by the Spanish presidency of the European Union.

The European Union aims to maintain the continent's technological lead

"Before, there was no funding and no vision and now we have both," says Nicolas Fichaux, head of the policy unit at the European Wind Energy Association (EWEA). "We know exactly where we want to go and have put the tools into place to implement that vision."

The European Wind Initiative (EWI) aims to ensure that Europe maintains its technological leadership in both onshore and offshore wind.

Other objectives are to make wind the most competitive energy source by 2020 and offshore wind the most competitive by 2030. It also aims to significantly increase the penetration of wind in Europe's electricity supply to 20% by 2020, 33% in 2030 and 50% in 2050 - up from about 5% today.

EWI will concentrate on four technology areas: new turbines and components; offshore technology; grid integration; and resource assessment and spatial planning. EWI was developed by the European Wind Energy Technology Platform (TPWind) in co-operation with the European Commission and EU member states.

TPWind is a network and R&D forum launched in 2006, comprising about 150 wind energy researchers and experts from major wind sector players in the EU. It is financed by the European Commission (EC) and co-ordinated by EWEA.

Priority areas

TPWind developed a wind energy roadmap for the first three years (2010-2012) of EWI, which will be revised and updated annually.

The 2010-2012 roadmap identifies 18 priority areas, including R&D activity involving turbines with rated capacity of 10-20MW; deep offshore technology; balancing technologies for large-scale wind power penetration and a European wind study on the socioeconomic value of wind energy in the EU.

EWI is one of four industrial initiatives launched in June as part of the EC's Strategic Energy Technology Plan (SET-plan), which aims to accelerate the development and deployment of cost-effective low-carbon technologies.

Others are solar energy, carbon capture and storage, and electricity grid initiatives. Two additional industrial programmes for bio-energy and fourth-generation nuclear reactors will be launched under the Belgian EU presidency in November, while one on energy efficiency in cities is set to be launched in 2011.

Last year, the EC said an extra EUR50 billion would be needed to finance the entire SET-plan over the next decade.

While vision is not lacking, in reality some of the financing details for both EWI and other initiatives still need to be worked out.

According to the broad financing agreement for EWI, roughly half of the budget is to be provided by the wind industry, with EU member states contributing about 20% and the EU set to foot the remainder of the bill.

While Fichaux says there are no concerns about financing from either the wind industry or EU member states, there are some issues with EU funding.

About EUR300 million will be needed from the EU to finance EWI from 2010-2012, says Fichaux.

The industry is pushing for funding from EU financing mechanisms, including the Seventh Framework Programme for R&D actions and European Investment Bank (EIB) R&D financing instruments.

Another source of funding is expected to be a new, specific EU budget category for SET-plan funding.

A 2011 draft EU budget had not yet allocated money to that budget item, although it is hoped that resources will be made available through this financing channel as the budget is finalised.

New players

Fichaux notes that not all member states will invest in all SET-plans.

"Member states do not have that much money to put into R&D and will make technology decisions," he notes.

Nonetheless, 15 member states have already expressed an interest in involvement and financing of the wind initiative.

The list includes not only established wind players, but also countries newer to wind energy, such as Lithuania and Poland.

Ben Caldecott, head of UK and EU climate change and energy policy at London-based investment advisors Climate Change Capital, believes the attempt of wind and other SET-plan initiatives to bring a co-ordinated approach to R&D in Europe is positive.

At the same time, Caldecott stresses that there are a few issues missing from discussions on the SET-plan, particularly on how the private sector can be involved in financing.

"It's brilliant as a way of bringing coherence to often disconnected efforts across the EU, but the real challenge is raising the private sector money to get to-scale deployment."

EWI and other SET-plan initiatives come as Europe's renewables sector is feeling the heat from international competitors. The biggest market is in China, then the US and Europe.

"In the US, most of the market is supported by European (wind) technology and this is true in China as well, but now we are competing against an innovative bloc in China and they are low cost," Caldecott says.

One objective of EWI is to maintain the best technology for the industry in Europe while bringing down costs.

Yet doing so may be more complicated than it appears at first glance. "Innovation and R&D are inherently complicated and unpredictable," notes Caldecott.

"The innovations created through the SET-plan could potentially be bought by non-European companies. It's just not that easy to predict or control the outcomes of R&D spending for a particular region given the complexities of globalisation."