Recovery budget will fire up green energy research

EU energy commissioner Kadri Simson says the EU's historic €1.8 trillion spending package, which includes the €750 billion recovery fund, will provide the firepower for a research and innovation push towards more clean energy.

With 37 per cent of the recovery package allocated to green spending, “this will be the biggest instrument to finance the green transition over the next few years, and a significant proportion of that investment will be going to clean energy,” Simson told the 14th SET Plan conference, held earlier this week.

Simson said the European Commission will seek to ensure EU member states’ national recovery plans align with the goals of the Strategic Energy Technology (SET) Plan, an EU framework set up in 2008 to help member states coordinate the development of energy technologies and set out goals for deploying them.

The conference outlined how the SET Plan will contribute to the Green Deal, as a driver of the EU recovery, and more specifically how it will support three main European energy policy initiatives, in energy system integration and hydrogen power; offshore renewable energy; and the ‘renovation wave’ that launched last month with the aim of refurbishing and improving Europe’s building stock to make buildings more energy efficient.

Ditte Juul Jørgensen, the chief of DG Energy at the European Commission told the conference more funding is needed because currently public and private investment in clean energy innovation is decreasing. To meet the EU climate targets, spending must increase by €350 billion a year compared to investments over the last decade, she said.

To inject some momentum, member states have been asked to say how research and innovation funding they get from the recovery fund will align with the SET Plan, an EU official told Science|Business. As an extra step, Simson also called on the SET Plan government representative groups to get in touch with their counterparts working on the recovery plans to ensure everyone is pulling together.

For Belgium, the SET Plan is the guiding framework for energy policy. However, investing in clean energy means choosing a long-term vision, which is difficult in the current economic climate, said the country’s energy minister, Tinne Van der Straeten.

She believes the recovery package could offer a solution. “For Belgium, the recovery package is indeed a unique opportunity to stimulate clean energy investments to reach a climate neutral society in a post-competitive way,” said Van der Straeten.

However, as things stand, long-term energy investments under the plan are still few. According to a report released by the Joint Research Council (JRC) this week, only 10 per cent of the current SET Plan R&I projects meet long term priorities for beyond 2025.

SET Plan coming to life

The SET Plan was adopted in 2008 as the first step in establishing an EU energy union. It set out six initiatives in areas including wind, solar, bioenergy, electricity grid, and carbon capture and storage. The original plan envisioned twelve demonstrator projects to be launched by 2015, proving the usefulness of the technology, however, the plans never came to fruition.

In 2015, the commission revised the SET Plan. Now, it sets out 107 targets across thirteen energy-related areas from batteries to energy efficiency in buildings. All member states have shown support for the initiative and have jointy launched 143 R&I activities to meet its targets.

One of the biggest joint projects is the upcoming Clean Energy Transition public-private partnership, which promises to enable collaborative research on a regional, national and global level, powered by industry, public sector and citizens‘ organisations. It will work in a complementary way to the member state national plans, said Patrick Child, deputy director general at DG Research.

The JRC reports suggests 88 per cent of priority activities for 2020-2021 are already being tackled by ongoing R&I projects, while the remainder will be addressed by projects expected to take-off in the near future.

But there is are still few links between EU level initiatives and national activities. “Member states and their national energy and climate plans have supported the SET plan, but we can see there is still room for improvement in objectives and funding targets for research and innovation,” said Jørgensen.

Moreover, when it comes to the SET Plan’s implementation strategies, nine out of the thirteen areas need revisions, according to the JRC report.

The commission is now amending the goals of the programme. In its proposal for an offshore energy strategy last week, the commission said it would review the SET Plan targets for ocean energy and offshore wind and launch a new group on high-voltage direct current technologies that allow bulk transmission of electricity.

There has also been talk of a group on hydrogen energy. However, with member states, including Germany and France, organising their own efforts to launch a hydrogen economy, it is unclear whether such a group will be needed.

All this will be discussed with member states in the next steering group meeting by the end of the year.

Money cannot fix all problems

Research and innovation is one of the economic areas that requires a constant push, Simson told the conference. Simply upping investment may not be enough to ensure a smooth energy transition.

The commission’s new industrial strategy suggests that Europe should shorten its supply chains in the energy sector to bring industry back to Europe. The same strategy could be extended to batteries, cooling, heating, and other parts of the energy sector Simson said. This way, innovation could accelerate the energy transition and simultaneously boost competitiveness. “[…] There is a strong link between research, innovation and competitiveness, and first movers’ advantage is always based on innovation,” said Simson.

Andreas Feicht, state secretary at Germany’s Federal Ministry for Economic Affairs and Energy, noted the EU already spends “enormous amounts” on new technologies. For example, in Germany’s €140 billion recovery package, €50 billion is dedicate to new technology.

However, investing more is not enough, there is a need for smarter regulation and for infrastructure, said Feicht. One case in point is a CO2 pricing system. “We should have a CO2 pricing system, from my point of view, for the mobility and heating sector at the European level that would show people that energy efficiency can be worth it, that investments are needed in new technologies and that we have a stable regulatory framework,” he said, adding that where such a system exists, it has already provided benefits.

Feicht is also hopeful about China’s plans to eliminate green gas emissions by 2060 and the new US administration’s greener agenda. With the green transition becoming increasingly important around the world, new opportunities will arise for Europe.