ETC Energy Projects – 58 ETC Pro- Grammes Assessing the Contribution of European Territorial Cooperation to EU Energy Policy

424 energy projects from ETC Energy Projects – 58 ETC programmes Assessing the Contribution of European Territorial Cooperation to EU Energy Policy

INTERACT is co-financed by the European Regional Development Fund (ERDF) | European Territorial Cooperation

ETC Energy Projects – Assessing the Contribution of European Territorial Cooperation to EU Energy Policy

INTERACT is co-financed by the European Regional Development Fund (ERDF) | European Territorial Cooperation Table of contents

Executive summary 1 4.2.9 Energy efficiency and renewable energy in businesses and industry 113 Context and background 4.2.10 Energy self-sufficiency 117 4.2.11 Energy infrastructure and energy 1.1 EU Energy Policy 14 management 122 1.1.1 20-20-20 Energy Targets 15 1.1.2 Energy strategy post-2020 15 4.3 Difference between strands 128 4.3.1 Average size of the partnership and typical 1.2 Energy in EU Regional Policy 16 types of partners 129 1.2.1 Programme period 2014 – 2020 16 4.3.2 Average partner budget 129 4.3.3 Typical project themes, activities Objectives and scope and outputs 129

2.1 Research questions 18 Conclusions and recommendations

Method 5.1 Discussion of methodology 134 5.2 Discussion of research questions 135 3.1 Sample 19 5.3 Outlook 147 3.1.1 Definition energy project 19 3.1.2 Data collection 20 Annexes

3.2 Data analysis 20 Annex 1 – Overview of analysed 3.2.1 Content analysis 20 programmes 148 3.2.2 Classification scheme 22 Annex 2 – Statistical evaluation of 3.2.3 Data exploration 25 differences between programme strands 149 3.2.4 Data limitations and methodological bias 26 Annex 3 – Concept map of categories 152

3.3 Data evaluation 29 Bibliography 154 3.3.1 Network graphs 29 3.3.2 Statistical evaluation 30

Results and discussion

4.1 Project main and sub-objective categories 31 4.1.1 Project main objective categories 31 4.1.2 Promoting the use of renewable energy category 31 4.1.3 Increasing energy efficiency category 35 4.1.4 Project sub-objective categories 39 4.1.5 Target groups 55 4.1.6 Beneficiaries 57

4.2 Activities and outputs per project main objective 58 4.2.1 Biomass 59 4.2.2 Solar power 68 4.2.3 Wind power 71 List of Abbreviations 4.2.4 Geothermal power 76 ETC … European Territorial Cooperation 4.2.5 Hydro power 81 EE … energy efficiency 4.2.6 Wave and tidal power 85 Mtoe … Mega tonne of oil equivalent 4.2.7 Energy efficiency and renewable energy (1 Mtoe = 41,868,000,000 GJ = 1,1630 GWh) in buildings and cities 89 MS … Member States 4.2.8 Energy efficiency and renewable energy RES … renewable energy source in transportation 101 SME … small and medium-size enterprise Executive summary

Objective and scope

In this study, we set out to investigate the contribution The core of the publication is organised around 11 chapters of European Territorial Cooperation (ETC) projects from or fact sheets: the 2007 – 2013 programme period to European targets in the area of energy efficiency and renewable energy, by energy from biomass analysing how these topics feature in programmes and projects in the current period, and by putting findings into their policy context. solar power In our analysis, we were guided by the following research questions:

—— In which areas pertinent to the field of energy efficiency wind power and renewable energy are ETC energy projects active, and how well are projects grounded in policy developments in the field? —— Based on the existing stock of projects and identified geothermal power barriers to increased energy efficiency and a wider deployment of renewable energy technologies, in which areas would it make sense to intensify efforts in the coming period? hydro power —— What are typical activities carried out and outputs produced in ETC energy projects, and how well are they oriented towards an existing need for measures in the field? wave and tidal power —— What are currently unexploited synergies between programmes and within thematic clusters of projects, and how could ETC make better use of them? —— Who are typical project beneficiaries and target groups energy efficiency and renewable energy in ETC energy projects? Are relevant and desirable in buildings and urban areas project partners currently underrepresented or missing in ETC projects? —— What are the differences between programme strands energy efficiency and renewable energy and how can they be explained? in transportation

The study primarily targets ETC actors from all strands (national/regional authorities, programme management energy efficiency and renewable energy bodies, projects), European Funds addressing energy top- in businesses and industry ics, and EU institutions concerned with regional policy, energy and climate change. For them, this study serves as a comprehensive reference work, providing targeted infor- energy self-sufficiency mation on all energy-related topics pertinent to ETC, and as an inspirational source for programming, project quality assessment, inter-programme capitalisation, ex-post evaluation, etc. energy infrastructure and energy management.

Thus, rather than showcasing ETC achievements of the 2007 – 2013 period, this report serves as a single entry point to the topic of Energy in European Territorial Coop- Each chapter provides an overview on existing tech- eration, to be actively used as a source of reference and nologies, policies and barriers to EE and RES, and sets knowledge. It also enables ETC programmes to create links out how they are addressed in ETC energy projects. The and identify synergies among programmes, across strands most common, but also unique, activities and outputs per and with other European funding instruments (e.g., Hori- energy topic are presented and illustrated with many project zon 2020, etc.) and initiatives. examples.

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Results

We identified 424 projects1 from 58 ETC programmes that Accessing project information proved difficult for some work on topics pertinent to the fields of energy efficiency programmes, in particular where no English version of the and renewable energy. About EUR 1.2 billion of national programme website was available, or where only the min- and ERDF-funding, or EUR 680 million of ERDF co-fi- imum required information about approved projects was nancing2, can be linked to ETC energy projects, benefiting published. The amount of publicly-available information around 2,800 project partners across Europe. per project varied considerably and determined the level of detail a project could be categorised at. Systematic dif- Based on a textual analysis of project descriptions re- ferences existed between programmes (depending on how trieved from programme and project websites, we mapped much information on each project is published by the pro- projects with regard to their main objectives, sub-objec- gramme and whether information on the project progress tives, activities, outputs and target groups, using a set of is regularly updated) and random differences between 232 categories and assigning each project partner to one of projects (depending on how active a project is in maintain- 10 beneficiary categories (c.f. Annex 3). The classification ing and updating its project website). Uniform minimum system is non-hierarchical to account, for example, for the standards3 regarding the type and depth of information fact that many projects are concerned with both energy published per project on programmes’ websites would not efficiency and renewable energy-related themes, and to only facilitate studies such as ours, but also help commu- allow for a high degree of differentiation between project nicate and demonstrate ETC’s contribution to EU sectoral objectives, activities and outputs. Capturing project re- policies. The lack of English content on both programme sults had to remain outside the scope of this study due and project websites can be seen as a lost opportunity for to the lack of uniform definition of results in the current inter-programme knowledge management and capitalisa- programme period, and because project results are usually tion. Projects should also be made aware of the fact that reported as ‘expected’ results, as they rarely materialize providing minimum information in English on their web- before the project has been finalized. sites can earn them much greater (search engine) visibility.

We opted for a full-sample survey in order to deal with One way of addressing the lack of available project infor- possible shortcomings associated with the methodology mation and differences in the level of information pub- and data, assuming that the large sample would none- lished per project would have been to base the study on theless produce statistically robust results. On the one project application and project reporting forms, as the hand, we had to accept certain methodological biases, information contained in these forms is, at least within a mainly due to the degree of subjectivity inherent in any programme, fairly standardised. The drawback in using qualitative analysis. This subjectivity was at least partially application and reporting forms is that they are not pub- overcome by using stringent, well-documented method- licly accessible, which means we would have had to contact ology. While we generally focused on manifest informa- all programmes. Besides being an extra burden for pro- tion when assigning categories, assigning activities and grammes, they might have been reluctant to share these outputs to sub-objective categories required a great deal forms, which can also contain information that could be of interpretation. ‘Interpretation’ was also sometimes nec- considered confidential. essary to tell whether an achievement presented by the project could be directly attributed to the project; in other Coming back to the research questions, the following con- words, whether it was co-financed with ERDF money or clusions can be drawn from our findings: whether it was something achieved outside the scope of the project, but presented on the project website because it fitted with the project theme. On the other hand, and more importantly, we were confronted with data limitations.

1 A number likely in reality to be higher, as our inventory 3 E.g., the minimum common standards for project descrip- only partially includes projects that were approved after tions and project progress reports to be published on pro- June 2012. Based on an estimated total number of 5,500 ETC grammes’ websites defined in the Harmonised Programme projects implemented in one of the 67 European Territo- Implementation Tools (for more information: www.interact- rial Cooperation programmes between 2007 – 2013, energy eu.net). projects comprise ~8% of all ETC projects.

2 Given a total share of ERDF for ETC of EUR 7.845 billion, 8.7% of the ETC ERDF is invested in energy-related projects.

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In which areas pertinent to the field of energy efficiency and renewable energy tial. Furthermore, bioenergy promotes regional economic are ETC energy projects active, and how structures and provides an alternative source of income well are projects grounded in policy for farmers. developments in the field? Even though it was assumed that biomass could account for up to two-thirds of renewable energy production in Results show that ETC energy projects address the full the EU, bioenergy is currently falling short of expecta- range of sustainable energy topics and are generally very tions, and it seems that the euphoria about bioenergy has well aligned to the objectives of EU energy policy. somewhat dwindled over the last years. This is largely In the area of renewable energy, 232 ETC energy projects due to the heated public controversy about the impact of work on promoting the use of biomass, solar power, wind bioenergy on resource consumption and greenhouse gas power, geothermal power, hydro power, wave and tidal emissions. ETC biomass projects addressed sustainabil- power and hydrogen for fuel cells, all of which are in- ity concerns by assessing the environmental impact of cluded in the EU Strategic Energy Technology Map 2011 as a planned investment, by promoting the potential use of cost-effective low carbon technologies. contaminated sites such as abandoned brownfield or mining sites for bioenergy production, and by exploring the 234 ETC energy projects aim at increasing energy efficien- use of wastes, residues, non-food cellulosic (incl. marine cy in different spheres of life, such ashousing, transporta- biomass) and ligno-cellulosic (waste) material as feedstock. tion, businesses (including SMEs, industry, retail, tourism, etc.), public infrastructure, etc., sectors, which are also On the other hand, the huge cost-effective but as yet un- addressed by the Energy Efficiency Directive. Projects not tapped energy-saving potential which lies in the EU build- only take a sectoral approach, but also develop integrated ing stock and the fact that the building sector has become low-carbon strategies for cities and urban areas, includ- a priority area in EU energy policy explain the strong focus ing urban mobility solutions, to tap the huge potential for of ETC energy projects on improving energy efficiency in cost-effective energy savings in cities, and work on im- buildings. proving energy infrastructure and energy management. However, despite the profitability of energy efficiency measures in existing buildings, annual rates of thermal re- In spite of the large spectrum of topics addressed by ETC habilitation are low in the European Union, which is not energy projects, it is striking that over 50% of all analysed only inefficient from an economic point of view, but also projects are concentrated in two areas: fails to unleash the potential for job creation in the labour- intense building refurbishment sector. The Energy Effi- —— 110 projects, representing more than a quarter of all ciency Directive (EED) therefore introduced binding tar- ETC energy projects, focus on biomass as a renewable gets for annual renovation rates of buildings owned and energy source. occupied by central governments, recognising their ex- —— 93 projects, or 22% of all analysed projects, work on im- emplary role in triggering a higher renovation rate while proving the energy performance of buildings, mostly bringing the public building stock up to higher energy per- by focusing on energy-efficient refurbishment. formance. ETC projects have readily taken up this topic: more than How can this rather unilateral concentration of projects one-third of the energy efficiency in buildings projects is on two topics be explained? targeted at public buildings. Projects addressed the EED requirement by realising pilot investments in public build- On the one hand, the large potential for energy from ings, monitoring the energy consumption in public build- biomass in Europe and the promising opportunities aris- ings, building capacities in public authorities on green ing from the use of biomass for energy production have public procurement, building energy management, refur- certainly contributed to the enormous interest in biomass bishment, policy making, etc., by developing energy con- among ETC actors. Bioenergy is very flexible in its use, as sulting and auditing services for public authorities, and by it can be converted into solid, liquid or gaseous fuel. Com- tackling energy consumption behaviour of public authori- pared to other RES technologies, electricity and heat from ties. biomass can be produced at relatively low costs under fa- Projects also addressed several of the market failures vourable conditions, and bioenergy is less dependent on preventing investments into energy efficiency measures short-term weather changes than other, more intermit- in buildings. These are, e.g., the lack of skilled building tent energy sources, and less bound to local site conditions professionals, the lack of awareness about investment op- than other technologies which rely on, e.g., site-specific portunities and the profitability and positive impact of en- wind conditions, solar irradiation or geothermal poten- ergy-efficient refurbishment on the asset value, the need

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Fig. 1: Renewable energy topics addressed in ETC energy projects (the width of the arrow between two categories represents the number of ties between two categories, i.e. the number of projects addressing the topic).

to target energy consumer behaviour, and the importance Energy from biomass, addressed under Investment Prior- of user behaviour for realising the full saving potential of ity 4(a) which summarises all types of renewable energies, energy-efficient houses and technical building systems. is not specifically highlighted in the Thematic Guidance Around 18% of the EE in buildings projects approached Fiche on Renewable Energy and Smart Grids Investments the challenge of insufficient financing by (giving assistance (European Commission, 2014c). For the same reasons that to) introducing innovative financing options, in particular dampened expectations concerning the role of bioenergy energy performance contracting. Given the importance of in achieving the EU energy targets on renewables, the in- leveraging private sector investment into energy efficien- terest in energy-from-biomass might also somewhat de- cy measures, it would be desirable to see more of these cline in ETC in the coming period. projects in the future. Based on the existing stock of projects Building energy performance is likely to remain a central and identified barriers, in which areas theme in ETC in the coming programme period. Meas- would it make sense to intensify efforts in ures targeted at EE in buildings, which correspond to In- vestment Priority 4(c), are also mentioned as part of the the coming period? indicative actions of high European added-value listed in the Thematic Guidance Fiche on Energy Efficiency Invest- The promotion of renewable energies and energy effi- ments (European Commission, 2014b). The Commission ciency needs all the support it can get for the EU to get recommends that priority should be given to deep retrofit- back on track regarding its 2020 energy targets. However, ting beyond minimum energy performance requirements some technologies and measures need more support than to capture all possible energy savings, to an integrated others: approach to urban regeneration that goes beyond the On the one hand, while remarkable progress has been sole refurbishment of buildings and to the use of energy made in the area of renewable energy in recent years, the performance contracting for EE investments in buildings, EU is lagging very much behind regarding its 2020 energy and stresses the importance of tackling non-cost and non- efficiency targets. Efforts to curb energy consumption in technological barriers. Europe must be intensified if targets are to be met.

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On the other hand, some renewable energy technologies, —— the development of energy infrastructure, in particular like photovoltaics and wind power, are doing compara- smart distribution systems at low and medium voltage tively well (although it must be added that they have not levels yet reached grid parity and will therefore need a sustained —— integrated energy management in cities and urban framework also in the future), while others will need con- areas tinued public financial support. This includes technolo- —— energy management in businesses. gies that are not yet mature enough to be deployed on a large scale; e.g., concentrated solar power, wave power, Projects that focused on improving energy infrastructure second and third generation biofuels. Some technologies, and energy management correspond to only ~4% of all although promising, are very site-specific and can only be analysed ETC energy projects, in spite of the fact that grid installed on selected locations. For example, wind power, barriers, such as inadequate grid capacity, poor grid inter- geothermal power for electricity production and marine connection, lack of energy storage, etc., were rated as one energy technologies rely heavily on local energy poten- of the most urgent barriers to a more rapid growth of re- tials. newable energies in Europe. Smart grids and smart meters Nevertheless, our study shows that there are some high- could remedy grid bottlenecks and increase the reliability ly-relevant, cross-cutting topics that have played a rather of the grid. According to the Thematic Guidance Fiche on marginal role in the current period, given the function Renewable Energy and Smart Grids Investments (Europe- they could assume in moving towards a low-carbon soci- an Commission, 2014c), “smart grids will be the backbone ety. In view of the fact that these themes apply to all re- of the future decarbonised power system. […] Investments gions of Europe, it would be desirable to see them become in smart grids will also have substantial cross-cutting im- a more central issue in ETC: pacts at local/regional level. Public investments in local/ regional smart grid pilot projects will substantially help to Fig. 2: Energy efficiency topics addressed in ETC energy remove existing technical and non-technical uncertainties projects (the width of the arrow between two categories associated with the full deployment at national/EU level.“ represents the number of ties between two categories, i.e. the number of projects addressing the topic).

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Explaining the reasons why ETC witnessed so few energy ergy management in cities should be the general direction infrastructure projects in this period would require a much for programmes and projects to follow in the next period. more thorough analysis of the topic and of Operational Programmes. One tentative explanation could be that en- A third important cross-cutting issue is energy manage- ergy infrastructure projects tend to be geared towards ment in enterprises, notably in SMEs. In the current pe- heavy investments, that relevant actors and authorities riod, only 3% of all energy projects dealt with this topic, might be found on the national rather than regional policy thus leaving plenty of room for further projects. Most level, and that there are already well-established boards frequent project activities were capacity building in op- that deal with the topic transnationally. erational energy management in enterprises and energy auditing. While energy audits will become obligatory for Nevertheless, we identified some encouraging examples large enterprises under the Energy Efficiency Directive, of projects that successfully demonstrated that ETC can for SMEs it remains a recommendation. It would be desir- contribute to this topic, for example by assessing the fea- able to see ETC projects step up their efforts in the area of sibility of smart grid implementation, analysing smart grid energy management in SMEs in the coming period, to help business cases or piloting smart grids (incl. virtual pow- fill this gap. er plants and microgrids) and smart meters (c.f. section 4.2.11). They could inspire the next generation of projects What are typical activities carried out and in programmes that have selected Investment Priority 4(d) outputs produced in ETC energy projects, ‘Developing smart distribution systems at low and medi- and how well are they oriented towards um voltage levels’. an existing need for measures in the field? Also, there is still room for more projects dealing with energy efficiency and renewable energy in cities and Typical activities in ETC energy projects are not funda- urban areas in an integrated way. In the current period, mentally different from activities undertaken in other ar- we identified 26 projects aiming at increasing energy ef- eas in which ETC projects are active. These are conducting ficiency in cities, plus eleven projects focusing on devel- studies, carrying out pilots, delivering meetings, informa- oping local energy strategies and action plans. Together, tion events, trainings, etc. The same is true for project these projects account for less than 9% of all ETC energy outputs. Common outputs are, among others, baseline projects, a low number given that around 70% of the EU’s studies, feasibility studies, management plans, handbooks energy consumption takes place in cities. and guidelines, policy recommendations, action plans and Of course, other projects also contributed to reducing strategies, networks and clusters, etc. energy consumption in cities, but followed a sectoral approach, by focusing on the refurbishment of buildings, the Rather than the activities and outputs as such, we mapped modernisation of public lighting or on the development of the (sub-)objectives towards which these activities and sustainable urban and municipal mobility solutions. How- outputs were geared, as this gave us a better understand- ever, energy-optimisation on the level of districts and ing of the different ways projects work towards the main communities is more cost-effective than optimising each project objective: for example, whether energy saving in building individually, and integrated urban development buildings is achieved by tackling user behaviour, through contributes to the quality of life in the whole neighbour- activities targeted at triggering investments or through hood, ensuring the investment’s sustainability. There- activities aimed at influencing relevant policies. A general fore, the development of sustainable energy action plans observation in this context was that (main, but also sub) and mobility action plans should be encouraged as part of objectives are often set unrealistically high with respect to broader low-carbon and urban development strategies, in the potential impact that project activities and outputs can order to facilitate optimisation and coordination of invest- possibly have. This made us wonder whether the discrep- ments. ancy between high-flying objectives and more realistic The importance of pursuing an integrated approach which measures is a marketing strategy (to promote the project), addresses both the supply side, the provision of renew- or whether projects have the tendency to be overly am- able energy, and the demand side, its efficient use, is also bitious. We also found it sometimes hard to tell what the highlighted in the Thematic Guidance Fiche on Energy Ef- purpose of a specific activity or output was in the overall ficiency Investments (European Commission, 2014b). The context of the project. For example, to an outsider the need fact that Investment Priority 4(e) bundles the promotion for more baseline and comparative studies, best practice of low-carbon strategies and of sustainable multimodal reports and knowledge databases, etc., for achieving the urban mobility and mitigation-relevant adaptation meas- project objective is not always so evident. If projects were ures under one priority also indicates that integrated en- encouraged to follow a more rigorous project intervention

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Fig. 3: Sub-objectives addressed in ETC energy projects (the width of the arrow between two categories represents the number of ties between two categories, i.e. the number of projects addressing the topic). In general, a lot of effort in ETC energy projects is put into compiling information and data. Our analysis showed that logic, this would not only enhance the comprehensibility 60% of all projects engage in gathering information and of the entire project logic, but also help forestall unrealis- data, making this, together with activities targeted at ex- tically high objectives and focus projects on what are the changing or imparting knowledge, the single most fre- most suitable means to achieving them. quent project activity. Considering that processing and compiling information is a time-consuming task, some Regarding typical activities in ETC energy projects, we questions pop up: Is all this information and data strictly found that over 50% of all projects undertake investment- necessary for achieving the project objectives? Does the oriented activities; i.e., activities that should eventually time spent on developing studies, guidelines and knowl- trigger concrete investments. Actual investments were edge databases detract from rather than contribute to the made in less than 18% of all projects. These were mostly achievement of project objectives? Finally, how do these small, pilot-scale investments in, e.g., solar power charg- knowledge gathering and processing activities match ing stations, biomass boilers or research equipment. with a more rigorous, result-orientated approach that Activities targeted at preparing investments mostly con- will require programmes and projects to deliver tangible sist of gathering existing knowledge or data for (feasibil- results in the coming programme period? Doing some of ity) studies, guidelines, manuals or handbooks, knowledge the groundwork before applying for the project would be databases, geodatabases, decision support tools, energy a possible way forward. Getting rid of unnecessary bal- action plans or strategies, or business/investment plans last and reducing project activities to what is essential for and business models. achieving the main project objective would be another.

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Among the most frequent project outputs are best practice —— administrative hurdles, by facilitating access to knowl- compilations, guidelines and knowledge databases gath- edge and external expertise in public authorities and ering data on best available technologies, which are pro- building capacities in public authorities through peer- duced by almost one in every three projects. We observed to-peer exchange, trainings, etc. that the same best practice examples were collected and —— the lack of capacities of building professionals in the described in different projects, even within one and the area of energy-efficient construction and renovation same programme. Since there is a pressing need to speed —— the lack of awareness about the benefits of energy ef- up implementation of sustainable energy solutions if the ficiency measures and renewables through information European Union is to meet its 2020 energy targets, the campaigns, public events, excursions, fairs, etc. next generation of ETC energy projects should be strongly —— attitudinal and behavioural barriers to reduced energy encouraged to move from exchanging good practices to consumption and changed mobility patterns through implementing them, and from gathering knowledge to training activities and awareness raising, e.g., by meas- applying it. uring and monitoring energy consumption.

Another pre-investment activity is developing or intro- Capacity-building activities were undertaken by around ducing financial instruments to stimulate investment in a third of all analysed projects. Projects facilitated knowl- energy efficiency and renewable energy. In the current edge exchange through meetings and network events, period, only 7% of all analysed energy projects were ex- delivered trainings, and organised study visits or staff ploring the use of energy performance contracting, pri- exchanges, etc. Capacity-building is vital to removing ad- vate-public-partnerships, low-interest loans, targeted ministrative hurdles like time-consuming and obscure subsidies and revolving funds for financing sustainable permitting procedures, the lack of capacities in the area of energy measures. In times of austerity policy and cuts green procurement, financial instruments, etc. Adminis- in public spending, financial instruments could raise the trative barriers are one of the most important barriers to urgently needed capital for energy investments. A more an accelerated deployment of sustainable energy invest- widespread use of financial instruments is, however, still ments, and the share of total project costs for investments hindered by several barriers, such as a lack of understand- into renewable energy that is allotted to administration is ing of and experience with financial instruments in public considerable. Still, the overall progress made in simplify- authorities, existing regulatory barriers and legal barriers ing administrative regimes in order to make renewables aimed at decreasing public debt, but which, at the same more competitive has so far been limited (European Com- time, stifle sustainable energy investments. The Commis- mission, 2013a). sion’s Guidance Fiches (European Commission, 2014b; Eu- ropean Commission, 2014c) underline that public funding How can ETC energy projects contribute to removing should not replace but complement and leverage private these barriers? investment. Public intervention ought to address market On the one hand, ETC energy projects can improve access failures, while financial instruments should be chosen in to knowledge and external expertise in public authori- instances where there is potential for sufficient revenues ties, for example by engaging project partners who have generated to pay back the investment. the relevant experience or by bringing in external experts; e.g., on financial instruments. Another common activity, undertaken by around 29% of On the other hand, ETC energy projects can facilitate all analysed projects, is developing new services. Most peer-to-peer exchange between public authorities to frequently, these are consultancy or technical advisory learn how administrative barriers are addressed in other services or training. However, it must be added that not regions and exchange on, e.g., good practices in streamlin- all of these services are (conceived to be) permanent, nor ing permitting procedures (e.g., such as one-stop shopping are they necessarily transboundary services. On the other schemes for getting a permit), in spatial planning, public hand, the development of new products plays only a mi- procurement, financial instruments, energy policy, etc. In nor part (in 11% of all analysed projects) in energy projects general, projects could make much more of peer learning and was found significantly more often in cross-border by exploring methodologies like work shadowing, part- projects. ner-to-partner mentoring and coaching or peer review and assessment. Apart from these activities, ETC energy projects have an important role to play in removing non-technological, Along the same lines, but focusing less on knowledge non-cost barriers to a wider renewable energy deploy- exchange, are activities aimed at changing institutional ment and reduced energy consumption, such as: practices, which were undertaken by 24% of all projects. A change in practices often requires a change in mindset and

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What are currently unexploited synergies the building up of institutional capacities, which is why it between programmes and within is strongly linked to capacity building and awareness-rais- thematic clusters of projects, and how ing activities. could ETC make better use of them? Limited information and awareness regarding the benefits of renewables and energy efficiency and a lack of public Our study demonstrates that energy projects across ETC acceptance are important barriers to the development programmes focus on similar issues and come up with of renewable energies and to the implementation of en- comparable solutions to address those issues. Only some ergy efficiency measures. In particular, renewable energy renewable energy-related topics, such as geothermal projects are often faced with a ‘Not In My Back Yard’ at- power for electricity production, marine energy tech- titude from local or regional decision-makers and the nologies and offshore wind power generation, whose use local population. Awareness raising activities, an active is very restricted to some parts of Europe, were clearly information policy and involvement of local actors (also confined to specific geographical areas. The majority of financially, e.g., by awarding local co-ownership) can help themes, however, seem to apply almost equally to all re- overcome opposition. In the current period, around 23% of gions of Europe, offering a large potential for themati- the analysed energy projects undertook activities aimed cally-related projects to capitalise on each other’s work. at raising awareness or changing attitudes. Awareness- Still, little cross-fertilisation takes place on project level raising is for the most part a communication exercise, and across ETC programmes, let alone between ETC and other typical awareness-raising activities carried out were run- EU programmes or Commission initiatives. To support the ning an information campaign, organising conferences, transfer of project-generated knowledge and outcomes, it excursions, fairs, or other public events, etc. Information would be recommendable, in the coming period, to make and awareness raising campaigns have a clearly positive better use of: impact on public opinion, if they are reliable, independent, —— synergies across ETC programmes easy-to-understand, up-to-date, target group-specific and —— synergies with other EU initiatives in the field of energy designed for the long-term. Unfortunately, many of the —— synergies with other EU programmes information campaigns carried out in ETC projects were —— project outcomes from the current programme period. just one-off events, thus unlikely to make a real impact. In the current period, several ETC programmes have Awareness-raising can also influence consumer and mo- formed clusters of energy projects in order to exploit syn- bility behaviour as another important area in which ergies among them; for example, in the area of commu- ETC energy projects can make a valuable contribution. nication and dissemination. By clustering projects across In the current period, only 7% of projects tackled energy ETC programmes, however, projects could be pooled consumption by targeting consumer behaviour, mainly which share the same or very similar topics, stimulating through information campaigns, trainings, public events a more substantive discussion and in-depth exchange that or by making energy consumption patterns and saving can leverage synergies in a specific thematic field. achievements visible by measuring or monitoring energy consumption. Given that potential energy savings due to We also identified potential synergies with other EU ini- measures targeting behaviour is in the range of 5-20%, tiatives in the field of energy. The European Commission it would be desirable to see more projects take up these has also launched several energy-related initiatives which ideas. overlap with areas in which ETC energy projects are active. One example is the ‘BUILD UP Skills’ initiative to boost continuing or further education and training of craftsmen and other on-site construction workers and system installers. The lack of appropriate training and qualification for building professionals in the area of energy-efficient construction and renovation was also addressed by a number of ETC energy projects that developed new training material or educational programmes and delivered training for building professionals. The question arises whether these individual project initiatives were coordinated with the national teams working on improving the qualification and skills of building workers which were established under the ‘BUILD UP Skills’ initiative. The dedicated ‘BUILD UP Skills’ internet platform further provides public authori-

PAGE 9 Executive summary

ties with access to legal sources, toolkits and guidelines countries. In addition, the Common Provision Regulation5 produced by cities, regions or countries, and the possibility calls on Member States and the Commission to strengthen to share expertise with peers. ETC projects that fail to co- coordination, synergies and complementarities between ordinate with these EU and national initiatives risk dupli- the European Structural and Investment Funds and Ho- cating work and missing out on relevant information and rizon 2020 and other centrally-managed Union funding on important opportunities to disseminate their results programmes (while also establishing a clear division of ar- outside the project partnership. eas of intervention between them). Furthermore, Member Another example is the Commission’s initiative to pro- States shall “[…] ensure complementarity and coordination mote Green Public Procurement. In order to foster Green with LIFE by promoting the use of solutions, methods and Public Procurement, the Commission collects best practice approaches validated under LIFE, inter alia, including in- examples, publishes guidance documents and toolkits, and vestments in green infrastructure, energy efficiency, eco- organises webinars and public events with similar activi- innovation, ecosystem-based solutions, and the adoption ties also being undertaken by ETC energy projects to build of related innovative technologies.” capacities in public procurement. So we expect to see more inter-programme activities in the coming period. Efforts to strengthen the links between Besides ETC programmes, there are other EU programmes ETC programmes and other EU funding instruments could, which fund renewable energy and energy efficiency ultimately, also lead to more coordinated and efficient de- projects, notably Horizon 2020 and the LIFE programme, ployment of EU funding between programmes and fund- giving rise to a lot of potential synergies between ETC and ing instruments. other EU programmes. Furthermore, there is an urgent need in ETC to promote the Horizon 2020 will continue funding the type of activities (re)use of project outcomes from the current programme that were previously supported by the Intelligent Energy period. This demands that more effort is put into knowl- Europe Programme4, such as measures to remove market edge management on ETC level to make project outcomes and governance barriers, by addressing financing, regula- more easily accessible. Until recently, one had to consult tions and the improvement of skills and knowledge, thus 63 programme websites to look for ETC-level generated will most likely have substantial complementarities with knowledge. With the ETC project database ‘KEEP’ now be- activities funded under ETC programmes. ing filled with around 85% of all the projects of 2007 – 2013 Eligible actions under Horizon 2020’s Energy Efficiency Territorial Cooperation, the foundation has been laid for Call also include complementary activities of network- KEEP to develop into a ‘one-stop-shop’ for ETC-specific ing and coordination between programmes in different thematic information. Studies like this one are also an important step in improving knowledge management in ETC, 4 Eligible measures that will be funded by Horizon 2020 and enable inter-programme capitalisation. under the Coordination and Support Actions are in the area of standardisation, dissemination, awareness-raising Fig. 1: Tree map representation of beneficiary categories and communication, networking, coordination or support (each tile’s area in the tree map is proportional to the services, policy dialogues and mutual learning exercises and number of counts per target group). studies, including design studies for new infrastructure *1 energy (infrastructure) providers 5 Annex 1, section 4.3 *2 utility companies

public authorities higher education and research interest groups including NGOs

interest groups

research universities energy and environ- institutions mental agencies private partners regional local public authorities public authorities infrastructure & (public) others service providers

business support organisations energy agencies infrastructure/ *1 transport providers *2 chamber of others local and regional business commerce/ education and development support industry/ training institutions agencies organisations trade/ national public authorities agriculture environmental schools agencies

PAGE 10 Executive summary

Who are typical project beneficiaries and target groups in ETC energy projects? Are tral governmental agencies. Obviously, that depends very relevant and desirable project partners much on the distribution of competences between the local, regional and national administrative levels within each currently underrepresented or missing in country. ETC projects? The private sector and, within the private sector, in par- In our study, we mapped project beneficiaries and target ticular SMEs, is often referred to as a target group of en- groups, and found that typical target groups were, with ergy projects, even outweighing the public sector as target few exceptions, quite similar to the types of project ben- group. The great interest in SMEs certainly stems from the eficiaries engaged in ETC energy projects. In fact, project fact that the fostering of cooperation between businesses beneficiaries, i.e. project partners, are often at the same and public authorities, notably SMEs, is seen as an impor- time the target group of a project’s outputs. We also ob- tant measure towards the achievement of the Europe 2020 served an undifferentiated use of the term ‘target group’ strategic objective of smart, sustainable and inclusive for ‘immediate target groups’ (benefiting from and using growth. In terms of beneficiaries to ETC energy projects, the project’s outputs) and ‘indirect target groups’ (benefit- however, businesses played a minor role and accounted ting from the positive mid- and long-term impact of the for only around 4% of all partners. Given the low number project). of private sector beneficiaries, ETC energy projects could certainly include more private actors, also in view of lev- In spite of these inaccuracies, the result of our mapping eraging investments into renewable energy and energy ef- clearly showed that local and regional public authori- ficiency. Current barriers to a wider involvement of private ties are the single most important actors in ETC energy companies in ETC projects are State Aid rules, the high ad- projects. They account for the largest group of beneficiar- ministrative burden of participating in ETC projects, and ies as well as target groups, which is not surprising given the fact that all project expenditures must be pre-financed that ETC is a regional development policy instrument that by the partners. For small companies in particular, the benefits the regions of Europe. National and European large outlay and commitment in resources and staffing and public authorities played no more than a minor role as target groups for ETC projects, and only rarely participate Fig. 2: Tree map representation of target group catego- as beneficiaries: they account for only around 2% of all ries (each tile’s area in the tree map is proportional to the beneficiaries. A greater involvement of national authori- number of counts per target group). *1 tourism industry ties, not necessarily as beneficiaries, would be desirable *2 education/training institutions, *3 hospitals, *4 artists in projects that touch upon areas of responsibility of cen- *5 business support organisations, *6 national politicians

private sector public sector general public

citizens businesses

higher education and political institutions and representatives research

local/regional European politicians politicians local/regional public authorities construction *6 sector research others infrastructure & service providers institutions

energy SMEs schools (infrastructure) forestry sector providers

agricultural green (public) transport sector businesses 2 interest groups * providers industry including universities 3 banking 1 NGOs * sector * sectoral agencies European institutions national authorities *4 *5

PAGE 11 Executive summary

the long payment time are challenging. and cross-border projects to be significantly smaller. As Other important target groups and beneficiaries arehigh- concerns typical types of partners, we made a number of er education and research institutions, in particular uni- interesting findings. versities, schools, infrastructure and (public) service providers, including power supply companies, and interest Cross-border projects involve significantly more cham- groups such as non-governmental organisations, associa- bers of commerce, industry, trade or agriculture and edu- tions of companies, etc. Intermediaries like business sup- cation and training institutions than their transnational port organisations and environmental and energy agen- and interregional counterparts. Another distinct feature cies are common beneficiaries to energy projects, but are of cross-border projects are project partnerships consist- hardly ever mentioned as designated target groups. ing exclusively or mainly of universities. Research institutions seem to be particularly drawn to transnational The question whether relevant and desirable project part- projects. Furthermore, regional authorities are represent- ners are currently underrepresented or missing in ETC ed significantly more often in INTERREG IVC projects than projects cannot be answered outside the context of a spe- in cross-border and transnational projects. On the other cific project. A ‘relevant’ partner is one that has the neces- hand, interregional projects engage fewer universities, sary institutional competence and/or required expertise fewer interest groups/NGOs than transnational projects, and experience for the achievement of a project’s objec- and no private enterprises. tive. However, it is also true that relevant partners might These differences between strands can be partially ex- be deterred from engaging in ETC energy projects by the plained by diverging eligibility rules; e.g., the ineligibility formal requirements on project implementation that sur- of private partners in INTERREG IVC projects. But they round ETC projects. Hopefully, the coming programme might also be a result of the varying territorial scope of period will bring some true alleviations of the administra- the three strands, hence the different strategic approach tive burden on ETC projects that really deserve to be called of the different programme strands, which would explain ‘simplifications’. why regional authorities were found relatively more often As regards target groups, for a project to reach its target in interregional projects whereas education institutions groups and to ensure that a project’s main outputs are put like vocational colleges were more frequently engaged in to use it is vital that a project involves stakeholders and smaller-scale cross-border projects. target groups early and assesses what their real needs are, possibly already during project preparation. The comparison of the average partner budget per strand showed that differences between strands are not sig- What are the differences between nificant. However, in terms of absolute project budget, programme strands and how can they be transnational projects have, due to the larger number of explained? project partners, the largest project budgets. The size of partnerships and project budgets also partially Owing to their varying territorial scale and average size accounts for differences in thenumber of assigned unique of programme areas, the three strands of European Ter- categories per project, which is highest for transnational ritorial Cooperation programmes take a somewhat dif- energy projects, indicating that more activities are under- ferent tack in working towards territorial integration and taken and outputs produced in an average transnational cohesion. Are these differences reflected in ETC energy cooperation project. The fact that individual pilot projects projects? To answer this question, we compared, using realised by project partners in their partner regions, a test statistics: common feature of transnational projects, increased the —— project partnerships in terms of average number of number of single activities and outputs per project is an- project partners and typical types of partners other possible explanation. A third alternative is that tran- —— project budgets in terms of the average per partner snational projects generally publish a lot of information on budget their websites compared to cross-border projects, which —— number of different activities and outputs, by using simply provided us with more data to categorise. the average number of assigned unique categories per project as a proxy Contrary to what one might expect, differences in territo- —— project themes, activities and outputs, by consulting rial scope and the typical size of project partnerships were the use of single categories and combinations of cat- not reflected in project themes and project outcomes. We egories. found almost no difference between programme strands as regards project main objective categories, and only few Regarding the average size of partnership, transnational significant differences on the level of sub-objectives and and interregional projects were found to be of similar size, activity/output categories. These findings statistically

PAGE 12 Executive summary

back the subjective impression we got from reading the Conclusions and outlook over 400 project descriptions. Nevertheless, the statistical analysis provided some interesting findings. To summarise, there is a pressing need to speed up implementation of sustainable energy solutions if the Europe- Statistical results suggest that differences refer more to an Union is to meet its 2020 energy targets. ETC energy the way projects operate and their type of interventions; projects have made and will continue to make an impor- i.e., whether they tackle renewable energy and energy ef- tant contribution to European energy policy, in particular ficiency topics from a policy or investment angle, than to in removing non-technological, non-cost barriers to a wid- the type of topics they address. For example, transnational er renewable energy deployment, and enhanced measures projects, compared to cross-border projects, were found to reduce energy consumption. However, the next genera- to be more policy-oriented and, compared to interregional tion of ETC energy projects should be strongly encouraged projects, more investment-oriented. The single exception to move from exchanging good practices to implementing was the relatively higher number of projects dealing with them, and from gathering knowledge to applying it. This sustainable transport in INTERREG IVC. view is supported by the new requirements that the 2014 – Cross-border projects, when comparing them to INTER- 2020 programme periods will bring for ETC programmes: REG IVC projects, seem to have a stronger focus on invest- – thematic concentration, meaning that programmes must ments as well as on awareness-raising and on the devel- concentrate funding on a limited number of programme- opment of new services. When compared to transnational specific objectives projects, cross-border projects turned out to be more ac- – result-orientation, meaning that programmes must tive in the area of developing prototypes of new products, define envisaged results and commit to corresponding an observation which is in line with the fact that universi- targets regarding the attainment of these results and ty collaborations, which often engage in the development progress towards them, whereas ‘result’ is understood as of prototype solutions, are not uncommon in cross-border the change that the programme makes in the programme projects. Some outputs were found to be specific for tran- territory. snational projects, such as knowledge databases and feasibility studies. Interregional projects place more emphasis For projects, this implies that the range of possible themes on knowledge exchange and transfer of good practices will be more narrowly defined than in previous pro- between local/regional authorities, as compared to cross- grammes, and that they will be required to demonstrate border and transnational projects. their contribution to the targets set on the programme level concerning outputs and results. To conclude, while, in general, our findings indicate that Thematic concentration and result-orientation are often there are few differences between A, B and C-strand en- mentioned in the same breath. Findings from this study, ergy projects, differences are most acute between the however, suggest that a project with a narrow thematic transnational/cross-border strand and the interregional focus is not necessarily a project likely to perform well in strand. A possible explanation for this is that the INTER- terms of results. We observed that even projects work- REG IVC programme has, compared to the cross-border ing within a very specific thematic area often undertake and transnational strand, a more narrowly defined pro- a large number of different activities and produce a host gramme objective: to improve the effectiveness of re- of outputs, not all of which appear to be well-aligned with gional policies and instruments through the exchange and the main project objective, and therefore detract from transfer of experience and good practices among project rather than contribute to the delivery of real results. Still, partners. Transnational and cross-border projects, on the the number of outputs is often used as a benchmark for other hand, are mainly distinguished by their size. determining a good project. To achieve a paradigm shift Furthermore, the statistical analysis showed that transna- from quantity to quality, programmes are advised to spur tional projects tend to ‘blend’ different approaches in one projects to aspire to ‘do more with less’. project and integrate in one project a large number of different activities: joint transnational activities, local or pilot activities, awareness raising activities, policy-oriented activities, etc. One might suspect that large (transnational) partnerships give way to individual interests of partners, and that the larger the number of partners the more difficult it becomes to have each partner fully committed to a common objective.

PAGE 13 Context and background EU Energy Policy EU Regional Policy Outlook 20-20-20 energy targets and Energy in EU Regional Policy Interreg programme period energy strategy post 2020 2007 – 2013 2014 – 2020

Promoting an increase in energy efficiency and in the use of energy from renewable sources has developed into a high-priority topic of European Ter- ritorial Cooperation programmes over the current programming period 2007 6 Estimated number based on KEEP – 2013. Over 430 out of around 5,500 projects6 implemented in one of the 67 data, INTERACT’s online ETC project European Territorial Cooperation programmes have been working in the vast database. realm of energy-related topics. ETC energy projects address a wide variety of energy issues from energy-efficient mobility to renewable energy production from agricultural waste. On account of their cross-cutting nature, energy-relevant activities can also be found in projects working in the areas of unlock- ing ‘green’ business potential, boosting innovation in low-carbon technologies, promoting green public procurement, building resilience to climate change, or promoting a modal shift to non-motorised means of transportation. The range of activities and outputs is equally varied. Projects target ‘hard measures’, such as financial investments into energy production from renewable sources, as well as ‘soft interventions’, such as awareness raising and the transfer of knowledge and know-how.

This study investigates the contribution of ETC projects to European energy targets in the area of energy efficiency and renewable energies, by analysing how energy features in programmes and projects in the current period, and by putting findings into their policy context. The analysis shows that about EUR 1.2 billion of national and ERDF-funding can be linked to ETC energy projects benefiting around 2,800 partners in Europe, which reflects the importance of sustainable and secure energy provision as a main strategic focus of the Euro- pean Union, and the impetus that the topic has gained in recent years with the European Climate and Energy Package. It also shows that sustainable energy management has made its way into ETC as a truly trans-regional challenge with a strong territorial dimension.

1.1 EU Energy Policy Energy occupies a relatively new, yet central place in European policy. On the one hand, the European Union is concerned for its security of energy supply and import dependency, which affect the Union’s competitiveness on the global market. This is counteracted by negotiating bilateral agreements and multilateral treaties with energy exporting countries, pressing ahead with the integration of Europe’s energy market for gas and electricity, and investing into an interconnected, interoperable Trans-European energy network.

PAGE 14 Context and background

On the other hand, energy features prominently in the policy goals set by the 1.1.1 20-20-20 Energy Europe 2020 Strategy, the European Union’s 10-year growth strategy that Targets aims at supporting a shift towards a resource-efficient, low-carbon economy through smarter, more sustainable and more inclusive growth. Mitigating climate change and increasing the sustainability of energy use and production are among the five headline targets contained in the strategy. As early as 2008, the Council and Parliament adopted concrete emission cuts and energy targets under the climate and energy package, at the time also driven by the objective to “lead the international climate negotiations by example”. The Union set itself the goal of achieving, by 2020, a cut of 20% in its energy consumption as compared to projections, a reduction of 20% in greenhouse gases, and an increase of 20% in the share of renewable energy in the total energy consumption of the EU. These shared goals were consequently translated into national goals, taking into account the Member States’ different starting points and individual economic performance, into concrete actions on the national level, and into several new pieces of legislation and recasts, most notably the Directive 2009/28/EC on the promotion of the use of energy from renewable sources. Since then, EU legislation in the area of energy has grown, and new policies have been adopted on ecodesign and energy labelling for energy-related products, on energy performance of buildings, on performance standards for light duty vehicles, etc.

Due to the long investment cycles that are characteristic of the energy sec- 1.1.2 Energy strategy tor, and the need for long-term planning security for private investments into post-2020 renewable energies, the European Commission was put in charge of coming forward with proposals for the post 2020 period as early as 2009. The result of these strategic deliberations was several Commission Communications, in particular the Low-carbon Economy Roadmap 2050, the Energy Roadmap 2050 and the Transport White Paper. Based on macroeconomic models, the Com- mission proposes a reduction of greenhouse gas emissions to 80-95% below the 1990 level by 2050. In transportation, a cut in carbon emissions by 60% by 2050 through a variety of measures, including a ban on conventionally-fuelled cars in cities, a shift of passenger and freight transport from road to rail and waterborne transport, and a cut on emissions in aviation and shipping were put on the table. Passing consensual conclusions and agreeing on the formulation of shared goals in the Council has so far failed because of Member States’ resistance (Fischer & Geden, 2013). Reasons for the strong opposition are, on the one hand, the shifting of priorities and scaling back of support schemes in the context of the economic crisis. On the other hand, the experience with implementing the 2020 targets, which are likely to fail, and the lack of success of the international climate negotiations negatively affected the willingness of Mem- ber States to once again agree on binding greenhouse gas emission and energy targets. Despite the recent publication of a Commission Communication (Euro- pean Commission, 2014a) for an energy policy framework 2030, proposing an EU-wide binding target for renewable energy of at least 27% and a reduction in greenhouse gas emissions by 40% below the 1990 level, no progress has yet been made in agreeing on the level of ambition of an integrated European cli- 7 http://europa.eu/rapid/press-re- mate and energy policy post- 20207. lease_IP-14-54_en.htm

PAGE 15 Context and background

1.2 Energy in EU Meeting ambitious targets on energy efficiency and renewable energies Regional Policy as formulated by the European Union will require countless initiatives and concrete efforts on local and regional levels, including activities and measures that span borders and engage actors from all parts of society. This is where ETC programmes and projects are ready to provide an important contribution. The importance of regional policy in driving the shift to investment in smart and sustainable growth through actions that tackle climate, energy and environmental issues, and the crucial role of local and regional decision-makers in filling the strategy with concrete action were also stressed by the Commission in a 2011 Communication (European Commission, 2011b). While at the start of the 2007 – 2013 programming period, energy efficiency and renewable energy were not considered main priorities, they were soon recognised as opportunities to create qualified, local jobs and promote economic development, especially in rural and coastal areas, outermost regions and islands, by tapping into their marine energy potential. The same message was reiterated in the 5th Cohesion Report, also stressing the importance of regional renewable energy potentials which ought to be better exploited, and the role of the public sector in reducing greenhouse gas emissions and energy consumption in areas not covered by the emissions trading scheme.

Priorities and themes in energy which were considered to be central to promoting sustainable growth are investment in energy efficiency in buildings and transport, the exploitation of endogenous renewable energy resources, and a greater use of market instruments to trigger private investment. Besides, EU Regional Policy was also thought to assist in boosting investment in district heating and co-generation, and fund investment in both the Trans-European energy grid and in local smart distribution networks.

1.2.1 Programme period In the next financial period 2014 – 2020, a closer alignment of regional funds 2014 – 2020 with the priorities of the Europe 2020 strategy will be required than was the case in the current period. ‘Supporting the shift towards a low-carbon economy in all sectors’ is among the four key priorities of EU cohesion policy. The total European Regional Development Fund investment in low-carbon themes such 8 http://ec.europa.eu/regional_policy/ as renewable energy, energy efficiency, clean urban transport and cycle paths sources/docgener/informat/2014/ should be increased from the current EUR 18.5 billion (from ERDF and Cohesion fiche_low_carbon_en.pdf Fund) to EUR 23 billion (from the ERDF only)8.

9 Beside TO 4 and 7, energy also touch- Energy-related topics are also well represented in the thematic objectives out- es upon TO 1 ‘strengthening research, lined in the Common Provisions Regulation for the programme period 2014 technological development and in- – 2020, notably in Thematic Objective 4 ‘supporting the shift towards a low novation’, TO 5 ‘promoting climate carbon economy in all sectors’ and Thematic Objective 7 ‘promoting sustain- change adaptation, risk prevention able transport and removing bottlenecks in key network infrastructures’9. and management’ and TO 6 ‘preserv- It is therefore anticipated that in the next programming period ETC pro- ing and protecting the environment grammes will continue to be an active player in the field of energy efficiency and promoting resource efficiency’. and renewable energy.

PAGE 16 Objectives and scope

Research objectives Scope of analysis Research questions

The European Territorial Cooperation objective is implemented de- centrally through 53 cross-border programmes, 13 transnational programmes and one interregional cooperation programme, presenting a real challenge to knowledge management and capitalisation. Despite the numerous initiatives by individual programmes to capture and capitalise on what their projects have achieved in the 2007 – 2013 programme period, there currently exists only very fragmentary documentation of the knowledge generated in ETC as a whole. This is a lost opportunity for ETC, as improved inter-programme knowledge management could lay the ground for ever-better project results, and achieve greater visibility of these:

—— How to build on and make optimal use of outputs and results from this period when there is currently no knowledge repository on past achievements in the field of energy? —— How to substantiate and demonstrate the contribution of ETC to EU energy targets when no systematic documentation of project outputs and results exists? —— How to deploy EU funding in the most efficient way between programmes and funding instruments when we lack a general view of what ETC programmes are doing in the area of energy? —— How to provide ETC actors with a quick and factual overview of the activities carried out, outputs produced and results achieved elsewhere in Europe?

The lack of answers to these important questions spurred INTERACT to extend its knowledge management activities to sectoral policy analysis, and initiate a study on the involvement of ETC programmes and projects in the field of energy. In times of information flooding it has become an ever-growing challenge for ETC programmes to keep up with latest developments in all policy areas relevant to ETC. INTERACT can support ETC programmes by providing a single comprehensive information source, also in view of the potential of INTERACT’s online project database ‘KEEP’10 to develop into a ‘one-stop-shop’ for ETC stakeholders who are looking for ETC-specific thematic information. 10 www.territorialcooperation.eu

The main objective of this project is to provide a comprehensive overview on ETC level of how the theme of Energy features in programmes and projects in the current period, and to gauge contribution towards EU energy and climate objectives. Results of the study will serve as a thematic inspiration for ETC actors in preparing for the 2014 – 2020 period, support understanding of the added value of ETC in the field of energy, provide programmes with a tool that can help them in the process of quality assessment of project proposals, and enable ETC programmes to create links and identify synergies among programmes, across strands and with other European funding instruments (e.g., LIFE+, Horizon 2020, etc.). Building up thematic expertise on the topic has already leveraged synergies between ETC and the Intelligent Energy Europe Pro- gramme (IEE) in the form of a joint seminar for ETC and IEE projects, and has deepened the existing cooperation between INTERACT and IEE. This cooperation will continue in the next programme period and possibly extend to other European programmes dealing with energy.

PAGE 17 Objectives and scope

Capitalisation The scope of the analysis is the programme period 2007 – 2013, and the overall research objective required a full sample survey rather than a case study ap- Capitalisation in ETC can be under- proach. The study primarily targets ETC actors from all strands (national/re- stood as an integrated process that gional authorities, programme management bodies, projects), European Funds gathers valuable programme and addressing energy topics, and EU institutions concerned with regional policy, project results in a specific domain energy and climate change. For them, this study will serve as a comprehensive of regional development policy, in reference work, providing targeted information on all energy-related topics order to share knowledge and to pertinent to ETC, and as an inspirational source for programming, project qual- raise awareness among ETC stake- ity assessment, inter-programme capitalisation, ex-post evaluation, etc. Thus, holders about the achievements of rather than showcasing ETC achievements of the 2007 – 2013 period, this re- ETC in the particular field, and to port will be actively used as a source of reference and knowledge. Findings are support the (re-)use and/or trans- also of potential interest to researchers, journalists, political decision makers fer of these results, ultimately pro- and the interested public. This report provides them with a single entry point moting improved performance and to the topic of Energy in European Territorial Cooperation, and will serve as a delivery. compact compendium of EU sustainable energy development for non-experts.

2.1 Research questions In our analysis, we were guided by a number of specific research questions, which can be grouped into three areas:

1.) Stock-taking and mapping of energy projects of the 2007 – 2013 programme period: —— In which areas pertinent to the field of energy efficiency and renewable energy are ETC energy projects active? —— What are typical activities carried out and outputs produced? —— Who are typical project beneficiaries and target groups in ETC energy projects? These questions will be addressed in section 4.1. Energy-related ETC projects will be mapped on the basis of projects’ objectives, activities, outputs and target groups by means of a set of categories. The resulting quantitative data will then be analysed and presented visually to reveal patterns and trends in the data.

2.) Analysing projects in their policy context: —— How well are project objectives, activities and outputs grounded in policy developments in the field? —— What are currently unexploited synergies between programmes and within thematic clusters of projects? —— What are the differences between strands, and how can they beexplained? These questions will be addressed in section 4.2 and 4.3. Links will be created between thematic clusters of projects and EU energy policy priorities, while cross-border, transnational and interregional projects will be compared using test statistics.

3.) Bridging between the 2007 – 2013 and the 2014 – 2020 programme period: —— Based on the existing stock of projects and identified barriers, in which areas would it make sense to intensify efforts in the coming period, and in which areas would it be desirable to see more ETC projects? —— How could ETC make better use of currently unexploited synergies between programmes and within thematic clusters of projects? —— Who are relevant and desirable project partners who are currently underrepresented or missing in ETC projects? These questions will be addressed in chapter 5, which summarises all findings and draws conclusions from them.

PAGE 18 Method Data sample, Data analysis, Data evaluation definition of energy projects classification scheme, data limi‑ and graphical data and data collection tations and methodological bias representation

The ambitious research objectives called for a systematic approach to selecting and analysing data, requiring proper data management and a sound methodological approach. The following chapter summarises key aspects of methodology: the sample chosen and methods used to analyse and evaluate the data.

The first step was the compilation of projects, which was done during the 3.1 Sample months of May and June 2012. Projects that were approved or published after that date are only partially included in the analysis. The starting point was a keyword search (‘energy efficiency’ and ‘renewable energy’) in INTERACT’s KEEP database. Due to the incompleteness of KEEP data Strand Number of % at the time, and uncertainty about its timeliness, an additional search for en- Projects Cross-border ergy-related projects was carried out on all programme websites, combining 211 50% full-text keyword search and a quick scan of all project descriptions. 61 pro- Cooperation Transnational grammes from A, B and C strand, excluding IPA and ENPI cross-border pro- 150 35% grammes, were included in the search. Accessing project information proved Cooperation Interregional difficult for some programmes, in particular where no English version of the 63 15% programme website was available, or where too little information about ap- Cooperation proved projects was published to include them in the analysis11. Tab. 1: Number of analysed projects The resulting project repository represents a near-to-complete snapshot of ap- per strand. proved energy-related projects (completed and uncompleted) from 58 cross- border, transnational and interregional programmes. The number of energy projects per programme varies between one and 63 projects in INTERREG IVC 11 This was, for instance, the case of (mean = 7, median = 4). All in all, 428 projects were identified, out of which 424 the Hungary – Slovak Republic and the were included in the analysis. For a full list of projects per programme see Poland – Slovak Republic Programme. Annex 1.

Energy is a cross-cutting theme, and aspects related to energy can also be 3.1.1 Definition energy found in projects that deal with climate change, transportation, or economic project development. So the question was what to consider an energy project. Since the objective was to look at a representative sample, we decided to include in the analysis all projects that make a direct reference to energy. Projects which only touch upon the topic of energy but do not mention it specifically; e.g., projects investing into bicycle-infrastructure, projects dealing with adaptation to climate change, etc., were excluded. According to its degree of reference to energy, each project was then classified into ‘energy is the main focus/objective of the project’, ‘energy is a secondary focus/objective of the project’ or ‘project undertakes energy-related activities’.

Cross-border Interregional Transnational Total % Cooperation Cooperation Cooperation

Energy is the main focus/objective of the project 166 48 105 319 75%

Energy is a secondary focus/objective of the project 21 8 22 51 12%

Project undertakes energy-related activities 24 7 23 54 13%

Total 211 63 150 424 100% Tab. 2: Number of analysed projects per degree of reference to energy and strand.

PAGE 19 Method

3.1.2 Data collection Data used for the analysis was retrieved from programme as well as project websites, and includes:

—— project acronym —— project title —— project website —— project duration (start + end date) —— project budget + ERDF funding —— partnership (incl. lead partner, name of organisation, town, country, type of partner according to a classification scheme) —— project summary description, description of project objectives and of project activities and outputs.

Information on the projects was taken from all available sources: programme and project websites, as well as project outputs such as studies, newsletters and project dissemination material. All relevant textual information was stored in an MS Access database to ease data management, storage and retrieval12.

3.2 Data analysis A database does not only offer clear advantages regarding the handling of large amounts of data; in our case, it also served as a data analysis tool. Having texts as source material, the choice of methodology was to carry out a qualitative content analysis. The database was used as a tool for coding the textual information, for assigning categories and for running complex queries in order to retrieve quantitative information on the entirety of projects.

3.2.1 Content analysis The content analysis methodology provides the theoretical-methodological framework which ensures that fundamental principles of empirical research, such as objectivity, reliability, validity, etc., are addressed, while leaving enough Content analysis flexibility to adapt the method to the question and material researched. These three scientific quality criteria refer to the transparency and reproducibility of Content analysis or textual analy- results of the research, thus the soundness of methodology and rigorousness sis is an empirical method for the with which the technique was applied. systematic description of pieces of A content analysis is only applied to manifest content of communication; that communication in form and con- is, the words, sentences or texts themselves, rather than their (inferred) mean- tent, and the interpretation based ings. Nevertheless, it is important to note that the analysis goes far beyond upon it (c.f. Früh, 2001). Content the coding of keywords, and that a great deal of interpretation on behalf of analysis methodologies have been the person(s) who classifies(y) the textual information is involved. In principle, developed as a way to study large the classifier decides on the basis of experience and language competence ‘in- amounts of textual information tuitively’ which textual segment indicates a specific content of communication. and identify its properties systematically. 12 We opted for the use of a database for data management, as a database has They provide a theoretical-meth- several advantages over, e.g., a spreadsheet, when handling large amounts of odological framework which en- data: First of all, databases are more user-friendly and flexible regarding data sures that fundamental principles entry and data viewing and offer extended possibilities for maintaining data in- of empirical research, such as ob- tegrity and ensuring data validation. Secondly, a database uses considerably less jectivity, reliability, validity, etc., are memory for storing data than a spreadsheet, and is generally more suitable for addressed, while leaving enough large data volumes. While in MS Excel, the number of characters a cell can con- flexibility to adapt the meth- tain is limited to 32,767 characters (of which only 1,024 characters are displayed), od to the question and material a memo field in an MS Access database can store up to 1 GB of data, of which researched. 65,535 characters can be displayed in a control. Thirdly, a database offers much greater possibilities to query the data and to automate routine operations.

PAGE 20 Method

The subjectivity of language is at least partially overcome by the methodologi- 13 Text fragments which are consulted cal procedure and classification rules and conventions that organize the per- are also called ‘units’. They can be lin- ception and restrict the scope of interpretation. guistic units such as lexemes, etc., but in our analysis we resorted to whole To ensure transparency, the qualitative researcher has an obligation to be me- text passages. Moreover, the units to thodical in reporting sufficient details on the data collection and the processes be classified can be defined syntacti- of analysis to permit others to judge the quality of results and potentially re- cally (as words, phrases, sentences produce them. That is done by coding the texts, which means that parts of the etc.) or semantically (as connotations, textual information are assigned to subordinate categories or classes13. concepts, and attitudes). In our case, Identified text fragments were marked in the actual text field of the database, we limited our categories to syntactic and the codes notated in square brackets after the text passage. Not only did units. this increase transparency, it also helped to rapidly identify the encoded unit when revising the codes with every iterative loop of classification.

A common test for the reproducibility of results is to establish the intercoder Example: reliability; in other words, the extent to which the codes of two different in- Education and training are important dependent coders correlate. However, since the coder judges based on an inti- tasks of the Build with CaRe project. mate knowledge of the whole dataset, this means that the second, independent It focuses both on formal education coder must be equally familiar with the text material as well as properly trained and non-formal knowledge transfer. on the classification rules. Instead of this time-consuming, resource-intensive Comprehensive target groups such as procedure, we contacted a number of programmes to confirm the validity and craftsmen and students, the construc- reliability of the categorisation by asking them whether the assigned catego- tion industry, architects and civil en- ries capture what the project does. Project officers follow a project during its gineers and also housing associations, whole lifetime, thus have a thorough knowledge of their projects and are best building owners and potential inves- suited for this task. The positive feedback received from programmes showed tors will be addressed. that the classification scheme is able to capture the main aspects of a project. New educational materials will be The biggest challenge in the process of categorisation is to ensure that similar created among the WP2 partnership. projects are categorised consistently. Given that we were working on a sample Specific content on passive house of over 400 projects for more than six months, one has to constantly calibrate technology will be highlighted. The oneself against one’s own judgements. This challenge is met by assigning cate- new material will be piloted across the gories iteratively. Once the first scheme of categories has been developed, more BWC partnership to gain experience, categories are added and modified in an iterative process with each project ana- to evaluate and to refine it, if needed. lysed. The whole text material is looked at several times and the classification The second wave of educational pack- is revised; i.e., extended by more categories, whereas others drop out again. ages and transnational educational The database proved very helpful in this, as it was easy to navigate and look up approaches on energy savings in build- categories in order to compare similar projects. ings is scheduled for the final project year. [developing a (new) service by As a last step in the analysis, the frequency of each category is counted and developing training material and pro- the data obtained evaluated statistically. This final, quantitative step should not viding training/education for the con- mask the fact that the focus is on the qualitative analysis, even though the construction sector]. tent analysis tries to combine the two and turn qualitative properties of texts into quantitative ones. The reduction of texts, however, allows revealing patterns of categories which otherwise would not be visible. For answering the research questions the whole plethora of data is used; thus, the quantitative data is backed with qualitative examples.

So what did we categorize? As previously mentioned, the researcher who makes use of content analysis as methodology must have a clear idea of what he is looking for. Most likely he already has some categories in mind before he even takes a first glance at the material to be examined. That means that the classification is purposive; i.e., it aims at answering the research question, and selective; i.e., fragments of the text that do not contribute to the issue under scrutiny are ‘blinded out’.

PAGE 21 Method

In our case, we were guided by our research questions and research objectives. On the one hand, we wanted to find out what the main themes are that ETC energy projects work on and from which methodological angle the topic is tackled. On the other hand, we wanted to get an insight into what projects produce in terms of outputs; i.e., tangible products, and what type of activities they undertake to achieve these. We would also have been interested in capturing project results, but faced two distinct problems: First of all, project results are usually reported as ‘expected’ results, as they rarely materialize before the project has been finalized. Secondly, due to the lack of uniform definition of results in the current programme period, projects describe the expected results on different levels, as immediate projects results, in terms of (main) outputs, or as mid or long-term results, in terms of the desired change.

3.2.2 Classification scheme Before the actual process of categorization can be tackled, one has to develop a scheme of categories.

Categories Most categories on renewable energy carriers and energy efficiency technologies were developed from an intrinsic knowledge of the topic. Examples are the Categories can be developed de- categories on biomass raw materials and conversion processes of biomass-to- ductively, thus theory-based, as energy. Meanwhile, categories on common activities and outputs were mostly well as inductively, thus observa- derived from the descriptions of project objectives, activities and outputs. tion-based, by developing the cat- For the purpose of developing a first classification scheme, we took a sample of egories directly from the texts. 50 projects from all three strands. We looked at the projects in terms of:

—— What is/are the main theme/s covered (main project objective)? —— What does the project deliver on (sub-objectives and outputs)?

The picture that emerged showed that a strictly hierarchically (taxonomically) Example: organised classification system is unsuitable for representing the variety of The project OPTIBIOGAS (Greater Re- thematic and methodological approaches that projects take. Even a basic classi- gion Programme) aims at increasing fication into ‘energy efficiency’ and ‘renewable energy’ projects proved imprac- the biogas production in the Greater tical, as many projects are concerned with both themes; e.g., projects targeted Region [promoting the use of renew- at an increase in local/regional energy self-sufficiency mostly tackle the chal- able energy from biomass for the pro- lenge from the angle of reducing energy consumption and increasing the production of biogas] through research duction of energy from locally-available, renewable sources. Also, the question collaboration on optimising the meth- arose how to classify projects that work on, e.g., increasing energy production ane-forming process and making use from biomass by developing a more efficient biomass-to-energy conversion of currently unexploited waste prod- process? The project clearly relates to the promotion of the use of renewable ucts of the process [increasing energy energy sources as well as to the increase in energy efficiency and was therefore efficiency in the production process]. classified as both.

A suitable classification system needed to strike the right balance between generating results which can be aggregated, while at the same time preserving the characteristics of each project. It had to allow a flexible, instead of a fixed se- Semantics quencing of categories along a hierarchical tree structure. The answer to our search for an appropriate classification scheme was a semantic network. ‘Semantic’ refers to the fact that resulting ‘phrases’ are semantically, A semantic network represents semantic relations between concepts, rep- i.e. in their meaning, but not neces- resented as ‘vertices’ that are connected through directed graphs, also called sarily syntactically, i.e. grammati- ‘edges’. In our semantic network, the vertices are our categories. They were cally, correct. entered into the database. Edges could not be represented in the relational database, but were depicted in a concept map (Annex 3). This graphical representation of all categories also helped with the categorisation.

PAGE 22 Method

To sum up, this approach gave us the possibility to add flexibility to the categorisation, while avoiding oversimplification, and to collect a rich dataset without extending the number of categories ad infinitum.

With our scheme, all combinations of categories were theoretically possible; 3.2.2.1 Classification rules however, it makes sense to deliberately limit the number of combinations for and conventions reasons of consistency and to ensure that results can be evaluated. That does not mean that the sequence of categories was prescribed, but that one has to consistently follow a strict set of classification rules and conventions:

Rule 1: There is a limited number of first order categories. We assigned all projects to one or more main objectives, and one or more sub- objectives, which acted as first order categories. In other words, all categories had to be preceded by an objective, and this was more than just a convention, but also a way to embed activities and outputs in the context of what their purpose is within the overall project objective. By this, we establish a project intervention logic and give meaning to, e.g., general output categories like [establishing a strategic partnership] which could fulfil the purpose of [influencing policies], [preparing investments], [boosting business development/innovation], etc. Pro- viding information on the output alone, in this case a newly-created partnership or network, would not tell us anything about what the network is meant to lead to. On the level of main project objectives, all projects were classified into: —— increasing energy efficiency —— promoting the use of renewable energy —— increasing energy self-sufficiency —— improving energy infrastructure —— improving energy management —— reducing greenhouse gas emissions. On the level of sub-objectives, all projects were classified into: —— developing a new product —— developing a new service —— making investments —— boosting business development/innovation —— preparing/facilitating investments —— harmonizing data/standards/policies/method-procedure —— influencing policies —— raising awareness —— changing attitude —— changing behaviour —— changing practices —— building capacities.

Rule 2: The order of categories is (to some extent) defined Besides the rule that all activities and outputs had to be assigned to a sub-objective, we introduced more conventions to ensure that data could be evaluated. On the one hand, the number of categories (in other words, the number of constituents of a sentence including lexemes, phrases and subordinate clauses) was limited to seven. This rule does not concern phrases which are joined by AND (c.f. Rule 5: AND logical operators require a new database record), but it concerns subordinate clauses. However, it is important to note that we very rarely formed clauses that consisted of more than six constituents or subordinate clauses.

PAGE 23 Method

Example: [Building capacities], that is on [energy-efficient refurbishment], by [increasing knowledge] through [training] for [SMEs] in the [construction sector] AND [Building capacities], that is on [energy-efficient construction], by [increasing knowledge] through [training] for [SMEs] in the [construction sector].

On the other hand, even though second-order categories were not as strictly defined as first-order categories, the number of possible paths had to be limited, also from a logical point of view. In some cases, it was allowed to take a short-cut as alternative to the ’long path’.

Example: [Preparing investments] by carrying out a [feasibility study] VERSUS [Preparing investments] by [collecting data] on [technical feasibility], [cost-benefit] and [environmental impact] for a [feasibility study].

In other cases, by convention, no short-cuts were allowed. In the following example, the concept [increasing knowledge] as opposed to [improving know- how/skills] was introduced as a stringent requirement, meaning that the sub- objectives [raising awareness] had to be followed by either of the two.

Example: [Raising awareness] by [increasing knowledge] through an [information campaign].

On the level of activities and outputs, we also collected information on target groups. According to our internal convention, target groups were always placed as a last category.

Example: [Building capacities] by improving [know-how/skills] through [training] for [local/regional authorities].

Rule 3: Similar concepts and projects must be classified alike The whole purpose of categorisation is to turn a large amount of individual textual information into a compiled dataset of aggregated categories; for this, abstraction is imperative. This means that similar concepts are classified using one and the same category, and that for reasons of consistency, similar projects must be classified alike.

For example, ’a demonstration project’ or ’pilot implementation’ were both categorised as [realizing a pilot]. The category [establishing (a) strategic partnership/s] between [target group] can stand for such diverse activities as ’establishing/creating/constituting a network/triple helix structure’, ‘bringing together/establishing links between different target groups’, ‘organizing B2B meetings’, as well as ‘preparing the ground for ongoing cooperation between the project cities by signing a charter/memorandum of understanding’.

Rule 4: Concepts must be properly defined This seems to be a rather self-evident rule and one that is applicable to every type of research. In the context of our analysis, it proved crucial to draw the line between one category and another, in particular since it proved very difficult to impossible, especially for some output categories, to establish whether ‘the label’ corresponds with ‘the content’. An energy action plan, for instance, was defined as referring to a sequence of steps to be taken or activities to be performed, including a concrete allocation of resources, for a strategy to succeed. In reality, we found that action plans often have the rather broad and general character of a strategy, and would be too unspecific to qualify as an action plan.

PAGE 24 Method

Another frequent example is that of the output ‘decision support tool’ which was defined as ‘using generally applicable decision criteria’ as compared to the ‘feasibility study’, which could also be considered a sort of decision support instrument, but was defined as ‘using case specific decision criteria’. Hence, any decision support output which had the character of a case study rather than a universally-applicable decision tree was not counted as a decision support tool.

Example: A decision-making tool based on the spatial planning methods of the Geographical Information System (GIS) environment will be developed to facilitate common planning for the exploitation of wind energy in the Gulf of Riga region [collecting data on RES potential for a geodatabase] (GORWIND, Estonia-Latvia Programme)

Rule 5: ‘AND’ logical operators between categories require a new database record The challenge of technically implementing a semantic network with its many- to-many relationships in a relational database required another set of conventions. Most importantly, a logical conjunction or disjunction of concepts with ‘AND’ (but also ‘OR’) operators called for the introduction of a new record in the database. This is easily illustrated taking again the example of the project collecting data on the technical feasibility AND on cost-benefit AND on the environmental impact of an undertaking for a feasibility study.

Example: [Preparing investments] by [collecting data] on [technical feasibility] for a [feasibility study] [Preparing investments] by [collecting data] on [cost-benefit] for a [feasibility study] [Preparing investments] by [collecting data] on [environmental impact] for a [feasibility study]

Data acquisition (assigning categories) and analysis (statistical evaluation) are 3.2.3 Data exploration two consecutive steps in a content analysis. Having gone through the text material at least twice, we ended with a set of 232 categories. How did we proceed with the data?

First, we queried the frequency of each category and of different combinations of categories. By doing so, we were able to turn qualitative data into a quantitative dataset, which allowed us to perform different numerical operations. Remember, we started from individual textual information and ended up with a compiled dataset of aggregated categories. This step of abstraction was necessary to unravel patterns in the underlying source material. In a consecutive step, for the purpose of data cleaning, we explored the data 14 We used Gephi, an open source visually using network analysis software14. The graphical representation of the network analysis and visualization network of categories allowed us to better view the data and detect inconsist- software package (www.gephi.org). encies and violations of the above-mentioned classification rules, in particular rules 1 – 3, which were then removed. Due to the intuitiveness of the presentation, we decided to use the network graphs also for the presentation and discussion of results.

PAGE 25 Method

3.2.4 Data limitations and Before we get to the presentation and discussion of results, let us look into the methodological bias possible shortcomings associated with the methodology and data. In relation to interpreting the data, it is important to note that several methodological biases had to be accepted by the authors. The assumption is that the large sample would nonetheless produce statistically robust results. We also took the methodological limitation into account when choosing an appropriate form of presentation for our results, and decided to rely more on a visual rather than numeric presentation of the results of the study.

3.2.4.1 Subjectivity As previously mentioned, qualitative studies are per se subject to criticism for of judgements being methodologically flawed. The main reason this is so is the great deal of subjective judgement involved in arriving at data. We explained in section 3.2.1 that this bias is at least partially overcome by using stringent, well-documented methodology. Nevertheless, the coder is sometimes forced to make judgements based on imperfect information, hence resorting more to interpretation than manifest information when assigning categories. To give an example, it sometimes proved very challenging to assign activities and outputs to sub-objectives. Projects don’t always explicitly mention why they are undertaking a certain activity or why they produce a specific output in the overall context of the project, and they rarely follow a strict intervention logic which would enhance the comprehensibility of the entire project logic. For example, many projects collect background information and data for baseline and comparative studies and reports, but to an outsider the necessity for such studies and reports in view of the project’s main objective is not always so evident.

Another problem is the non-exclusiveness of the sub-objective categories. One output might contribute to several sub-objectives. For example, an [information campaign] for the [general public] clearly contributes to [raising awareness]. The purpose of the information campaign according to the project, however, might be to achieve a behavioural change and, consequently, the output [information campaign] was assigned to the sub-objective [changing behaviour] (even though, behavioural change might be too ambitious an objective given the ‘soft- ness’ of the measure). By the same token, it is difficult to draw a strict line between the categories [building capacities] and [changing practices]. Obstacles to a change in (organisational) practices might be a lack of knowledge or a lack of capacities (i.e., skills, competences and abilities). Building capacities often serve as a prerequisite for changing institutional practices. To resolve this ambigu- ity, we introduced the convention that whenever a change in practices involves capacity building activities targeted at increasing knowledge and skills through information campaigns, trainings, staff exchange, etc., the activity is categorised as [building capacities]. On the other hand, whenever a change in practices is meant to be achieved through the provision of information, decision support, etc., then the activity is categorised as [changing practices].

A third problem relates to the fact that not all outputs we categorised are main project outputs contributing directly to the project main objective, but are sub- outputs contributing to a project main output. For example, the project’s main objective might be to increase the rate of energy-efficient refurbishment of houses in the programme area by [building capacities] by [improving the know- how/skills] through [training] for [SMEs in the construction sector]. A sub-output [development of educational/training material] contributes to the output

PAGE 26 Method

[training], but is assigned to the sub-objective [building capacities], even though the development of training material per se does not build capacities. It only does so if followed by a training course.

Maybe the largest potential bias of results stems from the heterogeneity of 3.2.4.2 Limitations of the available data due to the use of mixed data sources. In our study, we only available data resorted to publicly available information, in particular information which we took from project and programme websites. How much information we had available per project depended thus on how much information was published on the website. In particular, cross-border projects often don’t even have a project website. In this case, we had to be content with the little information that was published on the programme website. The amount of data, in turn, greatly determines the level of detail a project can be categorised at. So, fewer categories per project does not necessarily mean that a project produced fewer outputs. It might have just published less useable information. Data on the project’s main objective is more reliable than data on project activities and outputs, as the project’s topic is usually easily identifiable, even when little other information is available.

Using project application and project reporting forms might have provided better data with which to work, as the information contained in these forms is, at least within one programme, fairly standardised. The drawback in using application and reporting forms is that they are not publicly accessible, which means we would have had to contact all programmes with uncertain success rates, as these forms can also contain information which could be considered confidential, thus programmes might have been reluctant to share them. The consequence of this methodological limitation is that, based on the data used, we cannot make reliable statements on absolute numbers of activities and outputs. The large sample nevertheless gives a reliable picture of the relative distribution of categories.

At the beginning of our research project, several methodological choices had 3.2.4.3 Depth of analysis to be made. First of all, we had to decide how large the sample should be. Since the aim of our project was to give a comprehensive overview of ETC energy projects with respect to their objectives, activities and outputs, we opted for a full-sample survey. Another methodological decision that had to be made refers to the depth of analysis. For some specific research questions and for the development of the categories, it was necessary to have an in-depth understanding of how projects work, which activities they frequently set, and what typical outputs they produce. For example, comparing cross-border, transnational and interregional projects required a homogenous dataset which would allow us to analyse them at a comparable level of depth and identify differences between strands. However, given the scope of the sample, an in-depth analysis of all 424 projects was not feasible, also for reasons of data availability. As mentioned before, the information available per project varied considerably, even within one programme. In particular, cross-border projects appeared systematically to have less information available. Therefore, we drew a sample of 110 projects for an in-depth analysis, paying attention to a balanced geographical distribution and a representation of the three strands proportionate to the total distribution of projects among the three strands (c.f. Tab. 3).

PAGE 27 Method

Strand Number of % In-depth analysis % General analysis % projects analysed Cross-border Cooperation 211 50% 54 49% 157 50% Transnational Cooperation 150 35% 32 29% 118 38% Interregional Cooperation 63 15% 24 22% 39 12% SUM 424 100% 110 100% 314 100% Tab. 3: Sample for in-depth and general analysis.

In fact, we now had two different datasets; one included a set of 110 projects which we had analysed in-depth, meaning that we looked into all of the available project documentation, including written outputs, minutes, press releases, etc., insofar as they had been published. The other dataset consisted of the remaining 314 projects which we analysed by looking mainly at general descriptions of project objectives, activities, outputs and expected results. For the presentation of the general findings, we nevertheless decided to include the full sample of all 424 projects. Our decision is based on the fact that the relative frequencies of most categories in the in-depth sample are proportional to the general sample. In other words, even though we used significantly more categories when conducting the in-depth analysis, the frequency distributions of the majority of categories proved to be similar for the two datasets. We concluded that mixing the two datasets just meant increasing the overall number of categories, which in turn contributed to a better overview of the relative distribution of categories.

We also compared whether considerably more information on a project could be obtained by looking at the project in-depth, and found that both the average number of categories assigned per project, broken down by strand, as well as the number of categorisations (single database records) by strand, was significantly higher. Furthermore, the analysis of variances showed that the in- depth dataset is more homogeneous, fulfilling an important prerequisite for statistical testing.

3.2.4.4 Lack of data We mentioned earlier that the scope of publicly available data was very different and that, therefore, the degree of information per project available for analysis varied considerably. Systematic differences existed between programmes (depending on how much information on each project is published by the programme and whether information on the project progress is regularly updated) and random differences between projects (depending on how active a project is in maintaining and updating its project website). In general, we observed that cross-border programmes (and projects) publish less information than transnational and interregional programmes (and projects). But again, large differences exist between individual programmes (and projects).

Lack of timeliness of data is another problem. It is not uncommon that during project implementation changes occur to the originally proposed project. It might be that activities and outputs are modified, that partners drop out, or that initial objectives are found to be too ambitious and are downscaled. Of- ten the information displayed on websites is not up-to-date, which is why these changes are then not properly reflected in the categories assigned to the project. A possible remedy would have been to use project progress reports or directly contact projects or project officers in the Joint Secretariats, from which we refrained, in view of the large sample size.

PAGE 28 Method

Lack of data also concerns the incompleteness of certain information. On the one hand, budget information, information on the project duration and information on beneficiaries was sometimes missing. On the other hand, incomplete information made proper judgement difficult, in particular where a distinction had to be made between similar categories; for example, between the categories [energy action plan] and [energy strategy]. We defined an energy action plan as containing a series of sequential steps to be taken or activities to be performed for a strategy to succeed, including a time plan. An energy strategy was defined as a plan of action designed to achieve a long-term vision or overall aim. Another notion we repeatedly came across in the text material, was the term ‘energy concept’. It seems to be a term used mainly in the Germanic countries, and is largely comparable to an energy strategy. In most cases, the actual energy strategy/action plan/concept was not accessible, therefore a proper judgement regarding which category to assign was not possible. We had to rely on the information from the project, and decided to count energy concepts as energy strategies in the absence of the actual document which would justify a separate category. Furthermore, we found that it was sometimes hard to tell whether an achievement presented by the project could be directly attributed to the project. In other words, whether it was co-financed with ERDF money or whether it was something achieved outside the scope of the project, but presented on the project website because it fitted with the project theme.

Data evaluation posed several challenges. On the one hand, due to the 3.3 Data evaluation abundance of data we had to make intelligent choices on what to evaluate and present without omitting something important. Showing all 232 categories and 1,230 combinations of those categories would not have given very meaningful Network graphs results. On the other hand, due to the nature of the data, it didn’t make sense to use descriptive statistics like bar or pie charts to present the results. By ‘nature Network graphs can easily be pro- of the data’ we mean the fact that the use of one category generally does not duced using network analysis soft- exclude the use of another category in the same project and that, therefore, ware. Network analysis software frequency counts of individual categories can only be presented as ‘number of packages facilitate the quantitative counts per total number of projects’. To illustrate this with the example of the or qualitative analysis of networks, project main objective categories, projects were not exclusively assigned to one by either describing features of a first order category (e.g., either renewable energy or energy efficiency), but may network through numerical or visu- refer to more than one. Regarding sub-objective categorisations, categories are al representation. The visual repre- cumulative and the number of categories assigned to a project depends on the sentation is paramount for under- number of different activities undertaken and outputs produced by the project standing the complex network data and the depth with which the project could be or was analysed. and for conveying the results of By the same token, we were cautious not to put too much emphasis on the ab- the analysis. The frequency counts solute numbers of categories as these are subject to systematic and random of categories and of ties between biases described in this section. two nodes were imported in GEXF from the database into the network analysis software.

We concluded that the most meaningful way of presenting the data was a visual 3.3.1 Network graphs one, in the form of network graphs. The benefits are two-fold: due to the structure of our data (semantic network), the network graph is particularly well- suited to show a comprehensive overview of the large amounts of data and complex relationships, and is distinguished by the fact that it is quite intuitively understandable. In the network graph, categories are represented as nodes and the directed ties between two nodes are called edges. Both nodes and edges can have attributes, such as weights.

PAGE 29 Method

15 We choose the Yifan Hu multilevel Network analysis software offers many ways to manipulate the presentation of layout, a fast algorithm suitable for the network without changing the data as such; e.g., to change layout, colours, large graphs. It combines a force-di- size of nodes, width of edges and other properties of the network representa- rected model with a graph-coarsening tion. The purpose of the presentation is to support the qualitative interpreta- technique (multilevel algorithm) to tion of network data. reduce the complexity of the network. Layouts are based on graph-drawing algorithms that compute the positions of the nodes of a graph in two-dimensional space based on uniform edge length, Chi-square test uniform vertex distribution and symmetry. In general, many different layouts exist, and several algorithms are usually built in network analysis software. The Chi-square test is a non-par- The choice of layout should be guided by the feature of the topology one wants ametric (distribution free) test to highlight. We opted for using a layout15 that gave quite good results, showing designed to analyze group differ- clusters of nodes and reducing the complexity of the initial graph. Neverthe- ences when the dependent vari- less, we also created the layout of the graph manually where we were not satis- able is measured at a nominal level. fied with the simulated result. Advantages of the Chi-square in- Colour in network software is used to highlight certain aspects in a graph, such clude its robustness with respect as groups of nodes that are more connected to each other than they are to the to distribution of the data, its rest of the graph. With respect to colour, we used either a community detection ease of computation, the detailed algorithm, to stress clusters of nodes and edges, or a brush to manually colour information that can be derived central nodes of groups and their nearest neighbours. Edges inherit the colour from the test, its use in studies of the source nodes. for which parametric assumptions With regard to the size of nodes (and size of node labels), we used two distinct (normal distribution and homoge- methods of representation. To stress the importance of a node in relation to the neity of variance) cannot be met, central node, we used the ‘weighted out degree’ to assign weight to a node by and its flexibility in handling data counting the number of weighted out-ties with other nodes. For graphs with a from both two-group and multiple- very large range of degrees of weighted out-ties, we scaled down the presenta- group studies. Limitations include tion by reducing the range and using an exponentially increasing function to its sample size requirements (test- decrease the central node and increase the peripheral nodes for better reading is only valid if the expected val- ability. Even though this representation is not true to scale and proportion, it ue in each cell is not less than five), nonetheless gives an intuitive picture of the ranking of nodes without impair- difficulty of interpretation when ing the readability of the graph. For detailed views and graphs with more equal- there are large numbers of catego- ly distributed node sizes, we used the frequency count of each category to rank ries (20 or more) in the independent nodes according to their real relative node size. or dependent variables, and ten- The width of the edge between two categories represents the number of ties dency of the Cramer’s V to produce between two categories. This presentation gives a good, true-to-scale visual relatively low correlation measures, indication of the frequency of categories and of combinations of categories. even for highly significant results. Note that in the chosen layout the length of the edges is a result of the layout and doesn’t have any particular meaning.

3.3.2 Statistical evaluation In addition to the network graphs, we used test statistics where useful; e.g., for comparing the different strands as regards typical objectives, activities and outputs (c.f. chapter 4.3). All statistical evaluation was based on the in-depth data set, as it fulfilled the necessary criteria for testing, such as normal distribution, assumption of homogeneity of variances, etc.

For comparing the use of single and multiple categories in the different strands, we resorted to the Chi-square test to identify possible differences. The Chi- square test of independence looks for relationships between two categorical (qualitative) variables; in our case, between the use of a specific category in a project and the strand under which the project is operating. For all tests we have assumed a five per cent significance level, a common practice in social sciences.

PAGE 30 Results and discussion Project objectives, Project themes Differences activities, outputs, beneficiaries in the area of renewable energy cross-border, transnational and target groups and energy efficiency and interregional strand

T he folLOWIng chapter explores results of the detailed mapping of project objectives, sub-objectives, activities, outputs and target groups and beneficiaries. We will first give a comprehensive overview of the outcome of the analysis in terms of frequency counts of categories, then proceed by presenting in detail the various themes addressed by projects within the main thematic areas ‘renewable energy’ and ‘energy efficiency’, analysing them in their European policy context. Typical actions and outputs per theme will be discussed and illustrated with project examples. This will be followed by a discussion on the differences between strands and programmes.

This chapter focuses on the presentation of main objective and sub-objec- 4.1 Project main and sub- tive categories. Findings relating to the number of projects working on a par- objective categories ticular objective; e.g., on ‘increasing energy efficiency in transportation’ or on ‘building capacities’, are presented in the form of network graphs and tables. Additional project examples illustrate the use and meaning of these categories. Furthermore, we present the findings about typical target groups and beneficiaries of ETC energy projects.

In the course of the analysis and categorisation, each project was assigned to 4.1.1 Project main objective one or several of the six identified main objectives of ETC energy projects. Tab. categories 4 gives an overview of all project main objective categories.

Increasing energy efficiency and promoting the use of renewable energy are the Increasing energy efficiency 234 two most frequent main objective categories, encompassing 90% of all projects Promoting the use of renewable 232 (87 projects combine topics on renewable energy and energy efficiency). We energy will subsequently focus on these two objectives in section 4.1. The remaining Increasing energy self-sufficiency 30 main objective categories ‘increasing energy self-sufficiency’, ‘improving en- Improving energy infrastructure 5 ergy infrastructure’ and ‘improving energy management’ will be presented in Improving energy management 16 section 4.2. Reducing greenhouse gas emis- 27 sions Tab. 4: Number of projects per project main objective category.

By 2020, the European Union aims to meet 20% of its final energy consumption 4.1.2 ‘Promoting the use of and 10% of its energy consumption for transportation from renewable energy renewable energy’ category sources. How this is to be achieved and how much each Member State will contribute to the target is regulated in the Directive 2009/28/EC on the promotion of the use of energy from renewable sources. Besides binding national renewable energy targets, the Directive also defines requirements on monitoring and reporting of the progress towards these targets, on the simplification of the administrative regimes faced by renewable energy and on the improvement of access for electricity produced from renewable sources to the electricity grid, as these are current non-technological barriers to a wider deployment of renewable energies. Furthermore, it establishes a comprehensive sustainability scheme for bio-fuels and bio-liquids, including sustainability criteria related to greenhouse gas savings, land with high biodiversity value or high carbon stock, and agro-environmental practices.

PAGE 31 Results and discussion

The first Renewable Energy Progress Report shows that the EU and most Member States are currently on track to achieve their mid-term objectives (European Commission, 2013a). This is particularly true for the production of electricity and heat from renewables, but not for the use of renewable energy in transportation. In the base year 2005, the renewable energy share in the EU was at 8.6% and has since then increased to 12.7% in 2010. Despite this positive trend, projections for 2020 suggest that most Member States will fail to achieve their 2020 targets unless further policies and measures are implemented. This is because, on the one hand, differences between countries are considerable as regards their starting position as well as the growth rates of renewables and, on the other hand, because not all sectors and technologies are doing equally well. For example, for photovoltaics, due to the strong growth and price decline of the last few years, the forecast has been exceeded, while wind power and biomass are falling short of expectations. The main reasons for this are insufficient efforts undertaken by Member States to fulfil their National Renewable Energy Action Plan commitments, existing administrative barriers, such as lack of clarity of planning and permitting procedures, and lagging infrastructure development and operation. The latter can be partly attributed to the current economic situation in Europe, which not only led to cuts in support schemes, but also to uncertainty for investors as regards policy development, which has damaged investor confidence in RES investments generally characterised by high risk and long-term return.

4.1.2.1 Barriers to wider Removing the main existing barriers is a precondition for achieving the 20% deployment of renewables target on renewables, which requires a huge mobilisation of investment. The deployment of most renewable energy technologies still needs both financial and non-financial policy support, due to the stage of development of either technology or market, and due to the fact that renewables still do not have the same playing field as conventional energy technologies (Ecofys et al., 2011). The cost factor, which is very much linked to technology development, strongly determines the market penetration of a technology. However, contrary to what one might think, mobilizing (private) investment into small-size installations (e.g., solar thermal collectors or modern biomass heating systems at household Fig. 3: Long-run marginal generation level), in spite of their smaller investment costs and higher marketability, may costs (for the year 2009 with an as- be even more challenging than for large-scale. The following graphs illustrate sumed payback time of 15 years) for the cost range of different RES technologies, and show that the general cost various electricity from RES options in level as well as the magnitude of the cost ranges varies strongly between the EU countries (ECOFYS, 2011) different technologies. The broad range of cost per MWh can be attributed to differences in investment costs between the Member Wind offshore States, or technical parameters such as plant size and/or Wind onshore conversion technology, but to a larger degree it points to Tide & wave differences in resource conditions; i.e., site-specific wind Solar thermal electricity conditions, solar irradiation, etc. Photovoltaic PV: 259 - 1,336 EUR/MWh Hydro small-scale Current market price Looking at electricity generation from renewable sourc- Hydro large-scale Geothermal electricity es, the graph shows that only the most conventional and Biowastes cost-efficient options, like large hydropower and biogas (Solid) Biomass plants, achieve grid parity; i.e., they can generate electric- (Solid) Biomass co-firing ity at or below market prices. It is also noticeable that wind Biogas power from onshore wind parks cannot deliver electricity at market prices even at the best sites, something which cost range (LRMC) 0 50 100 150 200 is likely to change in the future if the costs for electricity Costs of electricity (LRMC - Payback time: 15 years) [EUR/MWh] from wind power continue to decrease.

PAGE 32 Results and discussion

For heat production from renewable energy, the situation Solar thermal heat & hot water is quite different. All technology options are either com- Heat pumps (non-grid petitive or are close to competitiveness under favourable Biomass (non-grid) - pellets conditions. The distinction between grid-connected (e.g., Biomass (non-grid) - wood chips (grid heat) biomass and geothermal district heating systems) and Biomass (non-grid) - log wood Current market price non-grid (e.g., biomass non-grid heating systems, solar Geothermal - district heat

thermal heating systems and heat pumps) heating systems Biomass - district heat Current market price is important, as off-grid systems are considerably cheaper. cost range (LRMC) 0 50 100 150 200 Costs of heat (LRMC - Payback time: 15 years) [EUR/MWh]

Biofuels for transport are still being produced far above market prices. Further Fig. 4: Long-run marginal generation efforts are needed on the technology side to reduce the costs of renewables and costs (for the year 2009 with an as- make them competitive in the market place without the need for continued sumed payback time of 15 years) for subsidies. various heat from RES options in EU countries (ECOFYS, 2011). Other important barriers concern the treatment and in- clusion of renewable energy production within the Biomass-to-liquid electricity grid, and barriers that hinder the necessary Lignocellulosic bioethanol reinforcement of the national electricity network infra- Bioethanol structure and the development of a trans-European elec- Biodiesel Current market price tricity network. The decentralised nature of renewable cost range (LRMC) 0 50 100 150 200 energy production and the intermittent power output of many renewables often call for grid expansion and rein- Costs of transport fuels (LRMC - Payback time: 15 years) [EUR/MWh] forcement. In reality, however, there is currently limited priority access for power produced from renewable versus fossil energy sourc- Fig. 5: Long-run marginal generation es, insufficient transport capacity and limited interconnection capacity. Missing costs (for the year 2009) for various connection and denied access to the grid can considerably delay or even block vehicle fuel from RES options in EU RES development, yet the Commission reports that most Member States have countries (ECOFYS, 2011). made important progress in tackling the barriers to electricity grid integration in recent years.

As regards non-technological, non-cost barriers to a wider renewable energy deployment, several major issues have been identified; most importantly, administrative hurdles like planning delays and restrictions. Lack of coordination between different authorities and lack of experience of civil servants, long lead-times in obtaining authorizations, but also the sometimes inhomogeneous application of laws, and unclear administrative framework (also concerning the application of environmental impact assessments) result in severe costs for obtaining permissions and consequently add to investor risk. Insufficient spatial planning that does not focus on securing areas for RES production or that even opposes RES development is another substantive barrier, preventing the realization of a larger number of RES investments. According to the Renewable Energy Progress Report, the overall progress made by the Member States in improving their administrative procedures has been limited, and increased efforts are paramount to achieving the 2020 target. Another identified barrier is limited information and awareness regarding the benefits of RES and available support schemes, due to poor dissemination of information and insufficient funding for awareness campaigns. Informa- tion campaigns have a clearly positive impact on public opinion, but they are often characterised by a lack of reliable, independent, easy-to-understand, easy-to-access, up-to-date, target-group-specific information. The potential of pilot and demonstrator projects and, in particular, the role of public buildings in this context is often not sufficiently exploited. As regards access to support

PAGE 33 Results and discussion

schemes, in addition to missing or poor-quality information, a lack of transparency and direct help for applicants can account for unused subsidies.

Also linked to awareness are attitudinal barriers to RES that are to be overcome. RES projects often face deliberate opposition from local or regional decision-makers and the local population. This can be due to the influence of conventional energy pressure groups and the fear of negative impact on tourism and on the quality of life. The ‘NIMBY’ attitude (‘Not In My Back Yard’) with which RES investments are often faced can considerably slow down the realisation of a project. To mitigate social opposition, local stakeholders should be engaged from an early stage, through an active information policy, through public participation, or by involving local stakeholders financially; e.g., by awarding local co-ownership.

4.1.2.2 ETC renewable Fig. 4 gives an overview of the different renewable energy topics addressed by energy projects ETC energy projects. The width of the arrow is proportionate to the number of projects addressing a particular sub-area of the vast field of application of renewable energy. Biomass 110 ETC energy projects address the full range of renewable energy topics, al- Solar power 35 though not every topic is equally represented. In total, 232 out of 424 projects, Wind power 29 more than half of all projects, work on promoting the use or production of re- Geothermal power 29 newable energy. By far the most frequent topic is the use of biomass for renew- Hydro power 11 able energy production. 108 projects, representing 47% of all projects in the Wave power 8 field of renewable energy, work in the area of biomass for energy production. Tidal power 5

Hydrogen 3 Fig. 6: Renewable energy topics Tab. 5: Number of projects per RES addressed in ETC energy projects. technology.

PAGE 34 Results and discussion

As a sub-category, the production of biogas (27 projects) and the use of wood as biogenic resource (28 projects) are the most commonly addressed topics in In buildings (including existing 19 biomass projects. Other frequent topics are show in Tab. 5. buildings and new constructions) In transport 6 Projects were also categorised according to their targeted area of application of In businesses 8 renewable energy; the most important areas of application are shown in Tab. 6. In industry 3 In tourism 3 Renewable energy In agriculture 3 Renewable energy comes from a diverse group of natural sources, such as Tab. 6: Number of projects per area of the sun, wind, flowing water, biological processes, or geothermal heat flows. application of renewable energy. Hydrogen, although being renewable and very abundant in nature as part of many compounds, cannot be considered a renewable energy source in the strict sense of the term, as with today’s technologies it takes more energy to produce hydrogen than the amount of energy hydrogen can yield. However, hydrogen is often considered a potential storage for renewable energy. The simple idea behind it is to use excess energy coming from fluctuating energy sources, such as wind or the sun, for the production of hydrogen, which is then stored as fuel in fuel cells. In this sense, hydrogen could also be associated with an increase in the efficiency of renewable energy exploitation and, thus, be considered as an energy efficiency increasing measure. In our classification scheme, however, we allocated hydrogen for fuel cells to renewable energy production, the reason being that projects often address the topic in the context of ‘renewable/sustainable production of hydrogen’ or ‘energy storages for increased renewable energy production’.

The EU aims for a 20% cut in Europe’s annual primary energy consumption by 4.1.3 ‘Increasing energy 2020. To move towards this goal, the Commission has proposed several meas- efficiency’ category ures to increase efficiency at all stages of the energy chain, including generation, transformation, distribution and final consumption. The main EU focus is on measures targeted at final energy consumption in the transport and building sectors, where the potential for savings is greatest. Another area in which energy efficiency is regulated on an EU level is in the domain ofconsumer goods. The general thrust of EU legislation is to influence user behaviour towards more energy-saving consumer behaviour. To promote energy-efficient consumer products, the EU introduced a series of obligations for clear product labelling. Similarly, the promotion of smart meters and informative billing is being pursued by the EU as a measure that should encourage citizens to manage their energy consumption better. In addition, energy efficiency requirements imposed on products are meant to reduce the energy (and resource) consumption of a product throughout its lifetime.

While remarkable progress in the area of renewable energy has been made in recent years, estimates undertaken by the European Commission in 2011 show that the EU is far from being able to achieve its energy efficiency objective. According to projections, the EU would fall short of the 2020 target by 1,474 Mtoe16 primary energy if the current trend is to continue. To get back on track, the Commission put forward a new Energy Efficiency Plan, proposing a mix of existing and new measures for higher energy savings of buildings, transport, 16 http://ec.europa.eu/energy/efficien- products and processes. Pursuant to the Energy Efficiency Plan, the EU adopted cy/eed/doc/2011_directive/20110622_ the Directive 2012/27/EU on Energy Efficiency, which establishes a common energy_efficiency_directive_slides_ framework of new and existing measures designed to remove barriers in the presentation_en.pdf

PAGE 35 Results and discussion

energy market, and to overcome market failures that impede efficiency in the supply and use of energy. The Directive contains, for the first time, a legal definition and quantification for the Union’s energy consumption in 2020, and provides for the establishment of indicative national energy efficiency targets for 2020. Furthermore, it obliges Member States to achieve at least some of the final energy savings in household, industry or transport through energy efficiency obligation schemes, submit National Energy Efficiency Action Plans and annual progress reports, introduce mandatory energy audits for large companies to help them identify the potential for reducing energy consumption and incentives for SMEs to undergo energy audits and disseminate best practices, and to achieve an annual three per cent renovation rate for buildings owned and occupied by the central governments. Where possible, the Directive mandates the public sector is to lead by example as regards the renovation of public buildings and the purchasing of energy-efficient buildings, products and services.

While the Energy Efficiency Directive will certainly help drive progress, it is likely that targets will nonetheless not be achieved. In part, this is due to a lack of appropriate tools for monitoring progress and measuring impacts on the Member State level, and the difficulty of mobilising the necessary funds in times of economic crisis, even though increasing energy efficiency is one of the most cost-effective ways to enhance the security of energy supply, and to reduce emissions of greenhouse gases and other pollutants, resulting in an 17 Full implementation of the existing economic gain rather than a loss17. The biggest energy savings potential to be and new measures has the estimated tapped in the European Union is to be found in the energy sector itself, by in- potential to generate financial sav- creasing the efficiency and reducing the losses in generation, transformation ings of up to EUR 1,000 per household and distribution, in the transport sector, and in housing. But there is also poten- every year, improve Europe’s industrial tial for savings to be exploited in commerce and industry. competitiveness and create up to two Even though energy savings directly translate into net financial gains, there ex- million jobs (European Commission, ists a great discrepancy between the actually realised and the technically-feasi- 2011c). ble and economically-sensible savings potential. Closing this energy efficiency gap requires surmounting existing barriers to increasing energy efficiency in buildings, transport, and products and processes.

Market barriers are probably the most prevalent type of barriers to energy efficiency, in particular the limited access to (cheap) capital on the free capital market for energy efficiency measures. Even though EE investments pay off in the mid- and long-term, high up-front costs coupled with long payback and low return on investment for many EE measures does not render them very attractive to investors. One such example is that of deep energy retrofit of buildings which, by taking a whole-building approach, can result in energy savings 18 Results from the EU Green Building of 40% and beyond, but has a much longer payback time compared to a single Programme, available at: or combined energy retrofit, which typically yields only an average of five to 15 www.eu-greenbuilding.org percent energy savings per building18. Another well-known market failure is the so-called “split incentives between landlord and tenant”; i.e., the landlord, who has the opportunity to invest in energy efficiency improvements, is not the one benefiting from the resulting energy cost savings and therefore has little incentive to invest.

High hopes have been put into financing instruments (e.g., loan guarantees for private capital, loan guarantees to foster energy performance contracting, grants, subsidised loans and dedicated credit lines, third-party financing systems) to raise capital, reduce the risks of energy efficiency projects and allow for cost-effective renovations, even among low and medium revenue households. However, a more widespread use of financial instruments is currently

PAGE 36 Results and discussion

hindered by a lack of understanding of and experience with financial instru- Energy efficiency ments in public authorities, as well as existing regulatory barriers. Energy efficiency is generally de- In this context, another important barrier that can be identified is the lack of fined as the ratio between output capacity of market actors and public institutions. Public authorities often lack to input; in other words, the ratio internal resources and know-how for harvesting even profitable ‘low-hanging between the benefit gained (in the fruits’ with low pay-back times, such as refurbishment of public lighting, or form of heat, light, motion, etc.) and developing bankable EE projects to make use of EU financing mechanisms such the energy used. Since energy effi- as ELENA. Lack of capacity also relates to a lack of skilled labour in the area of ciency is a relative term, it does not energy-efficient refurbishment in the construction sector. necessarily stand for an overall decrease in total energy consumption Administrative barriers can be found in the area of laws and rules regulating if the efficiency gain is eaten up public deficit and debt and public procurement, which often restrict or block by a higher consumption. Despite the realisation of even cost-efficient measures, but also in the area of building the crucial difference between the permits or regulatory barriers to the use of energy performance contracting concept of energy efficiency and and other third-party financing arrangements for energy savings. of energy consumption we found Another impediment to reduced energy consumption is a lack of integrated that the two are often used inter- spatial planning; in other words, the failure to create the framework for a changeably by projects (even in compact urban development with mixed land use which favours less energy- Commission publications), and a intensive lifestyles (reducing the demand for (private) motorized transport and clear classification of a project ob- increasing the viability of public transportation) and creates favourable pre- jective under one or the other is conditions on the level of building plans for the use of active or passive solar often not possible. Therefore the energy, or which makes district heating systems more economically feasible. term energy efficiency will be used in this publication to express both Just like for renewable energy, a lack of awareness and information about EE an increase in efficiency and reduc- opportunities is a major barrier to achieving higher energy savings, in particu- tion in consumption. lar as regards changing energy consumption behaviour. On an EU level, this is counteracted by obligations to make energy consumption data easily accessible for final energy consumers, including (smart) metering and clear billing of their individual energy consumption, introducing energy labels on consumer goods and energy performance certificates for buildings, and energy audits for companies. In the context of general awareness about energy efficiency measures, the exemplary role that public buildings can play as demonstration objects has often been neglected.

Different spheres of activity require a slightly different definition ofenergy efficiency. From a macro-economic perspective, energy efficiency is denoted as energy intensity, and relates to the productivity of an economy relative to its consumption of primary energy19. In energy production, energy efficiency 19 Eurostat defines energy intensity refers to the efficiency of conversion of primary energy (e.g., coal, crude oil) as the ratio between gross inland to secondary energy (e.g., electricity, gasoline). On the demand side, the term consumption of energy and gross energy efficiency means the amount of energy consumed to satisfy personal domestic product: http://epp.eurostat. needs, such as the demand for mobility or personal comfort gained from using ec.europa.eu/statistics_explained/in- electrical appliances. Increasing energy end-use efficiency can be achieved by dex.php/Glossary:Energy_intensity technical, organisational, institutional, structural or behavioural changes.

PAGE 37 Results and discussion

4.1.3.1 ETC energy efficiency projects

Fig. 7: Energy efficiency topics addressed in ETC energy projects.

Fig. 7 shows the areas pertinent to the topic of energy efficiency in which ETC energy projects are found to be active.

In total, 234 out of 424, more than half of all ETC energy projects, aim at in- Energy-efficient refurbishment 68 creasing energy efficiency in different spheres of life, such as housing, transportation, economic activity, etc. This means that the number of projects Energy-efficient construction 49 working on energy efficiency is almost equal to the number of projects in the Transportation 48 field of renewable energy. ETC energy projects address a wide range of energy Industry 8 efficiency-related topics. The most important area is that of energy efficiency Businesses, thereof 23 in buildings. Adding the projects that work on energy efficiency in existing SMEs 15 buildings to those that work on energy-efficient construction gives a total of 93 projects20 active in the field of energy efficiency in buildings, making this by far Retail 1 the most widely-addressed topic. Other important topics are energy efficiency In the production process 9 in transportation, and in the secondary and tertiary sector. The latter work, for By developing products or 6 example, on increasing energy efficiency in the production process or on devel- services that promote energy oping products or services that promote energy efficiency. Except for projects efficiency aiming at increasing energy efficiency in cities and urban areas, all other topics In cities and urban areas 26 are rather minor. Tab. 7: Number of projects per energy efficiency topic. 20 The 24 projects that work on both topics were counted only once.

PAGE 38 Results and discussion

Typical activities and outputs in ETC energy projects are not fundamentally 4.1.4 Project sub-objective different from outputs in other areas in which ETC projects are active. These categories are baseline studies, feasibility studies, technical studies, management plans, handbooks and guidelines, policy recommendations, action plans and strategies, networks and clusters and pilot investments, to mention but a few. Typi- cally, programmes collect quantitative information on the number of studies/ action plans/pilots, etc., as part of project monitoring, in the form of indicators. Output indicators provide information on what the grant money was spent on, Sub-objectives but tell us little about what was achieved by the project or what the purpose of developing the study, action plan or pilot was, which is what we were inter- Sub-objectives, as we understand ested in. We therefore assigned all outputs to one of 14 sub-objectives. them, express the desired outcome of the activities that a project sets Energy saving in buildings, for example, can be achieved in many ways: a and the outputs it produces. As change in user behaviour can be brought about through soft measures such such, they strongly link to the dif- as awareness-raising campaigns, a change in policy through involving policy ferent ways projects work towards makers in project activities and by disseminating project results to them, an a main objective. increase in personal capacities of craftsmen in the construction sector through a training course on energy-efficient refurbishment; the implementation of concrete energy efficiency measures in buildings by facilitating investments

Fig. 8: Sub-objectives addressed in ETC energy projects.

PAGE 39 Results and discussion

through carrying out a feasibility study. All these are common ways ETC energy Preparing investments 220 projects tackle the need to curb energy consumption in buildings. Categories Building capacities 133 like [changing behaviour], [influencing policies], [building capacities] or [facilitating investments] are understood as sub-objectives, as they themselves have Developing a new service 121 to be followed by concrete actions such as [carrying out an information cam- Influencing policies 108 paign], [establishing a strategic partnership], [providing training] or [carrying Changing practices 100 out a feasibility study]. Raising awareness 89 Making investments 76 But we went even further: as regards outputs, instead of counting the number of studies, we collected the typical type of information gathered through stud- Developing a (new) product 45 ies, and instead of collecting the number of established networks, we collected Boosting business development/ 44 information on new strategic partnerships established through the project be- innovation tween two or more ETC stakeholders. Changing behaviour 30 Changing attitudes 8 Fig. 8 gives an overview of the most frequent sub-objectives, sorted by fre- Harmonizing method/procedure 15 quency counts. In the following sections, we will look into these sub-objectives and typical outputs in more detail. Harmonizing standards 9 Harmonizing data 5 Tab. 8: Number of projects per sub- objective category.

4.1.4.1 ‘Preparing/ Around 50% of all projects aim at boosting investment in renewable energies facilitating investements’ or energy efficiency measures by undertaking pre-investment activities. Very category different approaches to facilitating investment can be found. The most frequent pre-investment activity (168 out of 220 projects) set by projects is the collection of information and data. In the framework of a cooperation project, project partners carry out the necessary groundwork that should eventually Feasibility study 46 lead to concrete investment. The collected data and information is typically Guidelines, manual, handbook 39 used for outputs such as feasibility studies, guidelines, manuals, or handbooks, knowledge databases, geodatabases, decision support tools, action plans or en- knowledge database 25 ergy strategies, or business/investment plans or business models. A technical Geodatabase 19 study21 is an output which we only found in cross-border cooperation projects. Decision support tool 17 22 Action plan, of which 21 We mapped the most commonly collected information and data , which is Biomass action plan 5 summarised in Tab. 10. Furthermore, if explicitly mentioned, we gathered information on how the data Local/regional energy action plan 2 was collected: through measuring, balancing23, modelling, monitoring, bench- Sustainable Energy Action Plan 1 marking, by means of a survey or by scenario analysis or modelling (c.f Tab. 11). Energy strategy 4 Business/investment plan 12 21 Examples are a prepared detailed plan for the rehabilitation of several public Technical studies 5 buildings in MOVE (Slovenia - Austria Programme), an expert assessment on how Tab. 9: Number of projects per output to realize a local district heating system in Inno-Heat (South Baltic Programme), category under the ‘preparing invest- or a technical project on how to equip several apartment houses, a school and ments’ sub-objective. other public buildings with a geothermal heating system installation in renewable energy (Latvia – Lithuania Programme).

22 Note that one project can collect different types of information, also for one and the same output.

23 [Balancing] refers to the use of a life cycle analysis, life cycle cost analysis, carbon footprint, energy balance methodology or similar.

PAGE 40 Results and discussion

[Establishing strategic partnerships] is another pre-investment activity frequently undertaken by projects (74 out of 424 projects). While the project part- Good/best practices 52 nership as such must also be considered a strategic partnership, in our case we Best available technologies 35 only mapped newly established networks between either one or several project Energy demand 42 partner/s and one or several third party/ies or between third parties. Although Energy efficiency potential 21 we think of ‘partnership’ and ‘network’ as being synonymous, we reserved the Renewable energy potential 69 term ‘network’ for [professional networks]24 (14 projects), which we understand as a ‘group of professionals working in the same sector/field forming a net- Current energy supply 10 work‘, versus ‘a network between, e.g., businesses and research institutions, a Existing measures into energy 12 public-private partnership, or a triple or quadruple helix cooperation’. efficiency or renewable energy ‘Strategic’ in the category [establishing a strategic partnership] refers to the Environmental impact 34 fact that the partnership is purposeful. A strategic partnership in the con- Cost-benefit 44 text of preparing investments can have many purposes; for example, a wider Technical feasibility 34 divulgation of information, the use of synergies and the exchange of expert Financial (or economic) back- 12 knowledge, the optimisation of a supply chain, the identification of potential ground investors, etc. Most partnerships are meant to last beyond the duration of the Legal (or political) background 33 project, but some projects take special precautions to ensure the longevity of a partnership by establishing a durable [management structure] (11 projects)25. Strengths-weaknesses-opportu- 4 The partnerships as such are as diverse as the partners (see also section 4.1.5 nities-threats (SWOT) on target groups). The most frequent partnerships are new networks created Market (conditions) 14 between the public and the private sector (21 projects), between public authori- (potential) Suppliers 6 ties and research institutions (13 projects), or private companies and research Stakeholder needs/requirements 6 institutions (15 projects). Relevant stakeholders 8

A last important pre-investment activity concerns the [introduction or use of Mobility demand 2 new financial instruments] (29 out of 424 projects). Tab. 10: Number of projects per type of information collected. Financial instruments

Financial instruments, as we understand them here, are financial incentives Measuring 19 which are meant to stimulate investment in energy efficiency or renewable Balancing 15 energy. Tab. 12 gives an overview of the financial instruments found in ETC en- Modelling 14 ergy projects. Not all of them are ‘innovative financial instruments’, defined Monitoring 8 by the European Commission (2011a) as “interventions other than pure grant funding”, including “interventions such as participation in equity (risk capital) Benchmarking 3 funds, guarantees to local banks lending to a large number of final benefici- Survey 8 aries or risk-sharing with financial institutions to boost investment in large Comparing different scenarios 8 infrastructure projects.” Tab. 11: Number of projects per type of data collection.

24 We found examples of networks of research institutions working on energy- Energy performance contracting 10 from-biomass, biochar, local renewable energy production, energy efficiency, network of green technology businesses working on low-carbon solutions, net- Fund or subsidy 6 work on biorefinery experts, etc. Public-private partnership 4 25 For example, Clim-ATIC (Northern Periphery Programme) establishes an inter- Revolving fund 3 national, self-financing service to disseminate knowledge to support the sustain- Low-interest loan 2 ability of rural communities across the Northern Periphery, ENER-COOP (Spain Other financial incentive 2 - External Borders Programme) establishes a permanent renewable energy centre for providing training to Moroccan technical and public personnel on the use of Allowance 1 renewable energy sources, and the Upper Rhine area (Upper Rhine Programme) Tab. 12: Number of projects per type of works on becoming a model region for energy by establishing a permanent net- financial instrument. work TRION for this end.

PAGE 41 Results and discussion

When comparing target groups under the ‘preparing investments’ sub-objective with the overall target group distribution (c.f. section 4.1.5), a very similar pattern emerges, with the exception of two distinct features: the general public is underrepresented as a target group, while the energy sector is represented more strongly.

higher education private sector public sector infrastructure & service providers and research

energy (public) (infrastructure) transport businesses providers providers

research political institutions and general public local/regional public authorities institutions representatives

construction sector citizens national agricultural sector politicians SMEs forestry sector green others sectoral agencies businesses industry environment/ interest groups energy national public authorities universities including agencies banking local/regional 1 NGOs * sector politicians development agencies

Fig. 9: Target groups under the ‘preparing investments’ sub-objective. Each tile’s area in the tree map is proportional to the number of counts per target group. *1 education/training institutions

Fig. 10: ‘Preparing investments’ sub-objective and related activity and output categories.

PAGE 42 Results and discussion

Capacity building is a key objective for a large number of ETC energy projects 4.1.4.2 ‘Building capacities’ (133 projects). Capacity building involves a learning process on the level of in- category dividuals or organisations, by increasing knowledge and skills and the ability to apply these to problem solving. We therefore have to assume that capacity building has to involve an [increase Capacity building in knowledge] (128 projects) and/or an [improvement of skills and know-how] (25 projects). Out of the 133 projects, 20 projects combine both approaches. Capacity building involves a learn- We also mapped the focus areas of capacity building activities undertaken by ing process on the level of individu- projects (c.f. Tab. 13). als or organisations, by increasing knowledge and skills and the ability The most common ways to increase knowledge is knowledge exchange (94 to apply these to problem solving. projects), training (53 projects), excursions and study visits (16 projects), information campaigns26 (14 projects) or staff exchange (2 projects). The improve- 26 Carrying out an information ment of skills is tackled through training (24 projects), or peer learning activities campaign includes such frequently such as study visits (5 projects), partner-to-partner mentoring (in other words, undertaken activities like organising knowledge exchange) (2 projects) or staff exchange (1 project). Five projects27 a conference, a media campaign, or train actors with the aim of turning them into multipliers of the knowledge and disseminating information kits to the skills they have gained. public, etc. 27 For example, AlpHouse (Alpine Space Since [building capacities] is considered a sub-objective and not an activity (the Programme) organises train-the-train- activity would be increasing knowledge or improving skills through knowledge er programmes on energy-efficient exchange, training, etc.), some other activities were also classified under the refurbishment for SMEs in the con- objective ‘to build capacities: collecting data (7 projects) or establishing a stra- struction sector. tegic partnership (3 projects). It should be pointed out that [building capacities] and [developing a new service] Public procurement 6 by [providing training] are two sides of the same coin, which made it sometimes Policy making 10 hard to decide to which sub-objective the training activity should be assigned. financing 4 It was to some extent intuition that guided us on the decision whether to clas- Governance 8 sify a training as a capacity building activity or to classify it as a new service, and in many cases we assigned both categories to a project. We trusted in what Climate change mitigation 6 projects stated as being the reason for providing training: if capacity building Energy (strategy) planning 15 was explicitly mentioned, then the training activity was classified as pursuing Energy management 20 capacity building. However, if it was apparent from the project description that Energy-efficient construction 13 the training was more than a one-off event, we classified it as a new service. Energy-efficient refurbishment 9 Urban planning 7 Land use planning 4 Fig. 11: ‘Building capacities’ sub-objective and related activity and output Transport planning 2 categories. Mobility management 13 Supply chain management 2 Tab. 13: Number of capacity building efforts per area.

PAGE 43 Results and discussion

4.1.4.3 ‘Developing a 121 out of 424 projects aim at developing a new service as part of the project’s new service’ category outputs. The types of services developed in ETC energy projects are manifold. They range from training on energy-efficient refurbishment or zero-energy building technologies for small and medium-size enterprises, to counselling services on household energy savings for the general public or the provision of technical expertise on the use of biomass for local district heating systems to local authorities. The services most frequently found in project descriptions are the provision Provision of expert advice/ 58 consultancy of expert advice/consultancy to a wide range of target groups, the divulgation or provision of technical or scientific knowledge, the development of new Delivery of training 52 educational material or educational programmes, and the delivery of train- Development of new educa- 40 ing. More energy-specific services are energy audits and energy performance tional material or educational 28. programmes certifications Energy audits 17 Activities to this end are, for example, developing a common methodology Divulgation/provision of techni- 9 for energy audits (3 projects), carrying out the necessary groundwork for the cal/scientific knowledge service development by collecting information (4 projects) on the feasibility as- Energy performance 6 sessment of a project, on stakeholder needs, on existing good practices, or by certifications collecting data through benchmarking. Establishing strategic partnerships29 (1 Tab. 14: Number of projects per ‘devel- project) or a permanent management structure (2 projects) are less frequent oping a new service’ activity category. activities; however, this figure does not include the project partnership as such, which must also be considered a strategic partnership.

29 The objective of CEEBEE (Austria-Hungary Programme) is to found a centre 28 The difference between carrying out of excellence for energy-efficient construction and renewable energy by es- energy audits and energy performance tablishing a partnership between research institutions and educational institu- certificates is rather small. Energy tions in the form of a new professional network. auditing is understood as the umbrella term for energy performance assess- Looking at target groups in connection with service delivery gives a good in- ments of companies, buildings, etc. sight into the nature of these services. The most important target group is Energy performance certification of small- and medium-size enterprises, SMEs (35 projects). SMEs benefit from buildings refers to the obligation for training courses developed (1 project) and carried out by ETC energy projects (11 Member States under the Directive projects), consultancy services (14 projects), for example, by supporting SMEs 2002/91/EC and Directive 2010/31/ with the development of business or investments plans (3 projects), counselling EU to introduce energy performance services by getting access to latest technical or scientific knowledge (1 project), certificates and to establish minimum or free-of-charge energy audits (2 projects) or certifications (2 projects). requirements for the energy perform- The private sector (48 projects)30, including industry and businesses, is also a ance of new buildings and existing main beneficiary of services developed by ETC energy projects. What is strik- buildings that are subject to major ing is the number of training programmes developed (12 projects) and training renovation. Certification services can courses carried out (11 projects) for the construction sector. These are mainly also refer to environmental certifica- continuing education courses offered for craftsmen, but courses are also avail- tions, etc. able for technicians and architects in the area of energy-efficient renovation and construction. 30 Infrastructure operators (1 project) Another important target group is the general public (20 projects). Services and energy (infrastructure) providers developed for them encompass consultancies31 (11 projects), e.g., on energy-effi- (3 projects) can be public or private and cient refurbishment and retrofitting (8 projects) or on energy-efficient building were therefore neither included in the design (3 projects), trainings (4 projects), energy audits (1 project) certification private nor the public sector. (1 project), etc.

31 Examples are the competence centre providing advice on the energy-efficient refurbishment of historic buildings developed by GOVERNEE (Central Europe Programme), or the cross-border competence centre for renewable energy and energy saving established by POLENERGIE (Greater Region Programme).

PAGE 44 Results and discussion

The public sector (35 projects), in particular local and regional public authori- Fig. 12: ‘Developing a new service’ sub- ties (32 projects), benefits from a range of services such as educational pro- objective and related activity, output grammes (6 projects), consultancies (8 projects), for example, on the develop- and target group categories. ment of business plans or business models (2 projects), on the development of an energy strategy (1 project) and on public procurement (1 project). Further- more, the public sector receives scientific or technical expertise (1 project), or benefits from energy audits (6 projects) and certificates (2 projects) carried out.

One fourth of all analysed ETC energy projects (108 projects) were found to 4.1.4.4 ‘Influencing policies’ aspire to having an impact on policy-making. Cooperating with international category partners is thought to build political support and momentum, either by adding weight to policy recommendations or by increasing the visibility of the project and the project’s objectives.

Policy recommendations (65 projects) are targeted at different governance levels (local, regional, national and European; c.f. Tab. 15) and they often contain Local or regional authorities 7 lessons learned from the project or recommendations on the harmonisation of National authorities 1 policies or standards. European institutions 4 Local or regional politicians 3 In addition to giving policy recommendations, several projects aim at influencing policies by putting tools in the hands of decision makers that will guide National politicians 4 them in their decision making. Such a tool can be an energy strategy or action Tab. 15: Number of projects per policy plan, a decision support tool, or a thematic study. recommendations target group.

The collection of information and data often serves as a preparatory step for the development of these tools. Tab. 17 gives an overview of the different types of information collected.

PAGE 45 Results and discussion

Fig. 13: ‘Influencing policies’ sub- objective and related activity, output and target group categories.

Energy strategy 26 Action plan, of which 20 Biomass action plan 7 Sustainable Energy Action Plan 1

Decision support 2 Another important output aiming at influencing policies is the establishment of Tab. 16: Number of projects per output a strategic partnership (16 projects) for the purpose of extending the reach of category. the project activities and results; for example, by involving decision makers or other relevant stakeholders in project activities. Local and regional authorities, Good/best practices, of which 11 for example, enter into a partnership with research institutions, businesses, construction companies, transport providers, interest groups, environmental Policy 3 and energy agencies, or politicians. Financial instruments 1 Legal (political) framework 8 ESPAN (Austria-Hungary Programme) builds a network of local and regional Financial (economic) framework 2 authorities and businesses to exchange knowledge, transfer technologies, develop joint pilot projects, and to collaborate in the areas of education and busi- Energy demand 7 ness development. Research institutions are involved in the network as exter- Current energy supply 2 nal experts. Existing measures 1 Energy efficiency potential 1 For example, partners of the project CARE-North (North Sea Region Programme) Renewable energy potential 2 involve third parties, such as city networks or the North Sea Commission, in the development of CO reduction strategies for transport. Stakeholder needs 1 2

Relevant stakeholders 2 MANERGY (Central Europe Programme) collaborated with energy agencies that Tab. 17: Number of projects per type of support partners with their expertise in the development of renewable energy information collected. supply solutions.

PAGE 46 Results and discussion

Exchanging on practices and learning from good practices among actors across 4.1.4.5 ‘Changing practices’ borders is inseparably linked to European Territorial Cooperation. The sub-ob- category jective ‘to change and improve practices’ in a given field is therefore an important one, and was pursued by approximately 25% of all analysed ETC energy projects. Tab. 18 gives a full overview of the different areas in which a desired change Practices in current practices is sought to happen as a consequence of the completed project. The most important areas are energy management, a change towards Practices are understood here energy-efficient construction and refurbishment, mobility management and as customary methods or proce- energy planning. dures, and refer to institutions or collectives. ANSWER (North Sea Region Programme) creates an incentive for an improvement in energy management in businesses through a business award, but also aims to inspire businesses by collecting and publishing good practice examples of successful green businesses.

APERSUE (South West Europe Programme) aims at changing agricultural prac- Energy management 19 tices by facilitating access to innovative energy-saving technologies, and Mobility management 13 by offering training to farmers on a variety of topics (savings and/or energy Energy (strategy) planning 11 production). Governance 10 EnerCoast (North Sea Region Programme) establishes new biomass energy sup- Urban planning 9 ply chains by jointly adapting and applying a sustainable supply chain manage- Energy-efficient construction 7 ment methodology within regional energy clusters. Energy-efficient refurbishment 7 Land use planning 5 Several ETC energy projects deal with changing practices and/or building capacities in public procurement (9 projects) through knowledge exchange on Climate change mitigation 5 green (public) procurement, development of e-procurement tools, or the draft- Public procurement 4 ing of public procurement guidelines. Supply chain management 3 Financing 3 RE-GREEN (INTERREG IVC Programme) aims at inducing local and regional pub- Transport planning 3 lic authorities to act as “leading examples” in renovation and retrofitting by facilitating a knowledge exchange on policy tools for green public procurement Management 2 between them. Planning 2 Awareness raising 2 Public procurement Participatory planning 1

Why is public procurement relevant for energy saving and the use of renew- Policy making 1 able energies? Public procurement criteria that takes energy efficiency into Tab. 18: Number of projects per area in account steers public spending towards energy-efficient products, transport which efforts to change practices are modes, buildings, works and services. For purchases subject to public procure- made. ment, the EU requires public organisations to consider energy efficiency criteria in the procurement of vehicles or office equipment. From 2019 onwards this will be expanded to new buildings, which will have to reach a “nearly zero-energy” performance level. In addition, the Commission promotes Green Public Procurement as “a process whereby public authorities seek to procure goods, services and works with a reduced environmental impact throughout their life cycle when compared to goods, services and works with the same primary function that would otherwise be procured.” The Commission’s collection of best practice examples and updated guidance document on GPP can be found here: http://ec.europa.eu/environment/gpp/index_en.htm

PAGE 47 Results and discussion

GRASP (Mediterranean Programme) aims at strengthening the capacities of local and regional public authorities to organize and develop Smart and Green e- Public sector 41 Procurement processes with a focus on renewable energy sources and energy- Local/regional authorities 38 efficient solutions. National authorities 1 EFFECT (South East Europe Programme) aims at the use of energy-efficient Private sector 15 public procurement to leverage energy efficiency improvements. Businesses 1 Industry 1 The sub-objective category [changing practices] is strongly interlinked with Agricultural sector 2 the categories [changing behaviour] and [building capacities]. The difference between this and [changing behaviour], which relates to individuals, is that Higher education and research 8 institutions [changing practices] refers to institutions or collectives. This is also reflected in the target groups at which activities and outputs are aimed. Activities un- Research institutions 6 dertaken and outputs generated under the [changing behaviour] sub-objective Universities 2 are mostly aimed at the general public, while [changing practices] is mostly tar- Tab. 19: Number of projects per geted at public institutions or private organisations. The most important target ‘changing practices’ target group. groups are shown in Tab. 19.

Changing practices often requires building up institutional capacities: 54 out of the 100 projects that tackle changing institutional practices also undertake capacity building activities.

Besides capacity building activities (which were classified under a separate sub- objective [building capacities]; c.f. 4.1.4.2), another important activity is collecting information and data (77 projects) on a variety of topics: projects collect and Fig. 14: ‘Changing practices’ sub- objective and related activity, output and target group categories.

PAGE 48 Results and discussion

share good practice examples and information on best available technologies, gather energy consumption data as well as data on environmental impact and Good practice 42 cost-benefit of planned measures or background information on the legal or Best available technologies 2 financial framework or on market conditions, to mention only a few. Tangible Energy consumption 11 outputs produced are knowledge databases, geodatabases, (policy) recommen- Energy efficiency potential 4 dations, manuals and guidelines, decision-support tools, action plans or newly- Renewable energy potential 1 established professional networks. Environmental impact 4 Another frequent approach to changing practices is by jointly developing a Cost-benefit 1 methodology (21 projects); for example, for the benchmarking of current ener- Legal background 9 gy management practices, or by developing a common carbon balancing meth- Financial background 1 odology for companies. Market conditions 2 GREEN (Sweden-Norway Programme) aims at inducing a positive change in the Tab. 20: Number of projects per type energy consumption of skiing resorts, as well as increasing the use of energy of information collected. from renewable sources by developing a common benchmarking system with which the energy performance of different skiing resorts can be benchmarked.

EnerBuiLCA (South West Europe Programme) aims to promote more energy- efficient building methods, and develops for that purpose a life cycle analysis method that identifies the best construction or refurbishment solution in terms of low energy demand over the whole life cycle of a building.

SusStation (North West Europe Programme) aims to increase the use of measures to achieve greater sustainability of railway stations by developing a joint sustainability assessment tool for railway stations.

Other common activities are to initiate new ways of cooperation through the establishment of new partnerships (18 projects), in particular triple-helix cooperation models between research, private and public actors (4 projects), and to increase knowledge (16 projects), in particular through knowledge exchange.

Not surprisingly, activities targeted at raising awareness can be found fre- 4.1.4.6 ‘Raising awareness’ quently in ETC energy projects (89 projects). Since awareness-raising is for the category most part a communication exercise, this figure most likely underestimates the actual number of projects that undertake awareness-raising activities, since communication activities were only assigned to the sub-objective [raising awareness] if this objective was explicitly mentioned by the project in connection with a project activity. Again, we classified based on the information given Information campaign 67 by projects. Training 13 Typical awareness-raising activities are to carry out an information campaign, Study visit or excursion 15 to give training, to organise study visits, events or fairs, or to provide oppor- Public event 8 tunities for knowledge exchange, such as meetings, conferences, etc. The clas- Fair 6 sification rule states that raising awareness has to be preceded by increasing knowledge. Knowledge exchange 12 Tab. 21: Number of projects per output Awareness-raising is targeted at different groups of stakeholders, most com- aimed at raising awareness. monly at the general public and at policy makers, but also at businesses (construction sector, energy suppliers or infrastructure providers, transport operators, SMEs in general), at research institutions, including universities, at the forestry and agricultural sector or schools. Tab. 22 summarises the most important target groups of awareness-raising activities.

PAGE 49 Results and discussion

Fig. 15: ‘Raising awareness’ sub-objective and related activity, output and General public 60 SMEs 3 target group categories. Local/regional/national authori- 15 Energy suppliers or infrastruc- 2 ties ture providers Local/regional politicians 8 (public) Transport operators 2 Research institutions, incl. 7 Forestry sector 3 universities Agricultural sector 8 Construction sector 7 Interest group 1 Businesses 6 Tab. 22: Number of projects per awareness raising target group.

4.1.4.7 ‘Making Implementing concrete investment (76 projects), such as pilot installations, investments’ category investment in research equipment, public infrastructure, etc. is a common activity, which can be found slightly more often in transnational cooperation projects (32 projects= 21% of all transnational energy projects) than in cross- border cooperation projects (42 projects= 20% of all cross-border energy projects) projects. However, statistical evaluation shows that the difference is not significant (c.f. section 4.3.). The sub-objective to [make investments] can either be linked to the testing (4 projects) or to the realization of a pilot (59 projects).

Testing a pilot 2 Testing and realising a pilot 2 Realising a pilot 57 Tab. 23: Number of projects per ‘making investments’ activity category.

Fig. 16: ‘Making investments’ sub-objective and related activity, output and target group categories.

PAGE 50 Results and discussion

Out of the 424 projects analysed, 45 projects work on developing a new product. 4.1.4.8 ‘Developing an new A new product is an umbrella term that circumscribes many different types product’ category of products. Examples of these products are prototypes for car components in electric cars, instrumentation for the online monitoring of microalgae for biomass-to-energy production, a prototype of an optimised wave energy converter, an improved technology in the area of smart metering, etc. Testing a prototype 28 Realising a prototype 24 Green-Car Eco-Design (South West Europe Programme) develops prototypes of Testing and realising a prototype 13 car components for electric cars, in particular batteries, testing different de- Collecting data 7 signs on their environmental impact by looking at the entire product life cycle. Establishing a strategic partner- 2 ship EnerBioAlgae (South West Europe Programme) develops several new products that aim at increasing the productivity of algal biomass production for energy Developing a common method- 1 ology purposes, such as technologies and instrumentation for on-line monitoring of microalgae and a quality-optimised microalgae-based biodiesel. Tab. 24: Number of projects per ‘developing a new product’ activity category. The WESA project (Central Baltic Programme) optimises an existing wave power system for operation in occasionally icy environments.

SMART (Latvia - Lithuania Programme) adapts smart metering technologies to local needs and conditions.

The new products are only tested and/or realised within the project lifetime. Other preparatory activities for the development of a new product are the collection of data, the development of a common methodology, e.g., for monitor- Fig. 17: ‘Developing a new product’ ing, or the establishment of a new cross-border partnership between research sub-objective and related activity, institutions. output and target group categories.

PAGE 51 Results and discussion

4.1.4.9 ‘Boosting business 44 out of 424 projects aim at boosting business development and innovation development or by undertaking different activities towards this goal. Most importantly, boost- innovation’ category ing business development involves establishing strategic partnerships (33 projects), in particular between public and private actors (SMEs, industry, energy infrastructure operators, green businesses, banking sector) and research institutions (R&D facilities, universities), or between businesses. Tab. 25 shows Strategic partnership between: the most frequent types of partnerships. These newly-established partner- Private sector – research institutions 15 ships may culminate in a permanent management structure (2 projects), a business cluster (4 projects), or a professional network (5 projects). Businesses – businesses (B2B) 13 Some projects also take a triple helix approach to innovation by bringing to- Private sector – public sector 5 gether universities, enterprises and public actors, as motor for a knowledge- Triple helix partnerships (private 2 based economy. In the triple helix, enterprises operate as the locus of produc- actors – public actors – universities) tion, government as the source of contractual relations that guarantee stable Tab. 25: Number of projects per type interactions and exchange, and universities as a source of new knowledge and of partnership. technology.

A common activity is the collection of information (13 projects) to lay the Good/best practices 6 ground for further action. Tab. 26 summarises the most important type of in- Best available technologies 4 formation collected for guidelines and handbooks (1 project), knowledge data- Relevant stakeholders 5 bases (4 projects), geodatabases (2 projects) or decision support tools (1 project). Market (conditions) 3 Other minor activities are the development of a new service for businesses SWOT 3 (11 projects), the development of concrete business plans or business models (3 projects), action plans (3 projects), or even concrete investments (1 project). Cost-benefit 2

Suppliers 2 SusLabNWE (North West Europe Programme) provides testing facilities for the Tab. 26: Number of projects per type industry by constructing ‘living laboratories’ for the purpose of studying tech- of information collected (only catego- nology-user interaction in real-life home environments. ries with more than one frequency count are shown).

Fig. 18: ‘Boosting business development’ sub-objective and related activity, output and target group categories.

PAGE 52 Results and discussion

The category [changing behaviour] (30 projects) is similar to the category 4.1.4.10 ‘Changing [changing attitude], yet the set objective is higher: instead of only challenging behaviour’ category the way people think about something, here the aim is to influence how people behave and what decisions they make. For example, whether to use the public transportation alternative to the private motorised transport options, or Information campaign 15 whether to invest in energy-saving retrofitting measures, such as changing old heating boilers, with a payback period of 10 years and more. In the context of Training 8 ETC energy projects, [changing behaviour] means, above all, tackling individual (public) Event 6 energy consumption patterns (24 projects) and mobility behaviour (6 projects). Through a participatory process 6 Knowledge exchange 1 Tab. 27 shows typical activities that will lead to an increase in knowledge and, subsequently, to the desired change in behaviour. Target groups of activities Fair 1 and outputs related to changing behaviour are varied, with the [general public] Tab. 27: Number of projects per output being the most important one (34 counts). aimed at changing behaviour.

Fig. 19: ‘Changing behaviour’ sub-objective and related activity, output and target group categories.

Out of the 424 analysed projects, only 8 projects were identified that directly 4.1.4.11 ‘Changing attitude’ aim at changing the attitudes of people; i.e., increasing the acceptance of elec- category tric cars32, overcoming scepticism towards the use of renewable energy33, etc. Awareness-raising activities could also be considered as project activities targeted at changing attitudes in the general public. However, since [changing at- 32 Examples are Enevate (North West titudes] denotes an objective, only projects that explicitly mention it as being Europe Programme) or SUSTRAMM the desired result of a particular project activity were classified under this cat- (INTERREG IVC). egory. The most common approach to bringing about an attitudinal change in 33 Examples are CEP-REC (Central the general public is to increase knowledge through public events (4 projects), Europe Programme) or WEBSR2 (South information campaigns (4 projects) or trainings (3 projects). Baltic Programme).

Fig. 20: ‘Changing attitude’ sub-objective and related activity, output and target group categories.

PAGE 53 Results and discussion

4.1.4.12 ‘Harmonising Harmonising data, standards and methods/procedures are presented together, data/standards/method- as they have certain overlaps. Nevertheless, they are independent sub-objec- procedure’ category tive categories.

[Harmonising data] (5 projects) refers to the standardisation of data formats34 or to an agreement on which data or types of data to collect35.

34 In Biochar (North Sea Programme) project partners test the characteristics of biochar in soil to demonstrate Fig. 21: ‘Harmonising data’ sub-objective and related activity, output and target the potential of biochar for improv- group categories. ing the quality of soil, increasing crop yields and carbon sequestration in [Harmonising standards] (9 projects) links to the definition or development of different test fields and agreed on common standards36 and to the harmonisation of existing technical standards37. data formats to make test results Types of standards developed or harmonised in ETC energy projects are, for comparable. example, standards on energy performance certificates (4 projects) or environmental certificates (1 project), data collection standards (1 project) or jointly- 35 In TRANSENERGY (Central Europe developed benchmarks (1 project). Programme) project partners agreed on which geoscientific data to collect for the joint assessment of flow paths of transboundary deep groundwaters, as a pre-requisite for the sustainable exploitation of the regional geothermal energy potential.

36 Livinggreen (North West Europe Pro- gramme) aims at developing standards for sustainable renovation.

37 BIOMASUD aims at implementing a system that audits and certifies the fulfilment of sustainability criteria for the whole biomass value chain in the partner regions.

Energy auditing 4 Fig. 22: ‘Harmonising standards’ sub-objective and related activity, output and Data collection 3 target group categories. Sustainable Energy Action Plans 1 The largest of the three categories is [harmonising a method/procedure] (15 Feasibility studies 1 projects). It bears a relation to the category [harmonising standards] as a har- Public procurement 1 monisation of standards can often only be achieved if, in a first step, a method- Monitoring 2 ology has been standardised. Likewise, [harmonising a method] has a certain Modelling 1 overlap with the category [developing a common methodology]. Again, it is important to bear in mind that 1st order categories capture objectives and not Benchmarking 1 activities. So, if a common method is developed for the purpose of harmonising Balancing 3 it, then the activity was classified under [harmonising a method] and not under Tab. 28: Number of projects per area [developing a common methodology]. in which harmonisation efforts are made. Tab. 28 shows in which areas harmonisation efforts are undertaken.

PAGE 54 Results and discussion

Fig. 23: ‘Harmonising method or procedure’ sub-objective and related activity, output and target group categories.

On the level of activities and outputs, we also collected information on target 4.1.5 Target group groups. categories

While the legal documents concerning ETC strictly distinguish between the terms ‘beneficiary’, as a public or private body receiving grant money for carrying out a project, in other words, a project partner, and ‘target group’, we must assume that projects use the term ‘target group’ in a less consistent way. Fur- Target group thermore, projects often mix immediate target groups, thus the ones benefiting from and using the project’s outputs, with other, indirect target groups that A target group is a particular group benefit from the positive mid- and long-term impact of the project, but are not of people or a part of society who the intended recipients of a project’s tangible outputs. For example, the stand- will be directly and positively af- ards for a European Zero CO2e Emission Certificate for communities jointly de- fected by a project’s activities and veloped by the project partners of ZECOS (North West Europe Programme) will results. Target groups are identified certainly benefit the population of these communities in the mid-term, but the as the intended recipient of a mes- immediate project outputs, such as the certification method, reports, business sage or users of a project output. plans, guidelines, etc., are targeted at the policy makers. A project may have more than one Beside the notions ‘target group’ and ‘beneficiary’, stakeholder ‘ ’ is another target group. This term should be commonly-used term. Stakeholders are all those (groups of) actors who, be- distinguished from ‘target popula- yond the defined/intended target groups, have an interest in a project or will be tion’ in the statistical sense. affected by its outputs.

With our classification, we stuck to classifying what projects described as being their target groups, but limited ourselves to the most important ones. Fig. 24 gives an overview of all the target groups that were distinguished.

The single most frequent target groups are local and regional authorities (161 counts). This is not surprising given that ETC is a regional development policy instrument that benefits the regions of the EU Member States. This is also in line with the findings of the beneficiary classification which showed that local and regional authorities are the single most important actors in ETC energy projects. National and European public administration plays no more than a mi- nor role as target groups for ETC projects. Political decision-makers on all governance levels are also frequently referred to as target groups of the project interventions (41 counts), in particular those who aim at influencing policy.

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private sector public sector general public

citizens businesses

higher education and political institutions and representatives research

local/regional European politicians politicians local/regional public authorities construction *6 sector research others infrastructure & service providers institutions

energy SMEs schools (infrastructure) forestry sector providers

Fig. 24: Tree map representation of However, in total, the private sector outweighs the public sector. Private sec- target group categories. Each tile’s tor categories, such as businesses, medium-size businesses (SMEs), businesses area in the tree map is proportional in the construction, tourism or banking sector, ‘green’ businesses, industry and to the number of counts per target the agricultural sector add up to 197 counts. This comes as no surprise, since group. the fostering of cooperation between businesses, particularly between SMEs, is an important measure towards the achievement of the thematic objectives of developing an economy based on knowledge, research and innovation defined under the ETC objective in order to deliver on the objectives of smart, sustainable and inclusive growth set out in the Europe 2020 strategy.

Other important target groups are the general public, higher education and research institutions, schools, and infrastructure and service providers. All these groups can be either public or private; the classification is purely functional, following the main mission of an organisation and not its legal status.

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The 424 analysed ETC energy projects have engaged around 2,800 beneficiar- 4.1.6 Beneficiary categories ies38, many of which have been involved in more than one project. We were interested in who the typical type of project partners in ETC energy projects were. Attempting to find an answer to this question, we were faced with two Beneficiary challenges: namely, defining an adequate typology for all these different organisations and bodies, and assigning them to the correct category. We soon ‘Beneficiary’ refers to a public or realised that this was an immense task – not only because of the large number private body responsible for ini- of organisations, but also because of the inherently difficult task of having to tiating or both initiating and im- decide for each of the 2,800 organisations which of our 13 categories fitted best. plementing an operation and, in The different administrative and legal frameworks in each country made com- the context of State Aid, the body parisons difficult. Furthermore, we mostly had to guess from the information receiving the financial aid. We use provided on the organisations’ websites, which were seldom available in Eng- the terms ‘beneficary’ and ‘project lish. Another problem was that the categories are not mutually exclusive and partner’ synonymously in this pub- that an organisation may fall into more than one category. For example, a pri- lication. Source: Draft Common vate utility company might be classified as a private partner or as a utility com- Provisions Regulation (Article 2(10)) pany or a national environmental agency as a national public authority or as an environmental agency, etc. Since our typology was meant to be a functional and not a legal classification, we tried to capture primarily the main function or mission of an organisation.

After some initial attempts, we decided to limit ourselves to the in-depth data- 38 The total number of beneficiaries set, classifying 100 projects composed of 1,157 partners. Fig. 25 shows the re- was estimated at 2,800 ± 5%. For two sult of our classification. In the following, each single category will be briefly reasons, it was not possible at this discussed: point to determine the exact number of beneficiaries: Public authorities account for the largest group of beneficiaries: 317 beneficiar- First of all, because several project ies, or 39.5%. The largest subgroup is local public authorities. Associations of partners appear in more than one communes and any administrative unit (counties, districts, etc., depending on project. Normalising duplicated part- each countries administrative and territorial structure) below regions (NUTS ners requires a lot of work not only be- II) were considered as local public authorities. Compared to local and regional cause of the large number of benefi- authorities, national public authorities were a minority group, accounting only ciaries, but more importantly, because for 2.1%. beneficiaries appear under different names; i.e., under the English name of The second-largest group is business support organisations, public or private, the organisation or under the original accounting for 87 beneficiaries or 10.8% of all beneficiaries. The category ‘busi- name in the language of the country ness support organisation’ includes local and regional development agencies, where the organisation is located. which make up for around 40% of all business support organisations, as well as Secondly, because even though a lot of interest groups like chambers of commerce, industry, trade or agriculture (25% effort was put into completing partner of all business support organisations), business incubators and others. information, the current database still contains 40 projects without partner Interest groups are a very heterogeneous group consisting of non-governmen- data. It was out of the scope of this tal organisations like think tanks or civil society associations, but also associa- project to manually add all partners. tions of companies, foundations and charities, etc. They account for 10.3% of all To ensure that our estimate was as beneficiaries. valid as possible, we normalised appar- ently duplicated partners and multi- Two other strongly represented groups are universities (9.5%), and research in- plied the 40 projects without partner stitutions (7.9%). Education and training institutions, comprising primary and data (CBC projects and 14 INTER- secondary schools and vocational colleges, account for 2.9% of all beneficiaries. REG IVC subprojects) by the average number of partners per CBC project Energy and environmental agencies together represent around 8.5% of all (the average number of partners per beneficiaries, of which 84% are energy agencies. CBC project is 6.6. See section 4.3).

PAGE 57 Results and discussion

public authorities higher education and research interest groups including NGOs

interest groups

research universities energy and environ- institutions mental agencies private partners regional local public authorities public authorities infrastructure & (public) others service providers

Fig. 25: Tree map representation of The category infrastructure and (public) service providers includes (public or beneficiary categories (each tile’s area private) transport companies, road authorities, utility and energy infrastruc- in the tree map is proportional to the ture companies (water supply, electricity supply, sewage, gas, waste collection, number of counts per target group). etc.), airports, ports, etc. *1 energy (infrastructure) providers *2 utility companies We classified as private companies small and medium-size enterprises, like consultancies, but also industry clusters or large companies; e.g., energy companies. They account for around 4% of all partners. The category ‘others’ contains all those organisations that did not fit into any of the above-mentioned organisation types.

4.2 Activities and This chapter links main objective categories to sub-objective categories. outputs per project main In other words, findings about typical and specific activities and outputs per objective category main objective will be presented and illustrated with project examples. We take a detailed look at biomass, solar, wind, geothermal, wave and tidal power projects, projects working on energy efficiency in buildings, cities, transport and businesses, as well as projects working on increasing local or regional energy self-sufficiency or on improving energy management and energy infrastructure. A brief introduction to each topic and technology, progress regarding the achievement of the 2020 RES targets, and existing barriers that hamper progress allows us to link project activities to existing needs and challenges in a specific thematic field.

PAGE 58 Biomass Overview Barriers ETC projects on conversion processes, to investments into on biomass feedstocks and fuel types bioenergy technology

En ergy-from-biomass makes use of ‘the biodegradable fraction of products, Energy-from-biomass waste and residues from biological origin from agriculture (including vegetal and animal substances), forestry and related industries including fisheries and Energy-from-biomass makes use aquaculture, as well as the biodegradable fraction of industrial and municipal of ‘the biodegradable fraction of waste’39. products, waste and residues from Several technologies exist to convert the energy (sunlight, in the form of chem- biological origin from agriculture ical energy) stored in organic matter into useable forms of energy such as heat, (including vegetal and animal sub- electricity or fuel (biogas, biodiesel or ethanol) via biochemical (aerobic, anaero- stances), forestry and related in- bic, landfill gas collection, biodiesel production, ethanol production, etc.), physi- dustries including fisheries and ochemical or thermochemical (combustion, gasification, pyrolysis, depolymeri- aquaculture, as well as the biode- sation) processes40. gradable fraction of industrial and municipal waste’40. The potential for energy production from biomass in Europe is big and has been estimated at 236 Mtoe, accounting for 13% of the EU’s total primary energy consumption41. Furthermore, biomass has many advantages over conventional 39 Definition taken from Directive energy sources, as well as over some other renewable energy sources: it can 2009/28/EC on the promotion of the be produced at relatively low costs, is less dependent on short-term weather use of energy from renewable sources. changes than, for example, wind or solar energy, promotes regional economic 40 An excellent overview of feedstock structures, and provides an alternative source of income for farmers. and technologies can be found on www.biofuelstp.eu Expectations on the contribution of biomass to achieving the 2020 renewable 41 Estimations can vary considerably energy target were therefore set high, in particular as regards the share of bio- depending on the assumptions made, fuels in the transport sector. It was assumed that biomass could account for in particular regarding the contri- up to two thirds of renewable energy production. However, scenario calcula- bution of agriculture to bioenergy tions show that for all biomass the outlook for 2020 is negative. Deviations production. from the 2010 targets defined in the National Renewable Energy Action Plans are highest (-14.92%) for electricity generation from biogas, with a wide geographical spread with respect to positive or negative deviation from domestic trajectories. As concerns deviations from the 2020 targets, they are highest for biofuels: a slight surplus over the planned trajectory reported in 2011 will decline and, unless further measures are taken, will result in a deficit of 9.5 Mtoe

PAGE 59 Biomass

(-33.15%) as compared to the target. The reason for this underachievement is 42 See also Fig. 5. However, it must not not a lack of installed biofuels production capacity, as around 60% of the biodie- be forgotten that the price of fossil sel and around 40 – 50% of the bioethanol production capacity are currently fuels does not account for negative unused (Ecofys et al., 2012). A possible explanation can be found in the cost of externalities inherent in the produc- biofuel production, which is still far above market prices42, and in the negative tion and use of fossil fuels. public opinion towards biofuels.

There are two main barriers to an increased deployment of biomass-based energy production: the cost factor and concerns regarding the sustainability of energy production from biomass. 43 While the fuel price for solid Regarding the cost of bioenergy production, it is necessary to distinguish be- biomass from agricultural products tween the (investment and running) costs for the different technologies, their (rape, sunflower, maize, wheat, short energy conversion efficiencies, which are significantly influenced by plant size rotation coppice willow, miscanthus, and feedstocks43, and the different end-uses of bioenergy (electricity, heating/ switch grass, sweet sorghum) or for- cooling or biofuel). Thus, cost-efficiency of bioenergy production is strongly estry products (wood chips, log wood, dependent on local production conditions and supply chains. In this context, etc.) is in the order of EUR 20 – 30 per a positive framework in terms of spatial planning is also important for secur- MWh of primary energy, biowastes, ing areas for the production of biomass and for biogas systems. Furthermore, i.e., using biodegradable fraction of the cost of bioenergy is subject to an observably strong price volatility which municipal waste, means a cost saving correlates with the volatility of the oil price. The reasons are, on the one hand, (Ecofys et al., 2011). that volatile fossil energy prices are a cost factor for the production of biomass, specifically for biomass stemming from the agricultural sector, while on the other hand the coupling of bioenergy to energy markets has increased; i.e., bioenergy is used as a substitute for fossil energy, thus price volatility in one market (e.g., oil) impacts price stability in the other market (e.g., vegetable oil) (Ecofys et al., 2011).

Another important barrier is the negative image of bioenergy, and in particular of biofuels, as regards its impact on resource consumption and on greenhouse gas emissions. Even before the Renewable Energy Directive was passed in 2009, critical voices were raised, advising against political support measures in favour of biofuels and questioning the sustainability of this development. Potential negative effects of the increased use of bioenergy concern theen- vironmental and climate impact of farming and forestry, changes to land use (deforestation, loss of nature areas, etc.), competition with food crops, and the total energy and greenhouse gas balance of the biofuel production. The debate on the sustainability of biofuels prompted the Commission to re- think its renewable energy policy for the transportation sector, and make proposals for amending the current legislation on biofuels; namely, the Renewable Energy and the Fuel Quality Directives. Most importantly, the proposals suggest limiting the amount of first-generation biofuels to five per cent, and providing market incentives for biofuels with no or low impact on climate change and indirect land use, notably so-called second-generation and third-generation biofuels. Unlike first-generation biofuels, which are produced from cereal crops, oil crops and sugar crops using established technology, hence possibly in competition with food production, second-generation (or third-generation) biofuels are produced by ‘advanced processes’ using non-food feedstocks; e.g., wastes, agricultural and forestry residues, energy crops such as grasses, short- rotation coppice or algae. However, little progress has been made as regards the introduction of new advanced biofuels. In 2010, only 1.4% of all EU consumed biofuels was produced from wastes, residues, non-food cellulosic and ligno- cellulosic material. The bulk of biofuels consumed in the EU is produced from agricultural crops, and around 80% of all EU consumed biodiesel and bioethanol is produced in the EU from EU feedstock. In the 2011 National Renewable

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Energy Progress Reports, Member States deem the impact of the production of feedstock for biofuels on water and air quality as low. Also greenhouse gas savings, as reported by Member States, as yet not including indirect effects from agricultural intensification or land use change, appear positive. Estimates on biofuel-induced land use change show that EU biofuels production led to about 1.1 Mha additional land use in 2010, compared to 2008.

In December 2013, a compromise proposal to put a seven per cent cap on biofuels failed to reach an agreement in the Council, which means that the uncertainty in European biofuels policy continues and certainly deters investment in the industry.

It seems that the general euphoria about the renewable energy potential of bio- 4.2.1.1 ETC biomass mass has spilled over into ETC: 110 projects, representing approximately a quar- projects ter of all ETC energy projects, focus on biomass as a renewable energy source. For the mapping of biomass projects, we distinguished different conversion processes, feedstocks and fuel types, with the general classification scheme:

[Promotion of renewable energy] from [biomass] by means of [conversion process] for the production of [fuel type] from [feedstock].

As a general rule, we only classified information that was specified by the project; i.e., if the conversion process, end product or feedstock was not explicitly mentioned, it was not classified.

Four conversion processes were distinguished: biomass combustion (4 projects), in other words, burning of biomass, is a chemical reaction between a carbona- ceous feedstock, such as biomass, and oxygen from the air that results in the release of heat and light, with water vapour and CO2 as the reaction products.

Biomass gasification (5 projects) is a thermochemical process that converts biomass at high temperatures and under a limited supply of oxygen into a gas mixture called syngas, which can again be burned directly or used as a starting point to manufacture fertilizers, pure hydrogen, methane or liquid transportation fuels.

Biomass pyrolysis (4 projects) is another thermochemical process in which organic material is decomposed at high temperatures and in absence of oxygen, and therefore without the creation of CO2. The resulting products are bio-oil, charcoal, also called ‘biochar’, and syngas. Biochar cannot only be used as a fuel, but has in addition other promising properties: if added to soil, biochar improves the water and nutrient-retaining capacity of the soil. Biochar is also very inert, and as such a potential candidate for Carbon Capture and Storage (CCS). GHG emissions Fig. 26: Biochar can be stored in soils possible carbon release for hundreds or potentially thousands Fast Slow of years (source: Biochar project, North carbon carbon Sea Region Programme). Biomass cycle Decomposition (wood) cycle Carbon sequestration Biochar into the soil Pyrolysis Bio-oil Bio-fuels Syngas

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Biochar (North Sea Region Programme) to disseminate knowledge about biochar and its benefits to different groups of stakeholders, such as academic researchers, farmers, companies and policy makers, on a national and on a transnational level by building up and linking the different national competence centres on biochar.

BalBiC (Central Baltic Programme) looks into the potential and feasibility of industrial biocharcoal production in the partner regions, and its requirements on raw material supply, production technology, logistics and market requirements.

All types of solid biomass can be used for the above-mentioned conversion Biogas 30 processes. The most commonly used feedstock in ETC biomass projects (ex- Liquid biofuel 16 cluding biogas and biofuels production) is wood, e.g., wood from sustainable Bioethanol 2 forestry (PROFORBIOMED, Mediterranean Programme), pellets (PELLETime, Northern Periphery Programme), wood chips (LAKO, Slovak Republic – Aus- Biodiesel 3 tria Programme) or short-rotation coppice (NEND, Germany – Netherlands Biochar 2 Programme), plant material, such as residues from agricultural and forestry Tab. 29: Number of biomass projects production (ARBOR, North West Europe Programme), grasses (ENERBIOM, per fuel type. Greater Region Programme), horticultural thinnings (EBIMUN, INTERREG IVC Programme) and crops (BIOREF, INTERREG IVC Programme).

Wood (including forestry resi- 29 A biorefinery (4 projects) is not a process, but a facility that integrates differ- dues) ent biomass conversion processes and equipment to produce fuels, power, heat, Other plant material (including 17 and chemicals, taking advantage of the differences in biomass components, and agricultural residues) intermediates to maximize the value derived from the biomass feedstock. Marine biomass 7 Sewage 4 In the Bio-refinery Öresund project (Öresund - Kattegat – Skagerrak Pro- Manure 5 gramme) project partners work together on the installation of a pilot-scale biorefinery for research purposes. Municipal waste 7 Waste (unspecified) 4 Biorefinery Mid-Scandinavia (Sweden – Norway Programme) aims at building Tab. 30: Number of biomass projects cooperation between industry and research, in order to foster innovation in the per feedstock. biorefinery sector.

Biogas is produced when readily bio-degradable waste is digested by bacteria in the absence of air, a process known as anaerobic digestion, resulting in a mixture of gases of which methane is the primary ‘fuel’ gas. Biogas has a wide range of uses; it can either be used as a substitute for natural gas and injected into the methane grid, or it can be transformed into electricity or heat or into compressed gas for use in vehicles. Different types of feedstocks can be used, including sewage and manure, energy crops and organic waste from various sources such as lawn cuttings, food leftovers or by-products from the food processing industry. ETC biomass projects work on the production of biogas from manure (Baltic MANURE, Baltic Sea Region Programme), from sewage sludge in small- and medium-sized municipalities (Euroslam, South Baltic Programme), from (municipal, agricultural, industrial) waste (REMOWE, Baltic Sea Region Programme), from plant material such as reed (COFREEN, Central Baltic Programme) and willow (BioM, Öresund - Kattegat – Skagerrak Programme), or marine biomass (ENERGREEN, Spain - France – Andorra Programme).

The term liquid biofuels stands for a number of products, including bioethanol, biodiesel, biomethanol, pure vegetable oil, etc. Biodiesel is produced from vegetable oil, animal oil or recycled fats and oils of diesel quality. Bioethanol is pro-

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duced from biomass and/or the biodegradable fraction of waste. In 2010, about 75% of the biofuels used in the EU were “bio-diesels”, 21% “biogasoline” (mainly bioethanol) and about 4% resided in “other liquid biofuels” (Ecofys et al., 2012). A total of 16 ETC biomass projects focus on the production and/or use of liquid biofuels.

Fig. 27: Different conversion processes, feedstocks and fuel types addressed by biomass projects.

Energy end uses (electricity, heat or vehicle fuel) were not mapped, as they were only rarely specified by projects. However, from the type of application it District heating is sometimes possible to infer on the use; for example, energy-from-biomass in buildings (8 projects) is certainly for heating purposes. A district heating system makes use of a centralized boiler installation ECOHOUSING (Central Baltic Programme) aims at promoting wood-fired (fire- or a combined heat and power plant wood, wood chips, pellets) boilers and stoves for small houses by developing to provide heat for a number of consumer-targeted guidance services and training material and courses for buildings or an entire municipality. installers.

PELLETime (Northern Periphery Programme) promotes business development Combined heat & power in the pellet energy sector, and aims to win new pellets end-users through market research, inventory of regionally- available resources and guidance material A combined heat and power (CHP) for SMEs. system, also known as co-generation, uses the heat associated with Another important biomass-to-heat application is district heating (9 projects), electricity generation for space while combined heat and power (CHP) (6 projects) plants produce, as the name heating or process heat and, in this suggests, heat and electricity. way, considerably increases the overall efficiency of the process in VARMEE Production (Sweden – Norway Programme) tackles capacity-building terms of the proportion of energy and knowledge development on the construction and operation of biomass- in the biomass fuel that is made use based heating plants. of. Cogeneration and district heating plants can achieve between 80 ETC biomass projects that deal with biomass co-generation and district heating – 90% efficiency, while large-scale can be mentioned alongside projects that aim at improving the energy-from- power and waste incineration with biomass conversion process: they all work on increasing efficiency in the con- energy recovery achieve between version of biomass to energy. For example, projects aim at optimising the way 10 – 35% efficiency (European Com- biomass is harvested, handled, stored and processed (Forest POWER, Botnia – mission, 2010b).

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Atlantica Programme), the processing of regionally-available biomass residues which, with conventional techniques, cannot yet be exploited cost-efficiently (ECP-biomass, Border Region Flanders – Netherlands Programme), or the conversion technology itself (OPTIBIOGAS, Greater Region Programme). Three projects promote the use of abandoned brownfield or mining sites for energy production, mainly from biomass, through the realisation of pilot installations (ReSOURCE, Central Europe Programme), through a support service to public authorities that want to revitalise brownfields (M2RES, South East Eu- rope Programme), or through recultivation with energy crops and short-rotation coppice (RekultA, Saxony - Czech Republic Programme).

4.2.1.2 Biomass project- The general thrust of activities carried out and outputs generated in ETC bio- specific activities mass projects is not fundamentally different from ETC projects in other en- and outputs ergy-related areas. A comparison of the frequency counts of the different approaches to ‘promoting the use of renewable energy from biomass’ with the general pattern found for all ETC energy projects shows that there are few44, yet distinct, differences: a relative overrepresentation of pre-investment activ-

80 72 ities and activities connected to the development of new All ETC energy projects ETC biomass projects 70 products, and an underrepresentation of capacity-building 60 52 50 activities and activities related to ‘changing practices and 40 31 29 behaviour’. In the following section, we will focus on the 30 24 26 25 24 24 21 22 19 18 19 20 most common activities and outputs found, and on those 10 11 10 10 10 7 2 2 1 4 2 2 2 1 2 activities that are unique to biomass projects. 0

Pre-investment activities are undertaken by 78 projects;

raising awareness harmonising data influencing policieschanging practices changing attitudes buildings capacities making investments changing behaviour i.e., 72% of all biomass projects. If we take a closer look preparing investments harmonising standards developing a new service developing a new product

boosting business development harmonising method/procedure at the ‘preparing investments’ sub-objective, biomass projects in particular frequently engage in collecting data Fig. 28: Comparison of the use of and information (65 projects), notably on biomass potential, market condi- sub-objective categories in biomass tions and technical feasibility, and the environmental impact of a planned in- projects with all energy projects (in %). vestment. ‘Collecting data on RES potential’ (35 projects) refers to two distinct activities: projects either collect data on available biomass resources and/or they assess the potential of biomass development in their regions. The scope of data collection is very different: ~40% rely on already existing data from studies on biomass availability, while the remaining 60% of projects make proper estimates or even measurements.

Energieland-Biores (Germany – Netherlands Programme) builds up a geoinfor- mation system on the available biomass resources from biogenic waste from agriculture and energy requirements in the programme area.

44 However, it is important to note VALUE (South West Europe Programme) estimates the potential of energy that biomass projects make up one recovery from waste products from the vegetable-processing industry. quarter of all ETC energy projects, thus significantly contribute to the sum BEN3 (Saxony - Czech Republic Programme) develops a cross-border, multi-lin- of counts per category. The observa- gual energy atlas that includes information on the current use of biomass, bio- tion of what activities and outputs are mass resource and development potential, heat demand, site selection criteria, typical for biomass projects is not only etc. based on a comparison of frequency counts, but on an intimate knowledge For the development of new biomass projects, it is important not only to of the whole dataset. know the existing resource potential, but also to carry out market research (11 projects); i.e., investigating existing bioenergy supply and demand, market

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structure, price development, etc., prior to analysing the cost-benefit of a concrete biomass investment (23 projects).

Collecting data on technical feasibility (19 projects) may culminate in a feasibility study, but in our case the activity generally refers to the assessment of technical feasibility or evaluation of technical parameters by means of a demonstrator or pilot study. In some cases, projects carry out desk research on technical feasibility of different state-of-the-art technologies (BISYPLAN, INTERREG IVC Programme) or develop a decision-support tool that helps public authorities determine the technical feasibility of different biomass technologies (EBIMUN, INTERREG IVC Programme).

Fig. 29: Activities and outputs aimed boosting investments into bioenergy.

The assessment of the technical feasibility and the environmental impact of a planned investment very often go hand-in-hand. Two thirds of all projects that collect data on the environmental impact of a planned investment are biomass projects, which clearly shows the importance of the sustainability debate in the biomass sector. Activities include the environmental assessment of concrete investments, of different technology options or of different types of feedstock. A handful of projects also deal with the potential utilisation of biomass EU Biomass Action Plan from protected nature areas or sensitive ecosystems (Stoken op Streekhout, Germany – Netherlands Programme; Utilisation et gestion énergétique dura- The EU Biomass Action Plan (Euro- ble des sources renouvelables dans les zones protégées, Italy - France Alcotra pean Commission, 2005) defines Programme; ENERBIOM, Greater Region Programme). actions aimed at increasing the demand for biomass, improving sup- Outputs generated in biomass projects are shown in Tab. 31. The typology of ply, overcoming technical barriers, outputs is similar to that of other types of energy projects, with the exception and developing research and calls of biomass action plans (BAP). Besides the development of a regional BAP, ac- for national governments to devel- tivities related to biomass action planning include the development of policy op National and Regional Biomass guidelines for sustainable biomass strategy development (Bioenergy Promo- Action Plans. tion, Baltic Sea Region Programme), the realisation of a database that pools

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information on relevant studies, material, etc., for BAP development (4BIO- Guidance document 25 MASS, Central Europe Programme), or the transfer of knowledge on BAP de- Feasibility study 16 velopment between experienced and non-experienced regions (BIO-EN-AREA, Geodatabase 10 INTERREG IVC Programme). Business plan/model 5 Biomass action plan/s 7 Another frequent activity related to preparing investments is establishing a strategic partnership (36 projects); e.g., for the creation of a professional net- Knowledge database 10 work (8 projects) or a (permanent) management structure (6 projects). On a side Decision support tool 11 note, in 4 biomass projects, the energy sector establishes new links with actors Tab. 31: Number of projects per in the agricultural or forestry sector. Biomass projects that develop a common biomass project output. methodology in the context of preparing investments are few in number (8 projects). Also, only a few biomass projects ‘introduce a new financial mechanism’: examples are PROFORBIOMED (Mediterranean Programme), which develops an energy supply contracting model, and RASLRES (Northern Periphery Energy supply contract Programme), which produces an ESCO contract model and guidance.

Energy supply contracting is a busi- Investments are not only prepared, but a number of pilot investments are un- ness model that shifts the focus dertaken by biomass projects (17 projects), including the installation of the bio- away from selling energy value mass boiler system, the construction of a small-scale pilot plant or biorefinery, (like fuel oil, gas or electricity) to the purchase of technical equipment for research purposes, or the financing of selling utility value (billed per vol- a short-rotation coppice plantation. ume items of heat, steam or compressed air). Financing, engineer- In ARBOR (North West Europe Programme) 6 regional investments are made ing design, planning, constructing, into a biomass boiler system, a wood waste material processing hub, a new operation and maintenance of the short-rotation coppice plantation, a central pipeline in which the biogas from energy production plant as well as different producers is collected and transported, a demonstration wood gasi- the management of energy distri- fication unit, and a trial energy crop plantation that functions as a buffer strip bution are often all included in the between agricultural land and surface waters. complete service package provided by the Energy Service Company In LAKO (Slovak Republic – Austria Programme) a waste collection place for yard (ESCO). The benefit of energy sup- waste is built. ply contracting for the customer is that he is released from having to Lastly, a very biomass-specific topic in ETC energy projects is that of supply raise capital for the investment and chain management. Bioenergy production requires a constant supply with a from any duty regarding the main- sufficient volume of biomass possible from local sources without the need to tenance and repair of the energy transport it over a long distance. Therefore, the development of a local or re- facility and, consequently, from any gional biomass market requires a holistic look at bioenergy production along of the resulting risks. The supplier the whole biomass value chain: from harvesting/collecting of biomass, trans- benefits from a long-term secured portation, trading, storage, processing, to delivery to the end users. Several purchasing of his energy service. biomass projects have picked up the topic of supply chain management: seven Since the supplier is generally in- projects aim at changing practices or building capacities in supply chain man- terested in achieving cost-efficien- agement through knowledge exchange, through the creation of new partner- cy by optimising operational costs ships between actors along the supply chain, etc. he has an incentive to renew the facility at the optimum time, which enerCoast (North Sea Region Programme) develops and implements an invest- also leads to a better environmen- ment plan based on commercially viable bio-energy supply chains, by applying tal performance. performance criteria to each stage of the supply chain from the materials, the economic stakeholder and the social-cultural perspective.

SILVAPLUS (Spain – Portugal Programme) aims to build the necessary organisational structure and brings together the relevant actors to develop a new value chain based on the production, processing and consumption of primary forest biomass for energy purposes.

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 The promising opportunities arising from the use of biomass (relatively low 4.2.1.3 Key findings costs, less dependence on short-term weather changes, promotion of regional economic structures and provision of alternative sources of income for farmers) for energy production has certainly contributed to the enormous interest in biomass among ETC actors: 110 projects, representing more than a quarter of all ETC energy projects, focus on biomass as a renewable energy source.

 Biomass projects cover a wide range of established conversion technologies: combustion, gasification, pyrolysis (linked to the production of biocharcoal), biogas (accounting for 25% of all biomass projects) and liquid biofuel production (14% of all biomass projects). Research and development also goes into novel technologies like biorefineries.

 Biomass projects explore the use of a plethora of potential feedstocks; most importantly, wood and plant material, including agricultural residues. A remarkably strong focus is put on non-food feedstock: agricultural and forestry residues, grasses, short rotation coppice, marine biomass, sewage, manure and (municipal) waste.

 Besides efforts in the field of non-food feedstock, ETC biomass projects contribute to the sustainability of bioenergy production by assessing the environmental impact of a planned investment (23% of all biomass project), but also by promoting the potential use of abandoned brownfield or mining sites for bioenergy production.

 Biomass projects are investment-oriented: 72% of all biomass projects undertake pre-investment activities and 22% realise pilot investments, while capacity building activities and activities related to ‘changing practices and behaviour’ are relatively underrepresented in biomass projects.

 Seven biomass action plans are being developed, following the call of the European Commission to all Member States to draw up national and regional biomass action plans.

 Several biomass projects have picked up the topic of supply chain management, thus look at the entire bioenergy production chain from harvesting/ collecting of biomass, transportation, trading, storage and processing, to delivery to the end users.

PAGE 67 Solar power Overview Barriers ETC projects on solar power to investments into solar on solar power technologies power technology

The use of solar power, especially for photovoltaics, was marked by a strong growth over the last few years in the European Union, and has had the highest growth rate of all main RES technologies: 37.39% between 2009 and 2010 (Ecofys et al., 2012). The reason for this strong growth is mainly to be found in technology cost reductions, especially for photovoltaics, where average module prices have fallen by over 80% in five years (Frankfurt School of Finance & Management, 2013). This cost decrease has been stimulated by the increasing globalization of the photovoltaic market, notably due to the stronger market appearance of Asian manufacturers, and happened faster than incentives could adapt, resulting in overcapacity, which in turn brought production costs down significantly. Despite falling prices, electricity production from photovoltaics has not yet reached grid parity and will therefore need a sustained framework also in the future. This includes financial support, but also the reduction of administrative hurdles, such as burdensome authorization procedures for (build integrated) small-scale systems, and the removal of grid barriers, due to the intermittent power output of photovoltaic systems. The lack of qualification measures and certification schemes for installers of solar systems might become a bottleneck for the full deployment of solar technologies in the future, even though the se- verity of the problem is currently rather low in most Member States (ECORYS, 2010). In spite of the positive trend regarding the use of solar power in Europe, sudden changes to a number of national support schemes and the uncertainty about the future of support schemes are again expected to curtail investment. Projections for 2020 therefore indicate that there remains a risk that the current surplus over planned levels will disappear and become a deficit by 2020 (European Commission, 2013a).

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As regards solar power technology, three different technologies must be distinguished: photovoltaic panels, concentrated solar power production and solar thermal collectors. Photovoltaic cells, grouped into panels and arrays of panels, convert sunlight directly into electricity. The cells consist of thin layers of semi-conducting Photovoltaic Geographic material, such as silicon, which absorb photons from the sunlight that knock Information System loose electrons from the silicon atoms, allowing them to flow through the ma- With the Photovoltaic Geographic terial. Due to the special composition of solar cells, the electrons are forced to Information System developed by move in a single direction, creating a flow of direct current. Different cell types the European Joint Research Cen- and semi-conductors can achieve different levels of efficiency, most typically tre, solar resource potential and around 15 to 20%. Besides the cell type, the power output that can be delivered performance of photovoltaic tech- strongly depends on the irradiance received, which again depends on the ori- nology can be determined for any entation and angle of inclination of the surface where the photovoltaic panels location in Europe: are installed. European targets for photovoltaics for 2010 were exceeded by 11% http://re.jrc.ec.europa.eu/pvgis/ (Ecofys et al., 2012).

Concentrated solar power technology uses the addition of optical equipment like lenses and mirrors to focus greater amounts of solar energy onto a small surface, heating a transfer fluid which circulates in a closed loop. The resulting steam is then used to power a generator. This technology is still at a developmental stage, with a number of demonstration projects launched under the EU Framework Programmes for Research, Technological Development and Demonstration and some full-scale projects realised to validate the full-scale application of different technological approaches and their economic viability under market conditions. In spite of technological advances, this technology has failed to reach the expected 2010 target by 40% (Ecofys et al., 2012).

Solar thermal collectors directly use the heat of the sun for heating up water, air or any other kind of suitable liquid (e.g., thermo oil). Above all, the efficiency of a solar thermal collector depends on the collector temperature and the type of collector used: evacuated tube collectors are more costly but better-suited to cold ambient temperatures, and work well in situations of consistently low sunshine, providing heat more consistently than flat-plate collectors. Howev- er, since solar radiation is not ‘consumed’, efficiency is not the main criteria. In certain cases, a low-cost and low-efficiency solar thermal system may be a rational choice from an economic and environmental point of view. Solar thermal technologies can be used for domestic hot water production, space heating, space cooling and process heat generation. Projections for 2020 indicate that the expected target for solar thermal will be exceeded by around 50% (Ecofys et al., 2012).

35 ETC energy projects aim at promoting the use of solar power for electric- 4.2.2.1 ETC solar power ity and heat production. However, only 6 projects focus exclusively on solar projects power; instead, solar power is mostly addressed in combination with other RES technologies. The majority of projects aim at promoting small-scale installations like photovoltaic panels or solar thermal collectors on roofs, in contrast RESI (Italy - Malta Programme) collects to the projects Ecoaqua (Spain – Portugal Programme), in the scope of which a available information on RES potential solar energy plant is actually planned and realised, and MOVE (Slovenia – Aus- and constraints to RES deployment tria Programme), which carries out pre-feasibility studies to attract potential (landscape, land use, local regulations, investors for a solar power plant in Slovenia. etc.), energy demand, local energy pro- 17 projects explore the potential use of solar power in their regions or munici- duction and good practices in the use palities, or investigate the feasibility of a concrete installation. 11 projects realise of solar power for a renewable energy pilot installations: photovoltaic charging stations for e-vehicles, photovoltaic atlas.

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The project ‘Widening the Thermal panels on public or residential buildings, solar thermal collectors for heating Solar Energy Exploitation by Success- water for public swimming pools, etc. In the area of training, 3 projects address ful Models’ (South East Europe Pro- the issue of improving qualifications for installers, VARMEEKOM (Sweden – gramme) promotes the use of solar Norway Programme) develops a master course during which students learn thermal collectors for domestic hot how to build and operate a heating plant (e.g., solar thermal power plant) and water production by developing tech- ENER-COOP (Spain - External Borders Programme) establishes a scholarship nical and training manuals to improve programme for Moroccan technicians. installers’ qualifications, implementing public awareness campaigns to over- 12 projects engage in raising awareness about the benefits of solar power by or- come preconceptions against solar ganising information events for interested citizens, exhibitions and fairs, dis- power, identifying barriers that inhibit seminating information material and realising installations for demonstration the domestic hot water market, includ- purposes. 6 solar power projects focus on innovation in the area of RES tech- ing policies and financial measures, and nology, including solar technology, and the creation of a cross-border market installs 240 new solar thermal systems. for solar technology. Related activities include the mapping of companies and scientific institutions in the field of renewable resources for the establishment PV-NET (Mediterranean Programme) of a cross-border knowledge network of regional industry and science (FURGY, aims at improving energy policy and Syddanmark - Schleswig-K.E.R.N. Programme), the development of common existing support schemes (incl. govern- research infrastructure (REGENERG, Hungary – Romania Programme), but also mental subsidies or grants) for photo- activities that aim at creating favourable conditions for a more rapid market voltaics in the partner regions by de- penetration of building-integrated solar systems (ENA1, Saxony - Czech Repub- veloping a PV net metering model that lic Programme), or at connecting suppliers and buyers of photovoltaic systems measures and manages the electricity across the border (NEND, Germany – Netherlands Programme). consumed in buildings by subtracting The issue of adapting support schemes and policies to the new market con- the energy produced by the installed ditions for photovoltaics is addressed by one project (PV-NET, Mediterranean PV system; pilot PV net metering sys- Programme). tems will be installed in Cyprus, Slov- enia and Portugal on different types of buildings (residential, commercial, industrial, etc.) and the data generated by the pilot plants analyzed to validate the different metering models.

4.2.2.2 Key findings  Only six projects focus exclusively on solar power. Solar power is mostly addressed in combination with other RES technologies or in the context of building retrofitting.

 The bulk of projects aim at promoting small-scale installations like photovoltaic panels or solar thermal collectors on roofs.

 Activities related to solar power are mostly to be found in the area of exploring the potential use of solar power in the partners’ regions or municipalities.

 Barriers tackled include the improvement of installers’ qualifications and addressing the lack of knowledge and awareness about the benefits of solar power technology among the general public. One project addresses the need to reform policies and support schemes for photovoltaics to adjust to new market conditions.

 Several projects aim at creating a cross-border market for solar technology and fostering innovation by establishing links between research institutions and the industry.

PAGE 70 Wind power Overview Barriers ETC projects on wind power to investments into wind on wind power technologies power technology

Two major trends have been characteristic of developments in the wind power sector in Europe for a long time: while the rated capacity of new wind Power output wind turbines has increased steadily, mainly achieved by up-scaling both tower turbine height and rotor size, the corresponding investment costs per installed kW The power output of a wind tur- have dropped. However, from around 2005 on investment costs started to bine increases with wind speed increase again, largely driven by the tremendous rise of energy and raw ma- to the third power; i.e., double the terial prices. Also, shortages in certain turbine components, an improved so- wind speed, eight times the power phistication of turbine design, and increased profit margins for manufacturers output, and is proportional to the have driven prices upwards (Ecofys et al., 2011). Rising investments costs, re- diameter squared of the rotor size. duced national efforts and infrastructure difficulties accounted for the failure How much wind power can actually to achieve the 2010 EU targets for wind power, which were missed by 29.23% be harnessed depends not on the for offshore and by 4.79% for onshore wind power. As for the 2020 targets for peak wind speed at a specific loca- electricity generation from wind power, the current trend points to the risk tion, as the turbine has to be oper- of achieving only half of the 500 TWh foreseen in National Renewable Energy ated at a much lower average speed Plans (European Commission, 2013a). and is switched off if the mechanical load is too high. The basic principle of wind power technology is simple: wind drives a turbine, which generates electricity. The power output of a wind turbine rises strongly with increasing wind speed; the higher the wind speed, the higher the harvesting. The wind regime at the chosen site is therefore crucial, and advances in the area of wind resource assessment (more accurate measurements and better computer models) have lead to improved site selection. Since wind speed increases with altitude (e.g., at a hub height of 100m above ground level the wind speed has doubled), a lot of effort has been put into constructing higher towers. Besides the turbine hub height, the size of the rotor is a decisive factor for the amount of wind energy that can be harnessed, which is why rotor blades have become increasingly longer. Substantial development and optimisation has also

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European situation taken place in wind turbine technology for offshore locations. Furthermore, optimised wind farm design can maximise energy production and minimise infra- Germany and Spain are by far the structure and operating costs. biggest producers of wind power in the EU, each having produced The theoretical wind energy potential, leaving aside environmental, social and around 43,000 GWh in 2010. As economic constraints, is huge in Europe. An equivalent of almost 20 times the regards offshore wind power, only projected energy demand in 2020 could be covered (European Environment few Member States have a signifi- Agency, 2009). Most wind farms in Europe are located onshore, with a total of cant number of offshore wind tur- 110.7 GW wind capacity installed onshore in the European Union in 2014, combines, with the UK being by far the pared to 6.6 GW offshore. The potential offshore wind resource in Europe is biggest producer, followed by Den- great, as are the associated technical challenges. Although the fundamentals mark. Other offshore wind power of the technology are the same onshore and offshore, installation (incl. connec- producing countries are Sweden, tion to the electricity grid) and operation of offshore wind parks is difficult and Belgium, the Netherlands, Germany costly. Therefore, development efforts go into minimising maintenance and and Ireland. In Germany, despite a maximising reliability of offshore wind turbines as access is per se difficult and growth rate of 80% between 2009 can be additionally hampered by pack ice (frequently the case in the Baltic Sea) and 2010, the development of off- or high waves (as is the case in the North Sea). Offshore experienced a much shore wind is lagging behind the higher growth rate than onshore between 2009 and 2010 (32.37% vs. 11.03%); original plans, due to lengthy ad- however, it accounted for only 9.15 TWh of the electricity produced in 2010, ministrative procedures and uncer- which is 15 times less than electricity from onshore wind turbines (Ecofys et al., tainties regarding the grid connec- 2012). tion procedures (Ecofys et al., 2012). Despite Europe’s enormous wind power resources, which should cover around 12 – 14% of Europe’s electricity demand in 202045, there are several significant barriers that hinder development. 45 www.wind-energy-the-facts.org/ On the one hand, the cost factor, including investment, operation and main- index-73.html tenance costs, still impairs the competitiveness of wind power. Even though costs have decreased significantly over time and grid parity may be reached in a couple of year’s time, costs still remain a major hurdle at present. Grid integration of wind power is another major constraint. Wind power as a generation source has specific characteristics, such as the variability of power output, since wind does not blow at all times, and the geographical distribution of wind farms, which are often located in distant regions far from major electricity consumption. This poses several challenges: On the one hand, understanding these variations and their predictability is of key importance for the integration and optimal utilisation of wind in the power system. The power grid can only transmit but not store electricity, which is why supply and demand must be continuously matched at the level of seconds. In principle, electric power systems are designed to cope effectively with variations in consumption and generation through their configuration, control systems and interconnection. This means that the variable output of wind power is just another variable in an inherently variable, dynamic electricity system. Due to the wide regional distribution of wind farms, short-term and local wind fluctuations are not correlated, therefore largely balance each other out. As a result, the maximum amplitudes of wind power fluctuations experienced in the power system are reduced. In this context, the grid plays a crucial role in ag- gregating the various wind farm outputs installed at a variety of geographical locations, with different weather patterns. 46 Wind energy penetrations levels This requires the present transmission system in Europe to be upgraded and of 10% upwards; estimates for extra interconnected. Once wind power becomes a significant supplier to the grid46, reserve requirements are in the order however, higher back-up capacities will have to be installed to maintain the of two to four per cent of the installed power balance, mostly in the form of rapidly starting gas-fired power plants, wind power capacity. (www.wind-ener- and short-term forecasting of the output from wind farms and grid intercon- gy-the-facts.org/index-32.html) nection will become increasingly important.

PAGE 72 Wind power

On the other hand, due to the decentralised production of wind power, large portions of the electricity produced must be transported over long distances to load centres. This means higher transmission losses, could lead to congestion of existing infrastructure, and might require additional extensions or upgrades of both the transmission and the distribution grid, also across borders. Environmental concerns and lacking social acceptance of wind power puts constraints on wind energy deployment. While wind power clearly has some environmental benefits compared to conventional electricity production from fossil fuels, as it contributes to a reduction in emissions and waste and has a very positive energy balance, it is also associated with negative impacts: a visual impact on the landscape, noise impact, impact on residents and migratory birds, and, in the case of offshore, a possible impact from electromagnetic fields on marine organisms, benthic fauna, fish and marine mammals. Therefore, in spite of the general positive attitude towards wind power among the population, there is often little local acceptance of wind energy projects. Since wind parks occupy large areas and an obligatory minimum distance to settlements has to be kept, another crucial constraint is insufficient spatial planning that missed out on securing areas for long-term wind power development. Further- more, lengthy administrative procedures, in particular environmental impact assessments, can considerably delay the realisation of projects already planned.

29 ETC energy projects promote wind power, although only eight projects fo- 4.2.3.1 ETC wind power cus exclusively on wind power while the majority of projects consider wind projects power as just one of several options for achieving a higher share of energy generation from RES in their regions. Interestingly, two projects explore the possibility of using port areas as wind power locations; e.g., by evaluating the cost-benefit of constructing wind turbines for providing electricity tothe harbour-based industry (E-Harbours, North Sea Programme). The majority of wind power projects cannot be clearly assigned to onshore or offshore locations; however, seven projects clearly focus on offshore wind power genera- Small wind turbines tion, while two projects investigate the potential use of small-scale application of wind power (WICO, INTERREG IVC Programme; RES-CHAINS, South Baltic Small wind turbines are used off- Programme). A noteworthy observation can also be made regarding the geo- grid, as ‘autonomous’ electrical graphic focus of wind power projects: all identified ‘true’ wind power projects systems, or for ‘distributed gen- are located in the North Sea or Baltic Sea Region, and almost all of them work eration’, as part of a larger public on offshore wind power. distribution network. Despite the attention given to multi-megawatt WICO (INTERREG IVC Programme) share knowledge and experience on how to wind farms, the markets for au- overcome technical and economic barriers to the deployment of small wind tonomous electrical systems and energy systems along coastlines. distributed generation using small wind turbines can be attractive The vast majority of wind power promoting projects focus on preparing the if prices of conventional electric- installation of wind turbines in the project territory, with 20 projects engag- ity and fossil fuels are sufficiently ing in concrete pre-investment activities aimed at assessing the potential use high. However, in spite of the ma- of wind power; for example, by measuring regional wind resources (RETALER, turity reached on the development Spain - Portugal Programme), by assessing the resource potential and the en- of the large- and medium-sized vironmental impact of exploiting it (MAREN, Atlantic Area Programme), or by wind technology for wind farms, carrying out feasibility studies (RES-CHAINS, South Baltic Programme). the state of the art for small wind turbines is far from technological GORWIND (Estonia – Latvia Programme) assesses the potential for offshore maturity and economical competi- wind power generation in the Gulf of Riga by collecting data on local wind re- tiveness (www.wind-energy-the- sources, ice conditions, and migrating and wintering bird and seal populations facts.org/index-26.html). for a geographical information system.

PAGE 73 Wind power

Almost no wind power-related investments are realised, with two exceptions: the purchase of monitoring equipment for wind measurements (REGENERG, Hungary – Romania Programme), and the realisation of an artistic installation on wind turbines (WEBSR 2, South Baltic Programme).

WEBSR 2 (South Baltic Programme) addresses legal barriers to the erection of wind farms by looking into existing good practices and formulating policy recommendations, financial barriers by elaborating new financing models, the issue of wind energy storage by analysing existing technological approaches and societal barriers through artistic installations and exhibitions.

The establishment of strategic partnerships in the wind sector, with the aim of facilitating investments, is pursued by four projects, either by creating an industrial or a research cluster.

Power Cluster (North Sea Programme) aims at developing a strong offshore wind industry cluster in the NSR by removing existing barriers: social acceptance is raised through information campaigns, exhibitions and through increased transparency regarding future site selection by developing a participatory GIS. Networking between local and regional government representatives and the wind industry is facilitated, the feasibility and impact of an integrated North Sea grid is assessed, and training modules for offshore wind personnel and university modules and programmes are developed.

GADOW (Syddanmark - Schleswig-K.E.R.N. Programme) aims at creating a Danish-German network in the field of offshore wind energy, in particular in the area of research, by establishing a cooperation between research and industry, and initiating further education programmes on offshore wind power generation.

Furthermore, several projects are concerned with removing existing bottlenecks in the area of skilled labour, by developing new educational courses and programmes, and barriers regarding social acceptance of wind power, by improving the quality of information concerning future wind deployment. The issue of grid integration is addressed by three projects; for example, by exam- ining the feasibility of constructing an offshore electricity transmission network linking potential offshore sites (ISLES, Northern Ireland - Border Region of Ireland - Western Scotland Programme).

South Baltic OFFER (South Baltic Programme) aims at overcoming existing bottlenecks in the supply chain, as well as legislative and societal barriers and the development of skills in the sector, by establishing a network that promotes the coherence of policies across the area, engaging in joint awareness-raising activities, developing a South Baltic wind atlas, and mapping the state-of-the- art in offshore wind power and available training opportunities in the region.

Wind in Öresund (Öresund - Kattegat – Skagerrak Programme) establishes a university partnership for developing courses, demonstrating the integration of large amounts of wind power by conducting a joint demonstration in a full- scale experimental wind park, and initiating necessary structural and regulatory changes in the area of energy taxes, dynamic tariffs, and new forms of diversified energy provision by involving policy-makers in the project.

PAGE 74 Wind power

 Only eight projects focus exclusively on wind power, while the majority of 4.2.3.2 Key findings projects that promote wind power consider it just one of several options for achieving a higher share of energy generation from RES in their regions.

 Wind power projects are mainly confined to the Northern part of Europe: all identified ‘wind power’ projects are located in the North Sea and Baltic Sea Region.

 ‘True’ wind power projects focus almost exclusively on offshore wind power generation. Furthermore, it can be observed that the offshore sector in the North Sea and Baltic Sea area is well connected, and that good cooperation exists between the different offshore projects.

 Two thirds of projects promoting wind power engage in concrete pre-investment activities that aim at assessing the potential use of wind power.

 Other activities that ought to trigger investment are clustering and networking in the wind sector, and between industry and research.

 Several existing barriers to wider wind energy deployment are tackled: grid integration, social acceptance and existing bottlenecks in the area of skilled labour.

PAGE 75 Geothermal power Overview Barriers ETC projects on geothermal power to investments into geo- on geothermal power technologies thermal power technology

Geothermal energy is energy stored in the form of heat below the earth’s surface. This heat originates mainly from heat released due to the radioactive decay of minerals, and to some extent from the earth’s hot core which dates back to the planet’s formation. The temperature difference between the core of the planet and its surface is responsible for a continuous heat flux to the surface. The geothermal energy potential is therefore limitless in human terms and comparable to the energy potential of the sun, but only a small fraction can be profitably exploited.

Geothermal energy can be reclaimed in two different ways: in the form of electricity or in the form of heat. Each type of utilisation is distinguished by different technologies and applications. Furthermore, a distinction has to be made between deep geothermal energy, which is geothermal heat extracted from Hot-dry-rock technology depths in excess of 400 meters extraction, and shallow geothermal energy, which is heat stored within a range of 0 – 400 meters depth. Deep geother- Hot-dry-rock technology is used to mal energy can be either directly used for heating purposes, such as a district extract energy from hot imperme- heating system, or it can supply the energy for electricity generation. It is ex- able rock. Water is injected from tracted by drilling into aquifers or fault-zones, or through hot-dry-rock proc- the surface into boreholes in order esses. Shallow geothermal heat can be directly utilised by a combination of heat to widen them and create some pumps and sub-surface heat exchangers such as collectors, wells or piles. fractures in the hot rock. The water heats up as it flows through these Geothermal power production either uses or creates steam from geothermal holes, and when it returns to the reservoirs in order to drive generator turbines, and requires high temperature surface it is used for generating resources that can only come from deep underground. The heat must be car- electricity. ried to the surface by fluid circulation; i.e., magma conduits, hot springs, hy- drothermal circulation, oil wells, drilled water wells, or a combination of these.

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This circulation sometimes exists naturally, where the earth’s crust is thin due 47 www.geoelec.eu/about-geothermal- to a geological fault line. If no hot spring is available, a well must be drilled into electricity/ a hot aquifer. However, away from tectonic plate boundaries, the gradient at 48 http://ec.europa.eu/research/en- which temperature increases with depth is too low to be exploited, as wells ergy/eu/index_en.cfm?pg=research- would have to be several kilometres deep to permit electricity generation. geothermal Depending on the temperature range available, different technological systems 49 Ground source heat pumps harvest for geothermal electricity production can be applied: dry steam power plants heat absorbed at the Earth’s surface for temperatures between 390°C and 600°C, flash steam and hybrid power from solar energy, so strictly speaking plants for a temperature range between 180°C and 390°C, and binary cycle it is not geothermal energy. power plants for temperatures ranging from 180°C to 80°C47. In general, it can be said that higher temperatures yield a higher power output. Where ground is Ground source heat pump hot but dry, or where water pressure is inadequate, a fourth technology comes into play: the so-called hot-dry-rock process or enhanced geothermal system, The operating principle of a ground- which is still in a developmental stage, with a recently completed EU-funded source heat pump is heat transfer: pilot plant48. Geothermal electricity production is also suitable for heat and a carrier fluid is circulated through power co-generation, to feed the waste heat of electricity production into a closed pipe loops buried in the district heating system. ground. As the cooler fluid circu- Currently, there is only one gigawatt capacity of geothermal electricity produc- lates underground it absorbs heat tion installed in Europe, and this is concentrated in a small number of countries. from the ground (since heat flows Italy is by far the biggest producer in absolute terms, followed by Iceland, Por- naturally from a higher to a lower tugal (Azores), France (Guadeloupe), Austria and Germany. While short-term temperature) and, on its return, expectations on geothermal electricity will most likely only be met in Portugal, the warmed fluid passes through plans for 2020 may well be achieved at EU level due to the expected progress, the heat pump. The heat pump specifically in Italy (Ecofys et al., 2012). unit extracts the heat from the fluid, mostly by using a compressor Geothermal heating and cooling can be provided either by directly using geo- driven by an electric motor, for ex- thermal reservoirs of hot water, by using the (waste) heat produced in a geo- ample. Both compressor and pump thermal co-generation plant, or by means of heat pumps. In direct-use systems, thus need auxiliary energy. The re- a well is drilled into a geothermal reservoir to provide a steady stream of hot chilled fluid is sent back into the water, which is brought up through the well, and a mechanical system delivers ground, thus continuing the cycle. the heat directly for its intended use. A disposal system then either injects the This process can also be reversed, cooled water underground or disposes of it on the surface. Where there is no in a process known as geothermal high temperature geothermal resource, the heat stored in the ground49 can be cooling. Besides the ground source, harnessed using a geothermal or ground-source heat pump. The temperature heat pumps may also use other beneath the upper six metres of the Earth’s surface maintains a nearly constant heat sources. Ambient and exhaust 10°C to 16°C, depending on the annual average ambient temperature in a specific air, soil and ground water are prac- location, and this heat can be extracted for space heating, for example. tical heat sources for small heat pump systems, while sea/lake/river Seven ETC projects promote the installation of heat pumps, of which four aim water, rock (geothermal) and waste specifically at ground-source heat pumps. water or effluent are used for large Geothermal energy can be used for many applications that require heat: for heat pump systems. Air-source heating or cooling buildings, heating swimming pools, heating greenhouses, heat pumps are the most common drying crops, heating water at fish farms and for other industrial processes, but type of heat pump and work better also for de-icing and snow-melting on roads, airport runways, etc., or sea-wa- in warm climates, as their efficiency ter desalination. Despite the multitude of possible uses, heat pumps and mid- to drops dramatically at low tempera- large-scale geothermal heating systems are the two technologies that most ur- tures. Ground-source heat pumps gently require additional initiatives within the heat sector in order to let them cost more to install, but have low play their role in meeting the 2020 RES obligations. For geothermal heating and operating costs because they take cooling, only a slight surplus was achieved with respect to the 2010 targets, and advantage of relatively constant in all considered scenarios the EU-wide target for geothermal heat for 2020 ground or water temperatures, will be missed by around -50%. For heat pumps, an even gloomier picture must and are therefore better suited for be painted: even though heat pumps have seen a growth of 10.79% between moderate or cold climates, also be- 2009 – 2010 and have achieved a positive deviation of 12.10% from 2010 tar- cause air has much less capacity for gets, scenarios indicate that the EU-wide gap between indicative targets and holding heat than water does.

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expected production of heat generated from heat pumps ranges from -68% to -71% (Ecofys et al., 2012).

Clearly, geothermal energy offers several advantages over other RES: it is unaf- fected by daily, seasonal and annual changes, and therefore generates continuous and reliable power, requires only little land, and has a low environmental impact compared to other RES. However, there are several reasons why the potential is not exploited to a greater extent, the most important being the cost barrier. Capital costs for geothermal power plants tend to be high and are closely related to the characteristics of the local resource. Exploration, well-drilling and plant construction make up a large share of the overall costs of geothermal electricity. Drilling costs can account for as much as a third to a half of the total cost of a geothermal project. Generation costs depend on a number of factors, but especially on the temperature of the geothermal fluid. In other words, viability is largely site-specific. Furthermore, geothermal energy carries a relatively high commercial risk because of the uncertainties involved in identifying and developing reservoirs that can sustain long-term fluid and heat flow. To reduce installation and operational costs, technology development is necessary in the area of improving plant efficiency, including conversion efficiency, improved site assessment, improvement of exploration methods, installation technologies, and system components, but also regarding the successful demonstration of enhanced geothermal power generation and dissemination of the technology to other sites and regions (Antics & Sanner, 2007). Non-technical development is also of paramount importance, comprising administrative and legal clarity, failure of spatial planning to secure suitable areas for geothermal power production, suitable infrastructure in form of machines and skilled labour, information to the public, etc. Concerning heat pumps, despite the reliability of the technology, various market failures, like split incentives between builders and building users (c.f. 4.2.7 for an explanation of split incentives), and a lack of information and long-term planning have reduced their uptake. Since the installation of heat pumps is strongly tied to building retrofitting, the technology suffers from the generally low renovation rate in Europe, from high initial investment cost, a short-term decision horizon, and high electricity costs, which influence the total operating costs of a heat pump system.

4.2.4.1 ETC geothermal 23 ETC energy projects were identified that promote geothermal power, of power projects which eight focus exclusively on geothermal power, while all other projects address geothermal power in the context of an overall promotion of RES in the partner regions. Geothermal energy for the extraction of heat is in the focus of ten projects, mostly for direct use, for example for district heating (3 projects), or for ground-source heat pumps (4 projects). Four projects focus on deep geothermal energy, while two projects aim specifically at utilizing low enthalpy: low temperature geothermal resources. Nine projects target thermal heat stored in groundwater aquifers.

Two projects explore the possibility of using abandoned brownfield, military or mining sites for RES production (M2RES, South East Europe Programme; RE- SOURCE, Central Europe Programme), for example by exploring the possible exploitation of geothermal energy from mine water. As regards activities and outputs specific to geothermal power projects, the majority of projects aim at triggering investments and launch activities in this

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direction. Four INTERREG IVC Programme projects promote geothermal power production through peer learning between regions; e.g., by collecting and exchanging good practices in the area of geothermal energy use (RETS), by match- ing regions with experience in geothermal energy development with regions that are experienced in other RES technologies (RENREN), or by preparing the transfer of selected best practices within the mainstreaming programmes of the participating regions and developing regional action plans to that end (GEO. POWER). 13 projects assess the geothermal energy potential and its viability, out of which five projects collect data by measuring or modelling, while six projects conduct a feasibility or technical study.

SzSzB-SM-Geo (Hungary – Romania Programme) analyses the economically re- coverable geothermal energy for the production of cross-border maps as the basis for commercial exploitation of the local geothermal potential.

GEOPOWER (Syddanmark – Schleswig-K.E.R.N. Programme) conducts geo- physical measurements in the Danish-German border area and combines all available geoscientific information (results of oil exploration, seismic profiles, temperature measurements) on the relevant subsoil areas of the cross-border region for the preparation of digital and analogue maps.

GERME (Latvia – Lithuania Programme) promotes the use of geothermal energy for communal heating systems in small rural municipalities and estates by raising awareness among key decision- makers about costs and benefits of deep geothermal energy utilization, and conducts two full-scale feasibility studies for pilot estates.

The sustainable exploitation of the geothermal energy potential of a transboundary groundwater aquifer calls for joint management and (sustainable) use of this shared natural resource. Five projects work on developing a joint management plan and joint monitoring. For this purpose, they harmonise data collection, set common data standards for a joint database, and develop joint geological and hydrological models and maps.

TRANSENERGY (Central Europe Programme) lays the groundwork for joint and sustainable management and use of the shared thermal groundwater reservoir in the border area Austria, Hungary, Slovakia and Slovenia, by jointly establishing the geothermal potential. This requires developing a transboundary management and monitoring strategy to be proposed to the national governmental institutions, harmonising data collection and management for a joint geodatabase, and the elaboration of utilisation maps and a joint geological model.

T-JAM (Slovenia – Hungary Programme) contributes to establishing harmonized and sustainable joint management and monitoring of geothermal aquifers in the cross-border area. To this end, geological maps and profiles are prepared, plus data on geology, hydrogeology and hydrogeochemistry, while data from boreholes and water wells are collected for a numerical flow model, etc.

Few small-scale investments are made in geothermal power projects: the installation of a heat pump in a brewery (C2Cl, North Sea Programme), of a geothermal heating system in public buildings (school, sports centre) (Renewable energy, Latvia – Lithuania Programme), and the use of geothermal energy to heat a public swimming pool (ESOL, Spain – Portugal Programme).

PAGE 79 Geothermal power

Research collaboration is established in one project with the aim of advancing technology development in the area of deep drilling technology.

Teregeo (Slovak Republic – Austria Programme) establishes a research network for developing new technologies for drilling at a depth of 10 km by means of micro detonations, by carrying out laboratory tests of physical processes of micro detonations and their demolition effects on stone. Test results will be processed to a simulation model.

4.2.4.2 Key findings  Geothermal energy is currently largely underexploited, in particular ground- source heat pumps and mid- to large-scale geothermal heating systems, even though it offers several advantages over other RES. 23 ETC energy projects promote the use of geothermal power. However, only eight projects focus exclusively on geothermal power.

 43% of all geothermal power projects aim at reclaiming geothermal energy in the form of heat, mostly for direct-use such as in a district heating system. Electricity production from geothermal energy is not pursued by any of the projects. Nevertheless, 4 projects focus on deep geothermal energy.

 Heat pumps require additional initiatives within the heat sector to let them play their role in meeting the 2020 RES targets. Only seven ETC energy project promote the use of heat pumps, out of which four specifically focus on ground-source heat pumps.

 Geothermal power potential is strongly location-based, and feasibility and viability of exploitation are largely site-specific. Over half of geothermal power projects assess the geothermal energy potential and its viability by measuring or modelling and by conducting feasibility or technical studies.

 Groundwater aquifers in border areas are joint assets, requiring joint management and coordinated use. Five projects work on developing a joint management plan and joint monitoring. They do so by harmonising data collection, setting common data standards for the development of joint databases and geological and hydrological models and maps.

 Research collaboration in one project tackles the need for further technology development in the area of deep drilling.

PAGE 80 Hydro power Overview Barriers ETC projects on hydro power to investments into hydro on hydro power technologies power technology

Hydro power is electrical energy derived from running or falling water.

In a run-of-river hydro power station the kinetic energy of running water, whether in a small stream or a larger river, is used to drive water turbines, which convert the kinetic into mechanical energy. The mechanical energy is then transformed into electricity by a generator. Run-of-river hydro power stations do not require a large impoundment volume of water. Instead, some of the water is diverted from the river into a pipe, which feeds the water downhill to the power station’s turbines. The output of the power plant is highly dependent on natural run-off: the amount of electricity generated therefore increases considerably when the river is carrying more water during the spring thaw or when precipitation is very high.

A pumped storage hydro power plant works on a similar principle, the main difference being that water is impounded behind a dam, using the potential energy stored in the water, and led to vertical pipes that deliver the water to the turbines, thus transforming the potential into kinetic energy. The water pressure created is used to turn the blades of a turbine that drives a generator. The power harnessed from the water depends on the water volume and on the difference in height between the water intake and the water’s outflow. In addition to generating electricity, a pumped-storage power station also serves as an energy storage technology by using excess generation capacity, for example from renewable energy sources, to pump water into the higher reservoir at times of high supply and low demand in electricity. Due to its cost-effectiveness and quick response time, a pumped-storage power station is by far the most efficient and mature energy storage technology currently in existence.

PAGE 81 Hydro power

A small hydro power plant is not simply a reduced version of a large hydro plant, but combines the use of kinetic and potential energy by converting the power available in flowing waters like rivers, canals and streams with a certain fall into electric energy at the lower end of the scheme, where the powerhouse is located. The power output is proportional to the height difference between up- and downstream water levels and to the discharge, i.e., the quantity of water which goes through the turbines in a given unit of time, and to the efficiency of the turbines. Small hydro facilities can be integrated into existing irrigation structures, flood control and dams. Because existing structures are used, adding generating capacity only requires the construction of small engineering works, which makes them potentially less harmful to the environment and the river ecosystem, thus less controversial.

Hydro power is an important contributor to the EU’s electricity production. In 2013, hydro power accounted for 16% of the total installed electricity capacity in the EU-27, more than nuclear power, and 45% of the installed renewable electricity capacity (European Commission, 2013c). It is not only the most important, but also the most mature renewable electricity technology. How- ever, the major share of hydro power potential is already being exploited in most Member States, which is why not much extra capacity was foreseen by 50 Small-scale hydro power is defined Member States in their National Renewable Energy Action Plans. Thus, the by the Commission as installed hydro scale of deviations between planned and actually generated electricity from power capacity of up to 10 MW, large- hydro power was also relatively small in 2010. For 2020, an insignificant under- scale hydro power as installations of achievement of around one per cent is expected for large-scale and small-scale more than 10 MW capacity. hydro power50 (Ecofys et al., 2012).

Hydro power has obvious advantages over other RES: it is a mature and reliable technology, which, contrary to many other RES, can cope with peaks in demand due to its fast response time. It is therefore an important complementary power source to more intermittent RES, such as wind and solar, and an important energy storage, calling for a further expansion of hydro power also in the future. But hydro power also has its drawbacks. For one thing, (large scale) hydro power installations are characterised by high initial investment costs. However, investment costs are not the main barrier, since hydro power is also marked by low running-, operation- and maintenance costs and a long lifetime. A more important barrier is the often considerable social opposition to plans for a new hydro power plant, mainly because of its high impact on the environment and landscape. The construction of a hydro power plant, especially if the construction of a dam is required, has a strong adverse environmental impact. Besides inundating valuable ecosystems and causing other disruptions to the ecosystem due to the construction of power lines, roads, etc., there are other, less immediate negative effects. First of all, the dam wall itself blocks fish migrations and, in some cases, even separates spawning habitats from rear- ing habitats. Secondly, a change in temperature, chemical composition and dis- solved oxygen level of the water takes place, which together with the changed physical properties of the river system might make it unsuitable for the en- demic aquatic flora and fauna. The greatest impact, however, is the alteration of the river’s flow and sediment transport downstream of a dam, as the dam holds back sediments that are naturally transported in the river. This results in river bed deepening and erosion of the river bed and banks downstream of the dam, which does not only reduce the habitat for fish that spawn in river bot- toms and for aquatic invertebrates, but also lowers groundwater tables along the river, drying up riparian woodlands and causing problems for communities along the river that draw water from groundwater wells.

PAGE 82 Hydro power

Lastly, administrative and regulatory barriers are a considerable impediment, including the lengthy periods required for obtaining licences, concessions and permissions. On a European level, the implementation of the Water Framework Directive, whose priority is to protect and restore the ecological status of rivers, is also restraining the development of the hydro power sector, as the interpretation of the directive at a national level is having direct consequences in terms of the approval of new projects and in terms of the allocation of conces- 51 www.erec.org/renewable-energy/ sions and permissions51. hydropower.html

Eleven ETC energy projects promote the use of hydro power; however, only 4.2.5.1 ETC hydro power six projects may be called ‘true’ hydro power projects as they deal extensively projects with the topic. Out of these eleven identified projects, six focus on small-scale hydro power use, which can be explained by the fact that there is still a considerable untapped RES potential in the EU from new small-scale hydro power facilities or from upgrading52 existing ones, and that small hydro power generally has a lower impact on the environment and on the river ecosystem (Euro- pean Small Hydropower Association, 2009). For example, the Nord (SE-FI-NO) Programme’s project ‘Potential development and demonstration of new tech- 52 As many as 55% of small hydro nologies in the field of environment-friendly small-scale hydro power plants’ power plants are more than 60 years responds to the need to renovate old small-scale hydro power plants while at old (European Small Hydropower the same time bringing them in line with today’s environmental requirements. Association, 2009).

Potential development and demonstration of new technologies in the field of environment-friendly small-scale hydropower plants (Nord Programme) ca- ters to the need to develop technologies for renovating existing hydropower plants and removing existing impediments to natural fish migration in small- scale hydropower plants that are lacking fish passages or spillways in the existing dams that lack fish tunnels.

A strong focus of hydro power projects is on mitigating the environmental impact of hydroelectricity production. Four projects, thus two thirds of the hydro power projects, aim at minimising the harmful effect of hydro power generation on river ecosystems, and at reconciling the contradictory European objectives of river ecosystem protection and renewable energy production, for example by testing environmental flow assessment methodologies, developing a multi-criteria decision support tool for evaluating different alternatives, or working on solutions for upgrading existing hydro power plants with fish passages and tunnels.

SEE HYDROPOWER (South East Europe Programme) aims at improving water and hydro power planning and management by considering all multiple uses of rivers, the preservation of river ecosystems and flood risk. The project defines common strategies for small hydro power production, tests common integrated management tools based on remote sensing techniques and meteorologi- cal forecast, and tests environmental flow assessment methodologies in pilot studies.

SHARE (Alpine Space Programme) promotes integrated river management for mitigating the conflicting uses of Alpine rivers and the need of decision-makers to have reliable tools to assist them in evaluating the effect of hydro power generation on mountain rivers, by developing a multi-criteria decision support tool (customisation of an existing tool) and applying it to pilot case studies.

PAGE 83 Hydro power

Investment-oriented activities are undertaken by three projects which are very different in their approaches and targets, ranging from a potential analysis, to research into micro-hydro power, to the actual realisation of a run-of-river power station.

Micro centrale hydroélectrique de Saut Maman Valentin à Mana (Amazonia (FR-BR-SU) Programme) realises a run-of-river hydroelectric power plant on Guyana, including a passage for fishing boats and migratory aquatic species.

Hydro BPT (Ireland – Wales Programme) investigates the technical, environmental and economic feasibility of energy recovery from the water industry through the installation of micro-hydro turbines in the water supply network (at the source reservoir or water treatment works, at break pressure tanks or pressure-reducing valves in the supply network, or at the end of the line at wastewater treatment plants), and aims to quantify the potential for energy recovery in the water infrastructure in Wales and Ireland. This is done through a technical examination of micro-hydro power turbine technology, by assessing the environmental impacts of micro-hydro power using a life cycle assessment approach, creating a GIS database of all energy recovery sites in Wales and Ireland, and developing a collaboration model for implementing micro-hydro power in practice.

ElectroRiver (Romania - Bulgaria Programme) conducts a joint technical study on the potential for power generation and for a pilot installation capable of extracting electric energy from the Danube River.

4.2.5.2 Key findings  Hydro power is a very mature technology, and a large share of its (socially- accepted) potential has already been tapped in most EU Member States. Nev- ertheless, eleven ETC projects promote the expansion of hydro power, out of which six deal extensively with different aspects pertaining to hydro power.

 Six projects focus on small-scale hydro power use, reflecting the considerable potential in the EU for building and upgrading small hydro power facilities which also have a lower impact on the environment and on river ecosystems.

 A strong focus of hydro power projects is on mitigating conflicting EU priorities on river ecosystem protection and renewable energy production. Projects work on methodologies for multi-criteria decision support, on environmental flow assessment and on removing existing impediments to natural fish migration, or assess the environmental impact by conducting a lifecycle analysis.

 Investment-oriented activities range from conducting a potential analysis, researching into micro-hydro power generation in the water supply network, to the actual realisation of a run-of-river power station.

PAGE 84 Wave and tidal power Overview Barriers ETC projects on wave and tidal power to investments into wave on wave and tidal power technologies and tidal power technology

Wave and tidal power also belong to the group of hydro power technolo- Tidal energy gies, as both take advantage of the kinetic power stored in moving water. In fact, the technology of converting tidal energy into electricity can be com- With tidal energy, large bodies of pared to the technology used in hydroelectric power plants. Electricity is gen- water such as oceans and seas are erated by water flowing into and out of gates and turbines installed along a dam acted upon by the gravitational or barrage built across a tidal bay or estuary. Two construction types for tidal forces of the sun and moon, which barrages can be distinguished, both of which are used in practice: in combination with the rotation of the earth around its axis In a double action system, the turbines work in both water flows by filling the cause movements of the oceans basin behind the dam during high tide and then draining the basin during low and seas, known as tides. Vertical tide, when the water flows back into the ocean. The advantage of the double movement can be seen in the dif- action system is that it closely models the natural phenomenon of the tide, ference in water level at high and therefore has the least effect on the environment, and that it can have a higher low tide, and horizontal motion of efficiency. However, this method requires more sophisticated, hence more ex- water is known as a tidal current. pensive, reversible turbines and electrical equipment. www.oceanenergy-europe.eu/index.php/policies/technologies/13- In a single action system, the turbines work only during the ebb cycle. The technology/47-tidal-energy water gates are kept open during the tide, allowing the water to fill the basin. Then the gates close and turbines start operating in the water flow from the basin back into the ocean during the ebb. The single action system is simpler and requires less expensive turbines than the double action system, but is also potentially more harmful to the environment, as it causes the accumulation of sediment in the basin.

Most wave power technologies make use of the oscillatory motion created by 53 A comprehensive summary of the waves. The energy in a wave is determined by wave height, speed, length and state-of-the-art in wave power tech- the density of the water. Over 50 different types of technology concepts have nology can be found in the Technical been developed, as wave energy converters are designed for the specific lo- Status Report of the SI OCEAN Project cation of the device (near shore, offshore, and far offshore) and for a certain of the Intelligent Energy Europe Pro- range of wave periods that are characteristic for the chosen site (Blažauskas, gramme (University of Edinburgh et 2013). We will not present technologies here53, with the exception of the point al., 2012).

PAGE 85 Wave and tidal power

absorber type, as this technology is used in one ETC wave power project. Point Wave energy absorber type devices use buoyant forces to induce a heaving motion of one floating body, the buoy, relative to a secondary, fixed body. The fixed body may Wave energy is energy from the be moored to the sea bed, or held in place by gravitational forces by a large wind passing over the surface of foundation mass. The advantage of point absorbers is that they can receive in- the sea. Depending on the energy coming waves from any incident angle (University of Edinburgh et al., 2012). flux between the wind and the ocean surface, the height and pe- The ocean is an enormous source of renewable energy, and could supply a sub- riod of resulting waves will vary, as stantial part of the electricity demand of several European countries in the will the energy yield. northern and western part of Europe, even though the power output is quite www.oceanenergy-europe.eu/in- variable for both technologies. Ocean energy is also particularly suitable for de- dex.php/policies/technologies/13- centralised energy production on islands and in remote areas. However, in 2013 technology/48-wave-energy tidal and wave power accounted for only 0.3% of the total installed electricity capacity in Europe (European Commission, 2013c). From the current perspective it can be expected that plans for ocean energy are not met and that, at EU level, a deficit of about 50% will arise by 2020 (Ecofys et al., 2012). This indicates that implemented and planned measures appear insufficient, and that further initiatives are required to bring tidal and wave power up to a marketable level.

Tidal and wave power may both still be classified as novel technologies in a non- mature market stage, but tidal technologies are already more mature, taking a step towards commercial viability. For both technologies it can be said that, so far, development work has mainly been financed through research projects, and that moving from the pilot and demonstration stage to a commercially- viable technology is a real challenge for this sector. Thus, lack of financing for larger-scale installations presents a true barrier to an accelerated deployment of ocean energy technologies. At the same time, there is a need to continue promoting technological development, to further improve existing technologies and bring down costs. One way could be to develop hybrid systems by combining ocean energy technologies with other technologies, such as offshore wind power.

Once the technologies are used more widely, one of the main hindering factors for their expansion will be the availability and capacity of the offshore and coastal electrical grid. Unlike the offshore wind sector, which has been involved in the planning process for grid expansion and development for many 54 www.erec.org/renewable-energy/ years, the ocean energy sector has not had a long-term outlook and planning in ocean-energy.html the area of grid access54.

In particular tidal, but also wave power generation, have adverse impacts on the marine flora and fauna, not all of which are yet fully known. Both technologies can cause significant disturbance to the local habitat, in particular during the deployment phase when submarine construction work is needed to connect the power generator to a shore-based grid. Combining the deployment of wave energy devices with existing offshore infrastructure such as wind parks offers a lot of synergies for harnessing renewable energy, while significantly reducing the unfavourable impact on the environment by taking advantage of existing infrastructure to connect to the grid. Tidal power generation causes changes to living conditions for sea flora and fauna due to the reduced natural water exchange between the cut-off water body and the sea, resulting in changes in the distribution of current speeds in the bay, a redistribution of bottom sediments, and a reduction in water turbidity, which increases the penetration of sunlight and the productivity of phytoplankton. Furthermore, passage through turbines during tide-related movements causes significant mortality

PAGE 86 Wave and tidal power

to both fish and marine mammals. Large marine mammals, such as whales or seals, are also affected by noise from construction activities and the operation of devices, collision with tidal devices and vessels, and the displacement of habitats (Renewable UK et al., 2013).

As soon as ocean energy starts large-scale deployment, the current regulatory framework and, in particular, the lack of integrated marine policy will also become an issue.

Ten projects promote the use of wave and/or tidal power55: four projects focus 4.2.6.1 ETC wave and tidal on wave power, one project on tidal power, while the remaining five projects power projects combine both topics. In fact, five projects combine different marine renewable energy topics, like tidal and wave power, (off-shore) wind power or bioenergy from marine biomass.

MAREN (Atlantic Coast Programme) researches the energy extraction potential of the Atlantic Area coastal waters and develops environmental assessment 55 4 projects are general RES projects methodologies to assess the impact of marine renewable energy production on that don’t set any noteworthy ocean the environment which are tested in selected demonstration sites. energy-specific activities.

SUBMARINER (Baltic Sea Programme) assesses the economic feasibility, availability and status of technologies, regional applicability and environmental impact of marine renewable energy production. Gaps and obstacles in the legal framework are analysed as a basis for the development of a roadmap, and regional development activities like feasibility or pilot studies are carried out. In the area of wave power, one project partner develops a prototype for generating energy from waves designed to meet the specific conditions of the Bal- tic Sea, which is marked by a relatively low wave power density and occasional harsh storms.

Two types of activities can be identified which are shared by several projects. On the one hand, one set of projects engage in assessing existing barriers in the area of technology, cost-efficiency, environmental impact and legal or policy framework. The lack of knowledge about the environmental impact of tidal and wave power generation is addressed by implementing a monitoring programme for grey seals in Cornwall and the Isles of Scilly, and by developing and testing an environmental impact-assessment methodology. On the other hand, two projects carry out research activities in the area of wave energy generation; i.e., they develop a prototype wave converter or a buoy optimised to work under occasionally icy conditions for a point absorber type wave generator.

Merific (France (Manche) – England Programme) aims to identify the specific opportunities and issues faced by peripheral and island communities in exploiting marine renewable energy resources by looking at issues such as marine energy resource assessment, potential legal barriers to marine energy development, business and commercial opportunities for island/mainland communities, infrastructure bottlenecks, and community and stakeholder engagement with key groups (e.g., fishing, wave farm developers, and investors). The project also engages in continued surveying and monitoring of grey seals in Cornwall and the Isles of Scilly to build a comprehensive baseline understanding of species and habitats.

PAGE 87 Wave and tidal power

WESA (Central Baltic Programme) works on optimising an existing point absorber wave power system, focusing on buoy design, for operation in occasionally icy environments, and adapting it to the wave conditions in the Baltic Sea (shorter wave period, steeper waves and smaller wave height than in the North Sea or the Atlantic ocean), by building a prototype and conducting various tests with a wave energy converter in the Baltic Sea to demonstrate its use.

4.2.6.2 Key findings  The ocean is an enormous source of renewable energy, and could supply a substantial part of the electricity demand of several European countries in the northern and western part of Europe. Ocean energy is also particularly suitable for decentralised energy production on islands and in remote areas. Nevertheless, from the current perspective it is expected that 2020 targets for ocean energy will not met.

 Only ten ETC energy projects promote the use of wave and/or tidal power, five of which combine different marine renewable energy topics, like tidal and wave power, (off-shore) wind power or bioenergy from marine biomass.

 Two types of project activities are shared by most projects:

On the one hand, one set of projects engage in assessing existing barriers in the area of technology, cost-efficiency, environmental impact and legal or policy framework.

On the other hand, two projects carry out research activities in the area of wave energy generation.

PAGE 88 Energy efficiency and renewable energy in buildings and cities Overview Barriers ETC projects on energy efficiency measures to investments into energy on energy efficiency in in buildings and cities efficiency in buildings and cities buildings and cities

The greatest energy-saving potential lies in buildings, which account for 40% of the EU’s total final energy consumption. Estimated potential energy savings until 2020 range from 94 TWh (8.1 Mtoe), if the annual renovation rate persists at today’s level of around one per cent in the European Union, to 527 TWh for the most ambitious deep retrofit scenario (Buildings Performance In- stitute Europe, 2011). Because the potential for cost-effective energy saving is so high, the building sector has become a priority area in EU energy policy.

Increasing energy efficiency in buildings can be achieved through a host of measures: For newly-constructed buildings, the range of possible energy-efficiency increasing measures is ample. High insulation standards for walls, roofs and basements and air tightness, combined with a ventilation system that includes efficient air-heat exchangers, can curb a building’s energy demand substantially. This principle is used in low-energy houses or zero energy houses, which require little or no external input of energy. Heat loss can be reduced through compact building form, as heat is emitted from the building shell; the smaller the surface in relation to the volume, the less heat is emitted. Furthermore, passive solar gains can be maximised through a high ratio of windows and glass elements with high-quality glazing on south facades, and good daylight supply, which improves comfort and reduces electricity demand for lighting. Depend- ing on the climate, additional solar protection devices, such as shading or re- flective roller blinds, reduce the demand for cooling. Active solar gains can be achieved through the installation of solar collectors for water heating on roofs, which can turn a building from a zero-energy into an energy-plus house.

PAGE 89 Energy efficiency and renewable energy in buildings and cities

Energy Performance of In existing buildings, heat loss can be reduced by improving the building en- Buildings Directive velope insulation, minimising heat bridges, and by replacing poorly-insulating EU Directive 2002/91/EC on the en- with well-insulating windows and doors. Electricity demand in buildings can be ergy performance of buildings and reduced by ensuring a good provision of natural daylight and ventilation, and its recast, Directive 2010/31/EU, is through the use of energy-saving lamps and energy-efficient technical building the main legislative instrument at systems such as space heating, domestic hot water preparation, ventilation and EU level for improving the energy air conditioning, which minimise auxiliary energy demand and thermal losses. efficiency of buildings. It contains The installation of smart meters can additionally curb electricity consumption, an obligation for Member States as they enable end-users to better manage their electricity bills. to adopt a methodology for calcu- lating the energy performance of Despite the profitability of EE measures in existing buildings, annual rates of buildings and to set minimum re- thermal rehabilitation are low in the European Union. This is not only ineffi- quirements for building energy per- cient from an economic point of view, but also fails to unleash the potential formance, including both new con- for job-creation in the labour-intense building refurbishment sector. Several structions and existing buildings barriers to an accelerated realisation of energy efficiency measures in buildings undergoing major renovation, for can be identified. different categories of buildings. Financial barriers are among the most important reasons why investments into energy efficiency in buildings, in particular as regards refurbishment and retrofitting, fall behind expectations. Any investment requires money and initial investment costs can be high, but willing houseowners are often faced with lack of funds and/or access to finance on affordable terms. This applies to individual householders, businesses, social housing providers and the public sector alike, and the economic crisis has further worsened the situation. On the part 56 Energy bills generally account for of the investors, there is a lack of awareness about investment opportunities, only 3 – 4% of disposable household but also a lack of interest due to the long investment horizon of EE measures. A income. However, electricity costs do lack of awareness about cost savings and the positive impact of energy-efficient not reflect negative externalities con- refurbishment on the asset value can also be observed among houseowners. In nected to energy production, such as addition, competing purchase decisions in connection with the small share of the costs of environmental degrada- electricity in the total household expenditure for most households56 leads to tion, climate change, etc. economically inefficient decisions. An alternative way of raising capital for energy refurbishment of buildings is the use of financial instruments, notably energy performance contracting. However, the deployment of energy performance contracting is hampered in many Member States by ambiguities in the legal framework and the lack of reliable energy consumption data to establish the baselines against which performance is measured (European Commission, 2011c).

But investment into energy efficiency in buildings doesn’t necessarily curb energy consumption if energy savings are offset by a more energy-intense life- style. The influence of consumer behaviour on energy consumption is considerable, and the range of potential energy savings due to measures targeting behaviour is 5 – 20%, depending on the type and combination of interventions (European Environment Agency, 2013b). Feedback on one’s own energy consumption, for example through the use of individual meters or heat cost al- locators for measuring individual consumption of heating in multi-apartment buildings, and information on the EE potential in one’s home, through the use 57 According to ECORY (2010), for small of instruments such as energy performance certificates, energy calculators or (usually < 5 kW) roof-top PV projects, energy audits as part of energy management, can raise the necessary aware- the legal administrative costs make up ness among building owners about how they can influence their energy bills. more than 30% of the overall costs of the project, in some cases even more Another set of important barriers are those related to legal-administrative is- than 40% (Italy) or more than 60% sues, for example administrative complexity in the context of obtaining build- (Bulgaria). ing permits for building integrated RES technologies57, and the difficulty of

PAGE 90 Energy efficiency and renewable energy in buildings and cities

making alterations to buildings under monument protection. The role of pilot demonstration projects, in particular the exemplary role of public buildings, is often neglected. Public procurement rules tend to focus on investment rather than overall life-time costs, which often leads to suboptimal decisions.

Furthermore, despite attempts in this direction on the European level, there exists no binding target for energy savings in the existing building stock that could create the necessary level of political commitment and enable the full economic potential of energy efficiency to be seized. For new constructions, Article 9(1) of the EU Directive 2010/31/EU on the energy performance of buildings requires Member States to “ensure that by 31 December 2020, all new buildings and that after 31 December 2018, new buildings occupied and owned by public authorities are nearly zero-energy buildings”. However, as the rate of new constructions in the EU is only around one per cent, the biggest challenge in exploiting the EE potential in buildings is the systematic renovation of the existing building stock.

As regards the use of RES in buildings, despite the specific (non-obligatory) requirement for Member States in the Renewable Energy Directive (Article 13(4)) to introduce minimum requirements for (heating) energy from renewable sources in new buildings and in existing buildings subject to major renovation, few countries have so far introduced such full or partial obligations.

Another barrier lies in the structure of ownership and occupancy of buildings: in tenement buildings, ‘split incentives’ are an important barrier to EE increasing refurbishment and retrofitting, as the costs of improvements to the energy performance of a building have to be borne by the house owner, while the tenant has all the benefit from reduced operating costs. On the other hand, tenants are reluctant to pay for retrofitting (exchanging windows, boilers, etc.) if they cannot recover at least part of these costs when moving out of the building. The same is true for the installation of renewable energy systems such as photovoltaic panels on roofs, etc. Possible remedies are legal provisions that define the amount which can be recovered by investors from tenants. In public and commercial buildings, Energy Service Companies can also play a key role in overcoming the problem, as they operate on a commercial principle and have an interest in keeping operating costs low.

In multi-owner properties a common barrier to the realisation of energy efficiency improving measures is the involvement of numerous stakeholders who have to either approve a decision or make a financial contribution. Further- more, the different views of stakeholders may prevent the bundling of small projects, which would make a more attractive business case.

Energy-efficient building solutions are often technically demanding. There is a lack of appropriate training for building professionals (architects, engineers, auditors, craftsmen, technicians and installers), notably for those involved in refurbishment. According to the European Commission, over half of the estimated 2.5 million qualified workers in the buildings sector that will be needed by 2015 in Europe are missing (European Commission, 2011c). The Renewable Energy Directive focuses on the qualification of installers, and requires Mem- ber States to set up certification schemes or equivalent qualification schemes as a way of assuring quality and creating trust in the various technologies.

PAGE 91 Energy efficiency and renewable energy in buildings and cities

4.2.7.1 ETC energy The energy performance of buildings is a central theme in ETC energy efficien- efficiency in cy projects: 44 projects deal with EE in existing buildings, 25 projects with EE buildings projects in newly-constructed buildings, while 24 projects ‘blend’ both topics. EE measures on buildings, such as thermal refurbishment, are often combined with renewable energy generation in buildings (photovoltaic panels, geothermal heat pumps, etc.). However, we will only touch upon the topic of building-integrated RES technology here, as these technologies will be discussed in more detail in the relevant chapters (photovoltaic panels in the chapter on solar power, heat pumps in the chapter on geothermal power, etc.). For the mapping of building-related projects, we distinguished between the construction of new, energy-efficient buildings and energy efficiency improvements in existing buildings, different types and sub-types of buildings and energy efficiency measures, with the general classification scheme:

[Increasing energy efficiency] in [newly constructed buildings/existing buildings], that is [type of building], more precisely, a [sub-type of building], by means of [energy efficiency measure].

Fig. 30: Types of energy efficiency measures and buildings addressed by EE-in-buildings projects.

33 ETC energy projects aim at increasing EE in public buildings. Publicly-owned or occupied buildings represent about 12% of the total floor area of the EU building stock, and have high visibility in public life (European Commission, 2011c). This prompted the European Union to introduce, with the Energy Efficiency Directive, binding targets for annual renovation rates of buildings owned and occupied by central governments. Public authorities are obliged to refurbish at least three per cent of their buildings (by floor area) each year, thus complying with their exemplary role in triggering a higher renovation rate while bringing the public building stock up to higher energy performance. ETC projects have readily taken up this topic by realising pilot investments in public buildings, monitoring the energy consumption in public buildings, building capacities in public authorities on green public procurement, building energy management, refurbishment, policy making, etc., or by developing an energy consulting and auditing service for public authorities and by tackling energy consumption behaviour of public authorities.

PAGE 92 Energy efficiency and renewable energy in buildings and cities

Servicepaket Nachhaltig Bauen (Austria – Germany Programme) establishes a new advisory and counselling service for public authorities on sustainable, ecological, energy-efficient construction and renovation of public buildings, assisting them in all stages from decision-making to procurement, quality assurance and execution of the construction work.

SERPENTE (INTERREG IVC Programme) aims to improve energy efficiency in different types of publicly- owned or managed buildings by identifying good practices related to incentives, technology, evaluation of building performances, awareness campaigns and policies.

Differenttypes of public buildings are targeted; the range goes from municipal buildings (Energy Efficiency and Micro Generation, Northern Ireland - Border Region of Ireland - Western Scotland Programme) to public schools (Teenergy schools, Mediterranean Programme), railway stations (SusStation, North West Europe Programme), tramway depots (TramStore21, North West Europe Pro- gramme) or buildings of the youth welfare service (Energetischen Innovation in Einrichtungen der Kinder- und Jugendhilfe, Saxony - Czech Republic Pro- gramme), etc. Another important topic is that of energy efficiency inresidential buildings (21 projects). The residential building stock is the biggest building segment in the EU, accounting for 75% of the total floor space, out of which 64% of the residential building floor area is associated with single-family houses and 36% with apartments (Buildings Performance Institute Europe, 2011). ETC energy projects tackle the need to improve EE in residential buildings by implementing pilot measures, instructing residents on the importance of user behaviour for reducing energy consumption in their homes and raising awareness by measuring building energy consumption data, advising citizens on energy-efficient refurbishment and retrofitting with energy-efficient technical building systems, collecting good practice examples or providing new financial incentives for EE improvements on buildings for homeowners, etc.

Longlife (Baltic Sea Region Programme) designs a prototype of a sustainable, energy-efficient and resource saving residential building in the Baltic Sea Re- gion.

SusLabNWE (North West Europe Programme) aims to set up an infrastructure of testing facilities, so-called ‘living laboratories’, for industry and research institutions for studying technology-user interaction in real-life home environments.

Within the group of EE in residential buildings projects, six focus on social Fuel poverty housing (6 projects). Similarly, six projects work on the topic of fuel poverty in low-income households. Fuel poverty, or energy poverty, oc- curs when a household is unable ELIH-Med (Mediterranean Programme) is targeted at low-income housing and to afford the most basic levels of aims at identifying innovative technical solutions and financial mechanisms energy for adequate heating, cook- that could be implemented to increase energy efficiency. ing, lighting and use of appliances in the home. Fuel poverty is occur- Stromsparcheck Bodenseeregion (Alpenrhein - Bodensee – Hochrhein Pro- ring across the EU, with particularly gramme) trains long-term unemployed people to become energy consultants high levels of fuel poverty found qualified to help low-income households through advice and by carrying out in Eastern and Southern European minor works such as installing automatic timers, water-saving shower heads, states. energy-saving lamps, etc.

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How to deal with EE measures in traditional, historic buildings is the central theme of 12 projects. Around 38% of the EU building stock consists of buildings built before 1960 (Buildings Performance Institute Europe, 2011). The challenge is how to reconcile monument protection, which aims to protect the historic substance and avoid alterations to the buildings’ original appearance, with the need to modernize and renovate old buildings so that they remain useable. Doubtless, there is a significant potential for energy-efficient refurbishment and deployment of renewable energies also in historic buildings, but requirements on the renovation of historic and tradition buildings are high, and few good examples of clear guidelines are in place (ECORYS, 2010). ETC energy projects that work on historic buildings carry out inventories of their historic building stock, on the current status and gaps in the partner countries concerning management of cultural heritage and energy efficiency questions, on existing laws on protection and building regulations, and on good practice examples, etc., for the development of guidelines and handbooks (10 projects). They develop teaching material and training courses for craftsmen, house owners and public authorities (7 projects), realise demonstration projects (5 projects), and develop common standards and certification methods (3 projects).

COOL Bricks (Baltic Sea Region Programme) tackles from a technical and policy angle the challenge of combining heritage conservation and energy-efficient refurbishment by facilitating expert exchange and developing guidelines and educational material.

GOVERNEE (Central Europe Programme) aims at improving decision-making and planning competences in public authorities regarding the refurbishment of historical public buildings, in particular through the collection of existing good practice examples and the implementation of pilot projects (e.g., the testing of new insulating materials and near-to-invisible photovoltaic panels, the installation of an ICT system in buildings).

Refurbishing old buildings while preserving their characteristic regional (Al- pine, Baltic, Mediterranean) architectural style is at the core of 6 EE-in-historical-buildings projects. Projects draw on available regional expertise on how to rehabilitate traditional houses with local materials, using traditional building methods.

AlpHouse (Alpine Space Programme) gathers available knowledge and skills in the various partner regions on how to renovate traditional Alpine houses, and develops and implements a comprehensive programme of qualification modules and a web-based information platform for craftsmen, architects, planners, and decision makers.

Case Mediterranee (Italy - France ‘Maritime’ Programme) aims to promote the use of traditional materials and building techniques in the renovation of historic Mediterranean buildings through the realisation of trainings and demonstra- 58 The non-residential sector is het- tion projects. The results of the project will contribute to amending municipal erogeneous and includes building building regulations. types such as offices, shops, hospitals, hotels, restaurants, supermarkets, Other types of buildings we distinguished were office buildings and industrial schools, universities and sports cen- buildings (5 projects). Even though the non-residential sector58 accounts for tres; buildings often serve multiple only 25% of EU floor space, the average specific energy consumption (cover- purposes. ing all end-uses) in the non-residential sector is at least 40% greater than the

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equivalent value for the residential sector. Furthermore, in the non-residential sector, electricity use over the last 20 years has increased by a remarkable 74% (Buildings Performance Institute Europe, 2011).

Energy CH-IT (Italy – Switzerland Programme) aims to reduce energy consumption in the manufacturing and processing industry through energy audits and the constitution of a non-profit organisation which fosters the development of innovative solutions to energy saving in the local industry, and the continuous quality improvement of products and services in the area of EE and RES.

The picture that emerges when comparing the general pattern of sub-objective 4.2.7.2 Energy efficiency in categories with the one specific to EE-in-buildings projects shows that EE-in- buildings project-specific buildings projects deliver above average in most areas, notably in the areas of activities and outputs capacity building, awareness-raising, behaviour change, development of new services, and in terms of concrete pilot investments realised.

60 57 A substantial number of projects aim at building capaci- 52 All ETC energy projects ETC EE-in-buildings projects 50 47 59 ties and/or changing practices in energy- efficient re- 39 40 31 32 32 (12 projects) and/or in 29 28 29 furbishment construction of en- 30 25 24 21 ergy-efficient buildings (15 projects). Capacity building is 20 18 13 11 10 10 achieved, above all, by delivering training, organising ex- 7 7 10 5 6 2 0 4 2 1 0 cursions and study visits, launching an information cam- 0 paign and facilitating knowledge exchange. Activities are mainly targeted at SMEs in the construction sector, such raising awareness harmonising data influencing policieschanging practices changing attitudes buildings capacities making investments changing behaviour preparing investments harmonising standards as local crafts businesses, architectural or technical con- developing a new service developing a new product sultancies, etc. (15 projects). boosting business development harmonising method/procedure

Zukunft Passivhaus (Germany – Netherlands Programme) aims to promote the Fig. 31: Comparison of the use of sub- construction of so-called passive houses by transferring knowledge on passive objective categories in EE-in-buildings house technology to craftsmen through a number of qualification measures with all energy projects (in %). (seminars, excursions, events); the result of the project is a cross-border competence centre on passive house technology. Training 16 Excursion/study visit 6 Moving away from conventional refurbishment or construction practices to- Information campaign 2 wards EE refurbishment and construction methods is pursued by means of Knowledge exchange 2 collecting good practice examples in energy-efficient refurbishment or construction, or by gathering energy consumption data, for example by using a Tab. 32: Number of projects per calculation tool for evaluating the impact of different architectural or technical capacity building in EE refurbishment solutions on the energy demand of a building. Data and information are pre- and construction output categories. sented in the form of manuals and guidance documents, knowledge repositories or background studies. New methods are developed for the techno-economic 59 Remember, the difference between evaluation of the refurbishment of public buildings (REPUBLIC-MED, Mediter- ‘building capacities’ and ‘changing ranean Programme), for the life cycle evaluation of building energy demand practices’ is that ‘capacity building’ (EnerBuiLCA, South West Europe Programme), for the energy performance as- must involve concrete activities that sessment of buildings (BIOURB, Spain – Portugal Programme), etc. lead to an increase in knowledge or improvement of skills on the level of EnerBuiLCA (South West Europe Programme) develops a life cycle analysis tool individuals or organisations, while for buildings which allows the identification of the best building solution in ‘changing practices’ refers to activi- terms of energy demand and environmental impact throughout the whole life ties such as collecting information and cycle of a building. Training is provided to the construction sector on how to data, jointly developing a methodol- use the tool. ogy or establishing new partnerships. Changing practices often requires building up institutional capacities.

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One of the barriers to a higher renovation rate is the lack of appropriate train- BUILD UP SKILLS ing for building professionals. 19 ETC energy projects help to remove this barrier by developing new training material or educational programmes and/or by The transition to energy-efficient delivering training for building professionals. technologies requires new skills and environment-conscious vo- ENERBUILD (Alpine Space Programme) provides craftsmen and architects with cational education and training in the latest technical know-how through specialized courses, vocational train- construction and in many other sec- ing, excursions and new teaching material, and provides public builders with an tors (European Commission, 2011c). evaluation tool that allows them to evaluate a newly-planned public building This insight prompted the Commis- based on ecological criteria. sion to launch the ‘BUILD UP Skills: Sustainable Building Workforce Ini- PHCC (Austria – Hungary Programme) aims at improving professional develop- tiative’ to support Member States ment in the area of energy-efficient construction and increasing cross-border in assessing training needs for the worker mobility by developing a modular passive house course that will be part construction sector, developing of the European Credit System for Vocational Education and Training. strategies to meet them, and fostering effective training schemes. Another type of new service offered by 12 EE-in-buildings projects is energy www.buildupskills.eu auditing and energy certification services, eight of which apply the service to public buildings and two to businesses.

CEC5 (Central Europe Programme) explores the possibility of developing a harmonised certification procedure for public buildings by comparing and evaluating the different approaches in each partner country.

GENERATION (INTERREG IVC Programme) creates an innovative methodology for conducting a simplified energy audit which is then tested by conducting at least 40 audits in public buildings.

Fig. 32: Activities and outputs aimed at developing a new service for increasing EE in buildings.

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18 projects develop a new consultancy service by offering freeenergy counselling for the general public (ENERGO OPTIMUM, Slovenia – Hungary), training Energy performance for energy counsellors to qualify them in the area of renovation of traditional contracting houses (HELTH, Central Baltic Programme), advice for public authorities on Energy performance contracting how to set up an energy service contract (FIPREC, INTERREG IVC Programme), is a type of long-term contractual or support to business park operators with master planning, design, financing, agreement where the customer development and marketing of low-carbon business parks (INTERREG IVC Pro- benefits from new or upgraded gramme). Technical advice is given by four projects. energy equipment or building fab- ric improvements, and the Energy SCC (INTERREG IVC Programme) supports house owners with improving their Service Company’s (ESCO) remu- building EE through the creation of collective purchasing groups for building neration is directly tied to the energy retrofitting. savings achieved by the reduced energy consumption. The cost of in- Energiesand 09 (Italy – Austria Programme) develops a complete service pack vestment is paid back from the cost for thermal refurbishment, including energy counselling, funding advisory reduction achieved through energy service, energy performance certification and quality assurance. savings, and in case the ESCO fails to accomplish the guaranteed sav- Another barrier to increased EE in buildings is the lack of awareness about in- ings, the ESCO covers the differ- vestment opportunities into EE and the profitability and the positive impact ence between the actual and the of energy-efficient refurbishment on the asset value. EE-in-buildings projects guaranteed costs. Two models ex- tackle this in various ways, by raising awareness about the project’s activities ist: Under the guaranteed savings (8 projects), about the benefit of EE measures (22 projects) or, more specifically, model the ESCO guarantees the about innovative financing instruments (2 projects). Various communication level of energy saved, while under channels are utilised: (travelling) exhibitions, fairs, public road shows, public the shared savings model the cost seminars, excursions and site visits, energy education programmes in schools, savings are guaranteed. A crucial information platforms, brochures, etc. issue is setting the energy (cost) baseline and verifying the energy CEEBEE (Austria – Hungary Programme) organises dinners in passive houses (cost) savings. during which participants are to experience firsthand how it feels to live in a passive house and receive independent information from passive house experts. Furthermore, the project develops a trilingual dictionary on energy-efficient construction and renewable energy.

Energieerlebniswelt (Austria - Czech Republic Programme) installs a permanent, interactive, multi-lingual exhibition on energy-efficient construction and renovation.

Awareness-raising activities and activities aimed at changing energy consumption behaviour are strongly related, and often co-exist in EE-in-buildings projects. In many cases, improper occupant behaviour accounts for the discrepancy between the designed and the real total energy use in buildings. EE-in-buildings projects are therefore concerned with raising understanding about the importance of user behaviour if energy-efficient houses and technical building systems are to realise their full savings potential. 13 projects engage in changing energy consumption behaviour, mainly by informing consumers about energy saving potentials linked to behaviour change through various information channels, such as internet, brochures, etc., (4 projects) or through training or other public events targeted at occupants (8 projects). Consumers need information in order to determine whether their energy consumption is excessive, and to identify saving potentials. The importance of making energy consumption patterns and saving achievements visible is taken into account by five projects, for example, by measuring energy behaviour and by testing smart meters to monitor consumption.

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EnercitEE and its sub-projects LEEAN, EEMTE, RIEEB, SSC, GRACE (INTERREG IVC Programme) identify good practices in awareness-raising and communication, adapt these and put them into practice.

Ifore (France (Manche) – England Programme) promotes energy saving in social housing by having tenants participate in the refurbishment works, and comple- ments these measures with user trainings, post-occupancy monitoring, indoor pressure tests on air tightness, etc.

The most important barrier to increasing the number of investments into energy efficiency in buildings is insufficient financing of EE measures. One way of overcoming this is through the use of innovative financing options, in particular through energy performance contracting (EPC). 17 EE-in-buildings projects aim at introducing a new financing mechanism, seven of which experiment with energy performance contracting; e.g., by developing and testing energy contracting models or by offering technical support to local authorities that want to establish an energy performance contract. The remaining projects aim at establishing private-public-partnerships or at introducing low-interest loans, subsidies and revolving funds; they form purchasing 60 61 Cogeneration groups or promote solar roof stock exchanges , eco-power stock exchanges and sun loans62. Cogeneration operates on the principle of combining electricity and E-Contract (Austria – Hungary Programme) develops EPC models, carries out heat production. Unlike tradition- feasibility studies for the use of EPC in ten concrete cases and organises infor- al power stations where exhaust mation events and workshops for the promotion of EPC. gases are directly evacuated by the chimney, the gases produced by co- CombinES (Central Europe Programme) explores the possibility of combining generation are first cooled before public subsidies with private co-financing by third parties through the EPC being evacuated by the chimney, mechanism, and provides practical recommendations for ESCOs as well as and the extracted heat is used in policy recommendations. the form of high pressure water vapour or hot water which can be fed into a district heating system. In this way, much higher efficiencies of up to 90% can be achieved. Combined heat and power generation can contribute about 2% towards the 20% annual primary energy savings objective for 2020, but the energy-saving potential of cogeneration is currently under- utilised in the European Union. Ac- cording to the Energy Progress Re- port, the heating and cooling sector has experienced slow growth since 2005, and projections signal that 60 A solar roof stock exchange is a market place for house owners who offer their the share of renewable energy in roof area to investors wanting to invest into a photovoltaic installation but lack the heating and cooling sector may the suitable roof for it. actually decline in the coming years (Ecofys et al., 2012). 61 A marketplace that allows producers of energy from RES to sell the energy they produce as eco-power.

62 A loan for the realisation of photovoltaic installations with a variable, performance-based interest rate.

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 In the EU, the greatest energy saving potential lies in buildings. A corre- 4.2.7.3 Key findings spondingly high number of 93 ETC energy projects focus on increasing energy efficiency in buildings: 44 projects deal with EE in existing buildings, 25 projects with EE in newly-constructed buildings and 24 projects ‘blend’ both topics.

 Project objectives target different building types: 35% focus on public buildings, pursuant to the Energy Efficiency Directive which calls on public authorities to assume an exemplary role in the renovation of buildings, 20% on residential buildings, which account for the largest share in floor space of EU building stock, and 13% on traditional or historic buildings, in particular on how to match refurbishment with monument protection and the preservation of characteristic regional architectural styles.  EE-in-buildings projects deliver above the average ETC energy project in the area of capacity building, awareness-raising, behaviour change, development of new services and in terms of concrete pilot investments realised.

 The lack of appropriate qualification measures for building professionals, in order to make available the 2.5 million qualified workers in the buildings sector that will be needed in Europe by 2015, is tackled in 20% of all EE-in- buildings projects. The question arises whether these individual initiatives are coordinated with the national teams working on improving the qualification and skills of building workers which were established under the Commission initiative ‘BUILD UP Skills’.  Another barrier to increased EE in buildings is the lack of awareness about investment opportunities into EE and about the profitability and positive impact of energy-efficient refurbishment on the asset value: 24% of projects undertake activities to raise awareness about the benefit of EE measures.

 The influence of energy consumer behaviour on the actual energy consumption in buildings is considerable. Potential energy savings due to measures targeting behaviour (such as measuring energy behaviour or monitoring consumption with smart meters) are in the order of 5 – 20%. 14% of EE-in- buildings projects aim at raising understanding about the importance of user behaviour if energy-efficient houses and technical building systems are to realise their full saving potential, and at changing energy consumer behaviour in general.  39% of EE-in-buildings projects develop and deliver new services: training courses for building professionals, energy advice for the general public and public authorities, and energy auditing and advice on the use of energy performance contracting for public institutions.

 The most important barrier, insufficient financing of EE measures in buildings, is approached by (giving assistance to) introducing innovative financing options, in particular energy performance contracting, by 18% of EE-in-buildings projects.

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4.2.7.4 Energy efficiency Around 70% of the EU’s energy consumption takes place in cities, with a huge and renwable energy in untapped potential for cost-effective energy savings. Energy-optimisation of cities and urban areas districts and communities as a whole, by taking an integrated urban development approach, is more cost-effective than optimising each building individually. In reality, however, sustainable energy investment projects often follow a sectoral approach, for example focusing on the refurbishment of buildings or the development of a local renewable energy supply. A key instrument for moving towards an integrated urban development model is urban planning. In- tegrated urban planning promotes compact, instead of low-density, sprawling development, and multi-, instead of mono-functional land use, both of which are associated with high energy demand for dwelling, infrastructure and mobility.

CONCERTO initiative 26 ETC energy projects aim at increasing energy efficiency in cities. They differ from EE-in-buildings projects in that EE-in-cities projects take a more holistic The CONCERTO initiative of the approach to increasing energy efficiency in urban areas, notably by building European Commission’s Directo- capacities and changing practices in urban planning (9 projects) and energy rate General for Energy co-funds (strategy) planning (5 projects). innovative energy efficiency meas- Projects that aim at changing urban planning practices develop urban planning ures, local RES generation, smart criteria and benchmarks (CAT-Med, Mediterranean Programme), facilitate co- grids, renewables-based cogen- operation between researchers and local authorities (Sound Settlements, Öre- eration, district heating/cooling sund - Kattegat – Skagerrak Programme), and exchange between municipal systems and energy management planning authorities (C-Change, North West Europe Programme) on sustain- systems in larger building settle- able urban development, collect and analyse good practice examples of housing ments for cities and communities schemes (CIDEP, Slovak Republic – Austria) or develop a new course on sustaina- that want to move towards energy ble urban planning (Urban Transition Öresund, Öresund - Kattegat – Skagerrak self-sufficiency. Programme). Capacity building in the area of urban energy planning is realised http://concerto.eu/concerto/ through mutual exchange of experience on the development of local energy about-concerto.html strategies and action plans between partner cities.

Covenant of Mayors My City AC2 (South West Europe Programme) aims to strengthen the role of cities in the adaptation and mitigation of climate change by developing urban The Covenant of Mayors initiative planning criteria applicable to both project development and urban regenera- is a European movement of local tion in four key areas of urban policy: urban planning and mobility manage- and regional authorities who volun- ment, planning green spaces and natural areas, energy saving and efficiency, tarily commit to increasing energy and citizen awareness and participation. efficiency and the use of renewable energy sources in their territories. COMBAT (Central Baltic Programme) aims at improving and fine-tuning the The political commitment is trans- participating cities’ sustainable energy action plans, with input from the public, lated into concrete measures and and supports them in finding adequate climate indicators. projects outlined in a Sustainable Energy Action Plan. Urban planning can also promote district heating systems and can create fa- www.eumayors.eu vourable pre-conditions for building integrated renewables, for example for the use of active and passive solar energy, biomass and geothermal energy. Four EE-in-cities projects aim at introducing district heating systems, while seven projects combine EE measures with activities targeted at increasing the production of energy from RES in cities.

PAGE 100 Energy efficiency and renewable energy in transportation Overview Barriers ETC projects on energy efficiency measures to investments into energy on energy efficiency in in transportation efficiency in transportation transportation

Transport is one of the biggest energy consumers in the EU, and also the one that is growing fastest. Final energy consumption in transportation accounted for 33% in 2011 (European Commission, 2013c) and increased by around 30% between 1990 and 2010 (European Commission, 2013d). This is mainly due to the constant increase in the number of new cars in the EU, offsetting energy efficiency gains in car engine development. Transport is also a large producer of greenhouse gases: more than a fifth of greenhouse gas emissions come from transportation, despite advances in transport technology and fuel formulation that have resulted in marked de- 63 http://ec.europa.eu/clima/policies/ creases in emissions of certain pollutants63. Besides, transport is responsible transport/index_en.htm for a large share of urban air pollution, as well as noise nuisance, and is responsible for other negative environmental impacts like the fragmentation of habitats, etc., thus links to climate, energy and environmental policy. European transport policies therefore aim at an integrated approach, with the energy objective being one aspect of it. No concrete, binding energy efficiency targets exist for transportation; however, for CO2 mandatory emission limits have been defined on EU level for passenger cars newly registered in the EU. European transport policies are based on a set of strategies. The most recent strategic document, the 2011 White Paper ‘Roadmap to a Single European Transport Area’ (European Commission, 2011e), formulates an integrated vision of how transport should look in the year 2050. It also spells out some intermediate goals for the year 2030, in order to make the scope of the transformation task more tangible and to facilitate monitoring. Cornerstones of the strategy

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are to reduce the transport system’s dependence on oil without sacrificing its efficiency or compromising mobility, and to cut carbon emissions in transport by 60% by 2050. The Commission proposes 10 strategic goals and benchmarks for 2050, including a phasing-out of conventionally-fuelled cars in cities, a 50% shift of medium-distance intercity passenger and freight journeys from road to rail and waterborne transport, a 50% shift of road freight over 300 km to other modes such as rail or waterborne transport, the substitution of 40% of conventional fuels in aviation with sustainable low-carbon fuels, and a minimum of 40% reduction in shipping emissions. Currently, the European Union is a long way off meeting these visionary targets. Even though consumption has decreased during the years of economic recession, consumption levels are still very high. It is highest for road transportation, making up 82% of transport energy consumption in 2010, followed by air traffic, accounting for 13.6%, while railways and inland navigation are responsible for less than 4% of the final energy consumed by transportation (European Commission, 2013d). Most of the EU’s freight transport is by road but a considerable proportion of goods, around 40%, are transported on waterways within the EU, as one of the most energy-efficient transport modes. How- ever, while the transport of freight by rail and waterways has been slightly de- Biofuels creasing, freight transport by road continues to rise and is currently at around 1,800 billion tonne-kilometers, 4.5 times more than rail freight. In 2010 about 75% of the biofuels used in the EU were ‘bio-diesels’ As regards passenger transport, the car by far surpasses all other means of (mainly methyl esters), 21% were transportation: 4,738 billion passenger-kilometres were travelled by car in ‘biogasoline’ (mainly bioethanol) 2010, a factor nine times the number of passenger kilometres travelled by and about 4% resided in ‘other plane or bus, and around 12 times more than passenger kilometres travelled by liquid biofuels’ like vegetable oils. train. Other means of transportation like powered two-wheelers, urban means Only 1.4% of all EU-consumed sus- of transport like tram or metro, and ships are very much at the low end of the tainable biofuels, or 0.11% points of scale. Air traffic has increased by more than 66% between 1995 and 2011, but the 4.70% renewable in the trans- public urban transport modes have also shown a remarkable increase of almost port share, were produced from 31% in the same period (European Commission, 2013d). wastes, residues, non-food cellu- The transport sector is almost completely dependent on petroleum-based fu- losic material and ligno-cellulosic els. In 2011, 96% of transport fuel consumed was petroleum products, while material (Ecofys et al., 2012). For biofuels accounted for 4% and the share of renewable electricity in 2010 was more information on biofuels, see only 0.43%, or 1.3 Mtoe (Ecofys et al., 2012). section 4.2.1. So far, the European Union has relied mostly on biofuels to constitute a viable Synthetic fuels alternative to petrol and diesel, despite the existence of several alternative transport fuels. Besides liquid biofuels, technologies exist to propel vehicles Synthetic fuels can be produced by by means of electricity, which can be produced from all primary (renewable converting biomass to liquid, coal and non-renewable) energy sources, methane, which can be sourced from fos- to liquid, or gas to liquid. Hydro sil natural gas or from biomass and wastes as biomethane, or hydrogen used treated vegetable oils, of a similar in fuel cells for on-board electricity production. Furthermore, synthetic fuels, paraffinic nature, can be produced substituting diesel and jet fuel, can be produced from different renewable or by hydrotreating plant oils and non-renewable feedstock. animal fats. Dimethyl ether from syngas is another synthetic fuel According to the report of the European Expert Group on Future Transport Fu- produced from fossil or biomass els (2011), established by the Commission in 2010, the main alternative fuels for resources via gasification, requir- propulsion in transport are electricity, hydrogen and liquid biofuels, synthetic ing moderate engine modifications fuels as a technology bridge from fossil to biomass-based fuels, methane as (European Expert Group on Future complementary fuel, and liquefied petroleum gas as supplement. Several op- Transport Fuels, 2011). tions for different transport modes have been formulated by the expert group. Road transport could be powered by electricity for short distances, hydrogen and methane for medium distances, and biofuels or synthetic fuels, liquefied

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natural gas and liquefied petroleum gas for long distances. Railways should be electrified wherever feasible, or otherwise use biofuels. Aviation should be supplied from biomass-derived kerosene. Waterborne transport could be supplied by biofuels; hydrogen for inland waterways and small boats, liquefied petroleum gas, a by-product of the hydrocarbon fuel chain, which could possibly also be produced from biomass in the future, for short sea shipping, and liquefied natural gas or nuclear for maritime transport.

Besides alternative (renewable) transport fuels, the European Union also promotes clean and energy-efficient vehicles. The ‘Clean Vehicle Directive’ (2009/33/EC) tackles the public transport sector by introducing a requirement on the procurement of road transport vehicles for public transportation which meet energy consumption and emission standards throughout their whole lifetime. The Directive also requires the Commission to encourage an exchange of knowledge and best practice between Member States with regard to promoting the purchase of clean and energy-efficient road transport vehicles. Already in 1995, the Commission adopted a Community Strategy (COM(95) 689) for reducing CO2 emissions from cars based on voluntary commitments from the car industry to reduce CO2 emissions and improve the fuel efficiency of new cars. While this did not deliver the progress needed, it did lead to the adoption 64 Fuel-economy maximising driving of Regulation (EC) No 443/200964, which sets mandatory standards for aver- behaviour can save around 30% of car age CO2 emissions of new passenger cars sold in the EU, limiting them to 95 g energy demand (Helms et al., 2010). 65 CO2 per km, which corresponds to a fuel consumption of 4.1 litre per 100 km Fuel type (diesel vs. gasoline engine), until 2020 and aims at creating incentives for the car industry to improve and engine efficiency, weight and aerody- develop innovative propulsion technologies. Car emissions and fuel consump- namic form of the car, energy-con- tion are determined under standard test procedures, and it is important to note suming equipment like air condition- that actual emissions and consumption can considerably exceed these thresh- ing, etc. olds. In reality, the specific fuel consumption of a car, thus the consumption per 66 E.g., general maintenance, lubrica- passenger-kilometer, is not only shaped by the efficiency of the engine but also tion, tyre pressure. by the design65, age and operating conditions of the car66, by the driving con- 67 E.g., Frequent acceleration and ditions and individual driving style67 and, most importantly, by the occupancy breaking, which is typical for city rate of a vehicle, as the specific fuel consumption (the average consumption per driving, increases consumption while passenger) decreases the more people share a lift. steady driving saves fuel.

An important role in the ‘greening’ of transport is played by biofuels, such as ethanol and biodiesel (c.f. section 4.2.1). The advantage of biofuels is that they can be blended with conventional liquid fuels and burned in existing combustion engines up to a certain ratio to substitute petrol or diesel without the need to change existing powertrain technologies and re-fuelling infrastructures. However, a higher blend needs the modification of the fuelling system and the engine of the vehicle. Synthetic fuels can also be distributed, stored and used with existing infrastructure and existing internal combustion engines; however, further development is needed to produce cost-competitive synthetic fuels derived from biomass on an industrial scale, as well as continued efforts to improve their CO2 balance.

In addition to pursuing the improvement of internal combustion engines and the promotion of biofuels, the European Union promotes other, alternative powertrains (European Commission, 2010a).

Natural gas vehicles use compressed natural gas or liquefied natural gas, which can be burned in modified combustion engines, either as dedicated (running only on natural gas) or bi-fuel (running on either gasoline or natural gas where both fuels are stored on-board in separate fuel tanks). Flex-fuel vehicles can

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run on a number of fuels, usually gasoline blended with either ethanol or meth- anol fuel, and both fuels are stored in the same common tank. The advantage of natural gas vehicles is that they emit fewer pollutants, nota-

bly particulate emissions, have lower CO2 emissions, since methane has a lower carbon content, and are more energy-efficient due to the higher energy density of methane compared to other fossil fuels. Natural gas vehicles can also run on biomethane. Biomethane can be fed into the general gas grid, which means that no separate primary distribution infrastructure is needed. However, additional refuelling infrastructure has to be built up to ensure widespread supply. A harmonisation of standards for biomethane injection into the gas grid and the building-up of an EU-wide refuelling infrastructure are pre-requisites for a broad market introduction of natural gas vehicles.

Electrically powered vehicles are either powered by batteries on board or by electricity from overhead lines/third rail in the case of tram, metro, trains and trolley-buses, with electricity taken directly from the grid without the need for intermediate storage. Battery-powered electric vehicles are strongly promoted as a way of curbing transport energy consumption, as in terms of fuel-to-wheel efficiency they are over three times more efficient than cars with a conventional internal combustion engine. However, this balance can also tip in favour of 68 The primary energy input considers the combustion engine if, instead of comparing final energy consumption, the conversion and transmission losses for amount of primary energy input needed to propel an electric vehicle – the gen- the generation of electricity. eration-to-wheel efficiency – is used for comparison68. This can be explained by the high conversion and transmission losses entailed in the production of electricity. The energy balance of an electrically-powered vehicle therefore highly depends on the efficiency of the electricity production and the energy mix. In other words, an electric car is not a particularly ‘clean’ vehicle if the electricity used to run it comes from a coal-fired power plant. Clearly, electric mobility has some true advantages: there are hardly any pollutants and noise emissions, vehicles require less maintenance, and engines have a higher efficiency. However, there exist significant barriers to a large-scale roll-out of electric vehicles. On the one hand, consumer demand is still low, owing to the high purchase costs, the relatively limited range and the long charging times of the batteries. The short range can be overcome by hybrid cars, which use the benefit of an electric engine for short distances and a combustion engine for longer distances. The high costs of the batteries in connection with their short lifetime 69 The mining of rare earth metals is requires more research and development into high energy density batteries to very damaging to the environment; bring costs and weight of batteries down and reduce their charging time. The furthermore, the need for rare earth intensive use of batteries in electric vehicles brings its own environmental im- metals bears the risk of shortage of plications due to the demand for rare earth metals69 in batteries, and for their supply and price spikes. recycling. On the other hand, as regards electrically powered road vehicles, there is still a need to establish rapid-charging, interoperable infrastructure to ensure that all electric vehicles can be charged anywhere in the EU and with all types of chargers.

As regards the regulatory framework, national and regional authorities in general need to make more use of purchase incentives and tax rebates in favour of clean and energy-efficient vehicles, but also explore more innovative incentives: free parking spaces for electric vehicles, free lanes, access to green zones, free consumption of electricity for the recharging of vehicles, etc. Com- mon requirements for type-approval in the EU have already been extended to cover alternative propulsion systems, but are still needed for electric vehicles.

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Hydrogen fuel cell vehicles are in many ways comparable to electric vehicles as they share many similar components; for example, both have an electric motor. However, the difference lies in the fact that hydrogen fuel cell vehicles generate the electricity on board the vehicle from hydrogen, using fuel cells. Hence, the benefits regarding pollutant and noise emissions are similar, as are the challenges faced: the need to develop cost-competitive fuel cells, on-board hydrogen storage and new infrastructure for hydrogen production, distribution and storage. Just like with electric cars, hydrogen fuel cell vehicles potentially have a double benefit: they are more efficient relative to combustion engines, even though they are not as efficient as electric batteries due to the lower efficiency of the oxygen reduction reaction, and, if the hydrogen is produced from RES, reduce CO2 emissions further. Hydrogen can also be used as a way of storing excess renewable energy, leading to an efficiency gain in RES production. How- ever, if hydrogen is produced from conventional fuels then the energy balance can easily become negative, as it takes more energy to produce hydrogen than hydrogen can yield energy.

Cities and urban zones are the most promising areas for the development of electric vehicles with their relatively limited range, and the use of low-pollutant and low-noise emission vehicles is also most pressing in densely-populated urban areas. With their high population densities and high share of short-distance trips, cities also bear a greater potential for shifting private motorised transport to more energy-efficient means of transport, by increasing the use of public transport and the share of walking and cycling, as well as developing and spreading new patterns for car use and ownership such as car sharing and carpooling.

Measures to increase the attractiveness of public transportation are urgently needed as, in 2011, 82.7% of all person-kilometres were travelled by passenger 70 The situation looks quite different car, while public transportation (bus, rail, tram and metro) accounted for less in main European city areas, some of than 20% of passenger-kilometers travelled in the EU (European Commission, which have a modal share of public 2013d)70. The choice of transport mode has an impact on energy consumption, transportation of >80% (European as consumption per passenger-kilometer is on average lower for public means Environment Agency, 2013a). of transportation. However, the average number of passengers per transport mode can vary a lot and can curb or drive up per capita consumption in both private motorized transport and public transportation. In other words, a fully- occupied car might have a lower energy consumption per passenger-kilometer than a half-empty train. In the long run, the most efficient way to reduce transport-based emissions and energy consumption is to reduce transport growth as a whole, which requires a transition to a new way of life from the transport perspective. Urban planning has an important role to play in creating favourable conditions for non-motorized means of transport. Spatial density, which reduces journey distances and makes public transportation more viable, and mixed land use with a good local supply structure of goods and services, contribute to a higher share of walking and cycling in cities.

However, individual mobility behaviour is not only shaped by necessity, but also by personal preferences and attitudes. Personal and household socio-economic characteristics are known to have an influence on travel distance and modal choice. Changing mobility patterns is therefore also a matter of awareness raising, campaigning and education, of introducing negative (e.g., parking fees and availability of parking, restricted access zones, urban congestion pricing, fiscal measures, fuel price, etc.) and positive (e.g., low public transport

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fares, high quality public transport services, integrated ticketing and advanced ticket systems, integrated travel information, etc.) incentives, and of providing necessary facilities and infrastructure (e.g., cycling infrastructure, intermodal facilities, bike share schemes, pedestrian-friendly streets, etc.).

All these different factors require integrated urban transport policies and must not be considered in isolation. However, barriers to the implementation of an integrated approach are common and persistent in many European cities: besides attitudinal barriers and lack of political will, there are also organisational barriers such as the fragmentation of the organisation, integration and management of public transport, and the separation of planning and transport functions within local authorities (European Environment Agency, 2013a). The Commission has actively promoted the concept of sustainable, integrated urban mobility planning for several years. EU-level support for sustainable urban mobility focuses on facilitating an exchange of experiences and best practices, catalysing research and innovation, and providing financial support for urban transport projects, with the Structural Funds being the single most important source of EU funding for urban transport and mobility projects (Eu- ropean Commission, 2013b). 71 http://ec.europa.eu/transport/ Among other initiatives, the Commission encourages the development of sus- themes/urban/urban_mobility/ac- tainable urban mobility plans71 by local authorities. Sustainable urban mobility tion_plan_en.htm plans should consider the whole functional urban area, be embedded in a wider urban and territorial strategy, and be developed across different policy areas and sectors and government and administration levels, also across administrative boundaries, involve all stakeholders, including citizens, and foster a better integration of the different urban mobility modes, address mobility behaviour and present measures to improve the efficiency of urban logistics and urban freight delivery.

4.2.8.1 ETC energy 53 projects, representing ~12% of all analysed ETC energy projects, aim at ei- efficiency in ther reducing transport energy consumption or increasing the use of renew- transportation projects able energy in transportation. As explained in section 3.1.1, in accordance with our internal definition of energy projects we included only those transport projects in the analysis which make a direct reference to energy efficiency or energy consumption, for example by promoting public transportation to reduce the number of car trips in cities, or those which make a direct reference to renewable energy, such as promoting alternative fuels and propulsion systems. For the same reason, we excluded projects whose focus was not explicitly on energy nor do they undertake energy-related activities, even though they most likely will have a positive effect on transport energy consumption: projects that aim at a modal shift in transport with the purpose of reducing air pollution, congestion, noise, etc.

For transport energy projects, the strict classification into [increasing energy efficiency] and [promoting the use of renewable energy] proved to be tricky, especially in the case of projects promoting electrically-powered vehicles or hydrogen fuel cell vehicles. As explained earlier in this chapter, electricity and hydrogen, as alternative transport fuels, bear the potential of leading both to an increase in energy efficiency, due to the higher efficiency of the propulsion systems and provided that the primary energy factor is low, and an increase in the use of renewable energy, provided that electricity and hydrogen are produced from RES. Since for most projects the production conditions of electricity and hydrogen are not explicitly mentioned, we assigned, by convention, both to

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the objective ‘increasing energy efficiency’. In cases where the fuel production was clearly renewable, for example a project that installs photovoltaic charging Fig. 33: Types of transport and differ- stations for electric cars, the project was additionally categorised as promoting ent propulsion systems addressed by solar power, to capture the RES aspect of the project. EE-in-transportation projects.

For the mapping of transport projects, we distinguished between private (passenger) transport, public transport and freight transport, different vehicle types and differentpropulsion systems, with the general classification scheme:

[Increasing energy efficiency/Promoting renewable energy] in [transportation], that is [private (passenger) transport/public (passenger) transport/freight transport], by promoting [alternative propulsion systems] powered by [biogas/liquid biofuel, electricity, hydrogen fuel cells].

Furthermore, we distinguished a few transport-specific sub-objectives:de- [ creasing mobility demand], [promoting a modal shift], [optimising engine efficiency] and [improving logistics].

As regards passenger transport, 14 projects focus explicitly on the transport of passengers, five of which deal with private transport and nine with public transportation. Of the public transport projects, three promote the use of alternative fuels in buses as an urban means of transportation: electric trolley buses (TROLLEY, Central Europe Programme) and buses running on biogas (Baltic Bi- ogas Bus, Baltic Sea Programme; Implement, Öresund - Kattegat – Skagerrak Programme).

Ticket to Kyoto (North West Europe Programme) is a cooperation project of urban public transport authorities that aims to improve energy management through staff training, the introduction of energy meter devices, the realisation of pilot investments into public transport infrastructures, and the devel-

opment of strategic plans and concrete roadmaps for achieving CO2 efficiency.

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Baltic Biogas Bus (Baltic Sea Programme) promotes the extended use of biogas for city buses to develop a market for biogas buses, in particular by tackling the lacking awareness of the benefits of biogas as transport fuel, as well as other barriers such as lacking infrastructure and biogas production capacity, high costs, etc. Through the pan-Baltic network the partners also want to obtain a better position from which to negotiate with infrastructure and bus suppliers.

Six projects aim at making freight transport (at sea, on land, by air) more energy-efficient, in particular by improving logistics.

SMILE (Mediterranean Programme) aims at increasing major stakeholders’ knowledge of the strong impact of urban logistics on energy efficiency development by disseminating existing proven urban logistics solutions that lead to energy consumption reduction and reduced negative externalities (e.g., congestion , noise, GHG emissions, etc.).

Green STRING Transport Corridor (Öresund - Kattegat - Skagerrak Programme) aims to promote the potential of innovative transport and logistics solutions for developing a green transport corridor between the Öresund Region and Hamburg. The project sets out to facilitate cooperation between the business sector, research institutions and public authorities in the STRING corridor by establishing The STRING Logistics Platform with special emphasis on implementing greener transport and logistics solutions and rail transportation.

A large number of transport energy projects, 20 in all, promote alternative fuels or propulsion systems; most importantly, electricity (13 projects), biogas (4 projects) and hydrogen (3 projects). In terms of project activities, 8 projects dealing with alternative fuels or propulsion systems realise pilot investments. Investments range from the purchase of e-bikes for tourists (C2Cl, North Sea Programme), investment into a shared community electric car (Clim-ATIC, Northern Periphery Programme), a solar-powered boat for ferry traffic (CO2NeuTrAlp, Alpine Space Programme), electric boats and charging stations for e-boats (E-Harbours, North Sea Pro- gramme), the technical upgrading of a garbage truck and container transporter with a full electric drive and the purchase of electric cars for conducting a series of tests on user behaviour, technical parameter under real-life conditions (ENEVATE, North West Europe Programme), a new pedelec garage and pedelec rental stations (ELEMOS, South Baltic Programme), the setting up of photovoltaic charging stations, of a rental service for e-vehicles and the purchase of e-bikes for municipal employees (REZIPE, Central Europe Programme), etc. Four projects plan to introduce e-vehicles, including e-bikes, scooters, pedelecs, e-cars and electric buses, as part of the municipal or region’s touristic infrastructure. The lack of charging and refuelling infrastructure is tackled by nine projects, either by piloting charging or refuelling stations, mapping existing electric charging stations, providing guidance on how to develop sustainable recharging infrastructure, or elaborating proposals for harmonising technical standards for recharging and refuelling infrastructure. The need for additional financial and non-financial incentives to make electric mobility more attractive is piloted in two projects.

REZIPE (Central Europe Programme) aims at increasing awareness of zero- emission vehicles powered by renewable energy through the development and pilot implementation of policy instruments such as financial and regulatory incentives and awareness campaigns. Demonstrator projects introduce finan-

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cial as well as non-financial incentives such as tax reduction and subsidies, the lifting of parking fees, and free entry and transit in limited traffic areas for e- vehicles, the introduction of sponsored eco-renting models, including routine maintenance as well as the replacement of the mechanical and structural parts of the e-vehicle, free insurance coverage of the rented vehicle, and the possibility of free charging of the vehicles at the rental company.

CO2NeuTrAlp (Alpine Space Programme) implements 13 pilot projects, testing a variety of alternative propulsion technologies for transport on the basis of renewable energies. The applied technical solutions are analysed as concerns their applicability, cost efficiency, local environmental footprint, and ecological and economical effects. Findings are used for the elaboration of proposals for harmonising technical standards, especially regarding the recharging and refuelling infrastructure. Pilot activities carried out within the project include the development of incentive strategies, the development of financial promotion tools for private users of e-vehicles, such as a guarantee or rotation fund for the purchase of e-vehicles, involving public bodies at national or regional level, credit institutions and energy services providers, or other measures that create favourable conditions for the use of alternative means of transport, such as reserved lanes and parking areas for e-vehicles.

Common outputs are guidance documents (9 projects): compilations of good practice examples, compendia of lessons learned from the project activities, a manual on advanced storage for trolley buses, etc., and policy recommendation (5 projects).

Enevate (North West Europe Programme) establishes cross-sector cooperation between the energy and automotive sector and public actors to address the lack of coordination, synthesis and dissemination of outcomes of research, pilots and testing of electric vehicles in Northwest Europe. Among other activities, the project maps pilots and draws up guidelines to enhance the quality, efficiency, effectiveness and sustainability of pilots.

Six projects develop different prototype vehicles, such as a prototype e-Scoot- er, or vehicle components, such as different drive solutions for electric vehicles, two of which work on optimising engine efficiency of conventional combustion engines (Champ, France (Manche) – England Programme; SCODECE, Two Seas Programme).

Green-Car Eco-Design (South West Europe Programme) introduces the principle of life-cycle assessment in the design of electric vehicles by analysing different vehicle components and technologies regarding their environmental impact. Findings are incorporated in a prototype design of various components, and in a virtual prototype of the whole vehicle.

eMOTION (Syddanmark - Schleswig-K.E.R.N. Programme) aims at developing the region of Schleswig-KERN and Syddanmark into a leading supplier in the electric mobility industry through the development, manufacture and distribution of robust, reliable and energy-efficient components and systems within selected niche markets, by exchanging specialized knowledge and developing shared business activities. Among other project activities, applied research is carried out to optimize efficiency and robustness, and develop prototype electrical propulsion drives for electric vehicles and cars and a prototype of win- dow-integrated solar cells for electric vehicles.

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72 We assume that a modal shift Apart from projects focusing on alternative fuels and/or propulsion systems, towards public transportation leads thus on the supply side of green mobility solutions, the bulk of EE-in-trans- to a reduction in energy consumption, port projects (25 projects) work on the demand side of mobility; i.e., they aim even though we argue in the same at changing unsustainable, energy-intense mobility patterns. Projects develop chapter that under certain assump- different urban and municipal mobility solutions: they introduce or improve tions the car may have a lower per mobility management schemes (18 projects), promote a shift away from pas- capita and kilometre energy consump- senger car use to more energy-efficient modes of transportation (13 projects) tion than its public counterpart. How- such as public transportation72, or non-motorised modes such as walking and ever, promoting public transportation cycling (6 projects), tackle mobility behaviour (7 projects) or look into the po- is assumed to increase the number of tential of urban planning for creating favourable conditions for a reduction in passengers, hence also the efficiency transport demand (5 projects). of public transport modes. Cycle Cities (INTERREG IVC Programme) aims at systematically integrating cycling into urban mobility management schemes by developing a knowledge base on good practices in mobility management and cycling, and building consensus on policies contributing to sustainable European mobility management schemes.

CYCLO (Mediterranean Programme) aims at developing local strategies to promote the use of bicycles as intermodal and touristic means of transport in small and medium cities, and increase awareness and knowledge of public and private key-actors about cycling policies. A detailed masterplan for each involved area is elaborated to strengthen local potentialities and, consequently, pilot actions are implemented.

CATCH_MR (INTERREG IVC Programme) facilitates an exchange of experiences on good models of sustainable land use and transport development, investigating their transferability. Four thematic workshops focus on urban sprawl and new planning solutions, incentives and disincentives to promote public transport, alternative fuels, and integration of regional and metropolitan transport policies.

Mobility management aims at promoting sustainable transport and managing Mobility management the demand for car use, mainly through ‘soft’ measures. Mobility management topics addressed in EE-in-transport projects range from advancing passenger Mobility management is a concept intermodality (CATCH_MR, INTERREG IVC Programme) and tariff integration that promotes sustainable trans- (CAPRICE, INTERREG IVC Programme), introducing integrated passenger in- port and manages the demand for formation (CO2NeuTrAlp, Alpine Space Programme), developing sustainable car use by changing travellers’ at- urban mobility plans, car pooling, introducing low emission zones, developing titudes and behaviour. At the core idling strategies (CARE North, North Sea Programme), introducing car sharing of mobility management are “soft” and bicycle rental services (SUMOBIS, South West Europe Programme) or flex- measures like information and ible transport services like shared taxis (FLIPPER, INTERREG IVC Programme), communication, organising serv- all of which aims at reducing car dependence and increasing the use of public ices and coordinating the activities means of transport. As part of mobility management, six projects devise meas- of different partners. “Soft” measures that target travellers’ attitudes and behaviour, such as awareness-raising ures often enhance the effective- campaigns, parking and traffic control measures, or through public participa- ness of “hard” measures within ur- tion, etc. ban transport (e.g., new tram lines, new roads and new bike lanes). MMOVE (INTERREG IVC Programme) aims to improve the effectiveness of Definition from European Platform sustainable mobility policies implemented by local authorities in small- and on Mobility Management: medium-sized cities in Europe, in particular those influencing travel behaviour, www.epomm.eu focusing on good practice exchange in the area of communication and awareness campaigns, parking and traffic control measures, and collective and public transport measures.

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SUSTRAMM (INTERREG IVC Programme) facilitates an exchange of experience Passenger intermodality between public authorities on how to encourage a change in mobility behaviour, and identifies and disseminates good practices for guidelines and policy Passenger intermodality is a policy recommendations. and planning principle that aims to provide a passenger using different The need for integrated trip-planning software, in the form of online web ap- modes of transport in a combined plications or mobile device apps, is tackled by four projects. trip chain with a seamless journey (LINK – The European Forum on SUMOBIS (South West Europe Programme) pursues the development and Intermodal Passenger Travel, n.d.). implementation of “Transport Offices” in the different member cities of the Measures to improve intermodal- project, whose main purpose is to promote and develop sustainable modes of ity in passenger transport include transport such as car-sharing and bike rental, and to develop IT solutions for door-to-door travel information integrating different travel information systems. In the scope of the project, and ticketing, integration of time- travel information systems, itinerary calculators, web application for car shar- tables and intermodal facilities, and ing, etc. are realised. the integration of interregional, regional and urban transportation. In terms of concrete project activities, the vast majority of projects focus on changing practices and building institutional capacities, mainly through exchange of experiences and transfer of knowledge on good practices73 across Europe (15 projects), but also through site visits or thematic workshops. Good practice examples (14 projects) are identified in the areas of public and stake- 73 This high number of projects focus- holder engagement, on land use planning, communication and awareness cam- ing on the transfer of good practices is paigns, parking and traffic control measures, collective and public transport largely due to the fact that eleven out measures, linked transport systems, mobility management, etc. Typical project of the 25 projects are INTERREG IVC outputs are good practice guidance and policy recommendations (7 projects). projects.

ELMOS (South Baltic Programme) aims to develop long-term strategies of mul- Eltis timodal urban transport incorporating electric mobility by jointly compiling, re- viewing and adapting state-of-the-art (intermodal) electric mobility solutions, Eltis, the European Urban Mobility and publishes its findings in a handbook. Portal, facilitates the exchange of information, knowledge and expe- CAPRICE (INTERREG IVC Programme) focuses on an exchange of experience riences in the field of urban mobil- between five capital regions about how to improve public transport systems ity in Europe. The site provides the regarding organisation and financing, contracting and tendering, clean vehicle latest local, regional and European fleets, integrated passenger information, tariff integration and revenue shar- transport news, informs about up- ing, urban mobility plans and accessibility for mobility-impaired people, and coming events in the field of urban formulates policy recommendations. transport and successful examples of urban transport initiatives and strategies, and provides guides, handbooks and on-line tools to support urban transport professionals in their work. www.eltis.org

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4.2.8.2 Key findings  53 projects, representing ~12% of all analysed ETC energy projects, either aim at reducing transport energy consumption or increasing the use of renewable energy in transportation.

 20 projects promote alternative fuels or propulsion systems; most importantly, electricity, biogas and hydrogen. With regard to projects promoting electrically-powered vehicles or hydrogen fuel cell vehicles, a strict classification into ‘increasing energy efficiency’ and ‘promoting the use of renewable energy’ proved difficult: both could potentially lead to an increase in energy efficiency, due to the higher efficiency of the propulsion systems and provided that the primary energy factor is low, and an increase in the use of renewable energy, provided that electricity and hydrogen are produced from RES.  In terms of project activities, projects dealing with alternative fuels or propulsion systems focus on realising pilot investments, and tackle the lack of charging and refuelling infrastructure and the need for additional financial and non-financial incentives necessary for electric mobility.

 25 projects develop different urban and municipal mobility solutions: they introduce or improve mobility management schemes, promote a shift away from passenger car use to more energy-efficient modes of transportation such as public transportation or non-motorised modes such as walking and cycling, tackle mobility behaviour or look into the potential of urban planning for creating favourable conditions for a reduction in transport demand.

 In terms of concrete project activities, the vast majority of projects focus on changing practices and building institutional capacities, mainly through exchange of experiences and transfer of knowledge on good practices across Europe.

PAGE 112 Energy efficiency and renewable energy in businesses and industry Overview Barriers ETC projects energy efficiency measures to investments into energy effici- on energy efficiency in in businesses and industry ency in businesses and industry businesses and industry

Businesses are significant consumers of final energy. In 2011, the industrial sector accounted for 26% and the service sector for 12.7% of the final energy consumption in the European Union, even though energy intensity, i.e. the productivity of the EU economy relative to its consumption of primary energy, has constantly decreased since the base year 1995 (European Commission, 2013c). The challenge for the EU economy is to remain competitive and, at the same time, minimise energy consumption and decrease emissions. Major saving potentials exist in commercial buildings and in the production process. While individual system components like engines, pumps or cooling water installations have been continuously optimised, even larger potentials could be tapped through an integrated, step-wise optimization of the whole production system. The main elements for such an optimization are avoiding unnecessary energy consumption and reducing specific energy consumption through technical Energy audit measures, improvements in efficiency and utilization, heat recovery or the use of renewable energy sources (Deutsche Energie-Argentur, 2013). Energy audits are usually delivered by independent experts, and pro- Energy savings mean cost savings. Shifting to a more energy-efficient economy vide detailed information on ener- accelerates the spread of innovative technological solutions, improving the gy use and saving potential. Energy competitiveness of industry in the Union. Prerequisite for energy-efficiency audits may stand alone or be part of optimisation is an analysis of the whole production process to determine en- a broader environmental audit. ergy use and detect energy saving potentials by means of an energy audit. Energy audits have become obligatory for large enterprises under the Energy Efficiency Directive, but remain voluntary for SMEs. Article 8(2) of the Energy

PAGE 113 Energy efficiency and renewable energy in businesses and industry

Efficiency Directive includes recommendations for Member States to develop programmes to encourage SMEs to undergo energy audits and the subsequent implementation of the recommendations from these audits. According to Art 8(4), Member States may set up support schemes for SMEs to cover the costs of an energy audit and of the implementation of highly cost-effective recommendations from the energy audits, and should bring to the attention of SMEs, e.g., through their respective representative intermediary organisations, concrete examples of how energy management systems could help businesses. The task of the Commission is to assist Member States by supporting the exchange of best practices in this domain.

Contrary to an energy audit, which is a one-off activity, anenergy management system is a series of processes that enables an organization to use data and information to maintain and continuously improve energy performance, while improving operational efficiencies, decreasing energy intensity, and reducing environmental impacts. An energy management system can also be part of an environmental management system.

In spite of the cost-effectiveness of EE measures in businesses, many efficiency potentials remain untapped for various reasons. On the one hand, a lack of information about energy efficiency opportunities or the energy performance of different technologies may lead to cost-effective opportunities being missed. Energy labels, energy advisories or energy audits are useful instruments to counteract imperfect information. On the other hand, SMEs in particular have often limited access to capital, which may prevent investments into energy efficiency; however, the primary explanation for the ‘efficiency gap’ ishidden costs. These are costs that outweigh the potential saving in energy costs, especially in SMEs with low energy intensity. Examples are overhead costs for management, disruptions to production, staff replacement and training, and the costs associated with gathering, analysing and applying information (Sor- rell et al., 2011).

4.2.9.1 ETC energy 33 projects, i.e. 8% of all projects analysed, aim at reducing energy consumption efficiency in and/or increasing the use of renewable energy in businesses, more than three businesses projects quarters of which specifically address SMEs. 13 of the 32 projects are targeted at industry, business parks or commercial areas.

BERRY (Nord Programme) aims at optimising energy and resource consumption in the production of juice concentrates by evaluating new technologies and processes in the production of juices and other products, developing them further, implementing test pilots, and developing quality parameters and new products and ingredients from berries.

Five projects target the renewable energy or clean technology sector to unlock the growth and job potential in ‘green businesses’, mainly by promoting business cooperation, providing business support, and undertaking capacity building.

ER-INNOVA (Spain – Portugal Programme) aims to increase the competitiveness of SMEs in the renewable energy sector through the development of a resource management software tool and a web platform that facilitates business and R&D cooperation.

PAGE 114 Energy efficiency and renewable energy in businesses and industry

ACE (Two Seas Programme) aims to attract new businesses in the clean technology and renewable energy sector, and supports existing businesses in making the transition to a low carbon economy by integrating low carbon principles in facility management, processes and daily operations, and by initiating cooperative networks that will trigger clean tech innovation and knowledge transfer between the partner regions.

The majority of projects, however, focus on increasing energy efficiency in the production process, in commercial buildings or areas, in logistics, etc., or on increasing the use of renewable energy in businesses. Aiming to increase energy efficiency, the use of renewables, but also competitiveness, 18 projects promote the use of clean technologies, energy-efficient building systems, innovative materials or the installation of a microgrid.

GE2Cs (Spain – Portugal Programme) focuses on energy production and consumption in the service sector. The project supports SMEs in adopting EE measures by identifying saving potentials and providing professional assistance, e.g., on energy management systems, and determining the feasibility of cogeneration and piloting cogeneration. Students are trained to become energy efficiency managers and EE guides are distributed.

Several projects facilitate technology transfer and give innovation and business support in the form of consultancies, training or information events.

EIVRIG (Alpenrhein - Bodensee – Hochrhein Programme) tackles the barrier of information deficit in SMEs regarding energy-efficient technologies, by providing consultancy, staff training in the use of energy-efficient technologies, organising workshops and information events, and implementing measures towards becoming climate-neutral businesses in pilot SMEs. The project also works on the development of an interregional programme and brand to continue the process started in the project, disseminate project results, foster the creation of networks, and bundle resources in the area of technology transfer and innovation support.

Two projects address financial barriers to investments in energy-efficient technology and the issue of restrictive lending practices of banks.

ECOFUNDING (Mediterranean Programme) promotes investments in energy and eco-innovation by developing a web database of existing public and private funds and financing resources, organising events to facilitate direct contact between investors and entrepreneurs, and setting up a permanent consulting service to provide information and technical assistance to SMEs on access to funding.

Another group of projects deals with capacity building in operational energy management. 12 projects offer energy advisories for businesses, and carry out energy audits and training on energy management. Several projects address energy management as part of an environmental management system. The project ENECO promotes green purchasing in the private sector, i.e. the incor- poration of environmental considerations in criteria related to the procurement and purchasing of products and services.

PAGE 115 Energy efficiency and renewable energy in businesses and industry

ENECO (Spain – France – Andorra Programme) promotes the use of renewable energy and clean technologies in SMEs by developing and implementing an environmental assessment method for businesses, disseminating a methodological and good practice guide, and carrying out trainings and information events to build knowledge and capacity.

ESP (Austria – Hungary Programme) builds up a network of Hungarian and Aus- trian businesses and intermediary organisations for the exchange of information and experience on energy efficiency measures and on regional energy advisory programmes. The project carries out 40 pilot energy advisories, organises training and information events, and develops energy concepts for different branches of business.

Two projects count on voluntary agreements with the industry to achieve a reduction in energy consumption and carbon emissions.

VACO2R (INTERREG IVC Programme), a ‘LoCaRe’ sub-project, aims at getting

SMEs involved in energy savings and CO2 reductions through voluntary agreements between local authorities and the SMEs. The project also offers training activities and energy audits for SMEs.

4.2.9.2 Key findings  33 projects, i.e. 8% of all projects analysed, aim at reducing energy consumption and/or increasing the use of renewable energy in businesses, more than three quarters of which specifically address SMEs. 13 of the 32 projects are targeted at industry, business parks or commercial areas.

 Projects address both, the major saving potentials in commercial buildings and in the production process. Aiming to increase energy efficiency, the use of renewables, but also competitiveness, 18 projects promote the use of clean technologies, energy-efficient building systems, innovative materials or the installation of a microgrid.

 Several barriers to energy-efficiency measures in businesses and industry are tackled by projects.

Projects address the lack of information about cost and energy efficiency opportunities by facilitating technology transfer and giving innovation and business support in the form of consultancies, training or information events.

Projects also deal with capacity building in operational energy management, i.e., they offer energy advisories for businesses, and carry out energy audits and training on energy management.

Two projects tackle financial barriers to investments in energy-efficient technology and the issue of restrictive lending practices of banks.

PAGE 116 Energy self-sufficiency Introduction Barriers ETC projects to the concept of local/regional that impede the energy transfor- aiming at increased local/regi- energy self-sufficiency mation on local/regional scale onal energy self-sufficiency

An increasing number of local and regional authorities are embarking on a journey towards becoming sustainable energy communities and regions, in Energy self-sufficiency response to the growing importance of EU and national sustainable energy policies and obligations. Some communities and regions even aspire to becom- An energy self-sufficient commu- ing energy self-sufficient or energy-autarkic in the mid or long run. The idea nity or region is largely independ- behind energy self-sufficiency or energy autarky is that a region can become ent of energy imports from other largely independent from energy imports from other regions by relying on its regions, providing much or all of its own resources to satisfy its need for energy services (Müller et al., 2011). energy from endogenous resources.

Full regional energy self-sufficiency is unlikely to be achieved74, because regions are open systems75 that exchange with other regions, which always leads to a 74 It might not even be desirable, not certain amount of imported energy and energy embodied in products manufac- least because there are also good tured outside the region. Thus, the concept rather denotes a desirable state or arguments in favour of trade in energy vision. Energy autarky rests on three closely-related principles (Müller et al., resources between regions. 2011): —— Use of endogenous potentials for renewable energy resources rather than 75 This is even truer for communities energy imports. which rely heavily on their hinterland —— Decentralization of the energy system as several renewable energy tech- in their endeavour to become energy nologies (e.g., solar panels, micro-generation, wood-based heating systems, autarkic, which is why we will be talk- heat pumps, etc.) is most suitable for decentralized, small-scale operations. ing mainly about energy autarkic or The short distances for the transport of energy resources lead to minimal energy self-sufficient regions. losses and enhanced efficiency of the energy supply, and regional energy production increases the local value added. —— Increases in the energy efficiency of the supply and the demand side to reduce the amount of primary energy used to provide a given level of energy services to the population.

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Modifying existing local or regional energy systems is a long-term process which typically involves several steps to be taken (Tischer et al., 2006):

As a first step, the process is initialised by getting stakeholders on boardto reach a broad consensus regarding goals. In this early phase, publicly-visible energy installations should be built to serve as ‘lighthouse projects’ that can positively influence the reception of the overall vision.

As a second step, the region’s situation regarding technical feasibility and economic viability of energy autarky is analysed. This includes the assessment of the current energy demand to establish a baseline value, identification of efficiency potentials and available renewable energy potentials, and an analysis of socio- economic aspects, of cost-benefits and financing options. Based on the results of the different analyses conducted, alocal or regional energy strategy is developed under active involvement of the local population. The strategy can be developed further with regard to its implementation by drawing up an energy action plan to precisely describe measures and concretise their implementation with regard to time, responsibilities and financial allocation.

Once the requirements for achieving energy autarky are known and decided upon, implementation planning and actual implementation need to occur, and should be accompanied by continuous monitoring and evaluation.

Besides the reduction of import dependency and energy bills, becoming a sustainable energy community or region has wider benefits for regional development, which is increasingly being recognised by public authorities. The implementation of an energy strategy can generate investment and economic growth, creating green jobs and innovative industries. Moreover, money spent on fossil fuels in most cases leaves the region’s economy, while investment into energy efficiency and local renewable energy supply retains money within the local economy, supports the development of local value chains, and increases the resilience of a region’s energy network by diversifying its energy supply (Intelligent Energy Europe & INTERACT, 2013). 76 However, there so far exists little This might have further socio-economic benefits76: the local generation of en- empirical evidence that energy strate- ergy increases the demand for labour, since jobs are created in the local energy gies have a strong effect on employ- sector which previously might have been in centralized, extra-regional plants. ment and regional value creation Consequently, the added-value created within the region rises, which in turn (CIPRA, 2010). increases tax revenues and the region’s financial ability to provide services and infrastructure for its population and businesses. Furthermore, the implementation of an energy strategy might contribute to creating a strong regional identity, increase the amount and quality of relationships residents have with one another, and improve the image the region has with people on the outside (Tischer et al., 2006).

If there is so much to be gained, why don’t more regions aspire to becoming energy autarkic or sustainable energy regions? It is often the non-technological barriers that impede the energy transformation on the local and regional scale. In particular, there is a lack of knowledge about the local renewable energy and energy efficiency opportunities and, more importantly, a lack of expertise and capacities in local authorities to develop, let alone implement, local energy strategies. This is particularly true for small- and medium-size communities. Regional authorities can step in to fill the competence and capacity gap, bring in a more strategic perspective and ensure more coherent delivery and monitoring of sustainable energy actions.

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Collaboration across governance levels, also termed ‘multi-level governance’, is also vital to establish a profitable renewable energy infrastructure by making Multi-level governance use of economies-of-scale. This is especially important where small municipalities do not reach a sufficient level of energy demand to efficiently operate a Multi-level governance refers to facility, for example a biomass plant. Establishing an inter-communal structure the effective interaction between to plan and build such a plant that is cooperatively owned by several municipali- the different political levels for an ties increases the financial viability of RES investments. The regional level can improved coordination and coher- also better address sustainable mobility issues. Providing attractive alterna- ence between the local, regional, tives to private motorised transport can only be realised based on an integrated national and European policy level. strategy that involves communities across the region. The regional level can www.governance.at/?pId=3 also help with economies-of-scale when it comes to financing energy projects. Regional authorities can, together with their local counterparts, bundle small investment projects to make them bankable and attractive to investors. More- over, greater efficiency in the procurement of goods and services to deliver energy projects can be achieved (Intelligent Energy Europe & INTERACT, 2013).

Another barrier to the roll-out of local and regional sustainable energy solutions is the lack of acceptance and backing in the local population. Therefore, local actors must be enabled to actively participate in the transformation of the local energy system and increase the legitimacy and acceptance of decision processes.

The ‘increasing energy self-sufficiency’-objective subsumes projects that de- 4.2.10.1 ETC energy self- velop integrated sustainable energy strategies for communities and regions sufficiency projects that aim at reducing their dependence on fossil energy imports, becoming climate neutral and strengthening local or regional economic development by committing to RES, some of which pursue a 100% energy autonomy in the mid or long run.

30 projects, or ~7% of all analysed ETC energy projects, were assigned to the ‘increasing energy self-sufficiency’-objective. Most projects pursue an integrated approach which addresses both the supply side, the provision of renewable energy, and the demand side, its efficient use. However, four projects place their emphasis on promoting local energy systems based on renewable, endogenous potentials.

The territorial scale in ETC energy self-sufficiency projects is for the most part regional (19 projects); eleven projects focus on local energy-autarky. In eleven projects, regions or institutions like regional development or energy agencies take on a coordinating role to speed up the energy transition on the local level and support municipalities in their efforts. Support is given in the form of help- ing local authorities with the development of local energy strategies or action plans, providing expert advice on renewable energy technologies, building up competences and knowledge, in particular in the area of sustainable energy planning, and supporting them in the area of financing, e.g., on how to establish public-private partnerships.

In MANERGY (Central Europe Programme) development agencies and regional authorities, which have the capacity to develop and implement regional energy policies, support local authorities in the development of local energy concepts and action plans by mapping energy consumption and renewable energy potential. The partners aim at implementing regional energy strategies that pave the way for a self-sufficient regional energy supply.

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ENERGIE-OBCE-GEM (Austria - Czech Republic Programme) aims at developing regional energy concepts and supports communities with expert advice, education and promotion, and gives financial support.

GREEN PARTNERSHIP supports local administrations to overcome existing obstacles to becoming energy-efficient cities such as administrative barriers, problems with financing, lack of innovative approaches to technological solutions, etc., by creating local partnerships.

Developing and implementing energy strategies and energy action plans is at the core of many projects’ activities: 12 projects develop energy strategies and seven projects energy action plans, two of which are Sustainable Energy Action Plans according to the Covenant of Mayors. As part of the development of the strategy or action plan, an analysis of the current situation in the region regarding energy infrastructure (5 projects) and energy demand (8 projects) is carried out to establish a baseline value. Furthermore, efficiency potentials (6 projects) and available renewable energy potentials (12 projects) are identified and the cost-benefit (1 project) of energy production and energy saving investments assessed. Some projects also carry out a scenario analysis (ESPAN, Austria – Hun- gary Programme; PRINCIP, Öresund - Kattegat – Skagerrak Programme).

SEAPAlps (Alpine Space Programme) promotes energy planning at local level by developing a common methodology for Sustainable Energy Action Planning, including all steps from drafting to implementing and monitoring. The project results in the implementation of new SEAPs and the peer review of existing SEAPs. The process is accompanied by a training of partners and local authorities on how to use the methodology and developed tools.

Mentoring PEA (Baltic Sea Region Programme) aims at sharing knowledge and expertise on the development and implementation of regional energy strategies. An energy Partner-to-partner mentoring pro- strategy is elaborated for each project region for which the potential of sus- motes targeted knowledge trans- tainable energy supply and consumption is assessed, based on the regions’ ex- fer, usually from more experienced isting renewable energy infrastructure. Results and conclusions of the project to less experienced partners, but are compiled in the Baltic Energy Compendium which should serve as a blue- also between all partners, through print for other European regions, promoting a bottom-up approach to energy setting up ongoing relationships of planning. learning, dialogue and communication (Intelligent Energy Europe & Special emphasis in ETC energy self-sufficiency projects is on peer-to-peer INTERACT, 2013). learning. Five projects go beyond knowledge exchange among partners, as a feature inherent to all cooperation projects, by applying peer learning methodologies such as mentoring and peer review. Transfer of knowledge and experi- Peer review ence is also used as a way to build capacities in sustainable energy planning in 14 projects. In addition, institutional capacities are also enhanced in the area of Peer review or assessment provides financing, public procurement and energy policies. partners with a common appraisal system in order to establish a ba- MORE4NRG (INTERREG IVC Programme) aims to strengthen the delivery of re- sis for mutual comparison, tran- gional strategies for renewable energy sources and energy efficiency through snational cooperation and learn- peer reviews by exchanging best practices on sustainable energy policies and ing (Intelligent Energy Europe & jointly developing an integrated monitoring tool for measuring the effect of INTERACT, 2013). regional sustainable energy strategies.

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MEDEEA (Mediterranean Programme) aims at implementing the ‘European En- ergy Award – eea®’ methodology for integrated municipal energy planning in the Mediterranean regions. The region of Liguria, which has fully implemented eea, transfers the methodology to the partners through training sessions. By way of an open call for interest, municipalities in each region are identified in which the eea is implemented by carrying out energy audits, setting up energy teams and overseeing the identification of action plans integrated with the Covenant of Mayors objectives.

Several ETC energy self-sufficiency projects establish strategic partnerships that span across governance levels, in particular through the establishment of networking structures. Eight projects initiate a permanent network or work within networks which have been established in the past.

Rève d’avenir (France – Switzerland Programme) is a network that gathers 27 European Energy Award French and Swiss Covenant of Mayor signatory municipalities committed to

performing actions on their territories, mobilising local actors to reduce CO2 The European Energy Award is a emissions and energy consumption, and increasing the share of renewable en- quality management and certifica- ergy. To quantify and render the results of the many individual actions visible, tion system which supports com- the platform 3x20 is developed, which should help spur the municipalities of munities that want to contribute the network into further action. to a sustainable energy policy and urban development through the Energieeffizienz-Gemeinden (Alpenrhein - Bodensee – Hochrhein Programme) rational use of energy and an in- aims at cross-border collaboration for joint project development and transfer creased use of renewable energies. of know-how within the existing e5-network of eea®-municipalities. www.european-energy-award.de

 30 projects were assigned to the ‘increasing energy self-sufficiency’-ob- 4.2.10.2 Key findings jective. Projects gather communities and regions that aim at becoming sustainable energy communities and regions, or even aspire to becoming energy- autarkic in the mid or long run.

 Two thirds of the energy self-sufficiency projects develop local or regional energy strategies and energy action plans and collect data on current energy consumption, as well as RES and EE potentials to establish baseline values.

 Projects tackle non-technological barriers to energy transformation on a local scale, such as lack of expertise and capacities in planning, financing, procurement, etc., through collaboration across governance levels. In eleven projects, regions or institutions like regional development or energy agencies take on a coordinating role to speed up the energy transition on the local level and support municipalities in their efforts.

 Other typical project activities are in the area of peer learning and capacity building of local authorities. Eight projects establish a new network of partner communities and regions, or work within an existing network.

PAGE 121 Energy infrastructure and energy management Technology Barriers ETC projects overview to investments into energy on energy infrastructure and infrastructure management

Developing Europe’s energy infrastructure is a strategic EU goal, as “adequate, integrated and reliable energy networks are a crucial prerequisite not only for EU energy policy goals, but also for the EU’s economic strategy” (European Commission, 2011f). Issues at stake are, on the one hand, the security of supply and, on the other hand, the grid integration of renewables, as grid connection is one of the main barriers to a more rapid growth of renewable energy in Europe.

Today’s grid infrastructure is outdated and poorly interconnected, and lacks reverse flow options and storage. It was mainly built at a time when the electricity sector was publicly-owned and was designed for a supply provided by large, centralized power plants. While these plants are typically situated near mines and rivers or near the main centres of consumption, renewable electricity plants are characterised by their dispersed pattern, close to or at the renewable energy source, and by their, in general, smaller scale of generation, with a few exceptional cases of large-scale biomass plants and wind farms. Large scale RES plants need to be connected directly to the transmission grid, which is less extended than the distribution grid, therefore often requires a grid extension or reinforcement. The transportation of large amounts of electricity over great distances to load centres also means higher transmission losses, and could lead to congestion of existing infrastructure, making it necessary to extend and upgrade both the transmission and the distribution grid, also across borders (ECORYS, 2010).

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To connect the RES generation hubs (of mainly wind power) in and around the Northern and Baltic Seas and in the East and South of Europe to the major consumption centres in Cen- tral Europe and with major storage capacities in Nordic countries and the Alps, the EU has plans for a Trans-Eu- ropean Electricity Network (TEN-E). The TEN-E should also cope with an increasingly flexible and decentralised electricity demand and supply. As explained in section 4.2.3 on wind power, the electric power systems must be balanced at all times. For the integration of an increasing number of RES plants with variable power output this means that the present transmission system in Europe has to be upgraded and better interconnected and that, eventually, higher back- up capacities will have to be installed to maintain the power balance. This might imply an over-engineering of the grid, as the maximum capacity of the grid will only be used for a short period during the year (ECORYS, 2010). Fig. 34: Energy system integration (source: EVNSR project, North Sea Smart grids could remedy this situation and increase the reliability of the grid. Programme). In a smart grid, fluctuations in supply can be better dealt with: on the one hand, whenever supply falls short of demand, energy services which are on an ‘in- terruptible rate’, such as the charging of an electric car, can be automatically interrupted or even act as distributed storage by discharging power back into the grid; for example, electric vehicles equipped with vehicle-to-grid technology. On the other hand, when supply of renewables exceeds demand, whole power plants that operate on coal or gas can be shut down. By providing system operators with continual, real-time information on how renewable energy facilities are operating and allowing them full control over these distributed Smart Grids systems, operators can reduce the output of, or even disconnect, distributed generation as needed, to maintain reliability and match load. The reliability of Smart Grids can be described as the grid is further enhanced, as problems in the grid can be addressed before an upgraded electricity network to they lead to a power outage, hence energy losses can be avoided. Smart grids which two-way digital communica- also make it possible to more accurately price and value distributed renewable tion between supplier and consum- energy production with the potential of turning energy consumers into poten- er, intelligent metering and moni- tial suppliers (IRENA, 2013). Studies estimate that smart grids could reduce the toring systems have been added annual primary energy consumption of the EU energy sector by almost 9% by (European Commission, 2011d). 2020 (European Commission, 2011d).

Smart metering is usually an inherent part of smart grids. It opens up unprec- edented possibilities for consumers to directly control and manage their individual consumption patterns, in turn providing strong incentives for efficient energy use if combined with time-dependent electricity prices. Today, only around 10% of EU households have some sort of smart meter installed, and consumers with smart meters have reduced their energy consumption by as much as 10% (European Commission, 2011d).

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Regarding the roll-out of smart grid technologies, there are several challenges to be tackled. Investment in smart grids and smart meters and technology development has to be promoted and advanced. Developing common (international) technical standards to ensure interoperability is another highly-relevant issue. On EU level, the European Commission has entrusted the European Standards Organization (CEN) with this task (European Commission, 2011f). Furthermore, smart grids raise several questions and challenges related to data protection and cyber-security: who owns and can access the data, who should control a distributed renewable generator (the owner/operator or the utility/ system operator) and how do smart grid technologies affect the electricity system’s vulnerability to natural disasters or malicious attacks (IRENA, 2013)? A recent publication developed by the Smart Grid Task Force, whose mission is to advice the Commission on policy and regulatory directions at European level regarding smart grid implementation, proposes a list of 45 security measures for smart grids (European Network and Information Security Agency, 2014).

Another key role is played by energy storage as a way of balancing supply and demand, as a back-up to intermittent renewable energy production, and as a way to locally improve the management of distribution networks. Currently, 77 DG ENER Working Paper (undated). there is limited storage in the EU energy system; only around 5% of the total The future role and challenges of installed capacity and almost exclusively in the form of pumped hydro-storage, Energy Storage (available at: http:// mainly in mountainous areas such as the Alps, Pyrenees, Scottish Highlands, ec.europa.eu/energy/infrastructure/ Ardennes or Carpathians. Other forms of storage like batteries, electric cars, doc/energy-storage/2013/energy_ flywheels, hydrogen and chemical storage are either minimal, or at a very early storage.pdf) stage of development77.

Besides the electricity grid, there is also a need to develop the gas network, as natural gas is expected to continue to play a key role in the EU’s energy mix in the coming decades, and will gain importance as the back-up fuel for variable electricity generation. On the one hand, there are additional requirements on flexibility in the system, such as bi-directional pipelines, enhanced storage capacities and flexible supply, including liquefied and compressed natural gas. On the other hand, Europe needs a more diversified portfolio of physical gas sources and routes and a fully interconnected and bi-directional gas network to decrease its dependency on a few supplier countries (European Commission, 2011f).

Lagging infrastructure development and operation was recognised as one of the main impediments to achieving the 2020 targets for renewable energy (Eu- ropean Commission, 2013a). Several barriers can be identified that hinder infrastructure development from keeping up with demand. High investment costs to finance electricity grid development are a considerable impediment. According to the Commission (2011f), around one trillion Euros must be invested in the EU’s energy system between today and 2020 in order to meet energy policy objectives and climate goals, and about half of it will be required for networks, including electricity and gas distribution and transmission, storage, and smart grids. About EUR 200 billion is needed for energy transmission networks alone. However, not realising these investments or not doing them under EU-wide coordination would also inflict considerable costs, as demonstrated by offshore wind development, where national solutions could be 20% more expensive. The fact that infrastructure projects often have regional or European value-added and only limited direct benefits at national or local level partially explains the lack of investment, together with the recent economic recession.

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Besides financing issues, the other specific issue that needs to be addressed is non-cost barriers, in particular project authorisation. Long and complex processes to get environmental and construction permits, but also a lack of regulation or weak coordination between authorities slow down or even hinder infrastructure development. Non-existent or insufficient spatial planning can also represent a considerable handicap; for example, when renewable energy generation and infrastructure demand is not considered part of spatial planning, or when the responsibilities for spatial planning are not clearly defined and coordinated between the different responsible authorities. In general, the lack of a long-term strategy concerning the development of the electricity network infrastructure and proper forecasts concerning to which extent the grid has to expand to cope with the expected rates of RES development constitute another barrier. Social opposition to new infrastructure development or lack of political will can even block the extension of the grid (ECORYS, 2010). As regards transnational grids, the lack of coordination between national governments or transmission system operators is perceived as one of the main barriers to the development of a TEN-E. According to the Commission (2011f), it needs “new tools, such as improved regional cooperation, permitting procedures, better methods and information for decision makers and citizens and innovative financial instruments” to support the implementation of projects of European interest.

Projects assigned to the ‘improving energy infrastructure’ or ‘improving ener- 4.2.11.1 ETC energy gy management’ objective either aim to improve energy infrastructure or en- infrastructure and energy courage better energy management78 by technical means, in particular through management projects the use of intelligent metering. 18 projects were identified, which corresponds to ~4% of all analysed ETC energy projects.

Only two projects, Power Cluster (North Sea Programme) and ISLES (Northern 78 Apart from the projects presented Ireland - Border Region of Ireland - Western Scotland Programme), tackle the in this chapter, 4 other projects were need to reinforce and extend the electricity grid in connection with offshore assigned to the ‘improving energy wind power generation. Both projects carry out a study on the feasibility of an management’-objective. They rely on interconnected grid. other than technical means to improve energy management, and are there- ISLES (Northern Ireland - Border Region of Ireland - Western Scotland Pro- fore not discussed here. gramme) assesses the feasibility of creating an offshore interconnected transmission network and subsea electricity grid based on renewable energy sources off the coast of western Scotland and in the Irish Sea/North Channel area.

Power Cluster (North Sea Programme) undertakes a North Sea grid study to evaluate the technical feasibility of a common European supergrid and its im- plications on the electricity markets in different European countries. The study covers an analysis of the pros and cons of different transmission systems for offshore wind farms (AC or HVDC) and of the industrial capacity of cable supply, cable laying and HVDC component manufacture, and investigates into possible connections between the offshore wind farms and interconnections with existing grids. As part of the study, a modelling of the electric grid is conducted.

The issue of energy storage is addressed by several projects in very different ways and for different fields of application: For example, ESPAN (Austria – Hun- gary Programme) develops and tests a prototype energy storage for photovoltaic installations, based on a conventional lead acid battery using an alternative charging procedure to prolong the battery lifetime.

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WEBSR 2 (Baltic Sea Programme) analyses existing storage technologies for wind turbines (pump storage, compressed air, hydrogen) exploring advantages and disadvantages, their technological implementation and existing obstacles, and formulates recommendations.

GEOPOWER (Syddanmark - Schleswig-K.E.R.N. Programme) investigates the possibility to store excess renewable energy underground in the border areas of Syddanmark, Denmark, and Schleswig, Germany.

Two projects were identified that are undertaking activities targeted at improving the gas infrastructure, albeit in very different areas: enercoast (North Sea Programme) realises the integration of local biogas production into the existing gas network, MarTech_LNG (South Baltic Programme) develops competences in building and operating (e.g., maintenance, loading, navigation) liquefied natural gas terminals and forming cross-border supply chains.

enercoast (North Sea Programme) focuses on the management of bioenergy supply chains and, in one of the regional supply chain pilots, increases the volume of biogas delivery by connecting several farms to one common biogas pipeline.

MarTech_LNG (South Baltic Programme) aims to equip local and regional Microgrid maritime-related businesses with knowledge on liquefied natural gas technologies (LNG), enabling them to be contracted for operating and maintain- A microgrid is a section of an elec- ing the planned LNG terminal in Lithuania and Poland, and to specialise and tric grid that can disconnect from form cross-border supply chains in the South Baltic which can better compete the main grid and operate autono- in LNG-related tenders on the global market. mously, supplying its own loads from internal power sources for a Eight ‘improving energy infrastructure’ projects promote smart grid technolo- period of time. When a microgrid gies, three of which focus on Virtual Power Plants. Activities range from as- is operating without a connection sessing the feasibility of smart grid implementation, to analysing smart grid to the central power grid, it is said business cases, to piloting a smart grid or virtual power plant. Two projects (E- to be ‘islanded’. A microgrid may Harbours, North Sea Programme; eMOTION, Syddanmark - Schleswig-K.E.R.N. island itself from the central grid Programme) explore the possibility of combining e-mobility with smart grid during a grid outage or when grid technology. Three projects aim at improving energy management in industrial power quality is poor (IRENA, 2013). areas by means of a microgrid (OPTIMAGRID, South West Europe), in science and technology parks (SMART-MED-PARKS, Mediterranean Programme) or in a business park (C2C-BIZZ, North West Europe Programme). Virtual Power Plant AlpEnergy (Alpine Space Programme) brings together power suppliers, devel- A Virtual Power Plant is an aggrega- opment agencies, research institutes and public administrations to develop, tion of energy resources, held to- pilot and implement technological, cooperative and business models for Vir- gether by software controls, which tual Power Plants (VPP), to research and test VPPs hardware and software pro- can be treated as a single larger totypes, and to form a network of excellence. Project outputs are VPP master resource from the grid operator’s plans for every project region, financial and organisational models and long- perspective. When geographically term business plans for VPP field introduction, and a VPP ‘white book’ as a com- – and technologically – diverse re- mon base for discussion with stakeholders and partner. newable resources are grouped together, the variability is signifi- E-Harbours (North Sea Programme) aims at transforming the energy network cantly lower than that of each indi- in harbour areas. The project works on a transnational methodology for optimal vidual resource, which significantly integration of renewable energy sources by means of smart grids, Virtual Power increases the reliability of the RES Plants or intelligent energy storage, and analyses smart grid/VPP business cas- (IRENA, 2013). es and feasibility, implementing smart grid solutions in local showcases.

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OPTIMAGRID (South West Europe) aims to define, design, develop and implement intelligent control systems based on distributed computing that facilitate real-time management of an electric energy microgrid in an industrial area with a high penetration rate of renewable energy.

Nine projects encourage the use of smart meters as a way of improving energy management. The majority of projects use smart meter technology to achieve a change in energy consumer behaviour or for studying technology-user interaction in home environments. PV-NET (Mediterranean Programme) uses smart net metering to measure and manage the electrical energy consumed in buildings, in order to develop an optimised net metering model as an incentive for investment in photovoltaic installations.

OCTES (Northern Periphery Programme) aims to increase the viability of renewable energy solutions in the Northern Periphery through energy demand management, by influencing consumer behaviour through the use of smart meters. The project develops an energy monitoring system studying changes in the behaviour of individual homes and consumers. Users of the system are presented with electricity consumption data, potentially including compari- sons with other households. Furthermore, the project extends existing energy advisory services to advising on appropriate types and sizing of energy storage, and develops tools for mapping the raw electricity usage data against nation- ally available tariffs, to help customers determine the best tariff.

ENCERTICUS (Mediterranean Programme) aims to reduce residential energy consumption in social housing throughout the Mediterranean region by means of awareness-raising, using energy performance certificates and smart meters in pilot projects.

 18 projects aim to improve energy infrastructure or encourage better en- 4.2.11.2 Key findings ergy management by technical means

 In spite of the fact that lacking grid connection and grid integration of renewables is one of the main barriers to a more rapid growth of renewable energy in Europe, only two projects look into the subject of grid connection, in particular into connecting offshore wind power parks to the grid.

 The topic of energy storage is addressed in very different ways (developing and testing a prototype, analysing existing technologies and feasibility), for different fields of application (solar and wind power) and different storage technologies (pump storage, compressed air, hydrogen, batteries).

 Eight projects promote smart grid technologies, also in the context of integrating e-mobility and smart grids, three of which focus on Virtual Power Plants. Smart grid implementation is speeded up through feasibility assessments, by analysing smart grid business cases and piloting smart grids or virtual power plants.

 Nine projects pilot smart meters as a way of achieving a change in energy consumer behaviour.

PAGE 127 Difference between strands Comparison Comparison Comparison of average size of partnership of average partner budget of typical project themes, and typical beneficiaries activities and outputs

European Territorial Cooperation comprises three strands of cooperation which, owing to their varying territorial scale, take a somewhat different approach in working towards territorial integration and cohesion.

Cross-border cooperation programmes (CBC) cover border regions between EU MS, are mostly bilateral and generally operate on a smaller scale than transnational and interregional programmes. The main aim of CBC programmes is to reduce the effect of borders as administrative, legal and physical barriers, and tackle common challenges identified jointly in the border regions. These challenges are, e.g., poor accessibility, especially in relation to information and communication technologies, connectivity and transport infrastructure. CBC programmes also aim to exploit the untapped growth potential in border areas; e.g., by jointly developing cross-border research and innovation facilities and clusters, through cross-border labour market integration or through the joint use of infrastructures in sectors such as health, culture, tourism and education. Programmes typically support people-to-people exchange between local authorities, schools, associations, etc., the joint (re)building of cross-border roads, cycle paths or bridges, the development of common services for the local population or the creation of thematic networks and clusters for innovation, to mention but a few (European Commission, 2011g).

Transnational cooperation programmes (TNC) operate on a macro-regional 79 However, we decided to make ad- scale and are formed by larger regions that share common challenges or joint justments to the interregional sample (natural) resources, such as a common sea basin or a mountain range. TNC pro- of the in-depth dataset and to exclude grammes aim to increase cooperation across Member States on matters of im- ten INTERREG IVC energy projects, re- portance for the macro-region, and typically facilitate coordinated strategic ducing the interregional sample from responses to joint challenges, such as natural risk management, environmen- 24 to 14 projects. Reason was that two tal management, business and innovation support, sustainable urban devel- of the interregional projects analysed opment, etc., and support technology transfer to improve access to scientific were actually mini-programmes with knowledge, activities to improve access to and the quality of transport and tel- several small sub-projects. These sub- ecom services, etc. (European Commission, 2011g). projects were all treated as individual projects which, in a small sample of The interregional cooperation programme INTERREG IVC covers the whole 24 projects, would have otherwise of the European Union as well as the non-member states Norway and Swit- led to two types of distortions: the zerland. Its objective is to foster improved effectiveness of regional and local overrepresentation of certain topics policies by enabling the exchange and transfer of experience and good prac- and a distortion of the typical size of tice between regions. Typical output of an interregional project is the transfer partnership and budget as these small of good practices through seminars, staff exchange and other events, where sub-projects, with few partners and a beneficiaries develop ideas together which they can then adapt to their own small budget, are rather unrepresenta- regional or municipal context (European Commission, 2011g). tive of the whole interregional strand. As part of our study, we were interested in whether there are differences in 80 For statistical testing, we used the the size of the partnership, type of beneficiaries, topics addressed and types of Tukey’s range test (resp. t-test) for outputs produced by projects of the 3 programme strands. comparing size of budget and partner- In order to compare the different strands, we resorted to the in-depth data- ship, and the Pearson’s chi-squared set of projects to avoid a systematic bias in the number of activity and output test for comparing types of topics ad- categories assigned (c.f. section 3.2.4.3 for more explanation)79. Results of the dressed and outputs produced. statistical analysis80 can be found in Annex 2.

PAGE 128 Difference between strands

Regarding the average number of project partners per strand, we expected 4.3.1 Average size of the TNC and IVC projects to be of similar size, and CBC projects to be significantly partnership and typical smaller in size. This was confirmed by the statistical analysis which showed types of partners that CBC projects’ partnerships are a significantly smaller than TNC projects and IVC projects. Tab. 33 shows the average number of partners per project and strand.

We also looked into the beneficiary classification to see whether there are dif- Cross-border Coop- 6.6 partners eration ferences between strands as regards the typical types of partners and partnership composition. And we found several interesting differences: Transnational Coop- 10.8 partners CBC projects involve significantly more chambers of commerce, industry, trade eration or agriculture and education and training institutions than their TN and IVC Interregional Coop- 12.3 partners counterparts. Another distinct feature of CBC projects, compared to the TNC eration and IVC strand, are project partnerships consisting exclusively or mainly of Tab. 33: Average number of project universities (10 of the 54 CBC projects). partners per strand. Research institutions seem to be particularly drawn to TNC projects. We found them significantly more often as partners in TNC projects. Regional authorities are represented significantly more often in INTERREG IVC projects compared to both CBC and TNC projects. This can be explained by the strategic approach of the INTERREG IVC programme, for which regional and local public authorities represent the main target group of the programme. On the other hand, interregional projects engage fewer universities, fewer interest groups/NGOs than TNC projects. The fact that no private enterprises were found in IVC projects is not surprising, since private bodies are not eligible as partners in INTERREG IVC.

These differences between strands can be partially explained by diverging eligibility rules, e.g., the ineligibility of private partners in IVC projects. But they might also be a result of the varying territorial scope of the three strands. Re- gional authorities can be found relatively more often in interregional projects whereas education institutions like vocational colleges are more frequently engaged in smaller-scale cross-border projects.

A comparison of the average partner budget per strand also confirmed what 4.3.2 Average partner we had initially hypothesised: that differences between strands are not signifi- budget cant. Tab. 34 shows the average partner budget per strand. Data indicate that CBC partner budgets are somewhat above and IVC partner budgets below av- Cross-border Cooperation EUR 350,013 erage. We conducted a similar analysis using the ERDF share, which yielded a similar result. In terms of absolute project budget, TNC projects have, thanks to Transnational EUR 302,447 Cooperation the larger number of project partners, the largest project budgets. Interregional Cooperation EUR 221,505 Tab. 34: Average partner budget per strand.

In view of the variation in territorial scope and the typical size of project 4.3.3 Typical project partnerships and, hence, the somewhat different strategic orientation of pro- themes, activities and grammes, one could expect that these differences are reflected in project out- outputs comes. From our intimate knowledge of the dataset, we expected to find little difference, especially between the cross-border and the transnational strand. We wanted to have this subjective assessment confirmed with statistically sound data.

PAGE 129 Difference between strands

First, we looked at the average number of categories assigned to a CBC, TNC 81 Differences are significant between and IVC project as a proxy for how many different activities are undertaken and the cross-border and transnational different outputs generated by an average project of each strand by compar- and between the transnational and ing mean and standard deviation. The statistics show that there are significant interregional strand, yet not between differences between strands as regards the number of unique categories as- the cross-border and interregional signed81. We have assigned the highest number of unique categories to transna- strand (c.f. Annex 2, Tab. 38). tional projects, indicating that more activities are undertaken and outputs produced in an average TNC project. This observation is in line with the fact that TNC projects, in general, involve more partners and budget. A large number of different activities and outputs per project may also be the result of different pilots realised by partners, i.e. individual partner activities in the scope of a demonstration or pilot project carried out in addition to the joint project activities, which is common in TNC projects. Another alternative explanation is that transnational projects generally publish a lot of information on their websites compared to CBC projects, which provided us with more data to categorise. IVC projects were found to have been categorised using a significantly lower Cross-border Cooperation 23.35 number of categories. We believe that this can be mainly ascribed to the fact that interregional projects take a quite uniform approach, by focusing on Transnational Cooperation 29.12 the exchange and transfer of experience and good practice between regions, Interregional Cooperation 23.00 which, with our classification scheme, can be represented with few categories. Tab. 35: Average number of catego- It is important to underline that the number of unique categories is not a proxy ries assigned to a CBC, TNC and IVC for the total number of activities carried out and outputs produced by a project, project. but for the number of different types of activities and outputs.

In a second step, we looked into differences between strands in the use of single categories and combinations of categories (1st and 2nd order categories) testing the pairs ‘cross-border-transnational’, ‘cross-border-interregional’ and ‘transnational-interregional’. Generally, it can be said that differences between strands were low and almost 82 It is important to note that for only on the level of sub-objectives and activities/outputs. Out of 215 tested cat- several of the tested categories fre- egories, only 33 categories were used significantly more or less often in any of quencies were too low to give reliable the tested pairs, corresponding to ~15% of all categories. The biggest differ- results, which is why they had to be ences in the use of certain categories were found between the cross-border and excluded. the interregional strand and the transnational and the interregional strand82.

The comparison of the cross-border with the transnational strand revealed a few differences on the level of sub-objectives and activities/outputs. No differences were found regarding the type of energy-related topics addressed. The significantly higher use of the sub-objective [influencing policies] in: —— influencing policies by giving policy recommendations —— influencing policies by drafting an energy strategy —— influencing policies by establishing strategic partnerships —— influencing policies by collecting data and of the target group categories: —— local/regional and national politicians indicates that transnational projects are more policy-oriented than cross-border projects. Furthermore, TNC projects were found to be more active in the area of: —— preparing investments by carrying out feasibility studies —— preparing investments by collecting data, e.g., on relevant stakeholders, on best available technologies, on the policies and legislation and on financial framework.

PAGE 130 Difference between strands

In relative terms, transnational projects also realize more pilot investments than cross-border programmes, yet the difference was not found to be significant. Some outputs seem to be typical for the transnational strand: —— knowledge databases —— data collections on ‘best available technology’ and ‘good/best practice’ —— decision support tools —— energy strategies —— feasibility studies.

In return, cross-border cooperation projects are more active in the area of developing prototypes of new products and the categories [developing a new product testing a prototype] were used significantly more often in CBC projects. This observation is in line with the fact that university collaborations, which often engage in the development of prototype solutions, are not uncommon in CBC projects.

A comparison of the cross-border with the interregional strand yielded more differences than between CBC and TNC projects. Due to the small interregional sample, however, more than half of the categories above the significance level had to be excluded as frequencies were too low to produce a reliable result. As regards project main objectives, [increasing energy efficiency in transportation] was represented significantly more often in the interregional strand, a finding which is consistent with our analysis of the theme of energy-efficient transportation, which showed that the sustainable transport theme features very prominently in INTERREG IVC. Most differences were on the level of activities and outputs and can be explained by the different strategic approaches of the two strands. The strong focus of IVC projects on regional policy and on the exchange of knowledge and good practices between regional actors was reflected in the higher use of the categories: —— building capacities in policy making —— good/best practice —— knowledge exchange —— influencing policies by giving policy recommendations —— local/regional authorities.

CBC projects, in return, have a stronger focus on investments as well as on awareness raising and on developing new services. Furthermore, activities and outputs are relatively more often targeted at the general public. Categories used significantly more often in the CBC strand are: —— preparing investments by collecting data, e.g. on cost-benefit —— raising awareness by increasing knowledge through information campaign —— developing a (new) service.

As regards the comparison ‘transnational-interregional’, differences between transnational and interregional projects can be subsumed as follows: Compared to IVC projects, TNC projects are much more investment-oriented. This is reflected in the higher use of categories like: —— preparing investments by collecting data on , e.g., best available technology, the legal framework; —— preparing investments by carrying out a feasibility study or cost-benefit analysis —— making investments by realizing a pilot.

PAGE 131 Difference between strands

But also the categories [awareness raising], [information campaign] and [developing a new service] were used significantly more often to describe TNC projects. 50% of TNC projects in the sample produced a [knowledge database] as compared to none of the IVC projects. On the other hand, IVC projects were found to place their emphasis on knowledge exchange and transfer of good practices between local/regional authorities, as demonstrated by the significantly higher use of the categories: —— knowledge exchange —— good/best practices —— building capacities in policy making.

Unlike when comparing the interregional with the cross-border strand, IVC projects were not found to be significantly more policy-oriented than TNC projects. Even though TNC projects are largely focused on preparing the ground for investments into renewable energy and energy efficiency, most of them are also engaged in activities targeted at influencing policies, such as drafting policy recommendations.

To conclude, we found almost no difference between programme strands as regards project main objective categories, and only few significant differences on the level of sub-objectives and activities/output categories. These findings indicate that differences refer more to the way projects operate and their type of interventions, i.e., whether they tackle renewable energy and energy efficiency topics from a policy or investment angle, than to the type of topics they address. The single exception was the relatively higher number of projects dealing with sustainable transport in INTERREG IVC. This finding is also consistent with our subjective impression we got from reading the over 400 project descriptions. Differences are most acute between the transnational/cross-border strand and the interregional strand. A possible explanation for this might be that the IN- TERREG IVC programme has, compared to the cross-border and transnational strand, a more narrowly defined programme objective: to improve the effectiveness of regional policies and instruments through the exchange and transfer of experience and good practices among project partners. TNC and CBC projects are mainly distinguished by their size of partnership and, hence, project budget, which is a result of the different territorial scale on which they work. Furthermore, it became evident from the statistical analysis that TNC projects tend to ‘blend’ different approaches in one project in order to integrate in one project a large number of different activities: joint transnational activities, local or pilot activities, awareness raising activities, policy- oriented activities, etc.

Findings should not mask the fact that there are pronounced differences between programmes (of the same strand), as each programme pursues specific strategic objectives, defined by regional specificities and common territorial challenges. In this context, it would also be interesting to compare programmes with overlapping programme territories.

Another important fact to bear in mind is that our analysis is based on a sample of 100 projects. An analysis of the full sample of 424 projects might have altered the results to some extent, especially, since a substantive number of categories could not be tested due to the small number of counts per categories.

PAGE 132 Difference between strands

 TNC and IVC energy projects have similar size partnerships whereas CBC 4.3.3.1 Key findings projects involve a significantly smaller number of partners.

 There are typical types of partners involved in CBC, TNC and IVC energy projects:

CBC projects typically involve a higher number of chambers of commerce, industry, trade or agriculture and education and training institutions than their TN and IVC counterparts. Another distinct feature of CBC projects are project partnerships consisting exclusively or mainly of universities. Research institutions are found significantly more often in TNC energy projects. Regional authorities are represented significantly more often in INTERREG IVC projects, while universities and interest groups are underrepresented compared to TNC projects. Contrary to CBC and TNC projects, no private partners were found in IVC projects as a result of INTERREG IVC eligibility rules.

 Differences in the average size of partner budget per strand are not significant. In absolute terms, TNC projects have a larger budget owing to the larger number of project partners.

 Comparing the average number of categories assigned to a CBC, TNC and IVC project, as a proxy for how many different activities are undertaken and different outputs generated, revealed that the highest number of unique categories was used to categorised transnational projects, indicating that more activities are undertaken and outputs produced in an average TNC project. IVC projects were found to have been categorised using a significantly lower number of categories.  A comparison of the use of single categories and combinations of categories yielded only few differences between strands on the level of sub-objectives and activities/outputs:

 Findings indicate that, TNC projects are, compared to CBC projects, more policy-oriented and, compared to interregional projects, more investment oriented. Some outputs were found to be typical for TNC projects, in particular, knowledge databases and feasibility studies.

 CBC projects, when comparing them to INTERREG IVC projects, were found to have a stronger focus on investments as well as on awareness raising and on the development of new services. When compared to TNC projects, CBC projects turned out to be more active in the area of developing prototypes of new products, an observation which is in line with the fact that university collaborations, which often engage in the development of prototype solutions, are not uncommon in CBC projects.  Significantly more INTERREG IVC projects than CBC projects work on increasing energy efficiency in transportation. IVC projects were also found to place more emphasis on knowledge exchange and transfer of good practices between local/regional authorities as compared to CBC and TNC projects.

PAGE 133 Conclusions and recommendations Discussion Discussion Outlook of methodology of research questions on potential further research and development

In this study, we set out to investigate the contribution of ETC projects to European targets in the area of energy efficiency and renewable energy, by analysing how sustainable energy features in programmes and projects in the current period, and by putting findings into their policy context. 83 Based on an estimated total number We identified 428 projects from 58 ETC programmes that work on topics per- of 5,500 ETC projects implemented tinent to the fields of energy efficiency and renewable energy; a number likely in one of the 67 European Territorial in reality to be higher, as our inventory only partially includes projects that Cooperation programmes between were approved after June 2012. Energy projects thus comprise ~8% of all ETC 2007 – 2013. projects83. 84 The total share of ERDF for ETC is About EUR 1.2 billion of national and ERDF-funding, or EUR 680 million of EUR 7.845 billion. http://ec.europa.eu/ ERDF co-financing, can be linked to ETC energy projects, benefiting around regional_policy/cooperate/coopera- 2,800 project partners across Europe. In other words, 8.7% of the ETC ERDF84 tion/index_en.cfm is invested in energy-related projects.

5.1 Discussion of Based on a textual analysis of project descriptions retrieved from pro- methodology gramme and project websites, we mapped projects regarding their objectives, sub-objectives, activities, outputs and target groups, using a set of 232 categories and assigning each project partner to one of 10 beneficiary categories (c.f. Annex 3). Capturing project results had to remain outside the scope of this study due to the lack of uniform definition of results in the current programme period, and because project results are usually reported as ‘expected’ results, as they rarely materialize before the project has been finalized. Several iterative loops of categorisation produced a compiled dataset of aggregated categories and combinations of categories. This method was very time-consuming, yet allowed us to draw conclusions from a large sample of 424 projects by turning qualitative data into a quantitative dataset.

We opted for a full-sample survey in order to deal with possible shortcomings associated with the methodology and data, assuming that the large sample would nonetheless produce statistically robust results. In taking a qualitative approach, we had to accept certain methodological biases, mainly due to the degree of subjectivity inherent in any qualitative analysis. This subjectivity was at least partially overcome by using stringent, well-documented methodology. While we generally focused on manifest information when assigning categories, assigning activities and outputs to sub-objective categories required a great deal of interpretation. ‘Interpretation’ was also sometimes necessary to tell whether an achievement presented by the project could be directly attributed to the project; in other words, whether it was co- financed with ERDF money or whether it was something achieved outside the scope of the project, but presented on the project website because it fitted with the project theme.

More importantly, we were confronted with data limitations. Accessing project information proved difficult for some programmes, in particular where no English version of the programme website was available, or where only the minimum required information about approved projects was published. The amount of publicly-available information per project varied considerably and determined the level of detail a project could be categorised at. Systematic differences existed between programmes (depending on how much information on each project is published by the programme and whether information on the project progress is regularly updated) and random differences between projects (depending on how active a project is in maintaining and updating its

PAGE 134 Conclusions and recommendations

project website). Uniform minimum standards85 regarding the type and depth of information published per project on programmes’ websites would not only 85 E.g., the minimum common stand- facilitate studies such as ours, but also help communicate and demonstrate ards for project descriptions and ETC’s contribution to EU sectoral policies. project progress reports to be pub- The lack of English content on both programme and project websites can be lished on programmes’ websites de- seen as a lost opportunity for inter-programme knowledge management and fined in the Harmonised Programme capitalisation. Projects should also be made aware of the fact that providing Implementation Tools (for more infor- minimum information in English on their websites can earn them much greater mation: www.interact-eu.net). (search engine) visibility.

One way of addressing the lack of available project information and differences in the level of information published per project would have been to base the study on project application and project reporting forms, as the information contained in these forms is, at least within a programme, fairly standardised. The drawback in using application and reporting forms is that they are not publicly accessible, which means we would have had to contact all programmes. Besides being an extra burden for programmes, they might have been reluctant to share these forms, which can also contain information that could be considered confidential.

In chapter 4, we presented and discussed the results of our mapping exer- 5.2 Discussion of research cise. Coming back to the research questions posed in chapter 2, what conclu- questions sions can be drawn from these findings? In the following section, we will address each research question and give an outlook on possible further work with the data and results of this study.

ETC energy projects address the full range of sustainable energy topics and are 5.2.1 In which areas generally very well aligned to the objectives of EU energy policy. pertinent to the field of energy efficiency and In the area of , ETC energy projects work on promoting the renewable energy renewable energy are ETC use of biomass, solar power, wind power, geothermal power, hydro power, wave and tidal power and hydrogen for fuel cells, all of which are included in energy projects active, the EU Strategic Energy Technology Map 201186 as cost-effective low carbon and how well are projects technologies. grounded in policy ETC energy projects also deal with the use of renewable energy and the need developments in the field? to increase energy efficiency in buildings, in transportation and in enterprises (including SMEs, industry, retail, tourism, etc.) as three main sectors addressed by the Energy Efficiency Directive. Projects not only take a sectoral approach, but also develop integrated low-carbon strategies for cities and urban areas, including urban mobility solutions, to tap the huge potential for cost-effective energy savings in cities and work on improving energy infrastructure and energy management.

In spite of the large spectrum of topics addressed by ETC energy projects, it is striking that over 50% of all analysed projects are concentrated in two areas: —— 110 projects, representing more than a quarter of all ETC energy projects, focus on biomass as a renewable energy source. —— 93 projects, or 22% of all analysed projects, work on improving the energy performance of buildings, mostly by focusing on energy-efficient refurbishment. 86 http://setis.ec.europa.eu/

PAGE 135 Conclusions and recommendations

How can this rather unilateral concentration of projects on two topics be explained? On the one hand, the large potential for energy from biomass in Europe and the promising opportunities arising from the use of biomass for energy production have certainly contributed to the enormous interest in biomass among ETC actors. Bioenergy is very flexible in its use, as it can be converted into solid, liquid or gaseous fuel. Compared to other RES technologies, electricity and heat from biomass can be produced at relatively low costs under favourable conditions, and bioenergy is less dependent on short-term weather changes than other, more intermittent energy sources, and less bound to local site conditions than other technologies which rely on, e.g., site-specific wind conditions, solar irradiation or geothermal potential. Furthermore, bioenergy promotes regional economic structures and provides an alternative source of income for farmers. Even though it was assumed that biomass could account for up to two-thirds of renewable energy production in the EU, bioenergy is currently falling short of expectations, and it seems that the euphoria about bioenergy has somewhat dwindled over the last years. This is largely due to the heated public controversy about the impact of bioenergy on resource consumption and greenhouse gas emissions. ETC biomass projects addressed sustainability concerns by assessing the environmental impact of a planned investment, by promoting the potential use of contaminated sites such as abandoned brownfield or mining sites for bioenergy production, and by exploring the use of wastes, residues, non-food cellulosic (incl. marine biomass) and ligno-cellulosic (waste) material as feedstock.

On the other hand, the huge cost-effective but as yet untapped energy-saving potential which lies in the EU building stock and the fact that the building sector has become a priority area in EU energy policy explain the strong focus of ETC energy projects on improving energy efficiency in buildings. However, despite the profitability of energy efficiency measures in existing buildings, annual rates of thermal rehabilitation are low in the European Union, which is not only inefficient from an economic point of view, but also fails to unleash the potential for job creation in the labour-intense building refurbishment sector. The Energy Efficiency Directive (EED) therefore introduced binding targets for annual renovation rates of buildings owned and occupied by central governments, recognising their exemplary role in triggering a higher renovation rate while bringing the public building stock up to higher energy performance. ETC projects have readily taken up this topic: more than one-third of the energy efficiency in buildings projects is targeted atpublic buildings. Projects addressed the EED requirement by realising pilot investments in public buildings, monitoring the energy consumption in public buildings, building capacities in public authorities on green public procurement, building energy management, refurbishment, policy making, etc., by developing energy consulting and auditing services for public authorities, and by tackling energy consumption behaviour of public authorities. Projects also addressed several of the market failures preventing investments into energy efficiency measures in buildings. These are, e.g., the lack of skilled building professionals, the lack of awareness about investment opportunities and the profitability and positive impact of energy-efficient refurbishment on the asset value, the need to target energy consumer behaviour, and the importance of user behaviour for realising the full saving potential of energy-efficient houses and technical building systems. Around 18% of the EE in buildings projects approached the challenge of insufficient financing by (giving assistance

PAGE 136 Conclusions and recommendations

to) introducing innovative financing options, in particular energy performance contracting. Given the importance of leveraging private sector investment into energy efficiency measures, it would be desirable to see more of these projects in the future. Building energy performance is likely to remain a central theme in ETC in the coming programme period. Measures targeted at EE in buildings, which correspond to Investment Priority 4(c), are also mentioned as part of the indicative actions of high European added-value listed in the Thematic Guidance Fiche on Energy Efficiency Investments (European Commission, 2014b). The Commission recommends that priority should be given to deep retrofitting beyond minimum energy performance requirements to capture all possible energy savings, to an integrated approach to urban regeneration that goes beyond the sole refurbishment of buildings, and to the use of energy performance contracting for EE investments in buildings, and stresses the importance of tackling non-cost and non-technological barriers.

Energy from biomass, addressed under Investment Priority 4(a) which summarises all types of renewable energies, is not specifically highlighted in the Thematic Guidance Fiche on Renewable Energy and Smart Grids Investments (European Commission, 2014c). For the same reasons that dampened expectations concerning the role of bioenergy in achieving the EU energy targets on renewables, the interest in energy-from-biomass might also somewhat decline in ETC in the coming period.

The promotion of renewable energies and energy efficiency needs all the sup- 5.2.2 Based on the existing port it can get for the EU to get back on track regarding its 2020 energy targets. stock of projects and However, some technologies and measures need more support than others: identified barriers, in which On the one hand, while remarkable progress has been made in the area of renewable energy in recent years, the EU is lagging very much behind regarding areas would it make sense its 2020 energy efficiency targets. Efforts to curb energy consumption in Eu- to intensify efforts in the rope must be intensified if targets are to be met. coming period? On the other hand, some renewable energy technologies, like photovoltaics and wind power, are doing comparatively well (although it must be added that they have not yet reached grid parity and will therefore need a sustained framework also in the future), while others will need continued public financial support. This includes technologies that are not yet mature enough to be deployed on a large scale; e.g., concentrated solar power, wave power and second- and third generation biofuels. Some technologies, although promising, are very site-specific and can only be installed on selected locations. For example, wind power, geothermal power for electricity production and marine energy technologies rely heavily on local energy potentials.

Nevertheless, our study shows that there are some highly-relevant, cross- cutting topics that have played a rather marginal role in the current period, given the function they could assume in moving towards a low-carbon society. In view of the fact that these themes apply to all regions of Europe, it would be desirable to see them become a more central issue in ETC:

—— the development of energy infrastructure, in particular smart distribution systems at low and medium voltage levels —— integrated energy management in cities and urban areas —— energy management in businesses.

PAGE 137 Conclusions and recommendations

Projects that focused on improving energy infrastructure and energy management correspond to only around 4% of all analysed ETC energy projects, in spite of the fact that grid barriers, such as inadequate grid capacity, poor grid interconnection, lack of energy storage, etc., were rated as one of the most urgent barriers to a more rapid growth of renewable energies in Europe. Smart grids and smart meters could remedy grid bottlenecks and increase the reliability of the grid. According to the Thematic Guidance Fiche on Renewable En- ergy and Smart Grids Investments (European Commission, 2014c), “smart grids will be the backbone of the future decarbonised power system. […] Investments in smart grids will also have substantial cross-cutting impacts at local/regional level. Public investments in local/regional smart grid pilot projects will substantially help remove existing technical and non-technical uncertainties associated with the full deployment at national/EU level.“ Explaining the reasons why ETC witnessed so few energy infrastructure projects in this period would require a much more thorough analysis of the topic and of Operational Programmes. One tentative explanation could be that energy infrastructure projects tend to be geared towards heavy investments, that relevant actors and authorities might be found on the national rather than regional policy level, and that there are already well-established boards that deal with the topic transnationally. Nevertheless, we identified some encouraging examples of projects that successfully demonstrated that ETC can contribute to this topic, for example by assessing the feasibility of smart grid implementation, analysing smart grid business cases or piloting smart grids (incl. virtual power plants and microgrids) and smart meters (c.f. section 4.2.11). They could inspire the next generation of projects in programmes that have selected Investment Priority 4(d) ‘Developing smart distribution systems at low and medium voltage levels’.

Also, there is still room for more projects dealing with energy efficiency and renewable energy in cities and urban areas in an integrated way. In the current period, we identified 26 projects aiming at increasing energy efficiency in cities, plus eleven projects focusing on developing local energy strategies and action plans. Together, these projects account for less than 9% of all ETC energy projects, a low number given that around 70% of the EU’s energy consumption takes place in cities. Of course, other projects also contributed to reducing energy consumption in cities, but followed a sectoral approach, by focusing on the refurbishment of buildings, the modernisation of public lighting or on the development of sustainable urban and municipal mobility solutions. However, energy-optimisation on the level of districts and communities is more cost-effective than optimising each building individually, and integrated urban development contributes to the quality of life in the whole neighbourhood, ensuring the investment’s sustainability. Therefore, the development of sustainable energy action plans and mobility action plans should be encouraged as part of broader low-carbon and urban development strategies, in order to facilitate optimisation and coordination of investments. The importance of pursuing an integrated approach addressing both the supply side, the provision of renewable energy, and the demand side, its efficient use, is also highlighted in the Thematic Guidance Fiche on Energy Efficiency Invest- ments (European Commission, 2014b). The fact that Investment Priority 4(e) bundles the promotion of low-carbon strategies and of sustainable multimodal urban mobility and mitigation-relevant adaptation measures under one priority also indicates that integrated energy management in cities should be the general direction for programmes and projects to follow in the next period.

PAGE 138 Conclusions and recommendations

A third important cross-cutting issue is energy management in enterprises, notably in SMEs. In the current period, only 3% of all energy projects dealt with this topic, thus leaving plenty of room for further projects. Most frequent project activities were capacity building in operational energy management in enterprises and energy auditing. While energy audits will become obligatory for large enterprises under the Energy Efficiency Directive, for SMEs it remains a recommendation. It would be desirable to see ETC projects step up their efforts in the area of energy management in SMEs in the coming period, to help fill this gap.

Typical activities in ETC energy projects are not fundamentally different from 5.2.3 What are typical activities undertaken in other areas in which ETC projects are active. These activities carried out and are conducting studies, carrying out pilots, delivering meetings, information outputs produced in ETC events, training, etc. The same is true for project outputs. Common outputs are, among others, baseline studies, feasibility studies, management plans, hand- energy projects, and how books and guidelines, policy recommendations, action plans and strategies, well are they oriented networks and clusters, etc. towards an existing need for measures in the field? Rather than the activities and outputs as such, we mapped the objectives towards which these activities and outputs were geared, as this gave us a better understanding of the different ways projects work towards the main project objective: for example, whether energy saving in buildings is achieved by tackling user behaviour, through activities targeted at triggering investments or through activities aimed at influencing relevant policies. A general observation in this context was that (main, but also specific) objectives are often set unrealistically high with respect to the potential impact that project activities and outputs can possibly have. It made us wonder whether the discrepancy between high-flying objectives and more realistic measures is a marketing strategy, or whether projects have the tendency to be overly ambitious. We also found it sometimes hard to tell what the purpose of a specific activity or output was in the overall context of the project. For example, to an outsider the need for more baseline and comparative studies, best practice reports and knowledge databases, etc., for achieving the project objective is not always so evident. If projects were encouraged to follow a more rigorous project intervention logic, this would not only enhance the comprehensibility of the entire project logic, but also help forestall unrealistically high objectives and focus projects on what are the most suitable means to achieving them.

Regarding typical activities in ETC energy projects, we found that over 50% of all projects undertake investment-oriented activities; i.e., activities that should eventually trigger concrete investments. Actual investments were made in less than 18% of all projects. These were mostly small, pilot-scale investments in, e.g., solar power charging stations, biomass boilers or research equipment. Activities targeted at preparing investments mostly consist of gathering existing knowledge or data for (feasibility) studies, guidelines, manuals or handbooks, knowledge databases, geodatabases, decision support tools, energy action plans or strategies, or business/investment plans and business models. In general, a lot of effort in ETC energy projects is put into compiling information and data. Our analysis showed that 60% of all projects engage in gathering information and data, making this, together with activities targeted at exchanging or imparting knowledge, the single most frequent project activity. Considering that processing and compiling information is a time-consuming task, some questions pop up: is all this information and data strictly necessary

PAGE 139 Conclusions and recommendations

for achieving the project objectives? Or does the time spent on developing studies, guidelines and knowledge databases detract from rather than contribute to the achievement of project objectives? Finally, how do these knowledge gathering and processing activities match with a more rigorous, result-orientated approach that will require programmes and projects to deliver tangible results in the coming programme period? Doing some of the groundwork before applying for the project would be a possible way forward. Getting rid of unnecessary ballast and reducing project activities to what is essential for achieving the main project objective would be another.

Among the most frequent project outputs are best practice compilations, guidelines and knowledge databases gathering data on best available technologies, which are produced by almost one in every three projects. We observed that the same best practice examples were collected and described in different projects, even within one and the same programme.

To summarise, there is a pressing need to speed up implementation of sustainable energy solutions if the European Union is to meet its 2020 energy targets. The next generation of ETC energy projects should therefore be strongly encouraged to move from exchanging good practices to implementing them, and from gathering knowledge to applying it.

Another pre-investment activity is developing or introducing financial instruments to stimulate investment in energy efficiency and renewable energy. In the current period, only 7% of all analysed energy projects were exploring the use of energy performance contracting, private-public-partnerships, low-interest loans, targeted subsidies and revolving funds for financing sustainable energy measures. In times of austerity policy and cuts in public spending, financial instruments could raise the urgently needed capital for energy investments. A more widespread use of financial instruments is, however, still hindered by several barriers, such as a lack of understanding of and experience with financial instruments in public authorities, existing regulatory barriers and legal barriers aimed at decreasing public debt, but which, at the same time, stifle sustainable energy investments. The Commission’s Guidance Fiches (Eu- ropean Commission, 2014b; European Commission, 2014c) underline that public funding should not replace but complement and leverage private investment. Public intervention ought to address market failures, while financial instruments should be chosen in instances where there is potential for sufficient revenues generated to pay back the investment.

Another common activity, undertaken by around 29% of all analysed projects, is developing new services. Most frequently, these are consultancy or technical advisory services or training. However, it must be added that not all of these services are (conceived to be) permanent, nor are they necessarily transboundary services. On the other hand, the development of new products plays only a minor part (in 11% of all analysed projects) in energy projects and was found significantly more often in cross-border projects.

Apart from these activities, ETC energy projects have an important role to play in removing non-technological, non-cost barriers to a wider renewable energy deployment: administrative hurdles, the lack of knowledge and capacities in public authorities, the lack of awareness about the benefits of energy efficiency measures, and attitudinal and behavioural barriers.

PAGE 140 Conclusions and recommendations

Capacity-building activities were undertaken by around a third of all analysed projects. Projects facilitated knowledge exchange through meetings and network events, delivered training, and organised study visits or staff exchanges, etc. Capacity-building is vital to removing administrative hurdles like time- consuming and obscure permitting procedures, the lack of capacities in the area of green procurement, financial instruments, etc. Administrative barriers are one of the most important barriers to an accelerated deployment of sustainable energy investments, and the share of total project costs for investments into renewable energy that is allotted to administration is considerable. Still, the overall progress made in simplifying administrative regimes in order to make renewables more competitive has been so far limited (European Com- mission, 2013a).

How can ETC energy projects contribute to removing these barriers?

On the one hand, ETC energy projects can improve access to knowledge and external expertise in public authorities, for example by engaging project partners who have the relevant experience or by bringing in external experts; e.g., on financial instruments.

On the other hand, ETC energy projects can facilitate peer-to-peer exchange between public authorities to learn how administrative barriers are addressed in other regions and exchange on, e.g., good practices in streamlining permitting procedures (e.g., such as one-stop shopping schemes for getting a permit), in spatial planning, public procurement, financial instruments, energy policy, etc. In general, projects could make much more of peer learning by exploring methodologies like work shadowing, partner-to-partner mentoring and coaching or peer review and assessment.

Along the same lines, but focusing less on knowledge exchange, are activities aimed at changing institutional practices, which were undertaken by 24% of all projects. A change in practices often requires a change in mindset and the building up of institutional capacities, which is why it is strongly linked to capacity building and awareness-raising activities.

Limited information and awareness regarding the benefits of renewables and energy efficiency and a lack of public acceptance are important barriers to the development of renewable energies and to the implementation of energy efficiency measures. In particular, renewable energy projects are often faced with a ‘Not In My Back Yard’ attitude from local or regional decision-makers and the local population. Awareness raising activities, an active information policy and involvement of local actors (also financially, e.g., by awarding local co- ownership) can help overcome opposition. In the current period, around 23% of the analysed energy projects undertook activities aimed at raising awareness or changing attitudes. Awareness-raising is for the most part a communication exercise, and typical awareness-raising activities carried out were running an information campaign, organising conferences, excursions, fairs, or other public events, etc. Information and awareness raising campaigns have a clearly positive impact on public opinion, if they are reliable, independent, easy-to- understand, up-to-date, target group-specific and designed for the long-term. Unfortunately, many of the information campaigns carried out in ETC projects were just one-off events, unlikely to make a real impact.

PAGE 141 Conclusions and recommendations

Awareness-raising can also influenceconsumer and mobility behaviour as another important area in which ETC energy projects can make a valuable contribution. In the current period, only 7% of projects tackled energy consumption by targeting consumer behaviour, mainly through information campaigns, training, public events or by making energy consumption patterns and saving achievements visible by measuring or monitoring energy consumption. Given that potential energy savings due to measures targeting behaviour is in the range of 5-20%, it would be desirable to see more projects take up these ideas.

5.2.4 What are currently Our study demonstrates that energy projects across ETC programmes focus on unexploited synergies similar issues and come up with comparable solutions to address those issues. between programmes and Only some renewable energy-related topics, such as geothermal power for electricity production, marine energy technologies and offshore wind power within thematic clusters of generation, whose use is very restricted to some parts of Europe, were clear- projects, and how could ly confined to specific geographical areas. The majority of themes, however, ETC make better use of seem to apply almost equally to all regions of Europe, offering a large potential them? for thematically-related projects to capitalise on each other’s work. Still, little cross-fertilisation takes place on project level across ETC programmes, let alone between ETC and other EU programmes or Commission initiatives. To support the transfer of project-generated knowledge and outcomes, it would be recommendable, in the coming period, to make better use of:

—— synergies across ETC programmes —— synergies with other EU initiatives in the field of energy —— synergies with other EU programmes —— project outcomes from the current programme period.

In the current period, several ETC programmes have formed clusters of energy projects in order to exploit synergies among them; for example, in the area of communication and dissemination. By clustering projects across ETC programmes, however, projects could be pooled which share the same or very similar topics, stimulating a more substantive discussion and in-depth exchange that can leverage synergies in a specific thematic field.

We also identified potential synergies with other EU initiatives in the field of energy. The European Commission has also launched several energy-related initiatives which overlap with areas in which ETC energy projects are active. One example is the ‘BUILD UP Skills’ initiative to boost continuing or further education and training of craftsmen and other on-site construction workers and system installers. The lack of appropriate training and qualification for building professionals in the area of energy-efficient construction and renovation was also addressed by a number of ETC energy projects that developed new training material or educational programmes and delivered training for building professionals. The question arises whether these individual project initiatives were coordinated with the national teams working on improving the qualification and skills of building workers which were established under the ‘BUILD UP Skills’ initiative. The dedicated ‘BUILD UP Skills’ internet platform further provides public authorities with access to legal sources, toolkits and guidelines produced by cities, regions or countries, and the possibility to share expertise with peers. ETC projects that fail to coordinate with these EU and national initiatives risk duplicating work and missing out on relevant information and on important opportunities to disseminate their results outside the project partnership.

PAGE 142 Conclusions and recommendations

Another example is the Commission’s initiative to promote Green Public Pro- curement. In order to foster Green Public Procurement, the Commission collects best practice examples, publishes guidance documents and toolkits, and organises webinars and public events with similar activities also being undertaken by ETC energy projects to build capacities in public procurement.

Besides ETC programmes, there are other EU programmes which fund renewable energy and energy efficiency projects, notably Horizon 2020 and the LIFE programme, giving rise to a lot of potential synergies between ETC and other EU programmes. Horizon 2020 will continue funding the type of activities that were previously supported by the Intelligent Energy Europe Programme87, such as measures to 87 Eligible measures that will be funded remove market and governance barriers, by addressing financing, regulations by Horizon 2020 under the Coordina- and the improvement of skills and knowledge, thus will most likely have sub- tion and Support Actions are in the stantial complementarities with activities funded under ETC programmes. area of standardisation, dissemina- Eligible actions under Horizon 2020’s Energy Efficiency Call also include com- tion, awareness-raising and commu- plementary activities of networking and coordination between programmes nication, networking, coordination or in different countries. In addition, the Common Provision Regulation88 calls on support services, policy dialogues and Member States and the Commission to strengthen coordination, synergies and mutual learning exercises and studies, complementarities between the European Structural and Investment Funds including design studies for new infra- and Horizon 2020 and other centrally-managed Union funding programmes structure (http://ec.europa.eu/easme/ (while also establishing a clear division of areas of intervention between them). energy_en.htm). Furthermore, Member States shall “[…] ensure complementarity and coordination with LIFE by promoting the use of solutions, methods and approaches 88 Annex 1, section 4.3 of the Regu- validated under LIFE, inter alia, including investments in green infrastructure, lation on the Common Strategic energy efficiency, eco-innovation, ecosystem-based solutions, and the adoption Framework of related innovative technologies.”

So we expect to see more inter-programme activities in the coming period. Ef- forts to strengthen the links between ETC programmes and other EU funding instruments could, ultimately, also lead to more coordinated and efficient deployment of EU funding between programmes and funding instruments.

Furthermore, there is an urgent need in ETC to promote the (re)use of project outcomes from the current programme period. This demands that more effort is put into knowledge management on ETC level to make project outcomes more easily accessible. Until recently, one had to consult 63 programme websites to look for ETC-level generated knowledge. With the ETC project database ‘KEEP’ now being filled with around 85% of all the projects of 2007 – 2013 Territorial Cooperation, the foundation has been laid for KEEP to develop into a ‘one-stop-shop’ for ETC-specific thematic information. Studies like this one are also an important step in improving knowledge management in ETC, and enable inter-programme capitalisation.

PAGE 143 Conclusions and recommendations

5.2.5 Who are typical In our study, we mapped project beneficiaries and target groups, and found that project beneficiaries and typical target groups were, with few exceptions, quite similar to the types of target groups in ETC project beneficiaries engaged in ETC energy projects. In fact, project beneficiaries, i.e. project partners, are often at the same time the target group of a energy projects? Are project’s outputs. We also observed an undifferentiated use of the term ‘target relevant and desirable group’ for ‘immediate target groups’ (benefiting from and using the project’s project partners currently outputs) and ‘indirect target groups’ (benefitting from the positive mid- and underrepresented or long-term impact of the project). missing in ETC projects? In spite of these inaccuracies, the result of our mapping clearly showed that local and regional public authorities are the single most important actors in ETC energy projects. They account for the largest group of beneficiaries as well as target groups, which is not surprising given that ETC is a regional development policy instrument that benefits the regions of Europe. National and Eu- ropean public authorities played no more than a minor role as target groups for ETC projects, and only rarely participate as beneficiaries: they account for only around 2% of all beneficiaries. A greater involvement of national authorities, not necessarily as beneficiaries, would be desirable in projects that touch upon areas of responsibility of central governmental agencies. Obviously, that depends very much on the distribution of competences between the local, regional and national administrative levels within each country. The private sector and, within the private sector, in particular SMEs, is often referred to as a target group of energy projects, even outweighing the public sector as target group. The great interest in SMEs certainly stems from the fact that the fostering of cooperation between businesses and public authorities, notably SMEs, is seen as an important measure towards the achievement of the Europe 2020 strategic objective of smart, sustainable and inclusive growth. In terms of beneficiaries to ETC energy projects, however, businesses played a minor role and accounted for only around 4% of all partners. Given the low number of private sector beneficiaries, ETC energy projects could certainly include more private actors, also in view of leveraging investments into renewable energy and energy efficiency. Current barriers to a wider involvement of private companies in ETC projects are State Aid rules, the high administrative burden of participating in ETC projects, and the fact that all project expenditures must be pre-financed by the partners. Especially for small companies, the large outlay and commitment in resources and staffing and the long payment time are challenging. Other important target groups and beneficiaries are higher education and research institutions, in particular universities, schools, infrastructure and (public) service providers, including power supply companies, and interest groups such as non-governmental organisations, associations of companies, etc. Intermediaries like business support organisations and environmental and energy agencies are common beneficiaries to energy projects, but are hardly ever mentioned as designated target groups.

The question whether relevant and desirable project partners are currently underrepresented or missing in ETC projects cannot be answered outside the context of a specific project. A ‘relevant’ partner is one that has the necessary institutional competence and/or required expertise and experience for the achievement of a project’s objective. However, it is also true that relevant partners might be deterred from engaging in ETC energy projects by the formal requirements on project implementation that surround ETC projects. Hopefully, the coming programme period will bring some true alleviations of the adminis-

PAGE 144 Conclusions and recommendations

trative burden on ETC projects that really deserve to be called ‘simplifications’. As regards target groups, for a project to reach its target groups and to ensure that a project’s main outputs are put to use it is vital that a project involves stakeholders and target groups early and assesses what their real needs are, possibly already during project preparation.

Owing to their varying territorial scale and average size of programme are- 5.2.6 What are the as, the three strands of European Territorial Cooperation programmes take a differences between somewhat different tack in working towards territorial integration and cohe- programme strands sion. Are these differences reflected in ETC energy projects? To answer this question, we compared: and how can they be —— project partnerships in terms of average number of project partners and explained? typical types of partners —— project budgets in terms of the average per partner budget —— number of different activities and outputs, by using the average number of assigned unique categories per project as a proxy —— project themes, activities and outputs, by consulting the use of single categories and combinations of categories.

Regarding the average size of partnership, transnational and interregional projects were found to be of similar size, and cross-border projects to be significantly smaller. As concerns typical types of partners, we made a number of interesting findings. Cross-border projects involve significantly more chambers of commerce, industry, trade or agriculture and education and training institutions than their transnational and interregional counterparts. Another distinct feature of cross-border projects are project partnerships consisting exclusively or mainly of universities. Research institutions seem to be particularly drawn to transnational projects. Furthermore, regional authorities are represented significantly more often in INTERREG IVC projects than in cross-border and transnational projects. On the other hand, interregional projects engage fewer universities, fewer interest groups/NGOs than transnational projects, and no private enterprises. These differences between strands can be partially explained by diverging eligibility rules; e.g., the ineligibility of private partners in INTERREG IVC projects. But they might also be a result of the varying territorial scope of the three strands, hence the different strategic approach of the different programme strands, which would explain why regional authorities were found relatively more often in interregional projects whereas education institutions like vocational colleges were more frequently engaged in smaller-scale cross-border projects.

The comparison of the average partner budget per strand showed that differences between strands are not significant. However, in terms of absolute project budget, transnational projects have, due to the larger number of project partners, the largest project budgets.

The size of partnerships and project budgets also partially accounts for differences in the number of assigned unique categories per project, which is highest for transnational energy projects, indicating that more activities are undertaken and outputs produced in an average transnational cooperation project. The fact that individual pilot projects realised by project partners in their partner regions, a common feature of transnational projects, increased the number of

PAGE 145 Conclusions and recommendations

single activities and outputs per project is another possible explanation. A third alternative is that transnational projects generally publish a lot of information on their websites compared to cross-border projects, which simply provided us with more data to categorise.

Contrary to what one might expect, differences in territorial scope and the typical size of project partnerships were not reflected in project themes and project outcomes. We found almost no difference between programme strands as regards project main objective categories, and only few significant differences on the level of sub-objectives and activity/output categories. These findings statistically back the subjective impression we got from reading the over 400 project descriptions. Nevertheless, the statistical analysis provided some interesting findings.

Statistical results suggest that differences refer more to the way projects operate and their type of interventions; i.e., whether they tackle renewable energy and energy efficiency topics from a policy or investment angle, than to the type of topics they address. For example, transnational projects, compared to cross-border projects, were found to be more policy-oriented and, compared to interregional projects, more investment-oriented. The single exception was the relatively higher number of projects dealing with sustainable transport in INTERREG IVC. Cross-border projects, when comparing them to INTERREG IVC projects, seem to have a stronger focus on investments as well as on awareness-raising and on the development of new services. When compared to transnational projects, cross-border projects turned out to be more active in the area of developing prototypes of new products, an observation which is in line with the fact that university collaborations, which often engage in the development of prototype solutions, are not uncommon in cross-border projects. Some outputs were found to be specific for transnational projects, such as knowledge databases and feasibility studies. Interregional projects place more emphasis on knowledge exchange and transfer of good practices between local/regional authorities, as compared to cross-border and transnational projects.

To conclude, while, in general, our findings indicate that there are few differences between A, B and C-strand energy projects, differences are most acute between the transnational/cross-border strand and the interregional strand. A possible explanation for this is that the INTERREG IVC programme has, compared to the cross-border and transnational strand, a more narrowly defined programme objective: to improve the effectiveness of regional policies and instruments through the exchange and transfer of experience and good practices among project partners. Transnational and cross-border projects, on the other hand, are mainly distinguished by their size.

Furthermore, the statistical analysis showed that transnational projects tend to ‘blend’ different approaches in one project and integrate in one project a large number of different activities: joint transnational activities, local or pilot activities, awareness raising activities, policy-oriented activities, etc. One might suspect that large (transnational) partnerships give way to individual interests of partners, and that the larger the number of partners the more difficult it becomes to have each partner fully committed to a common objective.

PAGE 146 Conclusions and recommendations

Chapter 5 was dedicated to summarising the findings of this study and 5.3 Outlook bridging between the 2007 – 2013 and the 2014 – 2020 programme periods, the latter of which will bring two fundamentally new requirements for ETC programmes: —— thematic concentration, meaning that programmes must concentrate funding on a limited number of programme-specific objectives —— result-orientation, meaning that programmes must define envisaged results and commit to corresponding targets regarding the attainment of these results and progress towards them, whereas ‘result’ is understood as the change that the programme makes in the programme territory.

For projects, this implies that the range of possible themes will be more narrowly defined than in previous programmes, and that they will be required to demonstrate their contribution to the targets set on the programme level concerning outputs and results. Thematic concentration and result-orientation are often mentioned in the same breath. Findings from this study, however, suggest that a project with a narrow thematic focus is not necessarily a project likely to perform well in terms of results. We observed that even projects working within a very specific thematic area often undertake a large number of different activities and produce a host of outputs, not all of which appear to be well-aligned with the main project objective, and therefore detract from rather than contribute to the delivery of real results. Still, the number of outputs is often used as a benchmark for determining a good project. To achieve a paradigm shift from quantity to quality, programmes are advised to spur projects to aspire to ‘do more with less’.

To sum up, this study aimed to provide a comprehensive overview on ETC level of how the renewable energy and energy efficiency theme featured in programmes and projects in the current period. We approached the task by analysing over 400 projects regarding thematic focus, activities and outputs, as well as policy developments in the field of renewable energy and energy efficiency. Despite the extensive work done in this study, there remain some open research agenda items which could not be covered in the scope of this project. On the one hand, we would have been interested in exploring the territorial dimension of energy projects, by analysing our data using a geographical information system to visualise the geographical distribution of energy themes, activities and outputs. This would have required using the information on partner locations to generate spatially referenced data, information which is not yet complete, and would have opened up a lot of possibilities for overlaying data on ETC projects with other geo-referenced data; e.g., on regional renewable energy potentials, regional energy consumption, etc. On the other hand, it would have been desirable to make the energy projects database publicly accessible, allowing programmes and projects to query the full dataset. One possible solution would be to integrate the data in INTERACT’s online project database ‘KEEP’, but that remains a medium-term goal. We hope that this study will be actively used as a comprehensive source of reference, providing targeted information on all energy-related topics pertinent to ETC, and will serve as an inspirational source for programming, project quality assessment, inter-programme capitalisation and ex-post evaluation.

PAGE 147 Annex 1 Overview of analysed programmes

Programme Number Programme Number of of projects projects Cross-border Cooperation Cross-border Cooperation Alpenrhein - Bodensee - Hochrhein (DE-AT-CH-LI) 3 Spain - External Borders (ES) 3 Amazonia (FR-BR-SU) 1 Spain - France - Andorra (ES-FR-AD) 4 Austria - Czech Republic (AT-CZ) 3 Spain - Portugal (ES-PT) 13 Austria - Hungary (AT-HU) 8 Sweden - Norway (SE-NO) 9 Bavaria - Austria (DE-AT) 1 Syddanmark - Schleswig-K.E.R.N. (DK-DE) 7 Border Region Flanders - Netherlands (BE-NL) 4 Two Seas (FR-UK-BE-NL) 6 Botnia - Atlantica (SE-FI-NO) 2 Upper Rhine (FR-DE-CH) 2 Central Baltic (FI-SE-EE-LA) 10 Transnational Cooperation Estonia - Latvia (EE-LV) 3 Alpine Space 7 Euregio Meuse-Rhine (NL-BE-DE) 1 Atlantic Coast 1 France - Switzerland (FR-CH) 2 Baltic Sea 20 France (Manche) - England (FR-GB) 7 Central Europe 20 Germany - Netherlands (DE-NL) 13 Mediterranean 37 Greater Region (BE-DE-FR-LU) 6 North Sea 12 Greece - Bulgaria (EL-BG) 2 North West Europe 21 Greece - Cyprus (EL-CY) 1 Northern Periphery 11 Greece - Italy (EL-IT) 1 South East Europe 6 Hungary - Romania (HU-RO) 6 South West Europe 15 Ireland - Wales (UK-IE) 2 Interregional Cooperation Italy - Austria (IT-AT) 7 INTERREG IVC 63 Italy - France Alcotra (IT-FR) 2 Sum 424 Italy - France ‘Maritime’ (IT-FR) 4 Tab. 36: Overview of number of projects analysed per ETC Italy - Malta (IT-MT) 1 programme. Italy- Slovenia (IT-SI) 2 Italy – Switzerland (IT-CH) 3 Latvia - Lithuania (LV-LT) 6 Lithuania - Poland (LT-PL) 1 Mecklenburg-Vorpommern/Brandenburg - Zachodni- 1 opomorskie (DE-PL) Nord (SE-FI-NO) 8 Northern Ireland - Border Region of Ireland - Western 5 Scotland (IE-UK) Öresund - Kattegat - Skagerrak (SE-DK-NO) 15 Romania - Bulgaria (RO-BG) 4 Saxony - Czech Republic (DE-CZ) 5 Slovak Republic - Austria (SK-AT) 7 Slovak Republic - Czech Republic (SK-CZ) 4 Slovenia - Austria (SI-AT) 3 Slovenia - Hungary (SI-HU) 4 South Baltic (PL-SE-DK-LT-DE) 9

PAGE 148 Annex 2 Statistical evaluation of differences between programme strands

Cross-border Transnational Interregional Cooperation Cooperation Cooperation Mean: 6.63 Cross-border Cooperation 0.0000 0.0037 Standard deviation: 3.71 Mean: 10.79 Transnational Cooperation 0.0000 0.5064 Standard deviation: 2.81 Mean: 12.28 Interregional Cooperation 0.0037 0.5064 Standard deviation: 5.27 Tab. 37: Comparison of average number of partners per project. P-value < 0.05 indicates a significant difference in the average number of partners per project (Tukey test).

Cross-border Transnational Interregional Cooperation Cooperation Cooperation Mean: 350,013 Cross-border Cooperation 0.0000 0.0037 Standard deviation: 312501.54 Mean: 302,447 Transnational Cooperation 0.0000 0.5064 Standard deviation: 137502.45 Mean: 221,505 Interregional Cooperation 0.0037 0.5064 Standard deviation: 153584.90 Tab. 38: Comparison of average project budget per partner.

Cross-border Transnational Interregional Cooperation Cooperation Cooperation Mean: 23.35 Cross-border Cooperation 0.0069 0.9891 Standard deviation: 9.27 Mean: 29.12 Transnational Cooperation 0.0069 0.0228 Standard deviation: 5.90 Mean: 23.00 Interregional Cooperation 0.9891 0.0228 Standard deviation: 9.11 Tab. 39: Comparison of average number of different categories assigned to a CBC, TNC and INTERREG IVC project.

Category Cross-border Cooperation Transnational Cooperation Chi2 p.value Chamber of commerce/industry/trade/agriculture 14 3.3% 7 1.3% 4.44 0.0351 Education & training institution 21 4.9% 12 2.2.% 4.27 0.0388 Research institution 22 5.2% 64 11.9% 4.16 0.0413 Tab. 40: Comparison of beneficiaries in CBC and TN programmes (α = 0.05).

Category Cross-border Cooperation Interregional Cooperation Chi2 p.value Regional authority 52 12.2% 66 34.2% 35.94 0 University 64 15.1% 4 2.1% 9.89 0.0017 Private company 23 5.41% 0 0% 7.94 0.0048 Education & training institution 21 4.9% 1 0.5% 4.77 0.0029 Chamber of commerce/industry/trade/agriculture 14 3.3% 1 0.5% 4.32 0.0377 Tab. 41: Comparison of beneficiaries in CBC programmes and INTERREG IVC (α = 0.05).

PAGE 149 Annex 2

Category Transnational Cooperation International Cooperation Chi2 p.value Regional authority 68 12.6% 66 34.2% 35.22 0 University 61 11.3% 4 2.1% 12.30 0.0005 Private company 24 4.5% 0 0% 6.98 0.0082 Research institution 64 11.9% 6 3.1% 5.40 0.0202 NGO 65 12.1% 11 5.7% 4.90 0.0269 Tab. 42: Comparison of beneficiaries in TN programmes and INTERREG IVC.

Category Cross-border Transnational Chi2 p.value Cooperation Cooperation knowledge database 4 7.41% 26 50.00% 20.42 0 influencing policies 14 25.93% 23 71.88% 17.31 0 policy recommendations 9 16.67% 19 59.38% 16.69 0 legal (political) framework 9 16.67% 17 53.13% 12.66 0.0004 identify relevant stakeholders 1 1.85% 7 21.88% 9.55 0.0020 decision support tool 2 3.70% 8 25.00% 8.87 0.0029 local/regional politicians 3 5.56% 9 28.13% 8.52 0.0035 feasibility study 6 11.11% 12 37.50% 8.45 0.0036 energy strategy 5 9.26% 11 34.38% 8.37 0.0038 national politicians 1 1.85% 5 15.63% 5.87 0.0154 preparing investments 39 72.22% 30 93.75% 5.87 0.0154 best available technology 8 14.81% 12 37.50% 5.79 0.0161 financial (economic) framework 2 3.70% 6 18.75% 5.59 0.0202 good/best practice 22 40.74% 21 65.63% 4.98 0.0257 testing a prototype 7 12.96% 0 0.00% 4.52 0.0336

Influencing policies by giving policy recommendations 9 16.67% 18 56.25% 14.62 0.0001 Preparing investments by carrying out feasibility studies 0 0% 8 25.00% 14.88 0.0001 Influencing policies by establishing strategic partnerships 1 1.85% 8 25.00% 11.49 0.0007 preparing investments by collecting data 35 64.81 28 87.50% 5.28 0.0216 influencing policies by collecting data 4 7.41% 8 25.00% 5.18 0.0229 influencing policies by drafting an energy strategy 4 7.41% 8 25.00% 5.18 0.0229 developing a new product testing a prototype 7 12.96% 0 0% 4.52 0.0336 Tab. 43: Comparison of frequency of use of single categories in CBC and TN programmes.

Category Cross-border Interregional Chi2 p.value Cooperation Cooperation policy making 0 0% 5 35.71% 20.81 0 good/best practice 22 40.74% 14 100% 15.67 0.0001 knowledge exchange 16 29.63% 12 85.71% 14.44 0.0001 influencing policies 14 25.93% 11 78.57% 13.25 0.0003 raising awareness 29 53.70% 0 0% 13.11 0.0003 local/regional authorities 23 42.59% 13 92.86% 11.27 0.0008 information campaign 28 51.85% 1 7.14% 9.09 0.0026 building capacities 27 50.00% 13 92.86% 8.43 0.0037

PAGE 150 Annex 2

Category Cross-border Interregional Chi2 p.value Cooperation Cooperation developing a (new) service 25 46.30% 1 7.14% 7.22 0.0072 preparing investments 39 72.22% 5 35.71% 6.49 0.0109 cost-benefit 17 31.48% 0 0% 5.88 0.0153 general public 22 40.74% 1 7.14% 5.61 0.0179 policy recommendations 9 16.67% 6 42.86% 4.44 0.0352

building capacities in policy making 0 0% 5 35.71% 20.82 0 raising awareness by increasing knowledge 28 51.85% 0 0% 12.34 0.0004 influencing policies by collecting data 4 7.41% 5 35.71% 7.76 0.0053 preparing investments by collecting data 35 64.81% 4 28.57% 5.97 0.0145 increasing energy efficiency in transportation 9 16.67% 6 42.86% 4.44 0.0352 influencing policies by giving policy recommendations 9 16.67% 6 42.86% 4.44 0.0352 Tab. 44: Comparison of frequency of use of single categories in CBC programmes and INTERREG IVC.

Category Transnational Interregional Chi2 p.value Cooperation Cooperation preparing investments 30 93.75% 5 35.71% 18.03 0 Policy making 0 0% 5 35.71% 12.82 0.0003 Raising awareness 17 53.13% 0 0% 11.80 0.0006 Knowledge exchange 11 34.38% 12 85.71% 10.27 0.0014 Building capacities 14 43.75% 13 92. 86% 9.69 0.0019 Knowledge database 16 50.00% 1 7.14% 7.68 0.0056 best available technology (BAT) 12 37.50% 0 0% 7.10 0.0077 feasibility study 12 37.50% 0 0% 7.10 0.0077 Information campaign 15 46.88% 1 7.14% 6.78 0.0092 Local/regional authorities 17 53.13% 13 92. 86% 6.78 0.0092 Good/best practices 21 65.63% 14 100% 6.33 0.0119 realizing a pilot 11 34.38% 0 0% 6.33 0.0119 legal (political) framework 17 53.13% 2 14.29% 6.06 0.0138 RES potential 14 43.75% 1 7.14% 5.94 0.0148 developing a (new) service 13 40.63% 1 7.14% 5.16 0.0232 General public 13 40.63% 1 7.14% 5.16 0.0232 Cost-benefit 9 28.13% 0 0% 4.90 0.0269 making investments 12 37.50% 1 7.14% 4.43 0.0354

preparing investments by collecting data 28 87.50% 4 28.57% 15.97 0.0001 building capacities in policy making 0 0% 5 35.71% 12.82 0.0003 raising awareness by increasing knowledge 16 50.00% 0 0% 10.73 0.0011 making investments by realizing a pilot 11 34.38% 0 0% 6.33 0.0119 preparing investments by carrying out a feasibility study 8 25.00% 0 0% 4.24 0.0396 Tab. 45: Comparison of frequency of use of single categories in TNC programmes and INTERREG IVC.

PAGE 151 Annex 3 wood crops manure sewage waste municipal (residues) material plant marine biomass marine brownfields/mining sites brownfields/mining on target group target target group target target group target on on from from from from from from from for for for sea water sea ground water ground iodies el biochar b bioethanol biomethane for fair for the production of production the for training excursions (public) event (public) id biofuel id staff exchange staff thermal biogas on shore on shore off pyrolysis fuel cells fuel large scale large small scale small biorefinery photovoltaic gasification heat pump combustion water source water knowledge exchange knowledge liqu information campaign information participatory process participatory multiplication/dissemination ground source ground artists others schools hospitals urban planning urban institutions organisations of land use planning use land transport planning transport for public procurement public including NGOs interest groups, for energy management energy business support mobility management mobility education/training by means through through through energy (strategy) planning (strategy) energy supply chain management climate change management for the production of production the for for the production of production the for biomass action plan action biomass energ audit energ by giving by classification collecting data collecting action plan action biomass hydrogen policy recommendations policy tidal power tidal energy strategy energy balancing/modelling wind power wind solar power solar wave power wave hydro power hydro local/regional energy action plan action energy local/regional research Sustainable Energy Action Plan (SEAP) Plan Action Energy Sustainable that must be performed for a a for performed be must that succeed. to strategy of steps to be taken, or activities activities or taken, be to steps of action plan refers to a sequence a to refers plan action universities energy performance certificate performance energy institutions monitoring/benchmarking and research geothermal power geothermal higher education from that is that for for EE construction for from from from from from from from EE refurbishment planning financing governance of increasing knowledge increasing for improving know-how/skills improving policy making policy management for by developing by by by that is that providers operators to tion ac that is that that is that that is that that is that that is that is that is that service provider (public) transport infrastructure and s energy (infrastructure) harmonizing data harmonizing influencing policies influencing harmonizing policies harmonizing harmonizing standards harmonizing hanging attitude hanging SMEs c mobility behaviour mobility raising awarenes raising building capacities building changing practices changing changing behaviour changing energy consumption energy promoting the use of renewable energy renewable of use the promoting developing a common method common a developing harmonizing method/procedure harmonizing /institutions/governments practice refers to collectives to refers practice while law can compel or prohibit behaviours. prohibit or compel can law while guide decisions and achieve rational outcome(s) outcome(s) rational achieve and decisions guide policy refers to a deliberate plan of plan deliberate a to refers policy private sector behaviour refers to individuals to refers behaviour forestry sector industrial sector tourism industry green businesses agricultural sector private businesses construction sector by smart meters smart that is that by is to is of of of of of of of of by drafting by energy agency improving energy management energy improving smart grids/virtual power plants power grids/virtual smart sectoral agencies development agency environmental agency powered by powered by is to is means for objectives public sector increasing energy self-sufficiency energy increasing target group target national authorities is to is district cooling district European authorities regional/local authorities of of of of of for by using using by powered by powered reducing GHG emissions GHG reducing electricity by by waste improving power grid power improving waste heat waste heating district (CHP) power and heat combined energy storage technology storage energy renewable energy production renewable improving energy infrastructure energy improving e alternative fuels/propulsion systems fuels/propulsion alternative ty study in in the production of production the in national politicians political institutions European politicians survey regional/local politicians modelling by balancing measuring monitoring by carrying out carrying by by using by by using by by using by by using by needs analysis /innovation geodatabas ision support tool support ision technical study technical feasibili by guidelines/manual knowledge data base data knowledge dec case specific decision decision specific case criteria decision applicable generally criteria making investments making by promoting by boosting business development increasing energy efficiency energy increasing developing a (new) service (new) a developing developing a (new) product (new) a developing by by general public preparing/facilitating investments preparing/facilitating ducing new new ducing by by by by for for for for for by by/for in in in in in in in in in in in in for collecting data collecting by by by providing by developing/intro testing a pilot a testing realizing a pilot a realizing financial mechanisms/instrument financial tourism schools hospitals businesses transportation that is that cult & forestry ure that is that that is that is that is that that is that by by by by cities/urban areas cities/urban by for on on on on on on on on on on on to on on on on on public administration public agri by developing rural communities/areas rural allowance SMEs public retail industry revolving fund revolving of freight of funds/subsidies low -interest loan -interest low construction financial incentives financial SWOT public lighting public lands suppliers existing buildings existing is private passenger private cost-benefit partnerships RES potential RES improving logistics improving mobility demand mobility (political) framework (political) training/education testing a prototype a testing good/best practice good/best existing measures existing technical feasibility technical market (conditions) market realizing a prototype a realizing public-private partnership public-private promoting a modal shift modal a promoting comparing scenarios comparing environmental impact environmental current energy supply energy current establishing (strategic) establishing for in expert advice/consultancy expert optimizing engine efficiency engine optimizing decreasing mobility demand mobility decreasing stakeholder requirements stakeholder that is legal energy audits/certifications energy efficiency potential efficiency energy through that is by using training material/programme training best available technology available best technical/scientific knowledge technical/scientific energy demand/consumption energy identify relevant stakeholders relevant identify financial (economic) framework (economic) financial energy performance contracting performance energy buses by air by at sea at on land on between by creating a creating by by establishing a establishing by office buildings office public buildings public for for industrial buildings industrial residential buildings residential business plan business building components building (the) production (process) (the) production for cluster retrofitting/thermal rehabilitation retrofitting/thermal developing new services/products new developing low/zero energy building technology building energy low/zero professional network professional target group target management structure management target groups target target groups target historic buildings historic through by using

PAGE 152 Annex 3 Concept map of categories wood crops manure sewage waste municipal (residues) material plant marine biomass marine brownfields/mining sites brownfields/mining on target group target target group target target group target on on from from from from from from from for for for sea water sea ground water ground iodies el biochar b bioethanol biomethane for fair for the production of production the for training excursions (public) event (public) id biofuel id staff exchange staff thermal biogas on shore on shore off pyrolysis fuel cells fuel large scale large small scale small biorefinery photovoltaic gasification heat pump combustion water source water knowledge exchange knowledge liqu information campaign information participatory process participatory multiplication/dissemination ground source ground artists others schools hospitals urban planning urban institutions organisations of land use planning use land transport planning transport for public procurement public including NGOs interest groups, for energy management energy business support mobility management mobility education/training by means through through through energy (strategy) planning (strategy) energy supply chain management climate change management for the production of production the for for the production of production the for biomass action plan action biomass energ audit energ by giving by classification collecting data collecting action plan action biomass hydrogen policy recommendations policy tidal power tidal energy strategy energy balancing/modelling wind power wind solar power solar wave power wave hydro power hydro local/regional energy action plan action energy local/regional research Sustainable Energy Action Plan (SEAP) Plan Action Energy Sustainable that must be performed for a a for performed be must that succeed. to strategy of steps to be taken, or activities activities or taken, be to steps of action plan refers to a sequence a to refers plan action universities energy performance certificate performance energy institutions monitoring/benchmarking and research geothermal power geothermal higher education from that is that for for EE construction for from from from from from from from EE refurbishment planning financing governance of increasing knowledge increasing for improving know-how/skills improving policy making policy management for by developing by by by that is that providers operators to tion ac that is that that is that that is that that is that that is that that is that is that service provider (public) transport infrastructure and s energy (infrastructure) harmonizing data harmonizing influencing policies influencing harmonizing policies harmonizing harmonizing standards harmonizing hanging attitude hanging SMEs c mobility behaviour mobility raising awarenes raising building capacities building changing practices changing changing behaviour changing energy consumption energy promoting the use of renewable energy renewable of use the promoting developing a common method common a developing harmonizing method/procedure harmonizing /institutions/governments practice refers to collectives to refers practice while law can compel or prohibit behaviours. prohibit or compel can law while guide decisions and achieve rational outcome(s) outcome(s) rational achieve and decisions guide policy refers to a deliberate plan of plan deliberate a to refers policy private sector behaviour refers to individuals to refers behaviour forestry sector industrial sector tourism industry green businesses agricultural sector private businesses construction sector by smart meters smart that is that by is to is of of of of of of of of by drafting by energy agency improving energy management energy improving smart grids/virtual power plants power grids/virtual smart sectoral agencies development agency environmental agency powered by powered by is to is means for objectives public sector increasing energy self-sufficiency energy increasing target group target national authorities is to is district cooling district European authorities regional/local authorities of of of of of for by using using by powered by powered reducing GHG emissions GHG reducing electricity by by waste improving power grid power improving waste heat waste heating district (CHP) power and heat combined energy storage technology storage energy renewable energy production renewable improving energy infrastructure energy improving e alternative fuels/propulsion systems fuels/propulsion alternative ty study in in the production of production the in national politicians political institutions European politicians survey regional/local politicians modelling by balancing measuring monitoring by carrying out carrying by by using by by using by by using by by using by needs analysis /innovation geodatabas ision support tool support ision technical study technical feasibili by guidelines/manual knowledge data base data knowledge dec case specific decision decision specific case criteria decision applicable generally criteria making investments making by promoting by boosting business development increasing energy efficiency energy increasing developing a (new) service (new) a developing developing a (new) product (new) a developing by by general public preparing/facilitating investments preparing/facilitating ducing new new ducing by by by by for for for for for by by/for in in in in in in in in in in in in for collecting data collecting by by by providing by developing/intro testing a pilot a testing realizing a pilot a realizing financial mechanisms/instrument financial tourism schools hospitals businesses transportation that is that cult & forestry ure that is that that is that is that is that that is that by by by by cities/urban areas cities/urban by for on on on on on on on on on on on to on on on on on public administration public agri by developing rural communities/areas rural allowance SMEs public retail industry revolving fund revolving of freight of funds/subsidies low -interest loan -interest low construction financial incentives financial SWOT public lighting public lands suppliers existing buildings existing is private passenger private cost-benefit partnerships RES potential RES improving logistics improving mobility demand mobility (political) framework (political) training/education testing a prototype a testing good/best practice good/best existing measures existing technical feasibility technical market (conditions) market realizing a prototype a realizing public-private partnership public-private promoting a modal shift modal a promoting comparing scenarios comparing environmental impact environmental current energy supply energy current establishing (strategic) establishing for in expert advice/consultancy expert optimizing engine efficiency engine optimizing decreasing mobility demand mobility decreasing stakeholder requirements stakeholder that is legal energy audits/certifications energy efficiency potential efficiency energy through that is by using training material/programme training best available technology available best technical/scientific knowledge technical/scientific energy demand/consumption energy identify relevant stakeholders relevant identify financial (economic) framework (economic) financial energy performance contracting performance energy buses by air by at sea at on land on between by creating a creating by by establishing a establishing by office buildings office public buildings public for for industrial buildings industrial residential buildings residential business plan business building components building (the) production (process) (the) production for cluster retrofitting/thermal rehabilitation retrofitting/thermal developing new services/products new developing low/zero energy building technology building energy low/zero professional network professional target group target management structure management target groups target target groups target historic buildings historic through by using

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