“CLEAN ENERGY FOR ALL EUROPEANS”euromanuforum.com/documents/EFM_Papers_Presented_280217.pdf2017/02/28 · We can start to consider the impacts that the “Clean Energy for all

© www.deribaucourt.com

PAPERS PRESENTED AT THE EUROPEAN FORUM FOR MANUFACTURING

ROUNDTABLE & DINNER DEBATE ON

“CLEAN ENERGY FOR ALL EUROPEANS”

TUESDAY 28 FEBRUARY 2017

Room ASP A5G-1 Members’ Salon

European Parliament - Brussels

FINANCE FOR GROWTH

Following the adoption of the Commission’s package ‘Clean Energy for all Europeans’, the European Forum for Manufacturing held a Roundtable Dinner Debate on Tuesday 28 February 2017 in the European Parliament, chaired by Jo LEINEN MEP, Member of the Environmental Affairs Committee, S&D Germany and Chair of the Delegation for relations with the People’s Republic of China. We had the privilege to welcome Mr Yi WANG, Vice President of the Institutes of Science and Development of the Chinese Academy of Sciences as Jo LEINEN’s personal guest.

The objective of the Forum was to discuss the comprehensive approach adopted by the European Commission for implementing this package in a way which will:

- Lead to a transformation of Europe’s energy system to the benefit of consumers both private and professional, and

- Allow Europe to respect its Paris commitments and permit the EU to keep and further develop its lead manufacturing technologies in this area.

We focused on two horizontal topics:

Ø The priorities of European manufacturing industries during the ongoing energy transition

Ø How to make the clean energy package deliver, using examples and building on experience brought by executives from the engineering industries where Europe has strengths

The event was opened by a keynote speech by Dominique RISTORI, Director General DG ENERGY followed by interventions from Tomas HEDENBORG, President of Orgalime, and technology companies active in this area such as Schneider Electric, Siemens, ABB Italy and GE Europe for the first session and Jean-Jacques MARCHAIS, Chairman of Orgalime’s Energy working Group, Electrolux, Bosch and Diehl for the second panel of the meeting.

We were pleased to welcome from the Parliament’s Industry, Research & Energy Committee for further contributions: Claude TURMES MEP - Rapporteur Governance of the Energy Union, Martina WERER MEP - Rapporteur Market Design, Benedek JÁVOR MEP - Shadow Rapporteur for the Energy Efficiency Directive, Sean KELLY MEP - Shadow Rapporteur for Renewable Energy Sources and Clare MOODY MEP, active member of the ITRE Committee.

The highlights from the presentations are included below. Ø WELCOME

PAPERS PRESENTED AT THE EUROPEAN FORUM FOR MANUFACTURING ROUNDTABLE & DINNER DEBATE

• • •

European Forum for Manufacturing – Tuesday 28 February 2017 – European Parliament - Brussels� 1

from left to right, Dominique Ristori, Jo Leinen MEP and Antony Fell Jo LEINEN, Member of the European Parliament

I am very pleased to welcome Dominque Ristori Director General DG Energy, the representatives of European manufacturing companies and of course my Parliamentary colleagues from the different political Groups to this European Forum for Manufacturing. I would like to focus in the first panel on: 1. ENERGY TRANSITION : PRIORITIES OF EUROPEAN MANUFACTURING

INDUSTRIES

Jean-Jacques MARCHAIS, Senior Expert in Energy matters, Schneider Electric

I will start with few words on Schneider Electric. Our objective is make sure that energy is available for everyone, everywhere at any time in a safe – reliable-efficient-sustainable and connected way. This is the role of our 160 000 people generating 25-billion-euro revenue balanced in terms of geography (27% Europe, 27% Asia –Pacific, 28 % North America and 18% elsewhere) as well as on end markets (building, industry, infrastructures, it) In Schneider Electric we have for the energy transition a simple formula: 3D+E Decarbonisation


• • •


The Paris agreement came into force end of last year. This is good (one year for ratification is 8 times faster than for Kyoto and this is a sign) however 400 ppm CO2 was reached last year, we cannot discount our ambition or delay mandated measures; EU has a CO2 target: less 40% in 2030. What is needed on top of this target are mandated measures, implemented measures and clear feedback on results.

• The bulk of decarbonisation will come from Energy Efficiency and Renewable and with both at par in term of contribution and Energy Efficiency is the cheapest source of energy: let us not forget and think always EE first.

Decentralization: If you look at the 2030 target of Renewable energy (27%) it means in fact 50% for renewable electricity . Most of these sources will be decentralized, more than 90% of these renewable sources are connected on the distribution network today and this will go on. Together with local generation, storage is coming (investments are on the way, link it with EV) This leads to paradigm changes, first at demand side where a very significant transition has to happen and then on the distribution networks where planning and operation will have to change very significantly

• Demand side transition need the energy user to completely evolve into a prosumer offering distributed energy resources on a market where his flexibility and generation surplus have real value. Automation, management systems, connectivity are critical for this to happen.

• Distribution network planning and operation will significantly change, be more flexible – smart to manage double way flows of both energy and information. Centralized generation will coexist with decentralized resources and this is a challenge and a new role for network operators.

Digitization: More sensors, more monitoring more automation & control, more data handling and processing that is what we are already living with and this will develop significantly as an enabler of the energy transition

• Of course this is not just about technology, it is about flexibility, effectiveness, efficiency it is about services. It is providing to energy users for better energy efficiency and renewable integration: better planning, better operation optimization , better assets management , higher efficiency with augmented reality for example

• Of course it will be key to have trust and data privacy and cybersecurity are issues where policies regulation and standards will be key enablers.

And E? E like electrification, electrification of usage (heat pumps and EV for example but also industrial processes) as electricity at end use does not emit CO2 and is now everyday lower in its CO2 content (70% of ww added power generation capacity in 2015 was from renewable according to IEA )


• • •


To conclude I would say that demand side transition (including electrical distribution grid) is where the main challenges and opportunities stand. Technology (automation & software) is there, costs are going down every day however there is a need of a clear policy and regulation framework for the investments to be made at the right level and the right pace to get growth, jobs and industrial development in the EU. The clean energy package proposal is a good encouragement signal, few things can be improved however, policy hesitation, flip flap regulation would for sure make Europe losing the opportunity of first mover advantage.

Paolo PERANI, Strategic Business Develoment Manager, ABB Italy

Summary of ABB’s message

We can start to consider the impacts that the “Clean Energy for all Europeans package” will have on our lives and on our infrastructures by looking at what was the result of previous targets. The 20 – 20 – 20 targets also addressed decarbonisation, efficiency and renewables. � The impact on the network is clear and visible. We have smart grids, then a prospect

now a reality. We have products in the network and in our catalogues that did not exist 10 years ago

� Look at the impact on our homes, with so many solar panels integrated in our roofs � Consider the impact on factories, consider the impact of the eco-design directive and the

upgrades of the huge European installed base Europe has proven that when there is a will there is a way. This is why ABB welcomes the package. Out of several topics we are pleased to see in the package, we would like to pick three: � Regulatory incentives can drive the deployment of efficient and smart grids. Our

technology is ready, but regulation must enable investments. In ABB we pilot our


• • •


technologies on our own plants, like microgrids, but in some countries this is difficoult, as you have more regulations to fight than standards to follow

� Free flow of energy and data is needed to manage a decentralized power system. The EU has set up an important process to define and support Energy Projects of Common European Interest (PCIs), but the real flow of energy will be enabled by a common European data format. Coming down to our houses, we do need a common European data format as, for example, we are currently experiencing difficulties when we try to connect appliances from different manufacturers to home automation system

� Smart and energy efficient buildings. We support the energy performance of building

directive, which supports energy management systems and will foster the uptake of electric vehicles.

We are ready to take the challenge to make this energy dream a true reality for Europe, and we hope that what was called the “winter package” will turn into a “technology spring”.

2. MAKING THE CLEAN ENERGY PACKAGE DELIVER

Jean-Jacques MARCHAIS, Chairman of the Orgalime Energy Working Group

It is difficult to summarize positions on a package of more than 1500 pages in a paper of 15, we in ORGALIME took the challenge and this position paper is now available . My personal challenge this evening is as chair of the ORGALIME Energy working group to summarize this paper in less than 5 minutes. Let us start by saying that we are encouraged by this proposition from the commission and are seeing a number of opportunities to accelerate the development of the energy transition and specifically the three mutually reinforcing no regret options of more energy efficiency, more renewables and smart and flexible distribution grids. We see as critical to keep consistency of the package and to make sure that this consistency between the different instruments is kept during the negotiations and evolutions:


• • •


• developing active energy consumers for instance is impacted and dealt in a number of articles of either the EPBD (buildings need to be equipped with proper technology – e.g. automation and communication) in the RES directive (active consumer needs full right to generate and self-consume) in the electricity directive (flexibility of active prosumer need to get value) and even in the electricity regulation (structure of network charges may impact flexibility reward)

• another example is if deleting demand response provision in the EED it needs to make sure that these provisions are in the market design and not watered down

Boosting the full potential of digitization, empowering consumers, making sure that demand flexibility is rewarded whatever is the user: individual, aggregated, a community, a district are other key aspects. Going by instruments and focusing on main issues what we have to say in short is : For EED, we welcome the 30% binding target, however taking into account the benefits of higher target (40%) as door needs to be kept opened to increase it later

For EPBD: it is time to mandate use of profitable technology - Quoting the EPBD impact assessment: “The timid recommendations in Article 8 of the EPBD have not been sufficient to overcome barriers preventing the integration of technical progress on key enabling technologies for 'smart buildings'” Taking into account that investment in a typical Building automation and control systems has a pay back of three years, It is really time to make a step and to mandate use of these digital technologies not only for Energy Efficiency but also to integrate buildings as prosumers in smart distribution grids : non-residential buildings whose total primary energy use is more than 250 MWh per year are equipped with building automation and control system For Electricity market design (Electricity regulation , Electricity Directive ,ACER regulation and risk preparedness directive )


• • •


The principle that generation, storage and demand response shall participate on equal footing on the market needs to be enforced. Demand side resources need to have access to all markets (wholesale, balancing , ancillary services) Consumer empowerment with clear right to self-generate, to self-consume, to store , to trade and sell energy and to aggregate is a key components and shall not be watered down Dynamic retail prices should be the rule applied to the three components of retail price (Energy, Network , Taxes & levies) New ways to remunerate DSO shall be introduced to incentivize their investments in smart grid For RES directive RES development will go hand in hand with efficiency , storage, self consumption and smart distribution grid RES development will include all sizes of generation from individual to main farms ; RES support schemes are still necessary for small (individual) and medium (communities) sizes and this shall be made more clear in the package For the regulation on governance of the energy union : We welcome the general mechanism based on integrated national energy and climate plans We recommend strengthening transparency of the governance mechanism through making Member States’ integrated plans, reports and summaries publically available and by introducing a structured and inclusive stakeholder mechanism at, both, national and EU level To conclude: The success of this package will in our view depend on adopting a final package that leads to effectively adjusting the EU’s energy policy acquis to the irreversible trends of Digitization, Decarbonisation and Decentralization arising for the period 2020-2030, and especially in the following respects:

• Preparing Europe for successfully managing the coexistence of centralized and decentralized energy production.

• Enabling Europeans to manage energy according to real time information with prosumers at the core and resolves pending questions regarding data handling and data processing.

• Organizing an ecosystem with the necessary flexibility to allow this modernization to

happen in Europe.


• • •


Viktor SUNDBERG, Vice President Environement & EU Affairs, Electrolux

The improvement of energy efficiency has been impressive for appliances over the past decades. The EU Energy Label in combination with consumer interest and demand, and innovation of producers, has been of central importance for this evolution. For the coming years we can expect further improvements with appliances, however unfortunately the same amount of saved energy and CO2 avoidance as over the past decades cannot be expected with energy efficiency of appliances.

Smart appliances may provide a further potential to contribute to reduce CO2 emissions from electricity generation, by providing Demand Side Flexibility (DSF) to reduce peak load on the grid. A success in this area requires that the consumer is in the center and will create the necessary demand for such products.

The EU Commission package looks promising with the focus on:

• A fair deal for the consumers! • All consumers are put in the center of the Energy Union! • Every consumer will be able to offer demand response and receive a financial reward

related to the flexibility provided! • More dynamic electricity prices reflecting spot market price, scarcity and real cost!

Appliances can potentially contribute to further CO2 emission reduction through Demand Side Flexibility (DSF). This may reduce peak load on the electric grid and thereby reduce the need to start electric generators powered with gas turbines, thereby reducing CO2 emissions.

This is not only about delaying the start of the appliance such as washing during the night at low electricity tariff (delayed start of appliances is not optimal as it is an inconvenience for the consumer).

Heating elements up to 2kW exist in all ovens, washing machines, dish washers, etc. These could be remotely switched on/off for short durations during the operation of the appliance. Intelligent control would be required to ensure the performance of the appliance is not negatively affected. The clothes still need to get clean and the food cooked well. This requires “smart appliances” and an infrastructure where appliances can communicate with the electric grid. The Commission eco-design LOT 33 study for smart appliances concludes the additional cost for the necessary electronic control to be in the range of 15-20€/appliance.


• • •


The consumer needs to be motivated to invest this extra amount when purchasing an appliance. Therefore, consumers have to get rewarded for providing the DSF to the electric grid. According to the Commission eco-design LOT 33 study the annual value of a dishwasher providing DSF to the grid could be 4,1€, and for a washing machine 2,4€ in 2020. In 2030 the values are estimated to have increased to 14€ respective 7,6€.

This means the 15-20€ additional cost of the appliance could have a payback time of 8 years initially, down to 1 year when the system has become mature.

The Commission package is putting the consumer in the center and has the strategy to reward consumers financially for providing DSF, so this looks promising.

The reward needs to come from the electricity providers who will benefit economically from appliances providing DSF (as the electric supplier could avoid costly use of electricity generators powered with gas turbines to handle peak load).

An example of the situation today, Belgium

• High tariff = week days • Lower tariff = nights and weekends • The difference between these tariffs is approx. 4€Cent/kWh, which is approx. ¼ of the

electricity cost • A normal family using a washing machine 220 times in one year only at the low tariff,

will save approx. 7€/year (compared to high tariff). This is with a modern energy efficient washing machine.

• The electricity cost for washing the 220 cycles only at high tariff is approx. 40€/year. • There is a fixed yearly cost of approx. 100€ for the electricity connection. • Fixed cost does not stimulate behavioral change

Recommendations:

• Ensure that consumers will get rewarded for providing DSF to the grid. • Explain to the consumer what can be gained with DSF • Increase the differentiation of the electricity tariffs, both in terms of value and time (real

time electricity pricing) • Remove annual fixed cost from consumer electricity contracts. • Aggregate appliances to make it possible to compete with large industrial electric users

that already provide DSF, and to compete with providers of peak electricity generation. • Do not mandate that appliances have to be smart and have to provide DSF. This would

not create the necessary interest among consumers and demand for the technology would not be created. It would jeopardise flexibility and innovation. It would remove the reason for electricity providers to reward consumers for providing DSF.

• Accept that the role out of smart appliances and DSF infrastructure will have to take several years.

• The EU Commission eco design LOT 33 for smart appliances has to be considered together with the Clean Energy for All package. These are not two separate ambitions.

[email protected], +32-498-94 77 50


• • •


Annette WAGNER, Head of EU Affairs, Bosch

Dear members of the EU Parliament, Ladies and Gentlemen, You may know Bosch from our green power tools or the household appliances with the brands of Bosch and Siemens. But did you know that we are also leading in heating systems with the brands of Buderus, Junkers, Volcano or e.l.m. leblanc? If we are discussing the energy winter package, another facet is very important: our industry technology: Bosch is not only an expert in drive and control technology, but also in packaging machines for foods and pharmaceuticals. Both processes and machinery can save a lot of energy by making them more efficient (introducing a stand-by mode, e.g.) but also through digitalization of processes. And there I am in the middle of the winter package: EED • Bosch supports the raise to 30% energy efficiency • What is the Bosch example? As stated in introduction: both machinery and processes still have

potentials – and potential is growing through digitalization • Focus of this panel 2: how can energy package deliver? • Very important question since energy efficiency target is only EU-wide binding • Therefore: strong governance needed • Bosch welcomes its binding nature • Important for governance framework: a) clear definition of both ambition and delivery gap, b)

clear milestones to monitor development and c) clear adjustment and control mechanisms with COM empowerment to enforce

EPBD • Touch upon interesting aspect for Bosch: smartness indicator • What is the Bosch example? App can remotely control whether you are leaving the house and

lower the heating, camera system can detect that landlord comes home with 5 friends and lowers the heating, even smoke detector is able to analyse number of people in the room and adjust heating and cooling system accordingly

• But 1: COM remains very vague on how the label should like and what it could include. We invite

the EP to make concrete and strong suggestions


• • •


• But 2: Energy can be saved through smart control of the heating and cooling system, but the modernization of the European heating stock remains the upmost challenge since the saving potential there is even higher

Market Design • What is the Bosch example: in Sweden the Bosch heat pump is connected to the end

consumers’ smart phone app. Stock market prices are passed through to end consumers. End consumers thus can choose to put on their heat pump when electricity is cheapest

• Technology is there. Business models are there. Market conditions for the empowering of the

end consumer were missing so far • End consumer need financial incentives in order to participate in the energy market Bosch welcomes the introduction of flexible tariffs that allow a true participation of small and decentralized market actors

Frank GUTZEIT, Member of the Board, Responsible for Diehl Metering Group, Diehl

The sustainable utilization of natural resources and energy is one of the most important worldwide issues of our time. The gradual transition to renewable energy calls for smart monitoring and optimized consumption networks. With high-performance and future-oriented solutions we support water and energy suppliers by helping them make their processes simpler, more efficient and more cost-effective – for everything from metering through to energy services. This enables us to take advantage of the economic as well as the ecological opportunities of the energy revolution. With smart tariffs, customer services, billing and leakage recognition, for example. Diehl Metering supplies solutions for the intelligent use of water, thermal energy, gas and electricity. We support energy providers all over the world with our meters, systems, software and services, all from a single source. Diehl Metering produces more than 7 million meters and 5 million wireless communication modules each year. We have over 150 years of experience in the development and production of accurate measurement technology. As a multi-utility solution provider we enable the handling of water, thermal energy, gas and electricity via one single system infrastructure. This


• • •


reduces costs per meter point or per reading and lays the foundation for various synergies and savings. According to our vision we support especially our European customers in their overall goals:

• Putting energy efficiency first • Global leadership in renewable energy • A fair deal for consumers.

In the area of smart metering we are prepared to accelerate the introduction of intelligent meters to give consumers more control over their energy costs and hence enforce energy efficiency. The EU requires the faster deployment of Smart Metering infrastructures not just for electricity meters but also for sub-metering including thermal metering (heat and cooling). This means:

• From 2020: all new meters must be readable remotely • 2027: all installed meters must be readable remotely • Customer information must be provided every 3 months and every month in the long

term (monthly billing). • Each invoice shall contain information on the consumption behavior of the last year

in the same billing period • In addition a benchmark with the average consumption of comparable customers has

to be delivered.

As visible effects on the energy market we see:

• Metering and billing will be fully automated and multi-utility-based. • Additional services for end consumers based on transparent energy behavior through

smart metering (fair billing). • New markets with totally new company alliances (e.g. Diehl – Rockethome – Dimplex). • Need for common standards for Metering as a part of the whole Internet of Things (IoT). • Less need for expansion of the electricity grid through intelligent metering services (A

dena study shows that the rollout of Smart Metering can reduce the need for the expansion of the distribution grid around 36 per cent).

The key messages from the industry’s point of view are :

• Europe needs more investment in roll-out schemes for Smart Meter infrastructures to make the energy efficiency obligation a success

• Smart Meters should be an integral part in smart buildings • The more we change the European energy mix from carbon- and fossil-based fuels to

RE energy sources the more we need to introduce more flexibility and accuracy into energy consumption – which we can only do with Smart Metering.

• All Europeans should be entitled to smart meters and a dynamic electricity pricing contract


• • •


Diehl Metering is one division of the globally acting Diehl Group, Germany – alongside the corporate divisions of Metal, Controls, Defence and Aerosystems. This means we have direct access to high-end technology from various sectors. Thanks to our stable ownership structure we have access to the capital required for vital investments. Thus our customers benefit from cutting-edge technology along with our outstanding integrity and safety.

Sean KELLY, Member of the European Parliament – Shadow Rapporteur Renewable Energy

Sources

Thank you for the opportunity to speak here this evening. I am pleased to see such interest on this important topic and one that I have a strong interest in, both personally and as rapporteur for the recast of the Renewable Energy Directive.

I would like to begin with some words on the wider context of decarbonising European industry. We should remember European Energy Intensive industries have already made significant strides in reducing emissions and the carbon intensity of their processes, and I think that sometimes this is not recognised enough. Steel production has reduced its emissions by around 40% since 1990, the chemicals sector by 60% - these are not insignificant advances, and advances which were made during a period of growing competition from other producing regions. However, the challenge is not complete, and industry still needs to drive towards lowering its emissions further - this is the cross-sector challenge we are faced with, particularly following the Paris Agreement in 2015.

A few weeks ago, the European Parliament passed its final text on the reform of the Emissions Trading System. A well-functioning ETS is the crucial tool to incentivise the uptake of cleaner technologies in the industrial sector and to push towards further decarbonisation. I must say I was extremely happy with the final text as I believe that there are a number of provisions in there that are very pragmatic and will help the industry to decarbonise without being needlessly exposed to carbon leakage - which would lead to increased emissions globally. The provisions will ensure we can implement the Paris agreement, while at the same time ensuring the needed protection to European Industry, which provides vital employment and value across the Union.

Additionally, what I believe to be an extremely positive element of the Parliament’s final text relates to the Innovation Fund. The Parliament’s proposal to increase the innovation fund to 600 million allowances could be crucial to help the industry to develop the new innovative and low-carbon technologies that will drive us towards a low carbon system. I now just hope that these provisions will make it through the Trilogues - this is crucial.


• • •


Although the ETS is not part of the Commission’s so-called “Clean Energy Package”, it is very much interlinked, and I hope it will function properly in the coming years to deliver the right investment signal to push us towards our targets, and related to my own work in particular, the Renewable Energy target.

I am greatly looking forward to the coming work on the recast of the Renewable Energy Directive, and I am pleased to be able to share some initial thoughts on the proposal with you here this evening.

First of all, the target. There will be a big discussion around the proposed 27% Renewable Energy target. Views will certainly differ, with many believing 27% to be perfect, others believing it to be not ambitious enough. My goal in these discussions is to ensure that we arrive on the right target that will not only help to greatly reduce emissions in the energy sector but also that will send the right market signals to investors in Renewable Energy. We should remember that renewables are growing fast and we should consider the entire technology supply chain, not to mention the interests of manufacturers in this regard, when we set the target. It must allow for the continued expansion of this growing industry.

Here in Parliament, we must be mindful that, on a few occasions now, Parliament has endorsed the higher target of 30%. Additionally, the costs of certain Renewables, such as Photovoltaic and Wind, have fallen significantly, and so we should look to align the legislation with the latest numbers as far as possible to be consistent with reality - if we can achieve more without increasing the needed investment then we should seek to do so. We must also bear in mind, that a “no policy action / business as usual” scenario has been modelled to achieve a Renewables share of as high as 24.3% by 2030 - if this indeed was accurate, 27% would seem rather unambitious, and so this is something I look forward to discussing in the coming months and arriving at the best outcome.

Heating and Cooling is another aspect that I think is important, and perhaps of particular interest given it is a new element in this proposal. Heating and Cooling is an area in which I see significant potential to decarbonise, especially given how reliant we are on fossil fuels in this sector; notably gas, but also heating oil in more rural areas that are off the gas grid. Supply of heat is obviously an important aspect for the manufacturing sector, and I think that as we face into a debate on what the best option is to decarbonise heat in Europe, it is important to consider a few aspects.

First of all, there are different types of heat we are talking about and perhaps there is a need to differentiate between these different types in the context of our work on this directive. I tend to agree that electrification is an important solution to decarbonising the heat sector, but perhaps not to cover the entire EU heat demand as has been suggested before. Electrification of the entire heat sector could be difficult technically due to what would be a huge increased and seasonal electricity demand, but also for small-scale low temperature residential heating, it could be a waste of high value electricity. That said, at the industrial scale, electrification could be a very efficient use of energy and means to decarbonise.

For this reason, we should note that the Renewable Heating and Cooling sector has made, and continues to make, great strides in increasing the deployment of its technologies around Europe over the past decade; this has led to much decarbonisation in the small to mid-scale sectors. We see more and more biomass boilers, solar thermal panels, and geothermal heat pumps across the EU as consumers look to lower their heating costs, and the manufacture of these products are high value industries across Europe. We need to look at what decarbonisation options are most appropriate for the different heating purposes, and I look forward to considering this in the discussions on the Directive, and helping to give Renewable Heating and Cooling the needed signals for continued investment.


• • •


To conclude, the recast of the Renewable Energy Directive is a key part of this clean energy package. I am delighted that I will have the chance to work on the file that will shape European renewable energy policy for the decade to come, and decide whether we will achieve our goal of remaining the world leader in renewable energy technologies. My number one priority for the upcoming work is to ensure investor certainty. Ensuring the climate is right to attract investment into the European Renewable Energy sector is the key challenge we face and it will be important that we put in place an ambitious, but achievable and stable legislative framework.

Europe’s share of global investment in Renewable Energy has reduced from 50% in 2005 to 21% in 2014 - the rest of the world is moving fast. Additionally, EU investment in renewable energy dropped around 20% between 2014 and 2015 - for me, this is simply an alarming statistic and if we saw this statistic in other sectors, we would be demanding action to rectify it. At that rate, we will simply not maintain world leadership in Renewable Energy Technologies. In terms of jobs, the renewable energy sector employed over a million people in Europe with a turnover of around €144 billion in 2014. This shows the potential for job creation in this growing sector, but also the potential problems we could face if we do not deliver a stable, pro-renewables framework.

I look forward to the challenge ahead.

Clare MOODY, Member of the Euopean Parliament

Introduction: • The Commission is right that investment is needed to ensure the success of innovation in

this sector and to achieve our COP21 climate commitments

• The Commission communication promises a huge amount in terms of funding over the next five years, but I worry about the viability of their proposals for the following reasons:

Overall budgetary challenges

The current MFF is in its final period, with serious gaps between its commitments and

payments. Horizon 2020 and CEF are already under serious pressures due to backlogs and the reallocation to EFSI. The migration crisis has seriously impacted our budgetary flexibility.

The next MFF will present more challenges, with Brexit, defence, the US situation, and a

general trend towards smaller EU budgets.


• • •


Commission proposals on financing the clean energy package • Financial instruments to boost private sector innovation

• Expanding funding and scope of the InnovFin finance for innovators joint initiative -

doubling existing budget of 24bn from Horizon 2020 funding • Cleaner Transport Facility to focus on targeted collaborative initiatives • European Innovation Council to better support potentially disruptive technologies,

innovations, and business models • Deploy more than EUR 2 billion from the Horizon 2020 work programme for 2018-

2020 to support research and innovation projects in four priority areas: (1) Decarbonising the EU building stock by 2050: from nearly-zero energy buildings to energy-plus districts; (2) Strengthening EU leadership on renewables (RES); (3) Developing affordable and integrated energy storage solutions; and (4) Electro-mobility and a more integrated urban transport system. This represents a 35% budget increase in annual terms from 2014-2015 levels in these four areas.

• A pilot project to cherry pick close to market innovation projects with Horizon 2020

funding • Launch a flagship Energy Innovation inducement Prize for EUR 5 to EUR 10 million

to reward a breakthrough innovation The Commission also promises to combine these initiative with research in Climate, space, transport and social sciences fields. Why these are to be welcomed, but are also problematic : • There isn’t enough money for all of these proposals, even with the Commission’s

commitment to deploy the majority of these initiatives with financial instruments • I am seriously concerned about the extent to which the Commission is directing funding

to “champion” particular projects and squeezing the funding for Scientific Excellence in pillar one of Horizon 2020 - which is where the majority of innovation occurs.

• The virtue and success of Horizon 2020 is that pure ‘undirected’ research is often the most innovative and “disruptive.” It is hard to be disruptive with the Commission looking over your shoulder.

• And the reality is that Horizon 2020 calls are already directed. They have themes, objectives and actions based around societal challenges to which researchers, SMEs and companies respond and bid.

• I welcome some of the new proposals designed to inspire closer to market innovation, especially for SMEs, such as the European Innovation Council.

• However, the total scope of these proposals amounts to a significant shift from grants towards the use of financial instruments. In and of itself this is not problematic.

• HOWEVER, if we remember that the intent of this funding is to be innovative, disruptive, and most importantly *risky* - I am unsure about the appropriateness of financial instruments for this purpose.

• The Commission has given no substantive analysis on the success of current financial instruments funding under EFSI, but the Parliament’s current report on the implementation of EFSI notes with concern reports that projects receiving EFSI funding could have been financed in other ways. In other words, they did not meet that additionality criterion that is essential to justify the use of financial instruments,

• A successful funding programme for risky, disruptive innovation should fund a lot of


• • •


unsuccessful projects. It is only through trial and error that true innovation occurs. • I am concerned that these proposals will actually damage the process of truly disruptive

innovation, by cherry-picking low hanging fruit, which will not achieve the aims we seek. I think you should be concerned too.

Additionally, the Commission’s proposals to combine with work on for example, space research through Copernicus, ignores the fact that significant budgetary pressures will limit the capacity of Copernicus to develop extra facilities and functions beyond 2020. Welcome changes to state aid rules for research & innovation • The Commission will also examine, when reviewing the guidelines on State aid for

environmental protection and energy 2014-2020 how those rules, together with the State aid rules for research & innovation investments, enable Member States to stimulate innovation in renewable energy technologies and solutions.

I welcome this proposal and think it is essential to ensuring we streamline and maximise the possibilities for European funded research and innovation. Ø CONCLUDING REMARKS

Tomas HEDENBORG, Orgalime President, Fastems

Dear Members of the European Parliament, Ladies and Gentlemen, As we come to the end of a very interesting and pleasant evening, I would first of all like to say thank you to EFM for hosting this event with us – and thank you to all our speakers and all of you for attending and contributing to such a lively discussion. Events like this are an excellent platform for exchanging views and deepening our understanding of the challenges we are facing. They give legislators an inside look into what is happening on the ground in our industry – and for us, as industry professionals, they provide a greater appreciation of the political dynamics that shape the regulatory environment we operate in. This two-way exchange is vital, as working closely together is the key to producing effective and workable policy solutions. I have greatly appreciated the opportunity this evening to hear many valuable insights from both sides of the fence. From the perspective of colleagues working in our sector, it is clear


• • •


that they see the transition unfolding in the energy space very much as an opportunity. The European engineering industry already has the technologies and the know-how to provide innovative solutions that can make this transition a success. As the sector at the forefront of the digitisation of industry, we have first-hand experience in integrating digital technologies to make Europe’s energy system, our production and entire economy more energy and more resource-efficient. Our experience and expertise in renewables can also make a significant contribution to reducing dependence on high-carbon energy imports. Moreover, the engineering sector can also support the ongoing decentralisation of the energy system through, for example, smart distribution grid and energy management solutions that unlock the potential of digitisation and turn consumers into “prosumers” that actively participate in the energy system and manage their own energy. European manufacturers are world leading in these technologies – but mostly selling these technologies outside of Europe. What is needed now is your political commitment and that of Member States to implement a framework that will help us bring all the benefits of these innovations to our home market and to all Europeans. From the side of the legislators here today, it has been really encouraging to hear such strong support for a successful energy transition. The rapid ratification of the Paris Agreement in autumn last year, followed by the announcement of such a comprehensive energy package, are two clear indications of the strong commitment to action. The task now will be to keep up this impressive momentum and preserve the comprehensiveness of the Clean Energy Package throughout the legislative process and national implementation. Let us be clear, if this package is finally to be a success for transition to a modern low carbon system, it will need a firm foundation built around a number of core pillars. By committing to ‘energy efficiency first’ we can tap into the vast potential for energy savings in many areas, especially in buildings and transport. More energy efficiency, together with the other ‘no-regret’ options of more renewables and smart, flexible distribution grids, will provide a huge leap forward in terms of decarbonisation – bringing us closer to the Paris goals. And by putting in place a framework that unlocks the full potential of digitisation and empowers consumers, we can encourage development of innovative solutions for how we manage our energy supply. Finally, we must not forget how important a transparent and inclusive governance framework will be: this the key to ensuring successful implementation. You have heard a number of ideas from my fellow industry speakers this evening. You will find details of what we propose in the position paper we have distributed this evening. Here Orgalime has outlined detailed recommendations for how we can achieve these aims across the 8 key parts of the Clean Energy package. We hope you will support us in pursuing these goals to make the new legislation work for all Europeans. We in the engineering sector have a complete policy vision for the future of energy in Europe – and the technologies to make it a reality. It is a core part of the overall vision that I developed earlier today at the EU Industry Day. As an organisation which represents companies with a turnover of some 1900 billion euro – about the GDP of Italy – and that employ nearly 11 million citizens in Europe, we see the potential for this package to allow our companies to retain leadership in this core technology area, and to continue to boost growth in employment and in output as we have succeeded in doing in Europe for the last three years. If we get it right with your support, we can achieve a win-win for all stakeholders – for citizens, for their jobs, for the environment and of course for industry. So thank you again for being here with us tonight. This evening has been a kick off dialogue for us. Orgalime’s Secretariat will be pleased to follow up with you and your offices after the event to deepen the discussion. And soon we will also be arranging for further events together


• • •


with the EFM on targeted parts of the package. I will now hand you over to Antony Fell, Secretary General of EFM, who will say a few closing words.

Antony FELL, Secretary General, European Forum for Manufacturing (EFM)

We wish to thank most warmly Jo LEINEN MEP for his excellent chairmanship and for the time devoted to this meeting. A warm thank you goes to Director General Dominique RISTORI from the European Commission for his attendance with us tonight.

We would also like to thank ORGALIME for the sponsorship of the evening as well as our MEPs and company speakers from the manufacturing sectors for their contribution to this meeting.

Please see hereafter Orgalime’s policy papers:


• • •



• • •



• • •



• • •



• • •



• • •



• • •



• • •



• • •



• • •



• • •



• • •



• • •



• • •



• • •


Documents

“CLEAN ENERGY FOR ALL EUROPEANS”euromanuforum.com/documents/EFM_Papers_Presented_280217.pdf2017/02/28 · We can start to consider the impacts that the “Clean Energy for all