Market uptake of renewable energy technologies

Since the adoption of RES Directive in 2009, most Member States have experienced significant growth in renewable energy consumption and the EU and large majority of Member States are on track towards 2020 RES targets. Considering Member States' current and planned policy initiatives, their current implementation rates and the various barriers to renewable energy development, the need for improvements for some RES technologies, like offshore wind, advanced biofuels, CSP and geothermal, however, becomes apparent.

To ensure the level of growth needed to deliver the technology deployment rates at least to the level planned in the National Renewable Energy Action plans and their necessary contribution to the 2020 RES targets. EU targets for renewable energy, and to create the appropriate business environment for EU industrial leadership in low-carbon energy technologies, a number of important market-uptake challenges need to be addressed.

Scope

One of the following technology-specific challenges has to be addressed:

Photovoltaics: Tackling the bottlenecks of high penetration levels of PV electricity into the electric power network: PV electricity is not necessarily generated when mostly needed. Furthermore, small distributed PV systems feed into the grid possibly all at the same time challenging grid stability. To enable the effective and efficient integration of growing shares of PV power into the grid, the idea of PV producers becoming “prosumers” – both producers and consumers of energy – is gaining ground while “self-consumption” is becoming a major driver for the installation of small distributed PV systems. To facilitate this to happen, the following sub-challenges need to be addressed:

• Development of solutions for innovative system-integration and power-management for households/larger buildings (in general small distributed PV systems) including storage, particularly addressing the impact of self-consumption on the operation of the grid and the value of PV electricity when aggregated and offered to the wholesale market;
• Based on these solutions, elaboration of business and management models, including cost-benefit analysis and assessing economic feasibility for the European urban landscape.

Heat Pumps: Accelerate the penetration of heat pumps for heating and cooling purposes: Heating and cooling represents almost 50% of the final EU energy consumption and cooling demand is increasing. The cost associated with the purchase and installation of heat pumps remains an obstacle for a wider penetration on the market. In order to accelerate the penetration of heat pumps for heating and cooling purposes, proposals should address the following challenges:

• identification of the most promising cost reduction options for CAPEX, installation costs, and OPEX as well as development of EU wide scenarios of deployment; proposed prioritisation of R&I investments;
• development of solutions for innovative system integration and integrated power management for household/industrial buildings.

CSP: Facilitating the supply of electricity from CSP plants in Southern Europe to Central and Northern European countries - By means of CSP Southern European countries could supply renewable electricity on demand to the entire European energy market, including Central and Northern European countries – in particular, the Renewable Energy Directive foresees cooperation mechanisms to this end to allow Member States to meet their national targets cost-efficiently. The exploitation of this possibility would greatly facilitate the market uptake of CSP, but this has not happened so far. The challenge is to identify all issues (technological, legal, economic, political, social, financial, etc.) that may constitute an obstacle to the supply of renewable electricity on demand from CSP plants to Central and Northern European countries (other than those bottlenecks related to building new physical interconnections), and to provide options for addressing them in the context of a concrete project case.

• Wind energy: Increasing the market share of wind energy systems: One of the following specific sub-challenges need to be addressed: i) Develop spatial planning methodologies and tools for new onshore wind and repowering of old wind farms taking into account environmental and social impacts but also the adoption of the latest developments in wind energy technology; ii) Identify the bottlenecks for further deployment in Europe and the regulations which limit the adoption of technological innovation and their deployment possibilities; iii) Increase the social acceptance and support for wind energy in 'wind energy scarce regions' using, with solid involvement of social sciences and humanities and local communities and civil society to understand best practices and to increase knowledge about social and environmental impact of wind energy.
• Geothermal energy: Tackling the bottlenecks of high penetration levels for geothermal energy systems: Geothermal energy suffers from a level of penetration that is limited compared to its potential and there are growing concerns regarding the environmental and the social impact of geothermal installations. The challenge is to remove environmental and social concerns that pose barriers limiting the contribution of geothermal energy to the energy mix. The challenge is to assess the nature of public concerns and the elements that influence individual and group's perception of geothermal installations, to increase the understanding of the socio-economic dimension of geothermal energy, and to promote change in community responses to new and existing geothermal installations. Different technologies and possible technological solutions, with particular reference to reinjection of incondensable gases in deep geothermal plants, are key elements of the environmental and social impact assessment. Specific challenges related to deep and shallow geothermal energy require separate considerations. Risk management strategies and adequate technology selection, for example induced seismicity or emission reduction should be addressed, when relevant.

Sustainable Fuels: Facilitating the market roll-out of liquid advanced biofuels and liquid renewable alternative fuels: The challenge is to enable commercialisation of advanced biofuels to help meeting the 10% target for Renewable Energy Sources in the EU transport energy consumption by 2020 and then contribute to the EU targets of 27% share of Renewable Energy Sources in the EU energy consumption and of 40% GHG reduction by 2030. Fossil fuels and biofuels produced from starch, sugar and oil fractions of food/feed crops are excluded. Proposals shall address one or several of the following sub-challenges:

• Development of tools for predicting the fuel cost in relation to different supply and demand scenarios taking into account technology performance, economies of scale, feedstock costs, market demand, socio-economic aspects, etc. and including sensitivity analysis through conceptual engineering and cost estimation for the most common conversion routes;
• Development and implementation of innovative crop rotation schemes for the production of lignocellulosic biofuels with improved sustainability;
• Development of numerical tools for prediction of fuel and fuel blend properties and model validation to facilitate the certification process in the transport sector;
• Development of communication strategies to increase the public acceptance for advanced biofuels for the most common conversion routes;
• Setting up sustainable and cost-effective European biomass supply chains for the industrial production of advanced biofuels;
• Actions aiming at development and implementation of common standards and certification schemes for fuels at EU-level;
• Actions aiming at harmonization of national standards and certification schemes for fuels at a European level;
• Development of tools and actions for capacity building among relevant stakeholders of all steps in the advanced biofuel value chain aiming at substantially reducing biofuel costs at large scale.

Proposals should address one of the sectorial technology challenges mentioned above. The complexity of these challenges and that of the related market uptake barriers calls for multi-disciplinary research designs, which may include contributions also from the social sciences and humanities. Regional specificities, socio-economic, spatial and environmental aspects from a life-cycle perspective shall be considered. For all actions, the consortia should involve and/or engage relevant stakeholders and market actors who are committed to adopting/implementing the results. Where relevant, proposals should also critically evaluate the legal, institutional and political frameworks at local, national and European level and how, why and under what conditions these (could) act as a barrier or an enabling element.

The Commission considers that proposals requesting a contribution from the EU of between EUR 1 to 3 million would allow this specific challenge to be addressed appropriately. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts.

Expected Impact

It is expected to increase the share of renewable energy in the future energy mix and to increase the share of sustainable advanced biofuels and renewable alternative fuels in the final EU transport energy consumption or facilitate those increases in the future. In addition, contribution to market understanding for possible policy and regulatory development is anticipated.