RESGen. RES Generation From Research Infrastructure to Sustainable Energy and Reduction of CO2 Emissions REPORT. Grant agreement No

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1 RESGen RES Generation From Research Infrastructure to Sustainable Energy and Reduction of CO2 Emissions Grant agreement No REPORT WP Number and title Task Number and title Deliverable Number and title Author and Partner Date and Version Dissemination Level WP2 Boosting the Regional Sustainable Energy Concept Task 2.1 Sustainable Energy RTD Offer, Demand and Related Policies D2.1 Directory of Regional RTD Offer, Demand and Related Policies in Sustainable Energy All (Coordinated by partners of Basque Country region) 25 January 2010, Final PU (Public)

2 Abstract: This document contains overviews of regional sustainable energy situation and policies as well as descriptions of RTD demand and supply directories in RESGen project regions. The main aim of this task was to describe and analyse the alignment of sustainable energy research demand, supply and policies. It serves an important role in information sharing and learning within the RESGen regions as well as between the RESGen regions. The document is divided into six Chapters first Chapter is giving an introduction followed by short background Chapter 2. Chapters 3, 4, and 5 are each presenting the results of Ostrobothinia (Finland), Basque Country (Spain), and Northern Hungary (Hungary) regions, respectively. The last Chapter summarises the efforts done. The Appendices contain the directories of each region that are described in the main part of the document. COPYRIGHT Copyright by the RESGen Consortium. The RESGen Consortium consists of the following institutions: Regional Council of Ostrobothnia (OSTRO) Coordinator Finland University of Vaasa Vaasa Energy Insitute (UWASA) Contractor Finland Oy Merinova Ab (MERINOVA) Contractor Finland Fundación Labein (TECNALIA LAB) Contractor Spain Ente Vasco de la Energía (EVE) Contractor Spain Cluster de Energía del País Vasco (CEPV) Contractor Spain North Hungarian Regional Innovation Agency (NORRIA) Contractor Hungary Károly Róbert College (KRF) Contractor Hungary Cornwall County Council (CCC) Contractor United Kingdom This document may not be copied, reproduced, or modified in whole or in part for any purpose without written permission from the RESGen Consortium. In addition to such written permission to copy, reproduce, or modify this document in whole or part, an acknowledgement of the authors of the document and all applicable portions of the copyright notice must be clearly referenced. All rights reserved. 2

3 Table of content: 1 Introduction Objective and Purpose Definition of Sustainable Energy Concept Method Lessons Learnt Structure of the Report Background Overview of the Renewable Energy Policy of European Union Recent Rrogress Made towards 2010 Target Progress in RESGen Countries Sustainable Energy RTD Demand, Supply and related Policies in Ostrobothnia Sustainable Energy Regional State of Play Energy Demand and Production Regional Overview Renewable energy Situation and Perspectives Energy Self Sufficiency Situation and Perspectives Overview of Sustainable Energy Policies Sustainable Energy Policies from National to Regional R&D Policies on Sustainable Energy from National to Regional Summary of Policies Regional RTD Demand on Sustainable Energy Overview of the Regional Company Base Summary on RTD Demand Directory Regional RTD Supply on Sustainable Energy Overview of the Regional Research Organisations Summary on RTD Supply Directory Sustainable Energy RTD Demand, Supply and Related Policies in Basque Country Energy Demand and Production Regional Overview Energy Consumption Electricity Demand and Supply Renewable Energy Situation and Perspectives Energy Self Sufficiency Situation and Perspectives Overview of Sustainable Energy Policies Regional Sustainable Energy Policies National Sustainable Energy Policies Regional RTD Demand on Sustainable Energy Overview of the Regional Company Base Summary on RTD Demand Directory Sustainable Energy RTD Supply in Basque Country Overview of the Regional Research Organizations Summary on RTD Supply Directory Sustainable Energy RTD Demand, Supply and Related Policies in Northern Hungary Sustainable Energy Regional State of Play Energy Demand and Production Renewable Energy Situation and Perspectives Overview of Sustainable Energy Policies Introduction Sustainable Energy Policy CO2 and GHG Emission Policy Conclusions Are the Regional RTD Policies, Demand and Supply Aligned?...62 APPENDIX I RTD Directories of Ostrobothnia APPENDIX II RTD Directories of Basque Country 3

4 1 Introduction 1.1 Objective and Purpose The main objective of this task is to map regional renewal energy research and technology development (RTD) supply, demand, and related policies into RTD directories for each RESGen project regions Ostrobothnia (Finland), Basque Country (Spain), Northern Hungary (Hungary), and Cornwall (UK). The mapping of regional capacities in sustainable energy aims to foster the understanding of regional actors on sustainable energy concept and ultimately, to support them towards increased sustainable energy generation and improved economical development of the region. This task serves as a starting point for understanding whether the RTD demand, supply and related policies are aligned within the RESGen regions and supports the cooperation between the actors of potential regional research driven cluster. In addition the collected RTD directories will allow identification of synergies and cooperation possibilities between the RESGen regions. This deliverable is an important starting point for the work of RESGen projects supporting regions towards increased sustainable energy generation. Without comprehensive understanding of regional capacities and their interconnections, finding possible links between regions would be an impossible task. The deliverable 2.1 serves as an input for forthcoming Tasks 2.2 (Regional SWOT analysis) and 2.3 (Benchmarking between the regions). The information gathered in this task is also very valuable input for WP3 Roadmap and WP4 Joint Action Plan. 1.2 Definition of Sustainable Energy Concept Sustainable energy fairly new concept and in order to ensure common understanding of the concept, RESGen project defined the sustainable energy concept to contain two main categories: Renewable energy sources and Rational use of energy. Under these main categories there are a variety of technologies to produce, distribute, and storage energy. Renewable energy sources: biomass, biofuels, wood, hydro, ocean, solar, geo and wind Rational use of energy: energy efficiency, energy storage, hydrogen generation, fuel cells, distributed energy sources, smart grids and CO2 sequestration and storage. 4

5 1.3 Method To obtain four regional directories of RTD demand, supply and related policies, each RESGen region collected information regarding their region following a template directory and instructions. The directory building was divided into four parts: 1) Sustainable Energy Regional State of Play Containing an overview of current regional energy production and demand; and a description of sustainable energy situations and perspectives. 2) Overview of sustainable energy policies Including identification and short description of national and regional sustainable energy policies with an especial focus on R&D policies. 3) Directory of RTD demand Directory with basic information (number of employees, turnover, R&D expenditures, international presence and main fields of activities) of regional company base in sustainable energy sector in year ) Directory of RTD supply Directory with basic information (number of employees, turnover, funding sources, and main fields of activities) of regional research in sustainable energy sector in year Lessons Learnt The mapping of regional capacities on sustainable energy turned out to be much more demanding and time consuming task than expected. Practically there was very little data readily available in regional level and thus constructing regional directories with a time frame and budget contrains of the project was a hard and partly impossible task. Mapping the regional capacities and related policies was however, considered to be really important task for the future work of the project and thus an effort has been made to describe the regional sustainable energy RTD demand and supply in the best possible way. Despite the hard work, some parts of the document are still lacking some requested information and therefore the document may be updated in future with additional information that is currently not available. In addition to these data availability issues, a part of the deliverable describing RTD directories and policies of Corwall region, UK, will be delivered later Structure of the Report This report is structured as follows: 1 Cornwall region will provide their part of the deliverable later due contract modification issues with EC. 5

6 Following the introduction, chapter two provides some very brief background information regarding sustainable energy policies in EU and a brief overview of the progress made in RESGen countries. Chapter three describes the sustainable energy situation, policies, RTD demand, and supply in Ostrobothnia region in Finland. Similarly, Chapter four and five are showing the results of data collection in Basque Country region (Spain) and Northern Hungary (Hungary). Chapter six provides a summary that concludes whether the RTD demand, supply and related policies are aligned within the regions. The RTD directories can be found in Appendices I and II. 6

7 2 Background 2.1 Overview of the Renewable Energy Policy of European Union Basically the energy policy of European Union is based on three inter related challenges: 1) fight against climate change, 2) energy security, and 3) competitiveness of Europe. The main strategic area of action to meet these challenges is to increase the use of renewable energy sources. European Commission set in (before the upcoming Kyoto Convention of climate Change) an objective of 12% penetration of renewables by 2010 with the expected impact on reducing the EU s CO 2 emission as well as contribute to job creation and regional economic development. This target was further refined to directives with objectives set for Member States on use of renewable electricity 3 (EU target 22% by 2010) and biofuels 4 (reference value in EU 5,75% by 2010). The follow up report in showed however uneven progresses between different countries levels of commitment to the development of renewable energy and that despite the progress made towards the targets set for 2010 they were unlikely to be achieved. This resulted on European Council requesting long term plans and commitment to renewable energies 6 and consequently European Commission launched Renewable Energy Roadmap 7 in 2006 with a long term vision with a proposal that the EU establish a target of 20% for renewable energy's share of energy consumption in the EU by 2020 and a binding 10% target for the share of renewable energy in transport petrol and diesel. The Brussels European Council of March reaffirmed the Community's long term commitment to the EU wide development of renewable energies beyond 2010 and invited the Commission to submit its proposal for a new comprehensive directive on the use of renewable resources. On January 2008, the Commission presented a proposal for a new directive, which was then adopted by the Parliament. The directive 9 sets mandatory national targets consistent with a 20 % share of energy from renewable sources and a 10 % share of energy from renewable sources in transport in EU energy consumption by The EU 2 Commission of the European Communities (1997). Energy for the future: Renewable sources of energy.white Paper for a Community Strategy and Action Plan, COM(97)599 final (26/11/1997). 3 DIRECTIVE 2001/77/EC "Directive on the promotion of electricity produced from renewable energy sources in the internal electricity market" 4 DIRECTIVE 2003/30/EC "Directive on the promotion of the use of biofuels or other renewable fuels for transport" 5 COM(2004) 366 final, The share of renewable energy in the EU" 6 Council Document 7775/1/06 REV10. 7 COM(2006) 848 final "Renewable Energy Road Map Renewable energies in the 21st century: building a more sustainable future" 8 Council Document 7224/07 9 DIRECTIVE 2009/28/EC "Directive on the promotion of the use of energy from renewable sources" 7

8 targets are translated to individual targets for each Member State by taking into account different starting points and potentials, including the existing level of energy from renewable sources and the energy mix. The directive also sets requirement of a national renewable energy action plan for all the Member States by June Recent Rrogress Made towards 2010 Target Despite all the efforts made, the latest progress report 10 revealed that Europe is still likely to fail to meet its 2010 renewable energy targets and that there has been very limited recent progress. In the electricity sector there has been considerable growth in some Member States, but on the other hand the renewable electricity shares have stagnated or shrunk in seven countries since Regarding the biofuels the use of obligation measures has led to an increase in the EU share of 1.6 percentage points since The following table reveals the progress made in each Member State (the RESGen countries are marked with green circle). 10 COM(2009) 192 final "The Renewable Energy Progress Report" 8

9 Table 1: Renewable energy progress in Member States. Renewable Electricity Biofuels (Source: COM(2009) 192 final "The Renewable Energy Progress Report", p. 11.) 2.3 Progress in RESGen Countries Although RESGen project focuses on regional level, understanding the renewable energy targets and recent progress in national level is vital. Finland Finland had rather high initial level (26.5%) of the electricity from renewable sources due mainly hydropower and use of biomass. The progress report of 2006 still classified Finland into a group which would likely achieve the RES E target. However, 9

10 this latest report reveals that the recent growth has not remained in the same level and that the progress made towards the target is less than 30%. Regarding the biofuels, Finland is among the EU countries with very little progress made towards the target of 5.75%. Finland was the only Member State that did not apply excise tax exemptions on biofuels. Hungary Hungary has shown a strong increase in renewable electricity since 2004 due to solid biomass (co firing). The target for 2010 was achieved already in 2005 and the growth rate remained relatively high. On the other hand, the use of biofuels in Hungary is not that promising as the level of biofuel usage is only 0.2%. Spain In Spain there has been a strong increase in RES E penetration mainly due to wind energy growth. Currently, Spain is the second largest producer of wind energy in the world. However, the strong growth in electricity consumption surpasses the relatively high level of renewable deployment. The biofuel usage is still relatively modest in Spain, with 1.1% share. UK In renewable electricity, some progress is visible in UK, especially on biogas. The new government policy on renewables is expected to have an impact on progress towards 2010 targets. The biofuel usage is still relatively modest in UK, with 0.8% share. 10

11 3 Sustainable Energy RTD Demand, Supply and related Policies in Ostrobothnia 3.1 Sustainable Energy Regional State of Play The total consumption of primary energy in Finland in 2006 was 1480 PJ or 411 TWh and 389 TWh in This figure includes the energy content of all fuels and other sources used for production, refining, transmission and delivery of energy, both from domestic and imported sources and direct import of electricity. Some 50 % of this total primary energy is consumed by the industry and about one fifth by heating of buildings. The share of traffic is about % and private households and agriculture 15 % of the primary energy. The end use, or as it is named in this overview, the demand of energy is much smaller. The difference depends on the efficiency of energy production. The best efficiencies might even be 90 % in combined heat and power (electricity; CHP) generation, but for instance in present nuclear power stations the efficiency is only about 30 %. In this overview we present figures based on the energy demand and energy produced as the end product, not as primary energy. Energy demand figures were mainly collected from or calculated according to published statistics and interviews. The sources of information have been listed in Table 1. The figures have been listed in tables 2 4. Table 2. Summary of the sources of information for attaining energy demand figures in the Region of Ostrobothnia. Electricity demand Heat demand Oil and gas Sources of information Energy Industry 2006 and 2008: Electricity demand statistics from 2004 and 2008 Statistics Finland 2005: Buildings Calculation based on building areas and average heat demand according to statistics The RES potentials were taken from an earlier separate study, and they include the following materials (methods of calculation shortly described): Manure Number of domestic animals by municipality, multiplication by specific quantity by species Dung from fur animals Number of animals by municipality; The Finnish Fur Breeders Association 2006, multiplication by specific quantity Sludge Statistics from West Finland Environment Office Biomass from fields Reed canary grass crop tons/ha, multiplication by fallowed areas by municipality; statistics by Ministry of Agriculture and Forestry

12 Wood Logging residues, statistics from the Forestry Centre of Ostrobothnia Straw and other residues of cultivation Cultivation areas by municipality and species, multiplication by specific quantities; Ministry of Agriculture and Forestry 2005 Municipal bio waste Population: municipalities; multiplication by 40 % of 180 kg/a per person Energy Demand and Production Regional Overview The total consumption or end use of electricity was 87 TWh in Finland in The demand of heating energy in 2006 was approximately 60 TWh, whereof 10,6 TWh was produced by electricity. The sale of traffic fuels in the whole country was 43,6 TWh (in 2005; gasoline 49 %, diesel 51 %). The production of electricity was slightly smaller than the demand, being 82,2 TWh in 2006; the remaining electricity was imported. The share of the Region of Ostrobothnia from the national electricity demand was only about 4 % in However, the variation between different years have been quite big. For instance in 2006 the demand was 2747 GWh, while in 2008 it was already 3553 GWh. Industries consumed slightly more than half the total both here and in the whole country. In Ostrobothnia the private demand, including agriculture, was nearly one third of the total consumption, while in Finland it was about one quarter. In 2008 the production of electricity in Ostrobothnia was about 1 TWh more than the demand. The region has the potential to produces more than twice its own demand, e.g. in 2006 it produced 7,3 % (6 TWh) of the electricity produced in the whole Finland. This means that the energy producers in Ostrobothnia serve a larger area in Western Finland, via the national grid. A substantial share of power generation is only for producing electricity without taking advantage from the heat, and the cooling water is mainly directed to the sea. There are, however, CHP units with district heating or industrial heating systems, where the electricity production corresponds one quarter of the whole electricity production in Ostrobothnia. The nationally important hydro power is not at all significant in Ostrobothnia with the exception of a couple of power stations. There is no nuclear power generation in the region, either (Table 2). 12

13 Table 3. The demand and production of electricity in Finland and the Region of Ostrobothnia (2008; TWh/a, upper and share, %, lower). Demand Private Industry Service Loss Total Finland Ostrobothnia Production Finland Ostrobothnia 22,1 25,3 % 1,01 28,6 % Hydro power 16,9 19,3 % 22,7 % 0,10 2,2 % 44,3 50,7 % 2,06 58,4 % 17,6 20,1 % 0,46 13,0 % Wind Nuclear CHP 0,26 0,3 % 0,3 % 0,01 0,2 % 22,1 25,3 % 29,6 % 26,5 30,3 % 35,6 % 1,50 32,8 % * Separate power generation without heat utilisation ** Percentage from the domestic production (net import omitted) Separate * 8,8 10,1 % 11,8 % 2,96 64,8 % 3,4 3,9 % Net Import 12,8 14,6 % The heating demand is estimated by a multiplication of the heated area of buildings and the average heat demand per square meter. The total heat demand in Finland was approximately 60 TWh in In Ostrobothnia the demand of buildings was nearly 2 TWh in The coastal and southern part of Ostrobothnia is a concentration of green houses, which use some 700 GWh/a heating energy. Green houses mainly produce their heating energy by oil (85 %) and partly by wood and peat (15 %). Taking this into account, nearly 50 % of all the heat is still produced by oil. The share of district heating is a little more than one fifth. From this roughly 40 % is produced by coal. In 2008, some 1,5 TWh or 3,4 % of the national traffic of fuels were sold in Ostrobothnia. 87,4 3,53 Total 87,4 ** 4,57 Table 4. Heating demand and production in Finland (in 2006) and Region of Ostrobothnia (in 2004; TWh/a, upper and share, %, lower). Production Finland Ostrobothnia District heating 29,4 49,4 % 0,57 21,5 % Oil 8,0 13,5 % *1,25 47,2 % Electricity 10,6 17,7 % 0,39 14,7 % Wood Peat 7,0 11,8 % **0,31 11,7 % Geothermal & other 4,5 7,6 % 0,13 4,9 % Includes heating energy for green houses: * 0,60 TWh; ** 0,10 TWh; *** 0,70 TWh Total 59,5 ***2, Renewable energy Situation and Perspectives The raw materials including RES are well documented in Finnish electricity generation, and the main figures can be seen in Table 2. Also CHP units and the conventional separate power generation use domestic RES, like wood based materials and other biomasses and 13

14 waste. There the use of biomass was 9,71 TWh and waste 0,71 TWh in 2008, while the remaining part was produced by fossil fuels (8,56 TWh coal, 0,38 TWh oil, 10,99 TWh natural gas, 4,89 TWh peat). Therefore, the share of RES materials was about 14 % of the own production of electricity (74,5 TWh in 2008, net import omitted) and 12,3 % of the total production (87,4 TWh). The share of hydro and wind power corresponded approximately one fifth of the Finnish power generation. According to this, the share of RES in the production of electricity is already quite high. Altogether the share of RES in the Finnish electricity production is about one third. The proportion of hydro power in Ostrobothnia is very low, being only 1,3 % of the total electricity production. Wind power is still nearly negligible both in the whole country and in Ostrobothnia, although there are large and quickly growing wind generation industries in Vaasa. However, in CHP generation the share of RES materials is significant in Ostrobothnia. For instance the fuel consumption (primary energy; 2007) for producing some 5 TWh electricity in the five largest power plants was as high as 18,8 TWh, whereof coal makes 7,8 TWh and 42 % but bark, black liquor and other wood based materials and peat 10 TWh and 53 %. The share of peat is, though, 14 %. Summarising, some 36 % of all electricity is produced by RES in Ostrobothnia. However, it is quite difficult to estimate the amount and share of RES based of energy in the end use of electricity in Ostrobothnia. This is mainly because the power stations are connected with the national grid and no energy is ear marked in the network. From the present heat production in Ostrobothnia nearly 20 % is RES based, taken into account that in district heating and heating with electricity the share of bio fuels is about 36 %, and peat has been considered as fossil fuel. The unused RES potential in Ostrobothnia was calculated by region and municipality, and the figures were compared with energy demand from the same areas, respectively. The results have been summarised in Table 4. The study shows a remarkable RES potential in the Region, especially in its rural parts. 14

15 Table 5. Energy demand (heat 2005 and electricity 2006), RES potential (in GWh/a) and energy self sufficiency potential (%) in the municipalities of Ostrobothnia. Energy RES Demand Wood Straw Other Total % Pietarsaari Region Luoto Pietarsaari Kruunupyy Pedersöre Uusikaarlepyy Total Total without Pietarsaari Vaasa Region Oravainen Vöyri Maksamaa Mustasaari Vaasa Maalahti Korsnäs Total Total without Vaasa Kyrönmaa Region Isokyrö Vähäkyrö Laihia Total Coastal Suupohja Kaskinen Kristiinankaupunki Närpiö Total Total without Kaskinen TOTAL Ostrobothnia TOTAL without Kaskinen Vaasa, and Pietarsaari Energy Self Sufficiency Situation and Perspectives The Region of Ostrobothnia produces more electricity than it consumes by itself. Some 40 % the electricity has been produced by imported and fossil fuels, like coal and oil. Moreover, 15

16 from all the domestic raw materials peat makes about 14 %, and also it is considered nonrenewable. This means that degree of sustainable energy self sufficiency (the share of domestic and regional RES) in power generation in 2008 in Ostrobothnia was 36 %. Correspondingly, the self sufficiency in heating is about 20 % This makes an overall degree of sustainable energy self sufficiency of about 30 %. However, as the study summarised in Table 4 shows, the overall RES potential is still much higher, ca. 2,7 TWh/a, while the whole energy demand in 2006 was 4,3 TWh/a. This means an overall potential sustainable energy self sufficiency of 63 percent. The study shows large regional differences, though. The most important characteristic is that the large centres of population and energy intensive industries clearly differ from the remaining rural areas, which, however, cover most of the Region of Ostrobothnia. Vaasa and Pietarsaari Regions are almost equal in their energy demand. They both are characterised by the feature that the demand is very concentrated, the central municipality representing 2/3 of the total demand. In Vaasa, Pietarsaari and Kaskinen there are energy intensive industries, and in Vaasa a population of nearly If these centres of high energy demand are omitted, the overall potential energy self sufficiency of the Region is 154 percent. This means, that the whole rural country side outside Vaasa, Pietarsaari and Kaskinen produces biomasses and other materials, which are not in use presently, and the energy content of which far exceeds the energy demand in the same area. The same characteristic can be seen in the Regions, too: without the large population centres and energy intensive industry the rural areas have the potential to become more than 100 percent energy self sufficient by RES materials. In 2008 the total demand of energy was much higher, though, and the yearly variations seem to be quite large. Moreover, the RES energy content with certain materials does not take into account the efficiency in the energy production phase. However, the real potential would be much higher: The figures in Table 4 do not include any wind or solar power or the energy reserves of the water bodies and the ground. Also we have omitted the ideas of transforming some of the cultivation grounds for energy plants or taking some of the wood mass presently used by the forest and paper industry for energy use, both having a tremendous RES potential. For instance only the planned wind parks in Ostrobothnia would produce 3,4 6,5 TWh/a electricity (effective hours: 30 %). That s why it is not possible to give exact figures for the potential degree of renewable energy self sufficiency. But still it is clear that the potential is significant. And, as a matter of fact, when taking into account only the presently planned wind parks, not to talk about the overall potential of wind and solar power and all the other reserves, the RES potential would even be inexhaustible. The research tradition at the University of Vaasa and Vaasa Energy Institute especially during the last five years has resulted in a remarkable development strategy for sustainable energy. The main objectives are to take advantage of the above mentioned RES potential and create a systematic and practical realisation program for achieving as high RES energy self sufficiency as possible. 16

17 The corner stones of the strategy are the following: The vision of the Dichotomy of the Energy Sector illustrating the anticipated and aspired structural and social change in a time perspective of years. The concept of Smart Energy Vaasa for developing and structuring energy self sufficient integrated solutions, from production of energy using renewable energy sources to energy efficient use and intelligent control, according to the idea of Smart and Micro Grid. The Dichotomy vision is based on two major observations from our research. Firstly, the RES potential is huge and may even exceed 100 %. Secondly, the economy of single and separate energy production units utilising RES is already now in many cases profitable and at least feasible in terms of regional economy. The conclusion from this is that these solutions will unavoidably become more common. This, in a time perspective of years will most probably mean a structural change, according to which the energy sector will be divided into two parallel parts. The first part will be the prevailing centralised power generation system for the largest population centres and energy intensive industry. The other part will be dominated by the decentralised strategy and smaller scale power production units utilising regional RES. This part is anticipated to cover all areas outside the largest population centres, perhaps even 90 % of the whole country. For putting this to practice we need the new concept. The production system will have to integrate single separate units and compilations of several units of different size and using different raw materials or other RES into coherent regional Smart and Micro Grids. They might operate independently and unplugged from the national grid, but the connection to the grid ensures the security and enables the transmission of energy to both directions. The energy industry in Ostrobothnia has been highly successful in traditional energy sector, and it has also adjusted to some of the changes lately. The research bodies have given their support to the industry in the field of education and training and some part of R&D. However, in the near future the role of research organisations may become much more important. The research strategy described above will serve the industry new business opportunities with proper scientific grounds. While the industry has before been quite independent and separate from research bodies, the RES based strategy would be the main research driven part of the energy cluster in Ostrobothnia. 3.2 Overview of Sustainable Energy Policies In the Kyoto protocol Finland has committed itself to a sustainable energy and climate policy. The programme of the second Government of Prime Minister Vanhanen (2003) includes concrete targets for the energy production. In the report given to the parliament in 2005 the Government stresses the use of domestic energy sources. In order to comply with its commitments Finland will increase the use of renewable energy sources (RES) and decrease the imports of energy with the exemption of natural gas. The programme also includes measures to increase the rational use of energy (RUE). In the use of RES the target in Finland is that the use should be 31,5 % by In achieving 17

18 this goal the forestry industry is in focus as bio fuels play a central role in the plan. In addition to bio fuels, hydro and wind power are emphasised in the strategy. The potential for wind power lies in the coastal regions like Ostrobotnia but the strategy assumes that the technological development in the industry continues and that price of electricity remains high. Other feasible sources for increasing the sustainability are in the use of thermal heating and some scope is also given to solar energy particularly linked to construction. In the Rational Use of Energy (RUE) the development of traffic systems are in focus for the strategy. The main targets are increasing the amount of public transports and railroads and rationalise the transportations systems of goods including the ambition to use seaways whenever possible In order to implement the strategy the development of the energy technology plays a central role. For the implementation of the RTD policies the National Technology Agency (TEKES) has built a research strategy where the relevant applied research areas are prioritised. Financing of RES research is also obtained through the Finnish Academy that grants financing for basic research in the field. Moreover, financing of research is obtained from the industry and from the basic financing of the Universities and the Polytechnic Universities. Through energy taxes and grants the government is trying to promote the production of RES. Moreover through taxes the mechanism that is created by the trade in release rights is being reinforced and RES industries are also given direct grants. Currently also the experiences of green certificates and compulsory feed tariffs into the electrical grid are being considered Sustainable Energy Policies from National to Regional The National Strategy for Sustainable Development addresses the problem of climate change and mitigation. In order to implement these ambitions Finland will develop its technological capability as well as promoting sustainable use of its natural resources and rational use of energy. The Environmental Strategy for Western Finland presents an implementation of the strategy for the regions of Ostrobotnia, South Ostrobotnia and Central Ostrobotnia. In the strategy the objectives in the national strategy are being concretised in the geographical area that makes up the domain of the Western Finland Environmental Centre. Implementing the strategy is carried out with a bottom up perspective making up the regional planning system. The instrument for physical planning is the Regional Plan which is a plan for the land use. It is complemented by the Regional Scheme that is a long term regional development plan. Sustainable energy policies, being a part of sustainable development, form a horizontal objective of both plans. The Regional Plan is giving the parameters for the more detailed municipal plans. In this plan for Ostrobotnia the reduction of CO 2 emissions is the central objective. The model opted for in achieving this is a decentralised multi polycentric model. Striving to have communities also on the countryside with the essential service within proximity is the principle leading the planning. In this respect Ostrobotnia is comparing favourable to many other regions in the sparsely populated Finland, but still lagging behind 18

19 when making the comparison in a European perspective. The Regional Plan is also creating conditions for exploration of wind power, as suitable areas are through the plan being reserved for wind power or other types of renewable energy production. The work on preparing the Plan is quite a large and a participative process where all the stakeholders are consulted and the aim of the process is to gain acceptance for the Plan. When completed the plan is approved by the Ministry of Environment and will give compulsory cornerstones for the municipal planning. The Plan is enjoying legislative support in its enforcement but this is seldom applied in practise in Finland. The strategy for implementing the objectives is rather an on going consultative process with the stakeholders, trying to consider possible remarks and to seek public acceptance for the objectives. The Regional Scheme is a complementing planning tool regarding the development planning. The Regional Scheme is a vision for the regional development and in the case of Ostrobotnia the energy cluster is playing a central role. The cluster is seen as the engine ofgrowth for the regional development and the challenge is the guarantee a favourable development of the industry. Since the cluster is very export oriented, measures that will facilitate the export play a central role in the vision. The Scheme which has a time span of 20 years is subsequently broken down to regional programmes which run for four years, and into annual plans of implementation. The annual plan of implementation is an essentially document that makes up the regional dialogue on the use of the regional development funds i.e. how to use of the budgetary items that comprise the regional development funds in the forthcoming annual budget. The ambition of the Regional Scheme is to take into account the national ambitions on sustainable energy policies but also to give a horizontal aspect to different national programmes e.g. the national Rural Programme. The Centre of Expertise Programme plays an important role in the national growth strategy as the programme is designed to pool local, regional and national resources to the exploitation of top level expertise. The programme supports regional strengths and specialisation and furthers cooperation between the centres of expertise. The process in applying of a centre of expertise programme is based on regional strengths and strategic considerations of local actors together with the regional authorities, who together apply for a centre of expertise programme. The centres, which were appointed by the Central Government for a term running from 2007 until the end of 2013, implement the programme at local level. The centres of expertise launch cooperation projects between the research sector, educational institutions, and businesses and industry. These projects boost the competitiveness of companies, strengthen and improve regional expertise, create new businesses and promote the creation of new innovation environments. The Centre of Expertise Programme in Ostrobotnia is based on distributed energy systems and sustainable energy solutions. The programme is coordinated by Merinova Ltd, located in Vaasa. The Regional Centre Programme is a government special programme in accordance with the Regional Development Act. The aim of the Regional Centre Programme is the development of a network of regional centres covering every region or province, based on the particular strengths, expertise and specialisation of urban regions of various sizes. Regional development based on a network of regional centres is expected to result in a more 19

20 balanced regional structure in Finland and an enhanced international competitiveness. In the future, the resources of national regional policy are meant to be expressly directed to regional centres, and to the enhancement of the network consisting of them. The Regional Centre Programme for the Vaasa Region is also having an emphasis on the energy technology and is administrated by the public company VASEK formed by the municipalities in the region. The difference between the programs are the following: while the purpose of the Competence Centre programme is to deepen the competence in the energy field, the purpose of the Regional Centre programme is to spread the competence and to create feasible solutions in energy production, particularly among the SMEs. The common denominator for the programs is that both should act as middlemen funding solutions for financing the deepening and spreading on the energy knowledge in the Vaasa Region. Also coordination of financing of the energy policies coming from different sources is common for the programs R&D Policies on Sustainable Energy from National to Regional The Energy and Environment Strategic Centre for Science, Technology and Innovation (ENYM SHOK) forms a Finnish Strategic Research Agenda. The background to the agenda is global as resources are limited and solutions have to be found to a pattern of increased nonsustainable consumption. This requires, in addition to a change in life style, also a new energy and environmental technology. The research agenda linked to the sustainable energy includes the following main areas: Carbon neutral energy production Distributed energy system Sustainable fuels Energy markets and smart grids Efficient energy use Resource Efficient Production Technologies and Services Recycling of materials and waste management Measurement, monitoring and assessment of environment efficiency Special emphasis is put on energy and research in the use of renewable energy. The aim of the research is to promote energy savings and for achieving this goal close cooperation is required. There is no direct regional research policy on a strategic level. However Finland has applied a decentralised university system with a purpose among others to reinforce the regional development. Particularly the Polytechnic Universities having a more applied agenda are given this role. The Universities and Polytechnics are assumed to specialise themselves on regional issues and have a mutual exchange with the surrounding area. In this way the national research agenda does also receive a regional dimension. This is particularly true in Ostrobotnia where the two Polytechnic Universities and University of Vaasa are developing their knowledge in energy technology i.e. in a field that is also 20

21 dominating the export industry. Tasks that will convert into R&D agendas are also introduced through the Centre of Expertise Programme giving in this way the research agendas a regional content. The financing obtained through the Academy of Finland and its multidisciplinary research program Basic research promoting environmental friendliness of energy systems. This program corresponds to one of the special themes of the EU 7 FP were energy is one of seven main topics for the programme. The key objectives for the research programme are: to generate new and innovative scientific knowledge in the energy technology, the operation of energy systems and efficiency to direct research to developing sustainable solutions in energy technology and energy systems taking into account the environment and health issues. to develop expertise in energy production, transfer, use and to develop knowledge in identifying future energy systems alternatives. The program is coordinated by a programme manager at the Academy and is also coordinated with the funding obtained through the national technology centre TEKES which jointly with the industry encompass the SHOK programs. The aim of the program is to help the research projects involved develop and this is done through networking and a national and international cooperation. The mechanism for regionalisation is alike in the case of ERA. There are no regional quotas but the regional universities and polytechnics are assumed to form partnerships with the industry and are encouraged to seek financing from the programs. Within the programs partners are also encouraged to net work themselves also internationally Summary of Policies The goal for the regional policy in Finland is to increase the competitiveness of all regions in Finland. This is done within a frame work of an outward oriented economical policy. The regions themselves are required in their planning documents to present their regional strengths and a plan to build on these. In the case of Ostrobotnia it has been the energy sector and distributed energy solutions. The available development instruments are subsequently being used to build on this specialisation. However the bulk of the national financing have not been included in any regional quota. The funding that is regionalised is rather for coordination purposes and for initiating larger projects. The actors within R&D policies can operate with national or European funding but cannot with respect to these, count on a regional research policy in the sense that it would enable setting aside a particular quota. However, trusting on funding from different sources has shown to be inefficient where the system has proven to been non transparent including a set of overlapping mechanism. Especially, SMEs participating in R&D activities are reported to have been frustrated with overlapping mechanism. This according to a major international recent evaluation (see: http: //www. tem.fi/index.phtml?l=en&s=3161). The conclusion of the evaluation is that although large investments have been made both by the state and the municipalities the regional 21

22 implementation of national strategies is not working well and is in need to undergo reforms. The basic financing for the Polytechnic Universities is provided by the municipalities and they are assumed to implement applies research while the Universities are within the sphere of national financing. The size of this financing is based on academic results and recently also based on their ability the rise private financing from the industry. This is assumed indirectly to contribute to a regional research agenda that differs between regions based on strategic considerations. However the experience has shown that there are very little specialisation between the Universities and the regional strategies are non exclusive in their strategic choices. The system should encourage the regions to make strategic choices not only formally but also to implement them. However the lack of control and nontransparency of the funding mechanism encourage the regions not the act in a strategic way. This leads to that the funding is sufficiently pooled with respect to the strategic considerations. 3.3 Regional RTD Demand on Sustainable Energy Overview of the Regional Company Base The energy cluster in the Vaasa region in Finland is the largest in Scandinavia. It comprises over 100 enterprises which have approximately a total of employees. The total net sales of these enterprises amount to approximately 7 billion euro (about 60 % in the Vaasa region). The share of exports is 70 %. These enterprises manufacture e.g. diesel engines, electric motors, power plants, electric transmission and distribution systems, frequency converters, and applications for the wind power industry. They also produce and transmit electricity and heat. The Vaasa energy cluster has provided many good examples on how expertise, existing wherewithal and infrastructure contribute to the birth of new enterprises. In addition to ABB and Wärtsilä, other well known Vaasa companies include e.g. Citec, KWH Pipe, Vaasa Engineering Group (VEO), and Vacon. To mention some of the most recent newcomers, The Switch, established in 2007, manufactures electric systems, power converters, and permanent magnet generators; and Mervento Oy, established in 2008, develops and delivers multi megawatt wind power applications. There are also a number of smaller technology companies dealing with renewable energy. Over 800 employees work with R&D in the various enterprises and universities in the Vaasa region. At least half of these R&D employees are working with sustainable energy Summary on RTD Demand Directory The 12 most important companies from Ostrobothnia region performing R&D in the sustainable energy field are listed in the RTD demand directory elaborated as a part of the RESGen project (WP 2, Deliverable 2.1). The total turnover of these companies in 2008 was 5,64 billion euro. The total employment in the sustainable energy field is about 4100 employees. The companies turnover from the sustainable energy field is 59,1 % of their total turnover. 22

23 Companies taken into account in this renewable energy RTD demand directory are listed in table 6. The Sustainable energy areas in which these companies were active in 2008 are shown in the Figure below. Most of the companies are dealing with smart grid technology or renewable energy as can been seen in Figure. The Wind energy cluster in Vaasa region is a fast growing industry and the increasing amount of installed renewable energy is also keeping smart grid technology providers busy. Table 6: The main companies undertaking research in Sustainable Energy field in Ostrobothnia. Company ABB Oy Wärtsilä Oyj Abp Vacon Oyj VEO Group Vamp Oy Citec companies Sesca KWH Pipe The Switch Wapice Oy Mervento Oy Mateve Oy Main business area Electric motors, generators and transformers Biofuels, fuel cells, back up power for windparks Energy efficiency, frequency converters Electrification and automation solutions for the power generation sector, including control, remote control, protection and automation systems. Also substations for transmission and distribution networks and medium voltage switchgears. Smart grids: design and manufacture of protection relays needed for electrical generation and distribution Engineering, power plant design Instrumentation and control systems as well as ICT systems for companies within energy production Energy pipes Megawatt class permanent magnet generator and full power converter packages for wind power and other New Energy applications Software and electronic solutions Wind: power plant design and manufacturing Low energy distribution systems 23

24 Figure 1: RTD Demand, areas of activity in companies. 3.4 Regional RTD Supply on Sustainable Energy Overview of the Regional Research Organisations In addition to each enterprise s own R&D departments, the most important actors in the energy business in this region include: Vaasa Energy Institute (VEI; VEI is a cooperation organisation to combine the know how within the field of energy. It was founded by the University of Vaasa Faculty of Business Studies and Faculty of Technology, and Levón Institute together with Vaasa Polytechnic and Novia Polytechnic. Its function is to offer energy research, consultancy, and supplementary training services to energy actors at local, domestic, and international levels. VaasaEMG ( VaasaEMG is a research unit at the University of Vaasa, and it has specialised in the energy markets since It focuses on consumer behaviour in the energy markets, energy pricing, and the operation and development of energy markets. Today, VaasaEMG is administratively a part of Levón Institute and a member of VEI. Technobothnia Research Centre Technobothnia is a joint research and training laboratory for the University of Vaasa, Vaasa Polytechnic, and Novia Polytechnic; with research and measurement equipment for electrical, mechanical, civil, and environmental engineering, as well as information technology. Today, a number of research 24

25 activities of VEI are performed in Technobothnia, including the Bio Fuel Laboratory, newly established by VEI. Technical Research Institute at the University of Vaasa (TTI; lipas.uwasa.fi/itt/tti) TTI promotes high class international scientific research in technology in Vaasa, expands the research domains at the University of Vaasa, and reinforces cooperation and interaction with international researchers in the field of technology. In addition to these there are a number of organisations undertaking sustainable energy related research and development activities in Vaasa region in a smaller scale. For instance, the Regional Forestry Centres in Finland, represented by Metsäkeskus Rannikko in Vaasa region, belong to the main experts in forest and wood based energy. The farmers organisation Österbottens Svenska Lantbrukssällskap is active in the fields of wood and crops based energy, biogas and energy saving. Both of them run projects, provide consulting and planning services, and give technical and general advices in their fields of expertise, often together with the other organisations listed above Summary on RTD Supply Directory The main part of the RTD activities through projects with external funds has been performed by Vaasa Energy Institute and especially University of Vaasa. The total value of VEI s RTD supply exceeds 1,5 M yearly. Separate projects have made altogether some 1 M of this funding. The industries have, on top of the project funding, donated three professorships to the University of Vaasa. There are also a number lecturers and researchers in all the participating organisations in VEI who actively work in RTD related projects but whose personnel costs are paid by the base funding of each organisation, not by the projects. 25

26 4 Sustainable Energy RTD Demand, Supply and Related Policies in Basque Country 4.1 Energy Demand and Production Regional Overview The Autonomous Community of the Basque Country (ACBC) has a higher level of industrialisation than the European average and amongst the highest of any region in Spain. The region's industry originally grew out of the iron ore mined in the area, which has now been used up. Although the blast furnaces have gone, there is still a major industrial sector based on steel, metal processing and transport construction. Other non steel industries are also important, including cement and paper. However, in recent years, industry has tended give way to the services sector. Services now account for over 60% of GDP, as opposed to a figure of 30% for industry and less than 1% for the primary sector. The ACBC has a population of 2.1 million living in a small land area (7,235 sq km), mostly in an area with a temperate Atlantic climate and limited natural resources. These factors have determined the characteristics of energy demand and the current degree of energy selfsufficiency Energy Consumption Gross energy consumption per capita in the Basque Country is 3.69 toe/capita, which is slightly above the EU 27 average. In general, Basque consumption is higher than that of countries in Southern Europe and lower than Northern Europe. The countries with the highest per capita consumption are Luxembourg, Finland and Sweden. Basque energy demand accounts for 5.4% of the Spanish total. In 2007, energy consumption in the Basque Country came to 7.8 Mtoe. Annual growth in consumption during the period stood at 2.1%. This growth was largely due to the increase in consumption of natural gas both for power generation in advanced combinedcycle power stations and in final consuming industries. The energy in most demand is natural gas, accounting for 44.2% of the total, followed by petroleum at 39.2%. Imports of electricity represented 7.7% of demand, coal 3.2% and renewables 5.4%. 26

27 Renewable energy 5,4% Electric power imports 7,7% Other 0,3% Coal 3,2% Natural gas 44,2% Oil 39,3% Figure 2. Gross energy consumption by types of energy, Industry and transport are the two sectors with the highest energy consumption in the Basque Country. The industrial profile of the Basque economy, combined with the climatic characteristics of the region mean that consumption by sectors is quite different to the European average; in the Basque Country industry and the tertiary sector (residential and services) account for 46.6% and 20% of consumption respectively, whereas in EU 15 they represent 27% and 39%. The sectors with the greatest growth in consumption in 2000 were transport (31%) and services (21%) Residential 11% Services 8% Primary 2% Transport 33% Industry 46% Figure 3: Final energy consumption by sectors in the Basque Country, Electricity Demand and Supply Electricity demand in the Basque Country in 2008 came to GWh, of which two thirds were consumed in the industrial sector. Power consumption grew continuously to 2008, but from the third quarter of that year, the effects of the economic downturn began to be evident. The region has more than 3,000 MW power generating capacity in classical fuel oil and coalburning thermoelectric power stations and combined cycle plants. It also has nearly 800 MW installed in CHP and renewable energy. Production from classical thermoelectric power stations has been greatly reduced in recent years as production from combined cycles 27

28 increases, to cover 46% of consumption. CHP and renewable energy sources represent 16.4% of the power supply, and around a third of consumption is imported from other regions. Figure 4: Electric power supply in the Basque Country Renewable Energy Situation and Perspectives Primary renewable output in the Basque Country in 2008 came to 427 ktoe, representing 5.4% of total Basque energy demand. Biomass accounts for most of this amount thanks to its use in industrial boilers in the paper and timber industries. Renewable power generation in 2008 covered 5.6% of total power demand. This chiefly came from three sources, in similar proportions: hydroelectric power, wind power and renewable thermoelectric power (CHP, MSW, biogas). Photovoltaic energy accounts for only 1% of all renewable power generation, despite major growth in recent years. 28

29 Figure 5: Use of renewable energy in the Basque Country Figure 6: Renewable energy share by types in Basque Country, Figure 7: Renewable electricity production by types in Basque Country,

30 Production from renewable sources in 2007 came to only 41% of the target set in the current Energy Strategy for 2010, meaning that overall compliance at this time is still low. There has been little progress in the area of biomass and biofuels, wind power and solar thermal, whereas in solar photovoltaic growth has been higher than expected. There have been delays in the plans for installing fresh wind power; installed capacity now stands at 153 MW and contracts for awarded in 2008 for a further 290 MW to be built over coming years, all on shore. This still comes well short of the 615 MW total envisaged in the Energy Strategy. There are no short term prospects for increasing these figures. At the same time, without fresh technological developments there is little possibility of developing offshore wind power in the Basque Country, since the coast is steep and there is very little continental shelf on which to install turbines. Solar thermal power is very underdeveloped in the Basque Country. Installation of solar panels for hot water in homes and services buildings (primarily sports complexes) has only begun in recent years. The goal for 2010 was to have 152,000 square metres of panels installed, but at present this target is very far from being met. The new Technical Building Code set the bases for large scale development of this energy; however the drop in the number of new homes being built will slow expansion. Solar photovoltaic power has grown at a fast rate, reaching a total of 18 MW installed in The tariff system that exists in Spain for promoting renewable energy sources has been of key importance in the development of photovoltaic energy, and there is room for continued development over coming years as the technology develops and prices come down. Hydroelectric power is a mature energy source in the Basque Country, with 173 MW installed and little potential for improvement given the geographical and environmental limitations of the region. Biomass is used in industrial facilities in the paper and timber industry, and in the furnaces of cement factories. It is also used in the domestic sector with an increasing number of boilers being installed that use pellets as fuel. The calorific power of municipal waste and landfill biogas is also being harnessed to generate power. There are targets for harnessing waste biomass from forestry, arable farming, cattle farming and water treatment for generating power, but studies indicate that the returns would be low. There is also potential for increased use of biomass in the domestic sector, though the limitation is availability. 30

31 Table 7: Targets of the 3E2010 Strategy on renewable energy and results at Renewable energy type Situation 2008 Objective 2010 ktoe % ktoe % Hydro Wind Solar Biomass Biofuels Wave energy Total renewable energy ktoe ktoe Renewable energy share of total demand Renewable electricity share of total demand 5.4% 12% 5.6% 15% Energy Self Sufficiency Situation and Perspectives Primary energy production per capita in the EU in came to 1.72 toe, compared to 0.2 toe per capita in the Basque Country. The region thus has a much lower degree of energy selfsufficiency than most European countries. During the 1980s, the Basque Country had enough natural gas to meet its own consumption needs and to export some, but the off shore reserves located off the coast of Bizkaia were eventually used up and no fossil fuels are currently being produced. Production of primary energy in the Basque Country therefore centres on renewable energy sources. Energy selfsufficiency has reached 420 ktoe, representing 5.4% of total energy demand. Figure 8: Evolution of self sufficiency in the Basque Country, This means that Basque external energy dependency stands at 95%, much higher that of 31

32 most EU countries (energy imports for the EU as a whole represent 53% of consumption). The ACBC is therefore among the regions with the lowest degree of local energy resources, despite work in the area of hydrocarbon exploration and the promotion of renewable energy. Although there is room for improvement; external energy dependency is difficult to avoid, even in the long term. 4.2 Overview of Sustainable Energy Policies Regional Sustainable Energy Policies The ACBC has established its own energy policies since the early 1980s. Initially, these powers were used to impulse energy efficiency in heavy industry, promote the extension of natural gas networks and diversification of sources of supply, and build the first wind farms and combined cycle power plants. At present, the basic guidelines on which Basque energy policy is based may be summarised as follows: To enhance actions in energy efficiency in all sectors that will help reduce energy consumption in overall terms and in terms of energy intensity, in keeping with EU targets. To intensify efforts to achieve greater use of local resources and renewable energy sources, especially in line with EU targets. To improve self sufficiency, competitiveness and quality of the Basque energy system, by improving energy infrastructures and reinforcing interconnections. To support the progressive closure of conventional thermal power stations, and their replacement with more energy efficient and environmentally sound power generating plant. To contribute to meeting the targets set in the Kyoto Protocol, and improve environmental quality at local level. To promote agreements and participation between the various agents with a view to reinforcing research and technological development in the area of energy, especially in the field of energy efficiency and renewable energy sources. To promote economic and social development and general quality of life. The current Basque energy strategy (the 3E 2010 ) lists the Basque Government s energy targets for the period from 2001 to 2010: Energy savings of 15%, incorporating measures that will enable annual energy savings of 975,000 toe. Fourfold increase in use of renewable energy sources to 978,000 toe (12% of Basque energy demand). Support for the replacement of coal and petroleum derivatives by cleaner energy sources such as natural gas, tripling consumption to 4.7 bcm (1 bcm = 1,000,000,000 cubic metres) by Complete restructuring of power generation plant, by promoting the gradual closure of 1,130 MW of conventional thermal power plant to be replaced by 2,800 MW of more competitive and less pollutant natural gas combined cycle facilities and 1,500 MW of CHP 32

33 facilities with renewable production, which would enable a slight net export. Contribution to meeting Kyoto targets, by limiting growth in greenhouse gas emissions from energy consumption to 11% of 1990 levels by 2010 and improving environmental quality of the air. The target set in the Energy Strategy is for total renewable resource usage of ktoe by 2010 nearly 12% of Basque energy needs. To achieve this, it is planned to increase the level of resources harnessed threefold, incorporating new power generation from renewable resources to give a figure of 1,000 MW by The direct investment required in renewable energy during the period will be 1.083bn. Within the framework of the Energy Strategy several different promotion and direct investment actions are being carried out in installations, support to installation projects through grants, technical assistance and advice, agreements with other public authorities, development of regulations in law, training, information and awareness. Grants for renewable energy facilities have come from the aid programmes of the Department of Industry, Trade and Tourism (large facilities), and EVE (small facilities); since 2006, agreements between EVE and the IDAE have represented an important additional source of funds. The impetus for establishing new installations through public participation is one of the leading lines of action. Public promotion helps speed up the process of introducing nonmature industries and creates the fabric of suppliers and installers necessary for development. General public familiarity with renewable energy has been promoted in different media. The EVE group organises training courses for technicians; Technical seminars have also been held on innovative aspects. Dissemination campaigns have also been organised to enhance awareness among the public on the importance of developing renewable energy for the future. Education at school level has been promoted through agreements with the Basque Government's Department of Education, Universities and Research. One important instrument for promoting the development of renewable energy sources from the sphere of local government has been the collaboration with Basque municipal authorities in drawing up Municipal Energy Management plans National Sustainable Energy Policies For the last fifteen years, Spain has seen major growth in energy intensity. Excessive and growing external energy dependency (around 80% in recent years ) and a need for environmental conservation has made it essential to encourage effective formulas for efficient energy use and the use of clean sources. Substantial growth in renewable energies, together with important improvements in energy efficiency, therefore form part of economic, social and environmental strategy. 33

34 REP (Renewable Energy Plan) The Spanish Renewable Energy Plan (REP) comprises a revised version of the Plan for the Promotion of Renewable Energy in Spain [Plan de Fomento de las energías renovables en España]. The purpose of this new version is to maintain the commitment to cover at least 12% of total energy consumption with renewable sources by 2010 and incorporate the other two guideline targets adopted since publication of the previous plan 29.4% of power generation from renewables and 5.83% of biofuels in transport by that year. Table 8: Targets of the 3E2010 Strategy on renewable energy. Situation 2004 Growth objectives Objectives 2010 Capacity (MW) Production (GWh) Production (ktep) Capacity (MW) Production (GWh) Production (ktep) Capacity (MW) Production (GWh) Production (ktep) Electricity generation Hydro power (> 50 MW) Hydro power (10<50 MW) Hydro power (< 10 MW) Biomass Biomass plants Co combustion Municipal solid waste Wind power Photovoltaic power Biogas Concentrated solar power Total Electricity Generation Heating Biomass Solar thermal Total Heating Biofuels (transport) Total Biofuels TOTAL RENEWABLE ENERGY Share of Primary Energy Consumption 6.9% 12.1% The overall estimated investment required to meet the energy targets in the period in question comes to bn, which will require own funding of 4.720bn; the remaining funding must come from the market ( bn) and public investment aid ( 681 million). 34

35 E4 (Energy Saving and Efficiency Strategy in Spain) The Ministry of Industry, Tourism and Trade drew up an Action Plan for the period , within the Energy Saving and Efficiency Strategy in Spain , approved by government. The Plan sets a quantified energy target for primary energy savings of 24,776 ktoe in As compared to the base scenario set out in Directive 2006/32/EC, on energy end use efficiency and energy services, the saving achieved would come to 11% in 2012, thus exceeding the target set in the Directive (9% by 2016). At the same time, as a direct consequence of the Plan and consistent with the SSCCCE (Spanish Strategy on Climate Change and Clean Energy), it is estimated that CO2 emissions will be reduced by 270,592 kt in the period , of which 238,130 ktco2 will be achieved during the period of the plan, The PAE4+ is made up of a network of specific measures that specifically affect the seven desegregated sectors: Industry, Transport and Miscellaneous Uses, subdivided into: Building, Home and office equipment, Agriculture and fishing and Public services; also impacting the energy transformation sector (refining, power production including transmission and distribution). So far 59 actions have been identified of which: 36 act through economic incentives; 3 relate to the promotion of initiatives in which a general communication plan is specifically included; 4 measures targeting the training of market users and agents. In addition, within some measures up to 16 regulatory actions will be developed with a scope extending beyond the period of the Plan. This framework of measures is quantified in public and private economic resources, with an identification of the participating agents. The Plan stands within a wider strategic framework whose design is outlined and specified in the measures to be carried out in With regard to the economic terms, the enclosed table sets out the public and private effort needed to implement the Plan, totalling 2.366,5 million, equivalent to a support intensity of 10.7%, which is needed to activate the proposed investment plan of million. Table 9: Targets of the 3E2010 Strategy on renewable energy and results at Sector Total investment (k ) Public funds (k ) Additional funds (k ) Incentive intensity (%) Additional incentives (%) Industry 1,671, , Transport 1,892, , , Buildings 13,469, , , Home and office eq. 1,992, , Agriculture 683,207 93,754 24, Public services 1,351,000 89,000 28, Energy transformation 1,085,330 29,284 21, Communication 40,000 40, ,0 0,0 Total 22,184,967 2,366, , % 20.2% 35

36 Spanish Strategy on Climate Change and Clean Energy The Spanish Strategy on Climate Change and Clean Energy (SSCCCE) forms part of the Spanish Strategy on Sustainable Development (SSSD). The SSCCCE covers various measures that will contribute to sustainable development in the area of climate change and clean energy. The SSCCCE is intended to ensure compliance with Spain's commitments on climate change and the encouragement of clean energy types, while at the same time achieving improvements in social welfare, economic growth and environmental protection. The operating targets are as follows: To ensure a reduction in GG emissions in Spain, with particular stress on measures related to the energy industry. According to the national inventory, using the IPCC classification, total emissions related to energy transformation in 2005 accounted for 78.87% of national emissions. To contribute to sustainable development and fulfilment of commitments on climate change, by strengthening the use of project based flexibility mechanisms. To promote additional measures of reduction in diverse sectors. To apply the National Climate Change Adaptation Plan (PNACC) promoting integration of measures and strategies on adaptation in industry specific policies. To enhance public awareness and sensitivity on clean energy and climate change. To encourage research, development and innovation in matters of climate change and clean energy. To guarantee security of the energy supply by encouraging penetration of cleaner energy sources, mainly of a renewable nature, obtaining other environmental benefits (for example, with regard to air quality) and restricting growth in external energy dependency. To encourage rational energy use and saving of resources both for companies and for end consumers. 4.3 Regional RTD Demand on Sustainable Energy Overview of the Regional Company Base The Basque energy sector and its auxiliary companies create a frame of more than 300 companies. They make together a turnover of m ; 35% of it is produced in the Basque Country. The energy sector is employing people in Basque region, which is equivalent to 12 % of the Basque Country industrial employment. Active Basque Energy Cluster (Cluster de Energia de País Vasco) gathers most of the companies 95% being associated to the cluster. There are some remarkable Basque companies in the energy sector like IBERDROLA, the first in the world promoting and operating electricity from renewables. GAMESA is the third biggest producer of wind mills. And there are other relevant companies in renewables like SENER, GUASCOR and producers of grid equipment like ORMAZABAL, ARTECHE, and ZIV. 36

37 The Basque sector is fully involved in the transition to a new sustainable energy model, according to Mr. Galán CEO of Iberdrola We have to face huge energy challenges, they bring opportunities for both the sector and the country... a change is need in the unsustainable present model characterized by our dependency (for Spain is 81%), high CO2 emissions and scarce grid interconnections. The objective is to increase energy efficiency, security and renewables. In the following part we will resume the activities of the main Basque companies in the different renewable energy technologies: THS. Thermosolar: This sector is in the transition phase from experimental research to commercial operation. Two Spanish groups are leading this move, ACCIONA and the Basque SENER who has created TORRESOL, a joint venture with the Abu Dhabi MASDAR to build generation plants in the solar belt all over the world. TORRESOL is now building two 50 MW plants in Cádiz, south Spain, with the estimation of a net production of 175 GWh/year each plant. TORRESOL and SENER, owner of the technology, are trying to find component suppliers for his business development. PHV. Photovoltaic: The market of photovoltaic has boomed in Spain in 2008 due to tariff subventions, however it only represents 0,5% of the energy consumption. Despite of the movement in Spain, in the Basque Country there are no PHV boards manufacturers, although there are some companies working in closely related areas: Research in new materials alternative to silicon; higher concentration (GUASCOR FOTON). Equipment for the automatic manufacture and assembly of the PHV modules (GOROSABEL). Development and manufacturing of inverters (INGETEAM,...) STH. Solar Thermal: A new National Regulation, Código Técnico de la Edificación has opened the market for the solar energy absorbers and water heating. The development and commercialization of this technology is expected to increase the adoption of solar water heaters, solar refrigeration, solar drying etc. FAGOR is a big Basque Group very involved in this sector. WE. Wind Energy: The flagship company of Basque WE sector is GAMESA, world s third largest manufacturer of wind mills. It is supplied heavily by e.g. electric, mechanical, and hydraulic parts by Basque manufacturers like INGETEAM or HINE RENOVABLES. There is a move to strengthen the wind supply chain, not only in the Basque Country but also in international markets. Offshore wind generator manufacturing is another field where Basque WE sector is targeting. GUASCOR is an important contractor of wind mill parks. IBERDROLA is the world leader utility in wind installations and has a strategic agreement with GAMESA to commit more wind energy. OT. Ocean technologies. There is one wave energy installation close to start operation commissioned by EVE (the Basque Energy Board), in the pier of Mutriku, a small village on the coast about 70 km from Bilbao. The objective is to take the energy from the waves hitting the port dam; it has an installed power of 296 kw and will produce 66 MWh. EVE is leading actor to impulse the marine technologies with the setting up of BIMEP, an experimental off shore park for the different emerging technologies. This installation will be 37

38 combined with a research centre and is open to all companies and technical centres interested in testing the WEC equipments. At the level of Spain, IBERDROLA through IBERENOVA together with US OPT is building a power buoy type of energy detainer in Santoña, Cantabria. At the development phase there are three projects in Spain: PISYS system based on a Buoy. HIDROFLOT, a floating structure composed by 16 buoys OCEANTEC, promoted by the Basque Technology Corporation TECNALIA and the support of IBERDROLA. It is based on a converter receiving energy from the nodding movement of the floating structure. Despite these technologies are in embryonic phase, some Basque companies are interested. BIO. Biomass and Biofuels: There are several Basque engineering companies developing installations for the gasification of vegetal raw materials and livestock waste like GUASCOR, IBERESE, IBERINCO, and IDOM. On the other hand, BIONOR is a Basque company refining oil into biofuel. H2. Hydrogen and fuel cells: This area is still in basic research phase, and the two Basque technology corporations, TECNALIA and IK4 are investing big resources on this through EC and national research funding. From the demand side only a handful of companies are present in this market: FAGOR ELECTRODOMESTICOS for domestic generation with fuel cells. GUASCOR is interested in Hydrogen generation with biomass gasification and renewables. CEGASA is interested in polymer fuel cells for small power devices. DER. Distributed Energy Resources, Smartgrids: Not only IBERDROLA as utility but also the suppliers of grid components are in the transition process (regulations, markets and technology) towards the micro grids scenario. Currently, products and services facilitating the transition are being designed, tested and installed by a relevant group of Basque technology providers companies e.g.: INGELECTRIC, ARTECHE, INCOESA, MESA, ORMAZABAL, ZIV, and JEMA. CO2 Sequestration and storage: Due to climate change fight, regulations in this area are becoming more relevant in order to both avoid emissions and save money. In Basque Country, the companies emitting CO2 start to search solutions. This includes at least iron and steel sector, energy producers, and oil refineries. EE. Energy Efficiency: Since the year 2000 there has been an active policy of EVE to promote the rational use of energy and increase the efficiency in its use. The graphs below illustrate the objectives for year

39 Energy Demand (in 1000 teps) / 2000 Trend if no changes 6,7 9, % annual Target scenario 6,7 8, % annual Figure 9: Energy demand trend and target scenario Several programs are in place to facilitate the Basque economic sectors to reduce energy consumption and increase the energy intensity of their processes in line with the objectives establish in the European Union: implementation of new processes in order to achieve energy savings, energy efficiency or the reduction of greenhouse gas emissions, including CO 2, at industrial level, in transport and in the tertiary sector. Some examples are thermal recuperates, recycling loops, thermal insulation, cogeneration Summary on RTD Demand Directory Our directory of RTD demand contains the information of 23 most important Basque companies performing R&D in sustainable energy field (Appendix II RTD Demand). These companies have: Total turnover 2008: m (Iberdrola alone ~ m ) Total employment: personnel Estimated turnover from sustainable energy field 52.9% We classified the companies according to sustainable energy technologies that they specialize in (one company can be active in several fields). Renewable energy was the most common area, being the focus area of 27 companies. Second most mentioned area was distributed energy and smart grids. 39

40 Figure 10: Focus area of Basque company base (in number of times mentioned). Most typical renewable energy focus area was solar energy (photovoltaic, solar power, solar thermal) with 13 companies mentioning it as their focus area. Wind energy was the focus area of seven companies, biomass and biofuels was mentined five times and embryonic marine technologies twice. Figure 10: Renewable energy focus area of Basque company base (in number of times mentioned). 4.4 Sustainable Energy RTD Supply in Basque Country Overview of the Regional Research Organizations In general, the research and technology development in Basque Country is done by four different types of at least partly public actors: Universities (3), Basic and Excellence Research Centers (BERCs) (6), Technological Corporations (2) and Cooperative Research Centers (CICs) (7). The role of universities and BERCs is more on basic research, whereas CICs and technology corporations work closer together with companies. CICs are new types of research centers that work on specific field of technology by forming collaboration between universities, technological corporations and companies. Technological corporations, on the other hand, are multi sectoral large technology centers that have had a long tradition on working together with Basque company base. 40

41 Figure 11: Research organizations in Basque Country. The RTD directly related on sustainable energy field is done mainly on University of Basque Country, University of Mondragon and in Technology Corporations Tecnalia and IK4 Research Alliance as well as on CICenergyGUNE, although the BERCs perform basic research that can directly benefit sustainable energy field (especially Basque Center for Climate Change, but also centers focusing on physics and applied mathematics). The following table shows the involvement of actors in different sustainable energy fields. Table 10: RTD supply organizations and fields of activities in Basque Country. CICenergi GUNE Tecnali a IK4 Mondragon University University of Basque Country Renewable energy sources (RES) Biomass x x x x Biofuels x x Wood Hydro Marine x x x Solar x x x x Geo Wind x x x x Rational use of energy (RUE) Energy efficiency x x x Energy storage x x Hydrogen generation, fuel cells x x x x Distributed energy sources, smart grids x x x CO2 sequestration and storage 41

42 CICenergiGUNE ( is a new energy research foundation currently in start up phase. The centre has been set up with support from public authorities and businesses directly associated with the energy industry. The CICenergiGUNE aims to contribute on world class energy sector research (physical CIC) but also to act as a coordinator of Basque energy field research (virtual CIC). The following figure describes the role of CICenergiGUNE. Figure 12: Role of cooperative research centre CICenenergiGUNE. The CICenergiGUNE has four lines of research, that all fall into definition sustainable energy field and are described in the following table. Table 11: Research lines of CICenergiGUNE. Power storage, Batteries and Fuel cells Advanced Batteries Electrochemical Condensers Ultra capacitors High temperature solar thermal Nanocrystal polymers Phase Change Materials Bioenergy Lignocellulosic biomass Natural Photosynthesis Systems Thermo chemical biomass processes Biological reactors Marine energy Development of prototypes for capturing wave power Assessment and certification of energy capturing devices under real operating conditions Development of maintenance techniques and operation of marine energy farms BOP associated with the development of marine energy farms TECNALIA Energy Unit ( is recently formed research unit that merges energy units of five research centres. The unit is devoted to renewable energies and sustainable energy carriers such as electricity and hydrogen. The unit has 120 personnel and it has a turnover of 12m in The main areas of research are described in the following table. 42

43 Table 12: Research lines of Tecnalia. Biomass Treatment of raw materials and waste with a high organic content Thermal transformation processes to obtain liquid and gaseous biofuels Aeolic energy Power converters: Conventional, multilevel and matricial Hardware and control algorithms Communications protocols for wind farms Materials and structures, blades Wave energy New concept wave energy harvesters Energy conversion and connection to the electricity grid Locations and prediction. Infrastructures. Environmental impact Evaluation of systems Active Electrical Energy Distribution Networks Advanced architectures for electrical networks Electrical demand management Hydrogen and Fuel cells Production of hydrogen from hydrocarbons and biomass Safety and behaviour of materials in relation with hydrogen Materials and components for PEMFC and SOFC cells Plant balance. Hydrogen for storage of renewables Fuel cell applications: mobiles and land lines Solar energy Distributed architectures, MPPT algorithms, monitoring and predictive maintenance. Organic, hybrid, and DSSC cells. Thin film cells. Flexible systems. Integration of photovoltaic in building Materials, coatings and joints for solar thermoelectricity. IK4 Research Alliance ( forms the other Technological Corporation of Basque Country. IK4 unites seven research centres from various fields of technology. From IK4 research centers three namely Cidetec, Ikerlan and Tekniker are working with sustainable energy field with a budget of 12M and 140 researchers in year Cidetec Department of Energy ( performs all types of electricity production and storage systems development where the electrochemical component development plays a dominant role. Thus, R&D efforts have historically focussed on batteries alkaline and lithium and polymer membrane fuel cells; considerable experience has also been gained in super condensers. For the development of these activities, the Department has a multidisciplinary workforce of 27 researchers (2008). Ikerlan Energy Efficiency and Sustainability in Buildings Technologies Unit ( is doing research relating to combustion, thermal systems and alternative generation systems with special attention being given to applications enabling optimisation of energy resources and the supply of energy to the final user with comfort control. The unit had 64 researches in Tekniker Renewable Energy Technology Area ( had 26 personnel in energy research. This focus area has emerged due wide range of technologically horizontal applications able to undertake multi discipline projects in the fields described in the following table. 43

44 Table 14: Research lines of IK 4. CIDETEC - Batteries Unit: - Primary and secondary batteries for consumer applications - Alkaline, An-Aire and lithium-ion batteries CIDETEC - Photovoltaic Unit: - Active organic and non-organic materials for photovoltaic production CIDETEC - Fuel Cells Unit : - Development of PEMFC fuel cells for low-power and portable applications IKERLAN - Alternative Generation Systems - Solid oxide fuel cells - Fuel cell-based electricity and heat generators - Bipolar plates for PEM (Proton Exchange Membrane) cells - Processors for proton exchange membrane cells and solid oxide fuel cells based on liquid and gaseous fuels TEKNIKER - Wind Power: - Lubrication of critical elements and bio-lubricants - Mechatronic simulation and design - Advanced maintenance strategies TEKNIKER - Solar Thermal for Heating and Cooling: - Developing advanced components - Developing specific production systems for the sector (e.g. coating chambers) - Surface Functionality (selective, reflective or transparent coatings) - Geometric characterisation of large concentrators - Wireless control systems for large solar fields - High precision tracking systems - Developing new heat transfer fluids and maintenance IKERLAN - Combustion and Thermal Systems -Generation of hydrogen from natural gas or biomass by pyrolysis - Efficient multi-gas combustion TEKNIKER - Energy storage: - Magnetically suspended flywheels - Designing intelligent materials for thermal energy storage - Surface technologies to improve hydrogen storage Mondragon University, Engineering Faculty The Electric Energy Research Group ( focus its activity on the energy management, in applications such as the distributed generation (generation, transmission and distribution), traction (railway and naval) and electronic devices (elevation, industrial processes, etc.). The group had 21 researchers in 2008 and their research lines are connected to the fields of power electric systems and electronic energy generation applications. Table 15: Research lines of Mondragon University. Power electronic systems for electric energy control - Applications on new power electronic components - New power electronic converter topologies development - Development of power electronic devices connected to the Medium Voltage grid, for several applications - Coordination of electric-electronic components for distributed generation applications Drivers for traction and electronic energy generation applications - Modelling, simulation and control of AC electrical machines - Electromagnetism: Development of mathematical tools to design electrical machines and actuators - Application analysis: Applications such as wind energy generation, vertical transport and traction require the specification of the different elements in order to perform an optimized system 44

45 In the University of Basque Country (UPV/EHU) ( there are several research institutions and research groups involved in the field of energy. Altogether the R&D funding in energy field was 2,1m in 2008, and 45 researchers were dedicated to energy research. The UPV/EHU does research in the following fields of energy: natural gas, wind energy, photovoltaic, biomass, wave energy, biofuels, hydrogen and fuel cells. Examples of research projects in UPV: SOSTENER (ETORTEK, regional funding). Area: bioenergy. Research and development of integrated solutions for minimizing the impacts of CO2 emissions. Total budget : LINCE (ETORTEK, regional funding). Main objective is to launch the physical CICenergigune cooperative research platform with four research lines in fields of renewable energies: marine energy, bioenergy, energy storage and concentrating solar power. Funding : Genedis III (Etortek, junto a y otros). Research on fuel cells, grids and distributed generation of energy. Funding: : , Deimos (CENIT AGE, nacional funding). Research on polymeric membrana fuel cells and solid oxid. Crisálida (CENIT AGE, nacional funding). Smart grids and secondary distribution security. Microsil (CENIT AGE, nacional funding): Photovoltaic modules and silicon thin film. One of the largest institutes of UPV/EHU is the Institute of Microelectronic Technology (TiM) that focuses its research activities on photovoltaics. TIM has about 20 researchers from various faculties of the university and is one of the leaders in development of emerging photovoltaic technologies, especially bifacial solar cells. The institute also analyzes device physics issues, advanced structures and manufacturing technologies that are in an early developmental stage. The institute has participated two large FP6 projects in the field of photovoltaic, namely Venetian PV and Bithink. The institute has a laboratory of solar energy and there are plans for 2me extra investment on this laboratory. The following table lists the actors RTD supply in Basque Country. 45

46 Table 16: Research organizations in sustainable energy research in Basque Country, Organization Type of organization Research Unit Number of researcher s in RES & RUE Annual budget CICenergiGUNE Research centre Tecnalia Research centre Energy Unit M IK4 Mondragon University / Faculty of Engineering University of Basque Country Research centre Tekniker, Ikerlan, Cidetec M University Electrical Energy 20? University Various M TOTAL 325 ~32M ~6 M estimation for future Summary on RTD Supply Directory The directory of sustainable energy supply collects a portfolio of 50 public funding projects on going in Unfortunately, the data in project level was not publicly available (except for FP projects) and thus we had to rely on information that research organizations provided us with. As a result, at the moment the project level data is only collecting the research projects of Tecnalia. The lacking project level data may be added later. The portfolio of public funding R&D projects on going in 2008 collects a total funding of 13,2 m, of which more that half (62%) is coming from FP6 and FP7. The proportion of European funding is perhaps little biased as in 2008, some FP6 projects were still on going and at the same time new FP7 projects were starting. National funding yields 25% share and regional funding sums up 13% of the funding. Figure 13: RTD projects by source of funding. The projects were classified according to sustainable energy technology they apply. Almost half of the projects were focusing on some of the renewable energy generation 46

47 technologies. Second largest field of research was distributed energy sources and smart grids. In this field Tecnalia has a strong tradition and well established research group. Figure 14: RTD projects by field of technology. Out of the projects focusing on renewable energy, most typical ones were solar (41%) and ocean energy (35%). There were some projects also doing research on wind energy and on biomass. Ocean 35% Biomass 6% Wind 18% Solar 41% Figure 15: Renewable energy projects by field of technology. 47

48 5 Sustainable Energy RTD Demand, Supply and Related Policies in Northern Hungary 5.1 Sustainable Energy Regional State of Play The total consumption of primary energy in Hungary in 2008 was 1125 PJ. (Figure 16) This figure includes the energy content of all fuels and other sources used for production, refining, transmission and delivery of energy, both from domestic and imported sources and direct import of electricity. Some 29 % of this total primary energy is consumed by the industry. The share of traffic is about 24 %, the private households 29% and agriculture just 3 % of the primary energy. There is a rest of 15% used for mixed other purposes. Renewable: 63,4 PJ, 5,6% Coal: 133,9 PJ 11,9% Natural gas: 455,5 PJ 40,5% Electricity: 175,5 PJ 15,6% Oil: 302,2 PJ 26,9% Figure 16: Consumption of primary energy in Hungary (2008), Source: Central Statistical Office of Hungary KSH. The ratio of renewable energy sources in the consumed energy is relatively low at this moment: 5,6%, including all kind of renewables. The total production of primary energy was 427 PJ that is why the ratio of energy import (energy dependency) is about 2/3. From this point of view the use of local (home) energy potential is more than necessary in the future. The role of the renewables has been increased stepwise in the last decade: it was 38 PJ in 2003 and today (2008) it is 63 PJ. (Figure 2) But tha majority of renewables are different kinds of biomass: biofuels, solid biomass, wood, biogas they take about 92% of renewable energy sources (mostly wood and solid biomass). These numbers suggest a reasonable high unused renewable energy potential for Hungary and many experts have made calculations to determine it in the last 4 5 years. Knowing these results there is a meaningful distribution among the numbers which leads us to the consequences: there is a need for consolidated methods of calculations, database and knowledge base 48

49 there is a need for wide network of experts to prepare a sustainable energy strategy for Hungary (despite of the prepared and accepted energy strategy, renewable energy strategy, bioenergy strategy but they represent just a special segment of the complex picture of the renewable energy strategy) and this work has to be started bottom up because of the need for local primary database (like our purpose for the Northern Hungarian EU region in the frame of the RESGEN project) electrovoltaic suncollector wind water biofuel biogas solid biomass wood geothermal Figure 17: Stepwise increasing role of renewables in Hungary (Source: KSH). The before mentioned Renewable energy strategy for Hungary has been prepared and accepted by the Government in (Figure 18) 49

50 Biofuel 11% Wind 3% Water 1% Sun 1% Geothermal 6% Biogas 7% Biowaste 2% Solid biomass 69% Figure 18: Renewable energy strategic objectives for Hungary, It is important from the point of view of a valid calculation of renewable energy potential. The problem is that there isn t any regional statistical database about the (calculated) RESpotential in the Hungarian EU region now. But we can solve the problem in different ways: it is possible to start with primary data collection at regional level (in Northern Hungary) to build up a regional RES database. It takes a lot of time and cost, but will be very valuable for strategic use we can calculate the regional situation starting from the national strategy level and taking into account the local specialities (terrestrial data, people, demand, organisations, capacities, etc ) We have decided to follow both directions parallel because the relevant database is needed soon or later and the calculation is necessary because of the short deadline. The RES potentials include the sources mentioned in the Figure 3. The strategy is focusing on four key components: 1. Major reduction in the use of fossil energy sources; 2. Phase out of the use of nuclear energy; 3. Substantial development and expansion of new renewable energy sources; and 4. Improvement of energy productivity far beyond historical rates. We have to take into account the next important principles during elaborating our regional sustainable RES strategy: Ecological point of view: Climate protection: the Northern Hungarian region belongs to the most threatened regions in the EU the climate change vulnerability index is the highest (Figure 4.) If the rate of temperature change exceeding 0.2 C per decade 50

51 and a mean global temperature rise of more than 2 C compared to pre industrial levels these are intolerable parameters of regional climate change. Sustainable land use: per cent of the national land surface should be reserved for nature conservation. Not more than 3 per cent should be used for bioenergy crops or terrestrial CO2 sequestration. As a fundamental matter of principle, natural ecosystems should not be converted to bioenergy cultivation. Where conflicts arise between different types of land use, food security must have priority. Protection of rivers and their catchment areas: In the same vein as terrestrial areas, about per cent of riverine ecosystems, including their catchment areas, should be reserved for nature conservation. This is one reason why hydroelectricity after necessary framework conditions have been met (investment in research, institutions, capacity building, etc.) can only be expanded to a limited extent. Prevention of atmospheric air pollution: Critical levels of air pollution are not tolerable. As a preliminary quantitative principle, it could be determined that pollution levels should nowhere be higher than they are today in the region, even though the situation there is not yet satisfactory for all types of pollutants. Socio economic principles: Access to advanced energy for all: It is essential to ensure that everyone has access to advanced energy. This involves ensuring access to electricity, and substituting fossil use by advanced fuels. There are about 300 hundred settlements in Hungary having no access to gas pipeline (many of them are in the Northern Hungarian Region). Meeting the individual minimum requirement for advanced energy: we consider the following final energy quantities to be the minimum requirement for elementary individual needs: by the year 2020 at the latest, everyone should have at least 1000kWh final energy per person. Today the average value is 960 kwh/capita/year. Limiting the proportion of income expended for energy: poor households should not need to spend more than one tenth of their income to meet elementary individual energy requirements. Keeping risks within a normal range: a sustainable energy system needs to build upon technologies whose operation remains within the normal range of environmental risk. Nuclear energy fails to meet this requirement, particularly because of its intolerable accident risks and unresolved waste management, but also because of the risks of proliferation. Decreasing unemployment by developing the local energy system: the local energy supply could have a meaningful role in developing new jobs, workplaces, family income in the agriculture, service, education, and the energy sector itself. 51

52 The Northern Hungarian EU region Figure 19: Climate change vulnerability index of the EU regions (Source: Regions 2020) Energy Demand and Production The total consumption or end use of energy was 794 PJ in Hungary in Comparing to the recent primary energy consumption (1125 PJ) it means about 30% waste of energy. The calculated end use of energy was PJ in the Northern Hungarian EU region distributed among different end users as follows: (Figure 5) 52