Turning Energy Challenges Into Opportunities: Horizon 2020

By Robert-Jan Smits, Director-General, DG Research & Innovation, European Commission
Spring 2014

The need to ensure a competitive, secure, affordable and sustainable energy system is without a doubt one of the greatest challenges of the 21st Century. It is a fundamental issue for Europe, its citizens and its economic well-being.

On 22 January last, the European Commission presented its '2030 climate and energy goals for a competitive, secure and low carbon EU economy'. While the European Union is making good progress towards meeting its climate and energy targets for 2020, an integrated policy framework for the period up to 2030 is needed to ensure regulatory certainty for investors and a coordinated approach among Member States. The Commission has put forward ambitious yet achievable objectives - a 40% greenhouse reduction target for 2030 and a 27% target for renewables. The Commission is convinced that this framework represents the most cost-effective milestone in our path towards a low-carbon economy; it gives stability to investments, it will boost green jobs and supports our security of supply.

The 2030 framework recognises the continuous evolution of technology and the crucial role that research and innovation must play if we are to achieve our targets. We know that countries that do not invest in R&D fall behind, and those that do not innovate risk stagnating. Without investment in science and research, we are at risk of stifling the advances in technology and the entrepreneurship needed for the energy solutions of tomorrow.

The European Union has just launched Horizon 2020, its biggest research and innovation programme to date. With almost €80 billion to invest over the next seven years, Horizon 2020 is one of the few areas of the EU's new budget that sees a major increase in resources. Striking the right balance between supporting excellent science, boosting the competitiveness of our industries, and tackling societal challenges, Horizon 2020 will make almost €5.8 billion available for (non-nuclear) energy research and innovation. It is clear that the current energy system, which is based largely on fossil fuels, will require a complete overhaul. Horizon 2020 aims to redress the balance by making new, cleaner, low-carbon, energy-efficient sources commercially attractive.

In a break with the past, the calls for proposals are less prescriptive. Rules are simplified, which will stimulate participation, encourage competition and deliver impact. Activities will cover the full cycle from ideas to market, with a new focus on innovation-related activities. The participation of SMEs is specifically targeted through a dedicated 'fit for purpose' instrument and will receive more than €8 billion during the sevenyear programme.

The Energy theme of Horizon 2020 has been designed taking into account the following key goals:

  • To unlock the full potential of energy efficiency. Europe is still the largest market in the world for energy-efficient products and services. But only a small part of our economic potential is exploited. In buildings for example, up to half of energy currently used could be cut by the use of intelligent and energy-saving technologies. Energy-intensive industries and SMEs need more affordable energy-efficient technologies to reduce their costs and become more competitive.
  • To exploit the potential of further indigenous resources in Europe. In this respect, increased attention should be paid to renewable energy and other clean conventional options. This will in turn bring the cost of low carbon technologies down, while at the same time it will promote co-ordinated and efficient European industrial value chains, from the supply of materials to the assembling of the final product.
  • To develop an integrated energy system. The internal energy market must be strengthened through smarter and more integrated EU energy grids. More attention must be paid to the incorporation of technologies into the energy system for more sustainable, cost-efficient solutions, economies of scale and to address increasing energy prices.
  • To reach out and engage. This requires cooperation with our international partners where there is clear added value. There is also a need to integrate the social science and humanities dimension into energy research. We must empower and engage further with the citizen by raising awareness about the need to develop innovative solutions.

The role that nuclear energy plays in Europe's overall energy mix should not be overlooked. Since nuclear energy remains an important technology of choice for many Member States, the Commission will maintain and develop research into this area. With a budget of over €1.6 billion, the five-year Euratom Programme will support nuclear research and training activities particularly for improving nuclear safety, security and radiation protection. It will, therefore, contribute to the long-term decarbonisation of the energy system in a safe, efficient and secure way.

New possibilities have been created so that Horizon 2020 funding can be combined with private and national funds, and with support from other European programmes such as the Structural Funds. In particular, Horizon 2020 will help mobilise private investment by making access to risk finance easier. This will leverage substantial investment in key research and innovation sectors, such as energy, which are strategic for reinforcing Europe's international competitiveness.

Over the next seven years, it is expected that more than €1 billion will be invested in the public-private partnership on 'Fuel Cells and Hydrogen'. This partnership with industry will accelerate the market introduction of carbon-lean energy systems based around fuel cells and hydrogen technologies, with significant potential applications in many sectors, including transport and power generation.

The central pillar for the coordination of research and innovation actions between Member States and the EU programmes is the Strategic Energy Technology Plan (SET Plan). It triggered investment in low-carbon technologies across the EU from €3.2 billion in 2007 to €5.4 billion in 2010. This investment is expected to substantially increase under Horizon 2020 with the development of a single integrated roadmap and action plan for coordinated investments for: energy efficiency; competitive lowcarbon energy; and smart cities and communities. This roadmap and action plan will take account of each Member State's preferred energy mix, and will provide greater support for first-of-a-kind, large-scale investments in technologies that have been successfully demonstrated at small scale but which are not yet commercially mature.

Horizon 2020 provides a means to accelerate innovation in cutting-edge, low-carbon technologies, to support the energy transition and help secure Europe's competitiveness by creating growth and jobs. We are convinced that by putting innovation at the heart of the energy transition the EU can bridge the gap between research and the market and take its place as a world leader in clean energy technologies and services