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Europe needs to focus on creating a competitive internal energy market offering quality service at low prices, on developing renewable energy sources, on reducing dependence on imported fuels and on doing more with a lower consumption of energy.

European Energy Policy

The Energy policy framework in Europe creates a structure of opportunity and challenge for those engaged in Energy production, research and technological development. EU-level policy is embodied in an accumulation of Commission proposals and Council-Parliament adoptions. Understanding this body of policy is central to capitalizing on the opportunities they present. Analysis reveals a clear portfolio of priorities for decision-makers and opportunities for industry. These can be categorized as: Energy efficiency; renewable energy; security of supply, smooth functioning of the internal market; and nuclear power.

A Commission Communication on the Energy Efficiency Plan 2011 identifies a main goal of the EU to deliver a low-energy economy to its citizens by reducing energy consumption and eliminating energy wastage while making the energy we consume more secure, competitive and sustainable. To achieve this multifaceted goal, the EU's energy policy strategy tries to encompass energy sources from fossil fuels, nuclear energy as well as renewables.

Policy Challenges

The EU recognizes the significance, as well as the level of ambition, of the goals articulated in the Energy Efficiency Plan. In response to this fact, a 2011 Commission Communication was released concerning the EU's Energy Roadmap 2050, which will serve to monitor the Union's advancement towards and beyond Europe 2020 flagship initiatives related to EU energy policy.

In this Communication, the Commission also identifies the challenges in promoting energy efficiency and delivering EU's decarbonisation objective while ensuring the safety and competitiveness of the Union's energy infrastructure. These challenges can be understood generally as the following: 

- Transforming the energy system;

- Rethinking energy markets;

- Mobilising investors;

- Engaging the public;

- Pushing change on an international scale.

Horizon 2020 Energy Objectives

Energy Efficiency

The current question facing the Union is what role the next framework programme, Horizon 2020, will play in addressing the opportunities and challenges posed by the current energy system in place. In support of the 20/20/20 climate energy targets, the Horizon 2020 funding framework will be instrumental in the development of Europe's climate action policy, resource efficiency and use of raw materials to create affordable green electricity in the near future. Horizon 2020 aims for the efficient use of the Union’s resources through the following goals:

• Raising renewable energy consumption up to 20% by 2020;
• Reducing the cost of onshore/offshore wind energy production by 20% by 2020;
• Halving the cost of solar energy consumption to 2010 levels in 2020
• 60% of Horizon 2020 budget will be dedicated to sustainable development (to reinforce environmental objectives)

Security of supply, external dimension and enlargement

To achieve its goal of secure, competitive and sustainable energy the EU must cooperate with producers, transit countries and consumers. At a time of vulnerability of imports, potential energy crises and uncertainty surrounding future supplies, the EU must make sure that its actions and partnerships guarantee the security of its energy supply.

A specific programme which will contribute to the implementation of priorities of the Horizon 2020 is the Euratom Programme. The ground for nuclear energy in Europe was laid in 1957 by Euratom. Its main functions consist of furthering cooperation in the field of research, establishing common safety standards, ensuring an equitable supply of nuclear fuel, monitoring the peaceful use of nuclear material and international cooperation.

With a mandate to Union funding from 2014 to 2018, the Euratom Programme will support research activities in nuclear energy (fusion and fission) and radiation products. Its initiative is to support pre-commercial and policy-related research and, therefore, to ensure an exchange of information between academia and industry. Expressed in the Commission's 2011 Proposal for a Council Regulation, the Euratom Programme  is expected to contribute to the three strategic objectives present in the Horizon 2020 Framework Programme for Research and Innovation. In accordance with Horizon 2020, the Euratom Programme Proposal sets objectives for R&D activities with a stronger focus on nuclear safety and nuclear training throughout Europe. In addition, the Proposal will specify the instruments which will be provided in the programme to support these activities.

Renewable sources of energy

Under Horizon 2020, as in other areas of the strategy, there is an aim to bring benefits of progress in these technologies to the European citizens and businesses.

Renewable sources of energy - wind power, solar power, hydro-electric power, tidal power, geothermal energy and biomass - are an essential alternative to fossil fuels. In order to reach the ambitious target of a 20% share of energy from renewable sources in the overall energy mix, the EU plans to focus efforts on the electricity, heating and cooling sectors and on biofuels.

Smart Cities

Almost three quarters of the EU population live in urban areas, which represents 70% of EU’s energy consumption and accounts for 75% of the EU's total greenhouse gas emissions. Bearing in mind the growing urbanisation trend in Europe and worldwide, which is expected to result in 60% of the world’s population living in cities by 2030, it is important to transform cities into intelligent and sustainable environments by using innovation as the main driving mechanism for change.  

Smart urban technologies can significantly contribute to the sustainable development of European cities. By launching the Smart Cities and Communities European Innovation Partnership, the European Commission seeks to enhance the development of smart technologies in cities by combining the research resources from the field of energy, transport and ICT and focusing them on a number of “lighthouse projects”, which are designed to test and validate the various technologies under real conditions of selected cities. For the year 2013, €365 million in EU funds have been allocated for these types of urban technology solutions.

The horizontal session “Smart Cities of the Future,” was held at the European Parliament in Brussels on the 7th of March 2013 as part of the EU Science: Global Challenges, Global Collaboration Conference (ES:GC2). This session placed smart urban technologies at the centre of innovation in order to speed up solutions to societal challenges. The presentations discussed highly topical scientific and practical developments, such as smart and sustainable digital infrastructure, sustainable urban mobility, smart energy production, or smart buildings and neighbourhoods. The plenary discussion focused on the barriers facing cities in becoming ‘smarter’, and offered the possible solutions to overcome them. The panelists uniformly agreed that a mindR08;set has to be adopted by local authorities, policy makers and citizens in general, which leads to targeted actions towards sustainability, circular material flows and innovation. It was also argued that crucial factors in empowering cities and communities include the education and training of all relevant stakeholders and, most importantly, networking and the exchange of best practices. Ultimately, behavioural change among citizens is considered an indispensable building block of smart cities, where individuals need to be driven to make sustainable and innovative choices in all areas of daily life.

Smart Grids

The Europe 2020 growth strategy places innovation at the forefront of the efforts towards ensuring economic growth and securing jobs, while at the same time highlights the crucial role of innovation in tackling one of the most critical challenges Europe is facing today, namely ensuring the efficient and sustainable use of natural resources. In order to adequately address the challenges Europe is facing today, innovation must also be translated into the development of future energy infrastructures. Smart grids can be considered as an upgraded electricity network, which can ensure economically efficient, sustainable power system and allow electricity to flow where and when it is needed at the cheapest cost. Smart grids open up unprecedented possibilities for consumers to directly control their consumption and this way save energy and money. Smart electricity grids are expected to reduce CO2 emissions in the EU by 9% and the annual household energy consumption by 10%.

The European Commission has launched several initiatives aimed at the modernisation of energy networks. During the last decade, over €5.5 billion has been invested in about 300 Smart Grid projects; nevertheless, the EU is still in the early stages of the actual deployment of Smart Grids. Presently, only around 10% of EU households have a smart meter installed and most of them do not in fact provide the full scale of services to the consumers. Where economically worthwhile, 80% of all electricity meters in the EU are to be replaced by smart meters by 2020.

On the 5th of March 2013, as part of the ES:GC2 conference, a horizontal session dedicated considerable attention to the topic of “Smart Grids,” labelling it one of the most sophisticated engineering systems in existence. It also acknowledged that the necessity to improve efficiency, reliability, affordability and security dictate the need for a “Smarter Grid,” which will lead to significant economic growth and subsequently create job opportunities. The seminar also identified a number of challenges, such as the need for education, training and high-quality engineers; the need for large-scale demonstrations in real-life environments to test integration of technology in new solutions; generation of strong standards to ensure compatibility; or ensuring cheap, efficient grid-level energy storage.