Horizon 2020 unveiled: energy needed more

The European Commission today presented its proposal for research and innovation funding in the period of the next EU budget (2014-2020 inclusive). An amount of € 5.8 bn (constant 2011 values) has been proposed for non-nuclear energy, which includes renewable energy.

€ 5.8 bn can be compared with approximately € 4.6 bn of EU-level spending on non-nuclear energy-related research or innovation work in the seven year period 2007-2013^[1], corresponding to an increase of 30%. If NER300 funding is included, the increase reduces to 10%^[2].

After adjustments to compare like with like, we judge the overall budget of Horizon 2020 to have increased by roughly 45%^[3].

The increase in energy spending fails to meet our expectations. The comparison with the overall increase of Horizon 2020 suggests that unless the EC intends to launch separate new instruments like a modified EEPR or NER300, or to put pressure on the Member States to use ETS Phase 3 auctioning revenues to accelerate the development of new energy technology, energy-related research and innovation work will appear to lose ground relative to other areas of interest to the EU.

Last-minute changes

Some decisions on Horizon 2020 were taken very close to the deadline for adoption (limits on research into human embryonic stem cells, reimbursement rates and the budget for the EIT were among them). In a leaked document dated 25 November it appeared also that funding for energy was cut substantially in the days that remained till adoption on 30 November, from 8.1 bn EUR in nominal values to 6.55 bn EUR. But, a Commission official said to EUREC, this impression was wrong. The amount earmarked for energy increased, and this is visible in the difference between the 8.1 bn EUR figure in the leaked document and the sum of the Euratom (2.65 bn EUR^[4]) and non-Euratom spending (6.55 bn EUR), which is 9.2 bn EUR. A piece of evidence that points to the truth of this interpretation is the fact that the leaked document talks for a total for Horizon 2020 of 90.4 bn EUR (nominal), while the Proposal for a Regulation from the Parliament and Council^[5] (which excludes the Euratom component) talks of a total budget of 87740 M EUR. This difference could entirely and plausibly be accounted for by the inclusion of Euratom in the leaked document.

Modalities

The suggestion that roughly one quarter of the money in the ‘access to risk finance’ instrument “may go towards the implementation of Strategic Energy Technology Plan (SET Plan) projects” is welcome. We expect to see substantial demand for this instrument from project developers and technology manufacturers.

Clues as to the way Horizon 2020 money will be spent were revealed at the SET Plan conference, which concluded on 29 November in Warsaw. The final communiqué signed by the EC and Member States affirmed their intention to use Horizon 2020 money on “programmes and projects with high EU-added value including joint actions with Member States to leverage […] matching private co-financing from industrial partners […].” We interpret this as a move by the EC to devolve responsibility for managing a share of Horizon 2020 money to the Member States. This idea is new compared to FP7 and deserves closer consideration.

[1] € 4.6 bn is calculated as € 2.35 bn (FP7) + € 0.73 bn (Intelligent Energy Europe) + € 1.5 bn (European Energy Programme for Recovery). The comparison is approximate: these quantities are in nominal values
[2] NER300 funding is included as follows: the total value of the NER300 pot is estimated at € 2.4 bn, € 1.6 bn for the first call for proposals (in the period 2007-2013) and € 0.8 bn for the second call for proposals (in the period 2014-2020).
[3] Calculated as follows: FP7 budget of € 51.1 bn in 2011 prices. It includes GMES (€ 0.62 bn from FP7), which Horizon 2020 does not. Horizon 2020 includes most aspects of the CIP (everything except the Enterprise Europe Network, we understand at present), which, in the 2007-2013 period had a budget of € 3.3 bn. Horizon 2020 includes the EIT. In the 2007-2013 period, this had a budget of 300 M EUR. To compare fairly, we imagine that GMES was not funded by FP7 (i.e. subtract it from the budget) and that CIP and EIT were funded by FP7 (add them). The Horizon 2020 budget of 80bn EUR excludes only the ITER part of Euratom. The other parts of Euratom are included (research related to radiation protection, Gen IV, etc) and estimated at € 1.2 bn for the 7 year period 2007-2013). So overall the comparison is between 51.1 - 0.62 + 3.3 + 0.3 + 1.2 = 55.3 with 80, which is an increase of 45%.
[4] The Euratom proposal is for five years, not seven, however its budget is programmed within Horizon 2020 for seven years. Therefore the figure of 1789 M EUR appearing in the Euratom proposal must be multiplied by 7/5, giving 2504 M EUR with some additional amount (say 150 M EUR) being allowed for the fact that funding should increase year-on-year, not stay constant.
[5] COM(2011) 809