Economic Development Group

NORTH SEA COMMISSION
Meeting of the Economic Development Group
Renewable Energy Subgroup 

Direktörsvillan, Trädgårdsföreningen, Göteburg, Sweden  
Thursday 5^th February 2004

DRAFT   MINUTES,  CONCLUSIONS  AND  ACTIONS

Present

Jessica Algehed	Västra Götalands Regionen, Sweden
Geert Boesjes	Province of Fryslan, Netherlands
Erika Brokvist	Energy Agency of West Sweden
Tom Christensen	Buskerud County Municipality, Norway
Vivien Collie	North Sea Commission
Daniel Dobson-Mouawad (Chair)	Suffolk County Council, England
Peter Kildal	Norsk Enøk og Energi AS, Norway
Paul Kyle	Perth & Kinross Council, Scotland
Erik Lindboe	Rogaland Fylkeskommune, Norway
Roddy Matheson	Aberdeenshire Council, Scotland
Thor Sverre Minnesjord	GreenPartner Grenland, Norway
Albert Moens	Provence North Holland, Netherlands
Mats Rydehell	KAN Energi Sweden AB
Eric Stewart	Angus Council, Scotland

Apologies

Robin Cotton	Renewable Heat and Power Ltd, UK
Ed Criag	Napier University, Scotland
Hanno Fecke	Messe Husum, Germany
Sibylle Hönscheidt	Business Development Corp. of Nordfriesland, Germany
Dr Matthias Huppauff-Jakober	Wirtschaftsforderungsgesellschaft Nordfriesland mbH, Germany
Morag McCorkindale	Aberdeen City Council, Scotlan
Caroline Privat	Regionalen Arbeitsgemeinschaft Bremen/Niedersachsen, Germany
Alan Russell	Fife Council, Scotland

2. Introductions  
Daniel Dobson-Mouawad (Suffolk County Council, England) welcomed everyone to the meeting.  He thanked Jessica for all her arrangements and assistance with the previous day's meeting (see meeting notes attached).

3.  Agreement of minutes
The minutes of the meeting of the Renewable Energy Subgroup held in Ipswich, England on Wednesday 5th of November 2003 were agreed.

4.  Matters arising - Comments on the OSPAR Guidelines
Daniel Dobson-Mouawad (Suffolk County Council, England) described how the group's comments had been compiled.  He also outlined the process under which the comments will be included in the North Sea Commission's formal response to OSPAR next month. 

Albert Moens (Provence North Holland, Netherlands) suggested that as it appears that the Kyoto agreements and targets are not progressing as originally planned - we should also ask the question if we need a new agreement on a European level?

Action:
Group Co-ordinator to bring this request to the attention of the NSC Secretariat and Executive Committee.

5.  Intelligent Energy - Europe (EIE), THE instrument for non-technological        Community support activity in the energy field. 
A presentation by Mats Rydehell, KAN Energi Sweden AB

Mats Rydehell (KAN Energi Sweden AB) gave a presentation on Intelligent Energy - Europe (EIE).   He described its relationship with FP6 and the CONCERTO Programme.  He also highlighted that the deadline for the next call for proposals is 30 April 2004.  The budget is 41.5M euros (plus contributions from EEA and participating countries).   The funding is only available, however, for a restricted number of priorities. 

The four fields of EIE are:

• SAVE - Energy efficiency (RUE)
• ALTENER - Renewable Energies (RES)
• STEER - Energy aspects of transport
• COOPENER - Promotion of RES and RUE in developing countries

The EIE has the principle of integration of:

• RUE and RES (support combined promotion of demand management and supply of renewables wherever possible)
• Instruments (combining legislation, technology, information, training etc and making tailored packages)
• Actors (involving all relevant key actors on the appropriate level(s))

The EIE is a non-technology programme.  It does not fund research or the costs of investments in demonstration.  It does, however, address non-technological barriers.

Mats identified the Vertical Key Actions (VKA) of SAVE, ALTENER, STEER and COOPENER:

SAVE	ALTENER	STEER	COOPENER
VKA1: Multiplying success in buildings. VKA2:Retrofitting of social houses. VKA3: Innovative approaches in industry.  VKA4: Energy Efficient Equipment and Products.	VKA5: RES - Electricity VA6: RES -Heat VKA7: Small Scale RES Applications.  VKA8: Alternative vehicle propulsion.	KA8: Alternative vehicle propulsion. KA9: Policy measures for an efficient use of energy in transport. KA10: Strengthening the knowledge of local management agencies in the transport field.	Energy policies, legislation and market conditions for enabling poverty alleviation in developing countries. Strengthening local energy expertise in developing countries. (Focus 2003: Sub-Saharan Africa)

Mats then identified the Horizontal Key Actions (HKA):

• Sustainable Energy Communities
• Think globally, act locally
• Financing mechanisms and incentives
• Monitoring and evaluation
• Dissemination and promotion

Mats detailed the Key Actions under the four EIE fields included in the recent call for proposals.   VKA6: RES - Heat was considered most relevant to the group members.  The aim of RES - heat is to "Encourage greater share of heat and cooling produced from renewable energy."  The target areas area:

• Legislation, fuels standards and norms (RES systems)
• Supply chain and market structures (RES products)
• Promotion and training (best practice, training)

Mats gave some examples of instruments and types of actions under VKA6.

He then clarified eligibility for participation in the different EIE fields, and the different levels of EU support available.  The Award criteria are:

• Quality of the action
• Quality of the approach
• Community added value
• Costs and benefits
• Organisation of the Team

Mats highlighted the importance of the consortium, and the need to clearly show the barriers, the solutions and the stakeholders/participants.  He also encouraged group members to check the EIE website information to establish the type of projects that have received support in the past.  The deadline for submissions is the 30 April 2004.

For further information visit:

• EIE website (including the project database) http://europa.eu.int/comm/energy/intelligent/index_en.html
• ManagEnergy website www.managenergy.net
• E mail Tren-intelligentenergy@cec.eu.int
• Fax +32-2-2966016

Mats described his involvement in assessing previous programmes, in writing and evaluating proposals and in provision of advice on proposals.

In addition to the Pellets for Europe project Mats has been involved in the "Efficient Energy Use for locally elected public representatives" project.  This is the result of a joint EU SAVE programme involving elected members in municipalities and counties in Sweden, Norway and Ireland.  The results are included on a web-site www.eepolicy.com

Action:
Group members to check the websites for more information on the EIE programmes.

6.  Project proposal by Peter Kildal, Norsk Enøk og Energi AS, Norway
Peter Kildal (Norsk Enøk og Energi AS, Norway) described his proposal for a web-based market place for Renewable Energy suppliers, producers and consultants.  This website would also be used for the transfer of knowledge between the different areas.  Peter is seeking partners for this project for the April call for applications.

Contact:
Peter Kildal
Managing Director
Norsk Enøk og Energi AS, Norway
Tel +47 32 20 16 00
E mail pk@nee.no

Action:
Group Co-ordinator to circulate the project proposal.

7.  Interreg IIIB project - North Sea Bio Energy
     Presentation by Geert Boesjes, Province of Fryslan, Netherlands

Geert Boesjes, (Province of Fryslan, Netherlands) outlined an Interreg IIIB project proposal that will be submitted in the February call for applications.  Province of Fryslan is the Lead Partner for this project.  Other partners are from Germany, Belgium, Scotland, Norway and the Government Service for Land and Water Use in the Netherlands.  (There is also a Danish interest in this project).

The Overall Aim is:  

• To enlarge the use of biomass for energy production in the North Sea countries.

The concrete aims are:

• To bring together and enlarge knowledge on the use of biomass for energy.
• To make that knowledge available to market parties.

The objectives are to provide:

• A solid and extensive centralised knowledge and experience platform relating to production, distribution and application of different bio-fuels, and the resources needed to create the fuels.
• A number of pilots to test and demonstrate technologies, processes and the use of different biomass types.
• Increased awareness of the bio energy market by informing and educating the various actors in this field.
• A network of contact persons or branch offices in the region to support further development of the bio energy market.

The partners share a number of key activities, but each also has a special area of interest.  Province of Fryslan has an interest in the energy potential from cow manure.  The German partners are interested in wood and straw ideas, the Belgian partners are interested in energy crops and the use of pig manure, the Scottish partners are interested in wood pellets, and the Norwegian partners are interested in bio diesel from fish waste and animal fat. 

The themes and activities include:

• Optimalisation of biogas production
• Production of biomass
• Ensuring bio fuel diversity
• Developing the market

Geert also described the proposed marketing and publicity schedule and links to other projects.

Geert then outlined the project costs and timetable of activities.  Although it is probably too late to include additional partners at this stage, the group agreed it would be good to learn from this project and share ideas.  There may also be the opportunity for sub-partners at a later stage.  Daniel Dobson-Mouawad (Suffolk County Council, England) also described a recent NSC visit to the Agro Business Park near Viborg in Denmark, where research was being carried out on the business potential of different elements of pig manure.  For more information about the Agro Business Park visit the website www.agropark.dk

8.  Renewable Energy Partnerships  
     Project idea by Mats Rydehell, KAN Energi, Sweden

Mats Rydehell (KAN Energi Sweden AB) outlined his idea for a new project "Renewable Energy Partnerships". 

He listed the problems experienced by SMEs (businesses with under 50 employees) in this sector eg:

• Lack of resources to branch out
• Lack of resources to find out more about opportunities
• Scepticism about the benefits of working with competitors

SMEs, however, often provide excellent entrepreneurs and technical experts.  It is important therefore that we tap this potential.

By working with a cluster of SMEs it is possible to create:

• Increased resources by joining forces
• Increased marketing activity
• Improved training
• Partnering opportunities
• R&D work
• Export initiatives

The objective of the project proposal is provision of network and clustering establishment for increased sale of equipment and services.   This would result in SMEs:

• Reaching new markets
• Finding new partnerships
• Increasing knowledge
• Better products

Mats identified the different actors in the value chain from suppliers to end users.  He then outlined the different Work Packages involved in the project proposal:

WP1	WP2	WP3	WP4	WP5
NETWORK  ESTABLISHMENT	TARGET  GROUP  DEFINITION	INFORMATION  SERVICES	TRAINING  AND  WORKSHOPS	EXPORT  ACTIVITIES
Preparation of lists of RES-SMEs Contact SMEs + questionnaire Agreement with participating SMEs  Contract management	Individual action plans, including individual meetings Clarify limited number of target groups for SME actions to be directed to (focus)	Seminars Website  Brochures for selected target groups etc.	Strategy development issues Export related issues Legislative issues  R&D related issues. Financial issues including funding possibilities. (Based on the action plans and information services).	Partnering events Study Tours Market overviews Proposal preparation Strategy development for each SME.

Mats outlined the various partnership opportunities offered by this project.  He suggested that the first stage would involve contact with key stakeholders, local manufacturers and businesses to establish their level of interest (ie how can we increase sales?).  The programme is then more likely to reflect their ambitions.  It is vital to keep in touch with the businesses and ensure quick results in order to maintain their interest.  It is also important to create a partnership that suits your area.  (Partnering can often mean exchanging knowledge and information at a local level rather than exporting). 

A number of the group members were interested in this proposal - especially its business perspective.

It was agreed that the Group Co-ordinator would circulate copies of Mat's overhead presentation on the RES Partnership proposal.  Members interested in participating should contact Mats NO LATER THAN 27 FEBRUARY.

Mats Rydehell can be contacted at:  
Tel: +46 708 27 97 28  
Email: mats.rydehell@kanenergi.se  
www.kanenergi.com

Action:
Group Co-ordinator to circulate copies of the overhead presentation on the RES Partnership proposal requesting members interested in participating contact Mats Rydehell NO LATER THAN 27 FEBRUARY.

9.  Discussion and conclusions
The group members agreed that the meeting had been a useful source of project ideas and contacts for the future.  It is hoped that this type of networking will lead to more collaboration on projects in the future and that this group can be used to bring a business perspective to politicians. 

The group agreed that it should:

• maintain contact with other groups.
• continue to exchange information before and during meetings.
• look at ways of influencing end users (eg. the public and others in the value chain).
• increase its political influence by discussing the barriers to using renewables, and inviting the public and private sector participants to create solutions.

10.  Date of next meeting
The next meeting of the group will be in Aberdeen (Scotland) to coincide with the 'All Energy' conference and exhibition.  This event is free of charge and takes place from 12 noon on the 25th May to 2pm on the 27th of May.  (For more information visit www.all-energy.co.uk).  

All-Energy Opportunities is the largest renewables exhibition in the UK, and the only one to cover all the renewable energy technologies.  Group members are, therefore, encouraged to use this opportunity to visit the conference and exhibition.  There will also be the opportunity for a study tour or talk with a local renewable energy company on the afternoon of Thursday the 27th May.  Aberdeen City Council and Aberdeenshire Council will jointly host a dinner on the evening of the 27th May and lunch on Friday 28th May.  The formal meeting of the group will be held on the morning of Friday 28th May.  Details and booking forms will be circulated.

It is also proposed that the autumn meeting of the group should coincide with the 'New Energy Husum' exhibition and conference in Germany in October 2004 (07-10.10.04).   For more information visit www.new-energy-husum.de .

Action:
Group Co-ordinator to circulate information and booking forms for the meeting to be held in Aberdeen in May.

NORTH  SEA  COMMISSION
 Meeting of the Economic Development Group
Renewable Energy Subgroup

Direktörsvillan, Trädgårdsföreningen, Göteburg, Sweden
Wednesday 4th February 2004

DRAFT  MEETING  NOTES

1.  Welcome to Västra Götaland
Jessica Algehed (Västra Götalands Regionen, Sweden) gave a short presentation to the group on Västra Götaland Region.  She highlighted the importance of Göteburg nationally and regionally.  She also described the area's importance as a major transport and export centre.  The major business sectors in this region are food, textiles, port/shipping activities, media/film, tourism and the petro-chemical industries. 

Jessica outlined the local government structure and highlighted the importance of healthcare delivery.  The other major public sector activity is Growth and Development.  This comprises:

• Sustainable growth
• Infrastructure and transport
• Competence and education
• Culture and creativity
• International co-operation
• Good environment

Sustainable development is encouraged from three perspectives:

• Social
• Environmental
• Economic

The four fields of environmental interest are:

• Energy
• Transport
• Food
•  Water  

Jessica distributed information about Västra Götaland and some of their environmental projects.  For more information visit www.vgregion.se

2.  Introductions  
Daniel Dobson-Mouawad (Suffolk County Council, England) welcomed everyone to the meeting and thanked Jessica for her assistance in organising it.  The group members discussed their expectations of the meeting, the projects they were involved in, and the ownership of energy companies in their areas.

3.  Bio-Energy in the Netherlands
Albert Moens (Provence North Holland, Netherlands) gave the group a presentation on renewable energy and bio-energy projects in the Netherlands.  Noord-Holland is committed to substantially decreasing CO2 levels within the next decade.  To this end it supports large-scale projects that are both financially and operationally innovative (eg the development of terrestrial heat pumps). 

According to the Kyoto Protocol the Netherlands are aiming for :

• 50 megaton reduction of CO2 (6%) in 2010 vs 1990
• 6% renewable power energy supply in 2020 vs 1990

This means that the province of Noord-Holland is aiming for:

• 4 megaton reduction of CO2 (6%) in 2010 vs 1990
• 5% renewable power energy supply in 2010

Sources of renewable energy in the Netherlands in 2003 are:

• Solar energy 1.3%
• Water  2%
•  Wind energy 16%
• Bio energy 76%

Bio energy is the largest source of renewable energy as it is seen to be low cost with high benefits.  It also has more potential.  A recent survey in North Holland showed that :

• In 2003 5.3 petajoule pro year
• With a potential of 6.6 petajoule pro year

The province of Noord-Holland stimulates entrepreneurs and municipalities to invest in bio-energy by:

• Start-up subsidies
• Climate agreements
• Transfer of knowledge meetings 

Information was circulated on projects in North Holland involving:

• Biomass
• Solar energy
• Fuel Cells
• Wind energy

4.  Bio-Energy in Sweden
The group heard a joint presentation by Jessica Algehed (Västra Götalands Regionen, Sweden), Erika Brokvist (Energy Agency of West Sweden) and Mats Rydehell (KAN Energi, Sweden). 

Erika outlined how energy was supplied and used by different sectors (users include residential, commercial, industrial and transport).  In recent years the use of oil and gas has decreased and the use of nuclear power (and bio-fuels) has increased.  The biggest potential for increasing the use of bio-energy by 2020 is wood fuels.  Other sources of bio energy are identified as waste products from the pulp and paper industries, agricultural crops, peat and waste.

Jessica described the Bio-Gas West project.  Natural gas (from organic municipal waste) is being brought into the area - and this has potential for use in vehicles.  To develop this initiative, however, work must be carried out on further development of the value chain (ie from raw material producers, distributors, gas stations, car manufacturers and users).  At present there are 18 filling stations providing gas, and 2,500 vehicles running on it.  The aim for 2006 is to have 35 filling stations involved and 7,000 vehicles using gas.   The main challenge is making the gas available to users.

Mats then gave a presentation on "The Pellets Programme".  This is a project supported by "Pellets for Europe".   Wood pellets are manufactured as bio-mass by-products of sawdust and shavings from the forest industry.  They have a low moisture and ash content which means that the energy content is high and the combustion characteristics are good. 

Sweden is the world's largest producer of wood pellets.  The largest users in Sweden have traditionally been big thermal power stations.  In recent years, however, increased growth has come from the small houses and medium size user markets.  Sweden has also recently begun importing wood pellets from Canada, the Baltic and Poland.

Mats described how the price of electricity in Sweden has been increasing, but wood fuel prices have remained static.  He highlighted how the location of wood pellet producers in Sweden is convenient for users.   Mats also highlighted the potential market in Sweden from converting oil fired boilers.  This can lead to payback within three years - and should increase demand for wood pellets.

The objectives of the Pellets Project are to:

• Increase the use of pellets in the region of Västra Götaland
• Increase the export of related equipment and knowledge/services

Mats then outlined the barriers to increased use of wood pellets and the possible actions that could be taken to overcome these barriers.  (eg training and increasing the number of installers; informing consumers about the benefits and availability; increasing the transfer of knowledge between producers, equipment manufacturers and users).  Mats described the co-ordination role required between the market, R&D activities and the advisory/information functions.

The achievements so far include:

• Creation of a website
• Training for installers etc
• A research network
• Partnering actions and study tours (leading to equipment sales)
• The Energy Train (promotional roadshow)
• Branch organisation and meetings
• Seminars for end-users and politicians
• A new initiative including solar heating

More information is available on the website www.EnergyCentre.info .  This website also has information on products and companies.

The group discussed problems relating to the European Waste Directive and the favourable taxation system for pellet use in Sweden.  The group agreed the need for state intervention in order to create investment in Renewable Energy.

5.  Bio-energy in Norway
Peter Kildal (Norsk Enøk og Energi AS, Norway) described how traditionally people in Norway had burned wood to heat their houses.  This was then replaced by oil for central heating.  The majority of houses today use electricity, the next major use is oil products, then bio-mass and a small number of district heating projects.  In Norway electricity prices have traditionally been low.  Oil and electricity are too cheap to boost the use of bio-energy at present.  This may change, however, due to the Enova goal for 2010 and government grant schemes.  The barriers to using bio-energy at present are the:

• Lack of bio-mass and bio-fuel at the correct price and quantity
• Lack of experience and knowledge in the value chain

The Norwegians are currently looking at areas of energy production and usage to determine where the need is, and how projects  can be developed in:

• Developing the chain from forest to fuel
• Industrial scale production
• Local heat initiatives

Peter suggested a project on developing a web-based market place and a bio-fuel exchange.  Mats also suggested that he should look at the Austrian bio-mass exchange run by colleagues in Vienna.

6.  Bio-Energy in Scotland
Roddy Matheson (Aberdeenshire Council, Scotland) and Paul Kyle (Perth & Kinross Council, Scotland) gave a presentation on bio-energy project development in Scotland. 

Roddy described how Scotland had historically been dependent on coal.  The exploitation of North Sea oil then provided an alternative to coal.  Next year the UK will start importing natural gas. 

Traditionally the UK government has taxed road fuel heavily and taxed heating fuel lightly.   The UK is lagging behind many other countries in the use and development of renewable energy sources.  The Scottish Executive has set a target of 40% of electricity to be generated by renewable sources by 2020.  (At present 12% is provided by hydro power).   In Scotland 50% of electricity is used for heating.  If wood fuel heating could be developed it would, therefore, help reduce electricity usage.

Roddy described the problems of using wood fuel in Scotland.  Government grants are available for equipment but not for running costs.   Wood pellets in Scotland are all imported and, therefore, expensive.  In addition, the use and production of timber does not have the same profile in the UK as it does in Scandinavia.  Some projects have, however, been developed in the Highlands and north east of Scotland.

Roddy highlighted the fact that the stable price of wood could prevent fuel poverty in rural areas in Scotland.  In order for wood fuel to be more widely used, however, the government must look at intervening and supporting these types of renewable energy sources.  The government must also be persuaded that heat production (and not just electricity production) should be eligible for financial support.

Roddy also described the chicken litter power station located in Fife (Scotland).  This facility burns 110,000 tonnes of chicken litter per annum.  It produces 10 MW of electricity and 11,000 tonnes of ash.  This makes good fertiliser as it is 20% phosphate and 17% potash.

Paul Kyle (Perth & Kinross Council, Scotland) then described the location, population distribution, energy use, energy types and energy providers in the Perth and Kinross area in Scotland.  He outlined the council's proposal for a school heating project that would use locally produced wood.

7.  Bio-energy in England
Daniel Dobson-Mouawad (Suffolk County Council, England) highlighted the differences between government structures in England and Scotland.  He said that the UK had reacted slowly to addressing the question of the future of the renewable energy sector in the UK.  It has now, however, set some national targets for renewable energy sources.  It has also acknowledged that some regions are better placed than others to do this (eg some areas have more suitable shorelines and topography). 

In the east of England there is potential for encouraging farmers to grow crops for fuel.   The area already has the UK's first, and largest, straw burning power station.  It also has the highest density of chicken farms.  Some work has been done on using the chicken litter as fuel - although the farmers now realise that the litter also has value as a fertiliser.  Some work is now required to establish if the nutrients and fuel elements of the litter can be efficiently broken down.  

The area also has the UK's first bio-diesel plant.  This facility recycles waste cooking oils for use as fuel.  The local authority is now looking at the potential of the bio-ethanol sector (locally and nationally).  A recent study has identified the key issues and barriers to implementation.

The main obstacle to implementation is convincing the UK government that the industry has long-term viability, and that it will make an impact on climate change.  The other barriers include the relative cost of bio-ethanol, the level of added value to the national economy, the net financial cost to the Treasury (ie less income from fuel tax), and the lack of a distribution system.

The government must also be persuaded about the extent the rural economy can be enhanced by the production and use of bio-ethanol, and the cost effective way that bio-ethanol use can help greenhouse gas avoidance.

8.  Bio-energy in Germany
The group members circulated a copy of a presentation by Sibylle Hönscheidt (Business Development Corp. of Nordfriesland, Germany) on the bioenergy activities of Nordfriesland, Schleswig-Holstein, Germany).  Copies are available from the Group Co-ordinator.

9.  Conclusion
The group discussed the various issues highlighted during the meeting.  They agreed that the meeting had emphasised the need for the group's aims to be political as well as practical.