EU spending on renewable energy needs improvements to enhance its contribution to policy goals, say EU Auditors

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Court of Auditors - ECA/14/33   08/07/2014

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ECA/14/33
Luxembourg, 08 July 2014

EU spending on renewable energy needs improvements to enhance its contribution to policy goals, say EU Auditors

A report published today by the European Court of Auditors (ECA) reveals that improvements are needed if EU funding is to make the maximum possible contribution to achieving the 2020 renewable energy target. The EU auditors examined whether funds in that period had been allocated to well prioritised, cost-effective and mature renewable energy generation projects with rational objectives and to what extent these funds had achieved good results in contributing to the EU 2020 target for energy from renewable sources

“The EU Member States have set ambitious renewable energy goals that can be supported significantly through EU money only if improvements in the management of the expenditure programmes are made,” stated Mr Ladislav Balko, the ECA Member responsible for the report, The Commission also needs to make sure the programmes being funded in the Member States are cost-effective.”

The ECA found that the audited projects delivered outputs as planned, and most of them were sufficiently mature and ready for implementation when selected. There were no significant cost overruns or time delays in the projects, and the renewable energy generation capacities were installed as planned and operational. However, the energy production results were not always achieved or not properly measured. The overall value for money of Cohesion policy funds support to renewable energy generation projects has been limited in helping achieve the EU 2020 renewable energy target, because: cost-effectiveness has not been the guiding principle in planning and implementing the renewable energy generation projects; and cohesion policy funds had a limited EU added value.

The Council of the European Union has set a binding EU target of 20 % in renewable energy in gross final energy consumption by 2020, based on the Commission’s Renewable Energy Roadmap which lays down a pathway for mainstreaming renewable energy into EU energy policies and markets.

Approximately € 4.7 billion was allocated for renewable energy by the EU Cohesion policy funds in 2007 - 2013.

Notes to the editors:

European Court of Auditors (ECA) special reports are published throughout the year, presenting the results of selected audits of specific EU budgetary areas or management topics.

This special report (No 6/2014) entitled “Cohesion policy funds support to renewable energy generation - has it achieved good results?” assessed whether good results had been achieved by the two most important funding sources among EU spending programmes for promoting renewable energy - the European Regional Development Fund and the Cohesion Fund (Cohesion policy funds).

The ECA found that the audited projects delivered outputs as planned. Most of them were sufficiently mature and ready for implementation when selected. There were no significant cost overruns or time delays in the projects, and the renewable energy generation capacities were installed as planned and operational. However, the energy production results were not always achieved or not properly measured. The overall value for money of Cohesion policy funds support to renewable energy generation projects has been limited in helping achieve the EU 2020 renewable energy target, because: cost-effectiveness has not been the guiding principle in planning and implementing the renewable energy generation projects; and cohesion policy funds had a limited EU added value.

The EU auditors recommend that:

  • The Commission ensure that future Cohesion policy co-funded renewable energy programmes are guided by the principle of cost-effectiveness, including the avoidance of deadweight. Programmes must be based on proper needs assessment, prioritisation of the most cost-effective technologies (while not discriminating between renewable energy sectors) and optimal contribution to the EU renewable energy 2020 target. Adequate renewable energy generation objectives in relation to the budget as well as project selection criteria with a focus on the cost-effectiveness of the energy generation results (avoiding over-compensation of projects) need to be set;

  • The Commission promote the establishment by the Member States of a stable and predictable regulatory frameworks for renewable energy in general, along with smoother procedures for the integration of electricity from renewable energy into the grid networks; and

  • The Member States should establish and apply, based on Commission’s guidance, minimum cost-effectiveness criteria which are adapted to the projects’ circumstances. They should also enhance the added value of cohesion policy funds by improving renewable energy project implementation as well as monitoring and evaluation and by building a stock of measured data about energy generation costs in all relevant renewable energy sectors.

A short video interview with the ECA Member responsible for the report and with the audit team leader is available at: https://www.youtube.com/user/EUAuditorsECA

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