To make the transition to a competitive energy system, we need to overcome a number of challenges, such as increasingly scarce resources, growing energy needs and climate change.
The Energy Challenge is structured around seven specific objectives and research areas:

• Reducing energy consumption and carbon footprint
• Low-cost, low-carbon electricity supply
• Alternative fuels and mobile energy sources
• A single, smart European electricity grid
• New knowledge and technologies
• Robust decision making and public engagement
• Market uptake of energy and ICT innovation.

A budget of €5 931 million has been allocated to non-nuclear energy research for the period 2014-2020. Out of this figure, more than €200 million is earmarked to support European Institute of Innovation and Technology activities, subject to a mid-term review.

Main priorities

The first work programme for "Secure, Clean and Efficient Energy" will be split into the following focus areas:

Energy Efficiency

Energy efficiency is a no-regret option for Europe, addressed by both short-term and long-term EU policies. The EU is aiming to progressively decrease primary energy consumption by 2020 and 2030. Research and demonstration activities within this area will focus on buildings, industry, heating and cooling, SMEs and energy-related products and services, integration of ICT and cooperation with the telecom sector.

Low Carbon Technologies

It is important to develop and bring to market affordable, cost-effective and resource-efficient technology solutions to decarbonise the energy system in a sustainable way, secure energy supply and complete the energy internal market. Research activities within this area will cover: Photovoltaics, Concentrated Solar Power, Wind energy, Ocean Energy, Hydro Power, Geothermal Energy, Renewable Heating and Cooling, Energy Storage, Biofuels and Alternative Fuels, Carbon Capture and Storage.

Smart Cities & Communities

Sustainable development of urban areas is a challenge of key importance. It requires new, efficient, and user-friendly technologies and services, in particular in the areas of energy, transport and ICT. However, these solutions need integrated approaches, both in terms of research and development of advanced technological solutions, as well as deployment. The focus on smart cities technologies will result in commercial-scale solutions with a high market potential.

Policy driver

Formulation of the energy challenge under Horizon 2020 would not have been possible without the revision of the Strategic Energy Technology Plan – so called SET Plan. Since 2008, the SET Plan has been the centre-piece of our research and innovation policy in the field of energy. It is the reference point for European, national, regional and private investment.

However, the SET Plan needs reinforcing and updating to better respond to new challenges and to better consolidate research and innovation across Europe. The process began in May 2013 when the Commission published a Communication on Energy Technologies and Innovation where the development of an Integrated Roadmap for the SET Plan was put forward. This will define priorities across the entire energy system through one consistent agenda at EU level from research to market uptake.

First work programme

As for the underlying principles, there are considerable changes between the previous research framework programme FP7 and Horizon 2020. First of all, work programmes are biannual under Horizon 2020, to allow better preparation of applicants. Secondly, Horizon 2020 takes a challenge-based approach giving the researchers more freedom to come up with innovative technology solutions. Cross-cutting actions have also been introduced under Horizon 2020. Last but not least, Technology Readiness Level (TRL) should be applied under this Programme in order to better specify the scope of activities.