Ea Energianalyse Helsingør - 4 June 2009 Anders Kofoed-Wiuff, Ea Energy Analyses Helsingør - 4 June 2009 Anders Kofoed-Wiuff, Ea Energy Analyses

Ea Energianalyse Scope of the study Phase I –Overview of current energy situation –Scenarios for the future regional energy system Phase II –Detailed scenario analyses of the electricity and district heating markets –Prioritized list of regional projects/polices to promote the region as a sustainable region Phase III –Develop strategies for deployment –Regional knowledge sharing in the field of sustainable energy –Outline the possibilities for the industry to be frontrunners in the development of new energy technologies Medio 2008Medio 2009

Ea Energianalyse Hydro Nuclear Bio Nuclear Bio Hydro Coal Nuclear Wind Coal Hydro, Gas Oilshale Nuclear Coal Gas Wind Gas Coal Hydro Nuclear Expected high economic growth GAS OIL GAS OIL

Ea Energianalyse Characteristics of the region * Including only North East Germany and North West Russia

Ea Energianalyse Characteristics of the region

Ea Energianalyse How can the energy and transport systems in the region develop to achieve: I.50 % reduction of CO2 emissions in 2030 compared to 1990 II.50 % reduction in oil consumption in 2030 compared to 2005

Ea Energianalyse CCS Nuclear power Biomass Improved fuel economy Electric vehicles Biofuels Energy savings District heating - CHP Biomass Wind, wave, solar Improved fuel economy Electric vehicles Modal-change ICT Two scenarios for 2030 Small-techBig-tech Energy Transport

Ea Energianalyse Results

Ea Energianalyse Results

Ea Energianalyse Scope of the study Phase I –Overview of current energy situation –Scenarios for the future regional energy system Phase II –Detailed scenario analyses of the electricity and district heating markets –Prioritized list of regional projects/polices to promote the region as a sustainable region Phase III –Develop strategies for deployment –Regional knowledge sharing in the field of sustainable energy –Outline the possibilities for the industry to be frontrunners in the development of new energy technologies Medio 2008Medio 2009

Ea Energianalyse Balmorel model The Balmorel model determines based on market principles and regulation: –generation of electricity and heat, distinguished by technology and fuel –consumption of electricity and heat –electricity transmission –emissions –prices –optimal investments in generation capacity given framework conditions and cost data –costs and benefits of alternative scenarios The model is open source:

Ea Energianalyse DE_CS Basic model contains 17 areas with transmission constraints For the purpose of this study data for Russia is included in the model North-West Russia –Karelia –Kola –Pskov –Kaliningrad Arkhangelsk –St. Petersburg incl. Leningrad –Novgorod –Komi Data is obtained from publicly available sources

Ea Energianalyse Baseline scenario Fuel prices according to International Energy Agency $/bbl in 2030 Targets –2020: 21 % CO2 reduction, 20 % RE (national targets) –2030: 38 % CO2 reduction (50 % compared to 1990), 20 % renewable energy (national targets) Model decides new investments in generation capacity except nuclear and hydro power Country specific renewable energy sources

Ea Energianalyse Development nuclear power

Ea Energianalyse Baseline: Investments Selected DRAFT results

Ea Energianalyse Baseline: Electricity generation Selected DRAFT results

Ea Energianalyse CO2-emissions (Mill. tonnes) Selected DRAFT results %red 50%red 38% red

Ea Energianalyse CO2 and RE prices Selected DRAFT results Shadow prices for CO2 target and RE target Country CO 2 EUR/ton RE EUR/MWh el CO 2 EUR/ton RE EUR/MWh el Denmark Estonia -- Finland 15- Germany 16- Latvia 15- Lithuania 14- Norway -- Poland -- Sweden Russia 13- CO2-price The cost in the model of additionally reducing one ton of CO2 (may be interpreted as an estimate of the CO2-price) RE-price The cost in the model of additionally increasing RE generation by one MWh (may be interpreted as an estimate of the cost of a RE certificate)

Ea Energianalyse

Sensitivity scenarios Regional renewable energy target Increased energy efficiency (lower demand for electricity, particularly for heating) Strong interconnectors Stronger CO2 target in 2020 Case: Integrated off-shore grid at Kriegers Flak

Ea Energianalyse Regional renewable target Selected DRAFT results Shadow prices for CO2 target and RE target Country CO 2 EUR/ton RE EUR/MWh el CO 2 EUR/ton RE EUR/MWh el Denmark Estonia Finland Germany Latvia Lithuania Norway Poland Sweden Russia Based on the model analyses it will be possible to quantify the benefits of a common a RE framework

Ea Energianalyse Benefits of increasing the transmission grid in the region Selected DRAFT results €/MW capacity, in 2020, in the baseline scenario Connections linking the thermal power based systems in Poland and Germany and the Nordic power system dominated by hydro power have the highest value. Strengthening connections between the Baltic countries and Scandinavia also appear attractive. Further analyses are needed

Ea Energianalyse Preliminary observations The targets set-out can be achieved given the RE resources available (stronger targets could be met) Wind power appears to be the most cost- efficient measure (however more detailed analyses required) Benefits of increasing strengthening the transmission grid in the region Benefits of cooperation on achieving RE targets

Ea Energianalyse Scope of the study Phase I –Overview of current energy situation –Scenarios for the future regional energy system Phase II –Detailed scenario analyses of the electricity and district heating markets –Prioritized list of regional projects/polices to promote the region as a sustainable region Phase III –Develop strategies for deployment –Regional knowledge sharing in the field of sustainable energy –Outline the possibilities for the industry to be frontrunners in the development of new energy technologies Medio 2008Medio 2009 Workshop Energizing the sustainable growth in the Region Kaliningrad June 2009

Ea Energianalyse Recommendations Develop a shared vision A Green Valley of Europe in order to mobilize the strong traditions in the region for public-private co-operation. Establish an energy stakeholder forum that includes different cross- border, cross-sector and cross-level actors. Not least the private sector needs a larger international platform in order to go beyond small markets. Develop regional projects which could benefit the region as a showcase for comprehensive and sustainable energy systems including R&D and demonstration activities. Develop a common interconnector strategy for the region to allow for a higher level of renewable energy penetration including from offshore wind power. Launch an action plan for efficient and sustainable heating, involving the larger cities in the region and the district heating companies. Establish a common regional training programme to strengthen the capacities in energy planning. Such a programme should aim at developing the exchange of experiences and best practices among officials at local and national level.

Ea Energianalyse THANK YOU

Ea Energianalyse

Analyses Leading to a synthesis scenarios for the region based on the outcome of the analyses and subsequent discussions of the results with key stakeholders in the region (-50 % comp. to 1990)

Ea Energianalyse Fuel prices In accordance the latest projection of the International Energy Agency Biomass/waste: -2,5 to 12 €/GJ Long-term oil price: App. 120 USD/bbl

Ea Energianalyse * excl. North West Russia

Ea Energianalyse RE targets 2020 Assuming, that the absolute share of renewable energy in electricity consumption should increase 1.5 times more than the overall share of renewable energy.

Ea Energianalyse Electricity demand

Ea Energianalyse Wind power potentials

Ea Energianalyse Based on the model analyses it will be possible to quantify the benefits of a common a RE framework

Ea Energianalyse Selected DRAFT results To the consumer price should be added to the cost of RE subsidies/certificates

Ea Energianalyse Benefits of increasing the transmission grid in the region Selected DRAFT results €/MW capacity, in 2020, in the baseline scenario

Ea Energianalyse Next steps Final report by June 2009 Presentation of results at –WS: Energizing the sustainable growth in the Region, Kaliningrad, June –4 June, Copenhagen, Foreign Ministers Phase III –Unfold the potentials identified in the scenario analyses through stakeholder activities and further analyses –A synthesis scenario for the BSR –Cooperation with Nordic Energy Perspectives Medio 2008Medio 2009

Ea Energianalyse Comments to BSPC report Involve the stakeholders in the region Establish concrete activities on specific topics –Opportunities for CHP in the big cities around the Baltic –Common plan for off-shore wind in the BS –Action plan for the utilization of municipal waste and biogas for energy purposes –Information and communication technologies to replace physical transportation Mention Kriegers Flak as a showcase for the Baltic Sea Region Education of the new energy planners Highlight the role of the cities as key to the implementation of energy and climate policies