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

2. 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

3. 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

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

5. Ea Energianalyse Characteristics of the region

6. 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

7. 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

8. Ea Energianalyse Results

9. Ea Energianalyse Results

10. 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

11. 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: www.balmorel.com

12. 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

13. Ea Energianalyse Baseline scenario 2010-2030 Fuel prices according to International Energy Agency - 120 $/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

14. Ea Energianalyse Development nuclear power

15. Ea Energianalyse Baseline: Investments Selected DRAFT results

16. Ea Energianalyse Baseline: Electricity generation Selected DRAFT results

17. Ea Energianalyse CO2-emissions (Mill. tonnes) Selected DRAFT results 1990 2005 21%red 50%red 38% red

18. Ea Energianalyse CO2 and RE prices Selected DRAFT results Shadow prices for CO2 target and RE target Country 20202030 CO 2 EUR/ton RE EUR/MWh el CO 2 EUR/ton RE EUR/MWh el Denmark 5 9 59 - Estonia -- Finland 15- Germany 16- Latvia 15- Lithuania 14- Norway -- Poland -- Sweden 160.5 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)

19. Ea Energianalyse

20. Sensitivity scenarios Regional renewable energy target Increased energy efficiency (lower demand for electricity, particularly for heating) Strong interconnectors Stronger CO2 target in 2020 (30%@COP15) Case: Integrated off-shore grid at Kriegers Flak

21. Ea Energianalyse Regional renewable target Selected DRAFT results Shadow prices for CO2 target and RE target Country 20202030 CO 2 EUR/ton RE EUR/MWh el CO 2 EUR/ton RE EUR/MWh el Denmark 018540 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

22. 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

23. 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

24. 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 10-11 June 2009

25. 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.

26. Ea Energianalyse THANK YOU

27. Ea Energianalyse

28. 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)

29. 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

30. Ea Energianalyse * excl. North West Russia

31. 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.

32. Ea Energianalyse Electricity demand

33. Ea Energianalyse Wind power potentials

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

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

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

37. Ea Energianalyse Next steps Final report by June 2009 Presentation of results at –WS: Energizing the sustainable growth in the Region, Kaliningrad, 10-11 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

38. 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