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

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

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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 2008 Medio 2009

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HydroHydroNuclearBio

NuclearBioHydro

CoalNuclearWind

Coal

Hydro, Gas

Oilshale

Nuclear

CoalGasWind

GasCoalHydroNuclear

Expecte

d high economic

growth

GASOIL

GASOIL

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Characteristics of the region

* Including only North East Germany and North West Russia

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Characteristics of the region

0

5

10

15

20

25

1990 1995 2000 2005

TJ/M€ Energy intensity

Old democracies New democracies

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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

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• 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-tech Big-tech

Energy

Transport

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Results

-

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

2005 Reference 2030 Small-Tech Big-Tech

PJ

Gross energy consumption

Nuclear

RE

Natural gas

Coal

Oil

50% oil target

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Results

-200

-

200

400

600

800

1.000

Mt CO2 / year Other energy

Electricity and district heatTransport

Storage CO2

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 2008 Medio 2009

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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

Ea EnergianalyseDE_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 sourcesData is obtained from publicly available sources

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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

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Development nuclear power

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Baseline: InvestmentsSelected DRAFT results

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Baseline: Electricity generation

Selected DRAFT results

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CO2-emissions (Mill. tonnes)Selected DRAFT results

1990

2005

21%red 50%red

38%red

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CO2 and RE pricesSelected DRAFT results

Shadow prices for CO2 target and RE target

Country

2020 2030

CO2

EUR/ton

RE

EUR/MWhel

CO2

EUR/ton

RE

EUR/MWhel

Denmark

5

9

59

-Estonia - -Finland 15 -

Germany 16 -Latvia 15 -

Lithuania 14 -Norway - -Poland - -Sweden 16 0.5Russia 13 -

CO2-priceThe cost in the model of additionally reducing one ton of CO2(may be interpreted as an estimate of the CO2-price)

RE-priceThe 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)

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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

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Regional renewable targetSelected DRAFT results

Shadow prices for CO2 target and RE target

Country

2020 2030

CO2

EUR/ton

RE

EUR/MWhel

CO2

EUR/ton

RE

EUR/MWhel

Denmark

0 18 54 0

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

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Benefits of increasing thetransmission grid in the region

Selected DRAFT results

Germany Cen.

Germany NE

Germany NW

Denmark East

Denmark West Estonia Finland Lithuania Latvia

Norway M

Norway N

Norway Oslo

Norway S Poland Sweden M Sweden N Sweden S

Germany Cen. - 59.745 80.651 Germany NE 59.745 - 20.906 50.996 51.096 62.983 53.290 Germany NW 80.651 20.906 - 71.531 71.604 77.310 73.731 Denmark East 50.996 71.531 - 309 5.779 25.364 2.607 2.353 Denmark West 51.096 71.604 309 - 5.707 25.561 2.483 2.194 Estonia - 4.461 10.103 9.789 7.934 19.959 Finland 4.461 - 16.463 15.762 16.106 Lithuania 10.103 - 399 6.048 29.392 29.328 Latvia 9.789 399 - 6.407 29.473 29.409 Norway M - 244 3.506 200

Norway N 16.463 244 - 397 Norway Oslo 5.744 5.672 - 404 3.460 3.757 3.544

Norway S 77.310 5.707 3.506 404 - 3.343 3.475 Poland 100.468 62.983 25.364 6.048 6.407 - 23.400 Sweden M 2.607 2.483 19.959 15.762 29.392 29.473 3.460 3.343 - 344 322

Sweden N 16.106 200 397 3.757 3.475 344 -

Sweden S 53.290 73.731 2.353 2.194 29.328 29.409 3.544 23.400 322 -

Germany Cen.

Germany NE

Germany NW

Denmark East

Denmark West Estonia Finland Lithuania Latvia

Norway M

Norway N

Norway Oslo

Norway S Poland Sweden M Sweden N Sweden S

Germany Cen. - 59.745 80.651 100.468 Germany NE 59.745 - 20.906 50.996 51.096 62.983 53.290 Germany NW 80.651 20.906 - 71.531 71.604 77.310 73.731 Denmark East 50.996 71.531 - 309 5.779 25.364 2.607 2.353 Denmark West 51.096 71.604 309 - 5.707 25.561 2.483 2.194 Estonia - 4.461 10.103 9.789 7.934 19.959 Finland 4.461 - 16.463 15.762 16.106 Lithuania 10.103 - 399 6.048 29.392 29.328 Latvia 9.789 399 - 6.407 29.473 29.409 Norway M - 244 3.506 200

Norway N 16.463 244 - 397 Norway Oslo 5.744 5.672 - 404 3.460 3.757 3.544

Norway S 77.310 5.707 3.506 404 - 3.343 3.475 Poland 100.468 62.983 25.364 6.048 6.407 - 23.400 Sweden M 2.607 2.483 19.959 15.762 29.392 29.473 3.460 3.343 - 344 322

Sweden N 16.106 200 397 3.757 3.475 344 -

Sweden S 53.290 73.731 2.353 2.194 29.328 29.409 3.544 23.400 322 -

Germany Cen.

Germany NE

Germany NW

Denmark East

Denmark West Estonia Finland Lithuania Latvia

Norway M

Norway N

Norway Oslo

Norway S Poland Sweden M Sweden N Sweden S

Germany Cen. - 59.745 80.651 100.468 Germany NE 59.745 - 20.906 50.996 51.096 62.983 53.290 Germany NW 80.651 20.906 - 71.531 71.604 77.310 73.731 Denmark East 50.996 71.531 - 309 5.779 25.364 2.607 2.353 Denmark West 51.096 71.604 309 - 5.707 2.483 2.194 Estonia - 4.461 10.103 9.789 7.934 19.959 Finland 4.461 - 16.463 15.762 16.106 Lithuania 10.103 - 399 6.048 29.392 29.328 Latvia 9.789 399 - 6.407 29.473 29.409 Norway M - 244 3.506 200

Norway N 16.463 244 - 397 Norway Oslo 5.744 5.672 - 404 3.460 3.757 3.544

Norway S 77.310 5.707 3.506 404 - 3.343 3.475 Poland 100.468 62.983 25.364 6.048 6.407 - 23.400 Sweden M 2.607 2.483 19.959 15.762 29.392 29.473 3.460 3.343 - 344 322

Sweden N 16.106 200 397 3.757 3.475 344 -

Sweden S 53.290 73.731 2.353 2.194 29.328 29.409 3.544 23.400 322 -

€/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 theBaltic countries and Scandinavia also appear

attractive.

Further analyses are needed

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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 2008 Medio 2009

WorkshopEnergizing the sustainable growth in the Region

Kaliningrad10-11 June 2009

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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.

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THANK YOU

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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)

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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

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* excl. North West Russia

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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.

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Electricity demand

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Wind power potentials

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

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Selected DRAFT results

To the consumer price should be added to the cost of RE subsidies/certificates

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Benefits of increasing thetransmission grid in the region

Selected DRAFT results

Germany Cen.

Germany NE

Germany NW

Denmark East

Denmark West Estonia Finland Lithuania Latvia

Norway M

Norway N

Norway Oslo

Norway S Poland Sweden M Sweden N Sweden S

Germany Cen. - 59.745 80.651 Germany NE 59.745 - 20.906 50.996 51.096 62.983 53.290 Germany NW 80.651 20.906 - 71.531 71.604 77.310 73.731 Denmark East 50.996 71.531 - 309 5.779 25.364 2.607 2.353 Denmark West 51.096 71.604 309 - 5.707 25.561 2.483 2.194 Estonia - 4.461 10.103 9.789 7.934 19.959 Finland 4.461 - 16.463 15.762 16.106 Lithuania 10.103 - 399 6.048 29.392 29.328 Latvia 9.789 399 - 6.407 29.473 29.409 Norway M - 244 3.506 200

Norway N 16.463 244 - 397 Norway Oslo 5.744 5.672 - 404 3.460 3.757 3.544

Norway S 77.310 5.707 3.506 404 - 3.343 3.475 Poland 100.468 62.983 25.364 6.048 6.407 - 23.400 Sweden M 2.607 2.483 19.959 15.762 29.392 29.473 3.460 3.343 - 344 322

Sweden N 16.106 200 397 3.757 3.475 344 -

Sweden S 53.290 73.731 2.353 2.194 29.328 29.409 3.544 23.400 322 -

Germany Cen.

Germany NE

Germany NW

Denmark East

Denmark West Estonia Finland Lithuania Latvia

Norway M

Norway N

Norway Oslo

Norway S Poland Sweden M Sweden N Sweden S

Germany Cen. - 59.745 80.651 100.468 Germany NE 59.745 - 20.906 50.996 51.096 62.983 53.290 Germany NW 80.651 20.906 - 71.531 71.604 77.310 73.731 Denmark East 50.996 71.531 - 309 5.779 25.364 2.607 2.353 Denmark West 51.096 71.604 309 - 5.707 25.561 2.483 2.194 Estonia - 4.461 10.103 9.789 7.934 19.959 Finland 4.461 - 16.463 15.762 16.106 Lithuania 10.103 - 399 6.048 29.392 29.328 Latvia 9.789 399 - 6.407 29.473 29.409 Norway M - 244 3.506 200

Norway N 16.463 244 - 397 Norway Oslo 5.744 5.672 - 404 3.460 3.757 3.544

Norway S 77.310 5.707 3.506 404 - 3.343 3.475 Poland 100.468 62.983 25.364 6.048 6.407 - 23.400 Sweden M 2.607 2.483 19.959 15.762 29.392 29.473 3.460 3.343 - 344 322

Sweden N 16.106 200 397 3.757 3.475 344 -

Sweden S 53.290 73.731 2.353 2.194 29.328 29.409 3.544 23.400 322 -

Germany Cen.

Germany NE

Germany NW

Denmark East

Denmark West Estonia Finland Lithuania Latvia

Norway M

Norway N

Norway Oslo

Norway S Poland Sweden M Sweden N Sweden S

Germany Cen. - 59.745 80.651 100.468 Germany NE 59.745 - 20.906 50.996 51.096 62.983 53.290 Germany NW 80.651 20.906 - 71.531 71.604 77.310 73.731 Denmark East 50.996 71.531 - 309 5.779 25.364 2.607 2.353 Denmark West 51.096 71.604 309 - 5.707 2.483 2.194 Estonia - 4.461 10.103 9.789 7.934 19.959 Finland 4.461 - 16.463 15.762 16.106 Lithuania 10.103 - 399 6.048 29.392 29.328 Latvia 9.789 399 - 6.407 29.473 29.409 Norway M - 244 3.506 200

Norway N 16.463 244 - 397 Norway Oslo 5.744 5.672 - 404 3.460 3.757 3.544

Norway S 77.310 5.707 3.506 404 - 3.343 3.475 Poland 100.468 62.983 25.364 6.048 6.407 - 23.400 Sweden M 2.607 2.483 19.959 15.762 29.392 29.473 3.460 3.343 - 344 322

Sweden N 16.106 200 397 3.757 3.475 344 -

Sweden S 53.290 73.731 2.353 2.194 29.328 29.409 3.544 23.400 322 -

€/MW capacity, in 2020, in the baseline scenario

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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 2008 Medio 2009

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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