Heat & Power Cogeneration Potential in Estonia

February 8th, 2007

Prof. Andres SiirdeTallinn University of Tehcnology

Current SituationGOOD ENOUGH OR NOT?

GOOD ENOUGH OR NOT?

Existing CHP’s in Estonia 2007

CHP generate electricity 1000 GWh/y11 % of total generation

17 CHPs in operation

+100 MW <10 MW

10...30 MW

Majority of Estonian CHP’s use steam cycle therefore low power to heat ratio

Production of Electricity in 2005

9,1

1,0

8,1

0

3

6

9

12

Total CHP other

TW

h

Production of Heat in 2005

10,5

3,1

7,4

0

3

6

9

12

Total CHP other

TW

h

• CHP’s produce 11 % of electricity

• Total number of CHP 17

• 30 % of heat is produced in CHPs

• Heat to Power 1:3

Source: Tallinn Technical Univercity, Peeter Raesaar “Latest Development on RES policy, implementation and planning in Estonia”

More than half of the heat is produced from local fuels

Energy balance of heat production in Estonia 2005

5,3

2,7

3,3

0,4

12,8 10,5

7,6

1,7

2,3

1,2

1,1

0

3

6

9

12

15

Nat

ural

gas

Loca

l RE

S

Loca

l Pea

t

Loca

l oth

er

Oth

er

Tot

al

Con

vers

ion

loss

es

Hea

tP

rodu

ctio

n

Net

wor

klo

sses

Dis

tric

Hea

ting

Loca

l

TW

h

A B C

A. 56% of the heat is produced from local fuels;

B. Overall efficiency of heat production is 82%,

C. District heating network losses 15%

• 49% of the heat is produced in small-scale boilerhouse (less than 5 MWth);

• There is on-going process to reconstruct boilerhouses for wood and other biofuels due to increase of oil and gas prices

• 49% of the heat is produced in small-scale boilerhouse (less than 5 MWth);

• There is on-going process to reconstruct boilerhouses for wood and other biofuels due to increase of oil and gas prices

D. Share of natural gas is 41%. 100% of the gas imported from Russia (Gazprom)

D

Energy Balance of Power Production in Estonia 2005

25,0

0,8 0,7

26,5 10,2 9,1

0,3

6,4

16,3

2,0

1,11,1

0

5

10

15

20

25

30

Oil

Sha

le

Oth

er L

ocal

Ful

es

Nat

ural

Gas

Tot

al

Con

vers

ion

Loss

es

Gro

ssP

rodu

ctio

n

Pow

erP

lant

own

use

Net

Pro

duct

ion

Impo

rt

Net

wor

klo

sses

Exp

ort

Con

sum

ptio

n

TW

hMajority of investments of power plants have to be made by

2016

Source: Statistics Estonia

B

C A

A. Over 90% of the electricity is produced from local fuels

B. Existing power production efficiency is 34%; Major imporovement potentential with implementation of CHP’s

C. Network losses losses 17% due to export, concentrated production, old network equipment;Potential positive impact from distributed generation

• Current electricity production is dominated by oil-shale power plants, 80% of existing capacity is out of operation by 2016 (LCPD);

• Opportunity to restructure whole generation structure towards more energy efficient system

• Current electricity production is dominated by oil-shale power plants, 80% of existing capacity is out of operation by 2016 (LCPD);

• Opportunity to restructure whole generation structure towards more energy efficient system

Potential of efficient heat & power co-generation in Estonia

existing heat loadavailability of fuelspotential techonogies

EVOLUTION or

REVOLUTRION?

EVOLUTION or

REVOLUTRION?

There is potential to double amount of co-gen power by 2015 in Estonia

Heat Production and Demand in Estonia 2005

3 750

4 389

1 775

1 163

1333 004 506 764

10 5140

2000

4000

6000

8000

10000

12000C

HP

Boi

lerh

ouse

Tot

al D

H

Hou

seho

lds

Indu

stry

Agr

icul

ture

Con

stru

ctio

n

Oth

er

Loss

es

GW

h

• Potential for CHP capacity is 2000...4000 GWh of heat load, mostly small-scale local boilerhouses;

• Potential electricity output from RES approx. 600...750 GWh; with natural gas 2000...4000 GWh;

• Additional potential from local microCHP approx ??? GWhel

• Potential for CHP capacity is 2000...4000 GWh of heat load, mostly small-scale local boilerhouses;

• Potential electricity output from RES approx. 600...750 GWh; with natural gas 2000...4000 GWh;

• Additional potential from local microCHP approx ??? GWhel

Source: Statistics Estonia

Potential for CHPs2000...4000 GWh

Existing CHP’s in Estonia 2007

Power generation 1000 GWh in CHPs11 % of total generation

17 CHPs in operation

+100 MW <10 MW

10...30 MW

Potential CHP’s in Estonia 2015

Potential for +2000 GWh in CHPs+20 % of total generation

+30 CHPs in operationInstalled capacity ____ MW

+100 MW <10 MW

10...30 MW

Choice of fuels depends on environmental, security of supply and economic priorities

Natural Gas

Availability Strength Weakness

• Gas is available in all major towns

• 100% imported from Russia

• Possible to import 8-10 mln m3 per day

• Wide range of available technologies

• Standard solutions and easy maintance

• High efficiency, good power to heat ratio

• Imported fuel with monopoly supplier

• Fossile fuel

RES• CO2 neutral• Local fuel• Development and

employment in rural areas

• Limited availability• High price due to

exports compared to regulated power prices

• CO2 neutral• Local fuel• Development and

employment in rural areas

Peat • Local fuel • Large resources• Competitive price• Development and

employment in rural areas

• Production seasonality

• High CO2 content• Environmentally

sensitive

• 20% of Estonia is covered with peat

• Available resource in existing fields enough for 150 years

• Annual growth +1TWh

There are substantial potential of economic and environmental benefits from wider use of CHP’s

Primary energy savings potential

1,11 1,18

3,03

1,18

1,92 1,85 1,85

0,0

0,5

1,0

1,5

2,0

2,5

3,0

GAS CHP Peat CHP Oil Shalecond.

RES CHP

MW

h/M

Wh

pro

d

CO2 emission savings potential

0,20

0,44

1,10

0,90

0,66

1,10

0,0

0,2

0,4

0,6

0,8

1,0

GAS CHP Peat CHP Oil Shalecond.

RES CHP

ton

/MW

h p

rod

• Use of local RES and peat is limited by availability of resources (up to 2 TWh per year)

• Natural gas provides potentially higher power to heat ration than local fuels and has considerable environmental benefit but security of gas supply must be carefully considered before wider use;

• Use of local RES and peat is limited by availability of resources (up to 2 TWh per year)

• Natural gas provides potentially higher power to heat ration than local fuels and has considerable environmental benefit but security of gas supply must be carefully considered before wider use;

Functioning power market is key to CHP development

Market opening

Power Exchange

Price regulation

• 35% of Estonian power market is opened 01/09; 100% - 01/13

• Power market in Baltics is dominated by national, no functioning spot market

• Regulated Price Cap level is lower than full-cost of a new power plant

Proper deregulation and development of functioning power market in the Baltics would give potential investors required confidence for investments with smaller need for state support schemes

Proper deregulation and development of functioning power market in the Baltics would give potential investors required confidence for investments with smaller need for state support schemes

Current Situation Impact on Investment• Independent power producers have very

limited access to end-customers and not able to build customer portfolio

• No transparent reference price available;

• Not possible to sell excess or buy energy in independent and transparent market place

• Regulated price-cap does not support investments into new capacity, support scheme needed for all investments;

• Investments delayed or only done with help of state support schemes

Thank you for your attention!

Prof. Andres Siirde

asiirde@staff.ttu.ee+ 372 55 166 19

Appendices

Heating season lasts approximately 5000 h per year

Heat production and average temperature 2000 - 2006

0

500

1000

1500Ja

nuar

y

Feb

ruar

y

Mar

ch

Apr

il

May

June

July

Aug

ust

Sep

tem

ber

Oct

ober

Nov

embe

r

Dec

embe

r

GW

h

-10

5

20

35

oC te

mp

Source: Statistics Estonia

• Heating season lasts approximately 5000 h per year;• Base-load CHP capacity is limited to bigger cities (hot-water) and heat intense

industry;,• Due to mild summers requirement for cooling capacity is minimal. Demand is

slowly growing but unimportant on national level

• Heating season lasts approximately 5000 h per year;• Base-load CHP capacity is limited to bigger cities (hot-water) and heat intense

industry;,• Due to mild summers requirement for cooling capacity is minimal. Demand is

slowly growing but unimportant on national level

49% of the heat is produced in boilers less than 5 MW

Soojuse tootmiseks olevate katelde arv ja osa toodetud energiast 2005. aastal

714199

5333171

28%

36%

11%4%

21%

0

1000

2000

3000

4000

1 MW 1-5 MW 5-20 MW 20-60 MW >60MW

Katla võimsus

tk

0%

10%

20%

30%

40%

Source: ???

Energy Production in CHP by technology in 2005

90454494 971921 11640

500

1000

1500

2000

2500

Back-pressure Steam Extraction Internal Combustion Engine

GW

h Electricity Heat

Source: ????

Scarcity of wood based fuels my delay development of RES CHP’s

Available wood and demand

2,1

0,7

2,8

0,8

1,00,1

0,3

0,6

0,2

-0,3

-0,5

-0,4

-1,2

-1,5

-1

-0,5

0

0,5

1

1,5

2

2,5

3

Fo

rest

wo

od

Wo

od

resi

du

e/b

ark

Bo

ilerh

ou

ses

Ho

use

ho

lds

Ind

ust

ry

Sa

wm

ills E

Ke

hra

Vä

o

Ta

rtu

Ah

tme

De

ficit

TW

h/y

ear

Source: Tallinn Technical Univercity, Estonian Univercity of Life Sciences