1. BDF Summit /BASREC GSEO Stockholm 5-6 October 2009 Anders Kofoed-Wiuff, Ea Energy Analyses

2. Objectives 1.To promote a common energy agenda for the Baltic Sea Region through the involvement of key stakeholders 2.To provide a substantial basis for discussion of different energy scenarios for the region based on an analysis of energy data PHASE I - Review of current energy situation - Scenarios for 2030 – Big-tech and Small -tech PHASE II - Detailed scenarios of the electricity markets in the region 2010-2030 PHASE III - Follow up analyses - Case studies May 2008 Oct 2009 Process Feb 2009

3. Developing scenarios Scenario Analyses Fuel prices Energy demand Infrastructure Technology data Renewable resources Efficiency measures Stakeholder dialogue Baltic Sea Parliamentary Conference Foreign Ministers Basrec Energy industry Joint Platform Energy and Climate UBC EU CO2-emissions 0 50 100 150 200 250 DG TREN 1990 DG TREN 2005 Ref_NorthNorth Scenario DG TREN 2030 Storage CO2 Other energy Electricity and district heat Tranport Results

4. Phase I Targets for 2030 CO2: -50 % (1990) Oil: -50 % (2005)

5. Phase II Targets –2020: EU targets for CO2 and RE –2030: 50 % CO2 reduction compared to 1990 Model decides new investments in generation capacity except nuclear and hydro power Fuel prices according to International Energy Agency - 120 $/bbl in 2030 Baseline scenario and three variations –Regional targets for renewable energy –Lower electricity demand –More CO2 reduction in 2020 Detailed analyses of the electricity markets 2010-2030

6. A balanced view on nuclear power

7. Future generation capacity

8. Generation outlook

10. Utilisation of biomass resources

11. CO2 emissions Marginal CO2 price - 7 €/ton in 2020 - 60 €/ton in 2030 Marginal cost of increasing RE generation 0 – 30 €/MWh in 2020 0 - 11 €/MWh in 2030

12. Scenario variations Regional target for increasing the share of renewable energy –Benefit: 5 billion Euro NPV, One RE price: 19 €/MWh 10 percentage points additional CO2 reduction in 2020 –Cost: 16 billion Euro NPV, CO2-price in 2020: 7 => 30 €/ton Lower electricity demand (approx. -22 %) –Benefit: > 100 billion Euro NPV (excl. cost of saving measures) –Electricity price: 40-50 €/MWh in 2020

13. Key findings The targets can be met at reasonable costs Potential for more efficient generation and consumption Benefits of regional cooperation –Interconnectors –Electricity markets –RE policies and projects Stronger targets are possible Hydro Wind Thermal

14. Recommendations from the stakeholder dialogue shared vision “A Green Valley of Europe” energy stakeholder forum regional projects common interconnector strategy action plan for efficient and sustainable heating common regional training programme

15. Phase III Modellling tool and data for the whole region is now available How to utilise this potential in the third project phase? Suggestions for further analyses –Develop a ”strategy scenario” with input from each country in the region –Identify and evaluate concrete projects in cooperation with stakeholders –Expand the scope to 2050

16. Phase III Input for -EU Baltic Sea Region strategy in parallel with Baltic Energy Market and Interconnector Plan (BEMIP) -Regional perspective on the National renewable energy Action Plans and national energy efficiency efforts

17. Input from BDF Summit The study could provide useful input for concretisation of EU Baltic Sea Strategy – climate, economy and security of supply We need concrete plans and actions – ”lighthouse projects” –Grids and wind power –Combined heat and power and energy efficiency –Training and education Incorporate national policies in the study (including nuclear) – develop a road map for the region Look at a portfolio of technology options, include a technological development, e.g. solar and wave Expand the scope to 2050 – explore ”truly” sustainable scenarios (no fossil fuels)