1. National Seminar Role of DER in the EU and Current Status in the Baltic States 6 March 2007 Current Status of Energy Policy on Development of Distributed Generation in Estonia EstoniaDr. Ülo Rudi Tallinn University of Technology

2. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 2 CONTENTS The Main Economic Indices The present situation of the Estonian energy sector The development conditions for the distributed generation. Supporting measures for the distributed generation The main targets for the lager use of distributed generation. Conclusions.

3. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 3 The Main Economic Indices INDEX 20002002200320042005 GDP at current prices, billion EUR 6.107.768.499.3711.06 GDP at 2000 constant prices, billion EUR 6.107.107.608.219.07 GDP at 2000 constant prices per capita, thousand EUR 4.455.225.616.096.74 GDP change at constant prices, % 7.98.07.18.110.5 Change of consumer price index, % 4.03.61.33.04.1 Foreign trade balance / exports, % -29.3-39.4-42.8-40.6-31.9 Current account / GDP, % -5.6-11.0-12.1-13.0-11.0 Growth of average monthly gross wages and salaries, % 10.511.59.48.410.8 Unemployment rate, % 13.610.310.09.77.9 Total primary energy supply (TPES), TWh 53.053.958.660.358.9 TPES ratio to GDP, kWh/EEK’2000 0.570.510.520.490.42 Source: Statistical Office of Estonia, Bank of Estonia

4. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 4 TPES ratio to GDP 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 Years 0 2 4 6 8 10 12 14 kWh / EUR TPES, PJ 0 50 100 150 200 250 300 350 400 450 GDP, milj.EUR TPES / GDP, kWh / EUR2000 GDP EUR2000 TPES, PJ 1993199419951996199719981999200020012002200320042005

5. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 5 BALTIC GENERATION MIX 2005 Lithuania 70%Estonia 91% Latvia 66% Latvia 33% Lithuania 23% Estonia 5% Source: Statistical Office of Estonia, Latvia,Lithuania

6. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 6 Capacity and Production of Power Plants Electrical Capacity in 2005, MW e Avail. / instal. Gross Production of Electricity, GWh 2004 / 2005 Thermal Power Plants 2523 / 269710302 /10201 Hydroplants5.0 / 5,222,4 /21.5 Windplants31.0 / 31,07,6 / 53.9 CHP Plants4211021

7. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 7 Used Resources for the Electricity Production 2005 Oil shale 91.06% Peat 0.14% Biofuel 0.32% Wind 0.53% Hydro 0.21% Natural gas 5.34% Shale oil gas and shale oil 2.40% Total Gross Electricity Production 10201 GWh Source: Statistical Office of Estonia

8. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 8 Fuels for the Heat Production 2005 Source: Statistical Office of Estonia

9. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 9 The biggest problems of the oil shale energy are The oil shale energy sector is the biggest polluter in Estonia The big pollution charge EU Directive 2001/81/EEC Too low efficiency The concentrated electricity production

10. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 10 The Environmental Requirements Influencing on Operation of Oil Shale Fired Power Plants 01.01.2008 – SO 2 bounding on existing boilers > 65%, – fly ash emissions < 200 mg/Nm 3 16.07.2009 – to reconstruct ash handling systems, and bring ash landfills in compliance with landfill directive 01.01.2012 – SO 2 emissions total < 25 000 ton/year The current SO 2 annual emission rate is about 60 000 tons/year. The new CFB based capacity will be erected 01.01.2016 – LCP directive requirements will apply to all boilers

11. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 11 Self-sufficiency –Ability to cover domestic electricity needs any time by producers located in Estonia. Increase in the use of renewables –Indicative target 5,1% of power by 2010 (2001-0,1%; 2005-1,1%). –Main emphasise on the biofuels based CHP generation and windpower. Strategic Energy Policy Objectives (1)

12. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 12 Increase in the use of CHP-s –Indicative objective 20% of power from CHP-s by 2020 (today 10%). Efficiency Improvements: –Primary Energy Consumption shall not exceed until 2010 the level of 2003. Strategic Energy Policy Objectives (2)

13. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 13 Estonian Energy prospective Energy Development Plan 2015 (2030) 20002010 Primary energy supply,PJ189220 – 250 Oil Shale consumption,10 6 t13.211 – 13 Share of renewables in energy supply,%10.513 – 15 Share of RES in production of electricity,%0.15.1 Final consumption of electricity,TWh5.46.5 – 8.0 Required net capacity of power plants,MW19802400 – 2650 Share of CHP in generation of electricity,%12 – 1420 Opening of electricity market,%1035 – 40 Heat consumption,TWh8.58 – 9 Share of CHP in heat production,%3335 – 40 Emission, share of limit for 2008,% SO 2 18190 – 100 CO 2 4850 – 55

14. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 14 Share of electricity from RES to gross electricity consumption 0 10 20 30 40 50 60 EstoniaLithuaniaLatviaEU27 % RES Share 2005 Rest of target 2010 4,0 3,1 0,9 6,8 48,4 14,2 3,91,1 Source: Eurostat

15. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 15 Instruments for supporting renewable energy sources Renewable energy sources – hydropower, solar energy, wave energy, tidal energy, geothermal energy, landfill gas, wastewater treatment gas, biogas and biomass A network operator is obliged to buy electricity produced from renewables within the network, which he owns or possesses A network operator pays the price for renewables based electricity 5.17 euro cents per kWh. (Planed 7.34 euro cents per kWh since 01July 2007)

16. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 16 Production of hydro- and wind energy Hydr o Wind 0 20002001200220032004 GWh 2005 5 10 15 20 25 3030 3535 4040 45 50

17. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 17 Consumption of imported liquid fuels and domestic biofuels for electricity and heat generation 0 2000 4000 6000 8000 10000 12000 14000 16000 TJ Heavy & light fuel oil Biomass & biogas Coal 19951998200220042005

18. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 18 CONCLUSIONS In Estonia wind and biomass resources are significant. If the "right" policies were in place, wind and CHP with biomass could make an important contribution to Estonia's energy supplies. The development of distributed generation needs the renovation of the transmission and distribution grids. The change of electricity generation technology needs a good level research.

19. 6 March 2007Role of DER in EU and in the Baltic StatesYlo Rudi 19 Thank you for your attention !