1. Jan MELICHAR Charles University Environment Center NEEDS Forum 3 - Cairo January 28, 2008 The external costs calculation in CEEC countries focusing on valuation of external cost associated with RE

2. Content Electricity and heat generation in CEE countries Focus on combustible renewables in CR Private and external cost of power plants in CR Biomass and biogas fuel technologies Conclusions

3. Gross electricity generation, by country, by fuel, 2005 (%) – selected CEE countries TWh 44.4 59.4 35.8 31.5 82.6 Source: OECD and IEA 2007

4. Gross electricity generation, by country, by fuel, 2005 (%) – selected SEM countries TWh 13.7 22.6 108.7 Source: OECD and IEA 2007

5. Gross electricity production from combustible fuels in the Czech Republic, 2006 (%) Source: OECD and IEA 2007

6. Gross heat production from combustible fuels in the Czech Republic, 2006 (PJ) Source: OECD and IEA 2007

7. Trends in electricity generation in CR (TWh, %) OECD and IEA 2005

8. The future importance of combustible renewables in CR EC Directive 2001/77 on the support of electricity from renewables – renewable energy should account for 8% (as an indicative target) of gross electricity consumption by 2010 Electricity from renewables should increase twofold – from 4,48% in 2005 up to 8 % in 2010 2/3 of electricity production is contributed by large hydropower station – is strongly dependent on uncertain weather condition For solar and wind power are not the best condition Biomass is the best suited renewable source

9. -0.3 2.0 2.5 2.6 3.1 3.5 3.9 4.2 4.3 7.2 7.8 129.2 Projected generation costs at 5% discount rate (2005, c€/kWh) OECD and IEA 2005

10. Fossil and biomass fuel cycles in CR I. Electricity generation Hard, brown, lignite coal fired power Natural gas fired power plant Heavy oil fired power plant Energogas fired power plant Biofuel fired power plant II. Heat production Hard, brown, lignite coal fired power Natural gas fired power plant Heavy oil fired power plant Biomass heating plant

11. External costs calculation Using ExternE methodology – one single energy technology EcoSense v4.1 software tool 2003 emission and reference technology data E xternal costs of operation phase is covered Impact categories: human health, buildings, crops, climate change Pollutants: PM 10, SO 2, NO x, CO 2, sulphates, nitrates, O 3

12. Biogas technologies

13. Biomass heating plants

14. External costs from electricity generation in the Czech Republic (2005, c€/kWh) 0.03 0.12 0.88 1.05 1.94 3.24 3.75 5.38 6.70 6.73

15. External costs from heat production in 2005 (€/GJ) 0.63 0.78 0.81 1.21 1.34 1.37 2.43 2.62 3.07 4.38

16. Conclusions and discussion Electricity and heat production strongly depend on fossil fuels in CEE countries Among renewables biomass energy source is suitable in CR High private costs of renewables compare to fossil fuels and nuclear Contrary to private costs external are much lower Need for more sufficient economic instruments in order to support energy production from renewables

17. Thank you for your attention Jan Melichar jan.melichar@czp.cuni.cz Charles University Environment Center Prague http://cozp.cuni.cz The research on externality calculation for energy sector was done within the IP NEEDS „New Energy Externalities Developments for Sustainability“ and CASES funded by the European Commission.