1. Ea Energianalyse Berlin - 18 May 2009 Anders Kofoed-Wiuff, Ea Energy Analyses Berlin - 18 May 2009 Anders Kofoed-Wiuff, Ea Energy Analyses

2. Ea Energianalyse Scope of the study Overview of current energy situation and scenarios for the future regional energy system Prioritized list of regional projects to promote the region as a sustainable region Outline the possibilities for the industry to be frontrunners in the development of new energy technologies Ideas for further development of regional knowledge sharing in the field of sustainable energy Medio 2008Medio 2009

3. Ea Energianalyse Three phases Phase I: Review of currrent situation – two scenarios for 2030 (completed) Phase II: Detailed scenario analyses of the electricity and district heating markets (ongoing) Phase III: Enhanced cooperation in the BSR (starting with Workshop in Kaliningrad, June 2009)

4. Ea Energianalyse 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 Phase I: Two scenarios for 2030 Small-techBig-tech Energy Transport …or perhaps a combination

5. Ea Energianalyse Results

6. Ea Energianalyse Results

7. Ea Energianalyse Phase II Detailed scenario analyses of the Baltic Sea Region. The scope of the analyses is to –examine how the electricity system may develop to comply with medium and long-term policy objectives given different developments in the framework conditions –show the value of establishing new electric interconnectors –explore the consequences of national vs. regional policy objectives for renewable energy –assess the costs and benefits of a concerted wind power planning and interconnection at Kriegers Flak.

8. Ea Energianalyse 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

9. Ea Energianalyse DE_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 sources

10. Ea Energianalyse 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)

11. Ea Energianalyse Fuel prices In accordance the latest projection of the International Energy Agency Biomass/waste: 0-12 €/GJ Long-term oil price: App. 120 USD/bbl

12. Ea Energianalyse * excl. North West Russia

13. Ea Energianalyse 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.

14. Ea Energianalyse Electricity demand

15. Ea Energianalyse Development nuclear power

16. Ea Energianalyse Wind power potentials

17. Ea Energianalyse Baseline: Electricity generation Selected DRAFT results

18. Ea Energianalyse CO2-emissions (Mill. tonnes) Selected DRAFT results 1990 2005 20%red 50%red 38% red

19. Ea Energianalyse CO2 and RE prices Shadow prices for CO2 target and RE target Country 20202030 CO 2 EUR/ton RE EUR/MWh el CO 2 EUR/ton RE EUR/MWh el Denmark 0 16 65 0 Estonia 24 0 Finland 23 0 Germany 250 Latvia 446 Lithuania 260 Norway 00 Poland 468 Sweden 260 Russia 160 Selected DRAFT results CO2-price The cost in the model of additionally reducing one ton of CO2 (may be interpreted as an estimate of the CO2-price) RE-price The cost in the model of additionally increasing RE generation by one MWh (maybe interpreted as an estimate of the cost of a RE certificate)

20. Ea Energianalyse Sensitivity – Regional RE target Selected DRAFT results Shadow prices for CO2 target and RE target Country 20202030 CO 2 EUR/ton RE EUR/MWh el CO 2 EUR/ton RE EUR/MWh el Denmark 024650 Estonia Finland Germany Latvia Lithuania Norway Poland Sweden Russia

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

22. Ea Energianalyse Selected DRAFT results To the consumer price should be added to the cost of RE subsidies/certificates

23. Ea Energianalyse Benefits of increasing the transmission grid in the region Selected DRAFT results €/MW capacity, in 2020, in the baseline scenario

24. Ea Energianalyse 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 – particular connections within and to/from Germany Benefits of cooperation on achieving RE targets

25. Ea Energianalyse 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 2008Medio 2009

26. Ea Energianalyse 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

27. Ea Energianalyse THANK YOU

28. Hydro Nuclear Bio Nuclear Bio Hydro Coal Nuclear Wind Coal Hydro, Gas Oilshale Nuclear Coal Gas Wind Gas Coal Hydro Nuclear Expected high economic growth GAS OIL GAS OIL

29. Bioenergy Potential as share of gross energy demand Calculation based on stats from DG TREN and EEA

30. Wind energy resource

31. Ea Energianalyse Baltic Sea Region Gross energy consumption

32. Ea Energianalyse Characteristics of the region

33. Ea Energianalyse Characteristics of the region

34. Nuclear power Today – 21 GW Big-tech – 28 GW – No phase-out in Sweden, Germany and Russia. New nuclear in Poland, Lithuania and 6 th reactor in Finland Small-tech – 9 GW – Phase-out in Germany, 50 % phase-out in Sweden and Russia – No nuclear in Lithuania

35. Carbon Capture and Storage Key measure in Big-tech – 30 GW power capacity equipped with CCS supplying 20 % of overall electricity demand – all large thermal power plants commissioned beyond 2020 with CCS. Coal power plants commissioned in the period 2010-2020 are prepared for CCS Assuming – 90 % cleaning eff. – 10 %-point electric efficiency loss

36. Small-tech calls for smart grids and ICT

37. Ea Energianalyse Renewed focus on the region EU strategy for the Baltic Sea Region –by June 2009 Baltic Interconnection Plan European coordinators –Connection to offshore wind power in Northern Europe –“Poland-Lithuania link” Study on ‘Enhanced regional energy cooperation in the Baltic Sea Region’

38. Ea Energianalyse Key issues How should the energy systems in the region develop? – Big-tech, Small-tech – or perhaps a combination? How to ensure a coordinated planning for off-shore wind and new infrastructure project? How to develop the energy markets? –Electricity and gas - biomass? How to promote best-practice policies on district heating and CHP, energy savings, sustainable transport systems? How to cooperate on the demonstration of CCS? How to promote industry cooperation on developing and marketing energy efficient appliances?

39. Ea Energianalyse Next steps Detailed scenario analyses of the region Least cost analyses based on targets for the region, to illustrate cost and benefits of –National policies vs. coordinated policies –Interconnectors –Specific projects (off-shore wind, CCS, nuclear, biomass) –Energy savings –Etc.