BRINGINGEUROPEANDTHIRDCOUNTRIESCLOSER

TOGETHERTHROUGHRENEWABLEENERGIES

The BETTER project

Zagreb, 09 December 2013

Andreas Tuerk, Dorian Frieden, JR

Robert Pasiscko, Zoran Kordic, UNDP

PROJECT PRESENTATION (2/2) CIEMAT (Spain)

Centro de Invest. Energ. Mediamb. Tecn

DLR (Germany) Deutsches Zentrum Für Luft-und raumfahrt e.V

ECN (Netherlands)Energy Research Centre of the Netherlands

JOANNEUM (Austria) Forshungsgesellschaft Mbh

NTUA (Greece) National Technical University of Athens

OME (France) Observatoire Méditerranéen de l’Energie

PIK (Germany) Postdam Institute for Climate Impact Research

TUWIEN (Austria) Vienna University of Technology

UNDP (International) United Nations Development Programme

PROJECT PRESENTATION (1/2)

BETTER: Bringing Europe and Third countries closer together

through renewable Energies (BETTER);

Intelligent Energy for Europe Programme, managed by the

Executive Agency for Competitiveness and Innovation (EACI);

Started: 1st July 2012;

Expected Completion Date: 1st January 2015;

Coordinator: CIEMAT, Madrid

http://better-project.net

Assess, through case studies, stakeholders involvement and integrated analysis:

•to what extent cooperation with third countries can help Europe achieve its RES targets in 2020 and beyond

•trigger the deployment of RES electricity projects in third countries and

•create synergies and win-win circumstances for all involved parties.

OBJECTIVES

Where can get the EU (green) energy from?

EU RES directive

• The RES Directive (2009/28/EC) sets binding national 2020 RES targets for all EU member states

• These targets do not explicitly reflect the national resource availability

-> Its not about capacity extension only but also on energy efficiency

Adoption of RES directive and RES targets in the West Balkan countries

STAKEHOLDERS INVOLVEMENT

COMM

UNICATION AND DISSEM

INATION

Bottom-up

Top

-Dow

n

Case studies (N.Africa, W.Balkans and Turkey) willinvestigate in detail the technical, socio-economic andenvironmental aspects of RES cooperation.

Integrated assessment will be undertaken from the “EU plus third countries” perspective, including:

• Detailed quantitative cost-benefit evaluation offeasible policy approaches as well as power systemanalysis

• Other possible “co-effects” (such as impacts on EU climate targets, energy security and macro-economicaspects).

METHODOLOGICAL FRAMEWORK

(Green-X, HIREPs Models)

Motivation for cooperation mechanisms

Renewable energy targets are calculated based on:• current RES share• country GDP

Do not take into account renewable energy potentials!

WB

MS

RES Directive -> RES targets

NREAP (Renewable energy Action Plan)

Cooperation mechanism

Different options how to reach the targets

domestically

most of the Member States plan to fulfill their renewable energy targets domestically 4 Member States namely France, Greece, Italy, and Spain noted in their forecast documents that they may use cooperation mechanisms to develop renewable energy in third countries

Basic principle of cooperation mechanisms

• Cooperation mechanisms were introduced to allow countries with high renewable energy potentials and/or low production costs (COUNTRY A) to sell their renewable energy surplus to those countries that have either low renewable energy endowments and/or have higher generation costs (COUNTRY B).

• The main idea behind this is to reach the targets in a more cost-effectively way and to reduce the overall costs in achieving it.

COUNTRY A (low/expansive RES potential)

COUNTRY B (high/cheap

RES potential)

Money transfer

RES transfer

Types of cooperation mechanisms

Cooperation Mechanisms are defined in Directive 2009/28/EC as followed:• Statistical transfers between MS (Article 6)• Joint projects between MS (Article 7 and 8)• Joint projects between MS and third countries, under the condition that RES electricity is imported to the

EU (Article 9 and 10)• Joint support schemes (Article 11)

Cooperation Mechanisms

Type of cooperation

Main actors Eligible for West Balkan countries

Type of transferred energy

Statistical transfers Only statistical transfer of RES shares

Governments Yes, but unlikely – because of statistics

No transfer of energy

Joint projects between MS

Project-based Governments No Heat/transport/electricity

Joint projects between MS and third countries

Physical transfer Governments Yes Electricity

Joint support schemes

Common support scheme

Governments Yes, but unlikely

Heat/transport/electricity

In focus: West Balkan region

• The green columns represent the share of renewable energy against projected 2020 energy demand

• The differences between the green (RES potential) and red columns (RES target) represents the energy that could be sold via cooperation mechanisms.

In focus: Joint projects between MS and WB

Country A(low/expensive RES

potential)

Country B (high/cheap RES

potential)

Money transferProject investor

RES transfer

MWh

Support payment (feed-in-tariffs)EU

Comission

Notification

Framework Agreement

Projected renewable electricity surplusses - Valleys of Opportunity (VoO)

 

RES transferRES transfer

Study case: The Serbia Italian CooperationJoint project on Ibar river

• Italy stated in its National Renewable Energy Action Plan (NREAP) that it would import 6 TWh per year of electricity from the Balkans, via Montenegro through the marine energy cable (2015)

• During 2009, Serbia and Italy signed Memorandum of understanding to implement joint projects• It was decided that the first project in mutual cooperation would be the construction of

hydroelectric power plants on the Ibar

Technology Hydro power

Capacity of hydro power plants 118 MW

Construction time 7 years

Investment costs 300 mil. €

Location Ibar river

Production 443,400 MWh

Number of parks 10

Cooperation mechanism Joint project between MS and third countries

Study case: The Serbia Italian CooperationCosts (red color) and benefits (blue color) from cooperation

Cost and benefits Base case scenario (Italy produces hydro power domestically)

Cooperation scenario (Italy buys electricity from Serbia)

Generation costs (€c/kWH) 20-22 10-12

Electricity market price (€c/kWh) 6-7 3-4

Grid related costs (€c/kWh) 0.5 n/a

Transmission related costs (€c/kWh) - 0,75

TOTAL COSTS (€c/kWh) ~15 ~5

Indirect costs and benefits CO2

Industrial LeadershipOther pollutantsEconomic activityEmploymentEnergy Security

CO2

Industrial LeadershipOther pollutantsEconomic activityEmploymentEnergy Security

Action plans roadmap and Stakehodolders dialogue

2013 2014

• Action plans for each contry• roadmap for the region

• We need YOUR feedback and input!

Do the West Balkans benefit from RES cooperation?

• Are there win-win situations?• Can potentials be exploited that cannot be exploited with

national feed-in tarriffs?• Economic benefits?• Environmaltal effects? Eg biodiversity loss?• Social implications?

Linking the Balkans with Italy

• Planned new grid connections will significantely change the energy market in the region

• Low feed-in tarifs barrier for some technologies

• New business cases for renewables and/or fossils

Our research agenda

Strategic consideration for each WB country:Domestic target achievement vs trade: Do the Balkans need the potential for 2020 or later?Trading with the EU or within the region?Can the cooperation mechanisms lead to new business models for the region adn how could they look like?Could the cooperation mechanisms assist in avoiding a fossil lock-in?Possible role and design of different cooperation mechanism with different pros and cons

Bosnia and Herzegovina

• Target of 40% renewables by 2020• Currently large hydro and lignite electricity• More fossil plants and hydro planned• Will Bosnia be able to expand wind up to 2020?• Can export create business cases for non-hydro?• New 400 kV to Serbia planned (to export hydro

electricity)• Regulatory and administrative barriers?

BIH: potential and targets

BIH: energy scenarios

Montenegro

• RES target of 33%• Currently large hydro, fossils and biomass• Focus is mainly on large and small hydro, but also wind

and biomass power expansion is envisioned.• Planned submarine interconnection cable between

Montenegro and Italy should offer new possibilities for international cooperation.

Montenegro: RES potentials and targets

FYROM Macedonia

• RES target of 28%• Strong expansion of hydroelectric generation is planned. • A Feed-In Tariff is in place, with a budgetary limit for non-

hydro technologies.• 400 kV to Greece, 400kV to Albania-Italy only after 2016• Limited financial support for solar and wind

Macedonia: RES potentials and targets

Croatia

• 20% RES target• Currently thermal and large hydro electricity generation • Increase of renewable electricity generation, especially

wind and biomass, but far below wind potentials • Increased biomass heat and solar energy use for

heating. • Wind energy could be available for export, if grid to Italy

is enhanced• current grid capacity for new wind power plants is

estimated at a maximum of 360 MW• EU MS since July 2013: No third country status anymore

Croatia: RES potentials and targets

Albania

• Albanian electricity generation mainly hydro• Albania has accepted a RES target of 38% by 2020• NREAP:

• Focus on hydro and renewable heat (biomass, solar thermal)

• Possible use of cooperation mechanism until 2020 for wind expansion

• Current grid connections are insufficient for large scale export, new cable to be built to Italy (to enable wind energy export)

AL: potential and targets

AL: Energy Efficiency pathway critical

Serbia

• RES target of 27%• Lignite fired TPPs, large hydro power and biomass as

the major renewable energy source• Increase of wind planned (500MW), but also biomass

electricity and heat. • Planned wind expansion at the upper limit of what the

Serbian grid is expected to be able to absorb (NREAP)• Feed-in Tariff for solar photovoltaics limited to 10 MW of

capacity.• Interest in using cooperation mechanisms for hydro and

solar projects in Serbia.

SR: RES potentials and targets

SR: energy demand

Kosovo*

• Strong expansion of hydroelectric generation is planned (large HPP Zhur)

• Feed-In-Tariff for solar photovoltaic generation is to start in 2014.

• Planned renewables would exceed RES targets if Zhur is impemented

• Surplus renewables could be sold via the cooperation mechanisms.

•  400 kV connection to Albania only in 2017

Kosovo*: RES potentials and targets

Cooperation within the region?

• Current lack of cooperation between countries led to an inefficient regional energy system as opposed pre-1990, where region was a net electricity exporter

• Cooperation between some countries in the region unlikely (eg Serbia and Kosovo), in others cooperation is emerging (Albania and Kosovo, or Macedonia and Kosovo)

• Joint Projects within the region an option• Joint Support schemes however unlikely in the near

future

Conclusions

• Export of those renewable potential in the next years that cannot be financed by the countries

• Export for those RES potentials that cannot be integrated in the countries grids, eg wind

• Meeting the RES targets will be a challenge• More efficient use and improvement of existing

infrastructure is key to meet the RES targets and may enable to export electricity

Thanks for your attention!