Brussels - 29 March 2017Unlocking the Potential for Renewable Energy and Energy Efficiency in South-Eastern Europe

COST-COMPETITIVE

RENEWABLE POWER GENERATION:

Potential across South East Europe

A Snapshot of Findings

Gurbuz Gonul

Senior Programme Officer, Regions

2

GEOGRAPHIC SCOPE

Contracting Parties

of the Energy Community

• Albania

• Bosnia and Herzegovina

• Kosovo*

• Montenegro

• Republic of Moldova

• Serbia

• The former Yugoslav

Republic of Macedonia

• Ukraine

Members of

the European Union

• Bulgaria

• Croatia

• Romania

• Slovenia

Input to decision making in the upcoming process of undertaking new commitments and developing long-term strategies for renewables

Identification of cost-competitive RE potential – focus on wind & solar PV

Assessment of the overall renewable electricity potential in the region

3

OBJECTIVES

Cost-Competitive Potential

• LCOE within the ranges of the fossil-fuel supply options

• Level of cost-competitive potential today, 2030 and 2050

• Sensitivity analysis for cost of capital (WACC)

RESOURCE ASSESSMENTSOLAR PV AND WIND SUITABILITY ANALYSIS

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Suitable locations

for Solar PV investments in SEE

Suitable locations

for Wind investments in SEE

What is a good site?

• Renewable energy resource intensity

• Topography

• Population density

• Distance to the grid

• Land cover

• Protected areas

IRENA Renewable Costing Alliance

IRENA Renewable Cost Database

based on data from

over 9,000 utility-scale RE projects

5

COST ANALYSISDRAMATIC DECLINE IN SOLAR PV & WIND COSTS

Significant cost reductions since 2009:

• Solar PV module costs by 80%

• Wind turbine prices by a third

Potential for further reduction by 2025:

• Solar PV - 59%

• Onshore wind - 26%

• Offshore wind - 35%

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TECHNICAL POTENTIAL

740 GW Technical renewable energy potential in South East Europe

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NREAP TARGETS VS.

COST-COMPETITIVE ADDITIONAL POTENTIAL

Based on: Medium cost of capital scenario

Solar PV5,2 GW

4%

Wind 98,2 GW

77%

Hydropower 18,1GW14%

Biomass 5.2 GW

4%

Geothermal 0,7GW1%

5,2 GW98,2 GW111,5 GW

405,3 GW

0

100

200

300

400

500

600

PV Wind

2030

2016

8.2 GWGap to achieve cumulative RE deployment target for 2020 (based on NREAPs)

620 GWWind and Solar PV by 2030

127 GWRenewable Energy today

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• Eliminate administrative barriers and

improve market access

• Create attractive and consistent RE

support schemes

• Improve PPA structure

• Address grid integration challenges

• Enhance skills and capacities

• Facilitate access to finance

IMPACT OF COST OF CAPITAL

Additional cost-competitive potential in 2016

How to improve the risk perception of the region?

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240

PV Wind Hydropower Biomass Geothermal

Po

ten

tial

[G

W]

Low cost of capital scenario

Medium cost of capital scenario

High cost of capital scenario

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HIGH-LEVEL MEETING ON RENEWABLE ENERGY

IN SOUTH EAST EUROPE - Abu Dhabi, 13 January 2017

Abu Dhabi Communiqué on Accelerating the Uptake of

Renewables in South East Europe

Action Areas

• Long-term planning for RE deployment

• Market based RE support schemes

• Socio-economic benefits vs. affordability

• Enabling frameworks: technical, policy,

regulatory, institutional

• Access to financing for RE projects

Thank you.

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• Energy Community Renewable Energy

targets for 2020 NREAPs

• Alignment with 2030 Energy and Climate

framework of the EU

• 30% RE share in regional electricity mix;

but mostly hydro installed decades ago

• Limited share of solar PV and wind despite

the dramatic cost decline

• Ongoing discussions on the future

electricity mix

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CONTEXT

Solar: 3,5 GW

9%Wind:

4,9 GW14%

Hydro: 27,3GW76%

Biomass: 0,3 GW1%

Shares of Renewable Power

Capacity in SEE

Total: 36 GW (2015)

2016

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0 20 40 60 80 100 120 140 160 180 200 220 240 260

Win

d P

ote

nti

al (

GW

)

LCOE Wind (EUR/MWh)

Low cost of capitalscenario

Medium cost of capitalscenario

High cost of capitalscenario

LCOE for CCGT(excluding CO2)

LCOE for CCGT(including CO2)

2030

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SEE COST-COMPETITIVE WIND POTENTIAL

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Win

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GW

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LCOE Wind (EUR/MWh)

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0

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PV

po

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tial

(G

W)

LCOE PV (EUR/MWh)

Low cost of capitalscenario

Medium cost ofcapital scenario

High cost of capitalscenario

LCOE for CCGT(excluding CO2)

LCOE for CCGT(including CO2)

0

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PV

po

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(G

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LCOE PV (EUR/MWh)

2016 2030

SEE COST-COMPETITIVE SOLAR PV POTENTIAL