Sled scenario assessment for macedonia kelemen
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Transcript of Sled scenario assessment for macedonia kelemen
SLED scenario assessment for
Macedonia
László Szabó, PhD – András Mezősi, PhD –Zsuzsanna Pató, PhD
Regional Centre for Energy Policy Research
Skopje, Macedonia
November 20, 2015
Outline of the presentation
1. Modelling methodology
2. Scenario definitions
3. Model results for Macedonia
4. Regional outlook for Western Balkans
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1. Modelling methodology
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Introduction
• Main tools:
‣ Electricity Market Model of REKK
‣ Network model of EKC
• Market impacts in the three analysed scenarios of SLED
(REF, CPP, AMB) are modelled with REKK European
Electricity Market Model (EEMM)
‣ Market price
‣ Electricity trade whole EU+neighbourhood
‣ Necessary RES support
• Network impacts with EKC network model
• Sensitivity analysis, e.g. for hydro generation (modelled
under average rainfall conditions, but in the sensitivity
assessment the impacts of dry years are also simulated)
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►Partial equilibrium model, perfect competition
in production
►36 countries (of which 6 exogenous: Morocco,
Tunisia, Turkey, Moldova, Russia and Belarus)
►The model calculates the marginal cost of
around 5000 power plant blocks and sets up the
merit order country by country
►Power flow is ensured by 85 interconnectors
between countries
►Model calculates electricity flows and
congestions on cross-border capacities
►Taking into consideration the merit order and
exports/import, the model calculates equilibrium
prices
►Constraints in production and network
capacity, prices do not equalise across borders
Model functionality
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Input data sources
• Information on PPs from
Platts database, for
modelled country from
national sources
• Future capacity expansion
from national strategic
documents
• Availability/utilization rates
‣ Hydro availabilities:
historical utilization rates for
country and season
‣ Wind and PV: JRC
• Prices
‣ Fossil fuel price forecase
from US EIA and IEA
‣ Natural gas TTF spot price
and oil index price
Gas/Oil ST Coal ST/Biomass CCGT
1960 37,0% 35,0%
1965 38,0% 36,0%
1970 39,0% 37,0% 50,0%
1975 40,0% 38,0% 50,0%
1980 41,0% 39,0% 50,0%
1985 42,0% 40,0% 50,0%
1990 43,0% 41,0% 50,0%
1995 44,0% 42,0% 52,5%
2000 45,0% 43,0% 55,0%
2005 46,0% 44,0% 56,5%
2010 47,0% 45,0% 57,0%
2015 48,0% 46,0% 58,0%
2020 49,0% 47,0% 59,0%
2025 50,0% 48,0% 60,0%
2030 51,0% 49,0% 61,0%
Year of
commissioning
Fuel efficiency for various power plant types
• Efficiency parameteres from
literature; dependent on the
commission year and the type of the
PP (see table)
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Determining short-term marginal cost
Short term marginal cost
=
Fuel cost
+
CO2 cost
+
Variable part of the OPEX
+
Energy tax
Merit order curves - examples
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Modelled baseload prices in 2015
(€/MWh), and the yearly trade flows
Base load prices and total yearly trading in 2015
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Modelled baseload prices in 2025
(€/MWh), and the yearly trade flows
Base load prices and total yearly trading in 2025
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Model output
• Equilibrium price in a demand period
• Baseload and peakload prices
• Electricity trade between countries
‣ Price of cross border capacities
• Production by plant
‣ Fuel consumption
‣ CO2 emissions
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2. Scenario definitions
Methodology
The SLED analysis is based on assessing three scenarios:
• Reference scenario (REF);
• Currently Planned Policies (CPP);
• Ambitious Climate Scenario (AMB).
For Macedonia the SLED scenarios were based on Markal model
scenarios of MANU
Scenario assumptions were related to six dimensions:
‣ carbon value;
‣ energy/excise tax;
‣ environmental standards;
‣ deployment of renewable energy technologies;
‣ deployment of conventional generation technologies; and
‣ electricity demand (integrating assumptions on end-use energy
efficiency improvement).
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Main information sources
• Macedonian Academy of Sciences and Arts (MANU),
Scenarios based on the First Biennial Update Report on
Climate Change (September 2014) – based on the
WOM, WEM and WAM scenarios of Markal
• Second Energy Action plan of Macedonia (2014)
• Report on Energy & Climate Policy – Macedonia (2014)
• Strategy for utilisation of renewable energy sources in
the Republic of Macedonia by 2020 (2010)
• Stakeholder consultation with Ministry representatives
held in November 2014
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SLED Scenario definition-
REFERENCE
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Scenario assumptions Reference GHG scenario (REF)
TaxationIntroduction of EU ETS
ETS to be introduced in 2025
Introduction year of minimum excise duty
Year of introduction: 2020
Electricity supply
Enforcement of environmental standards (LCP Directive)
Oil PP (Negotino) is phased out from 2015. Bitola TPP gets a desulphurisation system in 2017. Oslomej TPP (lignite PP) is closed for
refurbishment between 2016 and 2020.
RES-E deployment Without measures (WOM) MARKAL model
Conventional capacity developments
Closure of Negotino
Refurbishment of Bitola and OslomejNew capacities:
Gas-fired CCGT (440 MW) – 2019
Bitola 4 (200 MW) – 2025
Coal (200 MW) – 2028
Coal (400 MW) – 2030
Electricity demand Electricity demand WOM MARKAL model
SLED Scenario definition- CPP, AMB
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Scenario assumptions
Currently Planned Policies GHG scenario (CPP)
Ambitious GHG policy scenario (AMB)
Taxation
Introduction of EU ETS
CO2 cost in 2020 is 40% of the ETS price, from 2025 ETS is introduced
ETS to be introduced in 2020
Introduction year of minimum excise
dutyYear of introduction: 2020 Year of introduction: 2018
Electricity supply
Enforcement of environmental standards (LCP
Directive)
Oil PP (Negotino) is phased out from 2015. Bitola TPP gets a
desulphurisation system in 2017. Oslomej TPP (lignite PP) is closed for
refurbishment between 2016 and 2020.
Oil PP (Negotino) is phased out from 2015. Bitola TPP gets a
desulphurisation system in 2017. Oslomej TPP (lignite PP) is closed for refurbishment between 2016
and 2020.
RES-E deploymentWith existing measures (WEM)
MARKAL model With additional measures (WAM)
MARKAL model
Conventional capacity
developments
Closure of Negotino
Refurbishment of Oslomej
No new capacities
Closure of Negotino
Refurbishment and Oslomej
No new capacities
Electricity demand
Electricity demand WEM MARKAL model WAM MARKAL model
Electricity consumption
• Reference: we can observe a significant difference
between the REF and CPP-AMB scenarios, due to the
nature of REF – it represents a Without Measures
(WOM) scenario
• Energy efficiency improvements are the main drivers for
further reductions in the energy efficiency scenario
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RES-E capacities 1
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REFERENCE capacity values (MW)
Assumptions:
• Hydro capacity expansion is limited to 2016 level
• From 2017 no any new capacity is installed in the scenario
• Thus it serves as a comparative scenario
RES-E capacities 2
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CPP scenario capacity values (MW)
AMB scenario capacity values (MW)
• Significant increase in hydro capacities (over 60% in next 15
years)
• Wind also contributes with up to 150 MW capacities
Present cross-border capacity
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From To O D D O
AL MK 0 0
BA RS 488 403
BA ME 483 440
GR MK 329 151
GR AL 250 250
HR RS 507 429
HU RS 689 758
ME AL 400 400
MK BG 96 215
RO RS 570 347
RS ME 540 583
RS MK 491 253
RS AL 223 223
RS BG 162 250
Origin and
destination countryNTC valueHU
RSBA
MKME
AL
BG
GR
HR
IT
429
507
758
689
250162
250
250
488403
440
483
400
400
0
0
253
491
215
96
329 151
223
223
583
540
Planned cross-border capacities
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Country 1 Country 2Year of
commissioningInvestment status O D D O
RS RO 2017 Approved 800 800
BA ME 2023 Planned 600 600
IT AL 2020 Planned 500 500
RS MK 2015 Under construction 400 1000
MK AL 2019 Planned 600 600
AL RS 2016 Under construction 500 500
IT ME 2018 Under construction 1000 1000
RS BA 2022 Planned 600 600
RS ME 2022 Planned 600 600
HU
RSBA
MKME
AL
BG
GR
HR
IT
600600
600
600
600
600
1000
400
RO
800 800
1000
1000
500 500
600
600
500
500
Under construction and
approved categories are
used in the model runs
till 2030. IT-AL is not
realised in the modelling
period.
3. Scenario Assessment Results
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Modelling result – baseload electricity
price, (wholesale) €/MWh in real terms
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Modelling result – peakload price,
(wholesale) €/MWh in real terms
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Wholesale price evolution
• The main factors influencing the wholesale price
developments in Macedonia:
‣ Generation expansion in the fossil based generation in the region
is high. Over 7000 MW capacity (mainly lignite and coal) is built
in the countries: AL; BA; BG; GR; HR; HU; ME; MK; RS; RO
according to the national plans
‣ New RES capacities above 12000 MW are also contributing to
the price drop till 2020.
‣ Higher interconnectedness in the region also allows trade of
electricity (higher NTC)
• These new capacity expansion is illustrated in the
following slide for the region
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New PPs in the wider region*
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Region includes the following countries: AL; BA; BG; GR; HR;HU; ME; MK; RS;
RO;
New coal-based power generation, MW New RES-E generation capacity, MW
Electricity mix
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Generation mix and CO2 emissions
• Macedonia is characterised by dominating coal and lignite generation
share and low level of import in the modelled period.
• The Reference scenario sees further expansion of fossil generation with
increasing carbon emission levels.
• Import is increased in the scenarios except for the AMB scenario, where
it remains at low level.
• Concerning renewables, hydro is expanded in the CPP and AMB
scenarios, the rest of the technologies have limited contribution (lower
utilisation rates)
• Significant drop in CO2 emissions is observable in the CPP and AMB
scenario compared to the reference year values.
• Still, Macedonia is characterised by higher carbon intensity than the
ENTSO-E average in all years.
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CO2 emissions per capita
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Total investment cost of new PPs,
m€, 2015-2030
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Source of unit investment cost: Serbian Energy Strategy and Fraunhofer (2013)
•There is a significant investment cost need in the various scenarios:
• The Reference scenario has a 2.3 Billion € investment need over the
following 15 years period, reduced to 1.4 Billion in the AMB scenario due
to the lower coal and lignite expansion
• The main contributing part in the REF scenario are the coal and lignite
plants , while in the CPP and AMB scenarios these are the hydro
investments, but these are still the most economical RES options in the
country.
Yearly RES-E support need,
m€/year
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Unit RES-E support, €/MWh
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RES-E support vs CO2 revenues
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4. Regional Outlook
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Baseload prices (€/MWh)
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AL BA ME MK RS AL BA ME MK RS AL BA ME MK RS AL BA ME MK RS
2015 2020 2025 2030
Bas
elo
ad p
rice
, €/M
Wh
REF CPP AMB
Regional generation mix with different
CO2 prices in the AMB scenario (2030)
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0
10 000
20 000
30 000
40 000
50 000
60 000
-20 000
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
0 5 10 15 20 25 30 35 40 45 50
CO
2em
issi
on
, kt
Elec
tric
ity
mix
, GW
h
CO2 price, €/t
Net import Other fossil Other RES-E Hydro
Natural gas Coal and lignite CO2 emission
Generation mix change in the case
of low hydro availability (2030)
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-4 000
-3 000
-2 000
-1 000
0
1 000
2 000
3 000
4 000
REF CPP AMB REF CPP AMB REF CPP AMB REF CPP AMB REF CPP AMB
AL BA ME MK RS
Elec
tric
ity
pro
du
ctio
nch
ange
, GW
h
Net import
HFO, LFO
Hydro
Natural gas
Coal and lignite
Conclusions 1
• The wholesale price is dependent on regional generational capacity expansion
rather than on the ambition level of climate policy.
• Macedonia is currently a net importer of electricity and continues to be an
importing country in the all scenarios. However, in the AMB scenario the country
could effectively limit the import of electricity by 2030 to a very low level due to the
lower demand and the significant increase in hydro-based generation
• CO2 emission intensity remains higher than the electricity system in Europe, in
spite the high share of hydro-based generation, due to the high share of coal.
• If the country introduces a price tag for carbon emission, the government
revenues would be significant, well above the required RES-E support budget
after 2020.
• Macedonia could still develop significant capacities in hydro generation, which
could be a very valuable asset for the future operation of the electricity system. At
the same time, the electricity system would be more sensitive to meteorological
conditions (precipitation levels and patterns).
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Conclusions 2
• Macedonia is sensitive to meteorological conditions: in the short term, severe
droughts could drive up prices by EUR 7-8/MWh, and in the long term by EUR 3-
4/MWh. In such a year the country would still rely heavily on imports, but in the
AMB scenario imports could be significantly reduced.
• If the fossil based generation is expanded as assumed in the REF scenario it
would significantly increase carbon emissions in the country.
• If further cooperation is enhanced within the region and with EU member states,
the country could further utilise its hydro potential. Stricter climate policy would
create more demand for its hydro-based generation.
• The assessment of network impacts shows that the Macedonian electricity
transmission system would not require additional network reinforcements in the
future to cope with the planned RES capacity increase in the scenarios. If the
presently planned network additions are not built, contingencies would not
appear in the system.
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Thank you for your attention!
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