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Energy Security Scenarios in the Baltic States
Karl Sjöblom
Master of Science Thesis KTH School of Industrial Engineering and Management
Energy Technology EGI-2016-010MSC
Division of Energy Systems Analysis
SE-100 44 STOCKHOLM
Master of Science Thesis EGI-2016-010MSC
Energy security scenarios in the Baltic states
Karl Sjöblom
Approved
Examiner
Mark Howells Supervisor
Constantinos Taliotis
Commissioner
Contact person
Abstract
The Baltic region is facing a large‐scale transformation of its electricity supply system. The current
generation system consists of large fossil fuel based power plants that need to be replaced with more
environmental friendly generation types. Therefore, a thorough analysis of the future electricity supply
system is necessary to avoid shortages and ensure the security of supply. Not only does the Baltic
electricity systems contribute to a large amount of carbon emission, but is also struggling with a
regional deficit of electricity and is therefore forced to import electricity from Russia. The installed
capacity is not enough to cover the domestic and regional demand.
Four scenarios have been compared and analyzed in order to find possible ways to improve the energy
security. The first scenario was a plain least‐cost scenario, the second scenario included a target of
renewable electricity production of 100% by 2050, the third scenario included a target of zero carbon
emissions by 2050 and the fourth scenario included the construction of a nuclear power plant in
Visagina, Lithuania by 2022. The results from these scenarios detected several possible directives,
which would both improve the energy security and the Baltic region would obtain o more sustainable
electricity generation system. These results indicated that if Lithuania initiated the plans of a nuclear
power plant this would heavily decrease the Baltic region’s dependence on imported electricity.
However, large investments must be made in the renewable electricity production industry in to secure
the phase out process of the large fossil fuel based power plants.
These actions are the most effective way to improve the security of electricity supply in the Baltic
region. Still there are more research areas related to the same problems that has to be investigated.
To obtain a holistic overview of the energy system other sectors must be included. Both the transport
and heat sector contribute to large amount of carbon emissions due to the dependence on fossil fuels.
Further investigation in this area would be to include these sectors in the analysis.
Keywords: OSeMOSYS, energy security, Baltic region, long‐term scenario planning, carbon reduction
Preface
This project is the final step of my five years here at the Royal Institute of Technology, KTH. After finishing my bachelor’s degree in energy and environment I started the master’s programme sustainable energy engineering with focus on power generation and energy systems analysis and this is the thesis project that sums up all these years. First of all I would like to thank my supervisor Constantinos Taliotis for all great feedback and support. This valuable feedback has given me the guidance and directions I needed to achieve the goals. I would also like to thank the department of Energy System Analysis at KTH. This project has given me a great insight in the system perspectives of the energy analysis and how to find improvements using these methods. Finally, I would like to send a warm thank you to my family and friends for the support during these months! Stockholm, January, 2016 Karl Sjöblom
Table of Contents
1 Introduction ............................................................................................................................. 1
1.1 Energy situation in the Baltic countries ................................................................................... 1
1.2 Aims and objectives ................................................................................................................. 4
1.3 Literature and data collection review ..................................................................................... 4
2 Methods ................................................................................................................................... 4
2.1 Scenarios ................................................................................................................................. 5
2.2 Modeling software program ................................................................................................... 5
2.3 Model assumptions and inputs ............................................................................................... 7
2.3.1 Demand profile .................................................................................................................... 7
2.3.2 Fuel .................................................................................................................................... 10
2.3.3 Reference electricity system ............................................................................................. 11
2.3.4 Technology ........................................................................................................................ 14
2.3.5 CO2 Emissions .................................................................................................................... 16
3 Results ................................................................................................................................... 17
3.1 Scenario 1 – least cost ........................................................................................................... 17
3.2 Scenario 2 – 100% renewable electricity production by 2050 .............................................. 23
3.3 Scenario 3 – Zero carbon emissions by 2050 ........................................................................ 29
3.4 Scenario 4 – construction of a nuclear power plant in Lithuania .......................................... 35
4 Discussion .............................................................................................................................. 43
4.1 Scenario 1 .............................................................................................................................. 43
4.2 Scenario 2 .............................................................................................................................. 45
4.3 Scenario 3 .............................................................................................................................. 46
4.4 Scenario 4 .............................................................................................................................. 47
5 Conclusion .............................................................................................................................. 49
5.1 Future investigations and research ....................................................................................... 50
Bibliography .................................................................................................................................. 51
Appendix 1 .................................................................................................................................... 52
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1 Introduction
The Baltic region states, Estonia, Latvia and Lithuania became sovereign on 6th of September 1991 after almost half a century of Soviet occupation. Traces from that period can still be found in several places including the electricity supply system. Even though it is more than 20 years since the Baltic countries, together with the Soviet Union declared their independence the electricity transmission infrastructure is heavily integrated with today’s Russian network. The electric grid is still synchronized with Belarus and Western Russia in the so called BRELL transmission network. This means that frequency regulations and load/generation control is in the hand of foreign operators (BALTSO, 2006). The integration of the Baltic electric grid with the European grid is a continuous project. During the past ten years several interconnection links with the Nordic countries have been implemented and there are more to come. The first interconnection line, Estlink together with Nordbalt and LitPol are three larger interconnection projects with the aim of integrating the two separate grids (NTI, 2015).
These matters together with the fact that the region depends heavily on import of electricity show the importance of an analysis of the security of electricity supply in the region. However, the Baltics is not the only region dependent on import of energy. According to the European Commission more than 50% of the EU energy supply is imported, which clearly points out a lack of energy security not only in the Baltic but also in the whole European Union (Eurostat, 2015). Therefore, a numerous of policy plans and incentives have been implemented by the European Commission in order to increase energy security and to avoid energy shortages, conflicts or other matters that follows lack of energy. If the Baltic countries aim for a more independent and self‐controlled electricity supply structure actions must be done within a clear frame of united goals.
1.1 Energy situation in the Baltic countries
As mentioned above the Baltic region is heavily dependent on electricity import and has been so for the past 5 years, due to the transformation of the Lithuanian electricity supply caused by the shutdown of nuclear power. However, what is important to mention is the situation is different in all three states. In figure 1 the net electricity import is presented. In table 1 and table 2 the detailed electricity import and export flows are presented for the reader to see from which country the electricity comes from.
Figure 1: Net electricity import of the three Baltic countries from 2000-2012
Table 1: Annual electricity export from the neighboring countries
Exporter: ESTONIA LATVIA LITHUANIA
‐100
‐75
‐50
‐25
0
25
50
75
100
2000 2002 2004 2006 2008 2010 2012
[TWh]
Estonia
Latvia
Lithuania
2
[GWh] [GWh] [GWh]
Importer: Finland Latvia Russia Estonia Lithuania Russia Latvia Belarus Russia
2010 1 967 2 695 285 38 3 055 8 234 402 1 549
2011 1 657 2 633 696 26 2 734 0 443 747 155
2012 385 3 364 1 150 13 3 231 1 293 1 022 128
2013 476 3 535 1 971 23 3 626 1 89 893 146
2014 44 3 804 2 682 5 3 017 1 244 535 118
Table 2: Annual electricity import from the neighboring countries
Importer: ESTONIA [GWh]
LATVIA [GWh]
LITHUANIA [GWh]
Exporter: Finland Latvia Russia Estonia Lithuania Russia Latvia Belarus Russia
2010 246 38 1 459 2 695 234 1 044 3 055 4 488 634
2011 480 26 1 011 2 633 443 934 2 734 2 916 2 436
2012 1 511 13 1 114 3 364 293 1 280 3 231 2 230 2 603
2013 1 534 23 879 3 535 89 1 382 3 626 2 335 2 112
2014 3 522 5 185 3 804 244 1 290 3 017 3 356 2 147
Estonia has due to its great domestic oil‐shale resources been a consistent net exporter. This has played an important role of the economic development and has also been a large contribution to the growing gross domestic product (Sousa & Fedec, 2015). When it comes to import Estonia has shifted from Russian electricity to a larger import of Finish electricity, which can be seen in table 1 and table 2. This is because a second interconnection link between Estonia and Finland, Estlink 2, was in place 2014. Estlink 1 have a capacity of 350 MW and was installed 2006 and is now complemented with Estlink 2 which has a capacity of 650 MW. In Latvia and Lithuania the situation is different and by viewing figure 1 it is easy to see how the situation has changed. Latvia has during the past 15 years been net electricity importers, mainly from Russia and Estonia (ENTSOE, 2015). Due to lack of reliable primary energy sources they have been forced to import large shares of its domestic electricity supply. The situation in Lithuania has changed dramatically the past 15 years. From being a consistent net exporter Lithuania is now a major net importer. A milestone of this development occurred in 2009 when Lithuania was forced to shut down its nuclear power plant in Ignalina due to its low standard. This was necessary in order for Lithuania to be accepted as a member of the European Union (World Nuclear Association, 2015). The consequences that followed were an increase of the import demand, which pushed Lithuania even further away from safe and independent electricity supply. The shutdown of the Ignalina power plant affected the whole region, which can be seen in Figure 1, where the import increased significantly by 2010. Lithuania is now heavily dependent on import from Russia, Belarus and Latvia, which can be seen in table 2.
Even though Estonia is a consistent net exporter of electricity they have to prepare for a larger change in its production technology system. Oil‐shale fired power plants contribute to almost 90% of the annual electricity production, which causes large amounts of carbon emissions. Therefore, large investments must be done to increase its small renewable share to a more decent level. Latvia has by far the highest share of renewable energy in its domestic production. Due to its investments in hydropower the average renewable share stands for over 55%. Lithuania on the other hand has an average renewable share of 30%. Partly because of its hydropower but also an amount of wind power worth mentioned. Both Latvia and Lithuania will in the future struggle with both their dependence of import but also their large share of electricity produced in natural gas‐fired power plants. In table 3 the electricity generation mix of 2012 in each country is presented:
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Table 3: Electricity generation mix of 2012
Estonia Latvia Lithuania
[TWh] [%] [TWh] [%] [TWh] [%]
Fossil fuels 10,5 87,6 2,1 38,7 3,1 64,8
Biofuels 1,0 8,4 0,2 4,2 0,2 4,5
Other renewables 0,5 4,0 3,0 57,1 1,5 30,7
Total production 12,0 100 5,3 100 4,8 100
Net Imports ‐2,2 1,7 6,6
Final el. demand 9,7 7,0 11,4
Table 4: Installed capacity in 2010 and 2015
Estonia Latvia Lithuania
[MW] 2010 2015 2010 2015 2010 2015
Oil‐shale 1 787 1 787 0 0 0 0
Natural gas 188 438 865 865 2 520 2 520
Biofuels 83 101 16 88 45 120
Wind 149 301 30 68 163 288
Hydro 7,5 7,5 1 553 1 579 877 1 102
Nuclear 0 0 0 0 0 0
Fossil fuels stand for most of the installed capacity together with hydropower in Latvia and Lithuania. The installed capacity of 2010 and 2015 is presented in table 4 and it proves the Baltic regions dependence on fossil fuels. Oil shale capacity in Estonia and natural gas‐fired capacity in Latvia and in Lithuania are important facts and clearly gives an idea of the situation in those countries. All three countries have also experienced an economic growth since the separation from the Soviet Union with a, except during the financial crises of 2008, growing gross domestic product. In table 5 the economic forecasts are presented and they are positive which means that the future looks bright and the economies will continue to grow (Sousa & Fedec, 2015). Even though the annual growth rate is slowly decreasing the total GDP will follow the trend presented in table 5 (Sousa & Fedec, 2015).
Table 5: Gross domestic product forecast
2015 [Billion USD]
2020 [Billion USD]
2030 [Billion USD]
2050 [Billion USD]
Estonia 25,9 30,9 39,2 55,7
Latvia 31,9 37,9 47,8 67,5
Lithuania 48,2 58,4 75,6 110
In order to increase the security of supply a thorough analysis of the energy situation must be done. Important system components like infrastructure, access to necessary primary resources, regional political stability are a few parameters that affect the energy security. Another important parameter is the cost of energy. Even though future energy policy planning will focus mainly on low‐carbon alternatives that can replace today’s dependence on fossil fuel alternatives, the economic costs must
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be taken into account. Future predictions of investment cost, operating and maintenance cost, and the cost of fuel must be included in the policy plans to create a more reliable electricity system.
1.2 Aims and objectives
The aim of this project is to create and compare long‐term scenarios of the electricity supply in each of the three Baltic countries and use these comparisons to find improvements of the security of electricity supply. This is done using optimization software program OSeMOSYS. In order to create these scenarios several matters must be taken into account to obtain more reliable scenario plans and ease the comparison process. Important aspects that need to be analyzed include the current situation of installed capacity, domestic production, import of fuels and/or electricity, and other potential generation technologies that could replace existing technologies. Other important aspects are existing, and future cross‐border transmission infrastructure links, relevant European Union legislation and domestic energy policy plans, as well as cost projections of new investments, fuel extractions and imports, operating and maintenance. When comparing the four scenarios the following criteria will be used to perform the analysis. They are based on the International Energy Agency definition of a secure energy supply (Tanaka, 2009):
Diversification of generation technologies
Access to natural resources used for fuel extraction
Amount of imported electricity and from which country the electricity is imported
Environmental aspects
1.3 Literature and data collection review
In this project the data is collected from well‐known sources to ensure that the results are as reliable as possible. Most of the data is collected from sites connected to the European Union (EU), European Commission (EC) and the International Energy Agency (IEA). The electricity demand forecast is collected from a publication created by the EC. It is a publication of the energy situation in Europe and compares a business‐as‐usual scenario with a reference scenario based on the EU targets of 2020. Since the EU targets are binding for all member states, the demand projections are based on the reference scenario. Data related to load demands are collected from European network of transmission system operators of electricity (ENTSOE).
Cost projections are mainly based on an IEA program called Energy technology systems analysis program (ETSAP). In the section of energy supply technologies a great collection of publications for different generation, transmission and distribution technologies can be found. Additional cost projection data was collected from the IEA publication World Energy Outlook of 2014. One technology that did not appear in either of the two publication databases was the oil‐shale power plant costs, capital, O&M and fuel costs. In this project the projections of these costs are based on a study conducted 2005 by the European academics science advisory council (EASAC).
2 Methods
In order to achieve the project goals of comparing several scenarios a well‐structured method is necessary. Therefore, a few steps have to be taken and in chapter 2 a detailed explanation of the model development is presented in three sub‐chapters. Chapter 2.1 describes the scenarios with focus on the
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link between the chosen scenario and current energy policy plans, economic projections etc. Chapter 2.2 describes the optimization software program OSeMOSYS, a brief description of its mathematical content and why it is preferred instead of other similar software programs. Chapter 2.3 deals with the data input and other assumptions.
2.1 Scenarios
A detailed presentation of the chosen scenarios is vital and necessary to obtain a clear picture of what is expected from the results. In this chapter the different scenarios are presented with both a short summary of the goal and also with an explanation of why the scenario is important. In scenario 2, 3 and 4 all three countries must fulfill their share to the binding EU target of 2020. This includes a 20% decrease of its carbon emissions compared to 1990. The target also consists of an individual renewable share in the electricity generation mix, where the Estonian target is set to 25%, Latvian is set to 40% and the Lithuanian is set to 23%.
Scenario 1: A plain least‐cost scenario. This scenario will only take into account economic aspects and current cost projections and present the most economically competitive scenario. It is necessary to investigate how the electricity system will evolve over time if neither policy plans nor targets are implemented, and the future electricity generation systems will completely depend on the net present value of the different technologies.
Scenario 2: 100% renewables by 2050. By 2050 all three countries must transform their electricity generation system into 100% renewables. A milestone target is set to 2030 of at least 50% renewable energy. This scenario is important in order to find a possible strategy to transform the current system into a complete renewable electricity system. The renewable energy has large potential to grow and this scenario might help policy planners with the share structure of the generation mix since the net present value differs among the generation types.
Scenario 3: Zero carbon emission by 2050. By 2050 all three countries must produce all their electricity from renewable energy sources. This scenario is important to show an alternative carbon reduction scenario to scenario 2. With a goal of a total carbon reductions other none carbon emitting sources might be an option. Nuclear power is one example and nuclear potential have been discussed between the countries.
Scenario 4: The construction of a nuclear power plant in Visagina, Lithuania, with the start‐up year of 2022. Policy makers are currently investigating the possibility to construct a nuclear power plant in Lithuania and this is why this scenario must be included. This construction will change the energy mix a lot and will affect both the net import of the Baltic region and the net import of each of the three countries. It is therefore necessary to investigate.
2.2 Modeling software program
In order to perform the simulations and create the different scenarios OSeMOSYS is used. OSeMOSYS is short for Open Source Energy Modeling System and is developed to solve problems within the area of medium‐ and long‐term scenario planning (Howells, o.a., 2011). These scenarios can deal with installed capacity planning as well as planning of energy supply and is applicable in a multi‐sector use, which makes it useful for many different actors (Howells, An Introduction to OSeMOSYS, 2013).
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OSeMOSYS has the advantage of that it is easy to understand the software and the so called “learning‐curve” is considered low (Howells, o.a., 2011). A brief summary of the structure of the software program is that it is constructed with a block‐structure of 7 blocks. Each block represents so‐called functionalities, which together will contribute to the model. The functionalities are objectives, costs, capacity adequacy, energy balance, constraints, storage and emissions.
The objective block of OSeMOSYS is to use a built‐in discount rate together with cost projections of fuels and technologies, and calculate the lowest net present value (NPV) of the most cost effective structure of the energy supply system (Howells, 2013).
The block of costs relates to the cost of the different technologies, where several costs like capital cost, O&M costs, and fuel costs are implemented. The current costs together with cost projections in each year during the chosen time period is vital in order to obtain the optimized model results (Howells, 2013).
The block of capacity adequacy deals with issues of having enough installed capacity to cover the different demands in each time slice and each year. If the installed capacity does not cover each time slice or year no results will be obtained and the model will collapse (Howells, 2013).
The block of energy balance is there to ensure that during each time slice and year there are a production and a supply of fuel to cover the demand. It is not enough to only have enough capacity if there isn’t enough fuel. The fuel input must meet the demand in each time slice and year (Howells, 2013).
The block of constraints is there to implement different limits that might be used for several occasions. It is there to set a maximum and/or a minimum limit for both capacity and activity related problems. By implementing these limits it is ensured that the model becomes more realistic and it also simplifies the possibility to create scenarios based on for example emission reduction, renewable energy generation, and implementation of a specific capacity or activity (Howells, 2013).
The block of storage represents any possible reserve margins in the initial state (Howells, An Introduction to OSeMOSYS, 2013).
The block of emissions is there to analyze and implement environmental aspects into to model. Each technology has a certain emission activity ratio which denotes how much emission that has been polluted per generated unit of energy (Howells, 2013).
There are two interfaces and one extra third way to use OSeMOSYS configuration for the optimization process. LEAP, ANSWER, and the possibility to write your own code using Notepad and do the optimization in the Microsoft Windows typing commander Command Prompt. In this project ANSWER is used for the optimization process. The advantage of using the ANSWER interface is that there is a possibility to apply for almost all energy sectors and not only the electricity system. Even though this project only take into account the electricity supply system, there is now a possibility to expand this project and add the heat and transport sectors which would give an even more detailed analysis of the security of energy supply. ANSWER is also a very easy managed software program where the user can start right away with the modeling and don’t have to worry about a tricky learning process (Howells, 2013).
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2.3 Model assumptions and inputs
In this section the assumptions and inputs of the model are presented. The sub‐chapter describes every detailed model input necessary to create the model. It is of major importance to be well oriented about the energy situation before the actual modeling begins. A clear picture of the energy system is therefore necessary to avoid uncertainties and to be better prepared for the modeling process.
2.3.1 Demand profile
2009 the European Commission released a document with percentage forecast of the final electricity demand. By viewing table 6 with the demand projections and table 7 with the annual percentage change we can see that there will be a continuing demand growth in all three countries (Capros, Tasios, Mantzos, De Vita, & Kouvaritakis, 2009). The percentage values are used in this project as a frame of the future Baltic electricity demand system. In order to present scenarios of the future electricity mix it is first necessary to view the demand predictions. As written above, the demand curve will continue to grow and the growth is presented with values in table 6 and the annual percentage change in table 7.
Table 6: Final electricity demand projections 2010-2050
2010 [PJ/TWh]
2020 [PJ/TWh]
2030 [PJ/TWh]
2050‐ [PJ/TWh]
Estonia 24,9/6,9 29,9/8,3 34,7/9,6 46,7/12,9
Latvia 22,4/6,2 27,6/7,7 30,8/8,5 38,3/10,6
Lithuania 30,0/8,3 39,9/11,0 44,5/12,4 55,4/15,4
Table 7: Annual percentage change of the final electricity demand
2010‐2020 [annual % change]
2020‐2030 [annual % change]
2030‐2050 [annual % change]
2050‐ [annual % change]
Estonia 2,2 1,5 1,2 1,2
Latvia 2,4 1,5 1,5 1,5
Lithuania 2,3 0,7 0,7 0,7
To obtain a more accurate picture of a country profile it is also of major importance to investigate at what hours the demand occurs and during what hours the different electricity generation technologies are capable of producing electricity. Certain electricity production technologies are time dependent, which means that they can only produce electricity at certain hours of the day. This analyze is necessary to avoid shortages at peak demand states.
Since the electricity demand varies between seasons it is necessary to divide one year into so‐called time slices. An annual electricity demand curve shows that the demand is much higher during the winter period than the summer period. To calculate the time slices one must first create an annual demand curve to be able to see how the load varies over the year. Since the climate conditions are basically the same in the whole region one assumption is that the Estonian hourly electricity demand is proportional to the whole region. Therefore, the Estonian demand curve is used for the whole project. Data for the demand curve is collected from the European Network of Transmission System Operators for Electricity (ENTSOE) and the reference year is 2014 (ENTSOE, 2015).
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Figure 2: Average annual electricity demand in Estonia 2014
The blue vertical lines in Figure 2 represent the season breaks. Season 1 range from December to March, season 2 ranges from April to May, season 3 ranges from June to September and finally season 4 ranges from October to November. This gives us the following seasons and number of days in every season:
Table 8: Number of days in every season
Season 1 Season 2 Season 3 Season 4 Months Dec‐Mar April‐May June‐Sept Oct‐Nov
Days 31+31+28+31=121 30+31=61 30+31+31+30=122 30+31=61
It is not enough to only take into account at what time of year the demand occur. It is also necessary to analyze the load on a daily basis. Since the daily load changes over the year depending on the season three daily demand curves, one from January, one from June and one from October, are compared to find the most accurate representing daily load. The different load curves represent the Estonian load since the load is similar in all three countries and therefor the results will be the same. These load curves provides us a more detailed picture of when the power is needed.
400
600
800
1000
1200
1 2 3 4 5 6 7 8 9 10 11 12
(MW)
Month
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Figure 3: Electricity demand curves of two days in January, June and October
From figure 3 it is now possible to split the days into sub‐sections where the hourly load is similar to one another. The first part ranges between 01‐07 A.M., the second part ranges from 08 A.M. to 6 P.M., the third part ranges from 07 P.M. to 09 P.M. and the fourth part ranges from 10 P.M. to 12 P.M. This gives us the following part of the day values:
Table 9: Number of hours in each part of the day
Day Part 1 Day part 2 Day Part 3 Day Part 4
Time 01:00‐07:00 08:00‐18:00 19:00‐21:00 22:00‐24:00
Hours 7 11 3 3
By multiplying the number of hours in the specific part of the day with the number of days in that specific season and divide that number with the total amount of hours in one year (8 760 hrs.) we obtain the value of that specific Time slice. This is described in the following equation:
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∗
Table 10: Time slices for each season and part
Day Part 1 01:00‐07:00
Day part 2 08:00‐18:00
Day Part 3 19:00‐21:00
Day Part 4 22:00‐24:00
Season 1 (Dec‐Mar) 0,097 0,152 0,041 0,041
Season 2 (Apr‐May) 0,049 0,077 0,021 0,021
Season 3 (Jun‐Set) 0,098 0,153 0,042 0,042
Season 4 (Oct‐Nov) 0,049 0,077 0,021 0,021
Next step is to calculate the specified demand profile and the calculations are very simple. The specified demand profile is necessary to include in the model in order to determine at during what time slice the demand load occur. By only include the total annual demand would give incomplete results since the load varies between the seasons and hours of the day. That is why a specified demand profile must be calculated since it takes into account each time slice. The formula can be seen below and the results are presented in table 11:
Table 11: Specified demand profile
Day Part 1 01:00‐07:00
Day part 2 08:00‐18:00
Day Part 3 19:00‐21:00
Day Part 4 22:00‐24:00
Season 1 (Dec‐Mar) 0,070 0,147 0,039 0,032
Season 2 (Apr‐May) 0,056 0,120 0,031 0,027
Season 3 (Jun‐Sep) 0,050 0,111 0,028 0,024
Season 4 (Oct‐Nov) 0,063 0,137 0,036 0,029
2.3.2 Fuel
The fuel section denotes the energy carriers at every stage in the reference energy system, before and after every technology. In this project fuel occurs in four different shapes; primary fuel, electricity before and after transmission losses and final electricity demand. In table 12 the different primary fuel types are presented. Estonia stands out with their large oil‐shale resources. Other than that biofuels and natural gas are used in all three countries.
Table 12: Primary fuel used for electricity production
Oil‐shale Natural gas Biofuels Uranium
Estonia X X X ‐
Latvia ‐ X X ‐
Lithuania ‐ X X ‐
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2.3.3 Reference electricity system
A reference energy system as in figure 4, 5 and 6 shows the energy flow and transformation within a country or region from import or extraction of a natural resource all the way to the final electricity demand. The boxes represent technologies such as import technologies, extraction technologies, transformation technologies and transmission/distribution technologies and they all represent a transformation or a transportation of a fuel. The brown boxes represent all existing technologies except the green boxes, which represents the existing renewable power plants. The yellow boxes represent import technologies and the purple boxes represent potential technologies. The vertical lines are the different fuels within the system and primary fuels are the state before the power plants transform the fuels into electricity, secondary is the electricity without any transmission losses, tertiary is the electricity without any losses in the distribution network and the final electricity demand is the amount of electricity to cover the consumption within the region.
Figure 4: Estonian reference electricity system
Figure 4 shows the Estonian electricity supply system and a vast majority of the Estonian electricity supply are produced from oil‐shale fired power plants. Except the environmental concerns with carbon dioxide emissions, the oil‐shale fired power plants have played an important role in the development of the Estonian electricity system. During the past 20 years the net import of electricity have been negative, which means that they export more than they import (Capros, Tasios, Mantzos, De Vita, & Kouvaritakis, 2009). Estonia is a consistent net exporter. During the past 25 years Estonia have been able to produce more than the domestic demand which have lead to a continous export to their neighbor countries mainly Latvia and Russia, which can be seen in tabel 1 . The oil‐shale power generation accounts for over 90 % of the total production. Other sources worth mentioned are biomass and an increasing on‐shore wind power industry. However, by today they have only a minor share of hydropower in the electricity mix and the possibility of expanding the hydro is considered low (Eesti, 2015).
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The installed capacity is around 2.9 GW and the largest power plants are located in the Narva region close to the Russian border due to the closeness of the oil‐shale findings. The more environmental friendly renewable alternatives are not that wide spread. The hydropower projections say that it will not expand, but remain its capacity level of 7.5 MW. The share of wind power is higher and acounts for 300 MW. Future important power plant projects worth mention is the oil‐shale/biomass fired power plants in Auvere. The start‐up date is set to late 2015 and with a total capacity of 300 MW. Currently there are no existing plans of construct a nuclear power plant. Several discussionens and policy plans have been made but that has not lead to any serious actions (NTI, 2015). Due to Lithuania’s further plans of building a nuclear power plant in Visagina Estonias nuclear discussions and plans have been put on hold. However, discussions have been made regarding Estonia’s and Latvia’s participation of the investment in Ignalina. By today no serious actions have been made and both Estonia and Latvia are waiting for a response from Lithuania (WNA, 2015).
The Estonian government have implemented one incentive programme to stimulate the use and production of electricity from renewable energy sources and that is the premium tariff. But the future of that incentive programme is uncutrain since the government have said that they want to some how change the form of it. The reason is said to be that Estonia is predicting that they will reach the renewable targets and switch the focus to another subsidy programme (Pilvik, 2014).
Figure 5: Latvian reference electricity system
Figure 5 shows the Latvian electricity supply system and it varies a bit compared to the Estonian. Even though the reference energy system shows that there are similarities the generation mix says the opposite. The renewable share (see table 3) has during the past years contributed to over 50% of the total electricity production and the reason for that is Latvia’s large hydropower investments. This together with a tiny portion of wind power and biofuels has made the Latvian electricity generation much more environmental friendly than the Estonian. However Latvia still needs to deal with its large share of natural gas‐fired power plants, both because of the environmental concerns but also political aspects since all of the natural gas is imported from Russia and Latvia have no domestic natural gas resources. The amount of installed capacity is basically the same as in Estonia, around 3 GW.
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Hydropower plants stands for around half of the installed capacity and there are currently three large‐scale power plants. All constructed in the Daugava River which flows from the Baltic sea, through Riga and all the way down to the Belarusian border. Besides the hydropower plants there are around 1.2 GW natural gas‐fired power plants. Most of them in the areas around Riga except one plant placed in Liepaja by the Baltic Sea. There are also around 180 MW of other renewables, mostly wind and biofuels. There are two important incentive programmes to stimulate renewable electricity production in the Latvian Electricity Market Law (Upatniece, 2014). One of the programmes is a feed‐in‐tariff incentive, which stimulates renewable energy by supporting renewable technologies with subsidies that are based on, the kWh cost of each technology. The feed‐in‐tariff programme ended in 2010 but will start once again in 2016 (Upatniece, 2014). The other incentive programme is net metering which is implemented only for small‐scale producers and gives the producers the possibility to pay the net cost of electricity, which is the difference between the electricity gained from the national or regional grid and the electricity produced and sent back to the grid (Upatniece, 2014).
Figure 6: Lithuanian reference electricity system
Figure 6 shows the Lithuanian electricity supply system and it looks similar to the Latvian one but is far more dependent on import. The natural gas‐fired power plants accounts for 60‐65% of the total domestic production and this together with an electricity import of over 50% of the annual electricity demand has set Lithuania in a bad place. Not only do they import a lot of electricity from Belarus and Russia, but are also forced to import natural gas since Lithuania has none domestic natural gas resources. Lithuania has therefore by far the weakest electricity supply system and actions need to be taken in order to increase the security of supply. The renewable share of the domestic production is around 35% with a large portion of hydropower and tiny shares of wind, biofuels and utility‐scale solar PV. The installed capacity is 4.5 GW where 2.7 GW is natural gas‐fired power plants, 1 GW of hydro, 300 MW of wind, 70 MW of solar PV and around 80 MW of biofuels, mostly biomass. Most of the natural gas‐fired power plants are located near the towns of Kaunas and the capital, Vilnius in the Southeast parts of Lithuania and the larger hydropower plants are located in the Neman River.
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Two important projects to increase the energy security are the cross‐border transmission links to Sweden and Poland. The link to Sweden, Nordbalt, is a 400 km long submarine plus 50 km above ground HVDC cable with a capacity of 700 MW and with a commissioning date some day during 2016 (Litgrid, 2014). The other link, LitPol, is connected to Poland and is a 163 km long above ground HVDC cable with a capacity of 500 MW. A commissioning date is set to late 2015‐early 2016 (LitPol, 2014). These cables will decrease the dependence on Russian and Belarusian electricity. There are also four important subsidy programmes to stimulate the renewables; feed‐in‐tariff, loan from climate funds to stimulate climate neutral technologies, tax reduction on electricity from renewable sources and subsidies.
2.3.4 Technology
In the model a technology represents all transformations, transports, distributions, imports and extractions of the different fuels. Biofuels, natural gas, hydro, wind and utility‐scale solar PV plants are currently being used for power generation. However, nuclear power plants and small‐scale solar PV plants have potential to grow in that region and will therefore be a part of the model. Both Estonia and Lithuania have discussed the possibilities of constructing a nuclear power plants. The Estonian nuclear plans are currently paused but the Lithuanian plans are still in question (WNA, 2015). Table 13‐20 shows the data for each technology with current cost and cost projections up to 2050.
Table 13: Information and projections of biofuel-fired power plant and fuel costs
Biofuels 1 Unit 2010 2020 2030 2050
Availability factor % 93 ‐ ‐ ‐
Capacity factor % 91 ‐ ‐ ‐
Capital cost 2010 $/kW 3 750 3 100 2 750 2 160
Efficiency % 32 35 38 40
Fixed cost 2 2010 $/kW 64,5 53,3 47,3 37,1
Extraction cost 3 2010 $/GJ 1,11 1,09 1,09 1,07 1 – Values of biofuel power plants, except the fixed and extraction costs are collected from ETSAP database (Lako, IEA ETSAP, 2010) 2 – Values of the fixed cost are collected from Electricity market module (EIA, U.S. Energy Information Administration, 2010) 3 – Values of the extraction cost are collected from IRENA publication RPGC in 2014 (IRENA, 2015)
Table 14: Information and projections of natural gas-fired power plant and fuel costs
Natural gas 1 Unit 2010 2020 2030 2050
Availability factor % 92 ‐ ‐ ‐
Capacity factor % 60 ‐ ‐ ‐
Capital cost 2010 $/kW 1 100 1 000 900 700
Efficiency % 53 55 58 63
Fixed cost 2010 $/kW 44 40 36 28
Extraction cost ‐ ‐ ‐ ‐ ‐
Fuel import cost 2 2013 $/GJ 10 10,5 11,5 12,6 1 – Values of natural gas power plants, except fuel import cost, are collected from ETSAP database (Seebregts, 2010) 2 – Values of the fuel import cost are collected from IEA publication World energy outlook 2014 (Hoeven, 2014)
Table 15: Information and projections of oil-shale-fired power plant and fuel costs
Oil‐shale 1 Unit 2010 2020 2030 2050
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Availability factor % 92 ‐ ‐ ‐
Capacity factor % 75 ‐ ‐ ‐
Capital cost 2010 $/kW 1 370 1 233 1096 822
Efficiency % 47 48 50 52
Fixed cost 2 2010 $/kW 60 49,3 43,8 32,9
Extraction cost 2013 $/GJ 1,2 1,2 1,2 1,2 1 – Values of oil‐shale power plants, fixed cost, are collected from European Academic Science Advisory Council 2005 with a discount rate of 5% (Francu, Harvie, Laenen, Siirde, & Veiderma, 2007) 2 – Values of the fixed cost are collected from the Department of mechanical engineering, Jordan (Jaber, 2005)
Table 16: Information and projections of nuclear power plant and fuel costs
Nuclear 1 Unit 2010 2020 2030 2050
Availability factor % 95 ‐ ‐ ‐
Capacity factor % 85 ‐ ‐ ‐
Capital cost 2010 $/kW 4 600 4 350 4 250 4 000
Efficiency % 36 36 37 37
Fixed cost 2010 $/kW 115 109 106 101
Fuel import cost 2010 $/GJ 2,11 2,11 2,11 2,11 1 – Values of nuclear power plants, except fuel cost, is collected from IEA publication ETP 2012 (Diczfalusy, 2012) 2 – Values of the fuel cost is collected from U.S. Nuclear Energy Institute (NEI, 2015) Table 17: Information and projections of hydropower plants
Hydro 1 Unit 2010 2020 2030 2050
Availability factor % 100 ‐ ‐ ‐
Capacity factor (Est) % 52,5 ‐ ‐ ‐
Capacity factor (Lat) % 26,6 ‐ ‐ ‐
Capacity factor (Lit) % 13,5 ‐ ‐ ‐
Capital cost 2010 $/kW 4 500 4 000 3 600 3 000
Fixed cost 2010 $/kW 90 80 72 60 1 – Values of hydropower plants are collected from ETSAP database (Lako, ETSAP, 2010)
Table 18: Information and projections of on-shore wind power plants
Wind Unit 2010 2020 2030 2050
Availability factor % 100 ‐ ‐ ‐
Capacity factor (Est) % 24,2
Capacity factor (Lat) % 24,9
Capacity factor (Lit) % 26,4
Capital cost 2010 $/kW 1 800 1 600 1 550 1 500
Fixed cost 2010 $/kW 36 32 31 30 1 – Values of wind power plants are collected from IEA publication ETP 2012 (Diczfalusy, 2012)
The capacity factor of hydro and wind power varies depending on in which of the three countries we are focusing on and is based on installed capacity, produced electricity and the time measured in hours. Since the amount of produced electricity varies over the year every time slice has separate values of the capacity factor. The value in the Hydro and Wind tables (table 17 and 18) above are annual average values based on the years 2011, 2012 and 2013 and is calculated using the following equation:
∗
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Table 19: Information and projections of solar PV utility-scale power plants
Solar PV Utility 1 Unit 2010 2020 2030 2050
Availability factor % 100 ‐ ‐ ‐
Capacity factor % 19 20 20,5 21
Capital cost 2010 $/kW 4 000 1 880 1440 1 050
Fixed cost 2010 $/kW 40 19 14 11 1 – Values of solar PV utility power plants are collected from IEA publication ETP 2012 (Diczfalusy, 2012)
Table 20: Information and projections of small-scale solar PV power plants
Solar PV Rooftop 1 Unit 2010 2020 2030 2050
Availability factor % 100 ‐ ‐ ‐
Capacity factor % 17 18 19 20
Capital cost 2010 $/kW 4 000 2 300 1 750 1 300
Fixed cost 2010 $/kW 49 23 18 13 1 – Values of solar PV utility power plants are collected from IEA publication ETP 2012 (Diczfalusy, 2012)
2.3.5 CO2 Emissions
To be able to compare the emission activity between the four scenarios data about how much carbon dioxide emissions per energy unit is produced must be inserted in the fuel extraction and fuel import technologies. The emission factor determines how many kilograms of carbon are produced for every produced GJ of electricity. In table 21 the emission factors are presented and what is worth noticing is the fact that oil‐shale emits almost twice as much carbon compared to natural gas.
Table 21: CO2 Fuel Emission factors
Emission factor
[Mton CO2/PJ]
Emission factor
[mol CO2/MJ]
Emission factor
[kg CO2/MMBtu]
Natural gas 1 0,0503 ‐ 53,06
Oil‐shale 2 0,1056 2,4 ‐ 1‐ Value of natural gas emission factors is collected from EIA (EIA, 2007) 2 ‐ Values of oil‐shale emission factors is collected from EASAC (Francu, Harvie, Laenen, Siirde, & Veiderma, 2007)
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3 Results
In this chapter the results of the four scenarios are presented. Each scenario is presented with six graphs. Three graphs represent the annual electricity supply and the remaining three graphs represent the installed capacity in each of the three countries. A detailed description of the scenarios can be found in chapter 2.1.
3.1 Scenario 1 – least cost
Figure 7: Total annual electricity supply, scenario 1, Estonia
Figure 7 shows the annual electricity supply in Estonia according to the first scenario. With given cost projections the oil‐shale (in orange) will continue to play an important role. However, after 2030 there will be a significant decrease since the biofuels will be a cheaper option. During the first five years the supply is significantly higher than the final electricity demand. That is because of Estonia’s over‐production. Estonia is producing far more electricity than the demand due to its large oil shale capacity and resources. This electricity is exported mainly to Russia and Latvia, which can be seen in table 1 and 2. Biofuels (in green) will be tiny until 2030 and not reach annual productions above 1 TWh. After 2035 biofuels will contribute with productions up to 5,5 TWh which is almost half of the total production. The wind power (in purple) will remain at a tiny level with an annual maximum of 1,3 TWh during the whole time period and Estonia will continue to export electricity with an annual net import of around ‐0,45 TWh. Other sources worth mention are hydropower and natural gas that both remain at a tiny level and has no significant contribution to the domestic electricity supply.
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Figure 8: Total installed capacity, scenario 1, Estonia
In figure 8 the installed capacity in Estonia is presented. At the beginning of the time period most of the installed capacity consists of oil shale fired power plants with a maximum of 1,8 GW. The oil‐shale capacity demand decreases while the production (see figure 7) continues to be large. The reason for that is partly because of an increasing efficiency of the plants, but also because of the over‐production that exists in Estonia. Biofuel‐fired power plants accounts for almost 100 MW until 2015 when another 300 MW is installed and this amount will remain constant until 2050. The wind power capacity varies from 300‐350 MW until 2035 when the capacity decreases due to biofuel and oil shale production domination. The natural gas situation is a bit different here. By 2014 Estonia constructed a 250 MW natural gas‐fired power plant, which is why there is a significant share. Even though there are 250 MW installed capacity the production (see figure 7) is only around 0,25 TWh. As mentioned earlier the hydropower remains its tiny level over the time period and no new power plants are to be constructed.
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Figure 9: Total annual electricity supply, scenario 1, Latvia
Figure 9 shows the annual electricity supply in Latvia. The hydropower continues to have an important role with basically half of the supply demand and with a maximum of 5,2 TWh during 2025‐2030. It is today an important source and might according to this scenario remain so even in the future. By 2010 the natural gas‐fired power plants produced 2,7 TWh and this production decreases slowly to around 1 TWh by 2050. Large hydropower plants and electricity import is predicted to take over that share. During 2012‐2015 Latvia is installing around 80‐90 MW biofuel‐fired power plants which leads to an annual electricity production of 1,2 TWh. By viewing the trends of the net electricity import the situation does not look good. By 2025 the Latvian net import starts to grow and will do so for the rest of the time period and by 2050 half of the Latvian electricity supply is imported. Most of the imported electricity comes from Estonia, which is better than today’s dependence of Russian natural gas resources. The wind power will also remain tiny during the whole time period and Latvia went from a maximum production of around 0,3 TWh down to around 0,1 TWh by 2050.
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Figure 10: Total installed capacity, scenario 1, Latvia
In figure 10 the Latvian installed capacity is presented. With an installed hydropower capacity of over 1,5 GW Latvia will have no problems of reaching the European Commission renewable energy targets of 2020. It has been an important generation technology and will remain so even in the future. The amount of installed hydropower capacity will go through a minor decrease and reach levels of around 200 MW lower than today’s level of 1,5 GW. The natural gas capacity has its maximum during the years of 2014‐2017 with over 1 GW. By 2045 the capacity will be around 350 MW. These two generation types, hydro and natural gas, will continue to have the most important roles in the Latvian electricity production. The hydropower will be the base of the Latvian electricity production together with a decreasing share of natural gas. Other than that there are only tiny shares of wind and biofuels, where the installed wind power never reaches levels above 80 MW and the biofuel capacity reaches a maximum of 90 MW. What is worth mention here is the fact that the natural gas capacity decreases and accounts for 300 MW by 2050 compared to 865 MW by 2010.
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Figure 11: Total annual electricity supply, scenario 1, Lithuania
Figure 11 shows the Lithuanian electricity supply and it differs from both Estonia and Latvia when it comes to diversity. The domestic supply consists of shares of import, biofuels, wind, natural gas and hydropower. Lithuania has just like Latvia a large share of hydropower and with the predictions that it will remain so even in the future. The annual electricity production from hydropower reaches almost 3 TWh, which is about one fourth of the total domestic supply. The shares of wind power and biofuels are basically at the same level during the first 25 years at around 1‐1,5 TWh. But by 2040 a large increase of the biofuel production occurs while wind power actually decreases. The large increase of biofuel production is caused by a decreasing extraction price and after 2040 the net present value of biofuel‐fired power generation is considered as a cheaper option. From 2040 to 2050 the biofuel production increases from 2 TWh to over 7 TWh and will therefore be the most important generation type for the domestic production. Wind power production decreases from 1,5 TWh to 0,45 TWh. Lithuania is also the only Baltic country with a share of solar PV power plants for utility scale.
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Figure 12: Total installed capacity, scenario 1, Lithuania
Figure 12 shows the installed capacity in Lithuania and it can easily be seen that natural gas‐fired power plants accounts for the largest share with over 70% of the total installed capacity. Even though the share of natural gas slowly decreases over the time period it is the most important generation type. By 2050 the natural gas share has decreased to around 20%. The hydropower capacity with a beginning value of 877 MW increases to a maximum of 1,25 GW during 2015‐2035. By 2035 the capacity decreases to just above 1 GW. Wind power capacity never reaches levels above 290 MW and by 2050 that number is 95 MW and the Lithuanian wind power follows the same pattern as both the Estonian and Latvian wind power capacity. The installed biofuel power plants stay at levels of around 70 MW until 2035 when the capacity suddenly increases to over 500 MW. Even though it is a very tiny share the solar PV power plants for utility scale accounts for around 70 MW.
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3.2 Scenario 2 – 100% renewable electricity production by 2050
Figure 13: Total annual electricity supply, scenario 2, Estonia
In figure 13 the electricity supply in Estonia is shown. This graph shows the Estonian path to 100% renewable energy by 2050. The oil shale production with 9,4 TWh of produced electricity by 2010 will be phased out by 2048. After 2048 Estonia will only produce electricity from renewable energy sources. The natural gas production is basically not worth mention. With a maximum of 0,3 TWh it will completely be phased out before 2045. Biofuel and wind power will be the base of the Estonian electricity production. The biofuel production is very tiny at the beginning of the time period but increases strongly and accounts for more than half of the production by 2050 with a maximum production of 7,7 TWh. The wind power production remains at a level just above 1 TWh basically all the way until 2040 when the production suddenly increases. After 2040 the production reaches levels of 5,5 TWh. One important matter in this result is the change in net import. Estonia has due to its large oil shale resources been a consistent net exporter but it changes by year 2035. At that point the oil shale enters a major decrease, which forces Estonia to cover up the demand with imported electricity. Despite the fact that the biofuel and wind power production increases it will not be enough to cover the demand, which is why Estonia is forced to import.
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Figure 14: Total installed capacity, scenario 2, Estonia
Figure 14 shows the installed capacity in Estonia. The installed capacity of oil shale‐fired power plants decreases from 1,8 GW 2010 to a level of around 300‐350 MW 2035‐2040. After that point the capacity remains at a constant level until 2050. The biofuel capacity stays at a constant level from 2015 onwards. Even though the production increases (see figure 13) the capacity stays the same since Estonia has capacity to produce more electricity from biofuels but oil shale were still a cheaper option. Estonia will also have relatively large shares of installed natural gas power plants compared to the tiny share of produced electricity from natural gas‐fired power plants. During 2035‐204 when the oil shale power plants are phased out large investments are to be made in the wind power industry. Up to 2035 the installed capacity was 300 MW, but after 2035 the capacity increases strongly and reaches levels above 1,3 GW of wind power. These investments are necessary to reach the scenario target of 2050 since the biofuel capacity won’t be enough. The hydropower capacity is at its maximum and Estonia is already forced to import electricity (see figure 13) to cover the demand.
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Figure 15: Total annual electricity supply, scenario 2, Latvia
In figure 15 the Latvian electricity supply is presented. The most important source is the hydropower since it contributes to more than half of the domestic production. It does so 2010 and it does so in 2050. During 2025‐2030 the hydropower reaches a maximum production of 5,1 TWh and is vital for the Latvian electricity production system to reach the scenario targets of 2050. The wind power will not increase to any significant levels more than 0,6 TWh but it is still an increase compared to 2010. During the time period of 2040‐2045 there are a few major changes in the system. First of all the natural gas production is phased out completely by 2045 and the biofuel industry double their electricity production to 2,3 TWh. Unfortunately this scenario also predicts a major increase of the electricity import. The net import of electricity is by 2050 almost 45% of the domestic electricity supply with an amount of 5,5 TWh. To reach the scenario target of 2050 Latvia increases its biofuel and wind power production together with a strong increase of imported electricity.
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Figure 16: Total installed capacity, scenario 2, Latvia
In figure 16 the installed capacity in Latvia is presented and there are two generation types that have a significant role in the production system. The first one is the hydropower capacity, which by 2010 accounts for more than 60% of the total installed capacity. This percentage share remains the same and by year 2050 the capacity is just below 1,2 GW. This generation technology is important for Latvia to ensure energy security in the process of transforming the electricity system into a more sustainable mix. The other important generation type is the natural gas‐fired power plants. Even though it is decreasing from 1,06 GW by 2015 to just above 300 MW by 2050. A large decrease occurs after 2040 when the natural gas capacity is reduced to about half. Other less used generation types are biofuels and wind power. Both of them are important due to environmental aspects but according to these results there will be no significant extension and both wind power and biofuels capacities will reach a maximum of 150 MW by 2050. What is worth mentioning is that even though the biofuel capacity increase is very tiny the production is still increasing due to a decreasing fuel price.
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Figure 17: Total annual electricity supply, scenario 2, Lithuania
Figure 17 shows the electricity supply in Lithuania and their way to reach the renewable energy scenario target of 2050. Compared to Latvia the Lithuanian electricity supply system is more diversified. As mentioned earlier hydropower is the most important generation type and is so even in this scenario. The hydropower plants produce electricity in the range of 2‐2,5 TWh but since the demand increases the percentage share of hydropower in the generation mix decreases a lot by 2050 compared to 2010. Natural gas stands for almost half of the domestic electricity production by 2010 with an annual production of just above 3 TWh. This generation type is completely phased out by 2045 when other generation types take over that share and this shows that Lithuania reaches the scenario target of 2050. The wind power production in Lithuania is far more developed than in its neighboring countries with an initial amount of 0,8 TWh by 2010 to almost 2 TWh by the end of the time period. But the most important source to replace the natural gas after 2040‐2045 is the biofuels. Until 2038‐2040 the biofuel production remain constant at 1,1 TWh. After that period the biofuel industry entered a large increase phase and by 2050 the percentage share in the domestic generation mix is above 60% with a produced amount of 7 TWh. Due to this large increase of electricity produced from biofuels Lithuania managed to slowly decrease its dependence on imported electricity. By 2038 half of the domestic electricity supply was imported compared to 2010 when one fourth was imported and to 2050 when around one third was imported. At the same time both Latvia and Estonia increased their electricity import.
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Figure 18: Total installed capacity, scenario 2, Lithuania
Figure 18 shows the installed capacity in Lithuania. There are two generation technologies that stand out and those are hydropower and natural gas. By viewing figure 17 hydropower capacity will remain at levels above 1 GW and therefor continue to be the most important energy source. However, the natural gas‐fired power plants will lose its position and go through a major decrease from 2,5 GW to a remaining 0,5 GW by 2050. The remaining 0,5 GW might work as back‐up capacity at peak demand states when additional capacity is needed in the process of phasing out all none‐renewable sources. The wind power capacity will not experience any major extensions. By 2015 there are 290 MW installed wind power capacity compared to 370 MW by 2050. The biofuel on the other hand will go through a major increase and during the time period of 2040‐2050 almost 500 MW will be installed in order to phase out the natural gas. Both wind power and biofuel will play important roles in the transformation process and by viewing figure 17 the biofuel extension is vital in order to reach the scenario targets of 100% renewable electricity production of 2050.
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3.3 Scenario 3 – Zero carbon emissions by 2050
Figure 19: Total annual electricity supply, scenario 3, Estonia
Figure 19 shows the electricity supply in Estonia according to the third scenario with the target of zero emissions by 2050 and to reach that target Estonia must phase out their electricity production from oil shale and natural gas. Both technologies are fully phased out by 2045 and by viewing figure 19 we can see that it is a major transformation. 9,5 TWh electricity from oil shale and around 0,5 TWh from natural gas by 2010 is reduced to zero by 2045. To achieve that target both biofuels and nuclear power must be increased. The biofuel production increases from 0,6 TWh by 2010, to 5 TWh by 2030, to 7,7 TWh by 2050 and will at that time contribute with the largest amount of electricity. These results also suggest that Estonia develops a nuclear power plant. To able to phase out the large oil shale industry nuclear might be an option due to its lack of carbon emission. Nuclear together with biofuel expansion is considered as the best way to completely reduce all carbon emissions in the electricity production system. Additional generation technologies are the tiny portion of hydropower and wind power that with a maximum annual production of 1,2 TWh. These results also predict that Estonia must import electricity. The nuclear and biofuels will not be enough to cover the annual demand.
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Figure 20: Total installed capacity, scenario 3, Estonia
Figure 20 shows the installed capacity in Estonia according to the results of the third scenario. The large oil shale capacity decreases from 1,8 GW by 2010 to 0,26 GW by 2040 and remains constant to 2050. During the time period 2035‐2040 there are many important changes that occur in the electricity production system. The installed wind power capacity decreases to basically half the size from a previous 0,27 GW to 0,13 GW, while the installed biofuel capacity actually increases. It is not a large increase but around 100 MW new biofuel capacities are installed and this helps the reduction of carbon emissions. The natural gas capacity reaches its maximum 2015 with 0,43 GW and is fully phased out by 2045 as the nuclear power capacity enters. The nuclear power capacity enters the Estonian electricity system 2035 and is necessary to cover the demand when other sources that emit carbon are forced to shut down and phased out. When it comes to hydropower Estonia have as mentioned earlier no potential to construct new hydropower plants since it is considered at its full capacity. This is why no changes in the hydropower capacity can be seen in figure 20 and current capacity of 7,5 MW will remain.
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Figure 21: Total annual electricity supply, scenario 3, Latvia
Figure 21 shows the electricity supply in Latvia according to the results of the third scenario. The hydropower will even in this scenario play the most important role and contribute to the largest share of electricity with an annual electricity production of 5 TWh during 2025‐2030. The natural gas is completely phased out 2048 after producing with almost one fourth of the annual electricity supply from 2015 and onwards with a maximum annual production of 2,5 TWh 2015. As the natural gas‐fired electricity production decreases the biofuel goes the opposite way. By 2040 the biofuel produced electricity increases from a constant level of 1,2 TWh to 2,5 TWh by 2050. But the domestic electricity production is not enough to cover the electricity demand. Therefore, Lithuania must import 45‐50% as the natural gas capacity decreases. By 2050 almost 6 TWh of electricity is imported and this is nothing Lithuania wants to strive for.
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Figure 22: Total installed capacity, scenario 3, Latvia
In figure 22 the installed capacity in Latvia according to the results of the third scenario is presented. Latvia can heavily rely on its large hydropower capacity that covers more than half of total installed capacity. By 2040 that share increase even more and accounts for over 70%. By 2015 there are 1,54 GW hydropower capacity and even though that amount decreases to 1,2 by 2050 this will still be the most important generation type. The natural gas capacity reaches the maximum annual production 2015 with 1,08 GW and by 2040 is 0,69 GW. By 2050 only 0,315 GW of installed natural gas capacity remains and due to the scenario 3 target this generation technology is not allowed to produce electricity after 2050. The other renewable energy alternatives, wind power and biofuels never reach any greater levels. Wind power capacity has its peak value between 2015 and 2035 with only 74 MW. Biofuel capacity remains on a constant level of 90 MW until 2040 when it slowly increases to 176 MW by 2050.
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Figure 23: Total annual electricity supply, scenario 3, Lithuania
Figure 23 shows the results of the Lithuanian electricity supply according to the third scenario. During the first 25 years the electricity supply is far more diversified compared to the time period of 2035‐2050. There is a great mix of biofuel, natural gas, hydropower, wind power and electricity imports and none of the generation type’s accounts for more than 40% of the electricity supply mix. Natural gas has the largest share and by 2010 3,3 TWh is produced in natural gas‐fired power plants. This value decreases and by 2035 1,7 TWh is produced. The natural gas capacity is completely phased out by 2048. Hydropower is another generation technology that contributes with large shares of electricity with a range of 2‐2,8 TWh. By 2015 1,4 TWh electricity was produced from wind power plants but by 2035 this amount decreases to 0,5 TWh by 2050. Biofuel‐fired electricity production is the most important generation type by 2035 and onwards. Up to 2035 Lithuania had an annual electricity production from biofuels of 1,1 TWh. This increases strongly and by 2050 that amount is 8,6 TWh, which is a significant change. This is not only helping Lithuania to reduce its carbon emission but it also keeps the net import down. By 2037 7,9 TWh, which is more than half of the electricity supply is imported. Due to the large increase of the biofuel‐fired electricity production the net import decreases to 5,1 TWh by 2050.
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Figure 24: Total installed capacity, scenario 3, Lithuania
Figure 24 shows the results of the installed capacity in Lithuania based on the third scenario. The natural gas capacity goes through the largest change. From by far being the largest generation type with 2,5 GW of installed capacity to just above 1 GW by 2040 and to 0,52 GW installed capacity by 2050. At the same time the natural gas is being phased out more and more biofuel capacity is installed. By 2038 only 0,16 GW was installed compared to 2050 when that amount was 0,62 GW. Up to 2035 there was also a tiny portion of installed wind power and utility scale solar PV plants with 288 MW wind power and 70 MW of solar PV plants. By 2040 both of these two capacities was decreased. The wind power capacity was decreased to 95 MW and basically all of the solar PV capacity was phased out. 2035 will become a turning point for the installed capacity with a natural gas that is being replaced with an increasing amount of biofuel capacity.
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3.4 Scenario 4 – construction of a nuclear power plant in Lithuania
Figure 25: Total annual electricity supply, scenario 4, Estonia
Figure 25 shows the results from the Estonian electricity supply according to the fourth scenario and even in this scenario will the oil shale and biofuels be the most important generation technologies. The electricity from oil shale‐fired power plants varies in the range of 5‐9,4 TWh. But what is worth mention is that during 2040‐2050 the oil shale electricity production once again increases. During 2010‐2035 the production decreases and by 2037 the production is basically reduced to half the amount compared to 2010. The electricity production from biofuels undergoes a continuous increase of the production up to 2035 with a maximum at 2037. From that year the production decreases slowly to an annual production of 5,3 by 2050. Wind power stands for 1,3 TWh up to 2035. From that year the wind power electricity production decreases to a final amount of 0,3 TWh by 2050. The natural gas‐fired electricity production never reaches any levels worth mention and between 2010 and 2045 the annual electricity production from natural gas never goes above 0,3 TWh and is completely phased out by 2045. Due to large scale production of electricity from both oil shale and biofuels the Estonian net import is very low. Up to 2022 Estonia is actually exporting electricity, but after the construction of a nuclear power plant in Lithuania by 2022 Estonia instead becomes a net importer. But as written above the net import is very low at around 0,45 TWh per year.
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Figure 26: Total installed capacity, scenario 4, Estonia
Figure 26 shows the results of the installed capacity in Estonia according to the fourth scenario. The oil‐shale capacity decreases from an initial amount of 1,78 GW to 0,43 GW by 2038. By that year the capacity once again starts to increase to 0,67 GW by 2050. At the time that the oil shale capacity once again starts to increase the wind power does the opposite. Before 2035 Estonia will have a wind power capacity of 300 MW, but after 2035 the capacity decreases to a constant level of 100 MW. The natural gas capacity is by 2015 0,42 GW and this amount is decreased to 0,30 GW by 2040 and by 2045 the natural gas capacity have basically been phased out. The situation of the biofuel capacity is a bit different. By 2015 the capacity is the same as the natural gas, but the biofuel capacity remains constant during the whole time period. Since the hydropower in Estonia is considered full and there is no potential to expand he hydropower capacity the installed capacity remains at tiny level of 7,5 MW.
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Figure 27: Total annual electricity supply, scenario 4, Latvia
In figure 27 the results of the Latvian electricity supply is presented. The generation mix is similar to scenarios 1, 2 and 3 with large shares of electricity produced from hydropower and natural gas‐fired power plants. Up to 2025 there is an increase of electricity produced in hydropower plants with a maximum annual production of 5,1 TWh by 2025. By 2050 that value have decreased to 4,2 TWh. The natural gas share is much higher 2010 compared to 2050. By 2010 40% of the total electricity supply came from natural gas‐fired power plants. This percentage share decreased to 15% 2035 with a production of 1,4 TWh. By 2050 this share decreased even further to 8% with a production of 1 TWh. Both wind power and biofuel‐fired electricity production is very tiny, except during time periods of 2012‐2022 and 2045‐2050 when the electricity produced from biofuel increased to around 1 TWh. The wind power never reached an annual electricity production above 0,3 TWh. Due to the construction of the nuclear power plant in Lithuania the Latvian net import of electricity increases a lot after 2022. The electricity gained from biofuels suddenly stopped by 2022 since it is cheaper to import electricity from Lithuania. Between 2045 and 2050 basically half of the total electricity supply is imported.
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Figure 28: Total installed capacity, scenario 4, Latvia
Figure 28 shows the installed capacity in Latvia according to the fourth scenario and just as in scenario 1, 2 and three (see figure 10, 16 and 22) hydropower and natural gas capacities dominates the installed capacity in Latvia. Hydropower capacity with a maximum of 1,5 GW by 2015 and a minimum of 1,2 GW by 2050 contributes with the largest share of capacity. The natural gas capacity with a maximum of 1,54 by 2015 is reduced to 0,38 GW by 2042. Other generation types worth mention are biofuels and wind power. None of them reaches any larger levels. The biofuel capacity stays constant at 90 MW and the wind power capacity is at the beginning 75 MW but is by 2035 reduced to 30 MW.
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Figure 29: Total annual electricity supply, scenario 4, Lithuania
Figure 29 shows the electricity supply in Lithuania according to the fourth scenario. This scenario is based on the construction of a nuclear power plant in Lithuania by 2022. The results differs a lot and as can be seen in figure 29 compared to figure 11, 17 and 23 to construction of a nuclear power plant alters basically the whole Lithuanian electricity supply system and several generation types have less importance in figure 29 compared to figure 11, 17 and 23. Biofuels, wind power and solar PV plants are three sources, which only contribute with tiny shares in the generation mix. Wind power and biofuels reaches annual production amounts of around 1,4 TWh as a maximum, but other than that the percentage share is still very low. Hydropower and natural gas produces more electricity than wind and biofuels. However, only hydropower continues the production on to 2050. The natural gas‐fired electricity production decreases as the amount of electricity produced in the nuclear power plant increases. The construction of a nuclear power plant changes the whole system and as can be seen in figure 29 the share of nuclear electricity increases and by 2050 almost 80% of the domestic electricity supply comes from the nuclear power plant. This also leads to the fact that Lithuania goes from being a net importer to a net exporter and will therefore have the possibility to supply both Estonia and Latvia with the electricity they need to cover their domestic demand.
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Figure 30: Total installed capacity, scenario 4, Lithuania
Figure 30 shows the results of the installed capacity in Lithuania according to the fourth scenario. During the first ten years the installed capacity in Lithuania is dominated by natural gas and hydropower plants. The hydropower capacity remains constant after 2015 at around 1,2 GW and will not be reduced. However, the natural gas‐fired power plants is heavily reduced from being the largest and most important power source with a percentage share of 70% of the total installed capacity in Lithuania. By 2050 only 0,5 GW remains and this accounts for only 15% of the percentage share. The biofuel capacity stays constant at 80 MW and does so for the whole time period. There are also 200 MW of installed wind power capacity which together with the even tinier portion of solar PV plants is almost phased out by 2035. The wind power capacity is reduced to just above 100 MW. The nuclear power plant is the most important matter here. The scenario is based on that particular construction and as can be seen in figure 30 this has a major impact.
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Figure 31: Total annual cost (Million US Dollar) in the Baltic region, scenario 1
Figure 32: Total annual cost (Million US Dollar) in the Baltic region, scenario 2
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Figure 33: Total annual cost (Million US Dollar) in the Baltic region, scenario 3
Figure 34: Total annual cost (Million US Dollar) in the Baltic countries, scenario 4
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In figure 31, 32, 33 and 34 the annual cost according to each scenario is presented. Costs of investments, O&M, and fuel are shown to obtain another perspective in the comparison analysis. In the first scenario, presented in figure 31 we can see that the costs are actually decreasing after 2015 and are by 2030 the cheapest option. Scenario 2 and 3 both remain at a constant level of around 1000 million dollar/year. The most expensive option is scenario 4 where we can see clearly that the costs increase by the time of the commission date of the nuclear power plant in Lithuania by 2022.
4 Discussion
Four scenarios have been created and are now ready for the comparison analysis. The first scenario was a plain least‐cost scenario that only takes into account economic matters and no binding targets at all, the second scenario was based on a target of 100% domestic renewable electricity production by 2050, the third scenario was based on a target with zero carbon emissions by 2050 and the fourth scenario was based on the construction of a nuclear power plant in Visagina, Lithuania. Four major criteria was used for the comparison of the scenarios, diversification of generation technologies, access to fuels, amount of imported electricity and environmental aspects and these criteria was used to find improvements of the energy security. In table 22, 23, 24 and 25 the criteria of the four scenarios are graded in a scale from +3 to ‐3. These four tables are summarized in table 26.
4.1 Scenario 1
By first viewing the results of the first scenario with the electricity production presented in figure 7, 9 and 11 and the installed capacity presented in figure 8, 10 and 12, what we can see here is that the generation mix still differs between the three countries. The Estonian generations mix in figure 7 shows that production could be more diversified. According to these results two major generation types will be used for the electricity production. The Latvian generation mix in figure 9 is dependent on three generation types. Even though there are three major generation types the share of hydropower account for 65% of the domestic production. Therefore the shares of other sources must be increased in order to decrease the Latvian dependence on the precipitation dependent hydropower and to decrease the Latvian import of electricity to a more decent level. The Lithuanian generation mix in figure 11 looks better than the Estonian and Latvian from a diversification point of view. Up to 2035 four sources are used with basically equal shares, but after 2035 the large increase of the biofuel share makes it less diversified.
The fuel supply is another important measure of the energy security within the region. In the case of Estonia basically all of the production is oil shale and a tiny share of biofuels and since Estonia have large biofuel and oil shale resources the situation is convenient. The situation is a bit different in Latvia and Lithuania. Both countries use natural gas and none of the countries have domestic natural gas resources and is thereby forced to import from Russia. Both the European Union and the Baltic countries have stated the importance of reducing its dependence on electricity and electricity generation fuels from external regions.
The net import of electricity is different in Estonia compared to Latvia and Lithuania. In figure 7 it can be seen that the Estonian electricity supply is very balanced and the production is just above the demand. This means that Estonia will continue to be a net exporter with a very tiny annual export. Estonia is therefore in independent electricity producer and do not have to face issues with import. Both Latvia and Lithuania are in great need of reducing its large shares of import. The Latvian electricity import increases annually from 2025 and onwards. By viewing figure 10 with the installed capacity the best option according to this scenario would be to heavily decrease the natural gas capacity without replacing them with new capacity.
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Therefore the cheapest option is to import electricity. Latvia has the capability to install more biofuel capacity and this is necessary to reduce the dependence on import. In Lithuania the share of import actually decreases after 2038. The installed capacity (see figure 12) of biofuels is increased, which leads to an increasing domestic production. This is an important step for Lithuania to take if they want to increase their independence. When both wind power and natural gas electricity production and installed capacity decreases by 2038 other sources must cover that share to avoid the electricity import.
When it comes to environmental sustainability aspects the Latvian and Lithuanian generation systems are more environmentally friendly than the Estonian one. Large hydropower plants together with a decreasing amount of natural gas makes these systems almost carbon free. The only issue is the imported electricity since it is hard to say from which country the electricity is imported. This is regulated by the varying price of electricity. From an environmental point of view the Estonian generation mix is the worst and large investments need to be done to reduce its dependence on carbon emitting oil shale power plants.
This least‐cost scenario consists of both pros and cons, which are quantitatively described in table 22 from a scale of three minus to three plus. The positive points here are the biofuel expansion in both Estonia and Lithuania, which diversifies the Estonian generation mix a bit and transforms the Lithuanian generation mix into a less carbon intensive and a less fuel import dependent system. By also comparing the three generation mixes of 2010 with 2050 it is easy to see that the mix of 2050 is far more environmental friendly. Another positive point here is the fuel import is heavily decreased due to the large natural gas power generation have been replaced with biofuels, which is a domestic natural resource. According to this scenario the diversification of the generation mixes are the only criteria that are good enough and receives a grade of +6, which can be seen in table 22.
The negative points are net electricity imports, access of fuels and environment aspects. Even though the Estonian biofuel share increases a lot after 2030 it is still not enough to reduce the oil shale share and during the last 15 years the oil shale share once again increases. Other sources must be invested in to diversify and transform the generation mix to a more sustainable system. Due to Latvia’s and Lithuania’s reduction of natural gas the Baltic region is also forced to import large amount of electricity. Estonia has a balanced demand‐supply system but both Latvia and Lithuania are forced to import. The Lithuanian biofuel expansion by 2040 reduces the import a bit but far more actions need to be taken in order to reach a more balanced system. Both Latvia and Lithuania have a potential to invest in their wind power industry and according to these results the wind power share will continue to be very tiny. The total grade of the environmental aspects is +1, access to fuels is ‐1 and import of electricity is ‐3. This is far from okay and is caused by the large fossil fuel plants and their phase out process in Latvia and in Lithuania is not large enough and this scenario does not represent a sustainable electricity supply.
Table 22: The four criteria graded from +3 to -3 in scenario 1
Estonia Latvia Lithuania Total
Diversification + ++ +++ +6
Access to fuels +++ ‐‐ ‐‐ ‐1
Import of el. +++ ‐‐‐ ‐‐‐ ‐3
Environment ‐‐ + ++ +1
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4.2 Scenario 2
By viewing the results of the second scenario on the account of diversification the situation in Estonia is basically the same as in scenario 1, which can be seen in figure 13. During the first years there is only one larger generation type. As the wind power and biofuels expand there are three, which are reduced to two when the oil shale is phased out until 2045. The situation in Latvia, presented in figure 15, is basically the same as in Estonia where Latvia moves from having three large scale generation types to two by 2045. There is a tiny share of wind power but it only reaches about 8% of the domestic production. The diversification in the Lithuanian generation mix can be seen in figure 17 and the situation here is basically the same as in the first scenario with four generation types until 2040, when the natural gas is being phased out.
The access of fuels will not be a problem in this scenario. Both Latvia and Lithuania are free from natural gas by 2045, which means that all fuel used for electricity generation in this region is extracted from domestic natural resources. However, they have to face an import of natural gas up to 2035 when the amount of natural gas phase out process begins. But since both Latvia and Lithuania can rely on other sources this will not lead to any larger problems.
The net import of electricity situation looks very similar to scenario 1 but there are some differences related to the scenario target. Estonia is by 2035 forced to import a tiny share of its domestic supply. The reason for that is the phase out process of the large oil shale power plants and the wind power that is supposed to cover up for the oil shale phase out is not enough to cover the annual demand. This is why Estonia is forced to import electricity. In Latvia and in Lithuania the situation is as bad as in scenario 1 where both countries are heavily dependent on import. The reason they are forced to import is their lack of installed capacity. It is not enough to produce all the electricity needed and the option of constructing new power plants is considered as a more expensive alternative. Another thing that affects the import is the new installed grid infrastructure to Poland, Finland and Sweden, which makes it easier and cheaper to import than to build new power plants. The environmental aspects of this scenario are very clear. By 2050 all of the electricity is produced from renewable energy sources, which means that there are no emissions. There is a question mark on the issue of the imported electricity since origin cannot be traced.
The positive points in the results of the second scenario are first of all the environmental aspects. By completely transforming the electricity production system into 100% renewable would be groundbreaking and send many signals to international policy planners that this might become the first renewable electricity production region. To achieve this target all three countries must do large investments in the biofuel electricity industry since it by today only covers a tiny share of the electricity production. Another important aspect is the access to domestic resources used for fuel extraction and since all natural gas has been phased out this will not be an issue. However, this large biofuel expansion demands thorough planning to be able to provide the biofuel power plants with a continuous flow of fuel to avoid shortages and this large transformation will demand large amount of fuels. By viewing figure 14 we can see that the installed capacity in Estonia is far more than enough to cover the annual demand. There is still some oil shale capacity left to cover up for when the demand suddenly increases. By viewing table 23 two criteria are satisfied, diversification and environmental aspects. This is a bit different compared to the first scenario presented in table 22.
The negative points here are first of all due to the shutdown of the oil shale industry in Estonia all three countries are forced to import electricity and if Finland, Sweden and Poland do not have enough over production the Baltic region are forced to import from Belarus or Russia. Due to the political situation between these countries this heavily reduces the security of supply. In order to transform the electricity production the three countries must invest in more capacity than according to the scenario results in figure 14, 16 and 18. Otherwise the dependence of imported electricity will increase and the security of supply is therefore not certain. There is also an issue of the access of fuel
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where both Latvia and Lithuania are still importing large shares. In table 23 we can see that the import of electricity and fuel access are the issues and large shares of the supply must be imported to cover up the demand.
Table 23: The four criteria graded from +3 to -3 in scenario 2
Estonia Latvia Lithuania Total
Diversification + ++ +++ +6
Access to fuels +++ ‐‐ ‐‐ ‐1
Import of el. +++ ‐‐‐ ‐‐‐ ‐3
Environment ++ ++ ++ +6
4.3 Scenario 3
The third capacity with a target of zero carbon emissions by 2050 is dealing with similar problems as in the second scenario but there are some differences. Estonia is 2035 starting to produce electricity from nuclear power plants. As can be seen in figure 20 this diversifies the Estonian capacities mix with nuclear, oil shale, biofuels and wind power. However, since there is an emission target no electricity is to be produced from the oil shale power plants but the oil shale capacity might still work as back‐up capacity during peak demand states. The Latvian and the Lithuanian looks very similar to the second scenario and in Latvia there are still only two major generation types, biofuels and hydropower.
If Estonia would start to produce electricity from nuclear then they are facing another issue since Estonia have no domestic fuel resources for the nuclear process and is therefore forced to import. Countries with large (above 5% of the global resources) uranium resources are Australia, Kazakhstan, Russia, Canada, Niger, Namibia, South Africa and Brazil and the closeness to Russia and Kazakhstan makes them possible countries to import from. Since the nuclear is predicted to be a growing share of the generation mix the fuel demand will therefore also grow. Other than that biofuels and up to 2045, oil shale, resources are as mentioned above a domestic natural resources. Both Latvia and Lithuania are producing electricity from natural gas up to 2045, which demands imported fuels. However, after 2045 the only fuel needed for the production is biofuels.
There will be no change in the projections of the net import compared to the first and second scenario. The Estonian nuclear will not change the situation and will only be enough to cover the Estonian demand since the oil shale and wind power are heavily decreased. Latvia and Lithuania are still very dependent on electricity import. The phase out of the natural gas power plants will not be replaced with enough capacities to cover the demand. A large investment in the wind power industry would increase the domestic production and therefore reduce the import demand.
The environmental aspects of the third scenario are less positive than of the second scenario. By 2050 all fossil fuels have been replaced with none‐emitting generation types, where biofuels and hydropower stands for the largest shares. The entering of the nuclear power is bit controversial from an environmental point of view and the nuclear power industry is due to the risk of a breakdown and concerns regarding the fuel extraction, much debated whether it is an environmental friendly generation type or not. Despite that debate nuclear power is still not generating any carbon emissions during the electricity generation process.
The positive points in this scenario are mainly the environmental aspects with the fossil fuel phase out. This transformation is very important and must be done. Whether the nuclear power counts as environmental friendly or not can be discussed but the reduction of carbon emissions cannot be
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disregarded. Other than that this scenario reminds a lot of the second scenario, with an increasing amount of renewable energy sources.
The fuel supply is not secure due to the lack of domestic fuel resources for the nuclear power plants. The issue of finding a reliable import country is very important and is necessary to ensure a safe and continuous fuel supply. The net import is still very high in both Latvia and Lithuania. Both countries don’t have enough capacities and is forced to import. A large investment in wind power is one option and would increase the domestic production and also diversify the generation mixes even further. In table 24 we can see that the two big issues are access to fuels and electricity import, which is similar to the case in scenario 2 in table 23.
Table 24: The four criteria graded from +3 to -3 in scenario 3
Estonia Latvia Lithuania Total
Diversification + ++ +++ +6
Access to fuels + ‐‐ ‐‐ ‐3
Import of el. +++ ‐‐‐ ‐‐‐ ‐3
Environment + ++ ++ +5
4.4 Scenario 4
The fourth scenario consists of the construction of a nuclear power plant in Lithuania. Estonia is moving from one major generation type to two, which can be seen in figure 25. After 2035 the wind power is reduced and basically phased out, which is the wrong way to go. Even though the oil shale and biofuels are considered a cheaper generation type large wind power investments must be done. The Latvian system consists of basically two generation types, natural gas and hydropower until 2045. Figure 27 shows that up to 2045 these generation types stands for almost all the domestic production. By 2045 the biofuels expansion diversifies the mix a bit. This is a an issue that need to be taken care of and an expansion of both wind power and biofuel capacity would diversify the mix even further. As seen in figure 28 there are no predictions that Latvia will expand the wind power and biofuel capacities. The construction of a nuclear power plant changes the situation in Lithuania completely. From having a diversified production mix with significant amount of biofuels, natural gas, hydropower and wind power the generation mix transforms into being very dependent on one source; nuclear power. After 2030 more than half of the share is nuclear and that share increases even further. Lithuania has far more installed capacity, which can be seen in figure 30. Despite the fact that there are share of both natural gas and hydropower capacities the amount of produced electricity from those sources remains low.
There are still a significantly large share of imported fuel in both Latvia and Lithuania. Estonia with their oil shale and biofuels only use domestic resources and has therefore a secure fuel supply. But Latvia and Lithuania with their dependence on natural gas and uranium in the Lithuanian nuclear power plant are dealing with lack of security of supply. An expanded biofuel capacity or other renewable alternatives would alter this security issue.
In this scenario the net import of electricity is basically zero. Estonia is forced to import a tiny share of electricity from 2025 and onwards, but due to the construction of the Lithuanian nuclear power plant Lithuania have done an impressive change from being forced to import almost one third of the domestic demand to each year export large amounts of electricity. This changes the situation completely in the region. Latvia is still forced to import large share of electricity but most of it is produced in Lithuania. This means that this nuclear power plant have heavily reduced the demand of imported electricity.
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The environmental concerns are in this scenario not that positive as in the second and third scenario. Estonia continuous to produce electricity from their oil shale power plants and the oil shale stand for more than half of the production. The risks related to nuclear power generation together with Latvia’s and Lithuania’s natural gas shares are other points that clearly state the lack of environmental friendly alternatives. There are a few actions that can decrease the fossil fuel dependence. Estonia could increase their wind power production to a situation similar to scenario 2 and 3. Latvia and Lithuania have potential to expand their biofuels and wind power capacities. These actions would make this scenario far more environmental friendly.
The positive points in this scenario are mainly the total reduction of electricity import into the region. Latvia is importing from Lithuania but the net import into the region is reduced and balanced around zero. This improves the security of supply a lot. The reason why the net import of electricity decreases is the construction of the nuclear power plant in Lithuania. This gives the region a more secure and reliable generation system and focus can now be put on the renewable energy expansion to replace the existing fossil fuel‐fired power plants. The construction of the nuclear power plant would be an important step for the Baltic region to achieve a more independent electricity supply system.
The negative points in this scenario are mainly the environmental aspects. The large share of oil shale together with natural gas in both Latvia and Lithuania makes this scenario not environmental friendly and actions need to be done in order to reduce the carbon emissions. Since the region uses a lot of nuclear and natural gas large amount of fuels are imported. This demands thorough analysis of the political situation in and with the country from which the fuel is being imported. The wind power must be expanded in all three countries together with an expansion of the biofuels in both Latvia and Lithuania to make this scenario more environmental friendly.
Table 25: The four criteria graded from +3 to -3 in scenario 4
Estonia Latvia Lithuania Total
Diversification + ++ ++ +5
Access to fuels +++ ‐‐‐ ‐‐‐ ‐3
Import of el. +++ ++ +++ +8
Environment ‐‐ + + 0
The positive and negative points of the four scenarios have been compared in order to find improvements of the security of electricity supply. The comparison clearly shows that the Baltic region is in great need of new installed capacity to reduce their dependence of imported electricity and to increase the generation types that uses domestic natural resources as fuel. These two criteria together with the environmental aspects are therefore most important. In table 26 the grading is presented and by including all four criteria we can see that scenario 4 would be the optional choice and scenario 2 would be the second best choice. A construction of a nuclear power plant would heavily decrease the net import of electricity and is therefore the best option. Even though nuclear power demands imported fuel it is not enough to overweight the good cause that a nuclear power plant would provide. This would provide the Baltic region with electricity at a fair cost. It is also worth mentioning that the nuclear power plant must be constructed in Lithuania and not in Estonia as in scenario 3. The reason for that is Estonia has, compared to Lithuania enough installed capacity to cover its demand, which is why Lithuania are in great need of new capacity.
However, the environmental and fuel access concerns according to the results in scenario 4 must be investigated. The oil shale in Estonia and the natural gas in Latvia and Lithuania must be replaced with renewable alternatives. An expanding wind power capacity in all three countries together with an expanding biofuel capacity in Latvia and Lithuania would be the best option and both improve the
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access to fuel and reduce carbon emissions. The costs are another important aspect. In figure 31, 32, 33 and 34 the investment costs, fuel costs and O&M costs are presented in each scenario and it is important to mention that the fourth scenario will be more expensive. However, the positive aspects that this scenario shows would be very important in order to improve the energy security in the Baltic region.
Table 26: A sum up of the four scenarios
Diversification Access to fuels Import of el. Environment Total
Scenario 1 +6 ‐1 ‐3 +1 +3
Scenario 2 +6 ‐1 ‐3 +6 +8
Scenario 3 +6 ‐3 ‐3 +5 +5
Scenario 4 +5 ‐3 +8 0 +10
5 Conclusion
To be able to find improvements of the security of electricity supply in the Baltic region four possible future scenarios have been compared. The analysis was made with the following criteria; diversification of the generation types, access to fuels, electricity import and environmental aspects. The entire electricity supply system with installed capacity, demand projections, cost projections and other potential generation types have been used to create the model used to create the scenarios. These scenarios have provided results that could be used for policy makers in the transformation process of the Baltic electricity system.
From the results in chapter 3 several possible ways to improve the energy security in the Baltic region have been detected. To reduce the dependence on imported electricity new capacity investments must be done particularly in Latvia and Lithuania. According to the results of the fourth scenario the optimal decision would be to continue with the plans of constructing a nuclear power plant in Visagina, Lithuania. There are discussions between the three countries about how to secure the investments since this construction would benefit not only Lithuania but the whole region. If the nuclear fuel supply is secured and a reliable country to import from is found, then this would improve the energy security in the whole region. This would mean that one of the criteria of the analysis, electricity import, would be fulfilled. Yet there are three more criteria that affect the analysis and the electricity supply would still rely heavily on fossil fuels since the oil shale in Estonia together with the natural gas in Latvia and Lithuania contributes to large shares in the generation mixes.
In order to phase out the fossil fuels renewable alternatives must be invested in to ensure a balance between demand and supply. All three countries have potential to invest in both wind power plants and biofuel‐fired power plants and by today none of the countries have a significant amount of electricity produced from those particular sources. The results also indicate that the cost projections of biofuel power generation will be very competitive compared to for example natural gas and oil shale. By expanding the wind power and biofuel sectors the other three criteria, diversification of the generation types, access to natural resources used as fuels and the environmental aspects, would also be fulfilled. By transforming the system according to these suggestions would contribute to a major improvement of the security of electricity supply.
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5.1 Future investigations and research
This project has solely focused on the security of electricity supply. It is an important research area and the Baltic region stands upon a great transformation process to obtain a more independent and environmental friendly electricity system. However, to obtain an even more sustainable future this project must be expanded and include several other sectors. Energy efficiency is indirectly included since it affects the electricity demand projections. Two large and important sectors that must be included to obtain this holistic view is the transport and heat sector. The transport sector relies completely on gasoline and diesel and the heat sector relies mostly on oil and natural gas. Therefore further research is necessary to improve not only the security of electricity supply but the whole energy supply sector.
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Appendix 1
Figure 35: Total annual cost (Million US Dollar) in Estonia, scenario 1
Figure 36: Total annual cost (Million US Dollar) in Latvia, scenario 1
Figure 37: Total annual cost (Million US Dollar) in Lithuania, scenario 1
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Figure 38: Total annual cost (Million US Dollar) in Estonia, scenario 2
Figure 39: Total annual cost (Million US Dollar) in Latvia, scenario 2
Figure 40: Total annual cost (Million US Dollar) in Lithuania, scenario 2
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Figure 41: Total annual cost (Million US Dollar) in Estonia, scenario 3
Figure 42: Total annual cost (Million US Dollar) in Latvia, scenario 3
Figure 43: Total annual cost (Million US Dollar) in Lithuania, scenario 3
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Figure 44: Total annual cost (Million US Dollar) in Estonia, scenario 4
Figure 45: Total annual cost (Million US Dollar) in Latvia, scenario 4
Figure 46: Total annual cost (Million US Dollar) in Lithuania, scenario 4
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