National Seminar Role of DER in the EU and Current Status in the Baltic States

6 March 2007

Current Status of Energy Policy on Development of Distributed Generation in

Estonia

Estonia Dr. Ülo RudiTallinn University of Technology

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CONTENTSCONTENTS•The Main Economic Indices•The present situation of the Estonian energy sector•The development conditions for the distributed generation.•Supporting measures for the distributed generation•The main targets for the lager use of distributed generation.•Conclusions.

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The Main Economic IndicesThe Main Economic Indices

INDEX 2000 2002 2003 2004 2005GDP at current prices, billion EUR 6.10 7.76 8.49 9.37 11.06GDP at 2000 constant prices, billion EUR 6.10 7.10 7.60 8.21 9.07GDP at 2000 constant prices per capita, thousand EUR 4.45 5.22 5.61 6.09 6.74

GDP change at constant prices, % 7.9 8.0 7.1 8.1 10.5Change of consumer price index, % 4.0 3.6 1.3 3.0 4.1Foreign trade balance / exports, % -29.3 -39.4 -42.8 -40.6 -31.9Current account / GDP, % -5.6 -11.0 -12.1 -13.0 -11.0Growth of average monthly gross wages and salaries , % 10.5 11.5 9.4 8.4 10.8

Unemployment rate, % 13.6 10.3 10.0 9.7 7.9Total primary energy supply (TPES), TWh 53.0 53.9 58.6 60.3 58.9

TPES ratio to GDP, kWh/EEK’2000 0.57 0.51 0.52 0.49 0.42Source: Statistical Office of Estonia, Bank of Estonia

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TPES ratio to GDPTPES ratio to GDP

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Years

0

2

4

6

8

10

12

14

kWh/

EUR

TPES,PJ

0

50

100

150

200

250

300

350

400

450

GDP,milj.EUR

TPES / GDP, kWh / EUR2000

GDP EUR2000

TPES, PJ

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

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BALTIC GENERATION MIX 2005BALTIC GENERATION MIX 2005

Nuclear34%

Oil Shale33%

Natural Gas19%

Hydro14%

Lithuania 70% Estonia 91%

Latvia 66%

Latvia 33% Lithuania 23%

Estonia 5%

Source: Statistical Office of Estonia, Latvia,Lithuania

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Capacity and ProductionCapacity and Productionof Power Plantsof Power Plants

Electrical Capacity in 2005, MWe

Avail. / instal.

Gross Production

of Electricity,GWh

2004 / 2005Thermal Power Plants

2523 / 2697 10302 /10201

Hydroplants 5.0 / 5,2 22,4 /21.5

Windplants 31.0 / 31,0 7,6 / 53.9

CHP Plants 421 1021

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Used Resources for the Electricity Used Resources for the Electricity ProductionProduction 20052005

Oil shale 91.06%

Peat 0.14% Biofuel

0.32%

Wind 0.53%

Hydro0.21%

Natural gas 5.34%

Shale oil gas and shale oil

2.40% Total Gross Electricity Production 10201 GWh

Source: Statistical Office of Estonia

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FuelFuelss for the for the Heat Production Heat Production 2005 2005

Natural gas 41.33%

Wood waste 19.97% Briquette and pellets

0.18%

Sod peat 1.27%

Firewood 1.22%

Milled peat 1.71%

Peat briquette 0.02%

Oil shale 13.49%

Coal 0.82%

Other (Shale oil gas and biogas, black

liquor) 7.25%

Shale oil 8.32%

Liquefied gas 0.05%

Light fuel oil 3.51%

Heavy fuel oil 0.73%

Source: Statistical Office of Estonia

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The biggest problems of the oil The biggest problems of the oil shale energy areshale energy are

• The oil shale energy sector is the biggest polluter in Estonia

• The big pollution charge• EU Directive 2001/81/EEC • Too low efficiency• The concentrated electricity production

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The Environmental The Environmental Requirements Influencing on Requirements Influencing on Operation of Oil Shale Fired Operation of Oil Shale Fired

Power PlantsPower Plants 01.01.2008 – SO2 bounding on existing boilers > 65%,

– fly ash emissions < 200 mg/Nm3

16.07.2009 – to reconstruct ash handling systems, and bring ash landfills in compliance with landfill directive

01.01.2012 – SO2 emissions total < 25 000 ton/year

The current SO2 annual emission rate is about 60 000 tons/year. The new CFB based capacity will be erected

01.01.2016 – LCP directive requirements will apply to all boilers

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• Self-sufficiency– Ability to cover domestic electricity needs

any time by producers located in Estonia.• Increase in the use of renewables

– Indicative target 5,1% of power by 2010 (2001-0,1%; 2005-1,1%).

– Main emphasise on the biofuels based CHP generation and windpower.

StrategicStrategic Energy Policy Energy Policy Objectives (1)Objectives (1)

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• Increase in the use of CHP-s– Indicative objective 20% of power from

CHP-s by 2020 (today 10%).• Efficiency Improvements:

– Primary Energy Consumption shall not exceed until 2010 the level of 2003.

StrategicStrategic Energy Policy Energy Policy Objectives (2)Objectives (2)

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Estonian Energy prospectiveEstonian Energy prospectiveEnergy Development PlanEnergy Development Plan

2015 (2030)2015 (2030) 2000 2010

Primary energy supply, PJ 189 220 – 250Oil Shale consumption, 106 t 13.2 11 – 13Share of renewables in energy supply, % 10.5 13 – 15Share of RES in production of electricity, % 0.1 5.1Final consumption of electricity, TWh 5.4 6.5 – 8.0Required net capacity of power plants, MW 1980 2400 – 2650Share of CHP in generation of electricity, % 12 – 14 20Opening of electricity market, % 10 35 – 40Heat consumption, TWh 8.5 8 – 9Share of CHP in heat production, % 33 35 – 40Emission, share of limit for 2008, %

   

SO2 181 90 – 100CO2 48 50 – 55

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Share of electricity from RES to gross electricity consumption

0

10

20

30

40

50

60

Estonia Lithuania Latvia EU27

%

RES Share 2005

Rest of target 2010

4,03,1

0,9

6,8

48,4

14,23,91,1

Source: Eurostat

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Instruments for supporting Instruments for supporting

renewable energy sourcesrenewable energy sources •Renewable energy sources – hydropower, solar energy, wave energy, tidal energy, geothermal energy, landfill gas, wastewater treatment gas, biogas and biomass •A network operator is obliged to buy electricity produced from renewables within the network, which he owns or possesses•A network operator pays the price for renewables based electricity 5.17 euro cents per kWh. (Planed 7.34 euro cents per kWh since 01July 2007)

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Production of hydro- and wind Production of hydro- and wind energyenergy

Hydro

Wind

02000 2001 2002 2003 2004

GWh

2005

5101520253035404550

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Consumption of Consumption of imported imported liquid liquid fuels fuels and and domestic domestic biofuelsbiofuelsfor electricity and heat generationfor electricity and heat generation

0

2000

4000

6000

8000

10000

12000

14000

16000TJ

Heavy & light fuel oil

Biomass & biogas

Coal

1995 1998 2002 2004 2005

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CONCLUSIONS CONCLUSIONS

• In Estonia wind and biomass resources are significant. If the "right" policies were in place, wind and CHP with biomass could make an important contribution to Estonia's energy supplies.

• The development of distributed generation needs the renovation of the transmission and distribution grids.

• The change of electricity generation technology needs a good level research.

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Thank you for your attention !Thank you for your attention !

CENERG 3rd TEMATIC WORKSHOP, Katowice, Poland Ülo RUDI 3715. November 2004Baltic Oil-shale Power Plant