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ENERGY STRATEGY AND PROJECTS OF
ENERGY COMMUNITY INTEREST
Future water use and the challenge of hydropower development in
the Western Balkans
11- 13 February 2013, Ljubljana
Violeta Kogalniceanu, ECS
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Overview of topicsOverview of topics
Energy Strategy
Energy demand scenarios and investment needs
Regional infrastructure development
Criteria for identification of projects of Energy Community interest
Evaluation process
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Content of the Strategy Content of the Strategy
I. Introduction ........................................................................................................... 3
II. Objectives of the Energy Community Strategy ...................................................... 4
III. Actions required to meet the Strategy objectives .................................................. 4
IV. Current situation and national trends .................................................................... 8
V. Energy Community energy demand scenarios and investment needs ............... 14
VI. Development of Projects of Energy Community interest ..................................... 19
VII. Conclusions and Recommendations ................................................................... 23
1. Conclusions ........................................................................................................ 23
2. Recommendations .............................................................................................. 26
ANNEX 1 ....................................................................................................................... 28
ANNEX 2 ....................................................................................................................... 53
ANNEX 3 ....................................................................................................................... 62
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Energy Community Strategy (1) Energy Community Strategy (1)
The Strategy - developed by a Task Force with a large representation basis, benefitting from the technical assistance sponsored by USAID
In two phases:
Phase 1: A Strategy paper, endorsed by the MC in October 2012
Phase 2: Identification of Projects of Energy Community Interest (PECIs), and associated policy measures to promote these, October 2012 – October 2013
The strategy paper has set three important objectives:
Objective 1: Creating a Competitive Integrated Regional Energy Market
Objective 2: Attracting investments in the energy sector
Objective 3: Providing secure and sustainable energy supply to customers
…. and a large number of actions to support these,
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Current energy situation and national trends (1) Current energy situation and national trends (1)
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Current situation and trends (2)Current situation and trends (2)Electricity domestic generation 2009
103.5 TWh
2009, WBs and Moldova,
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Current situation and trends (3)Current situation and trends (3)
Electricity import/export balance in 2009 and forecasts for 2020
Net importers in 2020: Albania, Croatia, Moldova
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Current situation and trends (5)Current situation and trends (5)
New (planned) installed capacity
The forecasted new power generation capacity:
20 GW, between 2012 and 2020 (or 2021) in total, of which, in Ukraine approx 8.1 GW (2009-2020)
This represents a total 30% increase, respectively 60.9% in WBs and Moldova
This power needs transmission lines….
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Energy demand scenarios and investment costs Energy demand scenarios and investment costs
The task force decided that a scenario analysis should be used, as a way to understand the regional energy outlook and potential value of a regional energy strategy.
Three scenarios were selected:
– ‘Current trends’ – if current trends in development of the energy sector continue, what are the implications?
– ‘Minimal investment cost’ – what are the minimal costs required to ensure that there is adequate supply of electricity to meet demand?; this will be meeting the energy efficiency and RE energy targets only partially, and will not meet the Large Combustion Plants Directive
– ‘Low Emissions Development/Sustainability’ - if more aggressive promotion of EE and RE was pursued, what might be the implications?; under this scenario all targets will be met as well as the requirements of the Large Combustion Plants Directive
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Scenario analysis implicationsScenario analysis implications
A few highlights: The scenario analysis demonstrates the potential for severe electricity
shortages if current trends continue unabated.It also demonstrated a very large investment gap, with CP reported plans
already at 28.8 billion Euros through 2020 (Western Balkans and Moldova) – it is even higher when considering the view point of other regional energy experts or when the analysis extends to include plant in the 2021 to 2030 timeframe.
The scenarios indicate the potentially large investment needs required for the region to meet supply adequacy. Between 2012-2020, an estimated 39.1 billion Euros of investments are needed under the scenario that focuses on minimum supply adequacy.
It is evident that there are projects of regional significance that can benefit from a coherent EnC energy strategy.
– An EnC strategy supported by a framework for project support should help mobilize financing.
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Results for Results for 20202020, , 2025,2025, and and 20302030 (bln nominal euros) (bln nominal euros)
Scenarios and Key Results
Unmet Demand
(TWh)
Total Annualized Investment
Costs
Annual Fuel and O&M
Costs
Total Annual Costs
CO (Gt)
Current Trends
15.136.163.5
0.510.941.27
4.125.116.93
4.636.058.20
203,948231,875267,477
Minimal Investment
Costs0
1.342.113.13
3.644.566.04
4.986.679.17
179,427197,689223,567
Low Emissions/
Sustainability0
2.873.935.30
2.813.204.22
5.587.139.52
134,028139,352156,810
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Development of projects of Energy CommunityDevelopment of projects of Energy Community
Interest - PECI (1)Interest - PECI (1)Power generation: New generation capacities (including adding new units to existing facilities)
Modernization, retrofitting of existing power plants, allowing for more efficient and environmentally safe production
Electricity transmission: High-voltage lines: OHL and underground and submarine transmission cables
Electricity storage facilities
Smart meters and ancillary equipment
Equipment for the safe, secure and efficient operation of the system
Gas transmission: Gas transmission pipelines (bi-directional capacity)
Underground storage facilities
LNG and CNG terminals
Equipment for the safe, secure and efficient operation of the system
Oil: Refinery improvements for facilitating improved fuel quality
Storage facilities to contribute to the security stockholding obligations
Pipelines used to transport crude oil
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PECI (2)PECI (2)
Going forward into the next phase, it is important to focus on identifying those projects of regional importance that would benefit from additional interventions such as:
Policy and regulatory instruments
Technical assistance
Financing mechanisms.
This is NOT intended to replace or override each CP’s own strategy or project development priorities, but is focused on projects of regional significance that would benefit from additional support.
This is the challenge for this second phase of work.
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Policy and regulatory measuresFinancial
mechanisms
Policy and regulatory measuresFinancial
mechanisms
PHLG/MCagree on Energy
Community PECI; policy
measures adopted
Basis for PECI candi-
dates & data/ CBA
October - December
2012
February
2013
May
2013
October
2013
January
2013
PECI identification processPECI identification process
.....
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Energy, RE, Environment Objectives
PECIs selection criteria (1) PECIs selection criteria (1) Criteria categories
Contribution to the implementation of Regional Energy Strategy’s objectives
Min. 2 CPs, or a CP and an EU MS
Cross-border infrastructure (electricity, gas, oil)
Significant cross-border impact
Contribution to regional market integration, and enhanced competition
Enhancement of cross-border capacity (in both directions)
New links between markets
Reduction of market concentration and facilitating access for new market entrants
Security of supply
Diversification of supply sources, supplying counterparts and routes (mainly for gas),
Lowest cost of available resources, while taking into account all externalities (mainly for generation projects)
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Energy, RE, Environment Objectives
PECIs selection criteria (2) PECIs selection criteria (2) Contribution to sustainable energy development
Development of renewable energy sources
Replacing old and low efficient technologies
Facilitation of reaching national carbon targets and reducing GHG emissions
Improving efficiency in primary energy transformation and in energy use
Contribution to economic development
Economic, social and environmental viability
Socio-economic benefit
Maturity of the project
Progress in realisation (feasibility study, EIA, FID, permits and licenses)
Length of project realisation
Support from governments / local communities
Experience of project promoter.
To conclude:
All projects in each category will be assessed and evaluated against the same criteria, and indicators and they will be ranked accordingly
The final PECI list will be agreed based on the highest scores, by the PHLG/MC and a package of measures will accompany these in order to support their implementation.
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