Estonian energy scenarios
2030 2050
The first Balmorel model runs
Purpose of this…
• It is the first model runs – not final results!
– 30 time steps per year
• Will be increased to 72
• Can be used to find errors
• An exercise to help understand the model
• First attempt to present condensed results
– “Millions of numbers => Important key numbers”
2
Scenarios
– Two scenarios included:
• Reference
• Liberal market (= reference without 110% requirement)
– Focus on the electricity and district heating sector
110%
CO2 market collapse
Reference
CO2 concern
Combination scenario
Renewable energy
focus
Liberal market
Reference scenario
Reference scenario – Business as usual i.e. with a
requirement of having inland production capacity equal
to 110 % of the hourly peak demand, current trend in
energy efficiency, an oil shale price is a function of the
international oil price, and WEO 2012 forecast of CO2
prices in their new policy scenario i.e. 23-31-34 €/ton CO2
in 2020-2030-2035, respectively. The price in 2050 set to
45 €/ton CO2.
The 110 % requirement is calculated as follows:
110 % of peak demand – 150 MW
Liberal market scenario
Liberal market scenario – A scenario with
reduced requirements for inland Estonian
electricity capacity. In this scenario the impact of
setting a lower capacity requirement is
analysed. This scenario have no specific
requirement for Estonian capacity.
Updated assumptions
•
•
•
•
•
•
•
•
•
Investments in new generation capacity from 2015
Data on existing Estonian power plants
Estonian electricity consumption updated according to BAU forecast
Estonian biomass and wind resources according ENMAK resource report
Investment possible in new nuclear power plants in Lithuania, Poland and
Finland after 2030. Costs based on IEA and actual costs: 4.1 mio. EUR/MW
CCS not possible in Estonia, Finland and Sweden due to geological
conditions
NREAP requirements considered as a minimum RE target beyond 2020
Model invests in new transmission capacity from 2030
Opportunity costs of oil shale based on short term marginal costs (more
about this in next slides)
Oil shale opportunity costs
Method
The opportunity costs of oil shale seen from the existing power plants
at Narva from 2011 to 2050. The model will then consider the
efficiencies at existing Narva power plants and electricity prices etc.
This substitution price could be estimated as either the short or long
term marginal costs:
- Short term costs:
- fuel oil price x refinery efficiency - oil shale refinery OPEX – refinery
CO2-costs
- Long term costs:
- fuel oil price x refinery efficiency - oil shale refinery CAPEX - oil shale
refinery OPEX – refinery CO2-costs.
We assume the refineries are already in operation and base our cost
estimate on short term marginal costs.
Oil shale opportunity costs
Assumptions
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Reference oil price set to fuel oil based on price forecast from IEA World Energy Outlook 2012.
Mining fee (royalty) 2011-2014: 1,1 euro/tonnes. 2014-2050: 2,4 euro/tonnes
Mining costs (ex transport and royalty): 2011: 10,5 euro/tonnes, 2030: (10,5+16)/2= 13,25
euro/tonnes. 2050: 16 euro/tonnes. For the years between these points I have made a linear
projection.
Transport costs to Narva: 3 euro/tonnes in all years
OPEX of refinery: 21 euro/tonnes in all years.
CAPEX of refinery: Average of Enefit and Petroter: 10 euro/tonnes per year with an interest rate
of 10 % and 20 years pay back time.
1 tonnes of oil shale rock set to contain 2,33 MWh or 8,33 GJ energy - based on the report of the
resource group.
Refinery efficiency set to 70 % based on the report of the resource group. This is in line with the
efficiency of the existing Petroter refinery.
CO2 price forecast based on IEA World Energy Outlook New Policies scenario with an adjustment
to the historic 2011 and 2012 CO2 price level.
CO2 emission based on Enefit 280 data: 0,36 tonnes CO2/bbl shale oil. I have estimated
the calorific value of 1 bbl oil shale to 5,52 GJ and used an refinery efficiency of 70 %.
Oil shale short term opportunity costs
7.00
6.00
Euro/GJ
5.00
4.00
Oil shale mining costs
Oil shale long term opp cost
3.00
Oil shale short term opp cost
Coal price
2.00
1.00
0.00
Note: We have used the short term opportunity costs of oil shale in the following scenarios
Introduction
• Balmorel
– Optimal dispatch (a given year, with given technology)
• Input:
– Electricity and heat demand
– Fuel prices
– Capacities (generators, transmission) and efficiencies
• Output:
– Generation per unit, flow between areas
– Costs, emissions
– Optimal investments
• Input:
– Cost of technologies
– Interest rate, time horizon
• Output:
– New MW generation and transmission
10
“Optimal dispatch”
Area 1:
Generation: 0-100 MW
Marginal price: 100 X/MWh
Demand
50 MW
Generation
Area 2
Generation: 0-100 MW
Marginal price: 150 X/MWh
Price
Transmission
Area 1
Area 2
Area 1
Area 2
Area 1
Area 2
10
10
20
0
100
100
+10
10
40
50
0
100
100
+40
40
60
90
10
100
150
+50
50
60
100
10
100
150
+50
75
75
100
50
150
150
+25
40
150
90
100
100
150
+50
11
MW
MW
MW
MW
X/MWh
X/MWh
MW
Model set-up
• Model area
– Baltic states, Nordic countries, Poland, Germany,
NW Russia and Belarus
• Belarus modelled as transit country (No demand, no
power plants)
– 23 price areas
12
NO_S
NO_N
NO_M
NO_O
SE_M
DK_W
DK_E
SE_S
RU_KAL
DE_NW
DE_NE
PL_NW
LT
PL_W
BLR
DE_CS
2011
RU_KOL
SE_N
FI
LV
EE
RU_PSK
RU_STP
CO2 emission – model area
800
Endogenous investments from 2015
700
CO2 emission (Mt/year)
600
500
Natural gas
Coal and lignite
400
Peat
Oil
300
Oil shale
Waste
200
100
Reference
14
Note: Different step of X-axis, corresponding to simulated years
2050
2045
2040
2035
2030
2028
2026
2024
2022
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
0
CO2 emission – Estonia
110% requirements results in new investments from 2024
8
7
CO2 emission (Mt/year)
6
5
Oil shale
4
Coal
Natural gas
3
Oil
Waste
2
1
Reference
15
2045
2035
2028
2024
2020
2018
2016
2014
2012
2050
2040
2030
2026
2022
2019
2017
2015
2013
2011
0
Liberal market
Results are equal in the two scenarios from 2011 to 2022
Electricity generation – model area
1,600
1,400
Wind
Wind
Biomass
1,200
Biogas
TWh/year
1,000
Coal CCS
Coal & lignite
Solar
Coal CCS
Coal and lignite
800
Natural gas
600
Peat
Natural gas
Oil shale
Oil
400
Nuclear
Geo
Nuclear
200
Hydro
Hydro
Waste
0
2050
2045
2040
2035
2030
2028
2026
Reference
2024
2022
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
16
Electricity generation – Estonia
12.0
10.0
Wind
8.0
TWh/year
Natural gas
Coal
Wood chips
6.0
Biogas
Oil
4.0
Oil shale
Waste
Hydro
2.0
2011 2013 2015 2017 2019 2022 2026 2030 2040 2050 2012 2014 2016 2018 2020 2024 2028 2035 2045
Reference
17
Note: higher coal and natural gas generation in reference
scenario due to 110 % capacity requirement
Liberal market
Electricity from renewables - Estonia
4.0
3.5
3.0
TWh/year
2.5
Wind
Biogas
2.0
Wood chips
Hydro
1.5
Waste
1.0
0.5
2011201220132014201520162017201820192020202220242026202820302035204020452050
Reference
Note: Liberal market scenario practical the same
18
Investment in elec. generation – model area
80,000
Note 3: Wind and solar investments in 2040 and
beyond are primarily in Germany due to NREAP
70,000
60,000
Wind
Coal CCS
50,000
MW/year
Coal
Solar
40,000
Natural gas
Biomass
Biogas
30,000
Nuclear
Geo
20,000
Waste
10,000
2015
2016
2017
2018
2019
2020
2022
2024
2026
2028
2030
2035
2040
2045
2050
Reference
Note 1: Large investments in first year with endogenous
investments indicate an unbalance in earlier years
19
Note 2: Remember 5 years time step in the last part:
More investments per time step
Investment in elec. generation - Estonia
700
600
MW/year
500
Waste
400
Coal
Natural gas
300
Wind
Biomass
200
Biogas
100
2015
2016
2017
2018
2019
2020
2022
2024
2026
2028
2030
2035
2040
2045
2050
2015
2016
2017
2018
2019
2020
2022
2024
2026
2028
2030
2035
2040
2045
2050
-
Reference
20
Note: Additional coal and gas investments to meet 110 %
requirement in reference scenario
Liberal market
Elec. capacity
in Estonia
3000
Reference
2500
MW/year
2000
110 % requirement
1500
1000
500
0
3000
Liberal market
Existing
2500
1500
1000
500
Existing
21
New
2050
2045
2040
2035
2030
2028
2026
2024
2022
2020
2019
2018
2017
2016
2015
2014
2013
2012
0
2011
MW/year
2000
New
Cap requirement
District heating generation – Estonia
35
30
25
El
Wood chips
20
PJ/year
Straw
Biogas
Natural gas
15
Oil shale
Coal
10
Oil
Waste
5
2011 2013 2015 2017 2019 2022 2026 2030 2040 2050 2012 2014 2016 2018 2020 2024 2028 2035 2045
Reference
22
Liberal market
Note: increased coal generation in reference scenario
Total fuel consumption – Estonia
120
100
PJ/year
80
60
40
20
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2022
2024
2026
2028
2030
2035
2040
2045
2050
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2022
2024
2026
2028
2030
2035
2040
2045
2050
-
Reference
Waste
23
Halm
Biogas
Liberal market
Natural gas
Wood chips
Coal
Oil
Note: higher wood chips consumption in liberal market scenario
Oil shale
Electricity prices - Estonia
100
90
80
EUR/MWh
70
60
50
Reference
Liberal market
40
30
20
10
24
Note: Investments from 2015 results in decrease in electricity
price and less oil shale generation
2050
2045
2040
2035
2030
2028
2026
2024
2022
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
0
Electricity prices – region
120
100
80
EUR/MWh
Finland
Latvia
60
Lithuania
Poland
NW Russia
40
20
0
25
Estonia
Import balance
(TWh/year)
Reference
Liberal
2012
2015
2020
2030
2040
2050
Estonia
-2.4
-4.3
-3.4
-3.0
-3.6
-7.3
Latvia
0.8
4.0
9.0
7.6
-6.2
-1.7
Lithuania
-2.0
-5.2
-5.6
-8.2
-6.7
-6.2
Finland
-0.9
-0.9
-9.1
-8.1
-15.6
-17.0
NW Russia
2.6
8.5
17.9
13.9
13.8
12.2
Belarus
0.0
0.0
0.0
0.0
0.0
0.0
Poland
12.6
6.7
-9.1
-16.1
-5.0
-13.3
Sweden
-5.1
-1.5
-4.4
4.7
16.0
26.4
Denmark
7.3
5.0
16.6
15.2
-7.2
-13.4
Norway
2.6
4.7
11.0
27.6
39.8
55.6
Germany
-15.6
-17.1
-22.9
-33.6
-25.5
-35.3
(TWh/year)
2012
2015
2020
2030
2040
2050
Estonia
-2.4
-4.3
-3.4
-5.3
-6.5
-9.9
Latvia
0.8
4.0
9.0
8.0
-6.0
-1.9
Lithuania
-2.0
-5.2
-5.6
-8.1
-4.3
-2.5
Finland
-0.9
-0.9
-9.1
-8.1
-15.6
-17.1
NW Russia
2.6
8.5
17.9
14.3
14.1
13.3
Belarus
0.0
0.0
0.0
0.0
0.0
0.0
Poland
12.6
6.7
-9.1
-14.6
-4.4
-14.1
Sweden
-5.1
-1.5
-4.4
4.8
16.0
26.1
Denmark
7.3
5.0
16.6
15.6
-7.2
-13.6
Norway
2.6
4.7
11.0
27.6
39.8
55.6
-15.6
-17.1
-22.9
-34.3
-25.9
-35.8
Germany
26
Note: Estonia (and Lithuania and Latvia) as significant
importers of electricity – large import from Russia etc.
Transmission 2011
(MW)
BLR_BLR DE_CS
DE_NE
DE_NW
DK_E
DK_W
EE_R
FI_R
LT_R
BLR_BLR
DE_CS
3060
DE_NE
3060
DE_NW
3330
DK_E
NO_M
NO_N
NO_O
3330
1200
NO_S
PL_Central
PL_NW
PL_S
PL_SE
PL_W
RU_ARK RU_KAL RU_KAR RU_KOL RU_KOM
700
171
821
600
1200
1500
600
DK_W
600
950
600
1000
EE_R
350
FI_R
LT_R
LV_R
500
1300
350
100
500
2000
LV_R
1300
700
2000
NO_M
900
NO_N
100
600
900
50
NO_O
5200
NO_S
700
1000
600
2500
PL_Central
INF
PL_NW
598
INF
INF
INF
INF
INF
INF
INF
INF
INF
PL_S
INF
INF
PL_SE
INF
INF
INF
INF
INF
INF
PL_W
1280
INF
INF
RU_ARK
1E+100
RU_KAL
700
RU_KAR
INF
RU_KOL
INF
RU_KOM
INF
RU_NOV
RU_PSK
500
500
RU_STP
500
SE_M
740
SE_N
SE_S
27
1700
INF
550
1200
600
500
350
2300
750
700
600
Investments in transmission - MW
(MW)
Reference
Year
From
To
From
To
From
Estonia
Denmark W
To
Lithuania
Norway N
To
Poland
To
Total
2040
2045
2050
205
291
294
406
220
669
78
535
865
288
406
213
691
473
525
865
410
990
670
44
330
208
379
293
893
386
55
330
208
389
293
770
344
129
Sweden S
Denmark E
From
2035
Sweden N
To
To
2030
Sweden M
To
From
2050
175
Finland
Norway M
From
2045
Norway S
Denmark W
To
2040
Norwat N
To
From
2035
Finland
To
From
28
2030
Liberal market
1000
1000
Poland NW
Germany S
187
606
1020
2819
4616
373
1065
1110
1705
3258
4899
Poland W
Germany S
99
330
614
1596
330
614
Welfare economics
• Net present value of savings in liberal market
scenario is 73 mio. Euros (compared to reference)
• Increased consumer costs due to higher
electricity price
(Mio. euro)
Generator profits:
Consumer surplus:
TSO profit:
Public profit:
Socio economic benefit:
ESTONIA
103
-22
5
0
85
LATVIA LITHUANIA RUSSIA
29
16
4
-21
-27
-34
5
-4
19
0
0
0
12
-14
-10
NORDIC GERMANY & POLAND
179
6
-182
-5
4
-2
1
0
2
-1
TOTAL
336
-292
27
1
73
Generator profits
• Generator surplus of 103 mio. Euro (NPV) in
Estonia
• Significant decrease in Estonian capital costs
- revenue from electricity sales
- fuel costs
- variable costs
- fixed costs
- capital costs (new units)
- CO2-price
Total
ESTONIA
-578
-161
-16
-69
-285
-150
103
LATVIA LITHUANIA
75
212
18
1
3
13
11
29
39
12
11
128
5
16
RUSSIA
128
51
4
15
54
4
NORDIC GERMANY & POLAND
321
102
24
6
20
85
6
180
11
13
14
46
12
6
TOTAL
259
-18
21
-6
40
-117
337
Observations - Estonia
• The model invests in new coal power when it
starts investing in 2015 because this has less costs
than oil shale.
• The 110 % target results in investments in coal
power capacity when the majority of the Narva
oil shale plants are decommissioned by the end
of 2023
• From 2026 the capacity requirement is met by
investing in natural gas power plants
• Investments in renewables in Estonia limited to
NREAP and biogas only
Observations – surrounding system
• The model only to some extent invests in
additional nuclear capacity in Poland and
Lithuania (and not in Russia and Finland) from
2030
• Coal CCS deployment in Poland, Germany and
Lithuania from 2040 to 2050.
Important questions
• Should we use a historic oil shale price for
2011 and 12 and when is there enough oil
shale refinery capacity to use a pure
opportunity costs oil shale price?
• Is investments in new coal power plants
acceptable in Estonia in the short and long
term?
• Should we apply a CO2 price in Russia?
Next steps
• Update Latvian and Lithuanian data when we
receive feedback from TSOs
• Oil shale power plants as an investment option
• Forecast for district heating demand
• Simulation of all scenarios (change in oil shale
opportunity costs due to different CO2 price)
• Update of technology catalogue
• Increase time resolution