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RES Integration for Increasing
of Energy Supply Security in Latvia:
ENVIRONMENTAL AND ECONOMICAL FACTORS
Ivars Kudrenickis,
Gaidis Klavs,
Janis Rekis
Institute of Physical Energetics, Latvia
NEEDS FORUM 2
“Energy and Supply Security – Present and Future Issues”
Krakow 5-6 July 2007
6th RTD Framework Programme Integrated Project
Plan of presentation
Part I: Energy supply development trends and
National Energy Strategy
Part II: Integrated analysis of RES utilization,
energy supply security and climate
change mitigation factors in the national
energy system development
Part III: RES in Latvia power production and DH
sector: assessment of employment effects
and regional benefits
Part I:
Energy supply
development trends and
National Energy Strategy
Trends in primary energy supply
350 PJ
1
Electricity
300
Fuel wood
0,75
250
Natural gas
200
0,5
150
100
35%
34%
34%
Peat
33%
14%
Oil products
and shale oil
36%
36%
0,25
50
Coal etc.
Selfsufficiency
0
0
1990
2000
2001
2002
2003
2004
2005
Primary energy flows in 2005
Import of natural
gas from Russia
28,8%
Import of oil
products from
rest of world
12,3%
Import of electricity
from Estonia and
Lithuania 3,2%
Import of electricity
from Russia 0,7%
SHARE OF DOMESTIC ENERGY
RESOURCES IN TPER
36,5%
Import of oil
products from CIS
16,8%
Import of coal
from CIS 1,7%
National Energy Strategy 2007-2016
The principal measures identified to increase energy supply security
Increase in supply security and sustainability of national energy
system has to be basic criteria for economic analysis and
decision-making related to its development.

Diversification of fuels or fuel supply sources, relates both imported
and local ones.

Latvia active participation in the common EU policy - power
interconnection with European power systems (Nordel, UCTE),
expansion of Incukalns underground gas storage; regional cooperation with Baltic sea region states, particularly, Lithuania and
Estonia.

Effective use of resources in all stages: extraction, conversion,
transportation and end-use.
National Energy Strategy 2007-2016
The quantitative targets:
1.
Self-supply of total primary energy at the level
of 37% (year 2025)
2.
RES-E share of 49.3% in the electricity supply
(year 2010)
3.
Biofuels share of 10% (year 2016) and 15%
(year 2020) in the transport sector
Local resources: future challenges


despite significant
improvement of energy
intensity indicator, further
growth of total primary
energy supply is expected
to meet the indicated
target of self-supply, the
challenging growth in use
of local resources,
especially RES, have to
be reached: per 25% in
year 2020 and 40% in
year 2025, compared with
existing one
140
120
Energy
intensity
100
80
TPES
60
Local
resources
40
20
0
2005
2020
Energy, economy and environment
indicator interaction
Environmental indicators 2004
Source: Key world energy statistics 2005. IEA - CO2 emissions from fuel combustion only
RES-E share in power production
GWh
%
60
8000
RES-e
45,5
6000
45,8
47,7
47
46
44,5
47,1
48,4
43,2
45,4
43,5
39,3
41,2
35,4
4000
50
40
Fossil fuel
and import
30
20
RES-e
share
corrected
2000
10
0
0
1999
2000
2001
2002
2003
2004
2005
RES-e
share
RES-E structure in year 2005
1%
2%
3%
95 %
2%
Large HPP
Small HPP
Wind
Biogas
Part II: Integrated analysis of RES
utilization, energy supply
security and climate change
mitigation factors
Research Tasks

integrated analysis of national energy
system development taking into account both:
 RES
wider utilization,
 energy supply security,
 climate change mitigation
factors.


finding optimal structure of primary
sources balance for power production
optimisation model MARKAL applied
Description of modelled scenarios
REF
Target for GHG
emissions’
restriction in
energy sector
No
Target for minimal
RES-E share
in the total
electricity supply
No
REF-CAP
REF-CCAP
In year 1990 energy sector
Cumulative
contributed 72.2% (18690 kT) restriction
of national GHG emissions.
of
Annual restriction of GHG
GHG
emissions:
emissions for
the period
year 2010: 92% - 17195 kT
up to year
starting from year 2015:
2050:
75% - 14018 kT
725764 kT
No
No
REFRESE
No
49.3%
starting
from
year
2010
Modelling results: primary
sources for power production
TWh
12
Wind
10
Biomass
8
Import
6
Coal +
biomass
4
Hydro
2
Gas
0
REF
(2015)
REF+CAP
(2015)
REF+CCAP REF+RESE
(2015)
(2015)
REF
(2025)
REF+CAP
(2025)
REF+CCAP REF+RESE
(2025)
(2025)
Modelling results: total GHG
emissions in energy sector
kTon
20000
18000
REF
16000
REF+CAP
14000
REF+CCAP
12000
REF+RESE
10000
Kyoto
8000
6000
4000
2000
0
2000
2005
2010
2015
2020
2025
2030
Modelling results: division of GHG
emissions among end-users of energy sector
kTon
18000
16000
Agriculture
14000
Households
12000
Service
10000
8000
Industry
6000
4000
Energy
generation
2000
Transport
0
REF
(2015)
REF+CAP
(2015)
REF+CCAP REF+RESE
(2015)
(2015)
REF
(2025)
REF+CAP
(2025)
REF+CCAP REF+RESE
(2025)
(2025)
Modelling results: RES-E share in
the power production
%
60
50
REF
40
REF-CAP
30
REF-CCAP
REF-RESE
20
10
0
2000
2005
2010
2015
2020
2025
2030
Principal conclusions
1.
Hydro and natural gas are the main primary resources for power
production in all scenarios
2.
In reference scenario (REF) coal use, together with 15% solid
biomass co-firing, will be new important source for power
production thus increasing supply security. However the
reference scenario without defining particular environmental
targets in conditions of increased power demand will not allow to
fulfil the objectives of EU climate policy
3.
RES-E target alone can not be enough effective instrument to
mitigate climate change: RESE scenario target will allow in year
2030 to fulfil GHG emissions according Kyoto protocol only, but
not be enough to fulfil strong obligations for post-Kyoto period.
4.
To fulfil post-Kyoto obligation, RES-E target should be applied
together with other climate change mitigation instruments, taking
GHG emissions restriction obligation as a departure point
(scenarios CAP & CCAP).
GHG emissions mitigation costs and
RES-E additional costs
GHG mitigation marginal costs,
year 2030, EUR (2000) / t
GHG mitigation costs,
average for the period 2005-2025,
EUR (2000) / t
REF+
CAP
REF+
CCAP
63
42
41
15
REF+
RESE
RES-E additional costs, average for the
period 2005-2025, EUR (2000) / MWh


the highest costs are indicated at the beginning of the period;
the factor of fossil fuels prices and forecasted trends of RES-E technologies’ specific
investments strongly influence the calculated additional costs.
45
4,0
Part III: RES in Latvia power production
and DH sector:
Assessment of employment
effects and regional benefits
Research Tasks

To estimate economical benefits of RES
integration into national power production
system in accordance of the target to reach
RES share 49.3%

To assess economical impact of potential wide
use of non-traditional RES – straw – for district
heating
New capacities assessed

Biomass (Wood) CHP - 70 MWel

Wind: onland (135 MW) and
off-shore (77 MW)

Biogas – 8 MWel

Straw DH - 46 MWth
Possible approaches

Use of standard factors – the installation
and operation of a given energy production
capacity are associated with the specific
number of jobs

Production chain analysis –identifying of
the wages share in the value chain of a given
energy production installation
Job places per 100 GWh annually
produced electricity
Fossil technologies
Wind
1-6
15-20
Solar PV
Solar thermal
Small hydro
Biomass, forestry waste
50-54
25-27
8-9
18-19
Biomass, energy plantations
Biogas, agriculture waste
Source: R.E.H.Sims, “Biomass and Agriculture: Sustainability, Markets and Policies”,
OECD Publication, Paris, September 2004, pp.91-103
64
58
Pre-feasibility study of employment, based
on production chain analysis model
Facility
cost
Estimation of the wages part of the value chain
Technology
value chain
OM
cost
All
costs
RE
energy
Income of
= Fuel cost at
the supplier the facility
Wages
Equipment
Enduser
O&M
value chain
Localization of the employment
Employment
80%
30%
Fuel
cost
Total
and
per
unit
Local
regional
Nacional
Transnational
Fuel
value chain
20%
70%
Source:
Tyge Kjær,Roskilde University
Production Chain Assessment Methodology
Example: Biomass CHP, steam turbine, 0.6-4.3 MW
Efficiency
Electricity 25%
Heat 65%
Annual operating hours
5600
Specific investments, mill.LVL/MW
Operation & Maintenance costs (% of investments per year)
Biomass fuel cost, LVL/GJ
3.29
4
1.75
Wages share of total investments
(comprising Latvian local share)
8%
(20%)
Wages share of O&M costs
(comprising Latvian local share)
50%
(80%)
Wages share of fuel costs
(comprising Latvian local share)
80%
(100%)
Production Chain Assessment Methodology
Example of onland Wind
Annually produced power, GWh
298
Installed capacity, MW
135
New direct job places
Job places related to investments
151
Investments’ jobs calculated per 1 year of
technology life-time
7.5
Job places related to O&M
68
Total new full-time job places
76
Tax revenues (direct jobs)
Tax revenues in state budget, LVL
285 000
Tax revenues in municipal budgets, LVL
125 400
note: 1 EUR ~ 0,7 LVL
Production Chain Assessment Methodology
Example of Biomass CHP
Power production capacity, MW
Steam
turbine
Gasifiers
35
35
New direct job places
Job places related to investments
(assessed as new – 100%)
158
(158)
115
(115)
8
11
Job places related to O&M
(assessed as new – 75%)
154
(116)
246
(185)
Job places related providing wood fuel
(assessed as new – 50%)
317
(158)
264
(132)
282
328
Investments’ jobs calculated per 1 year of
technology life-time
Total new full-time job places
Tax revenues (direct jobs)
Tax revenues in state budget, LVL
Tax revenues in municipal budgets, LVL
1 057 475
1 229 971
465 300
541 200
Production Chain Assessment results:
Employment effect and related tax revenues
New
capacities
(MW)
New
direct
jobs
New
indirect
jobs
Tax
revenues
in state
budget
(LVL)
Straw DH
46
51
76
478 114
210 375
Biogas-E
8
50
75
468 739
206 250
135 onland +
77 off-shore
173
259
1 621 837
713 625
70
610
915
5 718 616
2 516 250
Wind-E
Biomass
(Wood) CHP
Tax
revenues in
municipal
budgets
(LVL)
Thank You !
Institute of Physical Energetics
Aizkraukles 21, Rīga,
LV-1006 Latvia
[email protected]