View
216
Download
0
Category
Preview:
Citation preview
October 2011
Hiiumaa offshore wind farm&
Hydro pump storage PP in EstoniaEnergiasalv O
Innovative combination of offshore farm
and hydro pump storage will reduce the
regions dependence on
fossil fuels
Offshore wind farm combined with hydro pump storage
2
Strong winds
average speed 8.5 m/s
Shallow waters
10-20 m depth
Close to the land
Around 10 km
Smooth sandy
seabed
No rocks
Combination of offshore wind farm and hydro pump storage is the only feasible opportunity to produce RE in the region at scale, due to limitations in the power system
Up to 700 MW
Significant capacity
Estonia
Late consenting
stage
Hiiumaa offshore wind farm
Energiasalv hydro pump storage
Cheap
Cost 0,54 EUR m per MW installed
Constructed in granite mine,
additional revenue from
graniteIdeal solution to
integrate wind
into the system
Allows reducing CO2 emissions
by 1,7 MT
Allows the Baltics function as
independent energy system
Hydro pump storage plant
3
Upper reservoirBaltic Sea
Lower reservoir
Maintenance tunnelHigh pressure pipe
Low pressure pipe
Turbines
Electrical grid tunnelLift
Management centre
Sub-station Entrance to maintenance tunnel
Hydro pump storage power plant in Estonia
Hydro pump storage power station of 500 MW installed capacity
Estimated construction cost of 0,54 EUR m per MW
Will allow integration of offshore wind farm into the system
Upper reservoir is the Baltic sea, while the lower reservoir is a granite mine
Synergy with granite mining, sales of granite - additional revenue
The power plant is projected to be commissioned by 2018
Strong project with positive impact on the environment
Project snapshot Positive impact on the environment
Realisation of the hydro pump storage project would allow reducing production of energy from oilshale, meaning reduction of 1,5 MT of CO2 emissions
Hydro pump storage with contemplated capacity of 500 MW would allow 1,5 TWh production of wind energy per annum
No reliance on imported resources, no fossil fuels
Preliminary design
Key figures
Plannedcapacity
500 MW
Reservoir size 5,4 mln m3
Water intake flow
270 th m3
Depth 500 m
Max non-stop working hours
12 h
Investment ~ EUR 270 m
Hydro pump storage power plant
In times of peak demand and high electricity prices, water is temporarily diverted through hydroelectricity turbines
5
In times of excess power on the grid and low electricity prices,water is pumped (returned) to the sea using wind power
Working cycle: buy cheap & sell expensive
Daily distribution of electricity prices (average for 2010)
Plant pumps water up, consuming
abundant cheap electricity
Plant produces
electricity, when it is
in high demand
Pump at night & produce in a day
Pump storage would earn from:
Capitalising on daily spread in electricity spot prices: night vs peak time
Capitilizing on spread between times of strong winds (low prices) and no-wind hours (expensive prices)
Providing balance power service to TSO
Some part of the capacity could be sold to TSO as emergency reserve
Pump storage will help facilitate Estonian goal to develop 650 MW onshore plus 500 MW offshore of wind power by stabilizing the variability and intermittent nature of wind generation, essentially acting as a battery for wind power.
This partnership of wind and pump storage makes wind generated energy more predictable and therefore more reliable and secure
Off-
peak
Peak load
Source: Riverbank Power
MW
Hydro pump storage power plant
6
Need to agree the subsidy scheme with the government
F carried out pre-feasibility study
LOI signed with the Port of Tallinn regarding the land plot
Efficient logistic site for granite sales
Upper reservoir would be Gulf of Finland
Port territory is industrial land according to the detail plan
Seawater intake scheme design completed
Detail planning and EIA process ongoing
Ideal solution for covering peak loads and provision of balancing power to wind energy
Activities so far
Next steps
Energy benefits
Reduce dependence on fossil fuel
Increase energy independence
Diversify energy portfolio
Reduce environmental impacts of energy generation
Wind Energy Battery stores the intermittent wind energy during low demand periods and shifts it to the peak periods
Security, Reliability and Assurance:
Black Start Capability
Spinning and non-spinning reserves
Voltage regulation, frequency control and load following
Energy Storage
Storing and converting low cost power into peak demand capacity meeting Blatic peak load requirements
Enhancing Wind
Converting intermittent wind power into a scheduled renewable electricity source in peak demand period
Pump storage will help Estonia meet its objective to develop 1,150 MW of wind by 2020
By adding pump storage to the Baltic energy supply network, Estonia would diversify its resources in a responsible and sustainable manner while enhancing its ability to integrate large quantities of wind generation
Benefits
Hydro pump storage power plant
7
Planned location of the station is Muuga Port
Good grid connections in the planned location
Preliminary land agreement with Port of Tallinn signed
Contemplated location
Location on the Baltic sea coast with good grid infrastructure
National Development Strategy envisages building 1 800 MW of reserve and wind parks balancing capacities by 2018
Wind balancing: 900 MW
Peak-load reserve: 300 MW
Emergency reserve: 600 MW
Significant share of wind energy in the countrys electricity balance will lead to the need for wind farms balancing capacities
Several offshore wind farms are planed next to Estonian western sea coast
Excellent conditions for offshore development: strong winds (40-45% capacity factors), shallow waters and smooth sandy seabed
Possibilities to balance wind energy with other countries electricity systems are limited due to insufficient grid connections
Need for internal solution
Hydro pump storage is an ideal solution for balancing of wind farms and as a reserve capacity station due to short start-up times
0
400
800
1 200
1 600
2 000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Emergency reserve capacities
Peak-load reserve capacities
Balancing capacities to wind parks
Balancing capacities needed in Estonia
81 800 MW of reserve and balancing capacities to be built
MW
Comments Balancing and reserve capacities needed
Project developer: Energiasalv
9
Inv
est
ors
Vardar is a Norwegian utility company with annual energy generation is around 3,2 GWh, mostly coming from hydro
4Energia is focused on developing renewable energy projects and operating wind parks in the Baltics
Organizational structure
Energiasalv
Hydro pump storage project developer
Voolu Energia
Competence in development and management of renewable energy projects
4E Technoinvest
Ma
na
ge
me
nt
co
mp
an
y
Competence in granite mining
Vool is an investment company active in energy and mining sectors. Appart from Energiasalv development project, the
major business line is Maardu Graniidikaevandus, mining of granite from Neeme granite deposit.
Investment companies of prominent Estonian business angels: Hannes Tamjrv and
Peeter Mnd
Experienced project development team
10
Martin Kruus(CEO of 4 Energia)
Education:
Tallinn Technical University - Thermal EngineeringPrevious employment:
Eesti Energia, Director of Business Unit of Renewable Energy. Main responsibility was to establish and run power plants using renewable energy sources wind, hydro, biomassMinistry of Economic Affairs, Department of Management of State CompaniesEstonian Privatization Agency, Project Manager for IPOs
Main accomplishments:
Renovation of Estonian biggest hydro power plant Linname HPP Building of Estonian first wind park Virtsu wind parkSeveral feasibility studies and project management about CHPs
Lembit ValiEnergiasalv CEO
Kalle Kiigske(CFO of 4 Energia)
Education:
Estonian Business School Banking and Financial ManagementPrevious employment:
United Partners Group, Pan-Baltic investment bank, Partner, responsible for merchant banking and investmentsAS Hansa Capital leading asset-based finance company in the Baltics, Russia and Ukraine with total assets over EUR 1,7 billion, Hansa Capital is the industrys largest company in Eastern Europe and among top 50 in Europe, Member of Board and Head of Factoring and Trade Finance Several positions in Factor Chain International (Amsterdam, the Netherlands) - Member of the Communication Committee, Member of the Internal Audit
Education:
Tallinn Technical University Electrical EngineeringPrevious employment:
Elering, Estonian national grid company CEOEstonian Energy Technical Director, a member of the management boardNarva Elektrijaamad (Narva Power Plants) - CEO
Main accomplishments:
Extenstive experience in power industry since 1973Worked on top management positions in energy sector for 18 years
foto
foto
foto
Hands-on experience in renewable energy and granite mining
Peep SiitamVoolu Energia CEO
Education:
Tallinn Technical University- M.Sc. in civil engineering Estonian Business School - MBA
Previous employment:
Vool - Co-founder of of the company having majority shareholding in Maardu Granite MineMerko Mines - Chairman of the management boardEstonian Energy Technology Program - Program Manager
Main accomplishments:
Chartered Engineer since 1998Substantial experience as a member of top management in the Baltic leading construction companies
foto
Project schedule
Expected date
EIA study 2011- 2012
Geological reseach 2012
Construction permit December 2012
Construction of water intake system 2013
Construction of water reservoirs, I stage 2013-2015
Construction of water reservoirs, II stage 2016-2018
Installation of equipment of the pump storage 2016-2018
Commissioning 2018
11
Hiiumaa offshore wind farm
12
Hiiumaa wind farm is in advanced stages of development compared to other potential projects in the region
Environmental Impact Assessment (EIA) carried out
Wind measurements on the sea carried out (100 m measuring mast was installed on the sea)
Seabed studies carried out
Wind park impact studies on birds, fish and seaplants carried out
Socio-economic assessments carried out
Technical conditions agreed on with the Main Grid, including grid access (connection to two 330 kV substations)
Scouting for structural design has been done by Ramboll
Shareholders:
Vardar Eurus 45% (JV between Vardar, Norwegian municipality energy company and Nothern Environmental Finance Corporation)
Freenergy 45% (Fund investing in renewable energy projects, EBRD has 33% shareholding)
4energia 10% (Management company for renewable energy company; JV between Vardar Eurus, Freenergy and the companys management)
13
Total Installed Capacity 500-700 MW
Yearly Net Production 1.7-2.4 TWh/y
Located on three shoalsApollo, Vinkov, Kuivaluka shoals next to Hiiumaa island, Estonia
Distance from shoreline 5 km to 20 km
Depth 6 m to 20 m, sandy seabed
Grid connectionConnection to substation in Estonia, possibly Sweden and Finland
Planned erection 2014-2025
Project snapshot Project status
Hiiumaa offshore wind farm: project snapshot
14
Layout of the wind farm
ContentComments Layout of the wind farm
Source: 4Energia, EMD
EMD completed a wind study (production assessment phase) based on the collected onshore-offshore site measurements
EMD prepared wind park visualization and currently finalizing the wind park turbulence study
A geophysical study was undertaken and provided maps of water depth
Maps are used to limit the assigned wind farm area to within 35 m water depth
Layout optimization in regards to coast guard radars was made
With current layout optimization, max installed wind park capacity could be 730 MW (with Repower 5MW turbines), where arrary loss is 10,2 %.
Layouts have been also optimized for production
15
Wind conditions in the Baltics
Content Comments Distribution of full load hours in Europe (120 m hub height offshore)
Source: The UNDP/GEF Baltic Wind Atlas, EBRD Renewable Development Initiative
The cyclonic activity of the Baltic Sea region results in high mean wind speeds throughout the area
In general, wind potential in the coastal zone of Estonia is higher than that in the other Baltic countries, however, the Baltic Sea impact dictates the difference in wind regimes on the coastal line and in the inland regions
In Estonia, there are several areas with annual average wind speed of 7-8 m/s at 10 m height (corresponding to wind speed over 10 m/s at 50m height)
Estonian wind climate is very volatile with respect to location and seasonality, whereas 2/3 of total energy potential is converted from October to February
As water has less surface roughness than land (especially deeper waters), offshore wind speeds are considerably higher than onshore
Thus, offshore wind resources are characterized by higher load hours
Considerably higher wind speeds due to less land/vegetation interference allows for generation of considerably more power than onshore locations
3 000-4 500 h/year offshore vs. 2 000-3 000 h/year onshore
Average 40%-45% offshore capacity vs. 25%-30% onshore
No onshore areas have resource potentials exceeding 4 000 full load hours
According to EEA, Estonian unrestricted technical potential of offshore development with less than 10 km to the shore exceeds 200 TWh in annual generation
Estonia has significant potential for offshore wind energy due to abundant availability of large areas of shallow waters with close distance to the land
Windy and shallow waters
16
Wind measurements
Content Comments Wind speed comparison Pakri and Hiiumaa
Source: 4Energia
Offshore wind measurement (on Vinkov shoal) executed with SODAR system
Measurements showed the average wind speed of 8.5 m/s during the period
Offshore (Vinkovi) 80 m and Pakri 80 m (onshore) comparison shows 2.0 m/s higher average wind speed in Vinkovi during Jul-Dec 2009
Average wind speed of 8.5 m/s
SODAR system installed on Vinkov shoal
Onshore wind measurement mast in Ristna, Hiiumaa
2
4
6
8
10
12
Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09
m/s
Pakri 80 m Vinkovi 80 m Ristna 80 m
Wind speed comparison
17
Enviroment Impact Assessment
ContentRoute of expedition plane of the bird study (Four times in year) Inventory of biota and habitat
ss
Comrehensive EIA studies completed
Fish study
18
Grid connection
Comments Main option for 330 kV AC grid connection
Source: 4Energia
Grid connection application made to Elering (TSO) where two possible connection points (new Kanapeeksi 330 kV substation in Hiiumaa or expanded Leisi substation in Saaremaa) are pointed out
Elering submitted technical coordination for the Hiiumaa offshore wind farm application of building permit
The total amount of connection payment is up to EUR 0.5 million and additionally there has to be 100% of coverage by the regulating power units what will ascend the total grid investments
Search for optimal solution for regulating power units started
A grid connection proposal must be issued for the regulating power units connection
The connection agreement for regulating power units must be signed simultaneously with the offshore connection contract
Legal procedure to receive approval for construction of offshore wind farm
Estonian offshore: legal procedure and permits
Source: xxx
Necessary legislation to regulate offshore developments was passed in February 2010 by the Estonian Parlament
Hiiumaa offshore wind farm project application has been filled to the Ministry of Economy that currently is processing it
4Energia requested the Ministry of Environment to approve Hiiumaa EIA program
Application to Ministry of Economy
First step for developer is to submit proper application to Ministry of Economy who is responsible for the treatment process and will finally issue the permit for the construction (land use) of offshore wind park
The annual tolerance fee will be calculated form specific land value (4% during wind park construction and 7% during operation)
The building of offshore wind park is primarily regulated with superficies
Application to Ministry of Environment
The application and further steps will be coordinated with Ministry of Environment, Ministry of Defence, Ministry of the Interior, Maritime Administration and with Civil Aviation Authority
If application is accepted for further proceedings then all the actions will be determined by the Ministry of Economy (EIA, other requested studies etc.)
The issued license will be valid for 50 years
Application for grid connection
The key components for successful application: overall wind park information (incl. turbine type and foundations), detail lactation maps with exact coordinates, what also includes all the other marine applications (substations and submarine cables routes) plus grid connection conformity from the TSO (Elering)
20
Hiiumaa offshore wind farm: investment highlights
Project snapshot
Offshore wind energy farm in the shoal sea close to Hiiumaa island coast with planned installed capacity of 500-700 MW in the planning stage with wind measurements done and environment impact assessment study in the completion stage
Harnessing one of the largest, easily scalable domestic energy resource offshore wind would provide a solid answer to the issues of energy security and independence, issues of increasing importance in the region
Excellent wind to grasp
Shallow water (primarily appr. 10-20 m) and close distance to the land (10 km) are optimal combination for the offshore development
Favorable wind conditions at the region with average wind speed of 8.5 m/s
Limited availability of coastal area land suitable for onshore wind parks should drive offshore wind energy sector
Favourable market
environment
Expected capacity shortage in the Baltic energy market fuels further the need for replacement of existing power generation capacity
Full liberation of Estonian electricity market since 2013 will lead to electricity prices converging with European average
Restructuing and uprading of fossil fuel based generation capacities is expensive and drive electricity prices up; as investment costs will be fully reflected in electricity price of newly built blocks of Narva PP
Undersea grid connections (current Estlink 1 and Estlink 2 to be built by 2013) with combined trandmission capacity exceeding 1,000 MW enable exporting electricity to the Nordic market
Renewable energy to
substitute fossils
Supplies of main fossil fuels used in power generation are becoming more difficult to extract and expensive due to carbon penalty
High carbon content per GDP in Baltics means increasing costs of electricity generated from fossil fuel
Increasing importance of CO2-free energy sources, as power sector is geared towards more sustainable use of energy
Rising profile of environmental issues along with improvements in the technology encourages wider political support
Regulation to support
offshore wind sector
Estonia has a binding target set by EU directive of 25% share of renewable energy in final energy consumptiion by 2020
Estonian National Energy Strategy envisages 500 MW of offshore wind capacity by 2018
.
Appendix
Baltic electricity market
Estonia is described by political and economic stability, accessibility, ease and low cost of doing business and investor equality
Estonia is ranked among the top 25 out of all countries in the Ease of Doing Business index by The World Bank Group
Estonian taxes are low and simple
There is no corporate income on profit, unless it is paid out as dividends, which is taxed at 21%
Estonia does not impose any gift, inheritance or estate taxes
Debt capital is abundant and readily available, as the nearly all banks operating in Estonia are subsidiaries of large Scandinavian players
In the period of 2007-2013 Estonia is allocated more than EUR 3.4 billion from the EU Structural funds, which stimulates economic development
Estonian economy is successfully recovering from the crisis
GDP growth in 2010 was 3,1%; forecast for 2011 6,3%
Public finances are under control: Estonia is the only EU country with a 2010 budget surplus (0,1% of GDP) and it has the EUs lowest debt (6,6% of GDP)
Estonia adopted Euro since January 2011
22
Key figures (2010)
Estonia: country snapshot
Map of Estonia
Source: Statistics Estonia
Population, mln 1,34
Area, 000' km2 45,2
GDP per capita, % of EUR average 65%
GDP growth, % 3,10%
Inflation, % 3%
Corporate tax, % 21%
Unemployment, % 14,4%
Average gross monthly salary, EUR 792
Attractive place for foreign investments
2
Electricity market in the Baltics
Content ContentComments Electricity sources in Baltics, 2010
The Baltics, especially Latvia and Lithuania, are dependent on imported energy resources
Estonian oil-shale based electricity production, albeit with relatively low energy efficiency, is a dominating energy source
Due to its environmental risks, lower competitiveness, the key issue is to reduce oilshale consumption at the expense of renewable energy alternatives
35% of Estonian energy market was opened since 1 April 2010 and full opening is scheduled for 1 January 2013
Cost-based electricity pricing will be converted into market-based pricing
In Latvia electricity is generated mostly by three Daugava hydro power plants
Lithuanian energy production was substantially dependent on decommissioned Ignalina nuclear power plant (INPP)
After the decommissioning of INPP Lithuania relies heavily on gas PP and electricity import, this is further exacerbated by lack of viable interconnections with Poland, Sweden and Finland
Source: Eesti Energia, National Statistical Offices
Dependent on imported energy
Hydro 47%
Gas 20%
Imports 30%
Other 3%
Other4%
Hydro 11%
Gas34%
Imports51%
Wind 3%
Wood7% Gas
4%
Oilshale86%
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Installed capacity Peak demand
2
Comments Energy production capacities and future imbalance, 2007-2017
Electricity market in the Baltics
Source: Estonian Ministry of Economic Affairs and Communications 1) All old pulverised combustion boilers have to be closed by the end of 2016 according to EU Directive on the limitation
of emissions into the air from large combustion plants
Production capacity shortage in the wake of worn-out infrastructure
Shutdown of Elektrenai Lithuanian Power Plant
Shutdown of Ignalina NPP (Lithuania)
Gap to be filled
Shutdown of old energy blocks in Narva power plants (Estonia)
Total annual power consumption amounts to around 25 TWh/year:
Estonia 7,5 TWh/year
Latvia 7 TWh/year
Lithuania 10 TWh/year
Due to environmental reasons and physical amortization there will be shutdowns of several major power plants in Baltics
Lithuania closed down Ignalina nuclear plant at the end of 2009
Estonia is forced to shut down 45% of capacity of oil shale power plants by 2018 due to environmental regulation (1,240 MW will be replaced by only 600 MW)
Although the new plants are planned to be developed, these will require large-scale investments and will not be probably completed before 2016
It is estimated that there will be a substantial gap between production and consumption capacities in Baltic states amounting to as high as 1,200 MW by 2017
In addition, 1,500 MW of capacities will be based on natural gas imported from Russia, being therefore with limited reliability and having upwards price pressure
Importance of the issues of energy security and energy independence is increasing
2
Electricity market in the Baltics
Content Content
Estonia
Latvia
Lithuania
Russia
Finland
Sweden
Belarus
Poland
Russia
Comments Grid connection in the Baltic states and actual power flow in 2009
650 MW
350 MW
800 MW
2,000
MW
1,000
MW
1,000
MW
2,000
MW
2,000
MW
1,000
MW
700 MW
1,000
MW
Estonian energy system is interconnected with the Russian and Latvian energy systems and starting from 2006 a connection has been established with Finland through an undersea cable Estlink(Baltics and Nord Pool)
Estlink connects Estonia to the Nordic power market, offering Baltic participants a liquid market and a trustworthy reference price
Export to Finland has been very active: most of the time Estilinkgrid connection is used at the maximum available capacity
Estonian electricity prices should converge with the Finnish level, especially after construction of a new undersea grid connection EstLink 2 (650 MW) by 2014, which will increase Estonian export capacity to 1,000 MW
New transmission capacities between the Baltics and other European countries are to be constructed in next five years, thus electricity price levels should converge
Planned new interconnections:
2013-2016 Lithuania-Poland, 1000 MW
2015-2016 Lithuania-Sweden, 1000 MW
Possibly additional Latvia-Sweden and/or Estonia-Sweden links will be built Existing grid connection
Planned grid connection
Exported: 2,642 GWImported: 205 GWNet import: 2,437 GW
Exported: 1,875 GWImported: 82 GW
Net export: 1,793 GW
Exported: 1,138 GWImported: 497 GW
Net export: 641 GW
Source: Baltso
Increasing connectivity with Scandinavia: converging energy prices
94,5
0
100
200
300
400
500
Irel
and
Nor
way
Ger
man
yP
ortu
gal
Spa
inIta
lyD
enm
ark
Aus
tria
Cze
ch R
epub
licLu
xem
bour
gS
love
nia
Bel
gium
Sw
eden
Mal
taF
inla
nd EU
Slo
vaki
aC
roat
iaF
ranc
eU
KP
olan
dH
unga
ryC
ypru
sT
urke
yLa
tvia
Gre
ece
Lith
uani
aR
oman
iaE
ston
iaB
ulga
ria
Electricity price in Estonia is among the lowest in the EU on the back of fully amortized production facilities of power plants
Since April 2010 Estonia is a Nord Pool price zone, as 35% of electricity market have been liberalized
Estonian electricity prices should converge with the Finnish levelin the mid-term
Convergence will be completed after full market liberalization in 2013 and construction of undersea grid connection EstLink2 by 2014
Electricity prices on Nord Pools1 spot market will remain mainly influenced in the long run by the level of water in the reservoirs of the Norwegian and Swedish hydropower plants2
Electricity price reflects production cost of the last unit sold, as such its pricing differs from other commodities
Electricity cant be stored and has to be available on demand, thus it is the most volatile commodity
The demand for electric power is inelastic, i.e. consumers do not respond to price changes very quickly
26
European electricity prices for domestic users (with taxes) in 2009
Electricity prices
EU average EUR 173.5/MWh
Comments Spot electricity prices in the region (EUR/ MWh)
Source: Bloomberg, Eurostat, Nord Pool1) Nord Pool is the trade name of the Nordic power exchange where electricity is traded on a day-ahead basis2) It is estimated that around 76% of observed variation in Nord Pool spot price is explained by Nordic hydrological balance
EU
R/M
Wh
0
20
40
60
80
100
120
Apr
-10
Apr
-10
May
-10
Jun-
10
Jun-
10
Jul-1
0
Aug
-10
Aug
-10
Sep
-10
Oct
-10
Oct
-10
Nov
-10
Dec
-10
Dec
-10
Jan-
11
Feb
-11
Mar
-11
Mar
-11
Apr
-11
Baltpool (LT)Nordpool EstoniaNordpool Finland
Electricity prices to converge with Scandinavian level
EU
R/M
Wh
Recommended