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BRINGINGEUROPE AND THIRDCOUNTRIES CLOSER
TOGETHER THROUGHRENEWABLEENERGIES
Report: D4.3 Prospects for the use of the renewable energy cooperation mechanisms
by the Western Balkan countries
Brussels, 19.12.2014
Andreas Tuerk, JOANNEUM RESEARCH,
Robert Pascicko, Zoran Kordic UNDP
Reports
• Report: D4.1: Report on Power System Inventory and
Status of RES(-E) Deployment in the Balkans
• Report: D4.2: Future Prospects for Renewable Energy
sources in the West Balkan countries
• Report: D4.3 Prospects for the use of the renewable
energy cooperation mechanisms by the Western
Balkan countries
The process
• More than 150 stakeholders in the region involved
• Involvement of UNDP regional offices
• BETTER became part of a political discussion process
how to accelerate RES implementation in the region
• Initiated by IRENA,
• followed up the European Climate Foundation and
BETTER
• Series of Workshops in close coordination by IRENA,
ECN, BETTER, Energy Community
Key characteristics of the region (1)
• Inefficient, fragmented and monopolized energy
systems
• Regulatory frameworks
continuous changes
market models lead to a lock-in of generation capacities by government-owned incumbents monopolists
• Markets in the region are far from being open and
sufficiently attractive for investors
Key characteristics of the region (2)
Key characteristics of the region (3)
• Institutions are locked in into national thinking
• Countries hardly consider synergies in the region, such
as
common use of shared water resources for hydro power or
sharing peak capacities in order to minimize the investments costs and avoiding over-dimension of new capacity
• Large concerns in the region from energy experts and NGOs
Too strong focus on capacity expansion in particular of hydro and coal
Lack of decentralized solutions
electricity exports may increase environmental pressures
Planned transmission corridors opportunites
Tools used
• Green-X model, TU Vienna • quantitative model-based analysis of future RES deployment and
corresponding cost and expenditures
• CopMex Calculator, JOANEUM RESAERCH
• Designing concrete business cases for the the cooperation mechanisms
• Green Jobs Calculator UNDP
RES expansion under BAU and EU average support
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
GW
h
Serbia
Kosovo*
Montenegro
FYR Macedonia
Croatia
BIH
Albania
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
160.000
180.000
200.000
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
GW
h
RES electricity production per country (SNPave, LowDemand) WEST BALKANS
+50%
Surplus/Shortfall of different 2020 scenarios vs. NREAP – RES electricity
-2.000 -1.000 0 1.000 2.000 3.000 4.000
Serbia
Montenegro
Kosovo*
FYR Macedonia
BIH
Albania
GWh
SNPave(BA-TR)-barC(LowDemand)
BAU(BA-TR)-barA(LowDemand)
Surplus Shortfall
Surplus/Shortfall of different 2020 scenarios vs. NREAP – Hydro large-scale
-1.500 -1.000 -500 0 500 1.000 1.500 2.000
Serbia
Montenegro
Kosovo*
FYR Macedonia
BIH
Albania
GWh
SNPave(BA-TR)-barC(LowDemand)
BAU(BA-TR)-barA(LowDemand)
Surplus Shortfall
based on „Green-X“
Surplus/Shortfall of different 2020 scenarios vs. NREAP – Hydro small-scale
-2.000 -1.500 -1.000 -500 0 500 1.000
Serbia
Montenegro
Kosovo*
FYR Macedonia
BIH
Albania
GWh
SNPave(BA-TR)-barC(LowDemand)
BAU(BA-TR)-barA(LowDemand)
Surplus Shortfall
based on „Green-X“
Surplus/Shortfall of different 2020 scenarios vs. NREAP – Wind onshore
-1.000 -500 0 500 1.000 1.500
Serbia
Montenegro
Kosovo*
FYR Macedonia
BIH
Albania
GWh
SNPave(BA-TR)-barC(LowDemand)
BAU(BA-TR)-barA(LowDemand)
Surplus Shortfall
based on „Green-X“
0
50
100
150
200
250
300
350
400
Serb
ia
Mo
nte
neg
ro
Ko
sovo
*
FYR
M
aced
on
ia
BIH
Alb
ania
GW
h
BAU(BA-TR)-barA(LowDemand)
SNPave(BA-TR)-barC(LowDemand)
NREAP
Expansion potential according to different 2020 scenarios– Photovoltaics
based on „Green-X“
Effects on society
Scenarios S1-Low S2-High S3-
Moderate
Share of domestic component in production (%) 10 80 50
Share of domestic component in installation (%) 20 90 60
Share of domestic component in maintenance (%) 40 100 80
• Effects on society are assessed under three possible scenarios (depending on the share of the domestic component in production, installation and maintenance)
Effects on society – new jobs created each year (direct and indirect)
Country total
BAU SNPmax
Albania 700 - 1.300 2.000 - 3.500
Croatia 700 - 1.200 3.500 - 6.000
Bosnia 900 - 1.600 2.600 - 4.800
Macedonia 300 - 500 1.000 - 1.800
Montenegro 200 - 400 800 - 1.400
Kosovo* 100 - 150 200 - 1.800
Serbia 800 - 1.500 3.000 - 5.500
• Depending on the share of local content SNPmax scenario may create 3-5 times more green jobs
* “References to Kosovo shall be understood to be in the context of Security Council resolution 1244 (1999)”
Projected SNPave surplus of different technologies 2020
Hydro large-
scale
Hydro small-
scale
Wind onshore
Photovoltaics
Overall RES (incl. heat) expansion potential of different scenarios 2030
0
10.000
20.000
30.000
40.000
50.000
60.000
Serbia Montenegro Kosovo* FYR Macedonia
BIH Albania
GW
h
BAU(BA-TR)-barA(LowDemand)
SNPave(BA-TR)-barC(LowDemand)
SNPmax(BA-TR)-barC(LowDemand)
based on „Green-X“
Key driver to use cooperation mechanisms
Host countries
• Grid limitations when expanding RES (e.g. lack of
balancing capacities)
• Limited financial support for non-hydro techologies
• Technology transfer (lack of technologies and know how)
• Expanding more costly potentials, that can be used by
the host counrty after the export period
Offtaker countries
• Improving cost-effectivness and economic relationships
Design options and business cases
• Each country has following options:
• Domestic projects > only domestic support applies
• Joint projects with partial export > domestic and
foreign support apply to different shares
• Joint projects with full export > only foreign support
applies while host country provides the location of the
projects and necessary legal support
• The share each country has in the project determines
renewable elecricity consumed in each country
counting towards their renewable energy targets
• providing energy security and
• decarbonisation
Cost efficient potentials beyond targets: hydro electricity in from Bonsia and Herzegovina
Required for 2020, 2030?
Joint Projects?
Case Study: Exporting wind from Albania to the EU
• Installed capacity - 230 MW
• Investment - 260 million EUR
• Electricity production - 550 GWh/y
• Listed in Albanian NREAP
• Close to border with Montenegro
Case Study: Exporting wind from Albania to the EU
0,00
50,00
100,00
150,00
200,00
250,00
300,00
350,00
400,00
100 90 80 70 60 50 40 30 20 10
FIT/FIP (EUR/MWh)
Export share (%)
Required minumum return in Euro - Export share -
20% IRR 14% IRR 10% IRR
Case Study: Exporting wind from Albania to the EU (NL)
-13,00
-11,00
-9,00
-7,00
-5,00
-3,00
-1,00
1,00
3,00
5,00
7,00
100 90 80 70 60 50 40 30 20
EURc/kWh
Export share (%)
- Lower value 20% IRR and higher value 10% IRR -middle value 14%
Case Study: Wind Albania-Kosovo
• New 400 kV interconnection planned to be constructed
in 2015.
• Kosovo plans 300 GWh wind by 2020, Albania only 165
GWh
• Wind in Albania is cheaper than in Kosovo
– Kosovo* could carry out joint projects in Albania to meet its targets
– It could define specific project sites in Albania eligible for joint projects or open up its support scheme for installations in Albania.
– Albania could keep cheap potentials it needs for 2020/2030 itself
Case Study: Wind Albania-Kosovo
0
20
40
60
80
100
120
140
160
0 500 1000 1500 2000 2500
€/M
Wh
GWh
Cost-potential curves Kosovo and Albania
Albania
Kosovo*
Key constraints for cooperation on RES
• Lack of demand by EU offtakers and lack of willigness to
cooperate within the region
• Unclear to what extent new transmission lines will be
available
• Administrative, legal and institutional bottlenecks that
apply to RES projects in the region in general
Outlook on Joint Projects up to 2020
• Italy-Montenegro undersea cable likely to be built
• Other transmission corridors unclear
• Export to the north of the region possible
The role of cooperation up to 2030
• EU member states start to open their support schemes
to RES from abroad: Netherlands, UK, German
• The need for region cooperation was highlighted in the
2030 Energy and Climate council conclusions
• Regional clusters are emerging in the EU
The role of cooperation will increase regardless of the
specific mechanism!
Key messages for the West Balkans
• Meeting 2020 RES targets, before focusing on exporting
renewables, opportunities for significant RES expansion
exist
• Regional cooperation on use of renewable energy is one
of the prerequisite for cost efficient RES expansion and
energy security in the region
• Cooperation mechanisms could be a starting point to
integrate the region’s energy systems with the EU
BRINGINGEUROPE AND THIRDCOUNTRIES CLOSER
TOGETHER THROUGHRENEWABLEENERGIES
Andreas Tuerk
JOANNEUM RESEARCH
Elisabethstraße 18
8010 Graz