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The Energy 4 Cohesion Project Financing Opportunities for Bioenergy Actions in the Rural Environment Saaremaa Island as part of the E4C Project. WIP – Renewable Energies, Munich Martha Bißmann, Dr. Christian Epp. Energy 4 Cohesion Oct 07. Presentation Structure.
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The Energy 4 Cohesion Project Financing Opportunities for Bioenergy Actions in the Rural Environment Saaremaa Island as part of the E4C Project WIP – Renewable Energies, Munich Martha Bißmann, Dr. Christian Epp Energy 4 Cohesion Oct 07
Presentation Structure • Bioenergy Projects in Rural Environment • Financing of Bioenergy Project Phases • Energy 4 Cohesion • E4C Project Ideas in Estonia • Conclusion and Outlook
Excellence, experience and professionalism For more than 20 years Interdisciplinary Team: >25 people Project Department Event Department Set-up, management and realisation of both large- and small-scale RE projects Organisation of major events aimed at advancing RE technologies
WIP Focus Rural Development based on RES WIP is currently working with14 target regions in Eastern and South Europe Organisation of European Biomass Conference: 16th European Biomass Conference & Exhibition in Valencia in June 2008
WIP is Project Coordinator and/or Partner in the following Projects: • PV Enlargement • PV Catapult • PV Policy Group • PV Employment • PV Secretariat of the PV Technology Platform • Sevilla PV • COMPETE • BEST • Biofuel Marketplace • BIG >East • ADIRA • Energy 4 Cohesion • RES-Integration • K4RES-H • RESCUE • Pellets Atlas
Presentation Structure • Bioenergy Projects in Rural Environment • Financing of Bioenergy Project Phases • Energy 4 Cohesion • E4C Project Ideas in Estonia • Conclusion and Outlook
Bioenergy - Opportunities • Use of own energy resources • Security of supply with affordable energy • Strengthening of rural economy • Accumulation of Know-How • New perspectives for young generation Sensitization of population for region‘s own strengths
Bioenergy - Business Fields • Mobilising of resources • Waste disposal • Biofuel production • Production of heat and electricity • Consultation and service Full, or parts of bioenergy supply chain
Bioenergy - Challenges • Long term security of supply of biomass raw materials • Development of regional ‘high-prized’ sales markets • Political support and public acceptance • Financing !! Starting Point: - Cooperative structures instead of delivery relations - Bioenergy projects embedded in regional energy planning - Use of innovative technologies - Acquisition of tailor-made financing
Presentation Structure • Bioenergy Projects in Rural Environment • Financing of Bioenergy Project Phases • Energy 4 Cohesion • E4C Project Ideas in Estonia • Conclusion and Outlook
Bioenergy Project Phases 1) Project Idea 2) Feasibility Study 3) Project Development 4) Construction and Commissioning 5) Operation
Phase 2: Feasibility Study Objective: Proof of feasibility Result: Detailed project description • Installation sites • Biomass supplier • Selected technologies, technical project design • Preliminary contracts und “Letter of Intents” attached Financial requirements: • Focus on advance payments • Use of own know-how • Purchase of external know-how for essential planning details (legal, technical, logistical) Financial requirements : Between 5.000 and 20.000 Euro
Phase 3: Project Development Objective: Profound data for acquisition of financing Result: Business Plan with attachments • Binding offers for production technology and distribution • PPA • Profit and loss account • Licensing and binding approval of land purchase Financial requirements : • Labour intensive process • Higher need for specialised know-how (licensing procedures, contractual arrangements) Financial requirements: between 20.000 und 100.000 Euro
Phase 4: Construction and Commissioning Objective: Erection of complete infrastructure Result: Sustainable utilization of region’s own bio-energetic resources • Mobilisation (Cultivation and harvesting) • Refinement (Drying, pressing, fermentation, etc.) • Distribution or energetic utilization Financial requirements : • Investment in production technology • Investment in logistics • Support in mobilisation of raw materials Financial requirements: between 1 Mio und 20 Mio Euro
Bioenergy Project Phases 1) Project Idea 2) Feasibility Study 3) Project Development 4) Construction and Commissioning 5) Operation
Financing Strategies 2) Feasibility Study: Own resources and public grants Financial backflow through company shares 3) Project Development: SEED Investment and public grants Financial backflow through project development fee 4) Construction and Commissioning : • Own capital (possible integration of biomass supplier) • Dept capital • Infrastructural funding Potential financial backflow through sale to operator 5) Operation Financial backflow through operative profit
Energy 4 Cohesion Financing Strategy 2) Feasibility Study: Own resources and public grants 3) Project Development: SEED Investment and public grants 4) Construction and Commissioning : • Own capital (possible integration of biomass supplier) • Dept capital • Infrastructural funding 5) Operation
Presentation Structure • Bioenergy Projects in Rural Environment • Financing of Bioenergy Project Phases • Energy 4 Cohesion • E4C Project Ideas in Estonia • Conclusion and Outlook
EC - Project ‘Energy 4 Cohesion’ • Support the implementation of bioenergy pilot actions in rural target regions through: • Selection and dimensioning the sustainable energy actions in feasibility studies, feasible for public financial support, with main focus on: • European Structural and Cohesion Funds during the funding period from 2007-2013. • Political lobby work on EC level to open SF and CF for bioenergy in rural areas Strategy: combined top-down and bottom-up approach
Project consortium • WIP - Renewable Energies, Germany (coordinator) • EREC – European Renewable Energy Council, Belgium • forseo, Germany • ENVIROS, Czech Republic • ECB – Energy Centre Bratislava, Slovak Republic • SEGI AT, Poland • GEONARDO, Hungary • Archimedes Foundation, Estonia • LEI – Lithuanian Energy Institute, Lithuania • EKODOMA, Latvia • ETA-Renewable Energies, Italy • AUA – Agricultural University of Athens, Greece
E4C Target Regions Selection criteria: • Large bioenergy potential • Difficult economic situation • Political support and interest in bioenergy • Availability of data and preliminary work Pre-requisites for interesting biomass project ideas
Presentation Structure • Bioenergy Projects in Rural Environment • Financing of Bioenergy Project Phases • Energy 4 Cohesion • E4C Project Ideas in Estonia • Conclusion and Outlook
E4C Master Plan for Estonia • Developed by Archimedes, Tartu, EE • Maria Habicht, • Ülo Kask • Target region: Saaremaa Island • 4 innovative RES and RUE actions feasible for Structural and Cohesion Funds 2007-2013 • Detailed financial and technical engineering of pilot energy actions 103 pages, 3 MB available for download at: www.e4c.org
Target Region Portrait - Saaremaa Island • General context: • Located in the centre of the Baltic Sea region in the western part of Estonia • Area: 2 992 km2,57% is covered by forests • Arable lands: 570 km2 • Population: 35 076 • Current energy situation: • Negative energy balance, high dependence on imported fossil fuels; • Lack of systematic planning; • Lack of detailed analyses of possibility of usage of RES which discourages potential investors; • Low efficiency and disagreement with changed economic situation.
RE and RUE Potential - Saaremaa Island Renewable Energy Potential: • Most promising and used sources: Wind and Biomass Energy Savings Potential: • EE potential in housing sector: 40.5 GWh peryear
Estonian Master Plan – Energy Actions 4 innovative RES/ EE Energy Actions, feasible for Structural and Cohesion Funds 2007-2013: • Implementation of a 54 MW biomass-fired CHP plant at the district heating company Kuressaare Soojus Ltd on the island Saaremaa. • Renovation of 0,7 MW DH boiler plant and switch to biomass fuel in Karla municipality. • Switch from fossil fuel to solid biofuel in the district heating boiler plant in Salme village. • Renovation of 0,8 MW district heating pipelines and installation of heat substations in the buildings of Liiva in Muhu Island. 103 pages, 3 MB available for download at: www.e4c.org
Energy Action 1 – Biomass CHP in Saaremaa • Current statewithin the existing DH system: • Installed capacity - 53 MWth • Length of pipelines in DH network - 33 km (36% of them new or with renovated insulation) • Number of consumers (buildings) switched to DH network – 270 • Annual heat production (2006): 80,193 MWh; 228,695 GJ • Technical parameters of the proposed CHP plant: • Installed capacity: 2,5 MWe + 10 MWth • Number of boilers: 1 • Annual heat production: 49,000 MWh, 176,400 GJ (~58% share on total DH system production) • Annual electricity production: 13,600 MWh • Fuel consumption: 76,300 MWh, 100,395 m3 of wood fuels (loose m3)
Energy Action 1 – Biomass CHP in Saaremaa Financial Engineering of Investment: 50% by bank loan, 40% from SF, 10% with own funding. Positive Impacts: + Decreasing the dependence on imported fossil fuels + contribution to security and stability on energy supply for local population + use of local energy resources for satisfying the local need for energy, both heat and electricity
Presentation Structure • Bioenergy Projects in Rural Environment • Financing of Bioenergy Project Phases • Energy 4 Cohesion • E4C Project Ideas in Estonia • Conclusion and Outlook
Conclusions • Bioenergy projects in rural environment can have very positive impacts on regions • New approaches are needed for security of supply of raw materials in the long-term to guarantee sustainable production • Projects like Energy4Cohesion are needed for raising awareness and creating project ideas • Tailor-made financing is needed for different projects
Energy 4 Cohesion Financing Structure • Financing of mobilization and sensitization in target regions and feasibility study through public EC money • Private investment for hardware financing • Structural Funds support for required accompanying infrastructural investments Various E4C projects are looking for potential private investors !!
Many Thanks for Your Attention!! Energy 4 Cohesion Oct 07
Contract Number: EIE/05/103/SI.420018 http://www.e4c.org Energy 4 Cohesion Oct 07