National Seminar Role of DER in the EU and Current Status in the Baltic States 6 March 2007

1. National Seminar Role of DER in the EU and Current Status in the Baltic States 6 March 2007 Current Status of Energy Policy on Development of Distributed Generation in Estonia EstoniaDr. Ülo RudiTallinn University of Technology

2. CONTENTS • The Main Economic Indices • The present situation of the Estonian energy sector • The development conditions for the distributed generation. • Supporting measures for the distributed generation • The main targets for the lager use of distributed generation. • Conclusions. Role of DER in EU and in the Baltic States

3. The Main Economic Indices Source: Statistical Office of Estonia, Bank of Estonia Role of DER in EU and in the Baltic States

4. GDP, milj.EUR TPES, PJ 9000 450 kWh/EUR TPES / GDP,kWh/EUR2000 8000 400 GDP EUR2000 7000 14 350 6000 12 300 TPES, PJ 5000 250 10 4000 8 200 3000 150 6 2000 100 4 1000 50 2 0 0 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Years TPES ratio to GDP Role of DER in EU and in the Baltic States

5. BALTIC GENERATION MIX 2005 Lithuania 70% Estonia 91% Latvia 66% Latvia33%Lithuania 23% Estonia 5% Source: Statistical Office of Estonia, Latvia,Lithuania Role of DER in EU and in the Baltic States

6. Capacity and Productionof Power Plants Role of DER in EU and in the Baltic States

7. Natural gas Hydro 5.34% 0.21% Wind 0.53% Peat Biofuel 0.14% 0.32% Shale oil gas and shale oil Oil shale 2.40% 91.06% Used Resources for the Electricity Production2005 Total Gross Electricity Production 10201 GWh Source: Statistical Office of Estonia Role of DER in EU and in the Baltic States

8. Oil shale Shale oil 13.49% 8.32% Othe r (Shale oil gas and biogas, black Heavy fuel oil Coal liquor) 0.73% Light fuel oil 0.82% Milled peat 7.25% 3.51% 1.71% Liquefied gas 0.05% Sod peat 1.27% Peat briquette 0.02% Firewood 1.22% Wood waste Briquette and pellets 19.97% Natural gas 0.18% 41.33% Fuelsfor the Heat Production 2005 Source: Statistical Office of Estonia Role of DER in EU and in the Baltic States

9. The biggest problems of the oil shale energy are • The oil shale energy sector is the biggest polluter in Estonia • The big pollution charge • EU Directive 2001/81/EEC • Too low efficiency • The concentrated electricity production Role of DER in EU and in the Baltic States

10. The Environmental Requirements Influencing on Operation of Oil Shale Fired Power Plants 01.01.2008– SO2 bounding on existing boilers >65%, • – fly ash emissions <200 mg/Nm3 • 16.07.2009– to reconstruct ash handling systems, and bring ash landfills in compliance with landfill directive 01.01.2012– SO2 emissions total <25 000 ton/year The current SO2 annual emission rate is about 60 000 tons/year. The new CFB based capacity will be erected 01.01.2016– LCP directive requirements will apply to all boilers Role of DER in EU and in the Baltic States

11. Strategic Energy Policy Objectives (1) • Self-sufficiency • Ability to cover domestic electricity needs any time by producers located in Estonia. • Increase in the use of renewables • Indicative target 5,1% of power by 2010 (2001-0,1%;2005-1,1%). • Main emphasise on the biofuels based CHP generation and windpower. Role of DER in EU and in the Baltic States

12. Strategic Energy Policy Objectives (2) • Increase in the use of CHP-s • Indicative objective 20% of power from CHP-s by 2020 (today 10%). • Efficiency Improvements: • Primary Energy Consumption shall not exceed until 2010 the level of 2003. Role of DER in EU and in the Baltic States

13. 2000 2010 Primary energy supply, PJ 189 220 – 250 Oil Shale consumption, 106 t 13.2 11 – 13 Share of renewables in energy supply, % 10.5 13 – 15 Share ofRESin production ofelectricity,% 0.1 5.1 Final consumption of electricity, TWh 5.4 6.5 – 8.0 Required net capacity of power plants, MW 1980 2400 – 2650 Share of CHP in generation of electricity, % 12 – 14 20 Opening of electricity market, % 10 35 – 40 Heat consumption, TWh 8.5 8 – 9 Share of CHP in heat production, % 33 35 – 40 Emission, share of limit for 2008, % SO2 181 90 – 100 CO2 48 50 – 55 Estonian Energy prospectiveEnergy Development Plan2015 (2030) Role of DER in EU and in the Baltic States

14. Share of electricity from RES to gross electricity consumption % 60 0,9 50 40 Rest of target 2010 48,4 30 RES Share 2005 20 6,8 10 3,1 14,2 4,0 1,1 3,9 0 Estonia Lithuania Latvia EU27 Source: Eurostat Role of DER in EU and in the Baltic States

15. Instruments for supporting renewable energy sources • Renewable energy sources – hydropower, solar energy, wave energy, tidal energy, geothermal energy, landfill gas, wastewater treatment gas, biogas and biomass • A network operator is obliged to buy electricity produced from renewables within the network, which he owns or possesses • A network operator pays the price for renewables based electricity 5.17 euro cents per kWh. (Planed 7.34 euro cents per kWh since 01July 2007) Role of DER in EU and in the Baltic States

16. Production of hydro- and wind energy Wind GWh 50 45 40 35 30 25 Hydro 20 15 10 5 0 2000 2001 2002 2003 2004 2005 Role of DER in EU and in the Baltic States

17. TJ 16000 14000 Heavy & light fuel oil Biomass & biogas 12000 Coal 10000 8000 6000 4000 2000 0 1995 1998 2002 2004 2005 Consumption of imported liquid fuels and domestic biofuelsfor electricity and heat generation Role of DER in EU and in the Baltic States

18. CONCLUSIONS • In Estonia wind and biomass resources are significant. If the "right" policies were in place, wind and CHP with biomass could make an important contribution to Estonia's energy supplies. • The development of distributed generation needs the renovation of the transmission and distribution grids. • The change of electricity generation technology needs a good level research. Role of DER in EU and in the Baltic States

19. Thank you for your attention ! Role of DER in EU and in the Baltic States