PROMITHEAS-2 EU-BSEC Energy and Climate Policy Network

1. PROMITHEAS-2EU-BSEC Energy and Climate Policy Network International Black Sea Energy Policy Conference “Energy Investments and Trade Opportunities” October 8 – 9, 2008 Athens – Greece Anca Simona Bardici MSc. Eng.

2. International Black Sea Energy Policy Conference“Energy Investments and Trade Opportunities” “Security of electricity supply in the framework of sustainabledevelopment in Romania” Authors:Ph.D. Anca Popescu – ISPE Bucharest MSc. Eng. Anca Simona Bardici – ISPE Bucharest

3. Content • Introduction • Sustainable development of Romanian Power Generation Sector • The actual status of National Power System • Analyzed power plants development program options • Conclusions

4. Introduction The energy sector plays an important role in the field of economic and social development in Romania. The development of the energy sector should include consideration of general development objectives and it should take into account both indigenous Romanian energy resources and the principles of sustainable development. The security of electricity supply is estimated through the global analysis at national power system level taking into consideration the evolution of the energy demand, the reserves of the domestic primary energy resources and the status of the reforms in the energy sector.

5. Paper objective • The main objectiv of the paper is to present various scenarios for development of power generation capacities during the period 2007- 2025 and estimations for 2035. • This development will be established based on: • electricity and cogeneration demand forecasts during the period 2007-2035; • the actual stage of the existing units and its evolution for the future; • the evolution of fuel domestic production; • international and domestic market fuel cost prognozis; • units technologies evolution; • imposed requierements by the duration of the development of power sector. • To establish the optimum solution of Romanian sustainable power plants development for the period 2007-2035 was used Wien Automatic System Planning (WASP) program available by International Atomic Energy Agency (IAEA). This program uses the probabilistic simulation for the estimations of generation costs, of undelivered energy and of security of supply and uses the dynamic estimation techique for optimization of NPS development programs in conditions of imposed restrictions by Romanian Government energy policy.

6. Sustainable development of Romanian Power Generation Sector The electricity medium and long terms objectives: • Increasing of electricity security of supply; • Increasing of competitivity of internal and regional electricity market; • Increasing of efficiency of the electricity and cogeneration units, using the best available technologies; • Achieving the environmental protection and mitigation of greenhouse gasses (GHG) emissions in accordance with EU assumed obligations and Kyoto protocol; • Maintaining the primary energy imports at an acceptable level; • The continuation of restructuring and technological modernization and increasing of profitability in electricity and cogeneration sector; • Promotion of electrictity and heat generation in cogeneration type and of renewable energy sources; • Privatization of electricity generation companies.

7. The actual status of National Power System (1) Romanian NPS main characteristics Source: - National Statistics Institute – National statistical Book for gross production. - CN Transelectrica SA – DEN – net production and gross peak load. Observations: *) estimations from Industrial Statistical Bulletin nr. 12/2006 From this table we can notice the increasing of the gross peak load from 8265 MW in year 2000 at 9620 MW in year 2006.

8. The actual status of National Power System (2) Increasing of electricity consumption: - actual 2.5-3% - trend maintaining on medium and long term (about 2%/year)

9. The actual status of National Power System (3) The existing thermal power units • were achieved with the 1970-1980 years technologies; • the hydro units which meet the life time of operation represent 37% from total installed capacity. • the majority of the thermal power plants are not equipped with performed installations for emissions mitigation for reaching the EU imposed norms, the situation of thermal units being more dramatic.

10. The analyzed power plants development program options (1) To establish the optimum power plants development program, the following scenarios were analyzed: • The reference scenario in which all type of candidate power plants (nuclear power, thermal power, hydro power, wind) are in free competition, no restriction whatsoever, the selection order being the economic one to meet the load curve; • The imposed hydro program (Pi=1230 MW); • The imposed nuclear program, only 4 units at NPP Cernavoda; • The imposed thermo program (3100 MW) in the period 2010-2013; • The imposed wind farm program (4000 MW) in the period 2010-2017;

11. The analyzed power plants development program options (2) • The imposed hydro program (1230 MW) and imposed thermo program (3000 MW) in the period 2010-2013; • The imposed thermo program for domestic lignite and hard coal consumption, imposed hydro program (1230 MW), without import gas restriction after 2025; • The imposed thermo program for domestic lignite and hard coal consumption, imposed hydro program (1230 MW), imposed wind farms program (4000 MW), without import gas restriction after 2025.

12. Criteria for scenarios hierarchisation (1) For these scenarios hierarchisation was taken into consideration: • the economical criteria; • the criteria resulted from Romanian Government energy strategy regarding security of power supply and primary energy sources efficient use; • the environmental protection. For characterization of these criteria were defined the following indicators. • The indicator for economical criteria was defined by the levelized cost of electricity, which takes into consideration both the capital cost and operation and maintenance costs during 30 years.

13. Criteria for scenarios hierarchisation (2) • For the security in electricity supply criteria were defined three indicators namely: - the degree of energy independency; - the Hirschman-Herfindahl (HHI) indicator of import concentration for characterization of primary energy sources diversification; - the primary energy import invoice. • The indicator “HHI” is defined with the formula: where si represents quote of imported primary energy source. An HHI indicator between 8000-10000 means a big concentration of sources, which conducts to a certain vulnerability, while this indicator between 1000-1600 means a diversification of sources, therefore a reduced vulnerability. • The indicator “primary energy import invoice” (PEII) is defined with the relation: PEII = Primary energy resources import value/GDP. This indicator was in France 5.2% from GDP in 1981, 1.8% from GDP in 1986, 1.4% in 2003 and 2.3% in 2005. • For environmental criteria, taking into account of the importance to achieve the imposed Kyoto protocol obligations, is defined as main indicator “the carbon intensity” (IC). The carbon intensity is calculated with the formula:

14. Criteria for scenarios hierarchisation (3) • The scenarios were hierarchised depending of: • the imported fuel quantity; • the share of energy generation in hydro and wind farms power plants from total net electricity production in 30 years period; • the share of imported fuel cost from total fuel cost in 30 years period. • For the environmental criteria, taking into consideration that is not possible to determine the variation rhythm of carbon intensity for the period 2007-2035, the scenarios hierarchisation is achieved based on total CO2 emissions generated in the period 2010-2035.

15. Total CO2 emissions for theperiod 2010 - 2035

16. Scenarios evaluation (1) The multicriteria analysis of the development programmes for the power plants presented allows the selection of the programmes taking into consideration the requirements imposed by „New Energy Policy” of EU. • Taking into consideration that the costs imposed by environmental protection can be included in the operation and maintainance costs from objective function, is avoided the criteria in multicriteria analysis that the hierarchy after econiomic criteria doesn’t change. • In this condidtion it is achieved multicriteria analysis only taking into consideration economic and security criteria with equal weights. • From all indicators defined for security of electricity supply it is used only imported fuels quantity for avoiding double evaluation. • The next table shows the hierarchy of scenarios based on the marks obtained taking into account the evaluation with mark from 1 to 10 of the programmes in function of the degree in which these programmes satisfay the criteria.

17. Scenarios evaluation (2)

18. Conclusions (1) • In the present economical and geopolitical context it is not possible to establish a sustainable energy development based exclusively on economic order of solutions and must adopt new criteriawhich can offer security of supply with energy resources and to be able to satisfayneeds of the electricity consumers. • For Romania situation must take into consideration all the solutions which assure: • The risks reduction; • The security of supply; • The increasing of energy efficiency; • The mitigation of environmental impact.

19. Conclusions (2) The program of development resulted from the analysis taking into consideration Romanian conditions answers at the objectives from Romanian Government energy strategy, namely: • Energy Security through: • the limitation of the dependency from imported primary energy resources, using the domestic lignite and hard-coal, hydropower and wind power; • the diversification of imported energy sources by using the nuclear fuel and natural gas. • Sustainable Development through: • the increasing of energy efficiency by using the modern technologies at the level of year “2015”; • the promotion of hydropower energy and wind energy; • the promotion of the cogeneration plants using the high efficient technologies on natural gas; • the reduction of negative impact on the environment.

20. Thank you for your attention!

21. Contact Anca Simona Bardici Institute for Studies and Power Engineering (ISPE) Power Systems Division 1-3 Lacul Tei Blvd. 020371 Bucharest Romania ph. + 4021 2061268 fax. + 4021 2061317 e-mail: sispe@ispe.ro www.ispe.ro