FINNISH ENERGY INDUSTRIES – ENERGY SCENARIOS and VISIONS for the FUTURE Background Report
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Jyrki Luukkanen – Jarmo Vehmas – Suvisanna Mustonen– Francesca Allievi – Anne Karjalainen – Mikko Värttö & Maria Ahoniemi FINNISH ENERGY INDUSTRIES – ENERGY SCENARIOS AND VISIONS FOR THE FUTURE Background Report FFRC eBOOK 10/2009 Jyrki Luukkanen Jarmo Vehmas Research Professor, Docent Senior Researcher Suvisanna Mustonen Francesca Allievi Researcher Researcher Anne Karjalainen Mikko Värttö Research Assistant Research Assistant Maria Ahoniemi Research Assistant Copyright © 2009 Authors & Finland Futures Research Centre, Turku School of Economics ISBN 978•951•564•980•5 ISSN 1797•132 Finland Futures Research Centre Turku School of Economics Rehtorinpellonkatu 3, FI•20500 Turku Korkeavuorenkatu 25 A 2, FI•00130 Helsinki Pinninkatu 47, FI•33100 Tampere Tel. +358 2 481 4530 Fax +358 2 481 4630 www.tse.fi/tutu tutu•[email protected], [email protected] 2 CONTENTS 1. INTRODUCTION........................................................................................................ 6 2. GLOBAL MEGETRENDS................................................................................................ 8 2.1. Review of selected Global Energy Scenarios ....................................................... 8 2.1.1. World Energy Council: Deciding the Future: Energy Policy Scenarios to 2050...... 8 2.1.2. IEA: World Energy Outlook 2008 .......................................................... 10 2.1.3. Greenpeace: The Energy [R]evolution ................................................... 29 2.1.4. State of the Future 2007, Global Energy Scenarios 2020............................. 30 2.1.5. UN: Global Environmental Outlook....................................................... 32 2.1.6. Shell Energy Scenarios to 2050 ............................................................ 34 2.1.7. World Energy Prospects According to Total............................................. 36 2.1.8. EREC: Renewable Energy Scenario to 2040.............................................. 38 2.2. Development in China and India....................................................................... 40 2.3. Development in the United States .................................................................... 50 2.4. Development in the European Union ................................................................. 54 2.5. Development in Russia .................................................................................. 56 2.6. The Future of International Climate Policy – Burden Sharing Approaches ..................... 60 3. REQUIREMENTS SET BY THE FINNISH SOCIETY ................................................................. 63 3.1. Energy policy goals ...................................................................................... 63 3.2. Changes in Regional and Community Structures.................................................... 66 4. DEVELOPMENT OF ENERGY RESOURCES / POTENTIALS AND TECHNOLOGIES............................. 71 4.1. Oil........................................................................................................... 71 4.1.1. Oil Resources and Reserves ................................................................ 71 4.1.2. Future of Oil .................................................................................. 73 4.2. Coal......................................................................................................... 78 4.2.1. Coal Resources................................................................................ 78 4.2.2. Future Trends in Coal ....................................................................... 80 4.3. Natural Gas................................................................................................ 81 4.3.1. Natural Gas Resources ...................................................................... 81 4.3.2. Future Trends in Natural Gas.............................................................. 83 4.4. Uranium Resources and Nuclear Technology........................................................ 84 4.4.1. Uranium Resources .......................................................................... 84 3 4.4.2. Nuclear Power in Electricity Production ................................................. 87 4.4.3. Development of Nuclear Technology ..................................................... 88 4.5. Hydro Power............................................................................................... 97 4.6. Solar Energy ............................................................................................... 99 4.6.1. Solar Technologies ........................................................................... 99 4.6.2. Market Growth Trends in Solar Energy..................................................103 4.6.3. Solar energy potential in Finland ........................................................105 4.7. Wind Energy ..............................................................................................107 4.7.1. Background Information....................................................................107 4.7.2. Wind Energy Industry and Market Trends...............................................108 4.7.3. Wind Energy potential in Finland ........................................................116 4.8. Bioenergy and Peat .....................................................................................117 4.8.1. Wood Fuels ...................................................................................117 4.8.2. Biomass Conversion .........................................................................117 4.8.3. Biofuels........................................................................................118 4.8.4. Peat resources of Finland..................................................................122 4.9. Bioenergy Potentials in Finland .......................................................................128 4.9.1. Biomass potential of the Finnish forests................................................128 4.9.2. Field biomass potential in Finland .......................................................130 4.9.3. Biogas Potential in Finland ................................................................131 4.10. Ocean Energy ...........................................................................................133 4.10.1. Current Technologies .....................................................................133 4.10.2. Situation in European Countries and Future Development ........................138 4.11. Hydrogen and Fuel Cells ..............................................................................139 4.11.1. Technology ..................................................................................139 4.11.2. Applications and Market Trends in Fuel Cells ........................................140 4.12. Energy Storage..........................................................................................141 4.12.1. Why Energy Storage? ......................................................................141 4.12.2. Current Uses of Energy Storage Technologies ........................................142 4.12.3. Energy Storage Technologies ............................................................143 4.12.4. The Future Potential and Challenges of Energy Storage Technology ............145 4.12.5. Carbon Nanotubes .........................................................................146 4.12.6. Comparison of Different Energy Storage Technologies .............................149 4.13. Carbon (CO2) Capture and Storage (CCS) ..........................................................154 4.13.1. Technologies................................................................................154 4.13.2. Current Status of CCS Technology ......................................................156 4.13.3. Environmental and Economic Benefits.................................................157 4 4.13.4. Market Trends for CO2 Capture Technologies........................................ 158 4.13.5. Barriers to Use and Local Health, Safety and Environmental Risks .............. 159 4.13.6. CCS Use in Different Countries ......................................................... 160 5. DEVELOPMENT OF THE ENERGY MARKETS..................................................................... 161 5.1. Role of third countries in EU internal energy markets ........................................... 162 5.2. Development of Market Regulation .................................................................. 162 5.3. Cooperation of Regulatory Authorities in the Energy Sector .................................... 163 5.4. Functions of the proposed Agency for the Cooperation of Energy ............................. 164 5.5. Long•term supply contracts ........................................................................... 164 6. ENERGY TRANSMISSION AND DISTRIBUTION ................................................................... 165 6.1. Restructuring and Unbundling of Transmission from Trade and Generation ................. 166 6.2. Cooperation of transmission network operators in Europe and Nordic Countries ........... 167 6.3. Challenges in developing power transmission and distribution ................................. 168 6.3.1. Future grids .................................................................................. 169 6.3.2. Distributed generation..................................................................... 170 7. SUMMARY...........................................................................................................