Reference Document on Renewable Energy Sources Policy and Potential

Project no: EIE/06/170/SI2.442662

RES2020 Monitoring and Evaluation of the RES directives implementation in EU27 and policy recommendations for 2020

Deliverables D.2.2 and D.2.3

RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

Table of Contents

1. INTRODUCTION ------3 2. AUSTRIA ------6 3. BELGIUM------22 4. BULGARIA ------34 5. CYPRUS------42 6. CZECH REPUBLIC------52 7. GERMANY ------63 8. DENMARK ------73 9. ESTONIA------83 10. SPAIN ------92 11. FINLAND ------112 12. FRANCE------120 13. GREECE ------129 14. HUNGARY ------141 15. IRELAND ------150 16. ITALY------161 17. LITHUANIA ------174 18. LUXEMBOURG------183 19. LATVIA------191 20. MALTA ------201 21. NETHERLANDS------208 22. NORWAY------216 23. POLAND------220 24. PORTUGAL------230 25. ROMANIA ------242 26. SWEDEN------249 27. SLOVENIA ------258 28. SLOVAKIA ------268 29. UNITED KINGDOM------280 30. REFERENCES------291

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1. INTRODUCTION

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The project RES2020 aims at analysing the present situation in the RES implementation, defining future options for policies and measures, calculating concrete targets for the RES contribution that can be achieved by the implementation of these options and finally examining the implications of the achievement of these targets to the European Economy.. A number of future options for policies and measures will be defined and they will be studied with the use of the TIMES energy systems analysis model, in order to analyze the quantitative effects on the RES development. The results will be combined to provide recommendations of optimal mix scenarios for policy measures, in order to ensure the achievement of the targets.

In this context the present document is the analysis of the present situation, and an attempt to approach the technological potential of Renewable Energy Sources in the EU27. The renewable energy sector is changing rapidly, especially in the sector of policies and measures in the European countries. Therefore this document will be updated continuously during the project and a new version is expected to be published at the end of the project in the spring of 2009.

The data are presented per country in the following pages. A small introduction is given for each country together with key figures on the existing situation. A description of policies and targets follows. Finally a critique on the progress towards the targets is presented and the set of support instruments that exist in the country. The Annexes present the potential data for electricity production and the data for bioenergy potentials that have been collected in the framework of RES2020 for each country.

The electricity potential table presents the data that have been collected • Through EREC and its Members • Through a revision of previous EU funded projects and reports (GreenX, OPTRES) • Through the partners of the project

The data have been discussed in the framework of the REWG of the EnR with the country experts. The table present an estimation of the technical potential that could be utilized as an upper bound by 2010, 2015, 2020 and 2030. As technical potential we are considering: • the future installed capacity of wind turbines without taking in mind financial issues at a "reasonable" wind speed as a possible upper limit in the development of the installed capacity over time. • the future installed capacity of hydro considering technical issues only and a possible upper limit in the development of the installed capacity over time.

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

The data on bioenergy potentials and costs originate from the European IEE project REFUEL. In the REFUEL project three scenarios are considered. A reference scenario (‘baseline’) that describes ‘most likely’ developments under current policy settings. Baseline essentially reflects effects of ongoing trends in food consumption patterns on the one hand and technological progress in food production on the other hand, and it assumes a continuation of current self-reliance levels in Europe’s aggregate food and feed commodities. An extended description of the assumptions driving the Baseline scenario can be fined in (Refuel D6, IIASA). In the other two scenarios, the focus is more on difference in land area becoming available in the future for bio-fuel feedstock production (scenario ‘high’ and scenario ‘low’). Agricultural production intensity, depends on agricultural and environmental policies as well as technological progress, and may vary significantly in different scenarios. In first instance the potentials from the Baseline scenario will be used. Potentials of the high and low scenario can be used for the scenario analysis in workpackage4 of the RES2020 project.

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Land availability Competing land use requirements for Europe’s food and livestock sector as well as land use conversion from agriculture to other uses, in particular built-up and associated land areas, will determine future availability of land for energy crop production. Future food and feed area requirements are the result of developments in food demand combined with changes in production intensity and trade of agricultural products. (Refuel D6, IIASA) Moreover, areas of high nature conservation value are excluded from the potential biofuel crop area.

Potentials When for a region the land available for energy production is known, the potential for each crop type can be determined. The total potential per region however, is much smaller than the sum of the potentials since there competition of available land. This one obviously wants to take into when taking up bio-energy crops in the energy system. When modeling potentials, one should adopt a constraint to avoid double use of land. Assuming the potentials of the crops are homogenously distributed over the region the following constraint should be satisfied: U1/P1 + U2/P2 + Ui/Pi + …. ≤ 1. Where Pi is the potential of the i-th crop and Ui is the real utilization of the i-th crop.

For example, if 30% of the woody crop potential is actually used, the homogenous distribution of the potential implies that 30% of the land is used for woody crops and 70% is still available for the cultivation of other energy-crop types.

However, in general potentials of crops will not be distributed homogenously within a region. Some sub-regions will be more suitable for the growing of specific energy crops than for others, but also the yield of a crop type will be better (and thus have a higher potential) in one sub-region than it will be in another sub-region. So in general, the constraint (equation..) can not avoid that there will be double use of land within a region. The impact of double counting is higher when the potential is less homogenously distributed, which is more likely for a large region. When the region is small enough, the error becomes acceptable. However, splitting a region (for example a country) in very small sub-regions like 1 by 1 km will make your database much too detailed for the scope of the RES2020 project. Therefore regions have to be defined that give an acceptable balance between the level of detail of the model and possible unwanted double use of land. For the REFUEL project, potentials are considered on NUTS2 level. Some (smaller) countries have just one region (Denmark), other (large) countries are split up in a lot of NUTS2 regions (41 regions). For each NUTS2 region, the potential of a crop and average cost are given. Costs and energy use As written above, the costs of a crop include costs for growing, harvesting and cost for truck transport of the energy crops to either a conversion plant or an export unit. In REFUEL, it is assumed that the costs of crop growing and harvesting decline between 0,5% and 2,5% per year depending on crop and year in each NUTS2 region. However, due to the aggregation of the regions done for RES2020 it is possible that the costs on country level increase in time. This is due to the fact that we are using weighted average costs. When the potential in a NUTS 2 region with higher costs increases faster in time than the potential in a region with lower costs, the weighted average cost can increase. This, will however be minimal. Costs for transport are based on transport by truck over a average distance of 100 km. The costs for transport are lower for Eastern European countries but will increase till the more or less stable cost level of Western European countries. Energy use for growing, harvesting or transportation are not taken into account. We assume these are included in demand agriculture or transport sector. Same holds for energy use for production fertilizer, it is assumed that this is included in the chemical industry. Same holds also for the CO2 related to the energy use for growing, harvesting, transportation and fertilizer production.

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2. AUSTRIA

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Austrian energy policy has focused for decades on securing a sustainable and socially-balanced supply of energy. The permanent promotion of renewable energy sources (RES), accompanied by the enhancement of a rational utilisation of energy, is a key strategic aspect of this policy. This long-term energy policy has resulted in a mix of energy sources characterised by a significant importance of RES. With 66% of electricity consumed by RES, Austria is the European leader on RES contribution to gross electricity consumption. The most significant source of renewable energy is hydropower, followed by biomass. With 46% of the Austrian territory being covered by forests, the share of woodland is one of the highest in Europe. Consequently, the use of biomass has been extensive in Austria. Logwood and industrial timber are used in district heating plants, while pellets are increasingly being used primarily in household heating systems. At the same time Austria is one the European leader in Solar Thermal per capita together with Cyprus and Greece.

On November the 5th, 1978 the Austrian voted with 50.47% against the use of nuclear power for electricity production in Austria. The use of nuclear power is therefore prohibited by law.

KEY FIGURES

• The share of RES in total primary energy consumption was of 22.4 % in 2006. With a share of 42.2%, oil remains the most important energy source, followed by RES, natural gas with a share of 21.9% and coal (11.8%). • The share of RES in the gross final energy consumption was 23.3 % in 2005. • The share of RES in the gross electricity production was 57% in 2006. Most of the renewable electricity (RES-E) is produced by hydropower plants (2/3), followed by solid biomass and wind power. • The share of biofuels in the transport in 2006 was 3.54%. • Austria energy dependence on imports amounts to 54.5% in 2005

Source: http://www.statistik.at Austrian Energy Agency

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RES POLICY

The Austrian Green Electricity Act of 2002 was amended in 2006, leading to revised subsidy conditions for new RES power plants. Whereas pre-established statutory provisions still apply to the existing plants, the new law applies to the following power plants: • Small scale hydro power plants (maximum capacity up to 10 MW): Generated (fed-in) electricity with purchase obligation. • “Other green power plants” such as wind-, solar-, geothermal-, biomass-, and high bio share of waste-, landfill gas-, sewage gas- and biogas-: Generated (fed-in) electricity with purchase obligation. • Heat tariff (combined support of electricity and heat) for solid biomass power plants that receive tariffs according to the feed-in tariff of 2002. • Existing or refurbished combined heat and power plants for public district heating supply: support tariff (when refurbishment investment amounts to 50% of the value of a new plant of the total capacity after refurbishment). • Subsidies for investments in “medium scale hydro power plants” (maximum capacity over 10 up to including 20 MW). • Subsidies for investments in new fossil combined heat and power plants.

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 20081 • 34 % share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 20012 • 78.1 % Share of RES on gross electricity consumption by 2010.

Indicative Target set by the European Biofuels Directive from 20033 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National commitments • At least 25 % of RES in primary energy consumption by 2010. • 80 % in 2010 and 85 % in 2020 of RES-E in gross electricity consumption. • According to the Ökostromgesetz from 2002, and from 2006, 4% and 10% of all electricity delivered to end-consumers by the public distribution network in the year 2008, 2010 respectively, should be produced from indigenous biomass combustion and digestion, liquid biomass (i.e. plant oils, except black liquor and sewage), wind, solar and geothermal sources. Besides this target, there is an indicative minimum quota for small hydro (< 10 MWel) of 9% in the Ökostromgesetz 2002.

1 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

2 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

3 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport currently in force, sets targets up to 2010, with indicative targets by 2005.

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• At national level, indicative targets for biofuels have been set at 2.5% in 2005, 4.3% in 2007 and 5.75% in 2008. (The goverment program goes even further: 10 % “alternative fuels” in 2010 and 20 % in 2020). • There is no national target/commitment for heating and cooling.

Technology roadmap • Targets per Technology are planned for the upcoming Ökostromgesetz 2008, but still in negotiation: In the electricity sector, it foresees +700 MW of wind, +700 MW for small hydro, +100 MW for biomass by 2015. • According to government program (2007-2010) a target of 5% cars with alternative powertrains (e85, methane, and hybrid) for the yearly new licenced cars (from around 300,000 p.a.) by 2010 has been announced.

Progress towards the Targets In 2006, the share of renewable energy in gross electricity consumption decreased to 57% compared to 70% in 1997, mainly due to the increase in total electricity consumption. According to the Austrian Energy Agency, 8% of RES electricity (not taking into account small and large hydro) will be reached in 2008). The 10% 2010 target from Ökostromgesetz 2006 probably won’t be reached any more because of stop and go policy (Ökostromgesetz 2006 was no success compared to 2002) The new target discussed for 2015 is therefore 15% including small hydro (the 9% target for small hydro theoretically is reached already - but many small hydro plants opted for market conditions as tariffs became lower than market prices and went out of the Ökostromgesetz framework). A 17% share of RES in national electricity would be achieved in 2015 if the electricity consumption would stay constant from 2008-2015 - but in Austria electricity consumption is rising sharply i.e. about 2-3 % per year. (RES-e share would shrink if no new capacity would be built). Large scale blending of all (nearly 95%) fossil diesel started in October 2005 . 3.2% of all gasoline and diesel was substituted - the EU target was 2% by the end of 2005. In 2006 large scale biodiesel blending (4.7% of the volume-) went on (288,500 to biodiesel for blend and 32,500 to for fleets), further 10,000 plant oil were used by fleets and tractors - 3,54 biogenic energy % contributed to all gasoline and diesel in transport. From October 2007 onwards 4.7 vol.-% bioethanol were blended to gasoline – however no official data available yet.

Support for RES Electricity

Feed in tariff with purchase obligation for electricity Small scale hydro power plants (maximum capacity up to 10 MW), wind-, solar-, geothermal-, biomass-, high biogenous share of waste-, landfill gas-, sewage gas- and bio gas generated (feed- in) electricity with purchase obligation.

Support level Feed-in tariff or Resource Technology [€cents/ kWh] premium? Duration [years that an investor is entitled to support] hydro small 3,8-6,3 feed-in tariff 13 wind onshore 7,8 feed-in tariff 13 gasification 10 years +2 years with a reduced tariff (in the 11th year: biomass 4.05- 16.95 feed-in tariff (biogas) 75%, in the 12th year 50% of the fixed tariff.) PV 32-49 feed-in tariff 12 10 years +2 years with a reduced tariff (in the 11th year: Geothermal 7,30 €c/kWh 75%, in the 12th year 50% of the fixed tariff.) See annex for more detailed info. Tariffs valid from 2007-onwards

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The Austrian Green Electricity Act of 2002 was amended in 2006, leading to revised subsidy conditions for new RES power plants. Key amendments to the old law: • The duration of the guaranteed feed-in tariff depends on the type of installation, but does not exceed 13 years from the start of the installation’s operation. Almost all types of installation will benefit from a purchase obligation at market price minus balancing costs for a further period of 12 years. • Change in the funding system: From 1 January 2007, the former fee on consumption is replaced by a metering fee expressed as a lump sum per metering point, which consumers have to pay per metering point (“Zählpunktpauschale”). The amount of the fee depends on the grid level to which the consumer is connected but is independent of his actual consumption. The fee is fixed by law and amounts to 15 000€ per annum for connection to the high voltage net levels 1 to 4, 3300€ to level 5, 300€ to level 6 and 15€ to level 7. • Change in the organisational structure of the support mechanism: The purchase and selling of green electricity will be carried out in accordance with a licence to be granted by the Ministry for economic affairs and labour. The now single Centre (www.oem-ag.at, formerly there were 3 bodies engaged) will be subject to the control of the national court of auditors. • The new law maintains the current level of the feed-in tariffs for different types of installations installed/substantially modernised or for installations for which administrative approval was granted at the latest by certain cut-off dates (administrative approval by 31.12.2004 for all technologies (except small hydro) and which went online by 30.06.2006 i.e. wind, PV. (except for plants with liquid, gaseous and solid biomass, for which deadline was set for 31.12.2007). • The law newly introduces that prices must be oriented on installations of best available technique and must have in mind the support of installations at the most efficient locations (this was valid for Ökostromgesetz 2002 too). The prices will be fixed for 2006, and reduced subsequently on an annual basis.

Investments Subsidies • For “medium scale hydro power plants” (maximum capacity over 10 up to including 20 MW). For newly erected fossil combined heat and power plants.

Support for Heating and Cooling

Feed in tariff for Heat • Heat tariff (combined support of electric energy and heat) for solid biomass power plants that receive tariffs according to the feed-in tariff legal regulations of 2002. • Support tariff for existing or refurbished combined heat and power plants for public district heating supply.

Investment subsidies: Federal/regional/local schemes on RES-H/C (for private houses mainly by the provincial housing subsidy systems, for private companies mainly by the federal “Umweltförderung im Inland” which is handled by kommunalkredit public consulting (Kpc) http://www.public-consulting.at/en/portal/

• Geothermal: 20 – 40 % of the total costs of investment for private investors • Solar Thermal grants up to 30% of the investment costs. Federal level support for companies. Support is given to private households at province level.

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Resource Support level [%/total investment] Comments Geothermal 20 – 40 % of the total costs of investment For private investors Solar Federal level support for companies. Support is given to Thermal Grants up to 30% of the investment costs. private households at province level.

Private households benefit from grants between € 600 and € 1700 for systems used for domestic hot water needs (dependent on the province). Installations aiming at space heating benefit from grants between € 1100 and € 3325.

The federal government supports buildings in the private sector (eg. Hotels) with grants up to 30% of the investment costs.

The KlimActive programme managed by the Federal Ministry of Environment counts with partnerships in the regions, the industry and the Austrian Energy Agency. The objectives of the programme are to promote RES technologies and Energy Efficiency. It has an important RES-H component to cover also information campaigns, education and training for installers, certification measures. Support to specific projects is implemented at regional level with the support of the Austrian Energy Agency.

Support for Biofuels

Tax exemption • Biodiesel are exempted from the tax on petroleum products (mineral oil tax “Mineralölsteuer”), if used pure there is no VAT reduction. • Biodiesel with a minimum blend of 4.4 Vol.% mineral oil tax reduction by 2.8 ct/l fuel-mix compare to pure fossil fuel (part of this exemption is for desulphurization) - no VAT reduction (stays at 20%). • Bioethanol with a minimum blend of 4.4 Vol.% mineral oil tax reduction by 3.3 ct/l fuel-mix compare to pure fossil fuel (part of this exemption is for desulphurization) - no VAT reduction (stays at 20%).

Total support level (= tax exemption incl. reduction of VAT to be paid) Resource [€cents/litre] start year Biodiesel Exempted from the tax on petroleum products if used pure 80ies

with a minimum blend of 4.4 Vol.% mineral oil tax reduction by 2.8 ct/l fuelmix Biodiesel 7/1/2007 compared to pure fossil fuel

with a minimum blend of 4.4 Vol.% mineral oil tax reduction by 3.3 ct/l fuelmix Bioethanol 10/1/2007 compared to pure fossil fuel

Quota Obligations The European Biofuels Directive was transposed into Austrian law by an amendment to the Fuel Order (Kraftstoffverordnung) in November 2004. Since 1 October 2005, in accordance with Austrian legislation, those subject to the substitution requirement have had to ensure that biofuels replace 2.5% (calculated on the basis of energy content) of all petrol and diesel fuels placed on the market. This will increase to 4.3% on 1 October 2007 and to 5.75% on 1 October 2008.

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Resource Technology Quota in % (per year) Comments 4.3% in October 2007 mineral oil companies and distributors are obliged free choice free choice 5.75% in October 2008 to fullfill the targets

Annex I Key Aspects of the Green Electricity Act Amended in 2006 Annex II. Overview of Feed in Tariffs for electricity Annex III. Austrian Electricity Potentials Annex IV. Austrian Bioenergy Potentials

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

The sole responsibility for the content of this Publication lies with the authors. It does not represent the opinion of the Community. The European Commission is not responsible for any use that may be made of the information contained therein. Drafted in March 2008.

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Annex I Key Aspects of the Green Electricity Act Amended in 2006

The amended Green Electricity Act of 2006 contains several new aspects. The most important ones are summarised below: The amendment constitutes new basic conditions from 2006 to 2011. For small scale hydro power plants the subsidizing system stays basically unmodified, also the 9 %-target for 2008 stays upright. For existing plants, which have been approved before 1.1.2003 and have not been refurbished since then, the feed-in tariffs expire at the end of 2008. However, for the plant segment up to 1 MW the purchase obligation at the market tariff (minus compensation of expenses for control energy) will persist for further 12 years. Also for “other green power plants” the subsidy mechanism, with a purchase obligation according to guaranteed feed-in tariffs for a particular duration, still remains upright. However, the subsidy volume to be allocated every year, is limited: In the years 2007 until 2011 an additional support volume of 17 Mio. EUR will be available, the budget for 2006 is 8,5 Mio. EUR. For this reason green power plants with a yearly support demand in the mentioned amounts can receive a new purchase contract. The support volume is distributed in the following way: • 30% for solid biomass (that means 5,1 Mio. EUR yearly, 2006: 2,55 Mio. EUR) • 30% for biogas (that means 5,1 Mio. EUR yearly, 2006: 2,55 Mio. EUR) • 30% for wind power (that means 5,1 Mio. EUR yearly, 2006: 2,55 Mio. EUR) • 10% for photovoltaics and others such as liquid biomass, hybrid firing and cofiring plants, and others (that means 1,7 Mio. EUR yearly, 2006: 0,85 Mio. EUR) With this budget the share of „other green power“, related to the power consumption of end-users connected to the public grid, should be increased up to 10 % in the year 2010 (according to the legal target). The purchase agreements are being allocated according to a “first-come-first-served” mechanism through the newly created green power settlement center (OeMAG, www.oem-ag.at), in charge since 1.10.2006: It replaces the three “green power balance group representatives”. For each plant segment purchase agreements will be assigned until the additional yearly feed-in tariff volume is exploited. Further the OeMAG has to publicize the still remaining feed-in tariff volume each day. The available feed-in tariff volume will therefore be derived from the support volume: annual support volume + Market value of the contractive green electricity – Expenses of the green electricity settlement center (aliquot share) – Expenses for balance energy (unscheduled elc. flows) (aliquot share) – Technology subsidies of the federal states (aliquot share of 7 Mio. EUR yearly)

= available feed-in tariff volume If the feed-in tariff volume, to be allocated in a particular category, is exploited, the application is postponed to the following calendar year. However if the available funds in a particular category can not be allocated in a specific year, the remaining funds are carried forward into the following year and distributed to the single technology categories according to the key above. After conclusion of the contract, the green power plant has to be put into operation within 24 months, after this time limit feed-in tariffs can be claimed – namely tariffs valid at the date on which the contract with the green power electricity settlement center was concluded: from the beginning of operation for the duration of 10 years; in the 11th year 75% respectively in the 12th year 50% of these tariffs will be compensated, at least the market price according to § 20 of the Green Electricity Act 13th till 24th year: Purchase guarantee to the market tariff according to § 20 of the Green Electricity Act minus expenses for control energy (separate depending on wind energy or other energy sources).

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The feed-in tariffs themselves were re-defined for the year 2006 and 2007 by ordinance and are consequently to be configured degressively. Hereby a total fuel efficiency of at least 60 % is necessary for combined heat and power processes (solid, liquid, biomass, waste with a high biogenous share, biogas, cofiring plants). For photovoltaic plants 50 % of the expenses, which are necessary for the purchase of the energy (i.e. the subsidy volume p.a.), have to be paid by the federal state in which the plant will be erected. For green power plants based on solid biomass, which receive tariffs according to the Green Electricity Act of 2002, the amendment enables a combined support of electric energy and heat. The subsidy mechanism of the amended Green Electricity Act 2006 came into effect on 1. October 2006. The feed-in tariffs themselves are set by ordinance. Currently the following tariffs are in force: • Ordinance on feed-in tariffs 2002 + amendment 2005 (these was an extension of the time by which plants had to be online to get the 2002 tariffs, was done because plant engineering and construction market was overheated because of approval flood by the end of 2004) (valid for plants approved in 2003 and 2004) • Ordinance on feed-in tariffs 2006 (valid for plants contracted in 2006 and 2007) Because of the amendment of the law and the new ordinance, there are currently different schemes in place. The following tables provide an overview of which conditions apply to which plant segment within the small hydro power plants- and other green power plants sector.

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Annex II. Overview of Feed in Tariffs

General Conditions for Small Scale Hydro Power Plants Type of Plant Period of Tariff Validity Tariff Amount

Existing plants until 31.12.2008 Tariffs according to BGBl. II Nr. 508/2002, (approved before amended BGBl. II Nr. 254/2005 (ordinance of the 1.1.2003) feed-in tariffs 2002 + amendment 2005)

For plants up to 1 MW: Market price according to sect. 20 of the Green 12 years from 1.1.2009 onwards Electricity Act minus expenses for control energy (separate for wind energy and other energy sources) in the last calendar year

Recent erection or 15 years after (Restart-)or initial Tariffs according to BGBl. II Nr. 508/2002, refurbishment before operation of newly erected plants amended BGBl. II Nr. 254/2005 (ordinance of the 1.1.2008 or for +50% RAV, 13 years for feed-in tariff 2002 + amendment 2005) +15% RAV

12 years after expiry of the above Market price according to sect. 20 of the Green mentioned tariffs (only plants up Electricity Act minus expenses for control energy to 1 MW EPL) (separate for wind energy and other energy sources) in the last calendar year

Recent erection or Guarantee period according to Tariffs according to ordinance that have to be refurbishment after the new legal regulations (min. enacted before 2008 1.1.2008 10 years)

For plants up to 1 MW: Market price according to sect. 20 of the Green 12 years after expiry of the above Electricity Act minus expenses for control energy mentioned tariffs (separate for wind energy and other energy sources) in the last calendar year

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General Conditions for Other RES Power Plants Type of Plant Period of Tariff Validity Tariff Amount

Old plants (approved before 1.1.2003) 10 years after start of Tariffs according to the legal operation, respectively regulations of the respective federal period of validity according state) to the legal regulations of the respective federal state

12 years after expiry of the Market price according to sect. 20 above mentioned tariffs of the Green Electricity Act minus expenses for control energy (separate for wind energy and other energy sources) in the last calendar year

Power plants, which have been 13 years after start of Tariffs according to BGBl. II Nr. approved by to 2003 or 2004 at first operation 508/2002, amended BGBl. II Nr. instance and have gone on line (started 254/2005 (ordinance of the feed-in operation) by 30.06.2006 (except solid-, tariff 2002 + amendment 2005) liquid biomass, biogas: Operation by Solid biomass: Combined support 31.12.2007) for electric energy and heat possible

Plants, that have been approved after 10 years after start of Tariffs according to BGBl. II Nr. the 31.12.2004 at first instance, or operation. In the 11th years 401/2006 (ordinance of the feed-in respectively that will go on line by the 75%, in the 12th year 50% of tariff 2006). In the 11. and 12. year dates mentioned above and that have the feed-in tariff at least market price according to concluded an agreement by 31.12.2011 the Green Electricity Act sect. 20

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Feed-In Tariffs for RES Power Plants

Energy Cource / Conditions Tariffs in Tariffs in technology Cent/kWh Cent/kWh according to according to ordinance BGBl II ordinance BGBl Nr. 401/2008 II Nr. 508/2002 Contracting 2006 (2007) 2003, 2004 Guarantee period 10 + 2 years 13 years Wind Energy 7,65 (7,55) 7,80 Solid Biomass up to 2 MW 15,70 (15,85) 16,00 (such as wood 2 to 5 MW 15,00 (14,95) 15,00 chips from the 5 to 10 MW 13,40 (13,30) 13,00 forrest, straw) above 10 MW 11,30 (11,10) 10,20 Materials according to SN 17… in minus 25 % of minus 20 % of table 2 of the annex, e.g. bark, saw tariff above tariff above dust Waste with a high Materials according to SN 17…, in biogenous minus 40 % of minus 35 % of table 1 of the annex, e.g. chip board proportion tariff above tariff above waste Materials according to other 5-digit 5,00 (4,90) 2,70 SN in table 1 and 2 of the annex Hybrid Firing proportional proportional Plants Solid biomass (wood chips from the 6,40 (6,30) 6,50 forrest, straw) Materials according to SN 17… in table 2 of the annex, e.g. bark, saw minus 25 % 5,00 Cofiring in caloric dust plants Materials according to SN 17…, in table 1 of the annex, e.g. chip board minus 40 % 4,00 waste Materials according to other 5-digit minus 50 % 3,00 SN in table 1 and 2 of the annex Hybrid firing plants proportional proportional vegetable oils, cold-pressed 13,00 (up to biogenous oils, biodiesel; up to 300 13,00 (12,50) 200kW) kW Liquid biomass Vegetable oils, cold-pressed 10,00 (above biogenous oils, 10,00 (9,50) 200kW) biodiesel; above 300 kW other liquid biogenous fuels 6,50 (6,00) Biogas from up to 100 kW 17,00 (16,95) 16,50 agricultural 100 to 250 kW 15,20 (15,15) 14,50 production (such 250 to 500 kW 14,10 (14,00) 14,50 as sweete corn, 500 to 1000 kW 12,60 (12,40) 12,50 liquid manure) above 1000 kW 11,50 (11,30) 10,30 Biogas from co- minus 30 % of minus 25 % of fermentation of tariff above tariff above waste material 3,00 (up to 1 sewage gas 6,00 (5,95) Sewage- and MW) Landfill Gas 6,00 (above 1 landfill gas 4,10 (4,05) MW)

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Geothermal Energy 7,40 (7,30) 7,00 60 (up to 20 kW up to 5 kW 49,00 (48,00) p p ) Photovoltaics 47 (above 20 5 kWp to 10 kWp 42,00 (40,00) kWp )

above 10 kWp 32,00 (30,00) Small Scale Hydro Power Plants Tariffs in cent/kWh accoring toordinance BGBl II Nr. 508/2002 (erection/refurbishment until 31.12.2007) a) existing old plants (tariff valid until 31.12.2008, phases out without subsitution) b) after refurbishment with at least 15 % electric power a) b) c) output progression c) new buildings, respectively refurbishment with at least 50 % electric power output progression first 1.000.000 kWh 5,68 5,96 6,25 following 4.000.000 kWh 4,36 4,58 5,01 following 10.000.000 kWh 3,63 3,81 4,17 following 10.000.000 kWh 3,28 3,44 3,94 surmounting 25.000.000 kWh 3,15 3,31 3,78 Combined heat and power funding of old biomass plants (approved 2003-2004) thermal support tariff (WT) possible WT=ET/4,4-WP whereas ET = Feed-in tariff accoring to BGBl Nr. 508/2002; WP = 2,6 Cent/kWh (th) for plants up to 10 MW (el); WP = 1,8 Cent/kWh (th) for plants greater than 10 MW (el)

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Annex III. Austrian Electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 819 2778 3396 4015 4458 4902 Maximum Wind onshore MW 819 2778 3396 4015 4458 4902 Maximum Wind offshore MW 0000 0 0 Maximum solar PV TWh 0.01 1.55 4.01 6.48 10.94 15.41 Maximum solar thermal MW 0.00 0.00 0.00 0.00 0.00 0.00 Total Hydro MW 11868 13280 14095 Maximum conventional hydro MW 8300 9116 9245 10060 10073 10085 of which Maximum run of river MW 5337 6153 6282 7097 7110 7122 Maximum Pumped Storage and mixed hydro MW 3568 4163 4850 Maximum Wave power plants TWh 0.00 0.00 0.00 0.00 0.00 0.00 Maximum tide power plants TWh 0.00 0.00 0.00 0.00 0.00 0.00 Maximum geothermal Total Twh 0.00 0.01 0.01 0.01 0.01 0.01 Maximum geothermal dry steam & flash power plants (>180°C) MW Maximum geothermal binary power plants (180°C

The previous table present the data that have been gathered in the framework of the RES2020 project in order to be used in the modelling. The data have been collected • Through EREC and its Members • Through a revision of previous EU funded projects and reports (GreenX, OPTRES) • Through the partners of the project The data have been discussed in the framework of the REWG of the EnR with the country experts.

The tables present an estimation of the technical potential that could be utilized as an upper bound by 2010, 2015, 2020 and 2030. As technical potential we are considering: • the future installed capacity of wind turbines without taking in mind financial issues at a "reasonable" wind speed as a possible upper limit in the development of the installed capacity over time. • the future installed capacity of hydro considering technical issues only and a possible upper limit in the development of the installed capacity over time.

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex IV. Austrian Bioenergy Potentials

TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 13,0 13,0 13,0 19,0 24,0 29,0 33,0 38,0 Cost [€/GJ] 9,1 9,1 9,1 8,8 8,54 8,32 8,12 7,95 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 10,0 10,0 10,0 15,0 19,0 23,0 26,0 30,0 Cost [€/GJ] 8,7 8,7 8,7 8,19 7,79 7,45 7,16 6,91 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 32,0 32,0 32,0 50 63 76 90 103 Cost [€/GJ] 6,0 6,0 6,0 6,0 5,8 5,6 5,5 5,3 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 29,0 29,0 29,0 44,0 56,0 68,0 80,0 92,0 Cost [€/GJ] 4,5 4,5 4,5 4,44 4,29 4,14 4,03 3,92 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 8,0 8,0 8,0 12,0 15,0 18,0 21,0 24,0 Cost [€/GJ] 9,8 9,8 9,8 9,5 9,3 9,0 8,8 8,6 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] 20 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste EEA Report 7 2006 Potential [PJ/a] UP 1 17 18 19 9 according to Wörgetter, M., et al. (2003): Bioenergy in Austria: Potential, Strategies, Success Stories. BLT Wieselburg, Cost [€/GJ] Austrian Biomass Association and Austrian Energy Agency, Vienna, Austria, 2003. Forestry residues Potential [PJ/a] UP 115 151 according to Wörgetter, M., et al. (2003): Bioenergy in Austria: Potential, Strategies, Success Stories. BLT Wieselburg, Cost [€/GJ] Austrian Biomass Association and Austrian Energy Agency, Vienna, Austria, 2003. Wood processing residues EEA Report 7 2006 Potential [PJ/a] UP 48 51 54 5 according to Wörgetter, M., et al. (2003): Bioenergy in Austria: Potential, Strategies, Success Stories. BLT Wieselburg, Cost [€/GJ] Austrian Biomass Association and Austrian Energy Agency, Vienna, Austria, 2003. Municipal solid waste EEA Report 7 2006 Potential [PJ/a] UP 6 7 8 8 8 according to Wörgetter, M., et al. (2003): Bioenergy in Austria: Potential, Strategies, Success Stories. BLT Wieselburg, Cost [€/GJ] Austrian Biomass Association and Austrian Energy Agency, Vienna, Austria, 2003. Wet manures EEA Report 7 2006 Potential [PJ/a] UP 15 16 17 1 according to Wörgetter, M., et al. (2003): Bioenergy in Austria: Potential, Strategies, Success Stories. BLT Wieselburg, Cost [€/GJ] Austrian Biomass Association and Austrian Energy Agency, Vienna, Austria, 2003. Black liquor EEA Report 7 2006 Potential [PJ/a] UP 19 22 24 25 19 according to Wörgetter, M., et al. (2003): Bioenergy in Austria: Potential, Strategies, Success Stories. BLT Wieselburg, Cost [€/GJ] Austrian Biomass Association and Austrian Energy Agency, Vienna, Austria, 2003. Sewage sludge EEA Report 7 2006 Potential [PJ/a] UP 1 according to Wörgetter, M., et al. (2003): Bioenergy in Austria: Potential, Strategies, Success Stories. BLT Wieselburg, Cost [€/GJ] Austrian Biomass Association and Austrian Energy Agency, Vienna, Austria, 2003. Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] EEA Report 7 2006 demolition Potential [PJ/a] UP 1 6 6 6 1 according to Wörgetter, M., et al. (2003): Bioenergy in Austria: Potential, Strategies, Success Stories. BLT Wieselburg, Cost [€/GJ] Austrian Biomass Association and Austrian Energy Agency, Vienna, Austria, 2003. Dry manures Potential [PJ/a] UP Cost [€/GJ]

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3. BELGIUM

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In Belgium, 77% of the primary energy comes from fossil fuels (petroleum, natural gas and coal), 21% from nuclear. The main renewable energy sources (RES) are hydropower and biomass, nevertheless the hydropower potential is relatively limited. Belgium green certificate system aims at giving enough incentives for a further development of renewable energy, however due to the low penalty rates; currently it is more favorable to pay penalties, than to use the certificates. Little trading has taken place so far and Belgium is still far form it RES targets. However, onshore wind generation has grown in recent years: the building of the largest onshore wind farm in Belgium has been recently announced, and the turbines will enter in operation gradually from 2010. Once the wind farm is complete it will produce 100-140 GWh annually.

KEY FIGURES • The share of RES in total primary energy consumption was of 2.11 % in 2006. • The share of RES in the gross final energy consumption was 2.2 % in 2005. • The share of RES in the gross electricity production was 2.98% in 2006. • The share of biofuels in the transport sector in 2006 was 0.01%. • Belgium energy dependence on imports amounts to 80% in 2005.

Technology Specific Figures • For the Walloon region, present biomass resources are estimated at about 700 000 toe. The current utilisation reaches 300 000 toe, principally by incineration of waste, utilisation of by-products in wood industries and space heating with wood logs in domestic stoves. • Wind energy represents only 0.3% national electricity production, but the Belgium Government plans to supply 3% of national electricity needs by wind energy by 2012.

RES POLICY Targets differ between the three regions of the country (Flanders, Wallonia, and Brussels) and national energy policies are implemented separately, leading to differing supporting conditions and separate regional markets for green certificates.

RES TARGETS Mandatory targets set by the newly proposed RES Framework Directive from 20084

4 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

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• 13% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 20015 • 6 % Share of RES on gross electricity consumption by 2010

Indicative Target set by the European Biofuels Directive from 20036 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National commitments • The target for renewable electricity is 7% by 2007 in the Walloon region, 6% by 2010 in Flanders and 2.5% by 2006 in Brussels. • There is no national target/commitment for heating and cooling.

Technology Roadmap • The Walloon Region aims at reaching a production of 5.550 GWh heat from wood by 2010. Regarding bio-methanization, the Walloon region aims at an energy production of 100 GWh to 225 GWh of heat production by the year 2010. • The Walloon region aims at reaching a production of electricity from wind of 370 GWh (approximately 150 windmills) by 2010 (of windmills installed on the Walloon territory). • Flanders region aims at a production capacity of electricity from wind of about 1,000 GWh by 2010. A memorandum of the Flemish government has been published in May 2006 aiming to reach this objective through accelerating measures.

Progress towards the targets • With an RES-e share of 2.98% in 2006 the national target of 6% is still far away.

MAIN POLICY INSTRUMENTS

Support to RES Electricity

3 sets of measures are key to the Belgian approach to RES-e:

Quota obligations Quotas have been set (obligation for all electricity suppliers to supply a specific proportion of RES- e) and guaranteed minimum prices or ‘fall back prices’ have been foreseen. In all three regions, a separate market for green certificates has been created. Due to the low penalty rates which will increase over time, currently it is more favorable to pay penalties, than to use the certificates. Little trading has taken place so far.

5 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

6 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport currently in force, sets targets up to 2010, with indicative targets by 2005.

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Resource Penalty level [€cents/ kWh] Quota in % (in year) Comments WALLONIA and BRUSSEL: WALLONIA : WALLONIA : electricity suppliers All RES-E 100 euros for each missing GC 3% 2003 - increase of 1 % a year till must pay to Wallonia’s energy technologies FLANDERS : 2012 authority for each GC missing at 125 € for each missing GC BRUSSEL : the end of each accounting period 2 % in 2004 BRUSSEL : electricity suppliers 2,25 % in 2005 must pay to Brussels’s energy 2,5 % in 2006, 2007 and 2008 authority for each GC missing at increase of 0,25 % after 2008 the end of each accounting period FLANDERS : FLANDERS : ......

Green certificates Price Currently (updated as of 4th February 2008) 1,615 green certificates without GoOs are being traded with an average price of 108.58 Euros/MWh, and 9,194 green certificates with GoOs were traded at the average price of 110.81 Euros/MWh. The statistics show that in January 2007 an overall volume of 45,743 green certificates without GoOs were traded with an average price of 108.99 Euros/MWh. The total number of green certificates with GoOs in this period reached 45,383 with an average price of 108.24 Euros/MWh. CWAPE (Commission Wallonne pour l’Energie), energy regulator in the Walloon region of Belgium, has recently published the green certificates market prices and volumes for the fourth quarter of 2007 - covering the months from October to December. The volume of green certificates traded was 154,087. The third quarter of 2007 ended with the highest volume traded since 2004, reaching 227,009. The average price for the fourth quarter was 88.16 Euros/MWh. The price of certificates traded in the previous quarter, from July to September, was 91.46 Euros/MWh

Resource Support level [€cents/ Duration [years that an Comments kWh] investor is entitled to support] biomass WALLONIA : WALLONIA : WALLONIA : 1 GC = 456 kg CO2 avoided - Market price : 90 €/GC 15 years maximum 2 GC / MWh BUT reduction of the Maximum price : price of BRUSSEL : amount of green certificates during the last 5 penalty = 100 €/GC 10 years years calculated on the rentability of the Minimum price : 65 €/GC investment in order to insure a 12% VAT during a period calculated on 65 €/GC = regional minimum price on basis of a the rentability of the convention with the grid operator investment (maximum 15 BRUSSEL : 1 GC = 217 kg CO2 avoided - years) OR 20€/MWh in any maximum 2 GC/MWh for installations > 1 MWe case (no maximum under) - 5 GC/MWh for BRUSSEL : biomethanisation Market price : ??? (no transaction yet) ALL THREE : 20 €/MWh = TSO undertake to Maximum price : price of buy any green certificate for biomass electricity penalty = 100 €/GC at this price Minimum price : 20€/MWh

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Resource Support level [€cents/ Duration [years that an Comments kWh] investor is entitled to support] wind WALLONIA : WALLONIA : WALLONIA : Market price : 90 €/GC 15 years 1 GC / MWh BUT reduction of the amount of Maximum price : price of BRUSSEL : green certificates during the last 5 years penalty = 100 €/GC 10 years calculated on the rentability of the investment Minimum price : 65 €/GC iun order to insure a 12% VAT during a period calculated on 65 €/GC = regional minimum price on basis of a the rentability of the convention with the grid operator - 50 €/MWh = investment (maximum 15 TSO undertake to buy any green certificate for years - usually 10 years) OR onshore wind electricity at this price 50 €/MWh BRUSSEL : 1 GC / MWh BRUSSEL : No market price : ??? (no ALL THREE : 50 €/MWh = TSO undertake to transaction yet) buy any green certificate for wind electricity at Maximum price : price of this price penalty = 100 €/GC Minimum price : 50€/MWh

Hydro WALLONIA : WALLONIA : WALLONIA : Market price : 90 €/GC 15 years 1 GC / MWh BUT reduction of the amount of Maximum price : price of green certificates during the last 5 years penalty = 100 €/GC calculated on the rentability of the investment Minimum price : 65 €/GC iun order to insure a 12% VAT during a period calculated on 65 €/GC = regional minimum price on basis of a the rentability of the convention with the grid operator - 50 €/MWh = investment (maximum 15 TSO undertake to buy any green certificate for years) OR 50 €/MWh onshore wind electricity at this price BRUSSEL : BRUSSEL : 1 GC / MWh No hydro Minimum price : 50€/MWh ALL THREE : 50 €/MWh = TSO undertake to buy any green certificate for hydro electricity at this price wind No market price (no market), 20 years 1 GC = 1 MWh only a minimum price of 107 Federal minimum price on basis of a convention €/MWh during 10 years for with the TSO the first 256 MW installed - 90 €/MWh during 20 years for the rest of the installation and for all the power during the last 10 years solar WALLONIA : WALLONIA : WALLONIA : Market price : 90 €/GC 15 years 7 GC / MWh from 0 to 5 kWp - 5 GC/MWh >5 Maximum price : price of BRUSSEL : kWp till 7 kWp - 1 GC/kW > 7 kWp penalty = 100 €/GC 10 years 65 €/GC = regional minimum price on basis of a Minimum price : 65 €/GC convention with the grid operator - during 15 years OR 150 BRUSSEL : €/MWh 7,28 GC/MWh from 0 to 20 m² - 5,46 GC/MWh BRUSSEL : > 20 m² till 60 m² - 3,64 GC/MWh > 60 m² No market price : ??? (no transaction yet) ALL THREE : Maximum price : price of 150 €/MWh = TSO undertake to buy any green penalty = 100 €/GC certificate for PV electricity at this price Minimum price : 150€/MWh

Source:EDORA

Investment support schemes for RES-e

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Investment subsides for all RES-e technologies and additional support for solar PV.

Resource Support level [%/total investment] Comments All RES-E WALLONIA : WALLONIA : technologies 40 % of eligible investment e.g. 13 % on average for (see the rules of the Community guidelines on state aid for wind energy environmental protection OJEC, 2001/C27/03, 3.2.2001) till around 37 % for P.V. BRUSSEL : (indicative figures) investment state aid for energy economy : 20 % of total investment + specific aid concerning RE for the need of the building : 40% of total investment (maximum 200.000 €/building and per year + European rule "de minimis")

Additional WALLONIA : investment for private person : 20% of total investment with a maximum of 3500 € support for / PV system solar BRUSSEL : for private person 50 % of total investment with a maximum of 3000 € / PV system

Fiscal Incentives

RES-e technologies benefit from a tax deduction

Resource Support level [% deduction from taxable profits] Comments

All RES-E tax deduction of 13,5 % for all investment on technologies equipment in order to reduce energy consumption Additional primes by the different regions are tax reduction of 40% with a maximum of 1280 € for cumulative All RES-E investment in 2006 (exercise 2007) and 3.380 EUR in Private person : for PV technologies 2007 (2008) Companies : for all RES and CHP installation

Others

Resource Technology Support level [Unit or %] WALLONIA : 50% of the study for pre-feasibility (wind measurement) with a Wind onshore maximum of 5.000 € / site Biomass digestion WALLONIA : 50 % of the study for pre-feasibility with a maximum of 2500 €

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Support for RES Heating and Cooling

Renewables for heating and cooling are mainly support by investment subsidies and fiscal incentives in Belgium. As of 2006, the Walloon government awarded grants for the installation of micro-cogeneration systems and high-efficiency wood-burning furnaces and heating boilers.

Investment Subsidies

Resource Technology Support level [%/total investment] All RES-HC WALLONIA : technologies 40 % of eligible investment (see the rules of the Community guidelines on state aid for environmental protection OJEC, 2001/C27/03, 3.2.2001) BRUSSEL : investment state aid for energy economy : 20 % of total investment + specific aid concerning RE for the need of the building : 40% of total investment (maximum 200.000 €/building and per year + european rule "de minimis")

Biomass Combustion WALLONIA : maximum 50 % of total investment small scale from 250 € to 3500 € depending on - maximum investment of 25.000 € furnace the power of the boiler, the system for loading (manual or automatic), the nature of biomass used (wood or crops) and the nature of the investor (private or public) Geothermal Heat pump WALLONIA : 75 % of the invoice WALLONIA : maximum 1500 € for BRUSSEL : 50% of the invoice the heating of a new building and 750 € for water heating of any building BRUSSEL : maximum 5000 € for the heating of a building and 2500 € for water heating Solar Thermal WALLONIA : 1.500 € for all WALLONIA : maximum 6.000 € + installation from 2 m² to 4 m² + 100 possibility t be combined with other € / m² for additional surface incentive if total amount of the aid BRUSSEL : 50% of the invoice is maximum 75% of total investment BRUSSEL : maximum 6000 € for the heating of a building and 300 € for water heating

Fiscal Incentives

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RES H&C technologies benefit from a tax deduction from taxable profits.

Resource Support level [% deduction Comments from taxable profits] All RES-HC Tax deduction of 13,5 % for all technologies investment on equipment in order to reduce energy consumption All RES-HC Tax reduction of 40 % of total maximum 3.380 EUR in 2007 (exercise 2008) technologies investment (invoice during the Private person : for the following investment : fiscal exercise) - replacement for a old boiler and maintenance of a boiler - solar water heating system - geothermal Companies : for all RES and CHP installation

Support for Biofuels

Quota Obligations For the production of bio ethanol, a yearly quota of 250 million litres has been allocated on October 2006 and until 2013, to 3 companies. For the production of bio diesel, the Belgian Government decided to allocate production quotas with reduced excise duties to three Flemish and one Walloon companies. These four producers must be ready to deliver adequate bio diesel supply to the Belgian market from September 1 st , 2007

Resource Quota in % (per year) 2% 2005 Biofuels 5.75% in 2010

Tax exemption The Act of 10 June 2006 concerning biofuels reduces the excise duties on diesel oil containing at least 3.37 % biodiesel and on gasoline containing at least 7 % ethanol of non-chemical nature. Furthermore, this Act allows the regional public transport companies to use a higher exempted percentage of biofuels. The Royal Decree of 10 March 2006) fixes the general conditions for the exemption of excise duties for pure rapeseed .

Total support level (= tax exemption incl. Maximum start year End year Duration Resource reduction of VAT to be paid) [€cents/litre] amount per [years of year eligible support (in case of entitled] tender system) biodiesel About 35c€/l (in fact tax on fossil diesel has been 380 000 m3 Nov. 2006 2013 almost 7 increased and biodiesel exempted, but only for blend lower than 5%) ethanol About 62 c€/l (same principle as for biodiesel. 250 000 m3 Oct, 2007 2013 6 Increased tax on gasoline and no tax on ethanol if blended at 7%) pure about 35 c€/l (full tax exemption upon certain strict April 2006 unlimited plant oil conditions) (until law is changed)

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Call for Tenders

A federal call for tenders will be used to market: • Biodiesel: 286.000 m3 from 1 November 2006 until 30 September 2007 • Biodiesel: 2.279.000 m3 from 1 October 2007 until 30 September 2013 • Ethanol: 1.485.000 m3 from 1 October 2007 until 30 September 2013

Annex I. RES Electricity Potentials Annex II RES Bioenergy Potentials

Sources European Commission Factsheets by Country http://ec.europa.eu/energy/energy_policy/facts_en.htm Member States Reports in the framework of the Directive 2001/77/EC on renewable electricity http://ec.europa.eu/energy/res/legislation/electricity_member_states_en.htm Member States Reports in the framework of the Directive 2003/30/EC on biofuels http://ec.europa.eu/energy/res/legislation/biofuels_members_states_en.htm EDORA http://www.edora.be/ ODE Vlaanderen http://www.ode.be/ Valbiom, Belgium http://www.valbiom.be/ EurObserv’er Barometer http://www.energies-renouvelables.org/observ-er/sig/eufores/sig.asp

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

The sole responsibility for the content of this publication lies with the authors. It does not represent the opinion of the Community. The European Commission is not responsible for any use that may be made of the information contained therein. Drafted in March 2008.

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Annex I RES Electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 167 1119 1952 3034 6086 Maximum Wind onshore MW 167 782 1158 1534 2286 Maximum Wind offshore MW 0.0 337.0 794 1500 3800 Maximun Solar PV TWh 0.58 Maximum solar thermal MW 0 Total Hydro MW 1497 1500 1500 Maximum conventional hydro MW 109 112 112 of which Maximum run of river MW 109 122 122 Maximum Pumped Storage and mixed hydro MW 1388 1388 1388 Maximum Wave & Tide power plants TWh 0.15 Maximum geothermal conventional power plants MW 0 Maximum geothermal hot dry rock power plants MW 0 Maximum biomass power plants (conventional+CHP) TWh 6.23 Maximum biogas power plants (conventional+CHP) TWh 3.18 Maximum Bio waste power plants (CHP) TWh 7.25

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bioenergy Potentials

TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 6,0 6,0 6,0 10,0 12,0 15,0 18,0 21,0 Cost [€/GJ] 8,2 8,2 8,2 7,95 7,7 7,48 7,28 7,1 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 3,0 3,0 3,0 5,0 6,0 7,0 9,0 10,0 Cost [€/GJ] 8,5 8,5 8,5 8 7,6 7,26 6,98 6,73 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 8,0 8,0 8,0 13 17 22 28 34 Cost [€/GJ] 5,8 5,8 5,8 5,4 5,1 4,8 4,6 4,4 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 8,0 8,0 8,0 13,0 17,0 21,0 26,0 32,0 Cost [€/GJ] 3,7 3,7 3,7 3,46 3,25 3,08 2,95 2,83 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 2,0 2,0 2,0 4,0 5,0 6,0 7,0 8,0 Cost [€/GJ] 8,4 8,4 8,4 8,1 7,9 7,7 7,5 7,3 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] 32 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste 9 according to Perez, P.S., et al. (2006): The role of renewable energy technologies in securing electrical supply in Belgium. K.U. Leuven - Potential [PJ/a] UP 11 12 13 ESAT/ELECTA, March 2006. Cost [€/GJ] BIONET 2 (2007): Biomass fuel trade in Europe. Summary Report VTT-R-03508-07, VTT, Finland, March 2007, p. 11. Forestry residues 4 according to Perez, P.S., et al. (2006): The role of renewable energy technologies in securing electrical supply in Belgium. K.U. Leuven - Potential [PJ/a] UP ESAT/ELECTA, March 2006. Cost [€/GJ] BIONET 2 (2007): Biomass fuel trade in Europe. Summary Report VTT-R-03508-07, VTT, Finland, March 2007, p. 11. Wood processing residues Potential [PJ/a] UP 9 10 10 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste EEA Report 7 2006 Potential [PJ/a] UP 17 18 19 1 according to Perez, P.S., et al. (2006): The role of renewable energy technologies in securing electrical supply in Belgium. K.U. Leuven - Cost [€/GJ] ESAT/ELECTA, March 2006. Wet manures Potential [PJ/a] UP 22 24 25 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP 6 6 6 EEA Report 7 2006 Cost [€/GJ] Sewage sludge Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] demolition Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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4. BULGARIA

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Due to the lack of support mechanisms, in the last years, renewable energy sources (RES) in Bulgaria are not broadly developed. However, good potential exist for biomass, wind and geothermal energy. Solar potential exists in the East and South of Bulgaria. Bulgaria has recently adopted a new feed-in tariff, its effective implementation with measures to non-discriminatory access to the power grid and simplified licensing procedures will be the basis for a market uptake of RES in the country. Currently, the legal framework to allow non-discriminatory access to the power grid for independent renewable energy producers remains too vague to increase investor confidence. However, various wind farms however are at planning stage.

KEY FIGURES • The share of RES in total primary energy consumption was of 4.5% in 2006. The share of RES in the gross final energy consumption was 9.4 % in 2005. • The share of RES in the gross electricity production was 11.8% in 2005 (thanks to the contribution of hydropower, currently, almost the only source of RES-e in Bulgaria). • The share of biofuels in the transport sector in 2006 was 0 %. • Bulgaria energy dependence on imports amounts to 70 % in 2005.

RES POLICY A new Renewable and Alternative Energy Sources and Biofuels Act were adopted in June 2007.

Mandatory targets set by the newly proposed RES Framework Directive from 20087 • 16 % share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 20018 • 11 % Share of RES on gross electricity consumption by 2010

Indicative Target set by the European Biofuels Directive from 20039 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National Commitments • The goal of Bulgaria’s National Programme on Renewable Energy Sources is to significantly increase the share of non-hydropower RES in the energy mix. The National long-term programme for support of RES utilization 2005-2015 aims at achieving a 6% RES share in 2015. • There is no national target/commitment for heating and cooling.

Progress towards the Targets Bulgaria’s RES-e share in gross electricity consumption increased from 7% in 1997 to 11.8 in 2005. Large-scale hydro power is currently the main source of RES-e.

7 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

8 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

9 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport currently in force, sets targets up to 2010, with indicative targets by 2005.

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Support for RES Electricity

Feed in tariff In 2007 Bulgaria introduced new feed in tariff for Renewable Electricity. The State Energy and Water Regulatory Commission has assumed the commitment to purchase alternative energy at a higher tariff and for the duration of 12 years. Suppliers refusing to accept renewably-produced electricity would be fined up to 500 000 (euros) in response to renewable power producers' reports of difficulty in grid connection.

Duration [years Feed-in that an Support level tariff or Start Resource Technology investor Comments [€cents/ kWh] premiu year is entitled m? to support] depending on the Wind onshore 120 лв./ МWh. feed- in 2006 12 years type of installation and capacity. New wind plants in operation after 01.01.2006 Wind without capacity limitations:• With working hours per year up to 2250 175 лв./ МWh. New wind plants in operation after 01.01.2006 Wind without capacity limitations:• With working hours per year over to 2250 156 лв./ МWh.

Depends on the Solar PV installed capacity up to 5kW feed in 2006 12 years installed capacity 782 лв./ МWh. With installed capacity over Solar PV feed in 2006 12 years 5kW 718 лв./ МWh. Small Hydropower up to 10 MW 80.00 лв./МWh. feed in 2006 12 years plant up to 10 MW

Biomass for between 162 and producing 215 лв./ МWh., electricity depending on the art of used biomass. Heat power produced by 67 – 149лв./MWh,

CHP depending on the installation producer.

The RES Act establishes a period of 12 years. The exchange rate is following - 1 Euro - 1,9583 Bg leva. VAT is excluded from the above prices. Source: Ministry of Economy

The New Energy Act stipulates that producers of energy from RES will be able to conclude contracts with the public supplier of energy i.e. the National Electricity Company for a period of 12 years. This is valid until 2010. After this period the Ministry of Economy and Energy is obliged (within one year period - end of 2011) to elaborate and submit for approval a new market mechanism for price-settings.

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Support for RES heating and cooling

Investment subsidies Bulgarian Energy Efficiency and Renewable Energy Credit Line established investment subsidies for RES H&C technologies.

Resource Support level [%/total investment] RES Heating technologies 20 per cent grant

Support for Biofuels

The national long-term programme for the use of biofuels in transport 2007-2020 has been recently drafted.

Quota Obligations

Resource Quota in % (per year) Biofuels 2% in 2008 3.5% in 2009 5.75% in 2010 8% in 2015 10 % in 2020

Tax exemption for biofuels Biofuels, if not blended with other fuels, have been exempt from excise tax since 2005. (note: not all types of bioethanol are included). There are also plans for the compulsory mixing of biofuels with liquid fuels of petroleum origin to be carried out at tax warehouses licensed under the Excise Duties and Tax Warehouses Act.

Support for all RES

In order to promote RES, Bulgaria is currently implementing the Bulgarian Energy Efficiency and Renewable Energy Credit Line (BEERECL). RES projects are eligible for a 20% grant. Loans worth more than EUR 12.8 million have already been granted.

Annex I. RES electricity Potentials Annex II RES Bioenergy Potentials

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Sources

European Commission Factsheets by Country http://ec.europa.eu/energy/energy_policy/facts_en.htm Member States Reports in the framework of the Directive 2001/77/EC on renewable electricity http://ec.europa.eu/energy/res/legislation/electricity_member_states_en.htm Member States Reports in the framework of the Directive 2003/30/EC on biofuels http://ec.europa.eu/energy/res/legislation/biofuels_members_states_en.htm Energy Efficiency Agency. Ministry of Economy and Energy http://www.seea.government.bg

Black Sea Regional energt Centre http://www.bsrec.bg/

In the framework of the EU con –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

38 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

Annex I. RES electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 WindTotal MW 10 245 650 1150 3450 Maximum Wind onshore MW Maximum Wind offshore MW 0.0000 0 0 Maximum solar PV MW Maximum solar thermal MW Total Hydro MW 1950 2040 2470 2710 Maximum conventional hydro MW 1380 1470 1690 1720 of which Maximum run of river MW 40 50 60 90 Maximum Pumped Storage hydro MW 570 570 780 990 Maximum Wave power plants TWh Maximum tide power plants TWh Maximum geothermal conventional power plants MW Maximum geothermal hot dry rock power plants MW Maximum biomass power plants (conventional+CHP) TWh Maximum biogas power plants (conventional+CHP) TWh Maximum municipal waste power plants (CHP) TWh Maximum industrial waste power plants (CHP) TWh

The previous tables present the data that have been gathered in the framework of the RES2020 project in order to be used in the modelling. The data have been collected • Through EREC and its Members • Through a revision of previous EU funded projects and reports (GreenX, OPTRES) • Through the partners of the project The data have been discussed in the framework of the REWG of the EnR with the country experts.

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 15,0 15,0 15,0 28,0 35,0 43,0 48,0 53,0 Cost [€/GJ] 6,3 6,3 6,3 6,36 6,46 6,65 6,96 7,42 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 59,0 59,0 59,0 113,0 144,0 175,0 194,0 214,0 Cost [€/GJ] 7,2 7,2 7,2 6,91 6,69 6,52 6,4 6,34 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 140,0 140,0 140,0 272 352 431 485 538 Cost [€/GJ] 3,2 3,2 3,2 3,0 2,9 2,8 2,8 2,8 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 116,0 116,0 116,0 225,0 291,0 357,0 401,0 445,0 Cost [€/GJ] 2,0 2,0 2,0 1,89 1,83 1,81 1,84 1,92 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 59,0 59,0 59,0 112,0 143,0 174,0 193,0 213,0 Cost [€/GJ] 5,4 5,4 5,4 5,3 5,1 5,0 5,0 4,9 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP 5 12 24 36 48 http://bioenergy-in-motion.com/index.php?id=3&sId=15 ACCESS (2006): Accelerated Penetration of Small-Scale Biomass and Solar Technologies - Maps Cost [€/GJ] and databases on the biomass potential. Intelligent Energy Europe, EC, 2006. Forestry residues ACCESS (2006): Accelerated Penetration of Small-Scale Biomass and Solar Technologies - Maps Potential [PJ/a] UP 13 18 23 28 33 38 44 and databases on the biomass potential. Intelligent Energy Europe, EC, 2006. Cost [€/GJ] http://bioenergy-in-motion.com/index.php?id=3&sId=15 Wood processing residues ACCESS (2006): Accelerated Penetration of Small-Scale Biomass and Solar Technologies - Maps Potential [PJ/a] UP 1 2 3 4 4 and databases on the biomass potential. Intelligent Energy Europe, EC, 2006. Cost [€/GJ] Municipal solid waste Georgiva, V. (2007): Biomass energy potential in Bulgaria. Ministry of economy and energy Bulgaria, Potential [PJ/a] UP 1 2 2 2 JI and biomass cooperation, Leipzig, Germany, 6 March 2007. Cost [€/GJ] Wet manures Georgiva, V. (2007): Biomass energy potential in Bulgaria. Ministry of economy and energy Bulgaria, Potential [PJ/a] UP 1 2 3 JI and biomass cooperation, Leipzig, Germany, 6 March 2007. Cost [€/GJ] Black liquor Potential [PJ/a] UP Cost [€/GJ] Sewage sludge Georgiva, V. (2007): Biomass energy potential in Bulgaria. Ministry of economy and energy Bulgaria, Potential [PJ/a] UP 0,4 0,4 JI and biomass cooperation, Leipzig, Germany, 6 March 2007. Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP Cost [€/GJ] demolition Potential [PJ/a] UP Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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5. CYPRUS

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Cyprus has no indigenous sources of energy and at the moment, it is almost entirely dependent on imported energy. In year 2006, imports of oil products, coal and pet coke for home consumption, amounted to 580 million Euros, representing approximately 18% of the country’s domestic imports. Energy is therefore, of vital importance to the island’s economy. The energy consumption in Cyprus is predominantly oil-based and amounts to 92.6% of the total energy consumption. Other forms of commercial energy used are Solid Fuels (coal and pet coke) for the production of cement, amounting to 5.9 % of the total energy consumption. The remaining 1.5% is mainly solar energy and at the moment is the only substantial contribution of renewable energy sources, in the country’s final energy consumption. The high costs of imported energy are a burden on the economy of the country. Renewable energy sources (RES) constitute the only indigenous source of energy in Cyprus capable of making a significant contribution to the island’s energy balance. However, until 2005, measures that supported renewable energy production, such as the New Grant Scheme, were not very ambitious and targets are not being met. In 2006, a New Enhanced Grant Scheme was agreed upon and in 2007 feed in tariffs for RES-e were set. Cyprus is one of the leading countries in the use and construction of solar water heating systems. 90% of households are equipped with solar water heaters and 53% of hotels have installed large solar water heating systems. According to ESTIF (European Solar Industry Federation), Cyprus has the larger number of solar collector installations per capita.

KEY FIGURES • The share of RES in total primary energy consumption was of 1.76% in 2006 (with important contribution of solar thermal). • The share of RES in the gross final energy consumption was 2.9 % in 2005. • The share of RES electricity generation is minimal 0.03 % in 2006 (all from PV). • The share of biofuels in the transport sector in 2006 was 0. • Cyprus energy dependence on imports amounts to 96 % in 2005.

RES POLICY In order to promote the uptake of RES, the Cyprus government adopted a framework for support measures: Action Plan for the Promotion of Renewable Energy Sources, 2002-2010, which is currently is considered to be revised The Action Plan provides the creation of a special financing mechanism to increase the exploitation of renewable energy sources. The Action Plan sets targets for the increase of the utilisation/contribution of the country’s main renewable energy sources, to the total electricity consumption and overall to the total energy balance. It includes a financial mechanism to encourage renewable energy sources and proposes strategies to eliminate administrative obstacles. The Action Plan covers the period 2002 – 2010.

RES TARGETS Mandatory targets set by the newly proposed RES Framework Directive from 200810 • 13% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200111 • 6 % Share of RES on gross electricity consumption by 2010

10 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

11 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010. 43 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

Indicative Target set by the European Biofuels Directive from 200312 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National commitments • The Action Plan for the Promotion of RES determines that the contribution of RES to the total energy consumption of Cyprus should rise from 4.5% in 1995 to 9% in 2010. • As an indicative target, 1% biofuel by energy content in 2005 has been set. • There is no national target/commitment for heating and cooling.

Progress towards the Targets At present, there is a 6% target for RES electricity contribution, by the year 2010, which is considered to be attainable. It is envisaged that by proper implementation of the relevant legislation that will reduce the administrative obstacles, the target will be achieved. The target for biofuels of 1% by the end of 2005 was not met. The use of biofuels in Cyprus was still at 0% in 2006.

Support for RES electricity

In January 2006, Cyprus introduced a new scheme13, which allows investors to benefit from subsidies on running investments and no longer on initial investments. This leads therefore on higher tariffs (for the duration of 15 years):

Feed in tariff Feed-in Duration [years tariff or that an investor is Resource Technology Support level [€/ kWh] premium? Start year entitled to support] hydro small 0.0632 €/ kWh feed in 2007 -

wind small (up to 30kW) 0.0632 €/ kWh feed-in 2007 Years*

Biomass and 0.0632 €/ kWh feed-in 2006 15 years biogas Capacity up to 20 PV kW connected to the 0.148-0.319 €/ kWh ** feed-in 2007 15 years network

Source: Ministry of Industry, Commerce and Tourism

* This situation applies for 5 years from the wind turbine’s commissioning. For the next 5 year period, the feed-in price payable to the owner depends on the turbine’s average performance over the first five years of its operation

**(PV) Small photovoltaic systems. Maximum capacity 20 KW, connected to the grid.

Option A: • for households and other entities and enterprises not engaged in economic activities the grant is set to 55% of eligible costs. The maximum amount of grant €64,926.85. • For enterprises the grant is 40% of eligible costs. The maximum amount of grant is €47,840.84.

Subsidy 20.5 euro cents /KWh - 6.32 euro cents= 14.18 euro cents/KWh.

12 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

13 http://www.cie.org.cy/sxediaxorigioneng.htm 44 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

Option B: • for households and other entities and enterprises not engaged in economic activities 0% grant and increased subsidy: 38.27 euro cents/KWh- 6.32 euro cents= 31.95 euro cents /KWh • For enterprises 0% grant and increased subsidy: 33.49 euro cents/KWh - 6.32 euro cents = 27.17 euro cents /KWh

Investment Subsidies

Investment subsides for all RES-e technologies:

Support level [%/total Resource Technology investment] Comments PV Small up to 20 KW 55% of eligible costs for households and 40% for companies

For Small and Medium Size (SMS) enterprises, the grant will be 30% in the form of regional aid plus de minimis aid. In any case the total amount from both forms of aid should 40% of eligible costs Hydro small not exceed 40% of eligible costs. The for companies maximum amount of grant is set to €102,516. Price for generated KWh is 6.32-euro cents. No running support is offered.

For enterprises 40%, Maximum amount of grant €41,006.43 per unit. For natural persons Wind turbines of 40% (for companies) to 55%, Maximum amount of grant €51,258.00 rated power 55 % (for households) per unit. The produced electricity is sold at wind <30kW or of the eligible costs for 6.32 euro cents/KWh to the Electricity windmills for water the purchase and Authority of Cyprus . No operating support pumping installation offered.

Maximum amount of grant €17,086.00 per unit. Windmills. For For natural persons 55%, maximum amount of Wind Windmills enterprises 40%, grant €25,629.00 per unit.

From Biomass: Systems up to 5MW. Subsidy 9.48 up to 12.3 euro cents / KWh Electricity according to thetype and size of the installation production from Biomass Biomass and and Biogas from From Biogas: Systems up to 600ΚW. Biogass Spaces Sanitary Subsidy 6.83 up to 9.1 euro cents / KWh Burial of Litter according to the type and size of the installation

Small hybrid/stand alone PV systems (not connected to the grid), of up to 20KWp capacity. • for households and other entities and enterprises not engaged in economic activities the grant is set to 55% of eligible costs. The maximum amount of grant €64,926.85. • for enterprises the grant is 40% of eligible costs. The maximum amount of grant is €47,840.84

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Desalination using RES • For Small and Medium Size (SMS) enterprises, the grant will be 30% in the form of regional aid plus de minimis aid. In any case the total amount from both forms of aid should not exceed 40% of eligible costs. The maximum amount of grant is €170,860

Co-generation of heat and electricity. • For enterprises 30%, Maximum amount of grant €170,860. Day Rate: 2.92 euro cents Night Rate: 2.56 euro cent [Day=07:00-23:00 Night=23:00-07:00]

• For households and other entities and enterprises not engaged in economic activities 45%, Maximum amount of grant €85,430

Day Rate: 6.53 – 2.92 euro cent = 3.61 euro cents/KWh Night Rate: 5.72 – 2,56 euro cent = 3.16 euro cents/KWh [Day=07:00-23:00 Night=23:00-07:00]

Biomass, landfill and sewage waste utilization • 10 to 40% according to the area of installation and the size of the enterprise. The maximum amount of grant is €683,441. 6.32 cent per KWh. No operating support is offered

Support for RES Heating and Cooling

Investment Subsidies

Investment subsides for all RES-H&C technologies:

Resource Support level [%/total investment] Comments 30-45% of investment in solar systems Depends on status:companies or Solar Thermal for central water heating systems households- 40-55% of investment in space heating Solar Thermal Depends on status:companies or households and cooling

Precondition: investement is materialised in a 10 to 30% of the eligible costs transition selectable for regional funding zone Biomass depending on the size of the company for 2007-2008. Maximum eligible costs: 683 4405 euros

20% of eligible cost for domestic solar Solar Thermal system - replacement 30% to 45% of the eligible costs- Maximum grant: 17086 euros to 25 629 Solar Thermal Heating system for swimming pools euros Central systems for heating and Biomass cooling - 55% of the eligible cost for Maximum amount grant €18,795 households For enterprises 30%, Maximum Geothermal amount of grant €170,860 heat-pumps for For Households and nonprofit

space organizations 30%, Maximum heating/cooling. amount of grant €15,377

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Solar Thermal Systems

Installation or/and replacement of central water heating systems. • For enterprises 30% of eligible costs. Maximum amount of grant €17,086.00 per unit. For natural persons 45%, Maximum amount grant €25,629.00 per unit.

Installation or/and replacement of space heating and cooling. • For enterprises 40% of the eligible costs. Maximum amount of grant €85,430.00 per unit. For natural persons 55%, Maximum amount grant €117,466.00 per unit. Domestic solar systems new and / or replacement • €341.73 for each forced circulation system and €170.86 for thermosyphonic systems.

Installation and / or replacement of swimming pool water, Solar heating systems. • For enterprises 30% of eligible costs. Maximum amount of grant €17,086.00 per unit. • For natural persons 45%, Maximum amount grant €25,629.00 per unit.

Support for biofuels

An exemption of excise duty for Biofuels exits.

Investment Subsidies

Resource Support level [%/total investment] Comments Precondition: investment is materialised in a 15 to 35 % of the eligible costs depending biofuels selectable for regional funding zone for 2007- on the size of the enterprise 2008. Maximum eligible costs: 6834405 euros

Support for all RES

A levy of 0,13 Cy Cent/KWh 0,13 KWh (0.22 Euro cents/KWh) is imposed on all electricity consumed. The income is used, to finance activities aimed to promote the use of RES and RUE. (It is estimated that more than £42 million Cy pounds will be collected by year 2010 to support and promote investments on RES and energy efficiency ).

Annex I . RES electricity Potentials Annex II RES Bioenergy Potentials

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In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

48 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

Annex I . RES electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 0 110 200 250 350 Maximum Wind onshore MW Maximum Wind offshore MW 0.0 0.0 0 0 0 Maximun PV TWh 0.02 Maximum solar thermal MW 0 Total Hydro MW 0.0 0 0 0 0 0 Maximum conventional hydro MW of which Maximum run of river MW Maximum Pumped Storage hydro MW Maximum Tide & Wave power plants TWh 0.24 Maximum geothermal conventional power plants MW 0 Maximum geothermal hot dry rock power plants MW 0 Maximum biomass power plants (conventional+CHP) TWh 0.19 Maximum biogas power plants (conventional+CHP) TWh 0.14 Maximum municipal waste power plants (CHP) TWh 0.06

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 1,0 1,0 1,0 2,0 3,0 3,0 4,0 4,0 Cost [€/GJ] 8,8 8,8 8,8 8,68 8,53 8,39 8,26 8,14 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 1,0 1,0 1,0 1,0 1,0 1,0 1,0 1,0 Cost [€/GJ] 8,3 8,3 8,3 7,92 7,62 7,35 7,12 6,91 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 6,0 6,0 6,0 9 12 14 16 18 Cost [€/GJ] 4,4 4,4 4,4 4,1 3,9 3,7 3,5 3,4 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 7,0 7,0 7,0 11,0 13,0 16,0 18,0 21,0 Cost [€/GJ] 3,6 3,6 3,6 3,29 3,09 2,94 2,82 2,71 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 1,0 1,0 1,0 1,0 1,0 2,0 2,0 2,0 Cost [€/GJ] 8,8 8,8 8,8 8,5 8,2 8,0 7,7 7,5 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP Cost [€/GJ] Forestry residues Potential [PJ/a] UP Cost [€/GJ] Wood processing residues Potential [PJ/a] UP Cost [€/GJ] Municipal solid waste EEA Report 7 2006 Koroneos, C., et al. (2005): Cyprus energy system and the use of renewable energy Potential [PJ/a] UP 2 2 2 sources. Energy 30 (2005), pp. 1889–1901. Cost [€/GJ] Wet manures Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP 7 8 8 EEA Report 7 2006 Cost [€/GJ] Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP Cost [€/GJ] demolition Potential [PJ/a] UP Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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6. CZECH REPUBLIC

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The Czech Republic is an important producer of hard coal. The Czech Republic has one of the lowest energy import dependencies in the European Union, mainly due its domestically produced solid fuels. Imports are limited to natural gas and oil from Russia. The share of renewable energy sources has also been increasing, although still below EU average. Coal is the main energy source for electricity production. The second most important source is nuclear power.

KEY FIGURES • The share of RES in total primary energy consumption was 4.10 % in 200614. • The share of RES in the gross final energy consumption in 2005 amounted to 6.1% • In 2006, renewable electricity accounted for 4.91% of gross inland electricity consumption, and 4.17% in gross inland electricity production15. • Biofuels represented in 2006 approximately 0.5% of the transport fuels16. • Dependence on external energy supplies is of about 37.6% in 2005

Technology Specific Figures: The highest share of renewable electricity production in 2006 came from hydropower followed by biomass: • Gross electricity production from hydro amounted to 2 550,7 GWh while the total installed capacity amounted to 1 028,5 MW. • Gross electricity production from biomass amounted to 731 GWh in 2006. (annual increment 171 GWh). • The exploitation of biogas (176 GWh) can also be viewed as a significant source of renewable electricity. • Wind plants produced 49.4 GWh in 2006. By the end of 2006, 43.5 MW of wind power had been installed in the Czech Republic. Between 2005 and 2006, the total installed capacity almost doubled. In 2006, 45 projects with a total capacity of 18.5 MW were put into operation. • Gross electricity production from photovoltaics was 0,2 GWh. Total installed capacity in October 2007 amounted to 2,9 MWp (only systems with licence). • Energy production from solar thermal was circa 127 TJ. Total area of glazed collectors in. 2006 was 105 000 m². • Heat production from biomass amounted to 16 370 TJ (without households). • Heat production from biogas amounted to 918 511 GJ. (including municipal and industrial waste treatments plants, biogas stations, landfill gas) • In 2006, approximately six million tonnes of fuels for transport was placed on the market in the Czech Republic, of which 29 600 tonnes was made up of biofuels – i.e. 0.5%.

14 EurObserv’er 15 Ministry of Industry and Trade 16 Ministry of Industry and Trade 53 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200817 • 13 % share of RES on the final consumption of energy in 2020.

17 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

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• At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200118 • 8 % share of RES on gross electricity consumption by 2010

Indicative Target set by the European Biofuels Directive from 200319 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National Commitments In 2004, the parliament of Czech Republic approved the national energy strategy setting targets for 2030: • RES share in electricity production should be 16-17%in 2030 • RES share in the primary energy sources 6 % in 2010 and 15 – 16 % in 2030

RES POLICY INSTRUMENTS

Support for RES electricity

The Act No 180/2005 on the promotion of electricity produced from renewable energy sources which implemented the EU Directive 2001/77/EC in Czech legislation, entered into effect on 1 August 2005. Its key features are: • Preferential connection to the grid. There is an obligation for operators of the regional grid systems and the transmission system operator to purchase all electricity from renewable sources • the guarantee of revenue per unit of electricity produced over a 15-year period as of the date a plant is put into operation the possibility of choosing between two support systems - minimum feed-in tariffs – all the electricity produced can be sold to the relevant distribution system operator green bonuses (premium on the market price of electricity) – electricity produced from renewable sources can be placed on the single electricity market • the support of electricity used for internal consumption (not supplied to the grid)

Feed in tariff and Green Bonuses A feed-in system for RES-E and cogeneration came into force in 2002. This scheme only led to a few new renewables installations. The RES Act adopted in 2005, extended this system by offering a choice between a feed-in tariff (a guaranteed price) or a “green bonus” (an amount paid on top of the market price). • Feed-in tariffs apply to electricity supplied and metered at the delivery point between the generating plant and the respective distribution system operators • Green bonuses apply to electricity supplied and metered at the delivery point between the generating plant and the regional system operators and supplied by the generator to an electricity trader or eligible customer.

18 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

19 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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Producers can choose if they sell electricity for purchase prices or offer it to trader for „market- price“ and simultaneously get extra green bonuses – paid by the operator of Transmission System) The “Energy Regulatory Office” determines the feed-in tariffs and the green boni each year in advance. The prices may not be lower than 95% of the value of the year before. Prices are set on the following assumptions: o Return on investment of 15 years o Prices are differentiated according to the renewable energy source o Prices are differentiated by the year of commissioning

Resource Technology Support level Feed-in tariff or Start year Duration [years that installed [€cents/ kWh] premium? an investor is entitled after Feed in tariff to support] 1.1.2007 wind onshore Equivalent of Feed-in tariff 2007 15 years 9€cents/ kWh for plants commissioned after January 1st, 2007 Hydro small 9€cents/ kWh Feed-in tariff 2007 15 years

biomass solid 9 to 13 €cents/ Feed-in tariff 2007 15 years kWh biogas 8 to 11 Feed-in tariff 2007 15 years

PV 50 Feed-in tariff 2007 15 years geothermal 17 Feed-in tariff 2007 15 years wind onshore 7 Green Bonus 2007 15 years Hydro small 5 Green Bonus 2007 15 years biomass solid 1 to 8 Green Bonus 2007 15 years biogas 4 to 7 Green Bonus 2007 15 years PV 47 Green Bonus 2007 15 years geothermal 13 Green Bonus 2007 15 years 1 EUR = 23.986 CZK in March 2008

State programme for energy saving and the use of renewable energy sources

Investors in renewable electricity can receive aid from the State programme for energy saving and the use of renewable energy sources. Subsidies from Part A of the programme (coordinated by the Ministry of Industry and Trade) may be a maximum of 30% of capital costs, but no more than CZK 2.8 million.

Subsidies from Part B of the programme (coordinated by the Ministry of the Environment) may be a maximum of 90% of the basis for the calculation of the aid in the case of local government units (municipalities) and non-profit organizations. In 2006, subsidies for the support of renewable electricity production totalling CZK 31.3 million were granted from Ministry of Industry and Trade and Ministry of Environment resources. Subsidies under Part B of the State Programme may, in the case of businesses, amount to 40% of the capital costs.

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Resource Support level Comments [%/total investment]

RES-E 30% of Subsidies under Part A of the State Programme for the Promotion of investment costs, Renewable Energy Sources (administered by the Ministry of Industry subject to a and Trade) maximum of CZK 3 million.

RES-E 90% Subsidies under Part B of the State Programme for the Promotion of Renewable Energy Sources (administered by the Ministry of the Environment) for MUNICIPALITIES AND NOT FOR PROFIT SECTOR

RES-E 40% Subsidies under Part B of the State Programme for the Promotion of Renewable Energy Sources (administered by the Ministry of the Environment) for BUSINESSES

1 EUR = 23.986 CZK in March 2008

Tax exemption There is no income tax in the year of putting in operation renewable electricity plants and for the following 5 years.

Reduced interest rates

Resource Support level [% reduction on interest rates] Comments

RES-E Credits equivalent to 35% of costs (interest-free) To non business entities

RES-E Credits equivalent to 90% of costs generally at an 19 businesses interest rate of 4% per annum over a 12 year period.

1 EUR = 23.986 CZK in March 2008

EU Structural Funds

From 2004, investors in renewable electricity production had the opportunity to obtain aid from the EU’s Structural Funds via the Operational Programmes. The Operational Programme for 2004- 2006 focused – amongst other things- on the construction and restoration of plants using RES.

Subsidies may be a maximum of 46 % of capital costs, but no more than CZK 30 million. In 2006, aid for 55 projects with total capital costs of CZK 1.817 billion, projected capacity of 32.25 MW and envisaged electricity production of 140.1 GWh was approved.

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Support for Heat

European Regional Development Fund- State Environmental Fund (SFŽP)

The Operational Programme for 2004-2006 includes the subsidy scheme “Exploitation of Renewable Energy Sources”, intended for legal persons (non-business). The scheme focuses on the construction of plants using biomass, on transforming current systems into systems using RES, on the use of RES-heat from municipal boiler houses. Subsidies from the ERDF (the European Regional Development Fund) may be a maximum of 75% of the basis for the calculation of aid (eligible costs), but no more than the equivalent of EUR 10 million.

In addition, a project can be co-financed from the State Environmental Fund (SFŽP) up to a total amount of 90%. SFŽP resources may be used to obtain a subsidy for project documentation of up to 50% of eligible costs; this may be a maximum of 3% of the basis for the calculation of investment aid, but no more than CZK 3 million.

For 2004-2006, total ERDF resources for Measure 3.3 (RES fall under Measure 3.3) amounts to EUR 44.1 million (ERDF EUR 30.9 million + municipal budgets EUR 7.9 million + SFŽP EUR 5.3 million).

Support for Biofuels

Addition of biomaterial is obligatory for producers, distributors, importers.

Government Resolution No 1080 of 20 September 2006 provides for a minimum quantity of biofuels in the range of motor-vehicle fuels without any subsidies or support from the state. On the basis of this resolution, amendments were made to the following legislation:

Act No 86/2002 Coll. on clean air protection. The amendment to this act concerns the setting of a minimum amount of biofuels. Any person bringing motor-vehicle petrol or diesel fuels into free tax circulation in the Czech Republic must ensure that they contain at least a minimum proportion of biofuels. The amendment introduces the following minimum values of biofuels blended with fuel:

• as of 1 January 2008, 2% of the total amount of motor-vehicle petrol fuel; • as of 1 January 2009, 3.5% of the total amount of motor-vehicle petrol fuel; • as of 1 January 2009, 4% of the total amount of motor-vehicle diesel fuel.

Support for all RES

Promoting energy crops in agriculture Programme “ Promoting the cultivation of crops for energy use in 2007“ was incorporated into the national support programme specifying the conditions for granting subsidies in 2007. The objective is to promote the establishment and maintenance of standing crops for energy use with aid of CZK 3,000 per hectare. In this programme, stated energy crops must be grown specifically for energy use. In 2007, 1,771 hectares were sown with energy crops and approximately CZK 5,314,000 was disbursed.

Aid for the cultivation of energy crops is provided in all EU countries at EUR 45 per hectare for any crop to be used for energy purposes. The conditions are governed by Governmental Order No 80 of 11 April 2007 laying down certain conditions for the provision of a payment for the cultivation of

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energy crops. An uninterrupted plot of arable land with an area of at least 1 hectare must be used for the cultivation of energy crops. Energy crops must be grown on the land as the main crop in the year concerned. As at August 2007, applications for aid for the cultivation of energy crops on approximately 59,920 ha had been registered.

- Support for cultivation of plants for energy purposes: In 2006, a total of CZK 2 000/ha was paid out to support the planting of plant crops for use in energy generation (combustion). Support totalling CZK 1 066 000 was granted for 1 033 ha.

- Support for the planting of production and reproduction crops of fast-growing wood species for use in energy generation

This support was granted under the Horizontal Rural Development Plan of the Czech Republic 2004-2006. The granting of support was regulated by the conditions laid down in Government Decree No 308/2004 Coll. In 2006, a total of 22 ha of crops were planted and CZK 1 551 366 in support paid out.

Annex I RES electricity Potentials Annex II RES Bioenergy Potentials

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

Drafted in March 2008.

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Annex I RES electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 26 584 1150 1717 2282 2849 Maximum Wind onshore MW 26 584 1150 1717 2282 2849 Maximum Wind offshore MW 0 0 0 0 0 0 Maximum solar PV TWh 0.4 0.5 0.6 0.6 0.7 0.8 Maximum solar thermal MW 0.0 0 0 0 0 0 Total Hydro MW 2115 2116 2137 Maximum conventional hydro MW 970 971 992 1017 1033 1049 of which Maximum run of river MW 149 150 171 196 212 228 Maximum Pumped Storage hydro MW 1145 1145 1145 Maximum Wave power plants TWh 0.0 0 0 0 0 0 Maximum tide power plants TWh 0.0 0 0 0 0 0 Maximum geothermal conventional power plants TWh 0.0 1.4 1.9 3.1 4.7 6.7 Maximum geothermal hot dry rock power plants MW 0 187 261 410 634 895 Maximum biomass power plants (conventional+CHP) TWh 0.6 2.2 3.7 5.2 6.8 8.3 Maximum biogas power plants (conventional+CHP) TWh 0.2 0.2 1.2 2.2 2.5 2.8 Maximum municipal waste power plants (CHP) TWh 0.0 0.5 0.5 0.5 0.5 0.5

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bioenergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 37,0 37,0 37,0 81,0 108,0 135,0 153,0 172,0 Cost [€/GJ] 6,5 6,5 6,5 6,53 6,63 6,79 7,05 7,41 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 24,0 24,0 24,0 52,0 70,0 87,0 100,0 112,0 Cost [€/GJ] 6,9 6,9 6,9 6,64 6,43 6,27 6,15 6,07 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 78,0 78,0 78,0 174 236 298 343 388 Cost [€/GJ] 9,2 9,2 9,2 8,4 7,9 7,5 7,2 7,0 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 51,0 51,0 51,0 117,0 160,0 203,0 236,0 268,0 Cost [€/GJ] 2,8 2,8 2,8 2,85 2,82 2,79 2,81 2,85 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 19,0 19,0 19,0 41,0 54,0 68,0 77,0 86,0 Cost [€/GJ] 6,2 6,2 6,2 6,1 5,9 5,8 5,7 5,6 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP 26 28 29 EEA Report 7 2006 Cost [€/GJ] Forestry residues Potential [PJ/a] UP 34 44.8 according to Jakubes, J. (2006): Development of support system for RES-E in the Czech Republic. New Europe, New Energy International Conference, Milton Keynes, UK, Cost [€/GJ] 26 September 2006. Ust'ak, S., and M. Ust'aková (2004): Potential for Agricultural Biomass to Produce Bioenergy in the Czech Republic. Biomass and Agriculture: Sustainability, Wood processing residues Markets and Policy. OECD, Paris, September 2004. Potential [PJ/a] UP 9 10 10 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP 18 20 21 EEA Report 7 2006 Cost [€/GJ] Wet manures Potential [PJ/a] UP 8 18 20 21 16 according to Jakubes, J. (2006): Development of support system for RES-E in the Czech Republic. New Europe, New Energy International Conference, Milton Keynes, UK, Cost [€/GJ] 26 September 2006. Black liquor Potential [PJ/a] UP 15 16 17 EEA Report 7 2006 Cost [€/GJ] Sewage sludge Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP Cost [€/GJ] demolition Potential [PJ/a] UP 12.2 according to Ust'ak, S., and M. Ust'aková (2004): Potential for Agricultural Biomass to Produce Bioenergy in the Czech Republic. Biomass and Agriculture: Sustainability, Cost [€/GJ] Markets and Policy. OECD, Paris, September 2004. Dry manures Potential [PJ/a] UP Cost [€/GJ]

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7. GERMANY

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The share of oil dominates the German primary energy supply and solid fuels (coal) prevail in domestic production. Imports concern primarily oil, and to a less significant degree gas and solid fuels, Russia being a significant source for all fuels. Electricity generation is based primarily on coal and nuclear energy, with growing shares of natural gas and renewable sources. In 2002, Germany adopted a law phasing out nuclear energy. Under this law, each reactor is assigned a fixed amount of electricity it is allowed to generate. Once the electricity is produced the respective unit has to be switched off. Germany is an EU leader in the wind energy, the photovoltaics, the solar thermal and the biofuel sectors. A stable and predictable policy framework has created favourable conditions to RES penetration. Germany has the highest installed wind power capacity in the world. Feed-in tariffs for renewable electricity (RES-E), market incentives for renewable heat (RES-H), and tax exemptions for biofuels have proven a successful policy mix leading to a very dynamic market for renewable energy sources (RES).

KEY FIGURES: • The share of RES in total primary energy consumption was 5.8 % in 2006. • The share of RES in the final energy consumption was 8.4% in 2007 compared to 7.8% in 200620. • The share of RES in the gross electricity consumption was 14% in 2007. Compared to 11.5% in 2006 (in 2005: around 10.4%21). • The share of RES in total heat supply amounted to 6.5% was achieved in 2007, compared to 6% in 2006 and 5.3% in 2005. • The share of biofuels in the transport fuels in 7% in 2007 compared to 4.7% in 2006 (and 3.8% 2005). • Germany’s dependence on imported energy amounts to 65.1%.

Contribution of renewable energy sources to energy supply in Germany 2000 - 2006 14 12.0 12 2000 2001 2002 2003 2004* 2005* 2006* 10 8.0 8 6.3 6.6 [%] 5.8 6.0** 6

3.9 3.8 4 2.6 2 0.4 0 Share of RE in total PEC Share of RE in total gross Share of RE in total FEC for Share of RE in fuel Share of RE in total FEC electricity consumption heat consumption for road (electricity, heat, fuels) traffic RE - renewable energies, PEC - primary energy consumption, FEC - final energy consumption * All figures provisional ** From 2003, new data from the Energy Statistics ACT (EnStatG) incorporated Source: BMU-Brochure " Renewable energy sources in figures – national and international development-" Version: June 2007

20 German Environment Ministry figures 21 German Environment Ministry figures 64 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

Contribution of renewable energy sources to electricity generation in Germany 1990 - 2006 80,000

70,000 Hydropower Wind energy new EEG 1. August 2004 Biomass* Photovoltaics 60,000

50,000 EEG 1. April 2000

40,000 [GWh]

30,000

20,000

10,000

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

* solid, liquid, gaseous biomass, biogenic share of waste, landfill and sewage gas; Electricity from geothermal energy is not presented due to the low volumes of electricity Sources: BM U-Brochure " Renewable energy sources in figures – national and international development-"; Version: June 2007 Provisional figures

Technology specific figures: • Wind energy is the largest contributor to electricity production from renewable energies in 2006 with 30.5 billion kWh (2005: 27.2 billion kWh). This equals a share in total electricity consumption in Germany of 5%. With a new installed capacity of 2,233 MW in 2006, the construction of wind energy plants increased by 23% compared with 2005. In total, at the end of 2006, 18,685 wind energy plants were in operation with an installed capacity of 20,622 MW. Germany thus remains world leader. • Electricity production from hydropower remained stable in 2006 with 21.6 billion kWh (2005: 21.5 billion kWh). • Electricity production from biomass (without gas from landfills and sewage treatment plants, biogenic wastes) amounts to approximately 13.1 billion kWh in 2006 (2004: approx. 8.6 billion kWh). This equals a share of around 2.2% in total gross electricity consumption. • Electricity production from biogas almost doubled from 2.8 billion kWh in 2005 to around 5.4 billion kWh in 2006. • The electricity production from photovoltaics increased from 1.3 billion kWh in 2005 to around 2 billion kWh in 2006. • The annual increase in solar thermal exceeded the limit of 1 million square metres of solar panel area for the first time in 2006. At the end of 2006, over 8 million square metres were installed. • Demand for biomass in the heating sector (especially wood) increased by an estimated 10% in 2006. In total around 84 billion kWh were supplied from biomass. This equals around 94% of heating supply from renewable energies. • Biofuels sales increased from around 2.3 million tonnes in 2005 to at least 2.8 million tonnes in 2006. In addition to the dominant sale of biodiesel (2005: 1.8 million tonnes), significant volumes of bioethanol (0.5 million tonnes) and vegetable oil (0.3 million tonnes) were recorded.

RES POLICY

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RES TARGETS Mandatory targets set by the newly proposed RES Framework Directive from 200822 • 18 % share of RES on the final consumption of energy in 2020. At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set under the RES- electricity European Directive from 200323 • 12.5% share of RES on gross electricity consumption by 2010

Indicative Target set by the European Biofuels Directive from 200324 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National commitments • As part of the national integrated climate and energy package, the government intends to increase the share of renewable energies in the electricity sector from the current level of around 13 percent to 25-30 percent by 2020. • The government also committed to increase the share of renewable energies in the heat sector from the current 6 percent to 14 percent in 2020. • The “Biokraftstoffquotengesetz” set a target for biofuels of 8% of the transport fuels by 2015.

Progress towards the target: The target set by the renewable electricity Directive was reached already in 2007: the share of electricity produced from renewable energy sources has almost doubled from 6.3 % in 2000 to 12.0 % in 2006. The "Biokraftstoffquotengesetz" was adopted in 2006 – to transpose into national law the 2003 Directive on biofuels- and set a target of 5.75 % by 2010 of the transport fuels. Interim targets has been set as well. Germany was the only country in the EU to exceed its 2005 target.

RES POLICY INSTRUMENTS

Support for RES electricity Feed-in tariffs The feed-in tariffs have been introduced in Germany in 1990. The Electricity Feed Act (StrEG) entered into force on 1 January 1991. In April 2000, it was replaced by the Renewable Energy Sources Act, which was amended in July 2004. The Renewable Energy Act (EEG) is based on the following core principles: • Priority access for renewable energy to the grid • Priority transmission and distribution • Obligation of grid operators to purchase the electricity produced from renewable energy • Fixed price (“tariff”) for every kilowatt-hour produced from renewable energy for 20 years. • Tariffs are differentiated by source and size of the plant

22 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process) 23 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

24 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport currently in force, sets targets up to 2010, with indicative targets by 2005.

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• Annual decrease (-1,5% - -6,5%) are in place to take account of technical development (degression) • Equalisation of additional costs between all grid operators and electricity suppliers

Resource Technology Support level [€cents/ Feed-in tariff Duration Comments kWh] or premium?

hydro small 6.7-9.7 Feed-in tariff 30 years wind onshore 8.7 during the first 5 Feed-in tariff 20 The wind turbine will years, then between years receive a minimum of 5,5 8,7 and 5,5. over its lifetime. Special tariffs are planned for repowering.

wind offshore 9.1 Feed-in tariff 20 years biomass solid 3.8-21.2 Feed-in tariff 20 years biomass gasification 6.35-16.99 Feed-in tariff 20 Depends on the (biogas) years technology and the installed capacity

Solar PV 51.8 and 48.74 in Feed-in tariff 20 With a 5% yearly 2006; 49,21 and 46,30 years degression. A 5 c€/kWh in 2007 bonus is added for building façade integrated systems. Geothermal 7.16 to15 Feed-in tariff 20 Depends on the installed years capacity

In August 2007, the German government elaborated an Integrated Energy and Climate Programme. On 5 December 2007, the government adopted a package of legislative measures to implement the programme. Another, smaller package will follow on 21 May 2008. In 2008 the German government committed to make a €3.3 billion available for climate protection measures - an increase of 200% compared to 2005. The Renewable Energy Sources Act (EEG) will be amended. The government will expand offshore wind energy use. The government committed to ensure that biogas is fed into the natural gas grid to a greater extent. A share of 10 percent is possible by 2030. The government intends to improve the legal conditions for the expansion of the grid.

Support for RES Heating

A new Renewable Energies Heat Act has been released in December 2007. It consists of: • Market Incentives: (A previous Market Incentive Programme provided subsidies for RES-H for solar thermal and small scale biomass heat generation for instance. In 2006 alone, almost 140,000 plants were supported through the German government’s market incentive programme, thus triggering investment of 1.5 billion euro). • the German government committed to make available 350 million euro in 2008, and 500 million euro from 2009, to support renewable energies in existing buildings. • Obligation: Homeowners will be obliged to use renewables in new buildings.

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Investment Subsidies Resource Technology Support level [%/total investment] Start year

investment subsidies (primary private households and Solar solar collectors SMEs) Thermal < 40 m2 large solar Solar collectors > 40 Thermal m2 repayment bonuses of up to 30% of the investment cost 2007 max. 1 Mio. € per drilling, max. 550 000 € per community Geothermal heating system 2007 RES- Community heating systems max. 550 000 € per community heating system Financial Incentives (reduction on interest rate) Resource Support level [% reduction on interest rates] Start year low-interest loans with partial debt waiver (commercial and solid public sector biomass applicants), Solar Thermal Reduced interest KWf loans 2007

Support to biofuels Tax exemptions Biodiesel benefits from a partial tax exemption (B100). The tax will gradually increase from 9 c€ per litre in 2007 up to 45 c€ per litre beginning in 2012". Crude vegetable oils benefit from partial tax exemptions. The tax will increase from 10 c€ per litre in 2008 to 45 c€ per litre beginning in 2012. 2nd generation biofuels/ E85 are exempted from tax until 2015. The German Federal Government has passed a (draft) biofuel sustainability ordinance. Under this ordinance, biofuel producers will in future enjoy fiscal and administrative support only if certain sustainability criteria are adhered to.

Total support level (= tax exemption incl. reduction of VAT Resource to be paid) [€cents/litre] start year Partial Tax exemption on B100. The tax will gradually Biodiesel increase from 9 c€ 2006 per litre in 2007 up to 45 c€ per litre beginning in 2012 Partial tax exemption. The tax will increase from 10 c€ Crude vegetable oil 2006 per litre in 2008 to 45 c€ per litre beginning in 2012 2nd generation biofuels/ E85 Exempted from tax until 2015

Quota obligation Quota obligation for biofuels (biodiesel and bioethanol) amount to 6.75% in 2010 and 8% in 2015. In the first term 2008, the German parliament will discuss the laws. The final vote could take place before the summer.

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Resource Quota in % (per year) Biodiesel 2007: 4.4%, Bioethanol 2% in 2008, 2.8% in 2009 ,3.6% in 2010. 8% in 2015, 6.75% in 2010. Total (biodiesel and bioethanol)

Annex I RES electricity Potentials Annex II RES Bioenergy Potentials

Sources: Federal Ministry for Environment, Nature Conservation and Nuclear Safety: http://www.bmu.de/english/renewable_energy/current/aktuell/3860.php German Renewable Energy Federation (BEE) http://www.bee-ev.de/ European Commission Factsheets by Country http://ec.europa.eu/energy/energy_policy/facts_en.htm Member States Reports in the framework of the Directive 2001/77/EC on renewable electricity http://ec.europa.eu/energy/res/legislation/electricity_member_states_en.htm Member States Reports in the framework of the Directive 2003/30/EC on biofuels http://ec.europa.eu/energy/res/legislation/biofuels_members_states_en.htm

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

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Annex I RES electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030

Total Wind MW 18428 25455 30307 39915 42199 46374 Maximum Wind onshore MW 18428 19083 23343 25105 26373 27554 Maximum Wind offshore MW 0 6372 6964 14810 15826 18820 Maximum solar PV TWh 1.3 4.1 5.4 6.7 7.9 9.2 Maximum solar thermal MW 0.0 0.0 0.0 0.0 0.0 0.0 Total Hydro MW 9804 9825 Maximum conventional hydro MW 4090 4111 4226 4446 4499 4552 of which Maximum run of river MW 2939 2960 3075 3295 3348 3401 Maximum Pumped Storage hydro MW 5714 5714 Maximum Tide & Wave power plants TWh 0.0 0.0 0.0 0.0 0.0 0.0 Maximum geothermal Total TWh 0.1 1.2 1.9 3.0 4.3 5.7 Maximum geothermal dry steam & flash power plants (>180°C) MW 13 159 260 407 577 766 Maximum geothermal binary power plants (180°C

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bioenergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 201,0 201,0 201,0 295,0 368,0 440,0 518,0 595,0 Cost [€/GJ] 9,0 9,0 9,0 8,72 8,45 8,21 8 7,81 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 107,0 107,0 107,0 158,0 196,0 235,0 277,0 318,0 Cost [€/GJ] 8,9 8,9 8,9 8,37 7,96 7,61 7,31 7,05 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 323,0 323,0 323,0 536 711 887 1071 1255 Cost [€/GJ] 6,0 6,0 6,0 5,6 5,3 5,0 4,8 4,6 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 258,0 258,0 258,0 436,0 583,0 730,0 885,0 1039,0 Cost [€/GJ] 4,8 4,8 4,8 4,47 4,21 4 3,83 3,68 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 83,0 83,0 83,0 122,0 152,0 182,0 215,0 247,0 Cost [€/GJ] 9,5 9,5 9,5 9,3 9,0 8,8 8,5 8,3 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste 1,550 according to RISE (2007): Biofuels – Developments in Germany and in the EU. Research Institute for Sustainable Potential [PJ/a] UP 158 169 180 Energy (RISE), Australia, 2007. Cost [€/GJ] http://www.rise.org.au/pubs/Detlev_Biofuels_April_27-2007.pdf Forestry residues 700 according to Stephan, B. (2007): Biomass to energy in Germany. University of Applied Science Bremerhaven, Potential [PJ/a] UP Germany, 2007. Cost [€/GJ] 14,7 http://www.jgsee.kmutt.ac.th/new/announcement/30/1-biomass%20germany%2006-4-1.ppt Wood processing residues €14.7/GJ for wood pellets, according to: Potential [PJ/a] UP 88 94 100 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP 88 94 100 EEA Report 7 2006 Cost [€/GJ] Wet manures Potential [PJ/a] UP 110 118 126 EEA Report 7 2006 Cost [€/GJ] 76 billion kWh (electric) = 273.6 PJe, according to: Black liquor Potential [PJ/a] UP 26 28 29 EEA Report 7 2006 Cost [€/GJ] Sewage sludge Potential [PJ/a] UP 15 16 17 EEA Report 7 2006 Cost [€/GJ] Other waste wood households Potential [PJ/a] UP 13 14 15 EEA Report 7 2006 Cost [€/GJ] packageing Potential [PJ/a] UP 44 47 50 EEA Report 7 2006 Cost [€/GJ] demolition Potential [PJ/a] UP 15 16 17 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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8. DENMARK

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Denmark has been self reliant on energy since 1999, with significant oil and gas production in the North Sea, and is a net exporter of energy. Denmark is the second largest producer of oil in the EU and oil plays an important role in the energy mix. Natural gas and renewable sources (RES) have been gradually replacing solid fuels and oil in primary energy supply. However, imported coal is still the most important fuel in electricity generation. Renewable energy has experienced a significant growth and shares in RES in primary energy and RES electricity in the electricity mix are above EU averages, specially in the case of wind energy, Denmark has become a global leader of installed wind power per capita and the Danish wind turbine industry exports serves about 1/3 of the world market.

Denmark has the lowest energy consumption per unit of GDP in EU and highest contribution to electricity from new renewable in the EU. Denmark has achieved a de-coupling of economic growth and energy consumption since 1980 GDP has grown 56 %, but the primary energy consumption is only 2 % higher in 2004 than in 1980 and CO2 emissions have been reduced substantially: 35 % lower in 2004 compared to 1980. The de-coupling has been driven by the policies to promote district heating and energy savings as well as renewable energy. Indeed, in Denmark biomass is largely used at power stations and for development of smaller biomass-based cogeneration of heat and electricity. District heating accounts for approximately 50% of Denmark's heat demand. The average connection rate in district heating areas is 82% and is still increasing. Twelve of the 14 largest power stations in Denmark deliver all or part of their surplus heat to a district heating network. Nearly all large-scale power plants are located close to major cities.

KEY FIGURES

• The share of RES in total primary energy consumption was of 15.01% in 200625. • The share of RES in the gross final energy consumption was 17% in 2005. • The share of RES in the gross electricity production was 26.59% in 2006. • The share of RES heating and cooling was XXX of % in 2006. • The share of all biofuels in the transport sector in 2006 was XXX • Dependence on external energy supplies is of about -58.8% (Denmark is a net exporter of energy)

Technology specific figures • In 2006, the wind energy in Denmark produced 6.108 GWh. This corresponded to 16.8% percentage of the electricity consumption in Denmark or to the consumption in about 1.73 million Danish households. In the first half of 2007 the turbines produced 3.934 GWh which corresponds to 21.7% of the electricity consumption in Denmark. By the end of January 2007 there was 5.267 turbines installed in Denmark with a total power of 3.135 MW. 877 MW offshore farms were installed by the end of 2006 In 2006 the offshore farms produced 22 % of the total electricity production from turbines • Biomass supplied some 12% of the energy consumed in 2006. • Hydropower only provides less than 1 % of the electricity production.

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Source: Danish Energy Authority

RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200826 • 30% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200127 • 29 % share of RES in gross electricity consumption by 2010.

Indicative Target set by the European Biofuels Directive from 200328 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010 on energy content.

26 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

27 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

28 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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National Commitments • On 19 January 2007 the Danish Government presented a comprehensive national energy proposal, "A visionary Danish energy policy", in view of negotiations with political parties. This proposal contains the objective that Denmark reduce its use of fossil fuels by at least 15% by 2025 compared to today, and that total energy consumption be maintained at its current level. The use of renewable energy is to be increased to account for at least 30% of energy consumption by 2025, and the proportion of biofuel for transport is to be increased to 10% by 2020. • In February 2008, the Danish parliament has agreed on plans for how to boost renewable energy production in the country. The aim is for renewables to cover 20 per cent of Denmark’s energy consumption by 2011. The agreement was made by all the parliamentary parties except the far-left Red-Green Alliance.

Progress towards the target

Biofuels for transport represented 0.15% of total sales of petrol and diesel for transport by 31 December 2006 and consequently exceeded Denmark's indicative target of 0.1%.

Denmark is at present close to reaching its RES-E target for 2010.

Support for RES electricity

Fixed feed-in tariffs and premium The support is given in the form of premium and or as a fixed feed in tariff, so that the combination of market price and supplement ensures a fixed tariff for the producer. All subsidies are passed on to the consumers as an equal Public Service Obligation (PSO) tariff on their total consumptions.

Feed-in Tariff Duration Feed-in [years that an tariff or investor is premiu Start entitled to Resource Technology Support level [€cents/ kWh] m? year support] Comments biomass solid 8 €cents/ kWh feed in 20 years Biogas plants connected to the grid 8 €cents/kWh(8€cents/ kWh for 10 between 22 April years and 5€cents/ kWh for the 2004 – 31 December biomass biogas following 10 years.) feed in 20 years 2008 electricity generated by central power 199 biomass stations 5€cents/ kWh feed in 3 10 years PV 8 €cents/ kWh feed in 20 years Geothermal 6,9 €cents/ kWh feed in 20 years For wind turbines premiu 200 connected after wind 1.3 €cents/ kWh m 5 20 years January 2005 Source: RISOE

For RE plants connected to the grid before 21 April 2004: • The transmission system operator sells the production on the spot market and the subsidy together with the market price ensures a tariff of 60 øre/kWh (8 €cents/ kWh) for 20 years from the date of grid connection and for at least 15 years as from 1 January 2004.

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Special RE plants of major importance and connected to the grid after 21 April 2004: • Special plants using energy sources or technologies of major importance to future exploitation of RE electricity include wave power, solar energy, fuel cells using renewable energy sources, biomass gasifiers and stiring motors with biomass. Other types of plant can be approved apart from water turbines in rivers and production technologies already in use for biomass incineration. • The transmission system operator sells the production on the spot market and subsidy together with the market price, ensuring a tariff of 60 øre/kWh for 10 years (8 €cents/ kWh) and 40 øre/kWh (5€cents/ kWh) for the following 10 years.

Other RE plants connected to the grid after 21 April 2004: • The transmission system operator sells the production on the spot market, and the owner receives the market price and for 20 years a premium of 10 øre/kWh (1.3 €cents/ kWh).

Tenders Tendering procedure for two new large offshore installations. Operators will receive a spot price and initially a settling price as well. Subsequent offshore wind farms are to be developed on market conditions. A spot price, an environmental premium (EUR 13/MWh) and an additional compensation for balancing costs (EUR 3/MWh) for 20 years is available for new onshore wind farms.

Fiscal incentives

Small solar cell systems connected via consumption installation:

Solar cell systems with an effect of less than 6 kW connected via consumption installations in households and that are exempt from electricity levies are not eligible for a subsidy.

Next steps

Resource Support level [Unit or %]

Solar heating Exemption from CO2 and energy tax Biomass Exempt from CO2 tax

Support for biofuels

Biofuel quota obligations

Resource Quota in % (per year) Year Comments Biofuels 5.75% (energy) 2010 Compulsory

Tax exemption Since January 2005, the Danish Government exempts biofuels from the CO2 tax imposed on the use of ordinary petrol and diesel for transport.

Investments in Second- generation biofuels The government decided in 2006 to significantly boost efforts to promote the use of second- generation biofuel technologies by allocating an additional DKK 200 million for the co-financing of large-scale private development programmes. Altogether, these additional private and public

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development interventions are expected to total significantly more than DKK 200 million. The government intends to further enhance this effort by allocating more government funds. This will ensure that, before 2010, work can go ahead on the full-scale establishment of test facilities in Denmark.

Annex I Danish Key energy data Annex II RES Electricity Potentials Annex III RES Bioenergy Potentials

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020.

Drafted in March 2008.

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Annex I Danish Key energy data

1980 1990 2006 Gross Energy Consumption per Capita [GJ] 159 160 159 Final Energy Consumption per Capita [GJ] 119 118 125 Energy Intensity, Gross Energy Consumption [TJ per Million GDP] 0.997 0.818 0.603 Energy Intensity, Final Energy Consumption [TJ per Million GDP] 0.747 0.603 0.474 Degree of Self-sufficiency [%] 5 52 144 Dependency of Oil [%] 67 43 40 Renewable Energy - Share of Gross Energy Consumption [%] 3.0 6.2 15.6

Gross Energy Consumption by Fuel Adjusted [PJ] 1980 1990 2000 2006 Total Gross Consumption 814 819 837 863 Oil 546 355 374 347 Natural Gas 0 82 192 191 Coal and Coke 241 327 176 182 Waste, Non-renewable 3 5 7 9 Renewable Energy

Energy Production [PJ] 1980 1990 2000 2005 2006 Total Production 40 425 1 165 1 317 1 243 Crude Oil 13 256 765 796 724 Natural Gas 0 116 310 393 390 Waste, Non-renewable 3 4 7 9 9 Renewable Energy 24 48 83 119

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Annex II RES Electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 3125 4229 4750 5840 8020 Maximum Wind onshore MW Maximum Wind offshore MW Maximun PV TWh 0.5 Maximum solar thermal MW 0 Total Hydro MW 11.0 11 11 11 Maximum conventional hydro MW 11.0 11 11 11 of which Maximum run of river MW Maximum Pumped Storage hydro MW Maximum Wave & Tide power plants TWh 2.58 Maximum geothermal conventional power plants MW 0 Maximum geothermal hot dry rock power plants MW 0 Maximum biomass power plants (conventional+CHP) TWh 1.3 5.3 Maximum biogas power plants (conventional+CHP) TWh 0.2 1.89 Maximum bio waste power plants (CHP) TWh 0.7 1.03

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex III RES Bioenergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 40,0 40,0 40,0 59,0 74,0 89,0 102,0 115,0 Cost [€/GJ] 10,9 10,9 10,9 10,59 10,33 10,13 9,97 9,84 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 23,0 23,0 23,0 34,0 43,0 52,0 59,0 67,0 Cost [€/GJ] 11,0 11,0 11,0 10,37 9,87 9,45 9,1 8,8 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 56,0 56,0 56,0 85 106 127 146 165 Cost [€/GJ] 8,0 8,0 8,0 7,4 6,9 6,5 6,3 6,0 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 26,0 26,0 26,0 40,0 50,0 60,0 69,0 77,0 Cost [€/GJ] 5,8 5,8 5,8 5,31 4,98 4,73 4,54 4,39 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 19,0 19,0 19,0 28,0 35,0 41,0 48,0 54,0 Cost [€/GJ] 15,1 15,1 15,1 14,7 14,3 13,9 13,6 13,3 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP 22 24 25 EEA Report 7 2006 Tafdrup, S. (2006): Danish policies and strategies on the implementation of biomass and biofuel Cost [€/GJ] technologies in the energy sector. Danish Energy Authority, Denmark, 2006. Forestry residues http://www.um.dk/NR/rdonlyres/17670257-E714-4285-ACDA-571BE0DAA914/0/Biomass1.pdf Potential [PJ/a] UP Cost [€/GJ] Wood processing residues Potential [PJ/a] UP Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP 9 10 10 EEA Report 7 2006 Cost [€/GJ] Wet manures Potential [PJ/a] UP 33 35 38 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP Cost [€/GJ] Sewage sludge Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] demolition Potential [PJ/a] UP 9 10 10 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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9. ESTONIA

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Estonian economy is highly dependent on fossil fuels. Approximately 90% of Estonia’s energy is produced through the combustion of fossil fuels. The remaining 10% comes from renewables, such as biomass, hydropower and wind. The main domestic energy source is the combustion of oil shale, which puts high pressure on the environment -approximately 70% of atmospheric pollution, 80% of effluents and 80% of generation of solid waste are connected with the oil shale power industry.

Estonia is less dependent on energy imports than most EU Member States. Imports are mainly oil and gas (the latter exclusively from Russia). Security of energy supply is seen as an important issue and increased energy links with other Baltic and EU states are seen as key to enhancing security of supply.

Estonia’s largest RES potential is to be found in the biomass sector, but possibilities also exist in the areas of wind power, biogas electricity and small hydro power.

KEY FIGURES • The share of RES in total primary energy production was 12.46 % in 2006. • The share of RES in the gross final energy consumption was 1.91% in 2006. • The share of RES in the gross electricity production was 1.6% in 2006 • The share of all biofuels in the transport sector in 2006 was 0.12%. • Dependence on external energy supplies is of about 33.9% in 2005.

Technology specific figures • In 2005, electricity production from RES amounted to 81.8 GWh: with wind accounting for 55,1 GWh(and 76.3 GWh in 2006), hydro for 21,5 GWh(13.5 GWh in 2006), black liquor for 4,1 GWh and landfill gas for 1,1 GWh. This represents 1,9% of total electricity. • Biofuel production in Estonia amounts to 6 ktoe in 2005. No bioethanol is currently being produced so this refers to biodiesel only. District heating covers ca 70% of total heat need in buildings.

RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200829 • 25% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200130 • 5.1 % share of RES on gross electricity consumption by 2010.

Indicative Target set by the European Biofuels Directive from 200331

29 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

30 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

31 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005. 84 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

• Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National Commitments The "Long-term national development plan for the fuel and energy sector until 2015" adopted through a decision of the Parliament on 15 December 2004 set a target for biofuel of 2% by 2006 and 5.75% by 2011, calculated on the basis of energy value. o 12 % of gross national energy consumption by 2010 The target is already achieved due to high share of wood and wood waste for heat production o 5,1% of gross national electricity consumption by 2010 and 8 % by 2015

Progress towards the target The production of electricity from renewable sources increased in the period 2005 -2006. At the same time consumption also increased (6 022 GWh in 2005 and 7 904 GWh in 2006), and therefore the share of renewable energy sources in total consumption even fell, from 1.8% in 2005 to 1.6% in 2006.

Support for RES Electricity

Feed-in tariff The Feed-In Tariffs are regulated by the Electricity Market Act which entered into force on July 1st, 2003. The Electricity Market Act was last amended in 2007. The version of the Act applying until 30 April 2007, required network operators to purchase in a trading period (at a price of EEK 0.81/kWh) all the electricity generated by a producer of renewable energy to the extent of the operator’s network losses. The main problem with this scheme was that a network operator who did not have a licence to sell electricity could not buy more electricity than the amount equivalent to his network losses in the trading period. This support scheme was above all a source of uncertainty for wind farms connected to the grid, since at times of low electricity consumption (for example summer nights) network losses are small and so the purchase obligation was also small.

For this reason, in 2005 amendments were made to the Energy Market Act to introduce a new aid scheme, and this process was concluded on 15 February 2007, when Parliament passed the Act that came into force on 1 May 2007. • The new aid scheme for producers of renewable energy allows them to use the purchase obligation as before, but adds the possibility for a producer to sell the electricity produced itself and be given aid for the electricity sent to the grid and sold. • The mandatory purchase price for electricity produced from renewable energy sources has been raised by 42% (to EEK 1.15/kWh), and the possibility of using the purchase obligation is no longer restricted to the network losses. • In addition to making use of the purchase obligation, producers of renewable energy can now receive aid of EEK 0.84/kWh for electricity sent to the grid and sold, which offers the possibility if sales are good of earning considerably more than from the purchase obligation. • The duration of the aid scheme has also been extended: 12 years from the start of production (the previous Act allowed the aid scheme to be used for between 7 and 12 years, but no longer than until the end of 2015). • The general aid scheme also includes one restriction on producers using wind as a source of energy from 2009, in that aid will be paid to them or they will be able to use the purchase obligation until such time as the production in Estonia in a calendar year reaches limits of 400 GWh and 200 GWh respectively (producers must sell electricity produced above these

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limits at market price without using the purchase obligation or aid). Separate records will be kept for each calendar year. The linking of the obligation to purchase electricity generated from wind power or the payment of aid to the annual production quantit y is a result of the technical particularities of the Estonian grid — there are no power stations in the grid that can be rapidly regulated. Most of the generating capacity in the electricity grid (more than 90 %) has been developed in the Narva area (North-Eastern Estonia), but the centres of consumption have evolved in other parts of the country (the main load centres are in Tallinn, Tartu and Pärnu and the surrounding areas).

In order to cover peak loads and extend the use of wind power, it will be necessary to construct reserve capacity that can be rapidly regulated (mainly gas turbines) and modernise the grid along the west coast of Estonia and in the islands. The investment requirement for new power generation units up to 2015 is estimated at a total of EEK 10–15 billion, of which EEK 2–3 billion for generation from renewable energy sources.

Support Duration [years level that an investor is [€cents/ Start entitled to End year [of the Resource kWh] year support] scheme] Comments up to the annual 74.2 total production Wind 2007 €/MWh of all wind farms 200 GWh From other 74.2 2007 12 years beginning of renewables €/MWh operation up to the annual 54.2 total production Wind 2010 up to the €/MWh of all wind farms 400 GWH From other 54.2 2010 12 years beginning of renwables. €/MWh operation Purchase obligation of wind energy - from 2009 - up to 200 GWh; from 2013 - up to All RES 5.2-7.34 12 years 2015 400 GWh. From 2009 balance responsibility for wind energy producers 1EURO: 15.64 EEK

Support for RES Heat

Biomass used for heating is the main source of Renewable energy: 90% of the production of firewood is used in households. Woodchips are also widely used in households.

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Duration [years that Support level an investor (feed-in tariff) is entitled Resource Technology [EUR/MWh_th] Start year to support] Comments

feed-in 54.0 from the beginning of wood CHP €/MWh 2007 12 years operation feed-in 54.0 any other CHP €/MWh 2007 12 years if replacing a boiler-hous support 33.3 from the beginning of wood CHP €/MWh 2010 12 years operation support 33.3 any other CHP €/MWh 2010 12 years if replacing a boiler-hous

Support for biofuels

Biofuel is exempt from excise duty without any conditions since July 2005. If biofuel is added to fossil fuels, the portion of biofuel contained in such fuel is exempt from excise duty until the permit expires. A biofuel permit granted for six years by the Tax and Customs Board gives the right to produce biofuel, import it into Estonia and release it for consumption free of excise duty. It obliges the beneficiary together with the application to present specifications and a yearly report.

Total support level (= tax exemption incl. reduction of start Resource VAT to be paid) [€cents/litre] year Duration [years of support entitled] biodiesel no excise tax 2006 6

Under the Alcohol, Tobacco and Fuel Excise Duty Act, biofuel is exempt from excise duty once the European Commission has authorised it and until that authorisation expires. Biofuel, for which the first four digits of the CN code are 4401 or 4402, is unconditionally exempt from excise duty. Authorisation to exempt biofuel from excise duty was received from the European Commission in a letter dated 27 July 2005.

Support for all RES

Tax relief To promote the utilization and development of RES, some tax relieves from the usual 18% VAT have been stated.

Project funding Some funding is available at the Estonian Fund for Nature (ELF), which grants subsidies to several environmental projects, among others, projects concerning sustainable development.

Development plan to promote Bioenergy (2007-2013) The government of the Republic drew up the Development plan to promote the use of biomass and bio energy 2007-2013. The main objective of this plan is to create suitable conditions for the development of domestic biofuel and bio energy production, reduce Estonia's dependence on imported resources and fossil fuel. The intention is to implement the development plan in two phases:

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Phase I (2007-2008) will begin with studies to analyse the market, resources, technologies. In phase II (2009-2013) all the sound, well-justified market organisation measures to promote the use of biomass (subsidies, taxes, standards, knowledge acquisition, etc.) will be applied on the basis of the analyses and studies carried out in phase I. On 8 February 2007 the Government approved the Estonian Rural Development Plan 2007-2013 which provides support to: ‐ investments aimed at the production of biomass and biofuels in agricultural holdings. ‐ micro-companies producing forestry products to invest in tangible and intangible assets in order to procure and introduce new products, production methods and technologies, ‐ the production of biofuels from non-wood agricultural products and from the production waste from the manufacture of agricultural and non-wood forestry products. ‐ to applied research and product innovation with regard to bio energy crops and biofuels.

In 2007 around EEK 700/ha will be paid in subsidies for energy crops, EEK 863.9/ha for growing agricultural crops and EEK 945/ha in standard agricultural subsidies. In 2006 applications for energy crop subsidies totalled 11 565.49 ha.

Annex I RES Electricity Potentials Annex II RES Bioenergy Potentials

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

Drafted in March 2008.

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Annex I RES Electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 32.05 307 935 1445 1805 Maximum Wind onshore MW 505 915 905 Maximum Wind offshore MW 430 530 900 Maximum solar PV TWh 0.0 Maximum solar thermal MW 0 Total Hydro MW 0.0 20 Maximum conventional hydro MW 0.0 20 of which Maximum run of river MW Maximum Pumped Storage hydro MW Maximum Wave& Tide power plants TWh 0 Maximum geothermal conventional power plants MW 0 Maximum geothermal hot dry rock power plants MW 0 Maximum biomass power plants (conventional+CHP) TWh 0.94 Maximum biogas power plants (conventional+CHP) TWh 0.041 Maximum bio waste power plants (CHP) TWh 0.07

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 8,0 8,0 8,0 16,0 21,0 25,0 28,0 30,0 Cost [€/GJ] 8,2 8,2 8,2 8,18 8,24 8,39 8,67 9,13 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 10,0 10,0 10,0 20,0 25,0 30,0 33,0 36,0 Cost [€/GJ] 8,2 8,2 8,2 7,91 7,64 7,44 7,29 7,21 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 19,0 19,0 19,0 38 49 60 67 74 Cost [€/GJ] 16,9 16,9 16,9 15,5 14,5 13,7 13,1 12,7 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 25,0 25,0 25,0 52,0 67,0 82,0 92,0 101,0 Cost [€/GJ] 2,6 2,6 2,6 2,43 2,32 2,27 2,28 2,35 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 8,0 8,0 8,0 17,0 22,0 26,0 29,0 31,0 Cost [€/GJ] 6,3 6,3 6,3 6,1 5,9 5,8 5,7 5,7 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste EEA Report 7 2006 Potential [PJ/a] UP 2 2 2 3.2 according to Koppel, A., and K. Heinsoo (2005): Renewable energy from biomass in Estonia: current status and outlook. Contribution of Agriculture to Energy Cost [€/GJ] Production, Tallin, Estonia, October 7, 2005. Forestry residues Potential [PJ/a] UP 12 according to Roos, I., and S. Soosaar (2004): Status of Renewable Energy Development and Review of Existing Framework and Review of Existing Cost [€/GJ] Framework. ALTENER, May 2004. Kask, Ü. (2005): Biomass resources and utilization in Estonia. Tallinn Wood processing residues University of Technology, 12-09-2005. Potential [PJ/a] UP 31 33 36 EEA Report 7 2006 Cost [€/GJ] 9 according to (Roos and Soosaar, 2004) and (Kask, 2005) Municipal solid waste Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ] Wet manures Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ] 1.8 according to (Roos and Soosaar, 2004) and (Kask, 2005) Black liquor Potential [PJ/a] UP 0.7 according to (Roos and Soosaar, 2004) and (Kask, 2005) Cost [€/GJ] Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP Cost [€/GJ] demolition Potential [PJ/a] UP Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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10. SPAIN

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The Spanish economy is characterized by a relatively higher energy intensity than the rest of Europe, by a high dependence on energy imports, but also by rapid changes of the energy system in the last few years. Indeed, security & diversity of energy sources remain the major driving forces for the growth of Spain renewable energy industry. A stable legal framework based on feed-in tariffs with premium price recognising the environmental benefits promotes the development of renewable. Spain has become the world’s second largest producer of wind energy, behind Germany, and ahead of the United States. The success in the development of wind power in Spain has been accompanied by the creation of competitive companies now active in the international technology markets. The photovoltaic energy is characterized by a similar industrial development. Emerging technologies like concentrated solar power have ambitious targets for 2010. There is already one 10 MW solar tower power plant in operation, another one of 20 MW in construction and up to five 50 MW solar trough power plants also in construction. However, biomass has not developed as fast as expected (nor for electricity neither for heating purposes). Spain has very low district heat supply, and despite the fact that Spain has been the first European country to enforce the obligatory implementation of solar thermal energy in new and refurbished buildings, remaining administrative barriers restrain the further development of RES for heating and cooling market. Regarding biofuels, Spain is the second producer of bioethanol in Europe (behind Germany) and remains behind the big European biodiesel producers such as Germany, France, although its installed capacity is increasing. The recent increase of imports of subsidized biodiesel from the United States, given its lower price, slowed down the domestic production, so that Spain is a net exporter of biofuels. Finally, despite its increasing biofuel installed capacity, Spain is not a leader in biofuel consumption due to the existing barriers to blending biofuels with gasoline and diesel (technical and logistic barriers, especially regarding the blending of gasoline and bioethanol given the characteristics of bioethanol, as well as some preoccupations related to the consequences of the target on the gasoline and diesel markets given the current overproduction of gasoline in Spain where more than 70% of the fleet is based on diesel cars).

KEY FIGURES

Remark: The annual statistics must be considered with precaution given the rapid changes occurring in the Spanish energy system. For example, the production of hydroelectricity varied due to very dry past years; the wind electricity is rapidly increasing; the installed capacity of gas combined cycle has increased a lot in the very recent years (+35% in 2006-2007) reaching 22097 MW in 2007.

• The share of RES in Total Primary Energy Consumption was of 6.8% in 2006. This contribution is higher than in 2005 thanks to higher hydropower (2005 was a very dry year) and biofuels consumption. The consumption of Renewable Energy has grown in 2006 in 1.1 millions toe (12% growth with respect to 2005). • The share of RES in the gross final energy consumption was 8.7% in 200532. • The share of RES in the gross electricity production was 18.8% in 2006 (including hydroelectricity) with 57167 GWh (Coal: 69988 GWh, Nuclear: 60021 GWh). • The share of RES heating and cooling was of 3.6% in 2006. • The share of biofuels in the transport sector in 2006 was 0.53%; with a capacity production of biofuels was 107% higher than the capacity in 2005. • Spain energy dependence on imports amounts to 78% in 2006.

Technology specific figures • Wind power represents 7.5% of total electricity production with an increase in the installed capacity of 17% as regards 2005. More than 13 GW of wind are currently (2007) installed in Spain.

32 Please see EC definition of "final consumption of energy from renewable sources 93 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

• Hydropower production has increased 35% as regards the production in 2005, the latter being a very dry year. It reached more than 36530 GWh in 2006, what remains below the historical levels. • In 2006, PV reached 118 MW of capacity installed; Biogas 160 MW, and Biomass 409 MW • Solar Thermal installed capacity reached 930 MW in 2006. • 315 ktoe of biofuels were produced in 2006 (204 ktoe of bioethanol and 111 ktoe of biodiesel, equivalent to 321 kt bioethanol and 125 kt biodiesel) while the domestic consumption was 170 ktoe (114 ktoe of bioethanol and 56 ktoe of biodiesel). The difference was exported.

Primary Energy in Spain (2006)

Source: IDAE

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Electricity production in Spain (2006)

Source: IDAE

RES POLICY

The Spanish Renewable Energy Plan (Plan de Energías Renovables en España, PER) for 2005- 2010 represents a revision of the Spanish Promotion Plan for Renewable Energy (Plan de Fomento de las Energías Renovables en España) 2000-2010 in force up until 2005.

The plan expects a contribution from RES (hydroelectricity included) of 12.1% of primary energy consumption in 2010, electricity generation from RES of 30.3% of gross electricity consumption, biofuels consumption of 5.83% of gasoline and diesel use for transport in 2010, and RES contribution of 4445 ktoe for heating and cooling.

The volume of emissions avoided in 2010 as a result of the Plan is estimated to 27.3 million tonnes of CO2.

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200833 • 20% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in each Member State in 2020.

33 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process) 95 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

Indicative Target set by the RES- electricity European Directive from 200134 • 30.3 % Share of RES on gross electricity consumption by 2010

Indicative Target set by the European Biofuels Directive from 200335 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National commitments • 12.1% of RES in Primary Energy Consumption by 2010. • 30.3% of gross electricity consumption generated by RES • Biofuels consumption of 5.83% of gasoline and diesel use for transport in 2010. • Indicative biofuels consumption target of 1.9% in 2008, mandatory targets of 3.4% in 2009 and 5.83% in 2010 (Disposición Adicional Decimosexta de la Ley 34/1998 del Sector de Hidrocarburos). This law is not yet fully approved but should be soon.

RES Technology Roadmap • Please see annex II for the Spanish technology Roadmap up to 2010. Emerging technologies, such as concentrated solar power, have ambitious targets for 2010.

Progress towards the Targets Spain is currently far from its RES-e target. The RES-e share of gross electricity consumption was 18.8% in 2006, compared to 19.9% in 1997. Despite the fast growth of some RES in Spain (i.e Wind), it remains too small to reach the 2010 target given the increase in electricity consumption.

Electricity Installed New installed Rate of fulfillment Capacity in Total capacity capacity target * (observed 2006 (MW) capacity increase 2005- 2005-2010 (MW) increase 2005- target 2010 2006 (MW) 2006 / targeted (MW) increase 2005- 2010) Hydro (<50 112 810 13.8% 4757 5456 MW) Biomass 65 973 6.7% 409 1317 Cofiring 0 722 0.0% 0 722 Wind 3451 12000 28.8% 11606 20155 Solar PV 81 363 22.3% 118 400 Biogas 19 94 20.3% 160 235 CSP 0 500 0.0% 0* 500 TOTAL 3728 15462 24.1% 17050 28785 * 10 MW in 2007 and 270 MW in construction phase

34 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010. 35 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport currently in force, sets targets up to 2010, with indicative targets by 2005.

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Heating and Installed New installed Rate of Capacity in Target 2010 Cooling capacity capacity target fulfillment 2006 (ktoe) (Ktoe) increase 2005- 2005-2010 (ktoe) 2006 (ktoe) Biomass 29 583 5.0% 3617 4070 Solar Thermal 19 325 5.8% 0.072 0.376 TOTAL 48 908 5.3% 3689 4446

According to recent statements of Spanish Ministry of Energy, in order to achieve the 2020 target of 20% share of RES in final energy consumption set in the proposal of the European Commission on a Renewable Energy Framework Directive from January 2008, Spain should achieve: • 42% of electricity coming from RES in 2020 (currently the share is 18%) • 6% share of RES in heating and cooling (currently is 3.6%) • 10% of biofuels (currently in 0.6%)

MAIN POLICY INSTRUMENTS

Support to RES Electricity

Feed in Tariff for electricity generation

Electricity generation in Spain has two different regimes, the ordinary regime (R.O.) to which all the conventional generation belong to, and the special regimen (R.E) to which the renewable energy generation and the CHP plants belong to. In this last regime a feed-in tariff promotion mechanism is implemented. Spain’s feed-in tariff incorporates both fixed total prices and price premiums added to the electricity market Price.

Project developers should choose one of the following options: • Transfer electricity to the system through the transport or distribution grid, therefore being paid a feed-in tariff for it, unique for all the programming periods. • Sell the electricity on the wholesale electricity market. In this case, the electricity sale price will be the hour price resulting in the wholesale market supplemented if any, with a premium. In this last case, a new feature is introduced for some technologies, a higher and a lower limit (cap and floor).

Tariffs have been updated in May 2007: Spanish ministers approved new rules curbing profits for wind generators and setting incentives for other types of renewable energy. The new rules guarantee an internal rate of return of 7 percent to wind and hydroelectric plants that opt to sell power to distributors direct and a return of between 5 and 9 percent if they participate in the electricity pool market. Tariffs will be revised every four years taking into account whether objectives have been achieved for different types of energy and the evolution of costs. These revisions will not affect plants that are already in operation.

The Feed in System in Spain provides a stable framework for investments. Together with Regional support for planning, simple administrative procedures, specially in the case of wind energy, are the key elements for the rapid growth of RES-e in Spain. However issues such as updating and improvement of the regulatory procedures regarding grid access and operating conditions and establishment of a single operation centre for the Special Regime plants should be taken into account in the future policy developments.

See annex III for a detailed description of the tariff system in Spain

Support to RES Heating and Cooling 97 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

Solar Thermal Obligation In March 2006: Spain has become one of the countries with the most advanced solar legislation in the world. On 17th March 2006, the Spanish government approved the new Technical Buildings Code (CTE, Codigo Tecnico de la Edificacion), the most significant reform of the Spanish building sector for decades. The new CTE built on the success of the previous municipal solar ordinances. The CET includes the following main areas: security of the buildings structure, fire safety, other safety and health issues, sustainability and energy efficiency of the buildings. The latter part ("Documento Basico HE - Ahorro de Energia") goes far beyond the minimal level of implementation of the EC Directive on the Energy Performance of Buildings and includes an obligation to cover 30- 70% of the Domestic Hot Water (DHW) demand with solar thermal energy. The solar thermal part applies to all new buildings and to those undergoing a renovation. It applies to any kind of buildings, independent of their use. Some exceptions are defined in the law; mainly in the case of buildings that either satisfy their DHW demand by other renewables or by cogeneration or for shaded buildings.

Investment subsidies For RES heating and cooling technologies covering 36.4% of the total cost of the installation.

Support to Biofuels Excise duty reductions for Biofuels To reduce the final price of biofuels and make them similar to the prices of the conventional petroleum-based fuels, fiscal incentives for biofuels commercialization were established in Law 22/2005, which incorporates several European directives about energetic products: until the end of year 2012, the Hydrocarbons Tax for biofuels will be of zero (instead of 0.278 €/liter for diesel and 0.371 €/liter for gasoline).

It must be noted that biofuels are not exempted from two other existing taxes:

• The “tax on the retail sales of certain hydrocarbons” (IVMH), including a national component of 0.024 €/liter as well as a regional component of approximatively also 0.024 €/liter;

• The “value-added tax” (IVA) of 16%.

Biofuel quota obligations In June 2007, the Spanish government has passed a new law (Disposición Adicional Decimosexta de la Ley 34/1998 del Sector de Hidrocarburos) making the blending of biofuels into petroleum fuel obligatory. It has set an interim target for 1.9% of biofuels to be blended into regular fuels in 2008 (not mandatory), which will become mandatory proportions of 3.4% in 2009 and 5.83% in 2010. Sanction could reach 30 millions €. This law has not yet been fully approved but should be soon.

Resource Quota in % (per year) Year Comments Biofuels 1.9% (energy) 2008 Guideline only Biofuels 3.4% (energy) 2009 Compulsory Biofuels 5.83% (energy) 2010 Compulsory

Fiscal incentives for Biofuels production a) Tax benefit for investment in biofuel production

Law 36/2003 created special fiscal deduction in the Company Income Tax. It can be deducted 10% in the down payment for investments made in equipments and installations to convert agricultural products in biofuels.

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Investment subsidies for biofuels a) Subsidy to biofuel R&D projects

The Spanish government has granted a subsidy of 22 millions € to a biodiesel R&D project involving several Spanish companies, including Repsol. The objective of the project is to reduce production costs, select and test new biomass feedstocks, including seaweed, waste cooking oils, and animal fats. b) Subsidy to bioethanol R&D projects

The Spanish government has also granted a subsidy of 13.9 millions € to a bioethanol R&D project leaded by Abengoa. The objectives of the project are to promote the energy crops development, to make progress in the bioethanol thermochemical production, to develop the bioethanol market by introducing bioethanol-diesel mixtures, and to support the public research centers and universities to improve their knowledge and research capacities.

Other measures stimulating the biofuels a) Support for farmers

Farmers can receive, depending on the crop, a grant of 45 €/ha for growing energy crops, until the total surface in the EU devoted to energy crops do not exceed 1.5 Mha. While in the first year of introduction in 2004 in Spain, 6705 ha received the aid, the area increased to 27321 ha in 200536 and in 2006, 223500 ha received the energy crop support. The use of set-aside land to grow energy crops in Spain has not been very successful. Indeed, since productivity is around one-third less than in Germany or France, Spain did not benefit so much from the compensatory program37 (based on yield) of the European Common Agricultural Policy. b) Promotion of second generation biofuels

Spain does not have any particular promotion plan or target for the utilisation of second generation biofuels. According to CIEMAT few R&D project have been funded by the Spanish research policy (1 in 2004, 2 in 2005 and 3 in year 2006). They are mostly concentrated in the conversion of lignocellulosic biomass into ethanol and only one has received funds to research in biohydrogen production.

36 In 2005, an estimated 0.5 MHa received the energy crop payment. 37 The goal of this set-aside program is to prevent over-production and preserve farm income by providing a financial incentive for removing marginally productive or environmentally sensitive land from cultivation. 99 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

Annexes Annex I. RES Installed capacity and electricity production in 2006 Annex II. Technology Roadmap until 2010 Annex III. Feed in Tariffs Annex IV RES electricity Potential Annex V RES Bioenergy Potentials

Sources: European Commission Factsheets by Country http://ec.europa.eu/energy/energy_policy/facts_en.htm Member States Reports in the framework of the Directive 2001/77/EC on renewable electricity http://ec.europa.eu/energy/res/legislation/electricity_member_states_en.htm Member States Reports in the framework of the Directive 2003/30/EC on biofuels http://ec.europa.eu/energy/res/legislation/biofuels_members_states_en.htm Asociación de Productores de Energías Renovables (APPA) www.appa.es Cabal H., Y. Lechón, L. Izquierdo, N. Caldés, R. Sáez, 2007. El sistema electrico en la península ibérica. Aspectos medioambientales y costes sociales. Collección Documentos Ciemat, Madrid, Spain. 91 p. CIEMAT, 2007. Enhancement of the NEEDS-TIMES model on Biomass and RES electricity. Data for SPAIN. Project RES-2020, Update, December 2007. CIEMAT/ASE/E0215/RES2020/1. CIEMAT, Madrid, pain, 19 p. Neeft J., van Thuijil E., Wismeijer R. And Mabee WE., 2007. Biofuel implementation agendas. IEA Task 39, Report T39-P5, 52p. MITYC, IDAE, 2005. Plan de Energías Renovables en España 2005-2010. 345 p. Available at: http://www.idae.es/uploads/documentos/documentos_Plan_de_Energias_Renovables_en_Espana _completo_49e2ac7d.pdf Red Eléctrica de España (REE), 2007. El sistema electrico español. 116 p. www.ree.es Red Eléctrica de España (REE), 2008. El sistema electrico español, Avance del informe 2007. 26 p. www.ree.es

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020.

Drafted March 2008.

CIEMAT has widely contributed in the elaboration of this review.

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Annex I. RES Installed capacity and electricity production in 2006

Producción con energías renovables en 2006

Producción en Producción en términos de términos de Potencia (MW) Producción (GWh) Energía Primaria Energía Primaria (Avance 2006) (Año Medio)(1) (ktep) (ktep)

Generación de electricidad Hidráulica (> 50 MW) (2) 13.521,0 25.013,9 1.550 2.151,2 Hidráulica (Entre 10 y 50 MW) 2.938,5 5.876,9 364 505,4 Hidráulica (< 10 MW) 1.818,9 5.638,7 360,3 484,9 Biomasa 409 2.606 761 808,2 R.S.U. 189 1.222,9 404,6 395,1 Eólica 11.606 27.855 1.958 2.395,5 Solar fotovoltaica 118 177 12 15,2 Biogás 160 935 314,5 302,4 Solar termoeléctrica - - - - TOTAL ÁREAS ELÉCTRICAS 30.760 69.326 5.724 7.058

2 Usos térmicos m Solar t. baja temp. (ktep) Biomasa 3.457 3.457 Biogás 31 31 Solar térmica de baja temperatura 930.235 72 72 Geotermia 88 TOTAL ÁREAS TÉRMICAS 3.568 3.568 Biocarburantes (Transporte) TOTAL BIOCARBURANTES 549 549

TOTAL ENERGÍAS RENOVABLES 9.842 11.175,6

CONSUMO DE ENERGÍA PRIMARIA (ktep) 145.086 145.086

Energías Renovables/Energía Primaria (%) 6,8% 7,7%

(1): Datos de 2006, provisionales. Para energía hidráulica, eólica, solar fotovoltaica y solar térmica, se incluye la producción correspondiente a un año medio, a partir de las potencias y superficie en servicio a 31 de diciembre, de acuerdo con las características de las instalaciones puestas en marcha hasta la fecha, y no el dato real de avance de 2006. (2): Incluye producción con bombeo puro

Source: IDAE

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Annex II Technology Roadmap until 2010

These targets imply, in accordance with the data of the selected PER Scenario, a contribution from renewable energy sources (RES) of:

- 12.1% of primary energy consumption in 2010, electricity generation from RES. - 30.3% of gross electricity consumption, - biofuels consumption of 5.83% of petrol and diesel use for transport in 2010, - RES heating and cooling contribution with 4445 ktoe to primary energy consumption.

ELECTRICITY

As regards the targets for electricity generation from renewable sources, the table below shows the anticipated generation from renewable sources in 2010 and the forecast gross consumption of electricity in 2010. According to the Plan’s targets, renewable energy sources will provide the system with more than 100,000 GWh a year by 2010, equivalent to 30.3% of gross electricity consumption, thus fulfilling Spain’s target (RES-e Directive) of 29.4% in 2010.

Source: PER 2005-2010

Wind Power The new target for the wind energy sector is an increase in output of 12000 MW over the period 2005-2010.This implies ending the decade with a total installed potential of 20155 MW. It must be noted that Spain does not yet have any off-shore wind farms. There are a number of ambitious plans for off-shore wind farm but it is considered unlikely that these projects will be developed during the period 2005-2010. If the current barriers to their implementation are overcome, which is an issue currently being addressed the installed capacity of offshore wind farms could reach 1000 MW around 2010.

Hydropower The target for the hydroelectric generating potential to be developed over the period 2005-2010 has been set based on the hydroelectric schemes currently being constructed or for which permits have been applied for or plans submitted to the relevant authorities. The overall target for the increase of small hydro (up to 10 MW) is 450 MW over the period 2005-2010. This will enable an overall generating capacity of 2199MW from small hydro facilities in 2010. The overall target for large hydro (10-50 MW) is an increase in generating capacity of 360MW over the period 2005- 2010, bringing the total up to 3257 MW. The more than 50 MW hydro plants are considered without change. Concentrated Solar Power The available solar resources, the technology experience gained in Spain from past research and development projects, the support in the form of a premium, and the presence of companies interested in the technological development of the sector make the concentrated solar power a promising technology for Spain.. There is one 10 MW solar tower power plant in operation, another

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one of 20 MW in construction and up to five 50 MW solar trough power plants also in construction. However, more than 80 CSP projects are registered in the “Special Regime for Electricity Producers”, a pre-requisite for the construction, and 40 plants have already got the access point to be connected to the national electricity network. Therefore, the current outlook and existing initiatives are sufficient for 500 MW of generating capacity to be installed (production of 1298 GWh in 2010), as targeted in the PER.

Solar Photovoltaic The Plan identifies a new target for an increase in photovoltaic capacity of 363 MWp over the period 2005-2010, reaching an installed capacity of 400 MW in 2010.

Biomass for electricity In the case of electricity generation from biomass, the growth target over the period 2005-2010 is 1695 MW., reaching an installed capacity of 2039MW in 2010. Achieving this target relies mainly on three factors: - Implementation of a co-combustion plan for the combined combustion of biomass and coal at nineteen existing coal-fired power stations. - A proposed significant increase in the price paid for electricity generated by biomass facilities. - The existing Interministerial Biomass Commission, which it is hoped will add dynamism to the market.

Biogas The target set for the biogas implies an increase of the installed capacity of 94 MW during the period, reaching an installed capacity of 235 MW in 2010.

TRANSPORT

Biofuels The table below shows the contribution of biofuels to targeted transport fuels consumption (gasoline and diesel). Under the PER, biofuels must account for 5.83% in 2010, thus also fulfilling the indicative target of 5.75% established for the target year.

Source: PER 2005-2010

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HEATING AND COOLING

Solar Thermal Energy A target of an increase in installed collector area of 4200000 m2 over the period 2005-2010 has been set. The solar thermal energy applications could develop considerably in Spain with the approval of the Technical Building Code.

Biomass for thermal uses In the case of thermal biomass, the target is an increase of 582.5 ktoe between present and 2010. To this end, a range of actions are envisaged to improve the waste supply logistics and the proposed creation of a new line of grant aid for investments.

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Source: PER 2005-2010 (http://www.idae.es/uploads/documentos/documentos_Plan_de_Energias_Renovables_en_Espana_completo_49e2ac7d.pdf)

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Annex III Feed in and Feed in Premium Tariffs

Project developers should choose one of the following options:

• Transfer electricity to the system through the transport or distribution grid, therefore being paid a feed-in tariff for it, unique for all the programming periods.

• Sell the electricity on the wholesale electricity market. In this case, the electricity sale price will be the hour price resulting in the wholesale market supplemented if any, with a premium. In this last case, a new feature is introduced for some technologies, a higher and a lower limit (cap and floor).

The titleholders of the facilities may choose the most suitable sale options for periods no shorter than a year. Nevertheless, the participation in the market is encouraged as it is deemed that in this way.

Feed in tariff Feed-in premium Capacity Life (y) Feed in tariff Reference Upper Lower (MW) (c€/kWh) feed-in limit limit premium (c€/kWh) (c€/kWh) (c€/kWh) Biomass Energy crops ≤ 2 0-15 15.889 11.5294 16.6300 15.4100 >15 11.7931 0 > 2 0-15 14.659 10.0964 15.09 14.27 >15 12.347 0 Agricultural ≤ 2 0-15 12.571 8.2114 13.31 12.09 residues >15 8.4752 0 > 2 0-15 10.754 6.1914 11.19 10.379 >15 8.066 0 Forest residues ≤ 2 0-15 12.571 8.2114 13.31 12.09 >15 8.4752 0 > 2 0-15 11.8294 7.2674 12.26 11.44 >15 8.066 0 Landfill biogas 0-15 7.992 3.7784 8.96 7.44 >15 6.51 0 Biogas from ≤ 0.5 0-15 13.069 9.7696 15.33 12.35 digesters >15 6.51 0 > 0.5 0-15 9.68 5.7774 11.03 9.55 >15 6.51 0 Manure 0-15 5.36 3.0844 8.33 5.1 >15 5.36 0 Agricultural ≤ 2 0-15 12.571 8.2114 13.31 12.09 industry >15 8.4752 0 residues > 2 0-15 10.754 6.1914 11.19 10.379 >15 8.066 0 Forest industry ≤ 2 0-15 9.28 4.9214 10.02 8.79 residues >15 6.51 0 > 2 0-15 6.508 1.9454 6.94 6.12 >15 6.508 0 Black liquor ≤ 2 0-15 9.28 5.1696 10.02 8.79 >15 6.51 0 > 2 0-15 8 3.2199 9 7.5 >15 6.5080 0 MSW 5.36 2.3 Biomass CHP Energy crops ≤ 2 0-15 16.0113 11.6608 >15 11.8839 0

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> 2 0-15 14.659 10.0964 >15 12.347 0 Agricultural ≤ 2 0-15 12.7998 8.4643 residues >15 8.6294 0 > 2 0-15 10.754 6.1914 >15 8.066 0 Forest residues ≤ 2 0-15 12.7998 8.4643 >15 8.6294 0 > 2 0-15 11.8294 7.2674 >15 8.066 0 Landfill biogas 0-15 8.2302 4.0788 >15 6.704 0 Biogas from ≤ 0.5 0-15 13.3474 10.0842 digesters >15 6.6487 0 > 0.5 0-15 9.9598 6.1009 >15 6.6981 0 Manure 0-15 5.36 3.0844 >15 5.36 0 Agricultural ≤ 2 0-15 12.7998 8.4643 industry >15 8.6294 0 residues > 2 0-15 10.9497 6.3821 >15 8.2128 0 Forest industry ≤ 2 0-15 9.4804 5.1591 residues >15 6.6506 0 > 2 0-15 7.1347 2.9959 >15 7.1347 0 Black liquor ≤ 2 0-15 9.4804 5.4193 >15 6.6506 0 > 2 0-15 9.3 4.9586 >15 7.5656 0 Other renewable Solar PV < 0.1 0-25 44.0381 > 25 35.2305 0.1-10 0-25 41.7500 > 25 33.4000 > 10 0-25 22.9764 > 25 18.3811 Solar thermal 0-25 26.9375 25.4000 34.3976 25.4038 > 25 21.5498 20.3200 Wind Onshore 0-20 7.3228 2.9291 8.4944 7.1275 > 20 6.1200 0.0000 Geothermal, 0-20 6.9800 3.8444 tide, ocean > 20 6.5100 3.0600 Hydro < 10 0-25 7.8000 2.5044 8.5200 6.5200 > 25 7.0200 1.3444 10 - 50 0-25 6.60+1.20*[(50- 2.1044 8.000 6.1200 capacity)/40] > 25 5.94+1.08*[(50- 1.3444 capacity)/40]

The premium to be paid every hour is calculated as follows: a) For values of the reference market price plus the reference premium lower or equal to the lower limit, the premium value to be paid shall be the difference between the lower limit and the daily market hourly price at that hour. b) For the reference market price values plus the reference premium included between the higher

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and the lower limits, established for a given group or subgroup, the value to be paid shall be the reference premium for this group or subgroup, at that hour. c) For the reference market price values included between the higher limit and minus the reference premium and the higher limit, the value of the premium to be paid shall be the difference between the higher limit and the reference market price at that hour. d) For the reference market price values higher or equal to the higher limit, the price of the premium to be paid shall be zero at that time.

The amounts of tariffs, premiums, supplements and cap & floor limits will be annually updated having the consumer price index (CPI) as a reference minus 0.25 until the 31st of December 2012 and minus 0.5 since then.

During 2010, in view of the result of the follow-up reports on the extent of fulfilment of the Renewable Energies Plan (PER) 2005-2010 and of the Spanish Energy Saving and Efficiency Strategy, as well as the new objectives that may be included in the following Renewable Energies Plan for the 2011-2020 period, the review of tariffs, premiums, supplements and cap & floor limits will take place, bearing in mind the costs associated with each of these technologies, the extent of participation in the special scheme in the meeting of the demand and its effect on the technical and economical system, always guaranteeing reasonable profitability rates with reference to the price of money on the capital market.

Every four years and from then on, a new revision will be done maintaining the criteria above.

The new feed-in Law includes a premium for Biomass and/or biogas co-combustion in thermal power plants under the ordinary scheme. The agreement, reached in Cabinet Meeting with a prior consultation to the Autonomous Communities, may determine the right to receive a premium, specific for each installation, all along the first fifteen years since its commissioning. The calculation of the premium for each installation will be established case by case.

Ministry of Industry, Tourism and Commerce is authorised specifically to issue the technical instructions that are necessary to establish a biomass and biogas certification system, which includes their traceability. Facilities using biomass and/or biogas shall send the information to be determined in the corresponding certification procedure.

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Annex IV RES electricity potential

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 9911 22717 40186 54202 Maximum Wind onshore MW 9911 22171 33186 44202 Maximum Wind offshore MW 0 0 7000 10000 Maximum solar PV TWh 0.1 5.13 Maximum solar thermal MW 0.0 5597 Total Hydro MW 18445 19105 20807 21622 Maximum conventional hydro MW 15718 14205 14907 15722 of which Maximum run of river MW 1788 1160 1935 2033 Maximum Pumped Storage hydro MW 2727 4900 5900 5900 Maximum Wave& Tide power plants TWh 13.23 Maximum geothermal Total TWh 5.79 9.66 Maximum geothermal conventional power plants MW 800 1400 Maximum geothermal hot dry rock power plants MW Maximum biomass power plants (conventional+CHP) TWh 2.79 54.30 Maximum biogas power plants (conventional+CHP) TWh 1.20 13.19 Maximum municipal waste power plants (CHP) TWh 2.06 5.65

The following tables present the data that have been gathered in the framework of the RES2020 project in order to be used in the modelling. The data have been collected • Through EREC and its Members • Through a revision of previous EU funded projects and reports (GreenX, OPTRES) • Through the partners of the project The data have been discussed in the framework of the REWG of the EnR with the country experts.

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex V RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 45,0 45,0 45,0 89,0 141,0 192,0 246,0 300,0 Cost [€/GJ] 9,4 9,4 9,4 9,01 8,69 8,4 8,15 7,92 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 32,0 32,0 32,0 64,0 101,0 138,0 176,0 215,0 Cost [€/GJ] 14,0 14,0 14,0 13,15 12,48 11,91 11,42 10,99 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 80,0 80,0 80,0 160 259 358 463 569 Cost [€/GJ] 5,9 5,9 5,9 5,4 5,1 4,8 4,6 4,4 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 38,0 38,0 38,0 76,0 124,0 172,0 224,0 275,0 Cost [€/GJ] 3,0 3,0 3,0 2,76 2,62 2,5 2,4 2,31 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 26,0 26,0 26,0 51,0 81,0 111,0 142,0 174,0 Cost [€/GJ] 10,9 10,9 10,9 10,6 10,3 10,0 9,8 9,5 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP 74 79 83,7 EEA Report 7 2006 Cost [€/GJ] Forestry residues Potential [PJ/a] UP Cost [€/GJ] 6,7 €120/t ≈ €6.7/GJ: Wood processing residues Potential [PJ/a] UP 7 8 8,4 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP 5,1 55 59 62,8 EEA Report 7 2006 Korz, D.J. (2005): Status and trends of the residual waste treatment options (landfilling, mechanical-biological treatment, incineration) in selected EU member states: Spain. The future of Cost [€/GJ] residual waste management in Europe, 2005. Wet manures Potential [PJ/a] UP 44 47 50,2 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP 52 55 58,6 EEA Report 7 2006 Cost [€/GJ] Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP 15 16 16,7 EEA Report 7 2006 Cost [€/GJ] demolition Potential [PJ/a] UP 15 16 16,7 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP 11 12 12,6 EEA Report 7 2006 Cost [€/GJ]

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11. FINLAND

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Bioenergy plays an important role in the decentralised and diversified Finnish energy system. Finland is one of the world leaders in utilising bioenergy. Almost 20 % of total primary energy consumption in Finland is met by bioenergy. The National Action Plan for Renewable Energy Sources (RES) aims at a further increase the use of biomass: by 2010, the use of bioenergy energy sources should be 30 per cent higher than in 2001. The RES National commitments for the year 2015 and 2025 aim to increase bioenergy utilisation in electricity and heat production. Currently in Finland CHP with biomass and biofuels are wider used, a main policy objective is to expand their RES-CHP-District heating schemes, but also biofuels in the transport sector. Finland policy framework for bioenergy has been very effective; however other RES with still potential in Finland are less developed. Additional support in the form of feed-in tariffs based on purchase obligations or green certificates is being considered for onshore wind power.

A very important role in the Finish biomass sector plays peat. 30% of the total land area of Finland of 30.5 million hectares is classified as peatland. Peat is very often used in CHP plants, however Peat it is not a RES and it should not count for fulfillment of the RES targets of Finland.

In May 2006, the Helsinki City Council voted to switch half of the city's public bus fleet to run on biodiesel made from biomass, animal fat and waste cooking oil. The three-year programme was slated to affect 700 vehicles and cut overall bus particle emissions by half. In May 2002 Finland's parliament approved the building a fifth nuclear power plant, to be in operation about 2009. The construction of the power plant is delayed.

KEY FIGURES • The share of RES in total primary energy consumption was of 24% in 2006. ( 20% from Bio-energy). • The share of RES in the gross final energy consumption was 28.5 % in 2005. • The share of RES in the gross electricity production was 25.54% in 2006. 28.4% in 2005. In 2006 was lower due to the decrease in Hydropower production. • The share of all biofuels in the transport sector in 2006 was 0.02%. • Finland energy dependence on imports amounts to 69 % in 2005.

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Source: Statistics Finland, Energy Statistics

RES POLICY Through subsidies and energy tax exemptions, Finland encourages investment in RES-e and RE- H&C.

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200838 • 38% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200139 • 31.5 % Share of RES on gross electricity consumption by 2010

Indicative Target set by the European Biofuels Directive from 200340 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National commitments • Increasing the use of renewable energy by at least 25% by 2015 and 40% by 2025 is a key objective of Finland’s energy policy. • The National Action Plan for Renewable Energy Sources was launched in 1999 and updated in 2002. By 2010, the use of bioenergy energy sources should be 30 per cent higher than in 2001. The RES National commitments for the year 2015 and 2025 aim to increase of bioenergy in electricity and heat production. • There is no national target/commitment for heating and cooling.

Progress towards the targets Finland is nearing its RES-e target for 2010.

38 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

39 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010. 40 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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Support for Electricity

Finland’s energy market is fully liberalised, right down to the level of the individual private consumer. Market support for renewable electricity consists of two instruments. Investment Subsidies First, the construction costs of renewable energy plant are co-financed by the government with grants of up to 40% in the case of wind. This applies to companies. In the recent year’s wood plants for energy and fuel production have been the ones mostly benefiting from this scheme (60% of the total grants in 2006). Biogas plants received 7% of the total budget that year (2,5 M€)41. Tax refunds for suppliers of renewable electricity The government imposes a per kWh tax on all Finnish electricity suppliers, which they pass on to their end consumers. The government refunds this tax to suppliers of renewable electricity, however, at 0.69 c€/kWh (wind). Guaranteed access to the grid

For all electricity users and electricity-producing plants, including RES-e generators (Electricity Market Act – 386/1995)

Feed in Tariff or Green Certificates Additional support in the form of feed-in tariffs based on purchase obligations or green certificates is being considered for onshore wind power

Support for Heating and Cooling

Investment Subsidies The construction costs of renewable energy plant are co-financed by the government with grants of up to 30%. This applies to companies. Direct investment support for individual biomass heating installations.

Fiscal Incentives Taxes imposed on heat, are calculated on the basis of the net carbon emissions of the input fuels and are zero for renewable energy sources.

Support for Biofuels

Quota Obligations On the basis of an expert group's proposals, on 19 October 2006 the Government submitted a legislative proposal to the Finnish Parliament concerning the promotion of biofuels in transport. The proposal aims to create demand for biofuels by placing an obligation in respect of the marketing of biofuels on the distributors of transport fuels. The proposed law has been submitted to the Finnish Parliament, and is due to enter into force on 1st January 2008. The proposal sets out a minimum percentage of biofuels to be supplied for consumption annually by the distributors of transport fuels. This minimum percentage would increase annually from, in 2008, at least 2% of the total energy content of the petrol, diesel oil and biofuels supplied by a distributor of transport fuels. In 2009, the share would be at least 4%, and in 2010 and afterwards annually at least 5.75%. A separate Government decree would, however, provide for the entry into force of the 2010 obligation. The obligation would be enforced if the quality standards of fuels, in 2010, allow the mixing of the required percentages of biofuels with petrol and diesel oil. The obligation would only apply to the total amount of biofuels, allowing the distributors to fulfill the obligation by using biofuels to replace petrol or diesel oil in a ratio they choose within the limits of the quality standards. Neither would the law regulate the origin of the biofuel. The distributors could subcontract their obligation wholly or partially to another company.

41 Figures from the Finish report connected to the biofuels directive 115 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

Irrespective of contracts, each distributor would be accountable to the Government for fulfilling his obligation either personally or through a contractor. If the distributor failed to fulfill his obligation, the customs authorities would impose a penalty fee.

Resource Quota in % (per year) Biofuels 2% in 2008 4% in 2009 5.75% in 2010

Annex I Finland RES Electricity Potentials Annex II RES Bioenergy Potentials

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

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Annex I Finland RES Electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total wind MW 82 500 1600 3000 6000 Maximum Wind onshore MW 82.0 280.0 500.0 900.0 2100.0 Maximum Wind offshore MW 220 1100 2100 3900 Maximum solar PV TWh 0.6 Maximum solar thermal MW 0 Total Hydro MW 2999 3141 3437 3437 Maximum conventional hydro MW 2999 3141 3437 3437 of which Maximum run of river MW Maximum Pumped Storage hydro MW 0 0 0 0 Maximum Tide & Wave power plants TWh 1.54 Maximum geothermal conventional power plants TWh 0 Maximum geothermal hot dry rock power plants MW 0 Maximum biomass power plants (conventional+CHP) TWh 9.8 20.51 Maximum biogas power plants (conventional+CHP) TWh 0.1 1.25 Maximumbiowaste power plants (CHP) TWh 0.2 0.71

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 5,0 5,0 5,0 8,0 10,0 12,0 13,0 15,0 Cost [€/GJ] 12,4 12,4 12,4 11,93 11,54 11,2 10,9 10,63 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 14,0 14,0 14,0 23,0 28,0 34,0 38,0 42,0 Cost [€/GJ] 13,5 13,5 13,5 12,75 12,11 11,57 11,1 10,7 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 27,0 27,0 27,0 45 55 65 74 82 Cost [€/GJ] 18,6 18,6 18,6 17,1 15,9 14,9 14,2 13,5 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 19,0 19,0 19,0 30,0 37,0 44,0 50,0 55,0 Cost [€/GJ] 4,1 4,1 4,1 3,79 3,56 3,37 3,23 3,11 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 6,0 6,0 6,0 10,0 13,0 15,0 17,0 19,0 Cost [€/GJ] 9,6 9,6 9,6 9,3 9,1 8,8 8,6 8,4 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP 15 16 17 EEA Report 7 2006 Cost [€/GJ] Forestry residues Sipilä, K., et al. (2005): Raw materials availability to synfuels production and remarks on Potential [PJ/a] UP RTD goals. Synbios, Stockholm, Sweden, 18-19 May 2005. Cost [€/GJ] http://www.ecotraffic.se/synbios/konferans/presentationer/18_maj/synbios_sipila_kai.pdf Wood processing residues Potential [PJ/a] UP 40 43 46 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP 9 10 10 EEA Report 7 2006 Cost [€/GJ] Wet manures Potential [PJ/a] UP 7 8 8 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP 147 157 167 EEA Report 7 2006 Cost [€/GJ] Sewage sludge Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] Other waste wood households Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] packageing Potential [PJ/a] UP Cost [€/GJ] demolition Potential [PJ/a] UP 7 8 8 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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12. FRANCE

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France faces an energy import dependency close to average EU levels, with the majority of imports being oil. The share of gas, also imported, has been steadily increasing in recent years. Electricity production in France is dominated by nuclear energy which amounts approximately to 78% and hydropower. Renewable sources such as biomass and hydro, participate to a significant extent to the energy mix. However, France is developing policies aimed at a more diversified mix increasing wind and photovoltaic electricity, solar energy for heat and biofuels. France has the second biggest potential in the EU in terms of wind energy and a very good potential in terms of solar and geothermal energy. All Renewable energy sectors have features in 2006 significant growth rates. Despite these growth rates, the share of renewable energy in the energy mix does not increase as energy demand has been growing steadily.

KEY FIGURES • The share of RES in total primary energy consumption was of 12.2% in 2006. • The share of RES in the final energy consumption was 10.3% in 2006. • The share of RES in the gross inland electricity production was 12.1% in 2006. • The share of all biofuels in the transport sector in 2006 was 1.77% en 2006. • France’s energy dependence on imports amounts to 54.5%in 2005.

Technology Specific figures • Wood represents almost 9 millions toe and is the main source of renewable energy in France. • Hydroelectricity increased by 7,8% in 2006 reaching 56.4 TWh. However, its production remains weak compared to the average of the last 20 years. Hydropower provides 14 % of the French electricity production and 95 % of renewable electricity. • Wind energy production reached 2150 GWh in 2006. Production increased by 123% compared to 2005. • Photovoltaics features significant growth rates as well. Production in 2006 increased by 50% to reach 54 GWh.

RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200842 • 23% share of RES on the final consumption of energy in 2020.

• At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

42 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

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Indicative Target set by the RES- electricity European Directive from 200343 • 21 % share of RES on gross electricity consumption by 2010

Indicative Target set by the European Biofuels Directive from 200144 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010. And 2% in 2005.

National Commitments The 2005 French Energy law laid down the basis of French energy policy: • 10 % of the energy consumption should come from renewable energy sources by 2010 • 50 % increase of renewable heat (which in the end should amount to 10 Mtoe in 2005) • 5.75% by the end of 2008, 7 % biofuels incorporated in 2010 and 10% in 2015. In September 2005, the Prime Minister presented measures to encourage the production of biofuels. The objective to incorporate biofuels at 5.57% initially anticipated for 2010 is now expected to be attained in 2008.

Progress towards the targets The objective set for 2005 by the biofuels 2003/30/EC Directive hasn’t been reached yet in France (2%).However, French government estimates that the objectives set for 2010 will be reached.

RES POLICY INSTRUMENTS

Support for RES electricity

Feed-in Tariffs Feed-in tariffs were introduced in 2001 and modified in 2005 for photovoltaic, hydro, biomass, biogas, geothermal, offshore wind, onshore wind, and Combined Heat and Power. Tariffs are guaranteed on 15 to 20 years. Tariffs were revised in 2006 and 2007 to take account of the investment and managing costs together with a premium taking into consideration improvements of air quality and reduction of greenhouse gases.

Duration [years Feed-in tariff Start that an investor is Resource Technology Support level [€cents/ kWh] or premium? year entitled to support] 6,07 c€/kWh + premium between 0,5 and 2,5 for small installations + hydro small premium between 0 and 1,68 feed-in tariff 2007 20 years c€/kWh in winter according to the production's regularity 8,2 c€/kWh during 10 years, then between 2,8 et 8,2 c€/kWh during 5 wind onshore feed-in tariff 2006 15 years years depending on the location's productivity. 13 c€/kWh during 10 years, then between 3 and 13 c€/kWh during wind offshore feed-in tariff 2006 20 years 10 years depending on the location's productivity. 4,9 c€/kWh (32,1 cF/kWh) + premium for energy efficiency biomass solid feed-in tariff 2002 15 years between 0 and 1,2 c€/kWh (7,8 cF/kWh)

43 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

44 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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Duration [years Feed-in tariff Start that an investor is Resource Technology Support level [€cents/ kWh] or premium? year entitled to support] Between 7,5 and 9 c€/kWh according to capacity + premium gasification biomass for energy efficiency between 0 feed-in tariff 2006 15 years (biogas) and 3 c€/kWh , + premium for méthanisation of 2c€/kWh Métropole : 30 c€/kWh , + premium for building integration of 25 c€/kWh - Corsica, Overseas PV feed-in tariff 2006 20 years departments, Mayotte : 40 c€/kWh , + premium for building integration of 15 c€/kWh . Métropole : 12 c€/kWh , + premium of energy efficiency between 0 and Geothermal 3 c€/kWh - overseas departments : feed-in tariff 2006 15 years 10 c€/kWh , + primum for energy efficiency between 0 and 3 c€/kWh Ocean energy 15c/kWh 20 years

A tender system exists for large renewable projects. Producers winning the tenders have a contract with the price they proposed in the tenders. In 2005, the French government made public its selection of tenders: ‐ 14 biomass projects (216MW) and one biogas project (16 MW). ‐ An offshore wind project (105 MW) ‐ 7 onshore wind farms (278MW). A new tender has been launched in 2006 (in total 300MW).

Tax credit: In 2005, tax credits were set up (50% since 2006) for equipments using renewable energy source. Support level [% deduction from taxable End Resource Technology profits] Start year year Comments 50% of the equipment 2006 Solar PV costs 2009 For households 50% of the biomass equipment 2006 costs 2009 For households 50% of the Wind equipment 2006 costs 2009 For households 50% of the hydro equipment 2006 costs 2009 For households

Reduction in VAT- Tax 5,5% reduction in VAT for residential energy equipment using RES

Support for Heat

France has developed an extensive programme to encourage the use of wood fuel for heating in collective housing: the Wood Energy Plan which leads in 2005, to an increase of 23% of the wood energy equipment sales for households Tax credit:

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In 2005, tax credits were set up (50% since 2006) for equipments using renewable energy source (efficient wood fired boilers, for household of the cost of equipment)

Support level [%/total Resource Technology investment] Start year End year Comments solar 50% of the Solar 2006 2009 For households thermal equipment costs For households concerning the 50% of the Biomass combustion 2006 2009 purchase of equipment costs efficient wood fired boilers subsidies up to Biomass Combustion 40% of 2006 2009 For businesses plants investment costs

VAT-reduced rates Support level [% Resource Technology reduction of VAT]

For residential equipment biomass 5,5% reduction in using RES boiler VAT (purchase and installation)-

Support for Biofuels

Quota Obligation Law 2005-781 of July, 13 2005 setting the orientation of the French Energy Policy sets the following objectives for the incorporation of biofuels.

Quota in % (per Resource year) Year Biofuels 5.75% 2008 6.25% 2009 7% 2010 10% 2015

Tax exemption There is a fiscal system of partial exoneration from the Interior Consumption Tax, which allows compensation for thecost of fabrication of biofuels compared to that of fossil fuels. This tax exemption is granted for biofuels produced by factories which have been selected in accordance with an invitation to tender published in the Official Journal of the EU. The amount of tax reduction is adjusted each year. For the year 2006, the total amount of fiscal exoneration for biofuels is in the order of 260M Euro. (for FAME-25 euros/hl, Biodiesel synthetised-25 euros/hl, for FAEE-30 euros/hl, for ethanol -33 euros/hl and ETBE-33 euros/hl). France also decided to accelerate E85 development in one hand and to increase the upper limit for the incorporation of FAME from 5% to 7% from January 2008.

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E85:An agreement has been signed between professionals with the Prime Minster to allow the use of E85 in France in January 2007. Fame: according to the Law of January2006, farmers are allowed to use pure vegetable oils to run agricultural equipment for an experimental one-year period.

Reduced Excise Tax on consumption

Total support level (= tax exemption incl. reduction of Resource VAT to be paid) start year Comments Ethanol / ETBE - These amounts (éthyl tertio butyl 33 euros per hectoliter in 2007 2003 are adjusted éther) every year EMHV (biodiesel- ester These amounts méthylique 25 euros per hectoliter in 2007 2003 are adjusted d'huiles every year végétales) EEHV(Biodiesel- These amounts ester éthylique 30 euros per hectoliter in 2007 2006 are adjusted d'huiles every year végétales) Exemption of motor-fuel taxes

for agreed biofuel plants

General Tax on Polluting Activities Operators (refiners, supermarkets and independents) who incorporate levels of biofuels inferior to the anticipated national objectives must acquit, according to the 2005 Financial Law a supplementary payment of General Tax on polluting activities. The rate of the tax decreases according to the amount of biofuels put on the market.

Annex I. RES Electricity Potentials Annex II RES Bioenergy Potentials

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

Annex I. RES Electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 700 9680 23000 37000 49950 Maximum Wind onshore MW Maximum Wind offshore MW Maximum solar PV TWh 0.01 5.91 12.00 Maximum solar thermal TWh Total Hydro MW 25181 24200 24200 24400 Maximum conventional hydro MW 20881 20200 20200 20200 of which Maximum run of river MW Maximum Pumped Storage hydro MW 4300 4000 4000 4000 Maximum tide &Wave Power TWh 0 13 Maximum geothermal Total TWh 0.18 Maximum geothermal dry steam & flash power plants (>180°C) MW Maximum geothermal binary power plants (180°C

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 159,0 159,0 159,0 237,0 295,0 354,0 414,0 473,0 Cost [€/GJ] 8,8 8,8 8,8 8,43 8,13 7,87 7,64 7,42 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 98,0 98,0 98,0 146,0 182,0 218,0 255,0 292,0 Cost [€/GJ] 8,7 8,7 8,7 8,22 7,81 7,45 7,15 6,89 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 264,0 264,0 264,0 481 666 850 1040 1231 Cost [€/GJ] 5,3 5,3 5,3 5,0 4,7 4,5 4,3 4,1 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 319,0 319,0 319,0 571,0 783,0 994,0 1214,0 1433,0 Cost [€/GJ] 3,4 3,4 3,4 3,23 3,06 2,91 2,79 2,69 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 61,0 61,0 61,0 91,0 114,0 136,0 159,0 182,0 Cost [€/GJ] 8,1 8,1 8,1 7,9 7,7 7,5 7,3 7,1 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP 221 236 251 EEA Report 7 2006 Cost [€/GJ] Forestry residues VTT (2005): AFB-net V - Export & import possibilities and fuel prices, country report of France. VTT, Potential [PJ/a] UP 158,0 Finland, 2005. Cost [€/GJ] http://www.afbnet.vtt.fi/france.pdf Wood processing residues Potential [PJ/a] UP 17,0 99 106 113 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP 81 87 92 EEA Report 7 2006 Cost [€/GJ] Wet manures Potential [PJ/a] UP 77 83 88 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP 37 39 42 EEA Report 7 2006 Cost [€/GJ] Sewage sludge Potential [PJ/a] UP 7 8 8 EEA Report 7 2006 Cost [€/GJ] Other waste wood households Potential [PJ/a] UP 7 8 8 EEA Report 7 2006 Cost [€/GJ] packageing Potential [PJ/a] UP 33 35 38 EEA Report 7 2006 Cost [€/GJ] demolition Potential [PJ/a] UP 9 10 10 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP 26 28 29 EEA Report 7 2006 Cost [€/GJ]

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13. GREECE

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Hydropower has traditionally been important in Greece, and the markets for wind energy and active solar thermal systems have grown in recent years. Solar heat is also a popular source of energy. Greece has set up a wider rage of support mechanism however the market uptake of Renewable Energy Sources (RES) in Greece is lower than expected, mainly due to long licensing and administrative procedures and grid- related issues. The Greek parliament has recently revised the RES policy framework partly to reduce administrative burdens. A new feed in tariff has been set, giving support for 20 years. There is also, a particular mention of hybrid systems for the storage of RES produced electricity in the law, mainly in the non-interconnected islands. The solar thermal systems (mainly domestic hot water systems) have been a success story since the 1980s (Greece is one of the EU leaders) but the market is not increasing so rapidly in the recent years. Greek abundant solar energy is very suitable for island, rural, and tourist application, either as stand-alone solutions or as PV hybrid systems.

KEY FIGURES • The share of RES in total primary energy consumption was of 6.37% in 2006. • The share of RES in the gross final energy consumption was 6.9% in 2005. • The share of RES in the gross electricity production was 12.4% in 2006. • The share of biofuels in the transport sector in 2006 was 0.7%. • Greece energy dependence on imports amounts to 70.8 % in 2005.

Technology specific figures • More than 853 MW of wind power are installed in Greece by 2007. • Hydropower installed capacity reached 3.164 GW in 2006. • Biomass represents 38.72 MW of installed capacity in 2007. • PV accounts for more than 1.3 MW in 2007.

RES production in 2006

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Source: CRES

RES POLICY The Greek parliament has recently revised the RES policy framework partly to reduce administrative burdens on the renewable energy sector. The new Law 3468/2006 deals with the RES-e and apart from the feed-in tariffs that are described below, reduces the bureaucratic licensing procedures. There is a particular mention of hybrid systems for the storage of RES produced electricity in the law, mainly in the non-interconnected islands. This type on installation receives a power availability tariff on top of the energy tariff.

RES TARGETS Mandatory targets set by the newly proposed RES Framework Directive from 200845 • 18 % share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200146 • 21.1 % Share of RES on gross electricity consumption by 2010

Indicative Target set by the European Biofuels Directive from 200347 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National commitments • The RES-e National target to be achieved is 29 % of gross electricity consumption by 2020. • For biofuels, the following national targets have been set: 0.7% by 2005, 3% by 2007, 4% by 2008, 5% by 2009 and 5.75% by 2010. • There is no national target/commitment for RES heating and cooling (RES-H&C). • Intended goal for the expansion of photovoltaic is up to 700MWp by 2020.

45 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

46 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010. 47 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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RES Technology Roadmap The RES installation requirements in order to meet the 2010 target for renewable electricity are shown in the following table.

Requirements in Energy Percentage share of every installed Technologies generated in renewable energy source in capacity by 2010 in TWh 2010 2010, in MW

Wind farms 3,648 7.67 10.67 Small hydro 364 1.09 1.52 Largehydro 3,325 4.58 6.37 Biomass 103 0.81 1.13 Geothermal 12 0.10 0.14 Photovoltaics 200 0.20 0.28 Total 7,652 14.45 20.10 Source: ‘Fourth National Communication for the penetration of RES-E by 2010 according to the directive 77/2001’

Progress towards the Targets The Share of RES-e in the total electricity consumption was of about 13.92 % in 2006; in 1997 it was 8.6%.

An increase of RES- e is expected in the following years due to: • The completion of projects that were delayed over the 2001-04 period due to the restructuring of the electricity sector. • The implementation of regulations which simplified the licensing procedures and set the duration of power purchase agreements for RES-e to 20 years (Law 3468/2006).

So far the growth in RES-e installation has been slower than expected in Greece. Despite a favourable feed in tariff the long an costly administrative process required to get all the licences needed to develop a RES-e plant and other grid related issues have hindered a further development of RES –e in Greece. The new Law 3468/2006 aims at reducing the bureaucratic licensing procedures.

MAIN POLICY INSTRUMENTS Support for RES electricity

Feed in tariff The New Renewable Energy Source Act, effective since 27 June 2006 stipulates feed-in rates for renewable and CHP.

Duration [years Support level Feed-in tariff Start that an investor is Resource Technology [€cents/ kWh] or premium? year entitled to support] hydro small 7.3-8.5 feed-in tariff 2006 20years wind onshore 7.3-8.5 feed-in tariff 2006 20years wind offshore 9 feed in 2006 20years biomass solid 7.3-8.5 feed in 2006 20years gasification biomass (biogas) 7.3-8.5 feed-in tariff 2006 20years Solar PV 40-50 feed-in tariff 2006 20years Solar CSP 23-25 feed-in tariff 2006 20years geothermal all 7.3-8.5 feed-in tariff 2006 20years Source: CRES

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A photovoltaic development programme has been setup with a Ministerial decision, on 18/7/2007, in conjunction with the high feed-in tariffs that are foreseen for electricity produced by PVs. According to this plan a total of 540 MWp will be installed in the interconnected system of the Mainland, 200 MWp in the islands and 50 MWp for of-grid applications, over the period 2007-2010. A specific geographical distribution of these installations has been decided (setting upper limits per region) taking in mind the solar radiation distribution over the country and the technical limits set by the now interconnected electricity systems of the islands. About 40% of the target will be covered by small systems (up to 150kWp), in order to have the minimum environmental impact, to reduce the network losses and create local jobs and sources of income.

Simplification of procedures The main scope of this new law is to simplify the licensing system for the RES investments in Greece (i.e. licensing procedures). According to this new law one point of strong interest is the new electricity feed-in-tariffs system, applicable for the sales of RES produced electricity to the grid. The operators of the electricity grids will be required to connect renewable energy plants to the grid and purchase all of their electricity at legally-fixed minimum prices.

Grid development Grid availability is an important issue in Greece, since the areas of high wind potential are usually isolated and far from the existing grid infrastructure. Therefore there are regions in mainland Greece where the installation of wind turbine is limited by the existing grids, and also in the islands there are upper technical limits due to the isolated networks. So an important part of achieving the RES target is connected with the grid development projects.

Investment incentives National Development Law (Law3299/2004) set subsidies that vary from 40- 55% according to region and the type of the enterprise (in case of SMEs and specific regions they can reach up to 55%)

Investment subsidies

Support level [%/total End Resource Technology investment] Start year year Comments hydro small 35% 2007 2013 Not all installations are wind onshore 35% 2007 2013 eligible for this subsidy. wind offshore 35% 2007 2013 There is a procedure for applications and biomass solid 35% 2007 2013 assessment biomass gasification (biogas) 35% 2007 2013 PV 30%-45% 2007 2013 geothermal 35% 2007 2013

Support for RES Heating and Cooling

The use of geothermal energy for heating purposes (mainly in greenhouses) has increased considerably over the recent years, mainly due to the introduction of a new law which simplified the procedures for the exploitation of geothermal fields.

Solar water heating systems are used to a large extend in the domestic sector. Investment incentives

Investment Subsidies

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Support level [%/total Resource Technology investment] Comments Biomass combustion large heat Biomass plant 35% Not all installations are eligible for Biomass combustion large CHP this subsidy. There is a procedure plant 35% for applications and assessment Geothermal Geothermal Conventional 35%

Fiscal Incentives There is a tax relief system for the installation of domestic hot water solar systems, according to which 20% of the cost of these systems can be deducted from the taxable income.

Support for Biofuels

The obligation of the Biofuels directive has been adopted in the national law. So there is an annual procurement for the supply of the quantity of biofuels that is foreseen by the law which is exempt from fossil fuel tax.

Fiscal Incentives Biofuels are exempt from the fossil fuel tax which is 24.5€cents/litre

Quota Obligations There is the commitment of the government for 5.75% biofuels in road transport, but there are no penalties in case of not reaching this share.

Resource Technology Quota in % (per year) Biofuels free choice 0.7% by 2005 3% by 2007 4% by 2008, 5% by 2009 5.57% by 2010.

Annex I. RES installed capacity in 2007 Annex II. Evolution of RES Sources in Greece 1995-2006 Annex III. RES electricity Potentials Annex IV RES Bioenergy Potentials

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In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

Drafted in March 2008.

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Annex I. RES installed capacity in 2007

The following table shows the installed capacity of RES electricity in January 2008, including the large hydropower stations, per region in Greece. On top of what is shown in the above table, there are installation licenses for RETs for electricity production, totaling 873MW, of which 670 MW are wind parks, 110 MW small hydropower plants, 1 MW photovoltaics and 32 MW biomass power plants. These are projects that are ready to be implemented, without any licensing or grid avaialability problems and are expected to be in operation by 2010. Grid availability is an important issue in Greece, since the areas of high wind potential are usually isolated and far from the existing grid infrastructure. Therefore there are region in Mainland Greece where the installation of wind turbine is limited by the existing grids, and also in the islands there are upper technical limits due to the isolated networks. So an important part of achieving the RES target is connected with the grid development projects. At the moment there are in progress three large projects for the upgrade of the electricity grid in Southern Evia, Southeastern Peloponnesus and Eastern Macedonia-Thrace, which are the areas with the highest wind potential in Greece.

Region (MW) (MW) (MW) (MW) Wind (MW) Photovoltaics Photovoltaics TOTAL (MW) Biomass (MW) (MW) Biomass Large Hydropwer Hydropwer Large Small Hydropower Small Hydropower Eastern Macedonia & Thrace 500,00 196,67 2,97 0,00 0,00 699,64 Attica 0,00 3,11 0,99 0,10 29,6 33,83 3 Northern Aegean 0,00 29,90 0,00 0,00 0,00 29,90 Western Greece 907,20 58,15 24,31 0,00 0,00 989,66 Western Macedonia 375,00 0,00 0,00 0,00 0,00 375,00 Central Macedonia 492,00 17,00 34,00 0,40 8,38 551,78 Epirus 543,60 0,00 45,75 0,00 0,00 589,35 Ionian Islands 0,00 40,20 0,00 0,00 0,00 40,20 Thessaly 130,00 17,00 11,43 0,00 0,35 158,78 Crete 0,00 129,50 1,00 0,80 0,36 131,66 Southern Aegean 0,00 37,56 0,00 0,00 0,00 37,56 Peloponnesus 70,00 119,80 2,00 0,00 0,00 191,80 Central Greece 0,00 204,30 24,62 0,00 0,00 228,92 TOTAL 3.017,8 853,19 147,07 1,30* 38,7 4.058,0 0 2 8

*Regarding PVs this is the licensed installed capacity. However there are a lot of small PV system that do not require a license. Based on sales the total installed capacity of PVs was around 5MWp at the beginning of 2008.

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Annex II. Evolution of RES Sources in Greece 1995-2006

The use of renewable energy sources, over the last years is presented in the following table.

ktoe Technology 1995 2000 2001 2002 2003 2004 2005 2006 HydroPower Plants 325 354 235 298 459 402 432 530 Of which Pump storage 22 36 54 57 49 46 50 52 Hydro <1 MW* 1 2 3 5 7 8 9 10 Hydro 1-10 MW* 8 12 8 8 15 18 19 22 Hydro >10MW* 295 304 169 228 389 376 404 499 Biomass 897 945 938 948 910 917 957 931 Wind turbines 3 39 65 56 88 96,5 113 145 PVs 0 0 0 0 0 0 0 0,5 Solar Heat 82 99 100 102 105 107 101 109 Biogas 1 1 33 48 36 36 33 33 Geothermal 3 2 2 1 1 9 10 11 Total 1311 1439 1373 1453 1598 1560 1646 1760 Total without pumping 1290 1403 1319 1396 1550 1514 1596 1708 Percentage of RES in the 5.6% 5.2% 4.8% 5.0% 5.3% 5.2% 5.4% 6.37% Primary Energy Supply

The electricity production from RES in particular is presented in the following table.

Evolution of Electricity Production from RES (GWh) Technololgy 1990 1995 2000 2001 2002 2003 2004 2005 2006 1997. 3783. 4111. 2725. 3463. 5332. 5205. 5610. 6773. Hydro 0 0 0 0 0 0 0 2 8 Of which pump 228.0 253.0 418.0 628.0 663.0 566.0 533.0 593.0 610.0 storage Hydro <1 MW 6.0 7.0 26.0 40.0 58.0 76.0 91.0 105.8 118.0 Hydro 1-10 MW 54.0 89.0 140.0 95.0 92.0 169.0 212.0 218.4 250.0 1709. 3434. 3527. 1962. 2650. 4521. 4369. 4693. 5795. Hydro >10MW 0 0 0 0 0 0 0 0 8 1021. 1121. 1266. 1691. Wind 2.0 34.0 451.0 756.0 651.0 0 0 4 5 Biogas 0.0 0.0 0.0 72.0 91.0 78.0 93.4 93.8 92.0 PVs 0.1 0.2 0.2 0.2 0.5 0.6 0.8 0.9 1.4 Share of RES-E (except energy used for pumping) in the 5,0% 8,4% 7.7% 5.2% 6.2% 9.7% 9.6% 10.0% 12.4% Gross Inland Consumption of Electricity 1999. 3817. 4562. 3553. 4205. 6431. 6420. 6971. 8558. Total 1 2 2 2 5 6 2 3 7

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Annex III. RES electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 573 2000 3500 5500 8130 Maximum Wind onshore MW 573 2000 3500 5500 8130 Maximum Wind offshore MW Maximum solar PV TWh 1.040 Maximum solar thermal MW 0.0 900 Total Hydro MW 3101 3539 3849 3849 Maximum conventional hydro MW 2402 2690 2800 2800 of which Maximum run of river MW 0 150 350 350 Maximum Pumped Storage hydro MW 699 699 699 699 Maximum Tide & Wave power plants TWh 4.01 Maximum geothermal Total MW Maximum geothermal conventional power plants MW 120 200 Maximum geothermal dry steam & flash power plants (>180°C) MW Maximum geothermal binary power plants (180°C

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex IV. RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 5,0 5,0 5,0 13,0 21,0 28,0 38,0 47,0 Cost [€/GJ] 11,1 11,1 11,1 10,66 10,31 10,01 9,74 9,51 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 5,0 5,0 5,0 10,0 16,0 22,0 28,0 35,0 Cost [€/GJ] 14,9 14,9 14,9 14,76 14 13,36 12,89 12,46 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 9,0 9,0 9,0 24 38 52 69 87 Cost [€/GJ] 5,5 5,5 5,5 5,1 4,8 4,5 4,3 4,2 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 9,0 9,0 9,0 23,0 37,0 50,0 67,0 84,0 Cost [€/GJ] 4,5 4,5 4,5 4,2 3,96 3,76 3,59 3,46 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 3,0 3,0 3,0 8,0 13,0 18,0 23,0 29,0 Cost [€/GJ] 13,3 13,3 13,3 12,9 12,5 12,2 11,9 11,6 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP 17 18 19 EEA Report 7 2006 Cost [€/GJ] Forestry residues Potential [PJ/a] UP Cost [€/GJ] Wood processing residues Potential [PJ/a] UP Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP 15 16 17 EEA Report 7 2006 Cost [€/GJ] Wet manures Potential [PJ/a] UP 18 20 21 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP Cost [€/GJ] Sewage sludge Potential [PJ/a] UP 7 8 8 EEA Report 7 2006 Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP Cost [€/GJ] demolition Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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14. HUNGARY

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Hungarian Renewable Energy (RES) electricity target for 2010 has been already achieved in 2007 especially due to the biomass contribution. However other RES such as solar, geothermal and wind energy are hampered by administrative constraints (i.e the permit process) and a non- effective, neither stable policy framework. As regards the policy framework, promotional schemes are being used and refined, and subsidies are available under certain conditions for the development of RES. Until 2020, Hungary aims at covering 11% to 15% of its energy demand from renewables. Most of the excess capacity will be provided for by new biomass power plants.

KEY FIGURES • The share of RES in total primary energy consumption was of 4.87% in 2006. Biomass in the main RES source representing more than 89% of RES primary consumption, follow by geothermal (8.2%) and Hydropower (1.7%) • The share of RES in the gross final energy consumption was 4.3% in 2005. • The share of RES in the gross electricity production was 3.7 % in 2006 in 2007 4.3%. • The share of biofuels in the transport sector in 2006 was 0.28%. • Hungary energy dependence on imports amounts to 63 % in 2005

Share of RES –e in the Hungarian electricity consumption

RES-H fuel fix in 2006 ( 37.5 PJ)

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Source: Hungarian Energy office

RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200848 • 13% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200149 • 3.6 % Share of RES on gross electricity consumption by 2010

Indicative Target set by the European Biofuels Directive from 200350 • Biofuels consumption of 5.75 % of petrol and diesel use for transport in 2010.

National commitments • The Hungarian Energy Saving and Energy Efficiency Improvement Action Programme expresses the country’s determination to reach a share of renewable energy consumption of at least 6% by 2010. • There is no national target/commitment for RES heating and cooling (RES-H&C).

Progress towards the Targets • The 3.6% RES-E target has already been meet. Hungary’s RES-e share amounted 2.24% in 2004, 4.6 in 2005, 3.7% in 2006, 4.3% in 2007.

48 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

49 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010. 50 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport currently in force, sets targets up to 2010, with indicative targets by 2005.

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RES POLICY INSTRUMENTS

Support for RES Electricity

Feed in tariff

The Hungarian RES-e Support mechanism is based on investment subsidy and on a feed-in-tariff. The feed-in-tariff was adopted by the Electricity Act in 2001 and by the ministerial decree (GKM 56/2002). The law does not define a time limit for the feed in tariff, the tariff are in principle guarantee for the life time of the installation. However, the electricity Act gives the Government the right to define a start date for a green certificate system. At that time the feed in tariff will cease to exist.

Feed-in Tariff for 2001-2007

Support level Resource Technology [€cents/ kWh] Feed-in tariff or premium? hydro Small 9.4 feed-in tariff wind onshore 0 feed-in tariff wind offshore 9.4 feed in biomass Solid 9.4 feed in gasification biomass 9.4 feed-in tariff (biogas) PV 9.4 feed-in tariff geothermal 9.4 feed-in tariff Feed-in-tariff is set by the Act : average tariff 12 UScent/kWh*k (k= last year inflation rate)

Feed-in-Tariff for (2008-onwards )

A new legal framework is under preparation. Some of the issues that the new legal framework may contain are: • Feed-in-tariffs for Renewables and Waste (only for the licensed period and amount). • Certificates of origin for RES-e. • Hungarian Energy Office sets the amount of RES-e that can be sold with a feed in tariff. Period and amount depend on the return period of the investment. • Possibility of introducing green certificates in the future. The electricity Act gives the Government the right to define a start date for a green certificate system. At that time the feed in tariff will cease to exist.

Support for RES Heating and Cooling

Investment Subsidies

The Environment Protection and Infrastructure Operative Programme (EPIO) of Hungary's National Development Plan specified measures to promote renewable energy sources.

In 2006, the EPIO provided 280 million HUF in subsidies to three types of energy efficiency project: the modernisation of buildings and institutions, the development of district heating systems, and the promotion of cogeneration.

Since its beginning the program focused on: • Installation of systems producing wood chips and pellets, baling equipment, and vegetable oil presses • Promotion of investments in renewable energy (biomass, geothermal energy, solar collector, PV, wind power, hydro power)

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• District heating systems using biomass or geothermal energy or waste deposit gases modernisation of buildings, district heating systems, application of cogeneration.

Support for Biofuels

Tax exemption for Biofuels

From July 1, 2007, there has been a tax allowance of 8.3 HUF/l for 4.4% biofuel blended into petrol. From January 1, 2008, the same allowance will apply to diesel oil. From July 1, 2007, and January 1, 2008, respectively, fuels sold by MOL Rt51, will contain 4.4% bio-ethanol and biodiesel. • Excise tax: 103.5 HUF/l for petrol, 85 HUF/l for diesel. • Sales of biofuels in Hungary receive a tax benefit. To avoid a tax gap, sales of petroleum fuel that doesn’t contain biofuel will carry a tax penalty. • For producers: the quantity produced is free from excise tax until 2010 if the whole quantity is blended in Hungary, transported from a Hungarian tax depot to a foreign tax depot, or sold to a registered distributor. • For distributors: excise tax can be reclaimed if biodiesel is blended up to 5%

Quota Obligations

Resource Quota in % (per year) Year Biofuels 5.75% (energy) 2010

Support to all RES

Investments Subsidies

The Operative Programme for Environment and Energy (KEOP) for the period: 2007-2013, and financed by EU Funds., will promote incentives to RES technologies:

2 main fields for Energy: Energy savings and Renewables • For Renewable Energies (RES-E and heat generation): 305 million USD: Supported projects: biomass, biogas, geothermal, small scale wind turbines • For Biofuels: 53 million USD : Supported projects: biofuel factories middle- and large scale capacities

Annex I . RES electricity Potentials Annex II RES Bioenergy Potentials

51 MOL Hungarian Oil and Gas company 145 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

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Annex I . RES electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 17 773 851 930 1041 1151 Maximum Wind onshore MW 17 773 851 930 1041 1151 Maximum Wind offshore MW 00000 0 Maximum solar PV TWh 0.000 0.240 0.480 0.720 0.960 1.200 Maximum solar thermal MW 0.000 0.000 0.000 0.000 0.000 0.000 Total Hydro MW 49 78 90 103 115 127 Maximum conventional hydro MW 4978 90 103 115 127 of which Maximum run of river MW 49 78 90 103 115 127 Maximum Pumped Storage hydro MW 0 0 0 0 0 0 Maximum Tide & Wave power plants TWh 0.0 0 0 0 0 0 Maximum geothermal conventional power plants MW 0.0 0.6 0.6 0.6 0.6 0.6 Maximum geothermal hot dry rock power plants MW 0.0 74.6 74.6 74.6 74.6 74.6 Maximum biomass power plants (conventional+CHP) TWh 1.6 2.4 4.6 6.9 9.2 11.5 Maximum biogas power plants (conventional+CHP) TWh 0.0 0.0 1.1 2.2 2.5 2.8 Maximum Bio waste power plants (CHP) TWh 0.1 0.6 0.6 0.6 0.6 0.6

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 24,0 24,0 24,0 51,0 67,0 84,0 96,0 107,0 Cost [€/GJ] 5,0 5,0 5,0 5,03 5,16 5,38 5,72 6,21 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 38,0 38,0 38,0 81,0 108,0 135,0 153,0 171,0 Cost [€/GJ] 6,4 6,4 6,4 6,11 5,92 5,78 5,68 5,65 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 112,0 112,0 112,0 252 344 436 503 569 Cost [€/GJ] 3,1 3,1 3,1 2,9 2,8 2,7 2,7 2,8 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 85,0 85,0 85,0 192,0 263,0 334,0 386,0 438,0 Cost [€/GJ] 2,0 2,0 2,0 1,89 1,83 1,81 1,84 1,92 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 29,0 29,0 29,0 61,0 82,0 102,0 116,0 130,0 Cost [€/GJ] 6,2 6,2 6,2 6,0 5,8 5,7 5,6 5,5 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste EEA Report 7 2006 Potential [PJ/a] UP 37 39 42 37.9 according to Cost [€/GJ] http://www.biomatnet.org/secure/Other/S1082.htm Forestry residues EEA Report 7 2006 Potential [PJ/a] UP 53.1 according to Cost [€/GJ] http://www.biomatnet.org/secure/Other/S1082.htm Wood processing residues Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste EEA Report 7 2006 Potential [PJ/a] UP 15 16 17 0.6 according to Cost [€/GJ] http://www.biomatnet.org/secure/Other/S1082.htm Wet manures EEA Report 7 2006 Potential [PJ/a] UP 11 12 13 3.2 according to Cost [€/GJ] http://www.biomatnet.org/secure/Other/S1082.htm Black liquor Potential [PJ/a] UP Cost [€/GJ] Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] demolition Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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15. IRELAND

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The rapidly increasing consumption of energy in Ireland, combined with the decreasing domestic production, has resulted in a significant increase in energy imports in recent years. Ireland experiences high levels of energy demand growth (an average of 3.3% per year from 1990 to 2006) in line with buoyant economic growth. Between 1990 and 2006 Ireland’s total annual energy requirement grew in absolute terms by 67%. Oil accounted for 56% of total primary energy requirements in 2006. Ireland exhibits a significant dependence on oil. The UK is the major source of oil and natural gas for Ireland. Gas has become the most important fuel for electricity generation in Ireland (46% of the total in 2006), gradually replacing coal (24%) and oil (13%). “Ireland has one of the finest renewable energy resource potentials in the world. Today we are making important steps to ensure that it is tapped,” said Irish Energy Minister Eamon Ryan.

A significant amount of wind power capacity has been installed recently for a total of 803.4 MWe at the end of 2007.

KEY FIGURES: • The share of renewable energy sources (RES) in total primary energy requirement was 2.7% in 2006 compared to 1.8% in 1990. In Primary Energy Equivalent terms the share in 2006 was 5.0%. • The share of RES in the gross final energy consumption was 3.09% in 2006(measured according to the methodology in the new Renewables Directive). • The share of RES in the gross electricity consumption was 8.6% in 2006 (compared with 4.9% in 1990) • The share of all biofuels in the transport sector in 2006 was 0.14%. • Ireland’s dependence on external energy supplies was 91% in 2006. • Domestic production accounted for 32% of Ireland’s energy requirements in 1990. However, since the mid-1990s import dependency has grown significantly, due to the increase in energy use together with the decline in indigenous natural gas production at Kinsale since 1995 and decreasing peat production. Imported oil and gas accounted for 82% of TPER in 2006, compared with 54% in 1990.

Technology specific figures • This 2.7% share RES in total primary energy requirement comprises wind (0.9%) hydro (0.4%) and biomass heating, as well as smaller quantities of landfill gas, biogas and biomass Combined Heat & Power. • Wind and hydro energy in 2006, respectively, accounted for 5.6% (4.0% in 2005) and 2.5% (2.3% in 2005) of Ireland’s gross electrical consumption while landfill gas was responsible for 0.38% (0.38% in 2005). • Total electrical output from wind in 2006 was 1,616 GWh representing an increase of 46% on 2005. The total installed capacity of wind farms in Ireland (December 2007) was 803.4 MWe an increase of 7.9% (59 MWe) on the end of 2006. • Hydroelectricity is the second most important source of renewable electricity. In 2006 electrical output from hydro was 721 GWh an increase of 3.9% on 1990. Hydro was responsible for 2.3% of gross electrical consumption in 2006. • In Ireland there are currently 12 landfill gas electricity generating units operating with a combined installed capacity of 29.5 MWe. The first landfill gas sites were installed in 1995. The electrical output from landfill gas in 2006 was 108 GWh, an increase of 2% on 2005. • Biofuels market penetration has doubled since 2005 and is increasing since the launch of the second biofuels Mineral Oil Tax relief scheme in November 2006. Market penetration of 2.2% is expected by 2008.

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Primary Fuel Mix for Electricity Generation:

3 Mtoe

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Coal Peat Fuel Oil Gasoi l Natural Gas Re n e w ab l e s Electricity (net imports)

Renewable Energy Contribution to gross electricity consumption

0% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Hydro Wind Landfill Gas Biogas Biomass Wind and hydropower make up most of Ireland’s RES-E production.

RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200852 • For Ireland 16% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in each Member State in 2020.

52 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

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Indicative Target set by the RES- electricity European Directive from 200153 • For Ireland 13.2% share of RES on gross electricity consumption by 2010.

Indicative Target set by the European Biofuels Directive from 200354 • Biofuels consumption of 5.75% of petrol and diesel use for transport in each Member State in 2010.

National Commitments A White Paper released in March 2007 sets out the Government’s Energy Policy for 2007-2020: The Government is committed to have 15% of electricity to be generated from renewable sources by 2010 and 33% by 2020 (taking into account the target of 30% co-firing in the peat power stations by 2015). The government also set a target of 5% renewable share in the heating sector for 2010 and a target of 12% renewable share in the heating sector for 2020.

Progress towards the target: Ireland is making progress in relation to its RES-E target: from 4.1% in 1997 to 8.6% in 2006. Progress is mainly due to wind energy. Ireland’s biofuel share was 0.05%, in 2005 compared to the National target of 0.06%.

Support for RES-Electricity

A tender scheme - the “Alternative Energy Requirement” (AER)- had been introduced in 1996. It was originally modelled on the UK Non Fossil Fuel Obligation (NFFO). Under the scheme, applications were invited from prospective generators to build, own and operate new wind, hydro, biomass and waste-to-energy facilities. All applications were ranked on the basis of bid price per kilowatt-hour supplied. Successful applicants were awarded Power Purchase agreements (PPA) of up to 15 years from the national Electricity Supply Board (ESB). There were in total 6 AER rounds. But all AER failed (except AER I) to reach the targets set. The Tendering scheme has therefore been abandoned. Since early 2006, feed in tariff has become the main tool for promoting RES-E technologies. Most of the new capacity is expected to come from onshore wind projects but there is also support for off-shore wind, biomass, landfill gas, anaerobic digestion plants, ocean energy and hydro projects. Feed-in tariffs are guaranteed for up to 15 years, but may not extend beyond 2024. During its first year, 98% of the feed in tariff support has been allocated to wind farms. Under the new feed in tariffs, both grid connection agreement and planning permission are preconditions for securing a contract. The government intends to expand the feed-in tariff scheme to facilitate delivery of cofiring in peat stations of 30% by 2015 and to encourage waste to energy projects by supporting hybrid projects. In February 2008, the Irish Energy Minister Eamon Ryan announced an amendment of the renewable energy feed-in tariff scheme (REFIT) to grant support for offshore wind of €140 per MWh.

Duration [years Support level Feed-in tariff Start that an investor is Resource Technology [€cents/ kWh] or premium? year entitled to support] hydro small 7.2 feed-in tariff 2006 15 years wind onshore 5.7-5.9 feed-in tariff 2006 15 years wind offshore 14 feed in tariff 2006 15 years

53 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

54 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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biomass Landfill gas 7.0 feed-in tariff 2006 15 years biomass solid 7.2 feed-in tariff 2006 15 years Anaerobic biomass digestion (biogas) 7.2 feed-in tariff 2006 15 years

On January 15th, 2008, the Irish Government announced a feed in tariff of 22 €cents/kWh for ocean energy.

Other Support measures for RES-Electricity

A White Paper released in March 2007 sets out the Government’s Energy Policy for 2007-2020. It sets out measures such as: • Strategic planning and investment in electricity infrastructure: The Grid Development Strategy 2007-2025 will have as a priority the integration of renewable energy growth. This strategy will be informed by the All Island Grid Study which was published in January 2007. • Government representatives from Ireland, Scotland, Wales and Northern Ireland are also working on a proposal to study the feasibility of building sub-sea transmission links under the Irish Sea. According to Minister Ryan this could be a part of a new extended European off-shore grid connection linking wind farms and therefore providing stable energy supplies. • The government has amended planning guidelines to facilitate development of micro renewable technologies at domestic level: allowing households to install solar panels or erect small wind turbines without having to apply for planning permission. • The Government intends to make Ireland a world leader for Ocean Energy technologies, through the National Ocean Energy Strategy with the aim of utilisation within a decade. The government will set an initial ambition of at least 500MW of installed ocean energy capacity by 2020. • The government will support development of offshore wind through a review of cost benefits and R & D.

Support for RES-heating

ReHeat Programme Launched in March 2007, the Renewable Heat (ReHeat) Deployment Programme managed by Sustainable Energy Ireland (www.sei.ie/reheat) provides assistance for the deployment of renewable heating systems in industrial, commercial, public and community premises in Ireland. In Budget 2006 a further €4m was added to the ReHeat Programme bringing the total funding available for the programme to €26m to 2010. The programme has now been expanded to include solar thermal and heat pump technologies, and to allow community and voluntary groups to benefit from the grants. The scheme will support the installation of an estimated 600 wood fired boilers, 12,000 m2 of solar heating collectors and 1.5 MW of heat pumps. It is anticipated that when the programme is fully rolled out approximately 600,000 MWh of wood fuel will be used annually. Together with the solar panels and heat pumps, this will displace approximately 61 million litres of heating oil per annum, which is 9% of the heating oil consumed in the commercial sector in 2006 (674m litres). It will result in a reduction in CO2 emissions of about 160,000 tonnes per annum.

Support level Resource [%/total investment] Start year End year Commercial and services sector users Solar Thermal up to 30% 2007 2010 Geothermal heat pumps up to 30% 2007 2010 Biomass boilers up to 30% 2007 2010

For all three technologies a total grant budget of €26 million to the end of 2010.

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Greener Homes Scheme In March 2006, as part of this package of measures, the Department of Communications, Marine and Natural Resources launched a “Greener Homes” scheme managed by Sustainable Energy Ireland (www.sei.ie/greenerhomes), which is aimed at providing grant aid to individual domestic householders towards the installation of renewable energy heat technologies. Funding of €27m was originally provided for the Greener Homes Scheme but this was increased to €47m in Budget 2006. There have been over 18,000 applications received since the scheme was launched in March 2006 with approximately 28% of the applications for grant aid relating to grants for biomass technologies.

Support level Resource [%/total investment] Start year End year Domestic users Biomass Boiler €3,000 [~28%] 2006 2010 Biomass Stove €1,100 [~39%] 2006 2010 Biomass Stove with Back-boiler €1,800 [~34%] 2006 2010 Heat Pump - Horizontal ground collector €2,500 [~17%] 2006 2010

Heat Pump - Vertical ground collector €3,500 [~21%] 2006 2010 Heat Pump - Water Source €2,500 [~21%] 2006 2010 Heat Pump - Air Source €2,000 [~17%] 2006 2010 Solar Thermal HW Plate €250/m2 [~21%] 2006 2010 Solar Thermal HW Tube €300/m2 [~20%] 2006 2010

For all three technologies a total grant budget of €47 million to the end of 2010.

Support for Biofuels

Fiscal Measures The Pilot Biofuels Mineral Oil Tax Relief Scheme which was launched in August 2005 for a two year period has already achieved the introduction of over 5.5m litres of biofuel to the Irish market. Following the success of the pilot scheme a second Biofuels Relief Scheme was launched: • Biofuels Mineral Oil Tax Relief Scheme II In November 2006 a new excise relief programme for biofuels (Biofuels Scheme II), valued at over €200m, was launched with sixteen (16) companies being granted excise relief for defined quantities of biofuels to be placed on the Irish market. The scheme is being rolled out over a five- year period to 2010 and is providing excise relief on selected biofuel projects in four specific biofuel categories as follows: • Biofuels blended with diesel and complying with diesel standard EN590, which can be sold at regular diesel pumps. Biofuels can be produced from oil crops such as oil seed rape, as well as from tallow or recovered vegetable oil. Biodiesel blended at 5% can be used in all diesel engines and is covered by engine warranties. • Bio-ethanol in a 5% blend with petrol, which can be sold at regular petrol pumps, and bioethanol in blends of up to 85% with petrol, for separate sale and use in flexible fuel vehicles (these vehicles have been granted 50% VRT relief under the Finance Act 2006). Bio-ethanol can be made from sugarbeet, wheat or other feedstocks and one project under the 2005 excise relief scheme is producing bioethanol from whey. • Pure Plant oil, which is made from crops such as oil seed rape and used in modified diesel engines as a pure 100% biofuel. • Biofuels for use in captive fleets. This is an innovative category in which developers can propose a range of biofuels, including high blend biodiesel, for use in dedicated vehicle fleets where it is

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established that the engines of the vehicles are capable of running on the biofuel or biofuel blend proposed. When at full capacity in 2008, the scheme is intended to result in 163m litres of biofuels being placed on the Irish transport market, representing 2.2% of the entire fuel market. The biofuels excise relief schemes are already resulting in the mainstreaming of biofuels in the regular petrol and diesel fuel chain. Already many filling stations are providing petrol and diesel which contain a 5% blend of biofuels. Other producers are developing niche markets for higher blend biofuels. Biofuels Obligation In February 2007 Ireland announced a move to a biofuels obligation from 2009. Under this scheme, fuel suppliers to the Irish market will be required to ensure that biofuels represent a certain percentage of their annual fuels. With targets as high as 5.75% by 2010 and 10% by 2020, the obligation will provide enhanced opportunities for farmers to contribute to this emerging market. Transport Measures The Department of Transport and Marine and the German-Irish Chamber of Commerce has introduced a pilot project “Biofuels for Transport” to incentivise the use of Pure Plant Oil biofuel among transport operators, in particular those with fleets of vehicles. The scheme, was launched early in 2007 and over 40 vehicles have been selected to receive a 75% grant to modify their engines. Ireland’s Bioenergy Action Plan, published in March 2007, commits to public bus companies moving as soon as possible towards a 5% blend in all their existing diesel fleet and to ensure that all of their new fleet purchases are capable of using biofuels at blends of at least 30%.

Support for all RES Wood Biomass Harvesting Machinery Scheme The Department of Agriculture and Food has introduced a special scheme of supports to grant aid biomass harvesting machinery, such as harvesters and chippers for processing of forest biomass. The funding being provided is €1.2m, and the scheme has attracted significant attention to date. Energy Crops Premium Scheme The Department of Agriculture and Food has also introduced a new Bioenergy Scheme providing establishment grants to farmers for up to 50% of the costs associated with establishing miscanthus and willow. In addition, the Government is providing a top-up payment of €80 per hectare to the EU Premium of €45 per hectare for energy crops. €8m is being allocated over the period 2007 to 2009 for the grant scheme to encourage the planting of willow and miscanthus for the production of biomass suitable for use as a renewable source of energy. The scheme is being piloted in 2007 and will allow up to 1,400 hectares of willow and miscanthus to be grant aided in the first year. Biomass crops such as willow and miscanthus have considerable potential for heat and electricity generation. The scheme has already reached its targets in terms of applications for 2007. Miscanthus has proved the most popular crop accounting for up to 90% of applications. Bioenergy Action Plan for Ireland In March 2007, the Bioenergy Action Plan for Ireland was published. The Action Plan followed the work of a Ministerial Task Force in which seven Government Departments were represented. The Plan contains 50 action items across seven Government Departments, many of which are already being implemented (including the biofuels and renewable heat programmes). Actions include: • Bioenergy heating systems to become the standard norm in new public buildings; • Convert within 12 months, 20 of the State’s large existing buildings to bioenergy heating systems; • Use of biomass CHP in future major public site developments; •More favourable consideration to buildings which use bioenergy or other renewable technologies when considering buildings for lease by the public sector; • Expansion of existing programme of biomass heating in schools; • Target of 30% biomass co-firing in Ireland’s three peat generating stations by 2015; • Expansion of renewable energy installer training; • Development of industry and product standards for wood pellets and wood chip; • Encouragement of afforestation, • Introduction of a Forest Environmental Protection Scheme (FEPS) to facilitate increased levels of afforestation. 156 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

Annex I RES electricity Potentials Annex II RES Bioenergy Potentials

Sources European Commission Factsheets by Country http://ec.europa.eu/energy/energy_policy/facts_en.htm Member States Reports in the framework of the Directive 2001/77/EC on renewable electricity http://ec.europa.eu/energy/res/legislation/electricity_member_states_en.htm Member States Reports in the framework of the Directive 2003/30/EC on biofuels http://ec.europa.eu/energy/res/legislation/biofuels_members_states_en.htm Sustainable Energy Ireland- website and publications on renewable energy. http://www.sei.ie/index.asp Irish Government White Paper http://www.dcmnr.gov.ie/NR/rdonlyres/54C78A1E-4E96-4E28-A77A- 3226220DF2FC/27356/EnergyWhitePaper12March2007.pdf Website of the Irish Department of Communication, Energy, Natural Resources http://www.dcenr.gov.ie/Energy/ EurObserv’er Barometer http://www.energies-renouvelables.org/observ-er/sig/eufores/sig.asp

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

Drafted in March 2008.

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Annex I RES electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 583 2883 5094 6094 6891 Maximum Wind onshore MW 583 2858 4444 5344 5891 Maximum Wind offshore MW 0 25 650 750 1000 Maximum solar PV TWh 0.310 Maximum solar thermal TWh 0.000 Total Hydro MW 532 539 549 549 Maximum conventional hydro MW 247 257 257 of which Maximum run of river MW 32.0 42.0 42.0 Maximum Pumped Storage hydro MW 292 292 292 Maximum Tide & Wave power plants TWh 3.4 Maximum geothermal conventional power plants TWh 0 Maximum geothermal hot dry rock power plants TWh 0 Maximum biomass power plants (conventional+CHP) TWh 3.76 Maximum biogas power plants (conventional+CHP) TWh 3.4 Maximum bio waste power plants (CHP) TWh 0.54

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 9,0 9,0 9,0 44,0 66,0 88,0 113,0 139,0 Cost [€/GJ] 7,6 7,6 7,6 7,39 7,25 7,15 7,08 7,03 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 0,0 0,0 0,0 2,0 2,0 3,0 4,0 5,0 Cost [€/GJ] 8,2 8,2 8,2 7,73 7,36 7,06 6,81 6,59 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 15,0 15,0 15,0 71 106 141 182 222 Cost [€/GJ] 4,5 4,5 4,5 4,2 3,9 3,7 3,6 3,5 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 13,0 13,0 13,0 62,0 93,0 123,0 159,0 194,0 Cost [€/GJ] 2,6 2,6 2,6 2,41 2,29 2,21 2,14 2,1 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 4,0 4,0 4,0 17,0 26,0 34,0 44,0 54,0 Cost [€/GJ] 5,5 5,5 5,5 5,3 5,2 5,1 5,0 4,9 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste EEA Report 7 2006 Potential [PJ/a] UP 7 8 8 20 according to DCMNR (2007): Bioenergy Action Plan for Ireland - Report of the Ministerial Task Force on BioEnergy. Department for Communications Marine and Natural Cost [€/GJ] Resources, Ireland, 2007. Buckley, P. (2005): Ireland’s Bioenergy Potential. Sustainable Energy Ireland (SEI), Forestry residues Renewable Energy – Opportunities for Biofuels Crops, 11th July 2005. Potential [PJ/a] UP http://internal.ifaskillnet.ie/pdfs/PearseBuckley.pdf Cost [€/GJ] 16 according to (DCMNR, 2007) and (Buckley, 2005) Wood processing residues Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste Buckley, P. (2005): Ireland’s Bioenergy Potential. Sustainable Energy Ireland (SEI), Potential [PJ/a] UP 7 8 8 Renewable Energy – Opportunities for Biofuels Crops, 11th July 2005. Cost [€/GJ] http://internal.ifaskillnet.ie/pdfs/PearseBuckley.pdf Wet manures Buckley, P. (2005): Ireland’s Bioenergy Potential. Sustainable Energy Ireland (SEI), Potential [PJ/a] UP 13 14 15 Renewable Energy – Opportunities for Biofuels Crops, 11th July 2005. Cost [€/GJ] http://internal.ifaskillnet.ie/pdfs/PearseBuckley.pdf Black liquor Potential [PJ/a] UP Cost [€/GJ] Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP Cost [€/GJ] demolition Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ]

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16. ITALY

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Most important Renewable Energy Source (RES) in Italy is hydropower, contributing to 16.6% of total gross electricity production of the country. Italy has also large geothermal resources, both high and low temperature: it is the most important producer of geothermal electricity in Europe. Despite strong growth in sectors such as onshore wind, biogas and biodiesel, Italy is far from the targets. Firstly, there is a large element of uncertainty due to political changes and ambiguities in current policy design. Secondly, there are administrative constraints such as complex authorization procedures at local level. Thirdly, there are financial barriers such as high grid connection costs. The Italian government is working out the details of more ambitious support mechanisms for the development and use of RES. Italy may be on the verge of moving towards a feed-in tariff-based renewable energy rebate scheme, similar to successful models implemented in Germany and Spain. Italian Government is developing a national building law that will ensure that solar thermal installations are installed in new and refurbished buildings and will assist in increasing the market penetration for RES-H&C technologies.

The Italian nuclear power referendum of November 1987 rejected the expansion of the country's nuclear power industry by the construction of new nuclear power plants. Subsequently, the Italian government decided in 1988 to phase out existing plants.

KEY FIGURES • The share of RES in total primary energy consumption was of 6.82% in 2006. • The share of RES in the gross final energy consumption was 5.2 % in 2005. • The share of RES in the gross electricity production was 16.6% in 2006 with 52.272 GW/h, conventional energy produced 261.851 GW/h. • The share of biofuels in the transport sector in 2006 was 0.52%. • Italy energy dependence on imports amounts to 86.8% in 2005.

Technology specific figures • Hydropower represents one of the most important energy resources in the country. It represents 24% of the total installed capacity in Italy supplying 16% of gross electricity production. • Biomass energy accounts for 25% of all primary energy from RES (excluding plants fuelled also from waste), in 2006 they were 2.565 plants in operation producing 4.786 (GWh), with an installed capacity of 2.469, 881 MW. • Geothermal energy is also important in Italy, representing 2% of the total gross electricity production. • Wind energy reached 2.100 MW of installed capacity at the end of 2006.

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Source: GSE, 2007

RES POLICY At the end of 2007 the Italian government has introduced some new provisions for renewable power generators. Small generators (up to 1 MW) will have the choice between selling their green certificates on the market and receiving a feed-in tariff.

The renewable energy obligation for Italian suppliers will increase annually by 0.75% to 2012 (instead of the former 0.35%), starting from the 2007 share of about 4%. After 2012, a new annual increase percentage will be established by the Italian government.

RES TARGETS Mandatory targets set by the newly proposed RES Framework Directive from 200855 • 17% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200156 • 25 % Share of RES on gross electricity consumption by 2010.

Indicative Target set by the European Biofuels Directive from 200357 • Biofuels consumption of 5.75 % of petrol and diesel use for transport in 2010.

Progress towards the Targets • The Share of RES-e in the total electricity consumption was of about 16.6.% in 2006, in 2005 13.93%, so smoothly Italy is moving towards it s 25% target by 2010 but still is far from reaching it. Italy aims for a RES-e share of 25% of gross electricity consumption by 2010. But then the Italian Government declared that a more probable a beliverable target would be 22%. • For biofuels, Italy’s Decree 128/2005 set a reference value of 1% by 2005, which is lower than the 2% reference value in the EU Directive.

55 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

56 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010. 57 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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RES POLICY INSTRUMENTS

Support for RES electricity

In order to promote RES-e, Italy has adopted the following schemes:

Quota obligation

An obligation for electricity generators to feed a given proportion of RES-e into the power system. In 2007, the target percentage was 3.05%. In case of non-compliance, sanctions are foreseen, but enforcement in practice is considered difficult because of ambiguities in the legislation.

Tradable Green Certificates

Tradable Green Certificates (which are tradable commodities proving that certain electricity is generated using RES) are used to fulfil the RES-e obligation. The cumulated average price of the green certificates for 2006, updated as of 03/01/2007, is of 13,91 EUR cent/kWh .

The Financial law 2008 (LEGGE 24 dicembre 2007, n. 244.) has introdued new change in the Italian green certificate system: • Each green certificate corresponds to 1 MWh (before was 50 MWh). • Green certificates will be released for 15 years (before were 12 years and even before 8 years). • Green certificates will be differentiated for the renewables sources: the number of green certificates corresponding to the production will be multiplied for a different factor for each sources (before was the same for all renewables). • Small plants (P<1MW) can decide to sell energy and take the green certificates or a feed-in tariff (electricity price+incentivation).

See Annex II for more details on the green certicates system in Italy.

Feed-in tariff for PV

The Italian Ministry for Industry passed a law for a new feed-in-tariff for small photovoltaic installations, effective from 24 February 2007. The new ‘Decreto’ guarantees a feed-in tariff for PV-installations larger than 1 kilowatt. The owner, being a person or a company, receives 0,44 Euros/kWh (and 0,49 Euros/kWh if the PV panels are architecturally integrated). For installations larger than 3 kW, the tariff is about 5% less. From 2009, the tariff annually decreases by 2%, and it will end by 2020. The maximum power to be installed is 3,000 MW by 2016. This is a fixed tariff, guaranteed for 20 years and adjusted annually for inflation.

New Feed in Tariff System The Financial law 2008 (LEGGE 24 December 2007, n. 244.) changed the green certificate system in many parts and, and together with the green certificate system, it has established a new feed-in tariff system for small (P <1 MW) renewable plants (except PV- have their own feed in tariff explained before) but these feed in tariff only applies for plants that will start producing from the 1st January 2008. • Small plants (P<1MW) can decide to sell energy and take the green certificates or a feed-in tariff (electricity price+incentivation).

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• These feed-in tariffs are different for each renewable source. These tariffs differ from 18 ct/kWh for gas from landfill to 34 ct/kWh for tidal and wave energy. • Feed-in tariffs will be released for 15 years. • Priority access to the grid system is granted to electricity from RES and CHP plants.

Plants (< 1 MWe) Feed-In Tariff (euro cent/kWh) Wind 22 Solar (according to decree 19 February 2007) Geothermal 20 Wave and tide energy 34 Hydro 22 Biodegradable waste, biomass different from the 22 other in next point Biomass and biogas via agricultural farming and 30 forestry activities from short chain Gas from landfill and gas from wastewater 18 purification processings and biogas

Support for RES Heating and Cooling

Investment subsidies

For micro, small scale and diffused cogeneration units.

The overall amount of contributions is equal to 30.000.000 Euro, to be distributed to eligible and selected projects with the following criteria: • Up to 20% of capital cost (maximum limit of 200.000 Euro) for units fed by natural gas (increased to 30% in case of tri-generation). • Up to 30% of capital cost (maximum limit of 300.000 Euro) for units fed by biomass or for hybrid units fed by natural gas- biomass. (Increased to 40% in case of tri-generation). • For projects in areas not serviced by gas network the contribution at point 2 is increased to 40%.

Tax incentives

Italian citizens, when they make their tax declarations, may deduct 36% of the investment costs of their solar thermal systems from their tax bill, spread over ten years. Any refurbishment to a house incurs VAT at 10% instead of 20%. Eligible refurbishments include the installation of solar thermal systems. a) Investment incentives A regulation from January 2007 establishes among others investment incentives for the solar thermal installations of 50 to 500 sm. The scheme covers 30% of eligible investment costs of these systems based on the following calculation: • Glazed flat collectors: C (€/m2) = 1/3 (1600 + 25000/S). S is the surface in sm. • Unglazed flat collectors: C (€/m2) = 1/3 (550 + 25000/S). S is the surface in sm. • Evacuated tube collectors: C (€/m2) = 1/3 (1900 + 25000/S). S is the surface in sm.

For citizens, grants are available through the Programme Comune Solarizzato, from the Ministry of Environment and Territory Management ("Ministero dell'Ambiente e della Tutela del Territorio") in combination with funds from Italy’s regional governments. Both parties contribute 50% to a scheme that refunds citizens who install domestic solar thermal systems. The programme includes as well raising-awareness campaigns at the level of the provinces, based on the agreements they have with the Ministry.

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The Italian Government is developing a national building law, which regulates the use of solar thermal installations for hot water production in new buildings and for refurbishment projects. In addition, a tax reduction of 55 % for each purchase of a solar thermal installation is planned.

Support for Biofuels

Biofuel quota obligations Resource Quota in % (per year) Year Comments Biofuels 2.5% (energy) 2008 Guideline only Biofuels 5.75% (energy) 2010 Compulsory

Fiscal Incentives Fiscal measures have been targeted on biodiesel and vegetable-based ethanol.

Biodiesel, provides for exemption from excise duty for an annual quota of 200 000 tonnes of biodiesel under a six-year programme running from 1 January 2005 to 31 December 2010.

The size of the reduction may be amended, by means of a decree issued by the Minister for Economic Affairs and Finance, in order to prevent overcompensation of the additional costs involved in the production of biodiesel (compared with the cost of diesel oil).

It is planned to monitor the average industrial production cost of biodiesel to provide a basis for assessing whether or not there is any overcompensation.

Italian law (Article 21(6a) of the single text on excise duties) provides for reduced rates of excise duty on vegetable-based ethanol and products derived as fuel or fuel additives as part of an experimental programme to encourage the use of this biofuel.

Support for all RES

Fiscal incentives

RES Investments benefit from a rebate on VAT (10% instead of 20%) and from a 10-year corporate tax reduction, if carried out in southern regions.

Investment Subsidies

Italy plans to offer incentives for investment in renewable energy production. Qualifying production units include: • grid connected photovoltaic plants from 20 kW to 50 kW ; • wind energy plants from 20 kW to 100 kW; • solar thermal collectors from 50 m2 to 500 m2; • biomass plants from 150 kW to 1000 kW;

For wind energy plants, solar thermal collectors and biomass plants, the refunds to capital costs can be up to 30 % of initial costs. For investment in solar PV, the incentives can reach 60% of the plant's capital costs. In the case of photovoltaic plants, it is hoped that this incentive scheme will help to boost Italy's installed photovoltaic capacity to 3,000 MW by 2016.

Annex I. Evolution of RES production in Italy (1994-2006) Annex II Green certificate system in Italy. Annex III RES electricity Potentials Annex IV RES Bioenergy Potentials

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In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

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Annex I. Evolution of RES production in Italy (1994-2006)

RES Production (GWh) (1994-2006)

Total Production Hydropower Geothermal Biomass Wind Solar

Total production Vs RES production (GWh) (1994-2006)

Total Production

RES Production

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Annex II Green certificatesystem in Italy.

The Financial law 2008 (LEGGE 24 dicembre 2007, n. 244.) has introdued new change in the Italian green certificate system: • Small generators (up to 1 MW) will have the choice between selling their green certificates on the market and receiving a feed-in tariff. • The renewable energy obligation for Italian suppliers will increase annually by 0.75% to 2012 (instead of the former 0.35%), starting from the 2007 share of about 4%. After 2012, a new annual increase percentage will be established by the Italian government. • New installations that can qualify as Renewable Energy Sources, will be granted green certificates (Certificati) for the duration of fifteen years (previously twelve years). • The default energy value of certificates changed from 50 MWh to 1 MWh, which is more convenient for small producers. • Moreover, the Italian government introduced 'banding' into the certificate system, similar to the UK modifications to its ROCs system. The quantity of green certificates granted to renewable power producers with installations larger than 1MW is derived from the multiplication of the real power production expressed in MWh and a coefficient, varying with the technology considered. This coefficient varies from the minimum unitary coefficient for the wind onshore energy to a maximum value of 1.8 for wave and tide energy, biomass and biogas energy. • If an excess of certificates is offered on the market, the 2008 financial plan says that the GSE (the Italian Power Services Administrator) is committed to purchase green certificates on the market at the yearly averaged price of the year before. In 2007 the green certificates price was around 130 euro/MWh. Plant Green Certificates Source size Coefficient

Wind onshore 1.00

Wind offshore 1.10

Solar (according to decree 19 February 2007)

Geothermal 0.90

Wave and tide energy 1.80 > 1 MWe Hydro source different from those from previous point 1.00

Biodegradable waste, biomass different from the other in next point 1.1

Biomass and biogas via agricultural farming and forestry activities 1.8

Biomass and biogas of previous point used in high yield CHP reusing the 1.8 heat power produced in agricultural sector Gas from landfill and gas from wastewater purification processings 0.80 and biogas from activities not included in the previous point

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Biomass Plant size Source GC Coefficient Biodegradable waste, biomass different from those described 1.1 in next points Biomass and biogas deriving from "short chain" agricultural, 1.8 Power > 1 farming and forestry activities MWe Biomass and biogas from previous feeding high efficiency CHP 1.8 plants reusing produced heat in agricultural sector Gas from landfill and gas from wastewater purification 0.80 processes and biogas different from previous point

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Annex III RES electricity potentials

Description Unit 2005 2010 2015 2020 2025 2030

Total Wind MW 1715 10000 15500 19000 23000 Maximum Wind onshore MW Maximum Wind offshore MW Maximum solar PV TWh 3.7 Maximum solar thermal MW 0.0 2642.0 Total Hydro MW 20744 21310 21904 21998 Maximum conventional hydro MW 13789 14323 14747 14791 of which Maximum run of river MW 4020 4345 4650 4726 Maximum Pumped Storage hydro MW 6955 6987 7157 7207 Maximum Tide & Wave power plants TWh 3.22 Maximum geothermal Total TWh 5.50 7.27 Maximum geothermal dry steam & flash power plants (>180°C) MW 785 791 810 Maximum geothermal binary power plants (180°C

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex IV RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 11,0 11,0 11,0 27,0 42,0 57,0 74,0 91,0 Cost [€/GJ] 10,0 10,0 10,0 9,69 9,39 9,12 8,89 8,68 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 12,0 12,0 12,0 28,0 44,0 60,0 78,0 96,0 Cost [€/GJ] 13,9 13,9 13,9 13,11 12,44 11,88 11,4 10,98 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 30,0 30,0 30,0 74 117 160 208 256 Cost [€/GJ] 5,0 5,0 5,0 4,6 4,3 4,1 3,9 3,8 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 41,0 41,0 41,0 100,0 159,0 218,0 283,0 348,0 Cost [€/GJ] 3,1 3,1 3,1 2,88 2,72 2,58 2,48 2,39 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 10,0 10,0 10,0 24,0 39,0 53,0 68,0 84,0 Cost [€/GJ] 11,4 11,4 11,4 11,1 10,8 10,5 10,2 10,0 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP 72 77 82 EEA Report 7 2006 Cost [€/GJ] Forestry residues Potential [PJ/a] UP Cost [€/GJ] Wood processing residues Potential [PJ/a] UP 13 14 15 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP 42 45 48 EEA Report 7 2006 Cost [€/GJ] Wet manures Potential [PJ/a] UP 35 37 40 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP 0 0 Cost [€/GJ] Sewage sludge Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] Other waste wood households Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] packageing Potential [PJ/a] UP 55 59 63 EEA Report 7 2006 Cost [€/GJ] demolition Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP 13 14 15 EEA Report 7 2006 Cost [€/GJ]

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17. LITHUANIA

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In 2005, the share of oil represented 30.8% of the national balance of primary energy resources natural gas – 28.4%, and nuclear energy 27.9%. In 2005, around 70% of the total domestic electricity production was generated by the Ignalina nuclear power plant (about 21% by thermal power plants).However, this situation will change as one of the two nuclear reactors has closed and the second will close in 2009. The following key factors influence the energy sector in Lithuania: prevalence of import of primary energy resources from Russia as well as absence of interconnections with Western European energy systems and the decommissioning of the Ignalina NPP in 2009. In Lithuania the main installations for heat production from renewable energy sources (RES) are biomass (wood, chips, wood waste, straw, biogas). Hydro is the main renewable energy source for power production. However, last year, the use of wind energy and biomass in CHP for power production increased.

KEY FIGURES • The share of RES in total primary energy consumption was 9.62%.in 200658. • The share of RES in the gross final energy consumption 15% in 2005. • The share of RES in the gross electricity production is 2.83% in 2006.59 • The share of biofuels in the consumption of fuels for transport amounted in 2006 to 1.72%. • Dependence on external energy supplies amounted in 2005 to 63.1%

Technology specific figures: o Installed capacity for solid biomass for heat production amounted to 440 MW; o Installed capacity for solid biomass electricity production amounted to16 MW o Small hydro power plants (N<10 MW) 27 MW; o Kauno hydro power plant amounts to 105 MW o Installed capacity for wind energy by the end 2006 was 54.3 MW • About 75% of residential buildings in Lithuania’s towns are supplied through district heating systems. • In 2006, Lithuania imported 2 600 tonnes bioethanol and 6 100 tonnes of biodiesel; produced 14 700 tonnes of bio-ETBE (containing 47% bioethanol). Lithuania consumed 1 531 200 tonnes of fuel, including 1 328 700 tonnes of fuel for land transport (as against 1 233 000 tonnes in 2005), including biofuels for transport and liquefied petroleum gas (211 100 tonnes)60.

58 EurObserv’er 59 EurObserv’er 60 Lithuanian Department of Statistics 175 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

Structure of gross inland energy consumption in Lithunia in 2006

2006 Renewable Natural energy gas 9.1% 28.5%

Nuclear energy 26.2%

Oil and oil Coal and products other solid 31.3% fuel 4.9% Total: 8.60 Mtoe

RE Sources used for Energy- 2006 Firewood and wood Agriculture waste waste Biogas 92.1% 0.2% 0.3% Small HPP 0.6% Large HPP 3.7% Wind 0.2% Geothermal 0.2% Bioethanol Biodiesel 0.9% 1.8%

RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200861 • 23% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

61 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

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Indicative Target set by the RES- electricity European Directive from 200162 • 7% share of RES on gross electricity consumption by 2010

Indicative Target set by the European Biofuels Directive from 200363 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National Commitments The National Energy Strategy adopted in January 2007 set the main targets: • RES must be 20% in the primary energy balance by 2025. • Increase the share of RES in primary energy balance by 1.5% each year until 2012. • To increase the share of biofuels (for transport) up to 20% by 2025.

Technology specific targets In 2006, the National Energy Strategy (NES) was updated, setting out key provisions of the energy policy planning that in 2010, 7.7% of the electric power consumed will be generated using renewable energy resources: wind farms will generate about 320 GWh of electric power, with hydropower plants contributing 452 GWh, biomass power plants - 220 GWh and solar and geothermal power plants - 3.2 GWh. In 2007 the Seimas of the Republic of Lithuania approved the revised National Energy Strategy, which is the main strategic document of the energy sector.

Support for Electricity Feed-in tariffs Lithuania has a feed-in tariff with a Purchase obligation. In 2002, the National Control Commission for Prices and Energy approved the average purchase prices of green electricity. The tariffs are guaranteed for a fixed period of 10 years.

Duration [years Support level Feed-in tariff that an investor is Resource Technology [€cents/ kWh] or premium? entitled to support] hydro small 5.8 feed-in tariff 10 years wind onshore 6.4 feed-in tariff 10 years wind offshore 6.4 feed in 10 years biomass solid 5.8 feed in 10 years gasification biomass (biogas) 5.8 feed-in tariff 10 years

Exemption from Excise duty The Law of the Republic of Lithuania on Excise Duty provides that exemption from excise duty is applied to electricity produced from renewable energy sources.

Grid issues The Law on Electricity sets forth that the National Price and Energy Regulation Commission must control that network connection conditions and tarrifs for new electricity producers are objective, transparent and non-discriminating taking into account all costs and benefit derived from renewable energy sources. Provisions of Resolution No 1474 intended to implement the Law on Electricity set that public and independent suppliers, market, transmission and distribution network operators holding activity licences and eligible customers importing electricity, shall provide services according to the list of public services obligation in the electricity sector.

62 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

63 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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Discount on the fee of connection of power plants to the network There is a 40% discount for power plants connection to the grid

Support for heat

There is no support measures for heat

Support for Biofuels

Exemptions from excise duty Pursuant to Council Directive 2003/96/EC of 27 October 2003 (restructuring the Community framework for the taxation of energy products and electricity), Lithuania began applying a reduced rate of excise duty to biofuels for transport. The relief is applicable to bioethanol, biodiesel, bio- ETBE and pure vegetable oil. Environment pollution tax reduction There is an exemption from the environment pollution tax from mobile pollution sources for natural and legal entities polluting through vehicles using biofuels. Natural and legal entities having produced documents of proof of biofuel consumption are exempted from the environment pollution tax from stationary sources of pollution. Compensatory payments To promote production of biofuels for transport, compensation is granted for raw materials sold for the production of biofuels for transport: for cereal grains - 114 LTL/tonne, for rapeseed (grains) - 160 LTL/tonne. In 2006, LTL 13.66 million was allocated from the national budget for compensatory payments. Beneficiaries included producers of rapeseed oil used for the production of rapeseed methyl ester, producers of rapeseed methyl (ethyl) ester and producers of dehydrated ethanol.

Annex I . RES electricity Potentials Annex II RES Bioenergy Potentials

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Sources European Commission Factsheets by Country http://ec.europa.eu/energy/energy_policy/facts_en.htm Member States Reports in the framework of the Directive 2001/77/EC on renewable electricity http://ec.europa.eu/energy/res/legislation/electricity_member_states_en.htm Member States Reports in the framework of the Directive 2003/30/EC on biofuels http://ec.europa.eu/energy/res/legislation/biofuels_members_states_en.htm Lithuanian Energy Institute www.lei.lt Lithuania Renewable Energy Agency http://www.avei.lt/ Ministry of Economy of the Republic of Lithuania http://www.ukmin.lt/en/energy/renew/ EurObserv’er Barometer http://www.energies-renouvelables.org/observ-er/sig/eufores/sig.asp

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Annex I . RES electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Maximun wind MW 1 250 500 800 1570 Maximum Wind onshore MW 1 250 420 700 1370 Maximum Wind offshore MW 80 100 200 Maximum solar PV TWh 0.03 Maximum solar thermal MW 0.00 Total Hydro MW 1023 1031 1035 1040 Maximum conventional hydro MW 123 131 135 140 of which Maximum run of river MW 0 0 0 0 Maximum Pumped Storage hydro MW 900 900 900 900 Maximum Tide & Wave power plants TWh 0.02 Maximum geothermal conventional power plants MW 0 Maximum geothermal hot dry rock power plants MW 0 Maximum biomass power plants (conventional+CHP) MW 4.21 Maximum biogas power plants (conventional+CHP) MW 0.03 7.5 Maximum bio waste power plants (CHP) MW 0.11

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 93,0 93,0 93,0 180,0 225,0 269,0 293,0 318,0 Cost [€/GJ] 6,1 6,1 6,1 6,16 6,27 6,47 6,79 7,29 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 2,0 2,0 2,0 5,0 6,0 7,0 7,0 8,0 Cost [€/GJ] 7,9 7,9 7,9 7,56 7,31 7,11 6,98 6,91 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 152,0 152,0 152,0 310 397 484 538 592 Cost [€/GJ] 3,8 3,8 3,8 3,5 3,3 3,2 3,2 3,2 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 119,0 119,0 119,0 243,0 311,0 380,0 422,0 465,0 Cost [€/GJ] 2,0 2,0 2,0 1,87 1,8 1,79 1,82 1,91 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 36,0 36,0 36,0 71,0 88,0 106,0 115,0 125,0 Cost [€/GJ] 5,1 5,1 5,1 4,9 4,8 4,7 4,6 4,5 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste EEA Report 7 2006 Potential [PJ/a] UP 0,2 9 10 10 7 according to Dravininkas, A. (2005): The use of plant biomass and its waste products for energy purpose in Lithuania. Institute of Agricultural Engineering, Lithuanian University of Cost [€/GJ] Agriculture, Lithuania, 2005. Forestry residues http://www.agri.ee/public/juurkataloog/BIOENERGEETIKA/Dravininkas.ppt Potential [PJ/a] UP 8,8 10.3 according to Dravininkas, A. (2005): The use of plant biomass and its waste products for energy purpose in Lithuania. Institute of Agricultural Engineering, Lithuanian University of Cost [€/GJ] Agriculture, Lithuania, 2005. Wood processing residues EEA Report 7 2006 Potential [PJ/a] UP 33 35 38 7 according to Dravininkas, A. (2005): The use of plant biomass and its waste products for energy purpose in Lithuania. Institute of Agricultural Engineering, Lithuanian University of Cost [€/GJ] Agriculture, Lithuania, 2005. Municipal solid waste Potential [PJ/a] UP 7 8 8 EEA Report 7 2006 Cost [€/GJ] Wet manures Potential [PJ/a] UP 6 6 6 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP Cost [€/GJ] Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ] demolition Potential [PJ/a] UP Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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18. LUXEMBOURG

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Luxembourg is almost totally dependent on energy imports. Oil dominates in terms of primary energy supply, while natural gas has been gradually replacing solid fuels. The majority of energy imports are of oil and natural gas, with the latter contributing substantially to the electricity generation since 2002. The share of transport in total final energy consumption is around double that of the EU-27 average. Energy consumption and CO2 emissions per capita are the highest in the EU-27. While the electricity production from small-scale hydro power has stabilised in recent years, the contributions from onshore wind, PV, and biogas have now started to increase.

KEY FIGURES • The share of RES in total primary energy consumption was of 2.61% in 2006. • The share of RES in the gross final energy consumption was 0.9% in 2005. • The share of RES in the gross electricity production was 3.60% in 2006. • The share of all biofuels in the transport sector in 2006 was 0.026% based on the energy content. • Dependence on external energy supplies is of about 99% in 2005.

Technology Specific figures:

In 2005, electricity production from biogas amounted to 27 GWh, biowaste to 18GWh, small hydro 102 GWh, photovoltaic to 19 GWh and wind onshore to 53 GWh (the total amounts to 219 GWh).

RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200864 • 11% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

64 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

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Indicative Target set by the RES- electricity European Directive from 200165 • 5.7 % share of RES on gross electricity consumption by 2010.

Indicative Target set by the European Biofuels Directive from 200366 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

RES POLICY INSTRUMENTS

Support for RES electricity

Feed in tariff

The 1993 Framework Law defines the renewable electricity (RES-E) policy: Feed-in tariffs are given to different types of RES-E technologies. These tariffs have been amended in February 2008. The new tariffs are in force for installations starting after the first January 2008. Tariffs are guaranteed over 15 years with simpler administrative procedures. They are differentiated according to technology and capacity. Some tariffs are degressive.

Tariffs for wind onshore since January 2008 are set at 82.7euros per MWh. For photovoltaic, this tariff is set for small PV panels (inferior or equal to 30 kW) at 420 euros per MWh (with an annual degression rate of 3%) and for bigger panels (31kW-1000kW) at 370 euros per MWh.

Concerning small hydro, (up to 1 MW installed capacity), tariff is set at 105 euros per MWh. For bigger systems (1 to 6 MW) , tariffs are set 85 euros per MWh.

Biogas feed-in tariffs amount to 150 euros per MWh for small systems (0 to 150 kW), to 140 euros (151-300kW), to 130 euros (301- 500kW) and 120 euros (501 kW-2500kW).

For sewage treatment plants, 65 euros per MWh is the tariff. Concerning solid biomass, the tariff is set at 145 euros per MWh for small systems (0 to 1 MW), and at 125 euros ( 1 to 5 MW). Concerning waste wood, tariffs are set 130 euros for systems up to 1 MW, and to 110 euros for systems between 1 and 5 MW.

Investments subsidies:

Subsidies are available to private companies (Framework Law of Economy Ministry- Framework Law of the Ministry of Middle Classes), communes (Environment Protection Fund of the Environment Ministry), farmers (Law from the Agriculture Ministry supporting rural development) and households (regulation of the 21st December 2007 of the Environment Ministry) investing in RES-E technologies.

In January 2008, new grants for households entered into force to promote RES-E: Concerning wind onshore, investment aid amounts to 20% to 25% of the investment depending on the site’s quality. Investment aid amounts to 30% of the investment for all PV panels. For small hydro, investment aid amounts to 20% of the investment costs. For sewage treatment plants, investment aid amounts to 90% of investment costs. Investment aid for biogas installation amounts to 50% and for solid biomass to and waste wood to 20 %.

65 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

66 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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Support for RES Heating

Premium Since January 2008, a so-called “heat premium” (prime de chaleur) has been introduced. This premium differs according to technologies (solid biomass, biogas and waste wood) and is granted for each MWth commercialised. For biogas, waste wood and solid biomass, the producer gets 30 euros per MWh if certain conditions are fulfilled. The new tariffs can apply to existing biogas installation (existing before the 1st January 2008) in case of extension of capacity.

Investment subsidies In January 2008, new grants for private households promoting RES-Heat entered into force (regulation from 21st December 2007). These investment subsidies promote the use of solar thermal panel (50% of investment costs), biomass boilers (25-30%), geothermal heat exchanger (50%), geothermal heat pumps (40%).

Support for Biofuels

The government foresees in its 2006 action plan to promote the use of biofuels in order to reduce greenhouse gases emissions in the transport sector.

Tax exemptions are made available for biofuels for transport. The setting of maximum levels of tax exemption is foreseen (EUR 23 per 1000 litres of unleaded petrol and EUR 10 per 1000 litres of diesel).

Reduced excise tax

Budget Law 2006 introduced a new provision to reduce taxes on biofuels blended in petrol and diesel. The budget law stipulates that : « biofuels when blended to petrol or diesel can benefit from a reduced excise tax. This reduction can not go beyond 23 € par 1.000 litres for when blended with unleaded petrol and 10,00 € for 1000 litres. Concerning bioethanol, the blending must be at least 2.93% by volume and for biodiesel at least 2.17%. Pure vegetable oil will be tax-free from 2007 to encourage captive fleets to switch.

Obligation

The 2007 Budget law plans an obligation on fuel suppliers to incorporate in 2007 at least 2% biofuels in tranport fuels consumed in Luxemburg (calculate by energy content). This obligation equals to a consumption of around 52 millions litres of biofuels combined with consumption in road transport estimated at 2.6 bn liters in 2007.

The budget law 2007 foresees a tax on oil suppliers which can not demonstrate that they’ve fulfilled their obligation ( 1.200 EUR/1.000 litres).

Annex I RES Electricity Potentials Annex II RES Bionergy Potentials

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Sources:

Energy Agency from Luxemburg- Website Powerpoint Presentation of the new feed in tariffs http://www.ael.lu/cms/upload/downloads/home/aktuelles/080320/presentation_rgd080208.pdf Regulation on new feed-in tariffs http://www.ael.lu/cms/upload/downloads/home/aktuelles/080320/RGD080208.pdf List of legislation affecting renewable energy sources in Luxemburg http://fr.ael.lu/cms/front_content.php?idcat=27 Brochure on subsidies to private households http://fr.ael.lu/cms/upload/downloads/home/dienstleistungen/privatpersonen/brochure_regimeaides .pdf Subsidies for companies, private households and communes in Luxemburg http://fr.ael.lu/cms/front_content.php?idcat=63

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Annex I RES Electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Wind Total MW 35 66 98 132 206 Maximum Wind onshore MW Maximum Wind offshore MW Maximum solar PV TWh 0.030 Maximum solar thermal MW 0.000 Total Hydro MW 1128 1128 1128 1128 Maximum conventional hydro MW 32 32 32 32 of which Maximum run of river MW 17 17 17 17 Maximum Pumped Storage hydro MW 1096 1096 1096 1096 Maximum Tide & Wave power plants TWh 0 Maximum geothermal conventional power plants MW 0 Maximum geothermal hot dry rock power plants MW Maximum biomass power plants (conventional+CHP) TWh 0.35 Maximum biogas power plants (conventional+CHP) TWh 0.02 0.16 Maximum Bio waste power plants (CHP) TWh 0.02 0.03

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 0,0 0,0 0,0 0,0 1,0 1,0 1,0 1,0 Cost [€/GJ] 9,2 9,2 9,2 8,85 8,56 8,31 8,08 7,88 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 0,0 0,0 0,0 0,0 0,0 0,0 1,0 1,0 Cost [€/GJ] 10,3 10,3 10,3 9,72 9,24 8,82 8,47 8,16 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 0,0 0,0 0,0 1 1 1 2 2 Cost [€/GJ] 5,9 5,9 5,9 5,5 5,1 4,8 4,6 4,4 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 0,0 0,0 0,0 1,0 1,0 1,0 2,0 2,0 Cost [€/GJ] 3,6 3,6 3,6 3,32 3,11 2,95 2,82 2,71 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 0,0 0,0 0,0 0,0 0,0 0,0 0,0 1,0 Cost [€/GJ] 8,8 8,8 8,8 8,5 8,3 8,1 7,9 7,7 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP Cost [€/GJ] Forestry residues Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ] Wood processing residues Potential [PJ/a] UP Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP Cost [€/GJ] Wet manures Potential [PJ/a] UP Cost [€/GJ] Black liquor Potential [PJ/a] UP Cost [€/GJ] Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP Cost [€/GJ] demolition Potential [PJ/a] UP Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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19. LATVIA

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The supply system of primary energy resources in Latvia consists of 3 resources: natural gas, oil and biomass. The supply of natural gas has an increased risk level since it is possible to receive it only from one supplier. Latvia has the largest share within the EU of renewable energy in its energy mix. Renewable energy sources make up one third of the energy mix in Latvia. Wood and water are the most widely used renewable energy resources: Wood as fuel is used for district heating, both centralised and local, and for heating individual buildings. The share of renewable energy resources in electricity generation in Latvia is very significant: electricity generation is predominantly based on renewable sources (mainly hydro) and to a smaller degree on natural gas, resulting in low CO2 emissions .

However, energy import dependency in Latvia is above the EU-27 average with oil and natural gas imported mainly from Russia.

KEY FIGURES: • The share of RES in total primary energy consumption was 29.1% in 200667 • The share of RES in electricity consumption was about 46 % in 2006 compared to 48% in 2005 with large hydro power plants (3 plants) contributing 46,3 %, small hydro power plants (149): 0,9 % , wind: 0,7 % • Biofuels accounted for 0,22 % of the transport fuels in 2006 compared to 0,33 % in 200568 Consumption of fossil fuels in transport in 2006 was 7,2 % higher than in the previous reporting period. • Energy dependence rate amounted to 94% in Latvia in 2005.

Technology-specific figures: • Hydro sources are mainly used in the big hydroelectric power plants of the public stock company Latvenergo. In 2004 the independent producers – the small hydroelectric power plants, wind and biogas electric power plants - provided only 2%1. • In 2006, 71 % of the biodiesel and 93 % of the (100 %) bioethanol produced in Latvia was exported to other EU Member States. 100 % biodiesel can currently be purchased at 14 filling stations69. • There are two bioethanol production plants, five biodiesel plants and seven rapeseed oil production plants operating in Latvia. Regarding the information given by Latvian Ministry of Agriculture over the next few years, at least six new biofuel production plants will be developed. The total annual capacity of biodiesel plants in Latvia in 2006 was around 11,000 t, while bioethanol production units had a capacity of10,000 t.

67 Central Statistical Bureau Latvia 68 State Revenue Service's data 69 Ministry of Economic Affairs

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Share of RES in the Primary Energy in Latvia ( 2006)

RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200870 • 23% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200171 • 49.3% share of RES on gross electricity consumption by 2010

70 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

71 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

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Indicative Target set by the European Biofuels Directive from 200372 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National Commitments The Energy Development Guidelines for 2007-2016 have determined that the proportion of biofuel in transport must reach 10% in 2016 and 15% - in 2020, and the share of electricity produced in highly efficient CHP using biomass should reach 8 % by 2016.

Guidelines for Energy Sector Development 2007-2016 developed by the Ministry of Economics are the main mid-term energy policy planning document. It is in particular the principal policy document driving increases in efficient use of RES.

Progress towards the target Latvia is on track to meet its renewable electricity target. In 2006, the share of renewable energy resources in total electricity consumption was 46 %. This is 3,3 % less than the indicative target for the share of electricity produced from renewables in total electricity consumption set for 2010.

Support to RES-Electricity

Feed in tariffs

Till January 1st, 2003 Latvia had a feed-in tariff which was double the average electricity price and which could be purchased for a period of 8 years after grid-connection. This tariff was very successful in promoting RES, especially in the small hydro power sector, where the production increased from 2.5 to 30 GWh in the period from 1996 till 2001. The feed in system has been amended through regulation Nr.503 on Electricity Production from RES (in force since August 2007). The new tariff-system differentiates between the specific RES and installed capacity. Itprovides particular regulations for electricity produced in CHP plants. There is a guaranteed purchase only for a fixed amount of RES-E. The purchase price is calculated as a natural gas price multiplied by factor. Electricity prices are regulated by the Public Utilities Commission (PUC) on a regular basis with multiple distinctions both for the specific generation source and also for the different steps of the electricity market chain: generation, transmission, distribution and sale.

Duration [years Start Resource Technology Support level [€cents/ kWh] that an investor is year entitled to support] Wind Power plants with capacity not For the first 10 years from the 2007 10 years over 0,25 MW beginning of PP operation - Wind Power plants with capacity not After 10 years from the beginning

over 0,25 MW of PP operation Biomass Power plants with electric For the first 10 years from the 2007 10 years capacity not over 4 MW beginning of PP operation Biomass Power plants with electric After 10 years from the beginning

capacity not over 4 MW of PP operation Biogas Power plants without any For the first 10 years from the 2007 10 years capacity limitations beginning of PP operation Biogas Power plants without any After 10 years from the beginning

capacity limitations of PP operation Hydro Power plants with capacity not 2007 10 years over 5 MW

72 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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Latvia has a tendering scheme for wind farms.

However, there is a long way of procedures related to the different elements of the chain including cap in the generation power, finding the transmission and distribution grid.

Support for RES heat

Duration [years that an Support level [Unit or Resource Technology investor is entitled to %] support]

Latvian Fuel switch - from Open call of proposals Environmental Up to 40% coal to biomass once a year Protection Fund

Support to biofuels

The Latvian Ministry of Economics has developed an action plan to enact the Law on biofuel (in force since 1 April 2005.

Obligation

Resource Quota in % (per year) Year Biodiesel 3.5 2007 Biodiesel 4.24 2008 Biodiesel 5 2009 Biodiesel 5.8 2010 Bioetanol 3.4 2007 Bioetanol 4.3 2008 Bioetanol 5.1 2009 Bioetanol 5.9 2010

Reduction of excise duties

2006 saw the adoption of a number of amendments to existing legislation on the production of and trade in biofuels. Under the amendments to the Law on excise duties adopted in 2006, the basic rate of duty for unleaded petrol is LVL 209/1000 litres and for diesel LVL 178/1000 litres. As an incentive, provision was made for the following duty reliefs on biofuels and mineral oil/biofuel blends.

1. application of a reduced rate of excise duty depending on the biofuel content of the fuel/blend: · for unleaded petrol containing: – 5 % by volume of dehydrated ethanol obtained from agricultural raw materials: LVL 199/1000 litres; – as from 1 July 2007: 85 % by volume dehydrated ethanol obtained from agricultural raw materials: LVL 31,5/1000 litres; · for diesel fuel, blended with rapeseed oil or rapeseed biodiesel, provided that the rapeseed oil or rapeseed biodiesel represents: – from 5 up to (but not including) 30 % by volume of the total product volume: LVL 170/1000 litres; – at least 30 % by volume of the total product volume: LVL 125/1000 litres;

2. application of a zero rate of duty (LVL 0/1000 litres) to rapeseed oil sold or used for heating or fuel and to biodiesel completely derived from rapeseed oil.

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Fuel types with added biofuels enjoy a reduced rate of excise tax. Biofuel made entirely of rapeseed oil is exempted from excise tax)

Total support level (= tax exemption incl. reduction of Resource start year Comments VAT to be paid) [€cents/litre]

Biodiesel excise tax rate - 0 2004 Biodiesel is produced from rape oil

Biodiesel (if excise tax rate 220,5 biodiesel is from 5 - 2004 Biodiesel is produced from rape oil €/1000 l 30%)

Biodiesel (if excise tax rate 162,2 biodiesel is at least 2004 Biodiesel is produced from rape oil €/1000 l 30%)

Excise tax rate for all types of above mentioned biodiesels is 0/1000 l if biodiesels are used as combustible fuel not as motor fuel.

Direct State Aid to producers: In Latvia the support is given direct to biofuel producers and the annual supported quota (subsidy) is granted in proportion to production capacity. The financially supported quota will be granted to enterprises until 2011. Annual subsidies are allocated to producers of biofuels proportionally to capacity:

Support level [Unit Resource start year End year Comments or %]

State financial support for 2007, first half a 2007, first half Biodiesel 270€/1000 l year 2007 ( quota - year a year 25000000 l)

State financial support for 2007, second half a 2007, second Biodiesel 370€/10000 l year 2007 ( quota - year half a year 25000000 l)

State financial support for 2007, first half a 2007, first half Bioethanol 327€/1000 l year 2007 (quota - year a year 21518987 l)

State financial support for 2007, second half a 2007, second Bioethanol 413€/1000 l year 2007 (quota - year half a year 21518987 l)

Reduced state fee to obtain licence

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As an incentive to the production and use of biofuels, the state fee for obtaining a special permit (licence) to carry out the activity of excisable goods warehouse keeper or approved trader is reduced if that person's business is with biofuels to the exclusion of petroleum products:

Annex I. RES Electricity Potentials Annex II RES Bioenergy Potentials

Sources

European Commission Factsheets by Country http://ec.europa.eu/energy/energy_policy/facts_en.htm Member States Reports in the framework of the Directive 2001/77/EC on renewable electricity http://ec.europa.eu/energy/res/legislation/electricity_member_states_en.htm Member States Reports in the framework of the Directive 2003/30/EC on biofuels http://ec.europa.eu/energy/res/legislation/biofuels_members_states_en.htm EurObserv’er Barometer http://www.energies-renouvelables.org/observ-er/sig/eufores/sig.asp Ministry of Economy http://www.em.gov.lv/em/2nd/?lng=en&cat=3&lng=en Institute of Physical Energetic http://www.innovation.lv/fei EKODOMA www.ekodama.lv

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

Drafted in March 2008.

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Annex I RES Electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 27 142 400 550 800 Maximum Wind onshore MW 320 430 650 Maximum Wind offshore MW 80 120 150 Maximum solar PV TWh 0.020 Maximum solar thermal MW 0.000 Total Hydro MW 1565 1580 1580 1620 Maximum conventional hydro MW 1565 1580 1580 1620 of which Maximum run of river MW 1565 1580 1582 1620 Maximum Pumped Storage hydro MW 0 0 0 Maximum Tide & Wave power plants TWh 0 Maximum geothermal conventional power plants MW 0 Maximum geothermal hot dry rock power plants MW 0 Maximum biomass power plants (conventional+CHP) TWh 0.94 Maximum biogas power plants (conventional+CHP) TWh 0.51 Maximum bio waste power plants (CHP) TWh 0.03

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 29,0 29,0 29,0 57,0 72,0 87,0 96,0 106,0 Cost [€/GJ] 6,7 6,7 6,7 6,72 6,81 7 7,31 7,8 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 2,0 2,0 2,0 4,0 5,0 6,0 7,0 7,0 Cost [€/GJ] 7,9 7,9 7,9 7,56 7,31 7,11 6,98 6,91 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 44,0 44,0 44,0 103 141 180 209 239 Cost [€/GJ] 5,3 5,3 5,3 4,9 4,6 4,4 4,3 4,3 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 51,0 51,0 51,0 120,0 166,0 213,0 248,0 284,0 Cost [€/GJ] 2,8 2,8 2,8 2,6 2,48 2,42 2,42 2,48 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 11,0 11,0 11,0 21,0 27,0 33,0 36,0 39,0 Cost [€/GJ] 5,8 5,8 5,8 5,6 5,5 5,4 5,3 5,2 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste EEA Report 7 2006 Potential [PJ/a] UP 4 4 4 5.2 according to Vigants, E. (2006): Experiences and Challenges of JI Biomass Projects in Latvia. CTI Capacity Building Seminar, Leipzig, Germany, 21-25 Cost [€/GJ] October 2006. Forestry residues http://www.ecologic-events.de/cti/documents/8_vigants.pdf Potential [PJ/a] UP EEA Report 7 2006 Cost [€/GJ] 20.1 according to Vigants, E. (2006): Experiences and Challenges of JI Biomass Projects in Latvia. CTI Capacity Building Seminar, Leipzig, Germany, 21-25 Wood processing residues October 2006. Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP Cost [€/GJ] Wet manures Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP Cost [€/GJ] Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP Cost [€/GJ] demolition Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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20. MALTA

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Malta is totally dependent upon imported fossil fuels for its energy needs, currently over 63% of the primary energy is used for power generation. Renewable Energy Sources (RES) could play a key role for the Island economy. Due to the lack of support mechanisms little development of RES exists so far. However, the potential for solar and wind is substantial. The Maltese government is currently creating a framework for support measures. However it has set up in the meantime national indicative targets for RES-e lower than the ones agreed to in its Accession Treaty to the EU (between 0.31% and 1.31%, instead of 5%). Solar thermal applications (for hot water requirements) are RES with highest penetration rate in Malta.

KEY FIGURES • The share of RES in total primary energy consumption was of 0.22% in 2006. • The share of RES in the gross final energy consumption was 0 % in 2005. • The share of RES in the gross electricity production was 0% in 2006. • The share of biofuels in the transport sector in 2006 was 0.52%. • Malta energy dependence on imports amounts to 100% in 2005.

RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200873 • 10% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200174 • 5 % Share of RES on gross electricity consumption by 2010. However, at the national level, it has been decided to aim for 0.31%, excluding large wind farms and waste combustion plants, or for 1.31% in the event that the plans are implemented.

Indicative Target set by the European Biofuels Directive from 200375 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

Progress towards the Targets • The total RES-e production in 2006 was 0.01 GWh and, therefore, the RES-e share of gross electricity consumption was effectively zero percent.

• Malta has exceeded the target for biofuel production it had set for 2005 (0.30%); the actual share of biofuel in 2006 was 0.58%.

POLICY INSTRUMENTS

Support for RES electricity

In order to promote the uptake of RES, the Maltese government is currently creating a framework for support measures. However it has set has set in the meantime national indicative targets for RES-e lower than the ones agreed to in its Accession Treaty (between 0.31% and 1.31%, instead of 5%).

73 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process) 74 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010. 75 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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Capital grants

• Capital grants on PVs and microwind for domestic use. • Net metering with a spill tariff - € 0.07 / kWh.

Others • Government leading by example (PV installations on public buildings and micro-wind installations). • Government has announced intention to allocate further funds to support RES-E from such installations.

Support for RES Heating and Cooling

Capital grants

Capital grants on solar water heaters for domestic use (25% grant on cost & capped at €233).

Support for biofuels

Quota

Resource Quota in % (per year) Year Comments Biofuels 0.3% 2005 Guideline Biofuels 5.75% 2010 Compulsory

There is Exemption of excise duty for biofuels .

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Annex I. RES electricity Potentials Annex II RES Bioenergy Potentials

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

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Annex I. RES electricity Potentials

Description Unit 2010 2015 2020 2025 2030 Total Wind MW 0 100 200 200 Maximum Wind onshore MW Maximum Wind offshore MW Maximum solar PV TWh 0.010 Maximum solar thermal MW 0.000 Total Hydro MW 0 0 0 0 0 Maximum conventional hydro MW of which Maximum run of river MW Maximum Pumped Storage hydro MW Maximum Tide & Wave power plants TWh 0.06 Maximum geothermal conventional power plants MW 0 Maximum geothermal hot dry rock power plants MW 0 Maximum biomass power plants (conventional+CHP) TWh 0.03 Maximum biogas power plants (conventional+CHP) TWh 0.05 Maximum biowaste power plants (CHP) TWh 0.03

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP Cost [€/GJ] Forestry residues Potential [PJ/a] UP Cost [€/GJ] Wood processing residues Potential [PJ/a] UP Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP Cost [€/GJ] Wet manures Potential [PJ/a] UP Cost [€/GJ] Black liquor Potential [PJ/a] UP Cost [€/GJ] Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP Cost [€/GJ] demolition Potential [PJ/a] UP Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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21. NETHERLANDS

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The Netherlands is a significant producer (and exporter) of natural gas and depends on energy imports for oil and hard coal. Electricity is generated mainly from gas and hard coal. The use of renewable energy sources for power generation has been increasing. The Netherlands have a significant installed wind power capacity.

KEY FIGURES

• The share of RES in total primary energy consumption was of 2.31% in 200676. • The share of RES in the gross final energy consumption was 2.4% in 2005. • The share of RES in the gross electricity consumption was 5.67% in 200677 • The share of all biofuels in the transport sector in 2006 was 0.3% (calculated on the basis of the energy content of the total amount of petrol and diesel placed on the Dutch market in 2006) • Dependence on external energy supplies is in 2005 about 38.9%.

RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200878 • 14% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200179 • 9 % share of RES on gross electricity consumption by 2010.

Indicative Target set by the European Biofuels Directive from 200380 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National commitments

In September 2007, Dutch environment minister Cramer presented the working programme ‘New energy for the climate’. Energy efficiency should increase to a yearly improvement of 2 to 2.3 % after 2011, while the share of renewable energy in 2020 should grow to 20% in 2020.

Support for electricity

Feed-in tariffs: Subsidies Duurzame Energie (SDE)

In July 2003, the a feed in premium has been introduced –the so called MEP premium- (premium on top of the market price for power- fixed for ten years). Under the MEP scheme, Dutch producers of renewable electricity feeding into the public grid receive a fixed fee per kWh for a guaranteed period of ten years.

76 EurObserv’er Data 77 EurObserv’er Data 78 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

79 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

80 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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The ‘MEP-premium’ was abolished in August 2006 when the previous Minister for Economic Affairs judged that the EU-approved target for the Netherlands of 9% renewable power consumed by 2010 would be met. Since then, investments in new RE installations have fallen down to practically zero.

In October 2007, the Dutch government published a new regulation for a feed-in premium for renewable energy. The new support mechanism, called SDE (‘Stimuleringsregeling duurzame energieproductie’) resembles the old MEP premium system. Producers will get a premium covering extra costs on top of the wholesale energy price for a number of years. The premium will be provided to the generator of green power for maximum ten years. The level of the premium and the duration of support will vary with each technology. However, the premiums will also vary with the wholesale price of electricity.

For the new SDE regulation (Subsidies Duurzame Energie), a fund of €300 to €350 million per year will be available by 2011. In contrast to the old scheme, the new one comprises an upper limit. In the first year, the premiums will be distributed on a ‘first come, first go’ basis.

Biomass and wind energy, that were already eligible for the old MEP regulation, will be eligible for SDE too, except for large co-firing of biomass in power plants. A new entry in the SDE is photovoltaics. Offshore wind has not yet been included, because no new permits have been issued. Because of sustainability concerns, liquid biomass fuels are excluded in the first year. Bio- energy producers will possibly be required to report on the sustainability of their biomass. The SDE will be evaluated in 2010.

In January 2008, the Dutch government published the premiums for different kinds of renewable power and gas:

Category Base Expected Expected Capacity Indicative: Expected cooretion premium 2008 (MW) capacity structural (base don 2008-2011 expenses per power and (MW) year for 2008 gas price) dispositions (x € 1 mln.) 1 Wind € 0.088 per €0.060 per €0.028 per 500 2070 31.2 onshore kWh kWh kWh 2 Power from € 0.058 per €0.067 per €0 per kWh 8 30 0 sewage kWh kWh sludge, landfill gas 3 Green gas € 0.277 per €0.21 per €0.07 per 5 10 0.6 from sewage Nm3 gas Nm3 gas Nm3 gas sludge, landfill gas 4 High Basisbedrag €0.067 per €0 per kWh 70 160 0 efficient loopt per kWh waste procentpunt incineration op naar rato (>22%) van het energetisch rendement 5 Solid € 0.12 per €0.067 per €0.053 per 40 160 17.0 biomass kWh kWh kWh burning; digester of organic waste, (co) digesters of manure and

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Category Base Expected Expected Capacity Indicative: Expected cooretion premium 2008 (MW) capacity structural (base don 2008-2011 expenses per power and (MW) year for 2008 gas price) dispositions (x € 1 mln.) 6 Small scale € 0.564 per € 0.234 per € 0.33 per 10 80 2.8 PV (0.6 kWp kWh kWh kWh – 3.0 kWp) DURATION OF THE SUPPORT: 10 Years

Support for heat

With a view to improving the basic economic conditions for the production of electricity and heat from biomass, resources are being deployed within the general body of instruments for sustainable (renewable) energy. These instruments consist of:

=> a tax bonus on investment in renewable energy and energy saving (EIA); => incentive programmes for research and development and the application of renewable energy and energy saving.

Private house owners can receive a subsidy on the purchase of thermal heating systems or heat pumps..

Support for biofuels

Obligation

As from 2007 suppliers of petrol and diesel for road transport purposes are required to ensure that biofuels account for a certain percentage of their sales in the Netherlands. For 2007 the proportion is 2%, calculated on the basis of energy content. In 2008 and 2009, the percentage will be gradually increased to 3.25% and 4.5% respectively and for 2010 it is 5.75%, as laid down in the European Directive.

Tax incentives

In 2006 a start was made on biofuel policy by providing tax incentives, in the form of a reduction in excise duty, to encourage the blending of a 2% biofuel component (bio-ethanol, bio-ETBE or biodiesel). In the case of the displaced quantity of unleaded light oil (petrol) to which at least 2% of ethyl alcohol had been added, the reduction in excise duty amounted to €10.10 per 1000 litres. If less ethyl alcohol was added the reduction was lowered proportionately. In the case of the displaced quantity of gas oil (diesel) to which at least 2% of biodiesel had been added, the reduction in excise duty amounted to €6.10 per 1000 litres. If less biodiesel was added the reduction was lowered proportionately.

Project subsidies

At the end of 2006, the Dutch cabinet allocated a total of 60 million euros of subsidies for projects relating to innovative biofuels which can bring about a significant reduction in C02 emissions. This scheme will run until the end of 2010.

Companies intending to invest in projects aimed at improving the production of innovative biofuels for transport purposes and which incur additional costs in order to reduce C02 emissions may be eligible for a subsidy.

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Support to all RES

Tax incentive

The Energy Investment Deduction scheme (EIA) is a scheme providing tax incentives for investment in renewable energy projects.

CO2 Reduction Plan

Under this scheme, incentives are provided for projects that may reduce CO2 emission. Renewable energy projects occupy a prominent place under this scheme.

Annex I RES electricity Potentials Annex II RES Bioenergy Potentials

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

Drafted in March 2008.

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Annex I RES Electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Wind Total MW 1124 3400 6700 10100 10200 Maximum Wind onshore MW 2700 3700 4100 4200 Maximum Wind offshore MW 0 700 3000 6000 6000 Maximum solar PV TWh 1.2 Maximum solar thermal MW 0 Total Hydro MW 37 37 37 37 Maximum conventional hydro MW 37 37 37 37 of which Maximum run of river MW 37 37 37 37 Maximum Pumped Storage hydro MW Maximum Tide & Wave power plants TWh 1.03 Maximum geothermal conventional power plants MW 0 Maximum geothermal hot dry rock power plants MW 0 Maximum biomass power plants (conventional+CHP) TWh 3.91 Maximum biogas power plants (conventional+CHP) TWh 4.32 Maximum biowaste power plants (CHP) TWh 2.43

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 1,0 1,0 1,0 4,0 6,0 9,0 13,0 17,0 Cost [€/GJ] 10,0 10,0 10,0 9,67 9,34 9,06 8,81 8,58 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 1,0 1,0 1,0 2,0 3,0 4,0 6,0 8,0 Cost [€/GJ] 9,8 9,8 9,8 9,25 8,79 8,39 8,06 7,77 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 1,0 1,0 1,0 5 9 14 28 42 Cost [€/GJ] 11,0 11,0 11,0 10,1 10,6 10,4 12,1 12,2 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 1,0 1,0 1,0 3,0 7,0 10,0 20,0 30,0 Cost [€/GJ] 8,5 8,5 8,5 7,77 8,02 7,81 8,84 8,9 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 0,0 0,0 0,0 1,0 2,0 3,0 5,0 7,0 Cost [€/GJ] 12,2 12,2 12,2 11,8 11,4 11,1 10,9 10,6 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP 6 6 6 EEA Report 7 2006 Cost [€/GJ] Forestry residues Potential [PJ/a] UP 32,1 Cost [€/GJ] Wood processing residues Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP 15 16 17 EEA Report 7 2006 Cost [€/GJ] Wet manures Potential [PJ/a] UP 13 14 15 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP Cost [€/GJ] Sewage sludge Potential [PJ/a] UP 7 8 8 EEA Report 7 2006 Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP 7 8 8 EEA Report 7 2006 Cost [€/GJ] demolition Potential [PJ/a] UP 6 6 6 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ]

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22. NORWAY

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Annex I RES Electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 274 1458 4070 6660 11970 Maximum Wind onshore MW Maximum Wind offshore MW 650 1890 7300 Maximum solar PV TWh Maximum solar thermal MW Total Hydro MW 27701 29075 29471 31651 Maximum conventional hydro MW 26158 27806 28203 29392 of which Maximum run of river MW Maximum Pumped Storage hydro MW 1269.0 1269 1269 2260 Maximum Wave power plants TWh 21 Maximum tide power plants GW 1 Maximum geothermal conventional power plants MW 0 Maximum geothermal hot dry rock power plants MW 0 Maximum biomass power plants (conventional+CHP) TWh 0.5 9.0 Maximum biogas power plants (conventional+CHP) TWh 2.1 Maximum municipal waste power plants (CHP) TWh 0.5 Maximum industrial waste power plants (CHP) TWh

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 0,0 0,0 0,0 1,0 1,0 1,0 1,0 1,0 Cost [€/GJ] 10,5 10,5 10,5 10,07 9,75 9,46 9,2 8,97 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 0,0 0,0 0,0 1,0 1,0 2,0 2,0 2,0 Cost [€/GJ] 42,7 42,7 42,7 39,2 37,1 35,35 33,77 32,43 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 1,0 1,0 1,0 3 4 5 6 6 Cost [€/GJ] 9,4 9,4 9,4 8,7 8,1 7,6 7,2 6,9 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 1,0 1,0 1,0 2,0 3,0 4,0 5,0 5,0 Cost [€/GJ] 3,7 3,7 3,7 3,41 3,21 3,04 2,91 2,8 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 0,0 0,0 0,0 1,0 1,0 1,0 1,0 2,0 Cost [€/GJ] 11,4 11,4 11,4 11,0 10,7 10,4 10,2 9,9 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste PFI (2007): From Biomass to Biofuels - A Roadmap for Future Solutions in Norway. Paper and Fibre Research Institute (PFI), Potential [PJ/a] UP 95 101 108 Norway, 2007. Cost [€/GJ] Forestry residues PFI (2007): From Biomass to Biofuels - A Roadmap for Future Solutions in Norway. Paper and Fibre Research Institute (PFI), Potential [PJ/a] UP 58 63 68 72 Norway, 2007. Øyaas, K. (2006): Renewable Liquid Biofuel from Scandinavian Wood Materials – a Vision or a Future Reality? E-World, Essen, Germany, Cost [€/GJ] 14-2-2006. Wood processing residues PFI (2007): From Biomass to Biofuels - A Roadmap for Future Solutions in Norway. Paper and Fibre Research Institute (PFI), Potential [PJ/a] UP 54 Norway, 2007. Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP Cost [€/GJ] Wet manures PFI (2007): From Biomass to Biofuels - A Roadmap for Future Solutions in Norway. Paper and Fibre Research Institute (PFI), Potential [PJ/a] UP 6 7 7 Norway, 2007. Cost [€/GJ] Black liquor Potential [PJ/a] UP Cost [€/GJ] Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP Cost [€/GJ] demolition Potential [PJ/a] UP Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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23. POLAND

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Being the largest hard coal producer in the EU, Poland’s energy import dependency is among the lowest in the EU. Hard coal plays a significant role in the Polish energy mix, with very large shares in electricity generation and also in primary energy supply, resulting in high emissions and CO2 intensity. Poland exports a significant share of its coal production. The use of other energy sources (oil, gas and renewable energy) has also been increasing. There are public concerns over security of supply, with Russia being by far the major supplier of gas and oil for Poland. Hydropower is the dominant renewable energy source in Poland. The installed capacity at hydropower plants is growing steadily, particularly at small-scale plants. Poland has a significant potential especially in term of biomass due to – among other things – its high share of good arable land per capita.

KEY FIGURES • The share of RES in total primary energy consumption was of 4.86% in 2006. • The share of RES in the gross final energy consumption was 7.2% in 2005. • The share of RES in the gross electricity consumption was 2.99% in 2006 • The share of biofuels in transport fuels in 2006 was 0.92% (estimates) • Poland’s dependence on external energy supplies is of about 18.4% in 2005.

Technology specific figures

• Installed capacity for RES-Electricity in 2006 amounted for biomass to 252,8 MW, for biogas to 36,8 MW, for wind to 176 MW and for hydro to 1082,8 MW, • Electricity generation from RES amounted for biomass to 503 846 MWh, Biogas 116 692 MWh, Wind 256 345 MWh, Hydro 2 028 984 MWh. • In 2006, approximately 106.8 million litres of bioethanol were placed on the market, while petrol consumption increased by over 170 million litres from the previous year’s levels. • In 2006, ester production was approximately 103.4 million litres. Since a large part of the output was sold abroad, Poland consumed only 51.0 million litres, while diesel consumption rose by approximately 1 161 million litres from the previous year’s level.

Structure of primary energy use in 2005

RES Oil 5% 21%

Gas 13% Hard coal Lignite 50% 11%

Primary energy use – 3932 PJ, within 187 PJ (4,76%) from RES

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Structure of renewable energy sources in 2005

Biomass - electricity Landfill biogas 0,3% 6,5% Biomass - district heating Waste water treatment 2,9% plant biogas 0,8% Animal origin biogas 0,1% Biomass - local heat Others Hydro 83,8% 6,8% 4,3%

Wind 0,3%

Ethanol 0,7%

Biodiesel 0,3%

Source: IEO EC BREC

RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200881 • 15 % share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200182 (Accession Treaty) • 7.5% Share of RES on gross electricity consumption by 2010.

Indicative Target set by the European Biofuels Directive from 200383 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National Commitments

Targets for renewable energy were set in the Development Strategy of Renewable Energy Sector (endorsed by the Parliament in 2001) and amount to 7.5 % RES in the primary energy balance by 2010 and 14% by 2020.

The target of 7.5% RES-E by 2010 set at national level is actually smaller than the target set by the EU, as it refers to electricity turnover in distribution companies and not to gross electricity

81 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

82 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

83 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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consumption as in the directive. The difference is approximately 38 TWh, which means that the national target is lower by 30%.

Support for Electricity

The revised Polish Energy Law Act, which was adopted on 4 March 2005, introduced a range of rules which strengthen the mechanisms for promoting the development of renewable energy.

Purchase obligation

There is an obligation for enterprises which sell electricity to end-users to purchase electricity produced from renewable sources.

Green Certificates

The principal legislative instrument is the Energy Act of 10 April 1997. The support mechanism consists of the obligation imposed on energy companies selling electricity to end users to obtain and present for redemption to the Energy Regulator a specified number of certificates of origin of energy generated from, renewable energy sources, or to pay a substitution charge. These certificates can be traded on the Warsaw Commodity Exchange as from 1 October 2005.

Quota

This is a requirement on energy suppliers to provide a minimum share of RES-E (4.8% in 2007 and 7.5% in 2010). Failure to comply with this legislation leads – in theory – to the enforcement of a penalty. In 2005, these were not sufficiently enforced. There is lack of legal and financial consequences for distribution companies, which don’t fulfill their obligation, as the level of penalty has not been stipulated. In such cases the Energy Regulatory Authority (URE) has to sue those companies, and in many cases penalties can be avoided.

In January 2007, changes in the Energy Law Act were made resulting in requirement of a licence RES energy generation regardless of the power installed (previously required only > 50 MW). Also changes in green energy purchase obligation were introduced resulting in higher % rates. For 2010 - 2014 the required RES share is 10,4% (previously only 9%).

Excise Tax exemption

An excise tax exemption on RES-E was introduced in 2002. It amounts to 0.02 PLN/kWh. (Exchange rate in April 2008: 1 Polish Zloty (PLN) = 0.28913 Euro (EUR) )

Support to Biofuels

Exemption of excise duty

Exemptions from excise duty for fuels containing biocomponents, which applied since 2004 were reduced following the entry into force in January 2007 of amendments to the Regulation on Exemptions from Excise Duty. Under the provisions in force since 1 January 2007 the following are exempt from excise duty:

1) biocomponents intended for use in liquid fuels and liquid biofuels, meeting the relevant quality requirements; 2) The following fuels, meeting the relevant quality requirements and containing over 2 % of biocomponents: a) petrol – 1.50 PLN on each litre of biocomponents added to it, b) diesel – 1.00 PLN on each litre of biocomponents added to it;

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3) biocomponents used as direct fuel and meeting the quality requirements specified in separate regulations – 1,680 PLN/1000 l.

Preferential excise duty treatment will increase under the Act of 11 May 2007, amending the Excise Duty Act, which includes amongst its provisions the following reductions of excise duty rates for the products listed below:

1) For products made by blending petrol with biocomponents and containing over 2% of biocomponents, excise duty charged on the petrol (1,565 PLN/1000 l) shall be reduced by 1.565 PLN for each litre of biocomponents added to the petrol, subject to the minimum excise duty payable being 10.00 PLN/1000 l.

2) For products made by blending diesel with biocomponents and containing over 2% of biocomponents, excise duty charged on the diesel (1,048 PLN/1000 l) shall be reduced by 1.048 PLN for each litre of biocomponents added to the diesel, subject to the minimum excise duty payable being 10.00 PLN/1000 l

3) For biocomponents used as direct fuel in internal combustion engines – 10 PLN/1000 l.

In 2006 exemptions from excise duty arising out of the use of biocomponents in fuels amounted to 261.99 million PLN.

Transposing the 2003 Biofuels Directive into Polish law

In August 2006 the Sejm of the Republic of Poland adopted two Acts: the Biocomponents and Liquid Biofuels Act and the Fuel Quality Monitoring and Control Act. The two Acts ensured full transposition of Directive 2003/30/EC into Polish law. Their most important provisions include:

- Enabling farmers to produce liquid biofuels for their own use. in addition, the provision of security for excise duty will no longer be required in the case of pure vegetable oils and esters. The Fuel Quality Monitoring and Control Act requires liquid biofuels produced by farmers for their own use to meet only minimum quality requirements, essential for reasons of environmental protection. The annual own use production quota is 100 litres per hectare of arable land owned by the farmer.

- The introduction as from 1 January 2008 of a requirement to ensure specified biocomponent participation in the transport fuels market. This requirement has been imposed on businesses producing liquid fuels or liquid biofuels and purchasing them intra-Community, for subsequent sale or for their own use. Such businesses are defined as entities implementing the national indicative target.

- The introduction of the concept of “captive fleet” into Polish law, defined as a group of at least 10 vehicles, agricultural tractors or off-road machines, or a group of locomotives or ships fitted with engines able to burn liquid biofuels, owned or used by individuals engaged in business, legal entities or organisations without a legal personality. The introduction of this concept has made it possible to use a wide range of liquid biofuels with high biocomponent content, other than those granted marketing authorisation, in vehicles and machines forming part of “captive fleets”.

Draft Amendments to the Corporation Tax Act

The Sejm is currently preparing a Draft Act amending the Corporation Tax Act, which introduces corporation tax relief for biocomponent manufacturers. The proposed system is intended to ensure stability of the tax relief and exemption system throughout the Programme period. Other financial support instruments offered by the programme include: removing biocomponents used as direct fuel from the list of products subject to fuel duty, a system of subsidies for farmers cultivating energy crops for use in biocomponent manufacture, investment support out of EU funds and a reduction of air pollution charges for entities using liquid biofuels in their vehicles. 224 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

Support to RES- Heat

There is no targeted support for RES-Heat in Poland.

Support for all RES

Grants and loans

In Poland there are no RES targeted development funds. Investors can apply for investment grant and/or for preferential loan to: the National Fund of Environmental Protection, the respective county and municipal funds; Environmental Protection Bank; ECOFUND and others.

Grants and preferential credits for investments in RES may be obtained from the Polish National Fund for Environmental Protection and Water Management, as well as from the corresponding regional funds. Pursuant to the Energy Law Act of 27 April 2001, these funds are, in particular, intended to support activities promoting the use of local RES, as well as to assist the introduction of more environmentally friendly energy carriers.

- the National Environmental Protection and Water Management Fund and provincial, district and commune environmental protection and water management funds. These funds are accumulated out of environmental charges and fines, including substitution charges and fines associated with the Green Certificates system. Under the terms of the Environmental Protection Act of 27 April 2001, these funds are intended to support the use of renewable energy sources.

- The EcoFund Foundation: its funds are generated by debt-for-environment swap activities.

EU Structural and Cohesion Funds

Additional support for renewable energy is provided by the implementation of the National Development Plan 2004–2006, under which public resources from the structural funds and the Cohesion Fund have been committed. These measures will be followed up by implementing the Infrastructure and Environment operative programme in the National Strategic Reference Framework 2007–2013, a document which will define the priorities and scope of the use of EU funds, as well as the system for implementing them.

Annex I RES electricity Potentials Annex II RES Bioenergy Potentials

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Sources:

European Commission Factsheets by Country http://ec.europa.eu/energy/energy_policy/facts_en.htm Member States Reports in the framework of the Directive 2001/77/EC on renewable electricity http://ec.europa.eu/energy/res/legislation/electricity_member_states_en.htm Member States Reports in the framework of the Directive 2003/30/EC on biofuels http://ec.europa.eu/energy/res/legislation/biofuels_members_states_en.htm EurObserv’er Barometer http://www.energies-renouvelables.org/observ-er/sig/eufores/sig.asp IEO, institute for Renewable Energy www.ieo.pl

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

Drafted in March 2008.

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Annex I RES electricity potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 73 830 2247 3665 5082 6499 Maximum Wind onshore MW 73 692 1840 2988 4135 5283 Maximum Wind offshore MW 0 138 407 677 946 1216 Maximum solar PV TWh00111 2 Maximum solar thermal MW 00000 0 Total Hydro MW 2207 2222 2222 Maximum conventional hydro MW 837 852 852 852 852 852 of which Maximum run of river MW 427 442 442 442 442 442 Maximum Pumped Storage hydro MW 1370 1370 1370 Maximum Tide & Wave power plants TWh01345 7 Maximum geothermal conventional power plants TWh 0 1223 3 Maximum geothermal hot dry rock power plants MW 0 181 251 322 393 463 Maximum biomass power plants (conventional+CHP) TWh 1 2 9 16 23 29 Maximum biogas power plants (conventional+CHP) TWh00246 8 Maximum biowaste power plants (CHP) TWh01111 1

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 229,0 229,0 229,0 479,0 632,0 786,0 890,0 995,0 Cost [€/GJ] 5,5 5,5 5,5 5,54 5,66 5,87 6,21 6,72 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 104,0 104,0 104,0 218,0 287,0 357,0 404,0 452,0 Cost [€/GJ] 7,0 7,0 7,0 6,76 6,55 6,38 6,27 6,22 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 335,0 335,0 335,0 714 952 1190 1357 1524 Cost [€/GJ] 3,3 3,3 3,3 3,1 2,9 2,9 2,9 2,9 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 325,0 325,0 325,0 695,0 928,0 1162,0 1326,0 1491,0 Cost [€/GJ] 2,3 2,3 2,3 2,11 2,03 2 2,02 2,1 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 76,0 76,0 76,0 158,0 209,0 260,0 294,0 329,0 Cost [€/GJ] 5,3 5,3 5,3 5,1 5,0 4,9 4,8 4,8 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste EEA Report 7 2006 Podlaski, S. (2007): Future of Bioenergy in Poland. Warsaw University of Life Potential [PJ/a] UP 1 110 118 126 Sciences, Poland, 2007. Cost [€/GJ] http://www.baltic21.org/meeting_documents/TFSA%206/Presentation_Podlaski.pdf Fagernäs, L., et al. (2006): Bioenergy in Europe - Opportunities and Barriers. VTT Forestry residues RESEARCH NOTES 2352, VTT, 2006, p. 52. Podlaski, S. (2007): Future of Bioenergy in Poland. Warsaw University of Life Potential [PJ/a] UP 162 Sciences, Poland, 2007. Cost [€/GJ] http://www.baltic21.org/meeting_documents/TFSA%206/Presentation_Podlaski.pdf Wood processing residues Potential [PJ/a] UP 18 20 21 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP 48 51 54 EEA Report 7 2006 Wiśniewski, G. (2007): Bioenergy framework and prospect for Poland. Meeting of the EU Agricultural & Environment Attaches in Poland, German Embassy, Cost [€/GJ] Warsaw, Poland, 28 March 2007. Wet manures Potential [PJ/a] UP 59 63 67 EEA Report 7 2006 Wiśniewski, G. (2007): Bioenergy framework and prospect for Poland. Meeting of the EU Agricultural & Environment Attaches in Poland, German Embassy, Cost [€/GJ] Warsaw, Poland, 28 March 2007. Black liquor Potential [PJ/a] UP 37 39 42 EEA Report 7 2006 Cost [€/GJ] Sewage sludge Podlaski, S. (2007): Future of Bioenergy in Poland. Warsaw University of Life Potential [PJ/a] UP 1 Sciences, Poland, 2007. Cost [€/GJ] http://www.baltic21.org/meeting_documents/TFSA%206/Presentation_Podlaski.pdf Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP Cost [€/GJ] demolition Potential [PJ/a] UP 15 16 17 EEA Report 7 2006 Cost [€/GJ] Dry manures Wiśniewski, G. (2007): Bioenergy framework and prospect for Poland. Meeting of the EU Agricultural & Environment Attaches in Poland, German Embassy, Potential [PJ/a] UP Warsaw, Poland, 28 March 2007. Cost [€/GJ]

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24. PORTUGAL

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Portugal, which is highly dependent on imported oil and gas, has stepped up its efforts to develop renewable energy sources (RES). The renewable policy framework in Portugal constitutes a comprehensive policy mix, complete with monitoring system; however administrative barriers are hindering a further development, especially for hydropower and solar technologies. In 2006, 70% of total RES-e production was from hydropower. The world's first wave power plant with a capacity of 4 MW is now operating, and a permit has been awarded for a photovoltaic power plant with forecast production of 76 GWh per year. Emerging technologies like wave energy and Concentrated solar power have ambitious targets for 2010. Wind energy is the RES source with the higher rate of evolution in the last years: the supply of electricity from this source, in 2006 reached almost 3000 GWh. For 2007, the contribution was 4003 GWh, representing 213 GW of power production capacity. For the Renewable heating and cooling sector (RES-H&C) a new Portuguese building code has recently introduced the obligation to install solar thermal systems in certain cases.

• The share of RES in total primary energy consumption was of 14% in 2006. • The share of RES in the gross final energy consumption was 20.5% in 2005. • The share of RES in the gross electricity production was 30.5 % in 2007(a 63% dry year), 30.6% in 2006 (an almost average year) 16.8% in 2005. 25.2% in 2004 (it highly dependent on the variation in hydropower production). • The share of biofuels in the transport sector in 2006 was 1.02% • Portugal energy dependence on imports amounts to 85% in 2005 and 86% in 2006.

Technology specific figures • More than 2.2 GW of wind are currently installed in Portugal. It reached more than 4001 GWh in 2007 and 2892 GWh in 2006. • More than 4.8 GW of hydropower are currently installed in Portugal. It reached more than 10 219 GWh in 2007 and 11202 GWh in 2006. • In 2007, PV reached 14.5 MW of capacity installed (3.4 MW in 2006); biogas 12.5 MW (8.2 MW in 2006), and biomass 357 MW in 2007 and 2006.

Source: DGEG

RES POLICY The Portuguese Government promotes RES principally via guaranteed feed-in tariffs for renewable electricity, direct subsidy payments (PRIME-Programme) and tax incentives. Beginning in 2005, a tendering/concession process has also been established. Subsidy payments and tax incentives have been largely, though not entirely, used for smaller-scale renewable energy applications. Feed-in tariffs and tendering schemes, used principally for larger-scale renewable applications.

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RES TARGETS Mandatory targets set by the newly proposed RES Framework Directive from 200884 • 31% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200185 • 39 % Share of RES on gross electricity consumption by 2010

Indicative Target set by the European Biofuels Directive from 200386 • Biofuels consumption of 5.75 % of petrol and diesel use for transport in 2010 (indicative target of 10% for 2010 following national energy policy commitment).

National Commitments • Indicative target of 45% Share of RES on gross electricity consumption by 2010 following national energy policy commitment). • Indicative target for Biofuels consumption of 10 % of petrol and diesel use for transport in 2010 following national energy policy commitment.

RES Technology Roadmap • Wind Power: increase by 1,950 MW the installed capacity goal for 2012 (reaching a new total of 5,100 MW with an increase of 600 MW through equipment upgrade) and promote the creation of new technological and investment clusters linked to wind power; • Hydropower: anticipate upgrading capacity investments for existing hydropower plants, in order to reach the 5,575 MW target of installed hydropower capacity by 2010 (575 MW more than expected in previous energy policies). For 2020 the target is 6960 MW following the recently approved National Plan for Dams with High Hydroelectric Potential; • Biomass: increase by 100 MW the installed capacity goal for 2010 (67% increase), promoting a tight coordination across regional forest resources and potential, and fire risk mitigation policies. Thus in 2010 the biomass installed capacity shall be of 250 MW ; • Solar: ensure construction of the world's largest photovoltaic plant (Moura plant) and a link to micro-generation policies and goals. The 2010 goal is of 150 MW of solar installed capacity; • Wave: increase installed capacity by 200 MW through the creation of a Pilot Area with a total exploitation potential of up to 250 MW for new emerging industrial and pre-commercial waves technological development prototypes; • Biofuels: define a 10% penetration of biofuels in road transport (attaining European Union goal 10 years in advance) and promote domestic agriculture initiatives through tax exemptions for road transport fuels incorporating biofuels; • Biogas: define goals and action plan for a previously uncovered area, establishing a 100 MW target of installed capacity for anaerobic waste treatment units; • Micro-generation: promote programme for installing 50,000 systems until 2010, with installation incentives for water heating systems based on solar energy in existing houses. A new law promoting the micro generation of electricity by home owners was approved in the end of 2007 and will be in force starting in February 2008, with a special fast process of licensing and an interesting tariff

84 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

85 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010. 86 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport currently in force, sets targets up to 2010, with indicative targets by 2005.

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• Replacing 5% to 10% of coal used in Sines and Pego Power Plants with biomass or waste until 2010.

Progress towards the Targets Portugal has been moving towards its RES-e target in 2007 41.9%, in 2005 (35.9%).However, Portugal has been moving further away from its RES-e target between 1997 and 2007, this is due to the fact that the target was not entirely realistic as it was based on the exceptional hydropower performance of 1997. As a consequence, Portugal is not expected to reach its target, even if measures are successful.

RES POLICY INSTRUMENTS

Support for Electricity

Feed in tariff

The Decree-law 33_A of 16th February 2005 modified the system of feed-in tariffs, establishing a new calculation system. The formula for calculation of the feed in tariffs takes in account the technology, the environmental aspects and the inflation rate through the index of prices to the consumer. There are also some minimum and maximum tariffs, according to the variations of load on the grid.

Feed-in Tariff Duration [years that an Support level Feed-in tariff or investor is entitled to Resource Technology [€cents/ kWh] premium? support] hydro small 7.5 feed-in tariff 20 years wind onshore 7.4 feed-in tariff 15 years wind offshore 7.4 feed in tariff 15 years biomass solid 11 feed in 15 years gasification biomass 10.2 feed-in tariff 15 years (biogas) PV 31-45 feed in 15 years CSP Up to 10 MW 26.3-27.3 feed-in tariff 15 years Wave 26 -7.6 feed-in tariff 15 years

The Decree-law 225/2007 introduced new tariffs for emerging technologies, such as wave energy and Concentrated Solar Power providing the legal basis for government use of public maritime areas for producing electricity from sea-wave power.

The present Portuguese feed-in law also describes a specific procedure that aims at minimizing local opposition towards new wind projects. In consideration of the crucial role of wind power within Portugal's energy strategy and the immense increases in installed capacity required to meet Portugal’s wind energy targets. Under this procedure, municipalities in which a wind farm is located will automatically benefit from the remuneration the operator of the wind project receives. Altogether, the municipality receives a share of 2.5 percent of the monthly remuneration paid to the wind project operator. As expected, municipalities have responded with support for wind power projects in their territory. Local resistance against new installations has consequently remained negligible. A comparable procedure for other renewable technologies does not exist under the Portuguese regulation, and most other countries with feed-in tariffs have not experimented with this approach to minimizing local opposition to new renewable energy projects.

Tendering procedures • Were used in 2005 and 2006 in connection to wind and biomass installations.

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• In 2006, a call for tenders was launched for CSP power plants using forest biomass.

Support for Heating and Cooling

Investment Subsidies

Support level [%/total Start Resource Technology investment] year End year Comments SIEST program Only applicable to All residential Azores Autonomous Region (roughly All renewables and 25 2006 1.5% of total national demand). It commercial applies to all residential and commercial technologies renewable based energy production Domestic SIEST program Only applicable to Solar thermal solar water 70 2001 Madeira Autonomous Region (roughly heater 1.5% of total national demand) all (applicable all (applicable to Applicable only to SMEs to a maximum to all 35 2007 2013 all renewables) of 250000€ per project renewables)

Financial Incentives (reduction on interest rate)

Support level [% reduction on interest Start Resource Technology rates] year End year Comments Applicable only to SMEs to a all (applicable all (applicable maximum of 750000€ per project; to all to all loan for 5 years and 2 years for renewables) renewables) 100% 2007 2013 capital " carência"

Fiscal Incentives (deduction from taxable profits) Support for individuals (thermal use) for the 2006 fiscal exercise, 30% of the costs in RES equipments were deductible.

Support level [% deduction from taxable Resource Technology profits] Start year End year Comments Domestic solar water heater; Solar space and water heating; Solar up to 777 solar; space heating and cooling; Space euros of the ambient and water heating; Space and water new heat; heating and cooling; Biomass not equipment biomass combustion small scale furnace 30 2000 defined cost State budget. This data is for the 2008 state budget proposal. The previous ones, since 2000 had the same measure but less ambitious (e.g. In 2000 % deduction was 25% up to 250 euros)

Energy Certification- Building Code

The System of Energy Certification (SCE) for buildings complemented by a Regulation on energy conditioning in Buildings (RSECE) and a Regulation on the Thermal properties of Buildings

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(RCCTE) are pieces of legislation passed in mid 2006. They develop a strategy to implement the directive 2002/91/CE on the Energy Certification of Buildings. The RSECE, in its article 14, determines the conditions under which a newly built building should be provided with a centralised energy conditioning system, obliging to make use of RES sources in all those cases where a study proves that it is financially viable. The National Energy Agency ADENE is the body in charge of the implementation of the Certification System. Heat from biomass boilers is one of the technologies benefiting from this new scheme.

Support for Biofuels

Biofuel quota obligations Directive 2003/30/EC was transposed into Portuguese law by Decree-Law No 62/2006 of21 March 2006, which sets the possible introduction of mandatory minimum quotas of biofuels in fossil fuels where the incorporation of such fuels during the preceding year was well below the level forecast

Resource Quota in % (per year) Year Comments Biofuels 5.75% (energy) 2010 Compulsory

Tax exemption The promotion of biofuels by fiscal means is the subject of Decree-Law No 66/2006 of22 March 2006, which provides for total exemption (in the case of small dedicated producers) or partial exemption from the duty on such fuels (more specifically the ISP - Tax on Petroleum and Energy products) up to a target set annually

Total support level (= tax Maximum amount per exemption incl. reduction of VAT year eligible (in case Resource Technology to be paid) [€cents/litre] of tender system) start year biofuels bioethanol 38.94 589221.5 GJ 2007 biofuels biodiesel 10.94 unlimited

Others • The possibility of imposing a quota for biofuels in transport fuels, and of establishing voluntary agreements whenever the biofuel share in blends exceeds 15% in the case of public passenger transport fleets • Establishing a recognised figure, that of the dedicated small producer, corresponding to firms producing up to 3 000 tones annually whose output is derived from waste products or is based on technology projects aimed at the development of products that are less polluting.

Support for All RES technologies

Investment subsidies for all RES technologies

The most recent legislation Portaria 1463/2007 of November 15th, defining the Incentive System applicable to SMEs. Art. 12, no.1, a) acquisition of renewable equipments. Art. 15, no.1) states maximum incentive rate • Support level [%/total investment] 35%. Start year 2007- End year 2013 Applicable only to SMEs to a maximum of 250000€ per project

Financial Incentives for all RES technologies • Support level [% reduction on interest rates] 100%: Start year 2007- End year 2013. Applicable only to SMEs to a maximum of 75 000€ per project loan for 5 years and 2 years for capital " carência".

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Fiscal Incentives for all RES

A reduced VAT rate of 12% is also in place for all RE equipments.

Annex I Historical development of renewable in Portugal (1999-2007) Annex II RES electricity Potentials Annex II RES Bioenergy Potentials

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

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Annex I Historical development of renewable in Portugal (1999-2007)

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Annex II RES electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Wind Total MW 5700 5954 8602 12829 Maximum Wind onshore MW 1024 5700 7602 9450 Maximum Wind offshore MW 0 1000 3379 Maximum solar PV TWh 0.004 0.30 16 Maximum solar thermal MW 0 250 2400 Total Hydro MW 4787 4955 6960 8071 Maximum conventional hydro MW 4007 4146 4919 5766 of which Maximum run of river MW 2164 2239 2726 3195 Maximum Pumped Storage hydro MW 780 809 2041 2305 Maximum Tide & Wave power plants TWh 0 2 7 Maximum geothermal Total MW 23 30 33 52 Maximum geothermal dry steam & flash power plants (>180°C) MW Maximum geothermal binary power plants (180°C

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 22,0 22,0 22,0 54,0 80,0 106,0 131,0 156,0 Cost [€/GJ] 8,3 8,3 8,3 7,99 7,75 7,54 7,35 7,19 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 9,0 9,0 9,0 24,0 35,0 46,0 57,0 68,0 Cost [€/GJ] 9,9 9,9 9,9 9,38 8,91 8,52 8,18 7,89 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 26,0 26,0 26,0 64 96 127 158 188 Cost [€/GJ] 4,6 4,6 4,6 4,2 4,0 3,8 3,6 3,5 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 13,0 13,0 13,0 33,0 49,0 65,0 80,0 96,0 Cost [€/GJ] 2,7 2,7 2,7 2,49 2,35 2,24 2,15 2,08 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 8,0 8,0 8,0 20,0 30,0 39,0 49,0 58,0 Cost [€/GJ] 8,7 8,7 8,7 8,5 8,2 8,0 7,8 7,6 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste EEA Report 7 2006 Potential [PJ/a] UP 4 4 4 23 according to Sunerny (2007): Market survey Portugal - Potential of biomass for energy. Sunergy, on behalf of EVD/Ministry of Economic Affairs the Cost [€/GJ] Netherlands, the Netherlands, March 2007. Forestry residues Potential [PJ/a] UP 25 according to Sunerny (2007): Market survey Portugal - Potential of biomass for energy. Sunergy, on behalf of EVD/Ministry of Economic Affairs the Cost [€/GJ] Netherlands, the Netherlands, March 2007. Wood processing residues EEA Report 7 2006 Potential [PJ/a] UP 18 20 21 13 according to Sunerny (2007): Market survey Portugal - Potential of biomass for energy. Sunergy, on behalf of EVD/Ministry of Economic Affairs the Cost [€/GJ] Netherlands, the Netherlands, March 2007. Municipal solid waste Potential [PJ/a] UP 24 26 27 EEA Report 7 2006 Cost [€/GJ] Wet manures Potential [PJ/a] UP 6 6 6 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP 61 65 69 EEA Report 7 2006 Cost [€/GJ] Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ] demolition Potential [PJ/a] UP Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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25. ROMANIA

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Romania has seen a large decrease in energy consumption since 1990 mainly due to the shutting down of large inefficient industrial businesses. The country has now a certain electricity over- capacity, the energy mix includes a significant share of hydropower (mainly large scale), while the remainder is constituted by fossil fuels and nuclear power. In near future, the nuclear electricity development with two more reactors is a priority. In terms of Renewable Energy Sources (RES), Romania has already achieved its target on share of RES in electricity consumption: current targets for renewable electricity in the region are too weak to stimulate progress. In Romania's accession treaty, the EU set a target by 2010 (33%) that it to be achieved mainly by its current large hydropower production. The high potential of small-scale hydro power has remained almost untouched. A small number of wind, solar, biomass and geothermal projects have been implemented in the country. Provisions for public support are in place, but few renewable energy projects have so far been financed. The September 2007 energy strategy includes upgrading and retrofitting of hydro-power plants with total installed power of 2328 MW. Also targets for electricity from renewables were established: 35% by 2015 and 38% by 2020. Romania has already opted for a quota/certificate system, but the green certificates system per se does not fully secure investor confidence in renewable investments in the country. Indeed, the investment rate in the renewable sector is quite low, also due to long administrative procedures.

KEY FIGURES • The share of RES in total primary energy consumption was of 12.3% in 2005. • The share of RES in the gross final energy consumption was 17.8% in 2005. • The share of RES in the gross electricity production was 35.8% in 2006. • The share of RES heating and cooling was of 12%in 200687. • The share of biofuels in the transport sector in 2006 was 0 %. • Romania energy dependence on imports amounts to 31.6% 2006.

RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200888 • 24% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200189 • 33 % Share of RES on gross electricity consumption by 2010.

Indicative Target set by the European Biofuels Directive from 200390 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National commitments • 11% of RES in primary Energy Consumption by 2010. (2015 – Renewable energy sources a share of 15% on the total primary energy sources).

87 The national statistics show 3022 ktoe from firewood within the final energy consumption of 25312 ktoe. It results the share of RES heating of 12.%. If we consider the gross (primary) energy consumption, then the share is 3185 ktoe versus 39571 ktoe, meaning 8% 88 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

89 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

90 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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• There is no national target/commitment for heating and cooling.

Progress toward the targets

In terms of RES of gross electricity consumption, Romania may be on target. In 2007, the majority of all RES-e was generated through large-scale hydro power.

RES POLICY INSTRUMENTS

Support for RES Electricity

Romania introduced the following measures to promote RES-e:

A quota system with tradable green certificates (TGC) for new RES-e has been in place since 2004. Purchase Obligation for supplier companies and the obligation to fulfill an annual quota of purchased RES electricity. • The mandatory quota increase from 0.7% in 2005 to 8.3% in 2010. • For the period from 2005-2012 the annual maximum and minimum value for the TGC in 24- 42 Euros/certificate.

TGCs are issued to electricity production from wind, solar, biomass or hydro power generated in plants with less than 10 MW capacity.

Mandatory dispatching and priority trade of electricity produced from RES since 2004.

Quota Obligations

Penalty level Quota in % Comments, Resource Technology [€cents/ kWh] (in year) Year obtained quota all RES-E all 63 0.70% 2005 0.000% 63 2.20% 2006 0.001% 63 3.74% 2007 84 5.26% 2008 84 5.78% 2008 84 8.30% 2010-2012 9.00% 2013 10.00% 2014 10.80% 2015 12.00% 2016 13.20% 2017 14.40% 2018 15.60% 2019 16.80% 2020

Source: ENERO Centrul pentru Promovarea Energiei Curate si Eficiente in Romania. Center for Promotion of Clean and Efficient Energy in Romania

Support for RES heating and cooling

There are no support schemes. However, the list of priorities of the Romanian Energy Efficiency Fund (2002) includes the use of RES for heating.

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Support for Biofuels

Legislation on biofuels was transposed into national legislation in December 2005.

Quota Resource Quota in % (per year) Year Biofuels 2% From 1st July 2007 Biofuels 3% From 1st January 2008 Biofuels 4% From 1st July 2008 Biofuels 4% From 1st July 2009 Biofuels 5.75% 2010

Excise exemption for biofuels

Annex I. RES electricity Targets Annex II RES Bioenergy Potentials

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

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Annex I. RES electricity Targets

Description Unit 2005 2010 2015 2020 2025 2030

Total Wind MW 1 420 1560 3100 3900 4800 Maximum Wind onshore MW 1 380 1400 2500 3100 3700 Maximum Wind offshore MW 0 40 160 600 800 1100 Maximum solar PV TWh 0.00 0.00 0.00 0.05 0.16 0.26 Maximum solar thermal MW 0.0 0 0 30 80 150 Total Hydro MW 6007.0 6617 7606 7606 Maximum conventional hydro MW 6007.0 6617 6656 6656 of which Maximum run of river MW 0.0 0.0 Maximum Pumped Storage hydro MW 950 950 Maximum Wave power plants TWh 0.0 0 0 0 0.01 0.05 Maximum geothermal conventional power plants MW 0.0 0 10 25 60 100 Maximum geothermal hot dry rock power plants MW Maximum biomass power plants (conventional+CHP) TWh 0.0 1.3 3.7 7.4 11.0 12.6 Maximum biogas power plants (conventional+CHP) TWh 0.00.5 1.1 1.7 2.1 2.6 Maximum municipal waste power plants (CHP) TWh 0.0 0.1 0.4 0.7 1.3 1.9 Maximum industrial waste power plants (CHP) TWh 0.0 0.1 0.4 0.6 0.9 1.2

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 58,0 58,0 58,0 122,0 160,0 199,0 224,0 250,0 Cost [€/GJ] 5,2 5,2 5,2 5,24 5,37 5,59 5,92 6,4 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 90,0 90,0 90,0 189,0 248,0 307,0 347,0 387,0 Cost [€/GJ] 6,1 6,1 6,1 5,85 5,67 5,54 5,46 5,43 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 252,0 252,0 252,0 564 768 972 1123 1274 Cost [€/GJ] 3,8 3,8 3,8 3,6 3,4 3,3 3,3 3,3 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 181,0 181,0 181,0 407,0 558,0 708,0 820,0 933,0 Cost [€/GJ] 2,4 2,4 2,4 2,24 2,16 2,13 2,14 2,21 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 67,0 67,0 67,0 141,0 185,0 229,0 258,0 288,0 Cost [€/GJ] 6,0 6,0 6,0 5,8 5,7 5,6 5,5 5,4 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP 79 85 90 Cost [€/GJ] Forestry residues Potential [PJ/a] UP 88,7 128,7 31 33 35 http://www.opet-network.net/opetnetworkinfo/19992001activities/pdf/OPET-ENERO-163.doc.pdf Cost [€/GJ] Wood processing residues Potential [PJ/a] UP 22 23 25 http://www.opet-network.net/opetnetworkinfo/19992001activities/pdf/OPET-ENERO-163.doc.pdf Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP Cost [€/GJ] Wet manures Potential [PJ/a] UP Cost [€/GJ] Black liquor Potential [PJ/a] UP Cost [€/GJ] Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP Cost [€/GJ] demolition Potential [PJ/a] UP Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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26. SWEDEN

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Sweden plans to be World's first oil-free economy by 2020. Indeed, in Sweden a share of 21% of total heat consumption is provided by biomass and biofuels. Sweden has an extensive district heating sector. District heating accounts for about 40 % of the heating market in Sweden. The change in the fuel mix has been impressive: compared to 1970, when oil was the main fuel, oil accounts for only a few percent today. More than 62 % of district heating fuel today is biomass. However, Sweden is moving away from its RES-e target. RES-e production has decreased between 1997 and 2006, mainly due to a lower level of large-scale hydro production. However, Hydro power– on average – is supplying almost half of Sweden’s total electricity production, other RES like biowaste, solid biomass, off-shore wind and PV have shown significant growth. In Sweden, a comprehensive policy mix exists with tradable green certificates as the key mechanism. Wind energy today accounts for less than one percent of the electricity production; however, the potential for wind energy is substantially larger.

KEY FIGURES • The share of RES in total Primary Energy Consumption was of 30.02% in 2006. • The share of RES in the gross final energy consumption was 39.8 % in 2005. • The share of RES in the gross electricity production was 48.47% in 2006, with Hydro power– on average – supplying almost half of Sweden’s total electricity production • The share of all biofuels in the transport sector in 2006 was 3.1%. • Sweden energy dependence on imports amounts to 45% in 2005.

Primary energy share in Sweden

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Energy Input to district Heating

Source: Swedish Energy Agency

RES TARGETS Mandatory targets set by the newly proposed RES Framework Directive from 200891 • 49% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200192 • 60 % Share of RES on gross electricity consumption by 2010.

Indicative Target set by the European Biofuels Directive from 200393 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National commitments • 12.1% of RES in primary Energy Consumption by 2010. • The RES-E target from the EU Directive for Sweden is 60% of gross electricity consumption by 2010. In June 2006 the Swedish target was amended to increase the production of RES- E by 17 TWh from 2002 and 2016. • There is no National target for heating and Cooling.

Progress towards the Targets • The Swedish share of RES-E for gross electricity consumption decrease to 48.47% in 2006 from 54.3% in 2005, due to decrease in Hydropower production. • In 2006, biofuels by energy content stood at 3%.

91 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

92 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

93 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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RES POLICY INSTRUMENTS

Support for RES electricity

Quota oblications

The electricity certificate system is a market based support system to assist the expansion of electricity production in Sweden from renewable energy sources and peat. Its objective is to increase the production of electricity from such sources by 17 TWh by 2016 relative to the production level in 2002.

One electricity certificate unit is issued to each approved producer for each produced and metered megawatt hour of electricity from renewable energy sources, or from peat.

Plants commissioned after the start of the electricity certificate system are entitled to receive electricity certificates for 15 years, or until the end of 2030, whichever is the earlier.

Plants that were started up before the certificate system was introduced are entitled to certificates until the end of 2012. Plants that, at the time of their construction or conversion, received a public investment grant after 15th February 1998 (in accordance with a grants programme for certain investments within the energy sector), and are entitled to certificates until the end of 2014.

Quota in % Resource Year (in year) All RES 12.60% 2006 technologies All RES 16.90% 2010 technologies

The demand for electricity certificates is created by the obligation that electricity suppliers and certain electricity users are required to purchase certificates corresponding to a particular proportion of their electricity sales and/or electricity use. This proportion, or quota, has been decided for each calendar year, and set at such a value that the system will play its part in achieving the objective of increasing the production of electricity from renewable energy sources by 17 TWh by 2016, relative to production in 2002.

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Grants For local authority land use planning for wind power. The electricity certificate system supports renewable electricity. As the country is experiencing some difficulties in seeking to achieve its planned objective for wind power (namely 10 TWh of wind power production by 2015), this grant seeks to assist achievement of the planning objective by supporting local authority land use planning for 2007 and 2008.

Premium Tariff The environmental premium tariff for wind power is a transitory measure and will be progressively phased out by 2009 for onshore wind.

Investment Subsidies

Resource Support level [%/total investment] Start year End year Comments 70% of the cost of the installation for public Solar PV may be refunded (with a maximum of 2005 2007 buildings 50000 SEK/building). 1 Euro = 9.38 SEK in April 2008

The environmental premium tariff for wind power is a transitory measure and will be progressively phased out by 2009 for onshore wind.

Support for RES Heating and Cooling

Investment Subsidies

In 2006, the Swedish government announced a grant scheme for investment in solar heating on commercial premises. This scheme will run until the end of 2010.

Resource Support level [%/total investment] Comments maximum subsidy of 800 € for a Solar Thermal one family house For installations in houses Solar Thermal 30% of its costs covered For public buildings Start year 2006. For the replacement of electric Geothermal storage heaters and oil boilers in a building by grant of 3500 EUR heatpump heating systems containing water as a heat transfer fluid

Tax exemption

Today only 8 percent of Swedish houses are heated by oil, those households get tax rebates if they switch to renewable sources.

Renewable heat has been supported in an indirect way by raising taxes on fossil fuels. Bioenergy, solid waste and peat are tax-exempt for most energy uses. The investment aid to district heating grids indirectly reinforces the promotion of bioenergy.

Support for Biofuels

A tax relief system is currently in place. Green taxes such as the carbon dioxide tax promote biofuels in an indirect way. In addition, the Swedish government is currently increasing the number of alternative fuel pumps and ensured that 36% of the vehicles it used in 2006 were fuelled, either

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wholly or in part, by biogas, ethanol or electricity. Finally, a subsidy is granted for investment in filling stations for biogas and other renewable fuels: SEK 150m was set aside in 2006 and 2007.

Tax exemption Bioethanol and biogas are exempted from the tax on petroleum products and from the tax on CO2.

Others • Obligation for large filling stations to provide biofuels. For large size service stations that supply more than 3000 m3 of petrol or diesel a year. Either ethanol or biogas, and since an ethanol filling station is much cheaper than a biogas filling station, ethanol filling stations are normally the preferred choice by the station owners. • Environmental policy for government vehicles • In addition, there is also a subsidy for buyers of new so-called environmental cars (biofuel cars, hybrid cars etc) of 10 kSEK94 per car payed by the government to the buyer. This is a relatively new scheme.

Support for all RES

Investment Subsidies

Resource Support level [%/total investment] Start year 30% of the cost of installing those technologies- All RES- technologies 2005 Credit to the tax account

Annex I Swedish RES Electrity Potentials Annex II RES Bioenergy Potentials

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

94 I euro= 9.3912 SEK

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Annex I Swedish RES Electrity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 493 2150 5600 10000 17000 Maximum Wind onshore MW 470 1600 3000 4500 6000 Maximum Wind offshore MW 23 550 2600 5500 11000 Maximum solar PV TWh 1.29 Maximum solar thermal MW 0 Total Hydro MW 16137.0 16200 16400 16600 Maximum conventional hydro MW of which Maximum run of river MW Maximum Pumped Storage hydro MW Maximum Wave & Tide power plants TWh 3 Maximum geothermal conventional power plants MW 0 Maximum geothermal hot dry rock power plants MW 0 Maximum biomass power plants (conventional+CHP) TWh 3.6 15.66 20 Maximum biogas power plants (conventional+CHP) TWh 0.1 1.87 Maximum biowaste power plants (CHP) TWh 0.5 2

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 29,0 29,0 29,0 42,0 49,0 57,0 64,0 70,0 Cost [€/GJ] 10,1 10,1 10,1 9,78 9,49 9,23 9,01 8,81 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 28,0 28,0 28,0 40,0 48,0 55,0 61,0 68,0 Cost [€/GJ] 8,9 8,9 8,9 8,38 7,97 7,63 7,33 7,08 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 54,0 54,0 54,0 79 94 109 122 135 Cost [€/GJ] 15,3 15,3 15,3 14,0 13,0 12,2 11,6 11,1 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 48,0 48,0 48,0 70,0 83,0 97,0 108,0 120,0 Cost [€/GJ] 3,1 3,1 3,1 2,87 2,71 2,58 2,48 2,4 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 19,0 19,0 19,0 28,0 33,0 39,0 43,0 47,0 Cost [€/GJ] 8,9 8,9 8,9 8,7 8,4 8,2 8,0 7,8 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP 18 20 21 EEA Report 7 2006 Cost [€/GJ] Forestry residues Potential [PJ/a] UP Cost [€/GJ] Wood processing residues Potential [PJ/a] UP 98 104 111 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP 9 10 10 EEA Report 7 2006 Cost [€/GJ] Wet manures Potential [PJ/a] UP 11 12 13 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP 197 210 224 EEA Report 7 2006 Cost [€/GJ] Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] packageing Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] demolition Potential [PJ/a] UP 7 8 8 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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27. SLOVENIA

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Slovenia exhibits an energy import dependency close to the EU average and mainly imports oil and natural gas. Slovenia produces nuclear energy, solid fuels and renewable energy, all of which are also used in electricity generation in almost equal shares. The share of renewable sources in primary energy supply is steadily increasing. Slovenia’s energy intensity is much higher than the EU-25 average.

KEY FIGURES • The share of RES in total primary energy consumption was of 10.55% in 2006. • The share of RES in the gross final energy consumption was 16% in 2005. • The share of RES in the gross electricity production was 24,4% in 2006 • The share of RES heating and cooling was of 4,5 % in 2006 • The share of all biofuels in the transport fuels was by energy 2% in 200695. • Dependence on external energy supplies is about 55.9% in 2005.

RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200896 • 25% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 200197 • 33.6% share of RES on gross electricity consumption by 2010

Indicative Target set by the European Biofuels Directive from 200398 • Biofuels consumption of 5% of petrol and diesel use for transport in 2010, just slightly below the reference value of 5.75%.

National Commitments

According to the 2004 National Energy Programme Slovenia plans to: • Increase the share of RES in primary energy balance from 9% to 12% by 2010; • Increase the share of RES in heat supply from 22% in 2002 to 25% by 2010.

Progress towards the target

Indicative targets according to the renewable electricity directive of 33,6 % (2010) will probably not be reached.

RES POLICY INSTRUMENTS

95 Figures from the Slovenian Restructuring Agency 96 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

97 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

98 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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Support for RES electricity

Feed in tariff

Slovenia has a feed-in tariff in place. Under this system, RES-E producers can choose to receive either fixed feed-in tariffs or premium feed-in tariffs from the network operators.

The network operator and the qualified producer sign a Purchase Agreement covering the purchase of electricity from the qualified producer for a period of 10 years. On the basis of the Purchase Agreement, the network operator then buys electricity at the uniform annual price or pays the qualified producer a uniform annual premium for electricity which the latter has sold independently or via an intermediary on the market.

Uniform annual prices and premiums for an individual qualified power plant apply for five years from the start of operation, and are then reduced by 5%. Ten years after the start of operation they are reduced by 10% relative to the original tariff. The start of operation is the day the plant begins to deliver electricity to a public network on the basis of their operating licence. Also for every 10% of investment subsidy the tariffs are reduced by 5%.

According to the Law on Energy, the uniform annual prices and premiums are set at least once a year by the government. The government is supposed to take into account the growth in the costs of essential goods published by the Statistical Office for the past period, changes in the prices of the basic fuel that is used to generate electricity in qualified power plants, and the expected average annual price of electricity on the market. However, so far, the government did not reevaluate the price.

A new Energy Law on amending the feed-in tariffs is currently discussed within the Government.

Loans with reduced interest-rate

Two different soft loans are normally offered every year by the "Environmental fund of the Republic of Slovenia". In 2006 the total amount of loans was EUR 34,7 millions.

1. Public tender for loaning ecological investment

This soft loan for companies, municipalities and other legal entities located in Slovenia amounted in total to 12 million €. The object of this tender was the stimulation of investments in RES-E. The loan can cover up to 90 % of the investment. However, in average they cover 50% of the investment. There was a fixed annual interest rate of 3m-Euribor+0.3 % for a maximum duration of 15 years with moratory interest of up to 2 years.

2. Public tender for loaning ecological investments

This soft loan for citizens located in Slovenia amounted in total to 10 million €. The goal was to stimulate investment in small-scale RES-E plants with a nominal power of up to 50 kW. Loans can cover up to 90% of the investment. However, in average they cover 50% of the investment. There was a fixed annual interest rate of 3,9 % for a duration of up to 10 years and not more then 40.000 € per PV plants.

For the remaining RES-E plants the credit limit is 20.000 € per installation.

Subsidies for RES-electricity for households are assigned by the department of the Ministry for Environment and Spatial Planning. There was a 40 % subsidy for correctly installed PV power plants, restricted to 600 SIT (2.5 €)/Wp for modules installed and to 500,000 SIT (2,086 €) for the whole system. For investments in remote areas with no connection to the network (solar collectors,

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PV and biomass), there is the possibility to apply for an additional 20% subsidy (in total up to 60%) of the investment costs.

The department of the Ministry also assigned means for the stimulation of investments in RES to legal entities and self-employed individuals. For the construction of an independent solar power plant in 2004, it amounted to 30 % of the entitled investment costs or to 40 % of entitled costs in case the produced energy covers the need for electrical energy. After 2004 no more subsidies for RES-E from this ministry have been conceded.

For those who opt for seasonal and double-tariff measurement, tThe lowest tariff is applied from May to September during the night or in the early afternoon. During this time RES-E producers receive only 70% of the regular tariff level. The highest tariff is paid from December to February during the morning and during the late afternoon. During this time RES-E producers receive 140 % of the regular tariff level. The result is that the producers of RES-E, who can adapt their operation, are able to achieve a higher price for their electricity and the supply is more demand-orientated.

Type of QPP Uniform Uniform Uniform annual Uniform regarding the Power annual annual price premium annual price primary capacity premium 2006 2006 (from 18/7/08) (SIT(1)/kWh) energy source (SIT/kWh) (€cents/kWh) (€cents/kWh) Hydroelectric up to 1 14,75 6,75 6.2 2.4 QPP MW (~ 6,3 €cents) (~ 2,9 inclusive €cents) From 1 14,23 6,23 5.9 2.2 MW up to (~ 6,0 €cents) (~ 2,6 10 MW €cents) inclusive Biomass QPP Up to 1 16,69 8,69 9.36 5.65 MW (~ 7,1 €cents) (~ 3,7 inclusive €cents) Above 1 16,17 8,17 9.11 5.35 MW (~ 6,8 €cents) (~ 3,5 €cents) Wind QPP Up to 1 14,55 6,55 6.1 2.31 MW (~ 6,2 €cents) (~ 2,8 inclusive €cents) Above 1 14,05 6,05 5.9 2.11 MW (~ 6,0 €cents) (~2,7 €cents) Geothermal 14,05 6,05 5.9 2.11 QPP (~ 6,0 €cents) (~ 2,7 €cents) Photovoltaic Up to 36 89,67 81,67 37.4 33.62 kW (~ 38,0 €cents) (~ 34,6 inclusive €cents) 7,46 37,4 Above 36 kW 15,46 (~ 6,5 €cents) (~ 3,2 33,62 33.62 €cents) Other(2) QPP 28,97 20,97 12.09 8.33 (~ 12,3 €cents) (~ 8,8 €cents) Combined QPP 16,05 8,05 6.69 2.94 using RES (~ 6,8 €cents) (~ 3,4 €cents)

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Type of QPP Uniform Uniform Uniform annual Uniform regarding the Power annual annual price premium annual price primary capacity (1) premium 2006 2006 (from 18/7/08) (SIT /kWh) energy source (SIT/kWh) (€cents/kWh) (€cents/kWh) QPP or heating Up to 1 12,74 4,74 5.31 1.56 plant using MW (~ 5,31 €cents) (~ 2 communal inclusive €cents) waste From 1 11,87 3,87 4.95 1.2 MW up to (~ 5,0 €cents) (~ 1,6 10 MW €cents) inclusive Heating plant Up to 1 13,90 5,90 7.29 3.54 for district MW (~ 5,9 €cents) (~ 2,5 heating inclusive €cents) From 1 13,38 5,38 6.88 3.13 MW up to (~ 5,7 €cents) (~ 2,3 10 MW €cents) inclusive Industrial Up to 1 12,86 - 7.08 0 heating plant MW (~ 5,4 €cents) inclusive Landfill Gas Up to 1 - - 5.3 1.56 and Sewage MW Gas inclusive The fixed conversion rate is 239,64 SIT=1 € (2) includes biogas

Duration of the supporting for the eligible power plant ≤ 10 years

Eligible power plants for the supporting: - new power plants - mostly new power plants ≤10 years old

Support for biofuels

Slovenia has adopted the following legislative acts: a. An operational programme to reduce greenhouse gas emissions, a revised version of which was adopted by the Slovenian government in 2006, and an initial programming document introducing measures to promote biofuels. The operational programme states that the objective of introducing biofuels in transport from 2008–2012 is to reduce greenhouse gas emissions by 120 000 tonnes CO2 equivalent a year, which will mean replacing 45 000 tonnes of diesel and petrol a year. Converting this Kyoto objective into the percentage of the share of biofuels in transport, the average annual use of biofuels for the period 2008–2012 comes to around 3% of all road vehicle fuel. b. The Excise Duty Act (Slovenian Official Gazette No 84/98, last amended in No 122/06), which exempts biofuels used as motor fuels from the excise inspection and payment system when used in their pure form. When biofuels are blended with fossil fuels, a maximum 5% exemption from the payment of excise duty can be claimed, or more for standard fuels containing biofuels. The level of exemption from excise duties is proportional to the share of biofuel added. c. The Rules on the content of biofuels in motor vehicle fuels (Slovenian Official Gazette No 83/05, corrigendum No 108/05), which, in accordance with Directive 2003/30/EC, defines:

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- the types of biofuels used as transport biofuels and- the minimum level of biofuels in motor vehicle transport which fuel distributors must ensure for motor vehicles each calendar year up to 2010.

Obligations of fuel distributors In accordance with the Rules on the content of biofuels in motor vehicle fuels (Slovenian Official Gazette No 83/05, corrigendum 108/05), distributors of fuel for transport vehicles must ensure that the annual average content of biofuels in all transport fuels placed on the Slovenian market in the particular calendar year is as follows: - 2006 - equivalent of at least 1.2%, - 2007 - equivalent of at least 2%, - 2008 - equivalent of at least 3%, - 2009 - equivalent of at least 4% and - 2010 - equivalent of at least 5%.

The content of biofuels is expressed as a percentage of the energy value of all motor vehicle fuel placed on the market.

Distributors may transfer obligations from one year to the next if the price of purchasing biofuels exceeds the total made up of the price of fossil fuels and the excise duties on them.

Incentives to grow crops for biofuel production

Upon accession to the EU, Slovenia adopted the market regulations and the system for direct payments for crops, introducing direct payments for the production of energy crops. In accordance with the Decree for direct payments for producers ofcertain arable crops (Slovenian Official Gazette No 10/05, last amended by Nos 113/05 and 99/06), in addition to direct payments, producers of energy crops (rape seed oil) who received SIT 71 291/hectare in 2005 could also receive aid for energy crops in the amount of SIT 6 474/hectare.

Incentives for local communities for sustainable development of transport

The Ljubljana Public Passenger Transport Office (LPP) joined the European Commission’s CIVITAS II - MOBILIS programme to encourage local authorities to develop sustainable transport. The objectives are to test the use of biodiesel to power urban bus vehicles. In July 2005 a blend of fossil diesel (80%) and biodiesel (20%) was tested in two LPP urban buses but, due to the difficulties of storing the fuel, there was a switch in 2006 to 100% biodiesel.

Support for heat

According to data from the Slovenian Statistics Office, Slovenia's consumption of wood and other solid biomass as fuel to produce electricity and heat produces at least 18.7 PJ a year, or approximately 6% of total primary energy consumption (320 PJ) per year.

Subsidies or loans with reduced interest-rates are also available. Financial incentives aim at using RES for heating.

Annex I RES Electricity Potentials Annex II RES Bioenergy Potentials

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Sources European Commission Factsheets by Country http://ec.europa.eu/energy/energy_policy/facts_en.htm Member States Reports in the framework of the Directive 2001/77/EC on renewable electricity http://ec.europa.eu/energy/res/legislation/electricity_member_states_en.htm Member States Reports in the framework of the Directive 2003/30/EC on biofuels http://ec.europa.eu/energy/res/legislation/biofuels_members_states_en.htm Energy Restructuring Agency Ltd. http://www.ape.si http://www.pv-platforma.si http://www.soncnikolektorji.si Ministry of the Environment and Spatial Planning http://www.mop.gov.si/en/ EurObserv’er Barometer http://www.energies-renouvelables.org/observ-er/sig/eufores/sig.asp

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

Drafted in March 2008.

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Annex I RES electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030

Total Wind MW 0 130 340 560 860 Maximum Wind onshore MW 0 130 340 560 860 Maximum Wind offshore MW 0 0 0 0 0 Maximum solar PV TWh 0.03 Maximum solar thermal MW 0.00 Total Hydro MW 862 992 992 992 Maximum conventional hydro MW 862 992 992 992 of which Maximum run of river MW 0 0 0 0 Maximum Pumped Storage hydro MW Maximum Wave power plants MW 0.00 Maximum tide power plants MW 0.00 Maximum geothermal conventional power plants TWh 0.00 Maximum geothermal hot dry rock power plants MW 0.00 Maximum biomass power plants (conventional+CHP) TWh 1.01 Maximum biogas power plants (conventional+CHP) TWh 0.71 Maximum municipal waste power plants (CHP) TWh 0.38

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 0,0 0,0 0,0 1,0 1,0 2,0 2,0 3,0 Cost [€/GJ] 7,8 7,8 7,8 7,75 7,78 7,86 7,98 8,14 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 1,0 1,0 1,0 3,0 4,0 5,0 7,0 8,0 Cost [€/GJ] 6,3 6,3 6,3 6,07 5,87 5,72 5,59 5,49 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 2,0 2,0 2,0 4 7 10 13 15 Cost [€/GJ] 4,1 4,1 4,1 3,9 3,7 3,5 3,4 3,4 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 2,0 2,0 2,0 5,0 8,0 11,0 14,0 18,0 Cost [€/GJ] 3,3 3,3 3,3 3,05 2,9 2,8 2,74 2,71 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 0,0 0,0 0,0 0,0 1,0 1,0 1,0 1,0 Cost [€/GJ] 8,6 8,6 8,6 8,3 8,1 7,9 7,7 7,5 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP Cost [€/GJ] Forestry residues Potential [PJ/a] UP OPET (2004): Technology needs and market potential of biomass CHP/DHC in Slovenia. OPET Slovenia, May 2004. Cost [€/GJ] http://www.opet-chp.net/download/wp3/WP3_3c_biomassCHP_technology_market_potential_JSI_Slovenia.pdf Wood processing residues Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP 4 4 4 EEA Report 7 2006 Cost [€/GJ] Wet manures Potential [PJ/a] UP 7 8 8 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ] Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP Cost [€/GJ] demolition Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP Cost [€/GJ]

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28. SLOVAKIA

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Fossil fuels cover 95 % of primary energy needs in Slovakia, and more than 90% of primary energy sources imported. At the same time, Slovakia has great potential to use biomass from own forests. But, the Government has decided to only use this source in remote, mountainous, rural areas, where natural gas is not available. About 40 % of primary energy consumption is used for heat production and roughly half of the households are served by district heating. The main energy source for district heating is natural gas (more than 70 %), often used in combined heat and power production.

Large-scale hydro energy is the only RES -e with a notable share in total electricity consumption. Despite the existing support mechanism and that in 2007 the Government has approved a Strategy of Higher Utilisation of Renewable Energy Sources (RES), the Government has presented a proposition to decrease the target to 19% RES-e in 2010 ( instead of 31%), that means only 1.35% growth of RES –e compared to 2002. Despite all European and national commitments, Slovakia is unfortunately far from meeting the targets. Official national policy documents (e. g. Strategy for Renewables , 2006) quote that only between 3.2% (2003) to 4.3% (2005), of the gross domestic energy consumption is summing from renewables (vast majority by existing large hydro power plants).

KEY FIGURES • The share of RES in total primary energy consumption was of 4.72% in 2006. • The share of RES in the gross final energy consumption was 6.7% in 2005. • The share of RES in the gross electricity production was 17.12% in 2006 in 2005 was 16.3%. • The share of RES heating and cooling was of 0.59% in 2006. • The share of all biofuels in the transport sector in 2006 was 2.1%. • Slovakia dependence on external energy supplies is of about 90%.

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Source: ECB

RES POLICY

The Strategy of Higher Utilisation of RES in the Slovak Republic was approved in April 2007.

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 200899 • 14% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 2001100 • 31 % Share of RES on gross electricity consumption by 2010.

Indicative Target set by the European Biofuels Directive from 2003101 • Biofuels consumption of 5.75% of petrol and diesel use for transport in 2010.

National Commitments On April 25, 2007, new Strategy on higher RES utilisation was approved by the government. • New internal targets for RES heat and electricity by 2010 and 2015

Ongoing Legislatives measures: • Law on RES electricity to be prepared by end of 2007 (proposal still not published, preparation process in delay).

99 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

100 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

101 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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• Support programme for households and housing associations for solar thermal and biomass technologies installation (programme had to be prepared till the end of 2007 according to governmental resolution, commitment not fulfilled) Biomass action plan under preparation, end November 2007 (January 2008: proposal of national Biomass Action Plan being amended)

However In 2007, the Slovakian Government came with 3 development scenarios, proposition to decrease the target to 19% RES-e in 2010; only 1.35% growth of RES –e compared to 2002

RES-e Technology Roadmap by 2010 and 2015

Production Installed Investment Production 2005 2010 increase capacity costs 2015 increase Source/ Year [GWh] [GWh] [GWh] [MW] [mio SKK] [GWh] [GWh]

SHPP 250 350 100 20 1800 450 100

Biomass 4 480 476 90 950 650 170

Wind energy 7 200 193 100 4000 750 550

Biogas 6 180 174 30 4200 370 190

Geothermal energy 0 30 30 4 400 70 40

PV 0 0 0 0 0 10 10

Total 267 1 240 973 244 11350 2 300 1 060

To reach 4% RESe (without large hydro) share on total electricity consumption 31 000 GWh in 2010 (1 240 GWh) and 7% share on total electricity consumption 32 900 GWh in 2015 (2 300 GWh)

RES-Heat Technology Roadmap by 2010 and 2015 Source Heat Production in 2010 Heat Production in 2015 TJ TJ Biomass 25 000 37 000 Biogas 2 000 4 000 Geothermal 200 1 000 Solar 300 1 000 Heat pumps ( low potential 200 800 heat) Total 27 700 43 800 Source: ECB

Progress towards the targets

Between 1997 and 2006, the share of RES-e decreased from 17.9% to 17.21% of gross electricity consumption.

RES POLICY INSTRUMENTS

Support for RES electricity

Feed in tariff

Tariffs are being set annually by Regulatory Office for Network Industries, increasing each year by index of national core inflation.

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Duration Support Support [years that an level level investor is End year [SKK/ [€cents/ Start entitled to [of the Resource Technology kWh] kWh] year support] scheme] 2,00 - hydro small 6,0 - 8,5 2008 1 year 2008 2,82 1,70 - wind onshore 5,1 - 8,9 2008 1 year 2008 2,94 wind offshore - - 2008 1 year 2008 energy biomass crops 3.15 9.5 2008 1 year 2008 combustion solid - 2,19 - biomass 6,6 - 8,9 2008 1 year 2008 combustion 2,96 waste from biomass bioethanol 3.6 10.9 2008 1 year 2008 production co-firing with 2,19 - biomass 6,6 - 8,0 2008 1 year 2008 fossil 2,65 biogas from waste water biomass treatment 2.63 7.9 2008 1 year 2008 and landfill gas biogas from anaerobic 3,90 - 11,8 - biomass 2008 1 year 2008 fermenting 4,31 13,0 technology Solar PV 8.41 25.4 2008 1 year 2008 Geothermal geothermal 3.68 11.1 2008 1 year 2008

Source: ECB

Other Measures:

RES-E policy in the Slovak Republic includes the following measures: • A measure that gives priority regarding transmission, distribution and supply was included in the 2004 by Act on Energy. • Subsidies (EU Funds) are available for the re-construction of RES-e facilities.

Support for RES Heating

Heat Purchase Obligation

Obligation to purchase heat (Act No. 657 / 2004 in the Collection of Laws of the Slovak Republic on Heat Energy).

The holder of license in heat distribution has to purchase heat from the holder of license in heat production who is producing heat from RES or CHP unit, if he: • Is not a producer or purchaser of RES / CHP heat himself; • Will not increase the price for his purchasers; • Cooling medium used in RES / CHP heating unit is identical that is used in public heating system; • Purchasing of heat from RES / CHP unit is economically equal with purchasing heat from other heat sources (in the point of heat distribution license holder’s view).

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Investment subsidies

Subsidies (EU Funds, Envirofond) are available for the (re)construction of RES-H facilities. Public (up to 95% subsidy) and private sector (up to 50% subsidy) is eligible.

Financial Incentives (reduction on interest rate)

Support level [% reduction on interest Resource Technology rates] Start year End year Comments 1% interest For private sector only, maturity of Solar rate on loan loan between 5-15 years; 130% Environmental Applications to be thermal (national guarantee of loan value is required; Fund submited annually. systems average is minimum 3 years history of private about 6%) company

Investment subsidies for households

In April 2007, the Slovak Government approved a framework of support for increased household use of biomass, financed from the State budget. This framework will be developed in more detail in the Programme for increased household use of biomass and solar energy, which the Slovak Ministry of Economic Affairs approved in September. Grants will be awarded subject to certain criteria being met. The overall amount of funding earmarked per year will be SKK 100 million (about EUR 3 million). The first stage of this measure, up to2011, will focus on plans for promoting the use of biomass.

Support level [%/total Resource Technology investment] Start year End year Solar Theoretically Thermal collectors cca 20% 2009 2015 Biomass combustion small 25% max. ca 750,- Biomass scale furnace € 2008 2015

An approx. 90 EUR/square meter up to total square 8m2, and over 8m2 it will be 45 EUR for every additional square meter. It is according the Government decree from 27th April 2007 " Programme for higher utilisation of solar energy a biomass (wooden chips and pallets only) in household sector" Amount 75 mil Sk (it is aprox. 2 200 000 EUR/year) was intended to be allocated for every year. Commitment for 2008 not fulfilled; possibility of shifting on 2009.

Support for Biofuels

In 2005, the National Programme of Biofuel Development was adopted. Legislation concerning the minimum amount of biofuels on the Slovakian market and a decree laying down the requirements for fuel quality and maintenance of records of fuels were scheduled for 2006.

Quota

This corresponds to the indicative target set in the EU Biofuels Directive. Interim targets are 2.5% in 2006, 3.2% in 2007, 4% in 2008 and 4.9% in 2009.

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Resource Quota in % (per year) Year Biofuels 2.5% 2006 Biofuels 3.2% 2008 Biofuels 4% 2008 Biofuels 4.9% 2009 Biofuels 5.75% 2010

Tax exemption for Biofuels Duration Total support level (= tax [years of exemption incl. reduction of End support Resource Technology VAT to be paid) [€cents/litre] start year year entitled] Comments Excise tax Excise tax (15,50 Max. 1,12 Sk/litre = 3,38 reduction is Sk/litre = €cents/litre for petrol calculated as 46,8 (corresponding to max. 15% reduction by €cents/litre Bioethanol share of ETBE in petrol); Till next Act each % for petrol; and 2004 n/a on excise tax corresponding to 14,50 biodiesel Max. 0,73 Sk/litre = 2,2 amendment. the energy Sk/litre = €cents/litre for diesel content of bio- 43,8 (corresponding to max. 5% ingedient in €cents/litre share of MERO in diesel); petrol or diesel for diesel)

All RES Investment subsidies Support level [%/total Resource Technology investment] Start year End year Comments Solar thermal Current Grant should systems year be applied till Environmental 95% (application the end of 1. Public sector only. Fund Biomass boilers till the end year after Heat pumps of October) application Relevant operational All RES programmes approved; technologies EU Structural state support schemes except wind Not specified yet. 2008 2013 Funds have not been finally turbines and large approved yet; waiting for hydro calls for proposals Financial Up to 90% for Mechanism of All RES public sector; Norwegian 2004 2009 technologies private sector - up Kingdom and to 50% EEA

Annex I. Evolution of RES electricity and RES heat Supply in Slovakia (2002-2005) Annex II. RES Electricity Potentials Annex III RES Bioenergy Potentials

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In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

Drafted in March 2008

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Annex I. Evolution of RES electricity and RES heat Supply in Slovakia (2002-2005)

RES electricity production in GWh, 2002 – 2005 2002 2003 2004 2005 [GWh] [GWh] [GWh] [GWh] Sources

Hydro power plants total 5 483 3 671 4 207 4 741

out of which pumping HPP 215 192 107 103 4 638 Hydro power plants (without Pumping HPP) 5 268 3 479 4 100

Wind power plants 0 2 6 7

Biomass 159 84 3 4

Biogas 1 2 2 4

Total 5 428 3 567 4 111 4 653

RESe share on electricity consumption 18,6 % 12,4 % 14,4 % 16,3 % Source: Slovak Strategy for higher RES utilisation, approved on April 25, 2007

RES heat supply in GWh, 2002 – 2005

2002 2003 2004 2005

Source [TJ] [TJ] [TJ] [TJ]

Biomass 474 643 1 354 1 673

Biogas 1 0 0 116 140 Geothermal 159 139 144

Solar 36 40 45 50

1 979 Total 670 822 1 543 Source: Slovak Strategy for higher RES utilisation, approved on April 25, 2007

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Annex II. RES Electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Maximun Wind MW 5 773 851 930 1041 1151 Maximum Wind onshore MW 5 773 851 930 1041 1151 Maximum Wind offshore MW 0000 0 0 Maximum solar PV TWh 0.00 0.10 0.20 0.30 0.40 0.50 Maximum solar thermal MW 0.00 0.00 0.00 0.00 0.00 0.00 Total Hydro MW 2420 2427 2495 Maximum conventional hydro MW 1550 1562 1630 1698 1766 1834 of which Maximum run of river MW 732 740 770 800 840 840 Maximum Pumped Storage hydro MW 865 865 865 Maximum Wave power plants MW 0.0000 0 0 Maximum tide power plants MW 0.0000 0 0 Maximum geothermal conventional power plants TWh 0.0 0.04 0.04 0.05 0.05 0.06 Maximum geothermal hot dry rock power plants MW 0.0 5.4 5.9 6.5 7.2 7.9 Maximum biomass power plants (conventional+CHP) TWh 0.0030 1.16 1.6 2.1 2.3 2.5 Maximum biogas power plants (conventional+CHP) TWh 0.0020 0.00 0.3 0.5 0.8 1.0 Maximum municipal waste power plants (CHP) TWh 0.0130 0.59 0.6 0.6 0.6 0.6

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex III RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 8,0 8,0 8,0 16,0 21,0 27,0 30,0 34,0 Cost [€/GJ] 7,3 7,3 7,3 7,34 7,42 7,56 7,8 8,14 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 16,0 16,0 16,0 34,0 44,0 55,0 62,0 69,0 Cost [€/GJ] 6,2 6,2 6,2 5,95 5,77 5,63 5,53 5,48 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 18,0 18,0 18,0 48 69 90 108 126 Cost [€/GJ] 4,0 4,0 4,0 3,7 3,6 3,4 3,4 3,4 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 21,0 21,0 21,0 55,0 79,0 104,0 124,0 145,0 Cost [€/GJ] 3,2 3,2 3,2 2,95 2,81 2,73 2,7 2,71 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 4,0 4,0 4,0 8,0 11,0 13,0 15,0 17,0 Cost [€/GJ] 8,5 8,5 8,5 8,3 8,0 7,8 7,7 7,5 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste EEA Report 7 2006 Potential [PJ/a] UP 9 10 10 28.6 according to ACCESS (2006): Report on the perspectives to the development of the biomass potential - Bulgaria, Czech Republic, Hungarry, Romania, Cost [€/GJ] Slovakia. ACCESS, 2006. Forestry residues 17 according to ACCESS (2006): Report on the perspectives to the development of the biomass potential - Bulgaria, Czech Republic, Hungarry, Romania, Potential [PJ/a] UP Slovakia. ACCESS, 2006. Cost [€/GJ] http://www.sustenergy.org/UserFiles/File/ACCESS_Newsletter_eng.pdf Wood processing residues EEA Report 7 2006 Potential [PJ/a] UP 6 6 6 12 according to ACCESS (2006): Report on the perspectives to the development of the biomass potential - Bulgaria, Czech Republic, Hungarry, Romania, Cost [€/GJ] Slovakia. ACCESS, 2006. Municipal solid waste EEA Report 7 2006 Potential [PJ/a] UP 6 6 6 1.58 according to Fehér, A., et al (2002): Biomass - a renewable energy source used in agriculture and forestry of Slovakia. EE&AE’2002, International Cost [€/GJ] Scientific Conference, Rousse, Bulgaria, 4-6 April 2002. ACCESS (2006): Report on the perspectives to the development of the biomass potential - Bulgaria, Czech Republic, Hungarry, Romania, Wet manures Slovakia. ACCESS, 2006. Potential [PJ/a] UP 22 24 25 EEA Report 7 2006 Cost [€/GJ] Black liquor EEA Report 7 2006 Potential [PJ/a] UP 7 8 8 6.5 according to ACCESS (2006): Report on the perspectives to the development of the biomass potential - Bulgaria, Czech Republic, Hungarry, Romania, Cost [€/GJ] Slovakia. ACCESS, 2006. Sewage sludge Potential [PJ/a] UP Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP 2 2 2 EEA Report 7 2006 Cost [€/GJ] demolition Potential [PJ/a] UP 1.62 according to ACCESS (2006): Report on the perspectives to the development of the biomass potential - Bulgaria, Czech Republic, Hungarry, Romania, Cost [€/GJ] Slovakia. ACCESS, 2006. Dry manures Potential [PJ/a] UP Cost [€/GJ]

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29. UNITED KINGDOM

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Until recently, the United-Kingdom (UK) was largely self-reliant for energy, producing significant quantities of oil, gas and coal. The gradual depletion of oil and gas reserves and a decrease in domestic coal production has led to a growing dependence on imports. In the electricity sector, gas has replaced coal as the principal fuel. Since 2005, rapidly increasing energy prices, growing concerns on security of supply and awareness of climate change have raised the profile of energy in the UK. The government has come out strongly in favour of new nuclear build, while some regions are putting particular focus on renewable energies (particularly wind and tidal). The UK Government set out its energy policy on 23 May 2007 when it published its Energy White Paper Meeting the Energy Challenge.

KEY FIGURES • The share of RES in total primary energy consumption was of 1.98% in 2006. • The share of RES in the gross final energy consumption was 1.3% in 2005. • The share of RES in the electricity production was 4.6% in 2006 up from 4.2% in 2005. • The share of all biofuels in the transport sector in 2006 was 0.54% by volume, or some 0.45% by energy content. • The United-Kingdom’s dependence on external energy supplies was about 13% in 2005.

Technology specific figures • For the first time in 2006, wind (with an 8% share) accounted for as much as hydro in primary input terms. Of the 4.43 million tonnes of oil equivalent of primary energy use accounted for by renewables, 3.94 million tonnes was used to generate electricity and 0.44 million tonnes to generate heat. • Decreased water flow from low rainfall was the cause of the lower hydro levels in 2006. • Since January 2006 more than 540MW of wind and around 80 MW134 of other renewables, including landfill gas, photovoltaics and biomass have been installed. More than 2GW of wind is now connected to the grid – with the first GW taking around 14 years to become operational and the second only 20 months. • A further 1,260 MW of renewables capacity is under construction; 4,600 MW has been consented, and 11,400 MW is in planning processes across the UK. The Department for Business, Enterprise and Regulatory Reform estimate that around £1billion has been either invested or committed to new UK renewable projects in the past year. • Total sales of biofuels in the UK in 2006 were some 264 million litres, whilst total road fuel sales were approximately 49,000 million litres.

Source: Energy Trends. National Statistics Publication. Department of Business enter[rice and regulatory reform

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RES POLICY

RES TARGETS

Mandatory targets set by the newly proposed RES Framework Directive from 2008102 • 15% share of RES on the final consumption of energy in 2020. • At least 10% share of biofuels of final consumption of energy in transport in that Member State in 2020.

Indicative Target set by the RES- electricity European Directive from 2001103 • 10% share of RES on gross electricity consumption by 2010.

Indicative Target set by the European Biofuels Directive from 2003104 • Biofuel sales target for 2010 is 5% by volume of total road transport fuel sales. The UK Government recognises that the level of the obligation for 2010/11 falls below the 'reference value' (5.75% by energy content) set out in the Directive. The Directive allows Member States to set targets which differ from the reference values provided that any differentiation is "motivated". The UK Government's motivation is primarily that: the UK Government is not yet confident that higher levels of biofuels can be delivered in a sustainable way. The 5% by volume level is consistent with current EU fuel quality standards which impose a 5% volume-based limit for biofuel blends.

National commitments: The UK government announced in January 2000 a 10% target RES- electricity supplied in the UK from renewable energy sources by 2010. This target has been embodied in the Government's Energy White Paper published in February 2003, which also introduced an aspiration to achieve a renewable electricity penetration of 20% of all electricity power generation by 2020. These goals were further underlined in the Energy White Paper ‘Meeting the Energy Challenge’ published in May 2007. The government also set out an aspiration to double this by 2020.

Progress towards the target

The UK will not meet its RES electricity target put forward by the European Commission said a report published in March 2008 by Cambridge Econometrics . The report forecasts the British government will fall short of its 10% target for 2010 reaching just 6%.

RES POLICY INSTRUMENTS

Support for RES electricity

Renewable obligation

The Renewables Obligation (RO) is the Government's main mechanism for supporting generation of renewable electricity. It was introduced in April 2002 and is the successor to the Non Fossil Fuels Obligation.

102 Proposal for a Directive of the European Parliament and the Council on the promotion of the use of energy from renewable sources from January 2008(the targets agreed but the directive is on legislative process)

103 Directive 2007/71/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Currently in force, sets targets up to 2010.

104 Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport Currently in force, sets targets up to 2010, with indicative targets by 2005.

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The RO places an obligation on electricity suppliers to source an increasing share of their power sales from renewable sources. In case they should not meet this obligation, they have to pay a penalty: 34.30 GBP (50.58 €) per MWh in 2007/2008. The percentage of renewable power that must be supplied is now 7.9% and will increase to 15.4% in 2015. For each megawatt hour of renewable energy generated, a tradable certificate called a Renewables Obligation Certificate (ROC) is issued.

Electricity suppliers meet their obligation: • by surrendering Renewables Obligation Certificates (ROCs) as evidence of their own renewable electricity generation: • by surrendering ROCs they have purchased from other renewable electricity generators; • by paying the ‘buyout’ penalty; • or by a combination of the options.

When a supplier chooses to pay the buy-out price, the money they pay is put into the buy-out fund. At the end of the 12-month Obligation period, the buy-out fund is recycled to electricity suppliers presenting ROCS. The buy-out price is the fixed penalty that an energy supplier pays for each MWh that it falls short of its obligation. The buy-out price is linked to the Retail Price Index (RPI) and for 2007/08 the price is £34.30 per MWh. The suppliers pay this money into an account administered by Ofgem (the Buy-out Fund) and each year the accumulated Fund is shared among those suppliers who have presented RO Certificates (ROCs). The combination of the buy-out price and the extent to which suppliers have fallen short of their obligations determines the nominal value of a ROC and the total support available for each MWh of renewable electricity under the RO.

Quota in Resource Penalty level [€cents/ kWh] % (in Year year) All RES- E technologies except hydro above 20 MW, 34.30 GBP (50.58 €) per MWh and energy from waste in 2007/2008. (annually 15.4% From 2002 to 2027 unless it is obtained through adjusted with the retail price in 2015 advance conversion index) technologies.

ROCs are issued to accredited renewable generators for each 1MWh of eligible electricity generated irrespective of the technology used. The Government is consulting on providing more targeted levels of support to different technologies in the form of multiple or fractional ROCs. New projects in more expensive technologies like dedicated biomass and anaerobic digestion would receive more support and those that are more economic like landfill gas would receive less. Subject to consultation and State Aid clearance, this change will take effect from 2009 at the earliest.

In May 2007, the UK Government announced – in the White paper- modifications to the Renewables Obligation (RO) legislation. Key announcements are: • The RO will continue until 2027. • Obligation levels will rise to 20% ‘with guaranteed headroom’: the obligation level will only be raised further if the growth in renewables generation justifies this. • The RO will be ‘banded’: this means that technologies will be awarded more or less than one ROC for each MWh of electricity they produce depending on the technological development and costs. Banding thus stimulates emerging renewable technologies that are still more expensive. Decisions about the future bands will be taken after consultation and will then be applied until 2013.

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• Emerging technologies, such as wave and tidal power, will still get support from capital grant schemes and other policies. The new Energy Technologies Institute and Environmental Transformation Fund will provide funding. Climate change levy

Renewable electricity is exempted from the climate change levy on electricity of £4.3/MWh (approx. 6.3 EUR/MWh)

Support for RES Heating

The deployment of biomass fuelled heat projects in the UK is also supported by the £66m Bioenergy Capital Grants scheme, jointly-funded by the Department of Trade and Industry and the National Lottery's New Opportunities Fund. Support is targeted in four areas: amongst others: smaller heat and CHP, medium scale CHP.

Support for Biofuels

Renewable Transport Fuel Obligation

The Renewable Transport Fuel Obligation Programme will, from April 2008, place an obligation on fuel suppliers to ensure that a certain percentage of their aggregate sales is made up of biofuels. The effect of this will be to require 5% of all UK fuel sold on UK forecourts to come from a renewable source by 2010. These targets have been set on a volume basis.

The RTFO is modelled on the existing Renewables Obligation in the UK electricity supply industry. The transport sector is responsible for 25% of emissions and through this initiative the RTFO expects to reduce the carbon emissions from road transport in 2010 by about 0.7 - 0.8 million tonnes, equivalent to taking 2.6 - 3.0 million tonnes of carbon dioxide.

Obligation

Under the Renewable Transport Fuel Obligation, the UK has set a target in July 2006: Incorporation level shall reach 2.5% during the 2008/09 fiscal year, 3.75% in 2009/10 and 5% in 2010/11 (expressed in volume-thus considerably lower than the 2003 Directive's level. Under the scheme certificates can be claimed when renewable fuels are supplied and fuel duty is paid on them. At the end of an obligation period, these certificates may be redeemed to the RTFO Administrator to demonstrate compliance and certificates can be traded. If any obligated supplier does not have enough certificates at the end of an obligation period, it has to 'buy-out' of the balance of its obligation by paying a buy-out-price. The buy-out-price will be 15 pence per litre in the first and second years of the obligation.

In order to ensure compliance the Administrator will issue RTF Certificates according to the quantity of renewable fuel on which duty has been paid. It will be possible for companies to trade certificates. If a company cannot produce enough certificates at the end of each compliance period it will have to pay a buy out price which will go into a buy out fund.

Level of buy-out prices

The RTFO buy-out price - the price paid by fuel suppliers who fail to meet their obligation for the year by producing certificates showing biofuel supply - will remain at 15 pence per litre for the second year of the Obligation (i.e. 2009-10). The government's intention is that the level of the RTFO buy-out should be sufficiently high to ensure that obligated suppliers do not routinely resort to using it.

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Sustainability requirements

The UK Government also announced on 21 June 2007 that it: ‐ aims to reward biofuels under the RTFO in accordance with the carbon savings that they offer from April 2010, provided that this is compatible with World Trade Organisation rules and EU Technical Standards requirements, ‐ aims to reward biofuels under the RTFO only if the feedstocks from which they are produced meet appropriate sustainability standards from April Promotion and Use of Biofuels in 2011. ‐ will ask the RTFO Administrator to report to the Secretary of State every three months on the effectiveness of the RTFO's environmental reporting mechanisms, and on the carbon and sustainability effects of the RTFO. The Government will keep the RTFO under review in the light of these reports.

In January 2007, the newly established Renewable Fuels Agency (RFA) in the UK published guidelines to companies on how to report on their fuels concerning the Renewable Transport Fuel Obligation, which is intended to entry into force on 15 April 2008. Companies can use the guidelines to provide information on the origin, greenhouse gas performance and production for all biofuels in their portfolio. Major suppliers are required to have an independently verified annual sustainability report.

Fuel Duty Incentives

Under the Alternative Fuels Framework published by the UK Government in December 2003, the UK Government sets out in each year's Budget the levels of fuel duty incentives for biofuels and other alternative fuels that will apply in each of the following three years. This provides certainty to support investment in the production and development of alternative fuels. The RTFO is likely, over time, to replace fuel duty incentives as the UK Government's principal support mechanism for biofuels. However, the UK Government believes that, in the early years of the RTFO, there should be a gradual, rather than an abrupt, transition from one mechanism to the other. Budget 2006 therefore announced that the 20 pence per litre duty differential would be guaranteed until 2008-09, and Budget 2007 has since extended it further to 2009- 10.

Enhanced Capital Allowances

The Government will re-apply for State aid clearance and, subject to that, will introduce a 100 per cent first-year allowance for biofuels plant that meet certain qualifying criteria, and which make good carbon balance inherent in their design, as proposed. In addition the Government will also Introduce a payable enhanced capital allowance for companies not in taxable profit to ensure both profit and loss making firms have an incentive to invest in the cleanest biofuels plant.

Government grant programmes

During 2006, the UK Government, through the Refuelling Infrastructure Grant Programme managed by the Energy Saving Trust, continued to provide grants toward the cost of installing alternative refuelling points including, for example, for hydrogen, electric, bio-ethanol and natural gas / biogas stations. Although not exclusively aimed at biofuels, the grant programme has attracted interest from a range of organisations considering the installation of E85 bioethanol refuelling points.

Regional Selective Assistance Grants

Regional selective assistance grants are one of the few methods of direct support for industry allowable under the EU's single market rules. During 2006 the Scottish Executive and the Regional Development Agencies continued to offer support to a number of businesses in the sector. The 285 RES2020 – Reference Document on Renewable Energy Sources Policy & Potential

Scottish Executive confirmed that it would provide a £9 million grant towards the construction of a 500,000 tonne biodiesel plant at Grangemouth, due to come on stream in 2008.

Support for all RES

Bioenergy Capital Grants scheme

Funds are reserved from the New Opportunities Fund for new capital grants for investments in energy crops/biomass power generation (at least £33 million (EUR 53 million) over three years), for small-scale biomass/CHP heating (£3 million or EUR 5 million), and planting grants for energy crops (£29 million or EUR 46 million for a period of seven years). A £50 million (EUR 72.5 million) fund is available for the development of wave and tidal power, the Marine Renewables Deployment Fund.

The UK published a Biomass Strategy in May 2007 alongside the Energy White Paper. The UK Biomass Strategy has been developed by Department for Trade and Industry (now BERR) and DEFRA to achieve carbon savings from biomass, while complying with EU policies.

Bioenergy Action Plan

The Government published an action plan in April 2006. Key highlights include: • The launch of a new five-year capital grant scheme for biomass heat and biomass Combined Heat and Power (CHP) systems at the end of December 2006. • Confirmation that proposals for a new Energy Crops Scheme are to be included within the Rural Development Programme for England 2007. • A set of regional maps identifying opportunities and optimum sitings for energy crops (short rotation coppice (SRC) and miscanthus) were published on Defra’s website in May 2007 • A mapping exercise accessing the suitability of the Defra estate for conversion to biomass heating was undertaken. The mapping exercise is currently being rolled out to other Government Departments.

Annex I RES electricity Potentials Annex II RES Bioenergy Potentials

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Sources:

European Commission Factsheets by Country http://ec.europa.eu/energy/energy_policy/facts_en.htm Member States Reports in the framework of the Directive 2001/77/EC on renewable electricity http://ec.europa.eu/energy/res/legislation/electricity_member_states_en.htm Member States Reports in the framework of the Directive 2003/30/EC on biofuels http://ec.europa.eu/energy/res/legislation/biofuels_members_states_en.htm Energy Trends. National Statistics Publication. Department of Business enter[rice and regulatory reform. Uk energy White Paper. EurObserv’er Barometer http://www.energies-renouvelables.org/observ-er/sig/eufores/sig.asp

In the framework of the EU co –funded project: RES 2020: Monitoring and Evaluation of the RES Directives implementation in EU27 and policy recommendations to 2020

Drafted March: 2008

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Annex I RES electricity Potentials

Description Unit 2005 2010 2015 2020 2025 2030 Total Wind MW 1460 8900 16979 26087 13805 Maximum Wind onshore MW 1246 5080 11159 18267 12249 Maximum Wind offshore MW 214.0 3820 5820 7820 1556 Maximum PV TWh 4.32 Maximum solar thermal MW 0 Total Hydro MW 4248 4237 4237 4237 Maximum conventional hydro MW 1460 1409 1409 1409 of which Maximum run of river MW 0 0 0 0 Maximum Pumped Storage hydro MW 2788 2828 2828 2828 Maximum Tide & Wave power plants TWh 58.9 Maximum geothermal conventional power plants MW 0 Maximum geothermal hot dry rock power plants MW 0 Maximum biomass power plants (conventional+CHP) TWh 1.6 36.99 Maximum biogas power plants (conventional+CHP) TWh 4.7 16.32 Maximum municipal waste power plants (CHP) TWh 1.0 4.09

For some technologies potential may be unlimited (e.g. photovoltaics), so we are using upper bound limits within the relevant time frames.

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Annex II RES Bionergy Potentials TABLE 1 Potentials agricultural bioenergy Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Sugar crops: sugar beet Step 1 Potential [PJ/a] or [Ha] UP 68,0 68,0 68,0 90,0 105,0 120,0 136,0 152,0 Cost [€/GJ] 9,7 9,7 9,7 9,34 9,05 8,78 8,55 8,35 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Starch crops: rye, oats, maize, wheat, barley, etc Step 1 Potential [PJ/a] or [Ha] UP 38,0 38,0 38,0 51,0 59,0 68,0 77,0 86,0 Cost [€/GJ] 11,0 11,0 11,0 10,41 9,89 9,45 9,07 8,74 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Grassy crops: switchgrass, miscanthus, sweet sorghum, etc Step 1 Potential [PJ/a] or [Ha] UP 115,0 115,0 115,0 169 208 247 290 334 Cost [€/GJ] 10,9 10,9 10,9 11,5 11,3 11,1 10,9 10,7 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Woody crops: willow, poplar Step 1 Potential [PJ/a] or [Ha] UP 97,0 97,0 97,0 140,0 171,0 201,0 234,0 268,0 Cost [€/GJ] 5,5 5,5 5,5 5,8 5,73 5,62 5,53 5,44 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Oil crops: sunflower, rapeseed Step 1 Potential [PJ/a] or [Ha] UP 34,0 34,0 34,0 45,0 52,0 60,0 68,0 76,0 Cost [€/GJ] 10,4 10,4 10,4 10,1 9,8 9,6 9,3 9,1 Step 2 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 3 Potential [PJ/a] or [Ha] UP Cost [€/GJ] Step 4 Potential [PJ/a] or [Ha] UP Cost [€/GJ]

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TABLE 2 Potentials bioenergy from wastes Description Unit LimType 2000 2001 2005 2010 2015 2020 2025 2030 Source Agricultural waste Potential [PJ/a] UP 90 96 103 EEA Report 7 2006 Cost [€/GJ] DTI (2007): UK Biomass Strategy 2007 - Working Paper 1 – Economic analysis of biomass energy. DTI, UK, May 2007. Forestry residues Potential [PJ/a] UP Cost [€/GJ] Wood processing residues Potential [PJ/a] UP 29 31 33 EEA Report 7 2006 Cost [€/GJ] Municipal solid waste Potential [PJ/a] UP 110 118 126 EEA Report 7 2006 Cost [€/GJ] Wet manures Potential [PJ/a] UP 31 33 36 EEA Report 7 2006 Cost [€/GJ] Black liquor Potential [PJ/a] UP Cost [€/GJ] Sewage sludge Potential [PJ/a] UP 11 12 13 EEA Report 7 2006 Cost [€/GJ] Other waste wood households Potential [PJ/a] UP Cost [€/GJ] packageing Potential [PJ/a] UP 15 16 17 EEA Report 7 2006 Cost [€/GJ] demolition Potential [PJ/a] UP 15 16 17 EEA Report 7 2006 Cost [€/GJ] Dry manures Potential [PJ/a] UP 11 12 13 EEA Report 7 2006 Cost [€/GJ]

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30. REFERENCES

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