Low Carbon Energy Transition in Estonia
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Stockholm Environment Institute Tallinn Centre (SEI Tallinn) Low carbon energy transition in Estonia NORSTRAT addition Baltics 2 Technical report Reeli Kuhi-Thalfeldt, Valdur Lahtvee March 2016 Tallinn NORSTRAT addition Baltics 2 Technical report Commissioned by: Nordic Energy Research Work done by: Stockholm Environment Institute Tallinn Centre (SEI Tallinn) Climate and Energy Programme Senior Expert Dr Reeli Kuhi-Thalfeldt, [email protected] Programme Director Mr Valdur Lahtvee, [email protected] Tel. +372 6276 100 Address: Lai Street 34, 10133 Tallinn, Estonia www.seit.ee Suggested reference: Kuhi-Thalfeldt, R., Lahtvee, V. 2016. Low carbon energy transition in Estonia. NORSTRAT Addition Baltics 2. Technical report. SEI Tallinn, Nordic Energy Research. Editors: Dr Tiit Kallaste (SEI Tallinn), Dr Kaja Peterson (SEI Tallinn) Language editor: Helen Saarniit (SEI Tallinn) 2 Table of contents Table of Figures .......................................................................................................................................... 4 Table of Tables ........................................................................................................................................... 5 Project Background .................................................................................................................................... 6 Executive Summary .................................................................................................................................... 7 1. National Climate and Energy Policy Targets ...................................................................................... 9 2. Description of the power system of Estonia .................................................................................... 12 2.1. Electricity generation ............................................................................................................... 12 2.2. Electricity balance .................................................................................................................... 16 2.3. Estonian electricity transmission network ............................................................................... 19 3. Potential for renewable resources for power generation ............................................................... 22 4. Scenarios for the development of low carbon power generation................................................... 27 4.1. Methodology ............................................................................................................................ 28 4.1.1. LEAP model ...................................................................................................................... 28 4.1.2. The Balmorel model ......................................................................................................... 29 4.1.3. The EMPS model .............................................................................................................. 30 4.2. Assumptions ............................................................................................................................. 31 4.2.1. Assumptions of final energy consumption and electricity demand prognosis ................ 31 4.3. Impacts from electrification of the transport and heating sector ........................................... 35 4.3.1. Electrification of transport ............................................................................................... 35 4.3.2. Electrification of heating .................................................................................................. 36 4.3.3. Electricity consumption forecast with electric cars and heat pumps .............................. 37 4.4. Electricity generation related assumptions ............................................................................. 40 5. Results from different models ......................................................................................................... 43 6. Impacts of scenarios on the need for transmission grids ................................................................ 48 7. Discussion on policy instruments for development of a carbon neutral electricity system in Estonia 52 7.1. Policy recommendations ......................................................................................................... 54 References ............................................................................................................................................... 55 3 Table of Figures Figure 1. Electricity production by fuel in Estonia in 2000-2014. Source: Statistics Estonia ................... 12 Figure 2. Share of renewable energy and combined heat and power in Estonia in 2002-2014. Source: Statistics Estonia ...................................................................................................................................... 14 Figure 3. Production of electricity from renewable energy sources in Estonia in 2000-2014. Source: Statistics Estonia ...................................................................................................................................... 14 Figure 4. Electricity balance in Estonia in 2000-2014. Source: Statistics Estonia .................................... 16 Figure 5. Electricity consumption by sector in Estonia in 2000-2014. Source: Statistics Estonia ............ 17 Figure 6. Trends of peak demand in Estonia (Elering, 2015b) ................................................................. 18 Figure 7. Electricity demand in 2014. Source: Elering Dashboard ........................................................... 19 Figure 8. Electricity load pattern during one week in January and July in 201. Source: Elering, 2015a.. 19 Figure 9. Transmission network of Estonia and location of power plants (Elering, 2015b) .................... 20 Figure 10. Maximum transmission capacities of interconnections in the Baltic States in 2014, MW. Source: Elering, 2015b) ............................................................................................................................ 21 Figure 11. Final energy consumption in households by fuel in Estonia in 2000-2014. Source: Statistics Estonia...................................................................................................................................................... 32 Figure 12. Share of primary and secondary fuels in final energy consumption of households in 2000- 2014. Source: current LEAP study ............................................................................................................ 32 Figure 13. Final energy consumption forecast up to 2050 by fuel in Estonia. Source: current LEAP study ................................................................................................................................................................. 33 Figure 14. Final electricity consumption prognosis per sector up to 2050 in Estonia. Source: current LEAP study......................................................................................................................................................... 34 Figure 15. Heat consumption prognosis per sector up to 2050 in Estonia. Source: current LEAP study 35 Figure 16. Prognosis of final energy consumption of households of RES+ scenario in Estonia. Source: current LEAP study ................................................................................................................................... 38 Figure 17. Comparison of final energy consumption forecast of scenario BAU and RES+ in Estonia. Source: current LEAP study ................................................................................................................................... 39 Figure 18. Comparison of electricity consumption forecast of scenario BAU and RES+ in Estonia. Source: current LEAP study ................................................................................................................................... 39 Figure 19. Fuel cost assumptions (Elering, 2014). ................................................................................... 41 Figure 20. Electricity production capacities in the Baltic States in 2050. Source: current Balmorel study. ................................................................................................................................................................. 43 Figure 21. Electricity generation in RES+ scenario in the Baltic States. Source: current Balmorel study.44 Figure 22. Electricity production in Estonia of BAU scenario. Source: current LEAP study ..................... 45 Figure 23. Electricity production in Estonia according to the CN scenario. Source: current LEAP study 46 Figure 24. Electricity production in Estonia according to the RES scenario. Source: current LEAP study 46 Figure 25. Electricity production in Estonia according to the RES+ scenario. Source: current LEAP study ................................................................................................................................................................. 47 4 Table of Tables Table 1. Electricity generation by source in Estonia in 2014, GWh. Source: Statistics Estonia ............... 13 Table 2. Installed net capacity of electricity producers in 2013 (Elering, 2015a). ................................... 15 Table 3. Electricity balance in 2014. Source: Statistics Estonia ............................................................... 17 Table 4. Renewable energy