Social and Economic Drivers for Hydropower Develop- Ment in Danube Countries
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Social and economic drivers for hydropower develop- ment in Danube countries Social and economic drivers for hydropower develop- ment in Danube countries Dr. Jürgen Neubarth e3 consult GmbH Commissioned by ICPDR January 2020 Imprint Authored by: Dr. Jürgen Neubarth (e3 consult GmbH) with support of ICPDR River Basin Management Expert Group Disclaimer: The views and opinions expressed in this report are those of the author and do not reflect an official ICPDR position. Contact: e3 consult GmbH Andreas-Hofer-Strasse 28a 6020 Innsbruck www.e3-consult.at Social and economic drivers for hydropower development in Danube countries Table of content Executive Summary 1 1. Introduction and background 6 1.1 Danube River Basin District and ICPDR 6 1.2 Aim and structure of the report 7 2. Overall energy policy and energy economic framework 9 2.1 European energy policy objectives 2030/2050 9 2.2 System and market integration of renewable energies 11 2.2.1 Generation characteristics of variable renewable energies 11 2.2.2 Interaction of renewables with the existing electricity supply system 13 2.2.3 Transformation of the electricity supply system 14 2.3 Development of wholesale electricity prices 16 2.4 Requirements related to water management and biodiversity 20 3. Electricity generation system in ICPDR countries 22 3.1 Danube region at a glance 22 3.2 Country profiles 24 3.2.1 Austria 25 3.2.2 Bosnia and Herzegovina 26 3.2.3 Bulgaria 27 3.2.4 Croatia 28 3.2.5 Czech Republic 29 3.2.6 Germany 30 3.2.7 Hungary 31 3.2.8 Republic of Moldova 32 3.2.9 Montenegro 33 3.2.10 Romania 34 3.2.11 Republic of Serbia 35 3.2.12 Slovenia 36 3.2.13 Slovakia 37 3.2.14 Ukraine 38 4. Energy economic dimensions of hydropower 39 4.1 Contribution to security of supply and system stability 39 4.1.1 Capacity credit 39 4.1.2 Provision of ancillary services 40 4.2 Costs of electricity generation 42 4.2.1 Levelised costs of electricity 42 4.2.2 System integration costs 45 4.2.3 External costs 46 4.2.4 Social costs of electricity generation 48 4.3 Impact of climate change on electricity generation 49 4.3.1 Vulnearbility of hydropower 49 - i - Social and economic drivers for hydropower development in Danube countries 4.3.2 Vulnerability of thermal power plants and other renewables 51 4.3.3 Mitigation measures and strategies 52 5. Social dimension of hydropower 54 5.1 Socio-economic aspects 54 5.1.1 Macroeconomic effects 55 5.1.2 Distributional effects 57 5.1.3 Energy system-related effects 58 5.1.4 Social and environmental effects 58 5.1.5 Other effects 60 5.2 Improving social acceptance of hydropower 61 5.3 Is small hydropower more beautiful than large hydropower? 65 6. Perspectives for further development of hydropower 67 6.1 Technical and economic hydropower potentials of Danube countries at a glance 67 6.2 A more detailed view on selected ICPDR countries 70 6.2.1 Scope and general considerations 70 6.2.2 Bosnia and Herzegovina 72 6.2.3 Bulgaria 74 6.2.4 Montenegro 75 6.2.5 Romania 77 6.2.6 Serbia 79 6.2.7 Ukraine 81 7. Conclusions and recommendations 83 8. Literature and references 86 9. Annex 1: Key figures of national power systems 2018 93 - ii - Social and economic drivers for hydropower development in Danube countries List of tables Table 1: Technical parameter of selected flexibility options ................................................................. 42 Table 2: Potential positive and negative social and environmental impacts of new hydropower stations .................................................................................................................................... 60 - iii - Social and economic drivers for hydropower development in Danube countries List of figures Figure 1: Danube river basin district overview ...................................................................................... 6 Figure 2: Historical and projected electricity generation from renewable energies within the EU-28 .................................................................................................................................... 10 Figure 3: Qualitative generation characteristic and predictability of different RES technologies ....... 11 Figure 4: Variation of electricity generation from run-of-river hydropower, wind power and solar PV in Austria in relation to installed capacity ...................................................................... 12 Figure 5: Electricity generation and consumption in Germany September 2018 ................................ 13 Figure 6: System-related options for the integration of renewable energies ........................................ 15 Figure 7: Annual average wholesale electricity price in exemplarily selected ICPDR countries ........ 16 Figure 8: Schematically price formation in the electricity wholesale market ...................................... 17 Figure 9: Bandwidth of average wholesale electricity price in selected ICPDR countries 2016- 2018 and exemplary scenarios of wholesale electricity price development 2020-2050 in the EU-28 and Germany ....................................................................................................... 18 Figure 10: Hourly spot prices day-ahead in 2001, 2010, 2018 and 2030 market area Austria .............. 19 Figure 11: Installed net generation capacity by technology groups and country 2018 .......................... 22 Figure 12: Share of technology in total national electricity production 2018 ........................................ 23 Figure 13: Range and average share of hydropower in total national electricity production 2011-2018 ..... 24 Figure 14: Key figures electricity generation and demand Austria ........................................................ 25 Figure 15: Key figures electricity generation and demand Bosnia and Herzegovina ............................ 26 Figure 16: Key figures electricity generation and demand Bulgaria ...................................................... 27 Figure 17: Key figures electricity generation and demand Croatia ........................................................ 28 Figure 18: Key figures electricity generation and demand Czech Republic .......................................... 29 Figure 19: Key figures electricity generation and demand Germany ..................................................... 30 Figure 20: Key figures electricity generation and demand Hungary ..................................................... 31 Figure 21: Key figures electricity generation and demand Moldova ..................................................... 32 Figure 22: Key figures electricity generation and demand Montenegro ................................................ 33 Figure 23: Key figures electricity generation and demand Romania ..................................................... 34 Figure 24: Key figures electricity generation and demand Serbia ......................................................... 35 Figure 25: Key figures electricity generation and demand Slovenia ..................................................... 36 Figure 26: Key figures electricity generation and demand Slovakia ..................................................... 37 Figure 27: Key figures electricity generation and demand Ukraine ....................................................... 38 Figure 28: Exemplarily range of capacity credit for different generation technologies ......................... 40 Figure 29: Specific investment costs of run-of river power plants in Austria ........................................ 43 Figure 30: Global development of levelised cost of electricity for different RES technologies ............ 44 Figure 31: Representative grid and balancing costs for wind and solar power in Germany .................. 46 Figure 32: Average external costs for electricity generation technologies in EU-28 member states ..... 47 Figure 33: Exemplarily social electricity generation costs ..................................................................... 48 - iv - Social and economic drivers for hydropower development in Danube countries Figure 34: Change of mean annual precipitation in the Danube River Basin for the periods 2021- 2050 and 2071-2100 ............................................................................................................. 49 Figure 35: Change in mean annual hydropower production for two climate scenarios (2031-2060) relative to current climate (1971-2000) ................................................................................ 50 Figure 36: Expected changes in annual wind energy potential (left) and solar radiation (right) for Bulgaria between 2021 and 2050 .......................................................................................... 52 Figure 37: Potential socio-economic aspects of renewable energy deployment ................................... 55 Figure 38: Possible key ecological impacts of hydropower installations – Illustrative range of possible alterations typically associated with hydropower dams ......................................... 59 Figure 39: Share of small and large hydropower capacity of ICPDR countries for NREAP baseline and 2020 targets .................................................................................................................... 65 Figure 40: Definition of different renewable potentials and applied restrictions ................................... 67 Figure 41: Annual hydropower production, technical and additional economic hydropower potential ................................................................................................................................