national renewable energy source industry roadmap belgium

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NATIONAL RENEWABLE ENERGY SOURCE INDUSTRY ROADMAP
BELGIUM WITH THE COLLABORATION OF ODE‐VLAANDEREN AND THE SUPPORT FROM Disclaimer: The sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein 1 CONTENT 1. INTRODUCTION ............................................................................................................................... 3 1.1. Objectives of the “RES industry roadmap” ........................................................................ 3 1.2. Being part of the Repap2020 European project ................................................................ 3 2. TARGETS AND TRAJECTORY ............................................................................................................ 5 2.1. Methodology ........................................................................................................................... 5 2.2. Overall renewable energy targets and trajectories ............................................................... 6 2.3. Sectoral targets and trajectories ............................................................................................ 7 3. MEASURES FOR ACHIEVING THE TARGETS .................................................................................. 12 3.1. Measures on administrative procedures, regulations and codes ....................................... 12 3.2. Measures on Information ..................................................................................................... 15 3.3. Measures on certification of installers ................................................................................ 16 3.4. Measures on electricity infrastructure development.......................................................... 16 3.5. Priority/Guaranteed Access to the grid ............................................................................... 18 3.6. Biogas integration into the natural gas network ................................................................. 19 3.7. District heating and cooling infrastructure development ................................................... 19 3.8. Compliance of biofuels and other bioliquids with sustainability criteria ........................... 20 3.9. Support schemes for renewable electricity ......................................................................... 20 3.10. Support schemes for renewable heating and cooling ..................................................... 21 3.11. Support schemes for renewable resources in transport ................................................. 22 3.12. Biomass availability .......................................................................................................... 23 4. FLEXIBILITY / JOINT PROJECTS / EUROPEAN PERSPECTIVES ....................................................... 26 5. ESTIMATED COSTS AND BENEFITS OF RES POLICY SUPPORT MEASURES .................................. 26 ANNEX I 2020 targets calculated by the Green‐X and Primes models ........................................... 28 ANNEX II Method of approach / key assumptions ............................................................................ 40 Annex III Short characterization of the Green‐X model .................................................................. 47 EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 2 1. INTRODUCTION 1.1.
Objectives of the “RES industry roadmap” The current document aims to show the vision of the renewable sector on the renewable energy share that could be consumed in Belgium by the year 2020. Trajectories and realizable targets for the main sectors (electricity, heating and cooling and transport) and renewable energy sources are also provided. In addition, this so‐called “RES industry roadmap“ gives key measures that should be implemented in order to reach the proposed targets, according to the renewable energy sector. The “RES industry roadmap” is mostly based on the template for National Renewable Energy Action Plans provided by a Commission Decision on the 30th of June 2009 [C(2009) 5174‐1] and should therefore facilitate the elaboration of the Belgian action plan on renewable energy required for the 30th of June 2010 under the Directive 2009/28/EC. The current document has been presented for final validation to the overall Belgian renewable sector on the 25th of January. From now on, the sector will present the proposed targets and measures to the decision makers and will provide them support to further develop the proposed measures. The sector would like to be instrumental in the development of an ambitious Belgian renewable action plan. After the official publication of the Belgian action plan planned at the end of June 2010, the sector will closely follow the Belgian decision makers in order to make sure that they efficiently implement the required measures. Further advanced versions of this “RES industry roadmap” could be published in the future in order to adapt the proposed 2020 targets (taking new elements, data, decisions or publications into account) and to add, develop or adapt some necessary measures. 1.2.
Being part of the Repap2020 European project The current document is part of a broader European project, namely Repap2020 (see here under for a brief description of the project). EDORA (“Fédération de l’Energie D’Origine Renouvelable et Alternative) is in charge of the Belgian coordination of the Repap2020 project. EDORA has been working in close cooperation with ODE‐Vlaanderen in order to facilitate the collection of inputs from a wide number of actors of the Belgian renewable sector. The targets for 2020 proposed are based on a calculation performed by the Fraunhofer Institute Systems and Innovation Research and by Energy Economics Group (Wien University) realized according to PRIMES and GreenX models. The results of these calculations have been reviewed by the sector in order to present the feasible targets exposed in this document together with the necessary measures to reach these targets. Therefore specific working groups have been organized by sector leading to the consultation of more than 50 actors from industries, federation or independent institutes. The current document has been validated by the overall Belgian renewable sector on the 25th of January 2010. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 3 Brief description of the Repap2020 project Repap2020 is a European project coordinated by the European Renewable Energy Council (EREC) and gathering 13 European participants. The specific objective of REPAP2020 is to facilitate the process of implementation of the RES Directive on a national level. The main target groups of REPAP2020 are Parliamentarians and Civil Servants in national administrations as well as national industry associations. REPAP2020 aims to support their political work in the field of Renewable Energy – mainly related to the Renewable Energy National Action Plans. REPAP2020 will – in a first phase before the notification of the renewable action plans (NREAPs) to the European Commission – accompany the development of the NREAPs by offering good advice to the relevant authorities on the design of the NREAPs. Furthermore, REPAP2020 will empower national industry associations to come up with their individual national RES roadmaps which will serve as important tool to influence the drafting phase of the NREAPs. In a second phase, the project will evaluate the NREAPs in order to facilitate a constant feedback and learning process. REPAP2020 will show good policy practice and highlight missing pieces in the individual NREAPs. REPAP2020 also aims at creating a network of key players in the field and at offering a platform for the RES industry as well as for Parliamentarians (both EU and national Parliaments) and National Administrations in charge of energy issues. These key actors will be involved both as input providers and disseminating partners. REPAP2020 shall enable them to express their views on the political process and help to improve the upcoming political decisions on RES within Europe and especially on the Member States’ level. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 4 2. TARGETS AND TRAJECTORY 2.1.
Methodology The proposed targets were provided by calculations performed for the EU27 by EEG (Energy Economics Group) based on the PRIMES and GreenX models1. The Green‐X model provides a detailed quantitative assessment of the future deployment of renewable energies on country‐, sectoral‐ as well as technology level. The core strength of this tool lies on the detailed RES resource and technology representation accompanied by a thorough energy policy description, which allows assessing various policy options with respect to resulting costs and benefits. The Green‐X database on RES potential and cost was used. The Green‐X database and the corresponding model use a quite detailed level of specifying costs and potentials. The analysis is not based on average costs per technology. For each technology a detailed cost‐curve is specified for each year, based on so‐called cost‐bands. These cost‐bands summarize a range of production sites, which can be described by similar cost factors. For each technology a minimum of 6 to 10 cost bands is specified by country. For biomass at least 50 cost bands are specified for each year in each country. The PRIMES model has been used for sectoral energy demand scenarios, primary energy prices, conventional supply portfolio by energy sector by country and corresponding conversion efficiencies and CO2 intensities. More information on models, the database and the scenario parameters is given in Annexes II and III. Once the calculations performed, the results were reviewed by the renewable industry sector in the different member states. In Belgium, EDORA based its feedback on a broad sectoral consultation during several working groups (about 50 different actors from different Belgian regions) and on existing independent studies2. As the model allows assessing various policy options, new calculations were performed based on the renewable sector’s comments from the different EU countries in order to define realizable targets in line with the updated sector trends. The targets, trajectories and cost & benefit analysis as calculated by the model are presented in Annex I. As the final calculations from the models didn’t completely fit to the sector expectations and vision, some last changes have been performed in the proposed targets (tables 1‐5). A special mention (footnote) indicates where the targets and trajectories proposed in tables 3‐5 differ from those calculated with the models. 1
The model Green‐X has been initially developed by the Energy Economics Group (EEG) at Vienna University of Technology in the research project “Green‐X – Deriving optimal promotion strategies for increasing the share of RES‐E in a dynamic European electricity market”, a joint European research project funded within the 5th framework program of the European Commission, DG Research Contract No. ENG2‐CT‐2002‐00607. For details on model, see Annexes II and III or www.green‐
x.at. 2
A.O.: “Impact of the EU Energy and Climate Package on the Belgian energy system and economy”, November 2008, Federal Planning Bureau; “Projet d’actualisation du Plan pour la Maîtrise Durable de l’Energie (PMDE) en Wallonie à l’horizon 2020”, March 2009, ICEDD, Econotec, Ibam; “Prognoses voor hernieuwbare energie en warmtekrachtkoppeling tot 2020”, October 2009, VITO. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 5 2.2.
Overall renewable energy targets and trajectories Overall share of renewable energy in final energy consumption in 2005, indicative trajectory & binding 2020 target (in % of final energy consumption) Table 1: Overall Renewable Energy Targets and Trajectories 2005 Average 2011‐2012
Average 2013 ‐2014 Average Average 2015‐2016 2017‐2018 ktoe 887,69 2230,9
3041,08
3866,87
4803,25 Expected Gross Final energy consumption moderate scenario (ktoe)4 Expected Gross Final energy consumption low demand scenario (ktoe) % of the gross final energy consumption (moderate energy demand scenario) % of the gross final energy consumption (low energy demand scenario) 39150 38333
38097
37913
37807 39150 38098
36692
35517
34683 2020 Targets
5984,66
37695
33700
2,27% 5,82%
7,98%
10,20%
12,70% 15,88%
2,27% 5,86%
8,29%
10,89%
13,85% 17,76%
4
The moderate and low energy demand scenarios have been developed according to Primes EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 6 2.3.
Sectoral targets and trajectories Targets for 2020 and indicative trajectory for the share of energy from renewable sources in the electricity, heating and cooling and transport sectors A special mention (footnote) indicates where the targets and trajectories proposed hereafter differ than those calculated with the models. Table 2: 2005 Average Average Average Average 2020 Ktoe/% energy demand 2013 ‐ 2015‐2016 2017‐2018 Targets 2011‐
scenario 2014 2012 Expected gross final moderate 7.912 8.327 8.501 8.693 8.927 9.230 electricity consumption (ktoe) low 7.912 8.686 8.682 8.713 8.855 9.036 Gross final consumption of 199 855 1196 1520 1900 2539 electricity from RES (ktoe) 2,52%
10,27%
14,07%
17,49%
21,28%
27,51%
Share of RES electricity in gross final electricity consumption (%) Expected gross final consumption in heating and cooling (ktoe) Gross final energy consumption from RES in heating and cooling (ktoe) Share of RES heating and cooling in final heating and cooling consumption (%) Expected gross final consumption in transport (ktoe) Gross final energy consumption from RES in transport (ktoe) Share of RES in transport (%) moderate 2,52%
9,85%
13,78%
17,45%
21,45%
28,10%
low moderate 21.312
19.666
19.243
18.863
18.534 18.135
low 21.312
19.039
17.793
16.805
16.236 15.558
688,6
1207,0
1592,0
1967,4
2356,0 2602,7
3%
6,14%
8,27%
10,43%
12,71% 14,35%
low 3,23%
moderate 9.926
6,34%
10.341
8,95%
10.352
11,71%
10.358
14,51% 10.346 16,73%
10.331
low 9.926
10.372
10.217
9.998
9.592 9.107
0
169
253
379
548 843
moderate 0,00%
1,63%
1,63%
2,44%
2,47%
3,66%
3,79%
5,29% 5,71% 8,16%
9,25%
moderate low 0,00%
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 7 Table 3 : CONTRIBUTION OF RENEWABLES TO ELECTRICITY CONSUMPTION Type of energy 2005 Average 2011‐2012 Average 2013‐2014 Average 2015‐2016 Average 2017 ‐2018 2020
MW 56,0 GWh 304,0 MW 142,9
GWh 803,8
MW 215,0
GWh 1.214,5
MW 295,7
GWh 1.686,3
MW 405,3
GWh 2.295,3
MW 590,1
GWh 3.189,5 293,0 960,0 670,0
3.198,5
774,8
3.770,9
837,1
4.088,0
866,3
4.229,9
999,7
4.906,7 Biogas
Solid biomass 52,8 326,0 84,4
592,2
90,3
630,6
96,5
670,8
103,5
716,2
112,8
776,6 Biowaste
5
Hydro <10MW 62,0 192,7 70,0
217,4
77,9
242,1
85,9
266,8
93,8
291,5
101,8
316,2 Hydro >10MW 55,0 163,8 55,0
163,8
55,0
163,8
55,0
163,8
55,0
163,8
55,0
163,8 0,0 0,0 3,5
29,1
10,5
87,2
24,5
203,4
38,5
319,6
59,5
493,9 Geothermal6 Photovoltaic7 2,0 1,7 632,0 537,2 1.060,0 901,0 1.631,0 1.386,4 2.352,0 1.999,2 3.439,9 2.923,9 Tide & Wave8 0 0 0 0 0 0 0 0 0 0 0,1 0,4 Wind onshore9 167,0 367,4 1.895,3
4.169,7
2.819,6
6.203,1
3.335,2
7.337,4
3.464,1
7.621,0
3.500,0
7.700,0 Wind offshore 0,0 0,0 72,8
236,3
216,7
700,1
579,9
1877,6
1380,8
4455,2
2824,6
9060,6 Gross final consumption of electricity from RES
2.315,6 9.947,8
13.913,0
17.680,5
22.091,5
29.531,6 5
The Hydro potential has been adapted from the model calculation as the sector plans 480GWh hydro production by 2020 The geothermal potential has been adapted from the model calculation, considering the projections from AGEOP (Association pour la géothermie profonde). These projections are based on potential geological zones and production sites together with a realizable growth rate. 7
The load factor has been adapted from the model calculation: 850 full load hours per year have been taken into account. In addition the trajectory has been adapted from the model calculation. Yearly growth factors of 20%, 15% and 10% have been considered for the periods 2011‐2013, 2014‐2016 and 2017‐2019, respectively. 8
The tide & wave potential has been adapted from the calculation, taking into account a first demonstration plant before full development between 2020 and 2030. 9
The onshore wind potential has been adapted from the model calculation as the sector plans an installed capacity of 3500MW in 2020. Full Load hours / year: 2200. 6
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 9 Table 4 : CONTRIBUTION OF RENEWABLES TO HEATING &COOLING Type of Energy 2005 Average 2011‐
2012 Average 2013‐
2014 Average 2015‐
2016 Average 2017‐
2018 2020 MWth Ktoe MWth Ktoe MWth Ktoe MWth Ktoe MWth Ktoe MWth Ktoe 110,9 25,0 206,6
35,5
286,6
40,9
332,9 43,5
337,2
43,8
369,0
45,5
Biogas (grid)
Solid biomass (grid)
34,0 316,6
87,8
484,2
133,0
591,8 166,3
651,6
186,5
866,3
247,6
0,0 0,0 Biowaste (grid)
Solid biomass 4975,1 616,0 (non‐grid)
Geothermal 4,7 2,6 357,1
65,5
381,8
70,6
407,5 75,9
436,1
81,8
471,4
90,2
7528,1
932,1
9578,7
1186,0
11528,1 1427,4
13405,1
1659,8
12960,4
1604,7
19,8
7,2
37,1
10,7
68,0 15,6
100,1
21,9
147,2
31,7
Solar Thermal Heat pumps Gross final energy consumption from RES in heating and cooling 118,7 79,5 3,0 812,0
30,6
1810,0
68,3
2833,9 107,0
4138,9
156,2
6383,7
241,0
64,5 8,0 389,1
48,2
665,5
82,4
1063,3 131,7
1662,4
205,8
2763,2
342,1
688,6 1207,0
1592,0
1967,4
2356,0
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 10 Targets
2602,7
Table 5 : CONTRIBUTION OF RENEWABLES TO TRANSPORT FUEL CONSUMPTION 2020 Targets Average 2011 2012 28,8
Average 2013 2014 43,2
Average 2015 2016 64,8
Average 2017 2018 93,7 0
4,8
7,3
10,9
15,7 24,2
0
122,9
184,3
276,4
399,3 614,3
0
20,6
31,0
46,4
67,1 103,2
Biofuels from wastes, residues, non‐food cellulosic material, and ligno‐cellulosic material Of which imported n.a. 0
16,9
25,3
37,9
54,8 84,3
8,5
12,7
19,0
27,4 42,2
Final energy from renewable sources consumed in transport 12 0
168,6
252,8
379,1
547,8 842,7
Consumption in Ktoe10 2005 Bioethanol Of which imported11 Biodiesel Of which imported 144,1
10
While the 2020 overall target remains the same than the one calculated by the models, the contribution of the different technologies have been adapted. As the mandatory share of bioethanol and biodiesel is on volume basis, the 2020 bioethanol and biodiesel targets are planned to follow the 2008 picture of fossile mix (19% gasoline and 81% gazole). A linear projection has been followed. Moreover, the following hypothesis has been followed: by 2020, 10% of all biofuels will come from second generation ones. 11
Imported fuel 12
As defined in Article 5(1)c EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 11 3. MEASURES FOR ACHIEVING THE TARGETS Preliminary remark: the list of measures proposed hereafter are presented as answers to questions mentioned in the template for National Renewable Energy Action Plans provided by a Commission Decision on the 30th of June 2009 [C(2009) 5174‐1]. This presentation should facilitate the work of the decision makers during their redaction of the Belgian action plan for renewable energy that must be sent to the European Commission by the 30th of June 2010. The presented measures are sometimes general and sometimes specific to a region or a technology. As this list of measures is non exhaustive, further versions of this “RES‐industry roadmap” will very likely be published in order to integrate new measures or to further develop the measures presented hereafter. In any case, the measures presented in such an action plan further need specific development for their implementation. The renewable sector will provide support to the decision makers before and after the publication of the Belgian action plan in order to bring its technical feedback on the political decisions needed to reach the Belgian targets. POLICY MEASURES 3.1. Measures on administrative procedures, regulations and codes13 •
Who are the administrative bodies responsible for authorization, certification and licensing procedures on national/or regional and local level? How should the competences be best defined and coordinated? Most of authorizations for renewable energy plants are given at the regional level, except for offshore which directly depends on the federal authority. However, part of the authorizations is of local authorities competence (e.g. public roads). This can lead to a project blockade. Some biomass projects could also suffer of delay due to shared competences as waste legislation directly depends on the federal authority. On biofuels, excise duties also depend on federal authority. In order to support an ambitious renewable development policy, it is of crucial importance to improve and better coordinate the authorization and licensing procedures, together with the policy frameworks in the different decision making levels, in order to avoid bottlenecks. •
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Are there unnecessary obstacles or non‐proportionate requirements detected related to authorization, certification and licensing procedures applied to plants and associated transmission and distribution network infrastructure for the production of electricity, heating or cooling from renewable sources, and to the process of transformation of biomass into biofuels or other energy products? If so, what are they? In order to develop the renewable sector as prescribed in the respective targets exposed in this document, numerous obstacles urgently need to be removed. Initially planned to be a distribution grid, the current electricity grid must progressively be seen as decentralized production grid. Therefore grid reinforcement in some specific regions is needed to allow the necessary deployment of renewable productions plants without delaying their installation. Current long lasting authorization procedures for electricity grid development, limited financial means and lack of renewable deployment strategy in terms of spatial planning could lead to several bottlenecks within the electricity grid in the near future. 13
The below listed questions are taken from the template of the European Commission which Member States will have to answer in their NREAP. They are listed here to give an exemplary indication which points you should touch upon in this section. This applies to all points mentioned under this point. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 12 ‐
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Lack of current clarity on strong granted priority access to the grid and dispatching for renewable energy could lead to project delays and renewable energy curtailments in the future when the renewable sector will reach a critical share compared to the traditional energy sources one. Current legislations and technical regulations are not sufficient to guarantee the dispatching of renewable electricity whatever the production and demand profiles are at any time (current legislation could always argue grid security reason to de‐
prioritize renewable production). Recently a tariff on the injection of electricity in the grid is applied on all decentralized installations. It is a new obstacle which increases the cost of renewable energy compared to the cost of centralized installations (mostly non‐renewable). This tariff must be repealed. Being obliged to finance themselves the access to the grid, the renewable energy producers are de facto discriminated compared to non‐delocalized electricity producers. These costs must be paid by the TSOs and directly socialized. The renewable project authorization procedures are still too long. A global framework is needed in order to consider the overall advice on the project in the likely cases where opposite advices arise from different consulted bodies or authorities (especially the case in Flanders). In most of the cases, a single negative advice among numerous other positive ones for a wind project currently leads to either project refusal or nearly automatic appeal procedures, further delaying the realization of the project. Numerous aeronautic constraints still affect renewable development as wind turbines installations. Considerable share of the Belgian territory (onshore and offshore) is still under military control zones (exclusion, high risk or training zones). In addition civilian aeronautic constraints (airport, radar…) further impact the wind energy development. Solutions could however be found to reduce and/or reshape these zones and radar locations (or to put more radars), to water down some constraints in order to take into account the windfarm development as prominent criteria. In addition a clear, scientific and integrated framework on the nature protection criteria is sometimes lacking leading to consulted bodies imposing their own unilateral criteria. This is particularly the case for the advisory bodies consulted during the wind turbine authorization procedure. The increasing presence of lobby groups that disseminates erroneous rumors on renewable energies (e.g. impacts of wind turbines) negatively impacts social acceptance and local decisions during the authorization process. In other cases, public information on renewable energy sources (e.g. on pellets) and their advantages are scarce. In both cases, public information campaigns are necessary. There isn’t any infrastructure allowing district heating There is a lack of legal framework for the exploration and exploitation of energy from the underground (deep geothermy). The current of biofuels policy (too low quotas) doesn’t allow further ambitious development. The current gap between production costs of biofuels compared to fossil fuels would need higher mandatory level. •
Is comprehensive information on the processing of authorization, certification and licensing applications for RES installations available? Not a major problem for most technologies. However, for hydro, the administrative procedures remain particularly intricate and seem to be specific to each sites and the « historical » character of some legislations or private agreements. No comprehensive information currently exists to complete such a procedure. Further development of heat production technologies including district heating will need clarification of existing authorization procedures or even elaboration of new ones. New procedures or legislative modifications for the biogas sector (e.g. on injection possibilities on the grid or transport use) must be implemented. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 13 Should authorization procedure take into account the specificities of different renewable energy technologies? If yes, how? Yes, it is already the case. • Should the renewable energy potential be taken into account in spatial planning? Yes. A top‐down approach with clear objectives per technology is firstly needed. Then, regional spatial planning with identification of possible favorable zones for renewable development must be anticipated in order to ensure, in early stage, the necessary grid re‐enforcements. The government must give clear guidelines to the TSOs in order to ensure this grid re‐enforcement, on schedule. The government also closely follows it up. The publication of these zones must be closely evaluated for each technology by the governments in order to avoid investment speculations and wrong or confusing messages among the population and local authorities. This renewable spatial planning must be linked to a careful analysis of current constraints and decisions on their review (and removal) in order to be able to comply with the identified renewable targets. These decisions must be taken by ministers in charge of the energy, the environment and spatial planning and the Defense, acting in close cooperation. Aeronautic constraints must then be watered down by restricting military exclusion zones for wind development. For radar constraints, mitigation measures, operational modification and surveillance engineering modifications shall be put in priority, whereas wind project redesign shall be the last option. Spatial wind farm planning related to nature protection criteria should be based to the last scientific evidence and should be balanced with the positive externatilities generated by wind energy production compared to traditional power plants (in terms of CO2 emission, toxic waste…). In any case, a clear, scientific and integrated framework on the nature protection criteria should be developed. For offshore wind development, the spatial planning must lead to enlarging the existing devoted zone and designate a new zone for offshore energies in order to reach the 2020 target and strive to 3800MW installed in 2030. In addition, specific areas must be devoted to other renewable offshore technologies (tide and wave) for both demonstration and development sites. The development of these technologies requires increased R&D funding, a specific financial support system and consequent grid (onshore and offshore) reinforcements. Spatial planning must be adapted for district heating development and development of heat plants in zones with high density in energy demand. These developments must allow an optimal mix of renewable energy technologies and sources, and maximize heat recovery. Some flexibility must also be foreseen for biomethenisation plants, in order to allow its development in agriculture zones. A special emphasis must be set on designing specific zones for ‘Ecozoning’ development, with the adequate infrastructure to allow the development of economic activities in an energetically optimized concept (synergies to be found between energy and raw material supply and demand and optimization of heat recovery). Obligation to connect to conventional gas systems should be abolished. • Should timetables for processing applications be communicated in advance? Yes, with mandatory deadlines. •
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 14 •
How many steps should be needed to obtain the final authorization? Should there be a one‐
stop shop for coordinating all the steps? Should a timetable for processing applications be communicated in advance? A one‐stop shop procedure is already in place for the wind energy authorization process in Wallonia (so‐called “permit unique” delivering environment and planning permits). This could also be envisaged for other technologies and in Flanders. The connection permit should however not be part of this “permit unique” as in this case the grid connection studies would have to be financed by the developers even without the authorization to build. For offshore wind process, a one‐stop shop is not desirable. Distinct processes between concession and authorization procedures prevent the wind energy developers to finance expensive studies without any guarantee to even have a concession. • For which small scale projects, should there be simplified and less burdensome authorization procedures? Simplified procedures should be considered together with the compensation mechanism for small scale installations depending on concerned technology and area of application. For instance, underground heat pumps or small scale installations in agricultural sector could benefit from simplified procedures for installed capacities higher than 10kW. 3.2. Measures on Information •
How should specific information be targeted at different groups, as end consumers, builders, property managers, property agents, installers, architects, farmers, suppliers of equipment using renewable energy sources, public administration? Positive communication campaigns based on real time renewable production and shares must be performed by the governments on regional and federal levels. Therefore, an observatory of renewable energy must be put in place in order to have up to date indicators on renewable energy production. Public authorities have a major role to play in raising awareness of the population (exemplary buildings). The current “resistance to Wind” mainly based on rumors and disinformation constitutes a major constraint to wind energy projects development. The regions must finance information campaigns in order to counter the dissemination of erroneous rumor on the impact of wind energy. These campaigns should be based on in situ enquiries amongst the population. Municipalities must actively participate in these campaigns. Education programs should also be supported by the Regions which could take advantage of events such as Wind days. The region must ensure that updated information on the status of the wind energy projects is forwarded to the consulted bodies in order for them to have the most accurate view of the impact of the new wind farm project they have to comment. Recent and reliable information about job creation and economic added value on a local scale should be disseminated amongst the population, with a special focus on youth, in order to attract new vocations in the technical field. Offshore wind farms can have a role as touristic attraction. On cruises correct information on wind energy is important. The public must have access to information that shows clearly the importance of offshore wind and the contribution of offshore wind to a more sustainable energy supply. A lot of educated professionals will be needed in future offshore activities. A special training program can lead to sustainable jobs in the next years. Public information campaigns are also necessary to show the advantages of specific renewable energy sources (e.g. pellets, biofuels, solar thermal, heat pumps). EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 15 •
How will you ensure that certification schemes or equivalent qualification schemes become or are available by 2012 for installers of small‐scale biomass boilers and stoves, solar photovoltaic and solar thermal systems, shallow geothermal systems and heat pumps ? Quality certification initiatives do exist but on a voluntary basis, and with different frameworks between regions. Certification schemes for installers should be harmonized between regions in order to insure high homogenous quality of installations and equipment throughout the country and avoid concurrency distortion between regions. • How should guidance for planners and architects be provided to help them consider the optimal combination of renewable energy sources, high efficiency technologies and district heating and cooling when planning, designing, building and renovating industrial or residential areas? These topics should be a part of the compulsory formation of new planners and architects. Already graduated planners and architects should go through compulsory in service training on these topics. • What should be the role of regional and local actors in the design and management of programs for information, awareness raising and training programs for citizens on the benefits and practicalities of renewable energy sources? Each local community should have an energy counselor at its disposal for continuous information of inhabitants and public building administrator. 3.3. Measures on certification of installers Qualification requirements for installers should be established and harmonized through a broad consultation of the existing organizations comprising industry, government and stakeholders. Quality labeling for industries must be ambitious but progressive at affordable costs for SMEs and micro‐enterprises. An audit system with on site verification must be put in place, at term. 3.4. Measures on electricity infrastructure development •
How should transmission and distribution grids be developed to integrate renewable electricity while maintaining the secure operation of the electricity system? How is this requirement included in the transmission and distribution operators’periodical network planning? In order to integrate a higher share of renewable electricity with a granted priority access to the grid and dispatching, significant changes in the grid structure and management are necessary. Several grid reinforcements in some specific regions are needed to allow the necessary deployment of renewable productions plants without delay. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 16 Based on clear and ambitious regional targets, TSOs must analyze the possibilities of reaching these targets with the current grid. The TSO must then identify the needed reinforcements in order to reach or even overshoot the targets. It is essential to switch to a grid management strategy based on an increased share of decentralized production units. Experience in other countries could help. These reinforcement and management strategy must be developed together with the regional and federal authorities, which must identify the possible locations where the renewable deployment would take place. This planning must be linked to decisions on the removal of some current constraints to renewable development (onshore and offshore) and reinforcements of the interconnection capacities with neighboring countries. The authorities should closely follow up the TSOs grid adaption in order to assess the fulfillment of their adopted targets. In order to allow the full development of renewable offshore production sites, clear middle‐term and long term targets should be adopted as soon as possible in order to anticipate both offshore and onshore grid reinforcements. In this view, the 2030 targets for offshore wind energy together with other renewable offshore energy sources (tide and wave) must be considered. New financing means are needed in order to accelerate the modernization of the grid. • How will the development of intelligent networks and storage facilities be ensured? Decisions on the share of variable renewable energy production should be taken together with decisions on the share of controllable renewable energy capacities, on storage capacities, interconnection reinforcements and smart grid developments. This is essential to guarantee a systematic and secure priority in the dispatching of renewable electricity. • How should the interconnection capacity with neighboring countries be reinforced? Increased interconnection capacities must be part of a national energy strategy (related to the increased shared of variable renewable energy production) and international strategy. An increased interconnection should be decided among the pentalateral forum and should also be part of a broader EU strategy (e.g. among the North Sea countries linked to the TEN‐E initiatives). An increased onshore interconnection with neighboring countries must be closely analyzed. In addition, a Blueprint on an offshore interconnection should be developed on international level, together with increased cooperation between TSOs and regulators. In this context, Belgian authorities must further lead the EU negotiations with other North Sea countries to speed up the development of a European offshore supergrid allowing the integration of an increased and controllable renewable electricity share on the Belgian grid (based on guaranteed electricity production from wind, ocean, hydro and other dispatchable renewable sources). Concretely, a hub (substation) must be implanted in the Belgian North Sea (or onshore) with offshore interconnections to UK, France and Dutch grids. Consequent Belgian onshore grid reinforcements must be anticipated (even further than the current STEVIN project) to take full advantage of these interconnections. • How should the grid infrastructure authorization procedures be accelerated? The TSO currently assesses the authorization procedures for grid reinforcement as long‐lasting and complex. The procedure should urgently be simplified and strictly time‐limited (1‐3 years depending on the scale of the project). • Should there be priority connection rights or reserved connection capacities provided for new installations producing electricity from renewable energy sources? EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 17 Any authorized renewable project should be guaranteed to have access to the grid when the power plant is ready to produce. This requires accelerated and financially guaranteed grid connection process (no more financed by the developer or the producer). • How should the costs of connection and technical adaptation be shared between producers and transmission and distribution system operators? How should it be ensured that transmission and distribution system operators are able to recover these investment costs? Should any modification of these cost bearing rules be planned in the future? The connection costs of renewable energy production (onshore and offshore) should be adapted, as the RES producer must not be proportionally penalized. The needed offshore substation together with its connection to the onshore grid and the consequent onshore grid reinforcements must be financed by the TSO. Revenues from a possible windfall profits or stranded benefits recuperation of depreciated power plants could be used to finance these grid reinforcements. 3.5. Priority/Guaranteed Access to the grid • Should priority or guaranteed access be ensured? Explain. Priority access to the grid for renewable installation required by the directive 2009/28/EC is currently inscribed in federal and regional legislations and technical regulations. However, this priority is associated to several conditions (“as far as it is possible”, “taking into account the security of supply”, depending of the grid security…). Amending these federal and regional legislations and technical regulations is now necessary to guarantee unconditional priority access to any renewable production installation without causing any delay to the injection. The current reservation system for the grid connection should be abandoned and the grid connection and reinforcement procedures must be fully in charge of and coordinated by the TSO and dramatically speed up. Any authorized renewable project must have automatic granted connection to the grid. • How should it be ensured that transmission system operators, when dispatching electricity generating installations give priority to those using renewable energy sources? Priority dispatch to renewable electricity is envisaged under conditions by the current federal technical regulations but apparently not guaranteed at the regional level legislations. Problems linked to the lack of guaranteed dispatching for renewable power have not been experienced yet due to the current renewable share. However, with increasing renewable production share, lack of clear priority dispatch for renewable energy could lead to renewable power plants being forced to sometimes switch off in the future. It is therefore important to adapt the current legislation and technical regulations in order to guarantee unconditional priority dispatching for electricity from renewable energy sources. The grid security should intrinsically be based on a systematic priority dispatching for renewable electricity, consequent interconnections and storage capacities must be activated to implement this rule. In the very unlikely cases where renewable productions must be shortly switched off (e.g. higher renewable production than the overall demand associated to congestions in the interconnections), consequent financial compensations should be given to these renewable energy producers. • What grid and market related operational measures should be taken to minimize curtailment of electricity from renewable energy sources? EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 18 Curtailment could be reduced with a strong unconditional priority dispatch for renewable electricity in the legislation. Curtailment could further be prevented by the development of a strategy in order to balance an increased share of variable renewable energy production by increased interconnection and backup power plants. Any curtailment of renewable energy must lead to financial compensations to the related producers. 3.6. Biogas integration into the natural gas network •
‐
‐
‐
How should one ensure that charging of transmission and distribution tariffs is not discriminating against gas from renewable energy sources? A support mechanism should be developed for biogas production and coupled with an obligation for gas distribution companies to support the injection of biomethane. A compulsory share of renewable gas injection should be considered. Socialization of biogas enrichment and compression costs should be considered. •
‐
‐
‐
Should any assessment be carried out at national or regional level on the need to extend gas network infrastructure to facilitate the integration of gas from renewable sources? A master plan bringing heat supply and demand together should lead to heat load maps on a regional level. Policies must be developed to allow power developers to connect to existing or planned network. Clarity must be set on ownership and investment needs of gas network in order to allow funding of potential needed reinforcements. 3.7. District heating and cooling infrastructure development •
What are the needs for new district heating and cooling infrastructure using renewable energy sources and contributing to the 2020 target? How should these plans be promoted? Regional and local authorities’ awareness must be raised on the potentials and advantages of district heating and cooling development and the opportunities of public – private partnerships. Feasibility evaluation of district heating infrastructure development should be compulsory for any new construction of housing estates and communities of sufficient densities and collective habitat. District heating infrastructure should be developed in priority in zones with high energetic density and a potential of combination of different ER technologies and energy recuperation. Clear political will must be showed to favor the use of public money for the development of district heating instead of traditional gas network. Existing gas distribution managing utilities must be progressively transformed into heat distribution utilities. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 19 3.8. Compliance of biofuels and other bioliquids with sustainability criteria The Belgian law of 22nd of July 2009 contains an obligation of 4% volume biofuels incorporation for biodiesel and bioethanol. Under the Art2‐8°, the notion of “sustainable fuels” is defined, which already includes sustainability criteria. The future Fuel Quality Directive, once transposed in the Belgian law, will implement the sustainability criteria for biofuels. FINANCIAL SUPPORT 3.9. Support schemes for renewable electricity What further improvements could be implemented to ensure reaching the target in the electricity sector? Investment aid: What investment aid should be granted by the scheme? (subsidies, capital grants, low interest loan, tax exemption or reduction, tax refund). Who could benefit from this scheme? Investment support schemes should be widened to allow the broad participation of historically excluded sectors and the emergence of new partnerships like the public private partnerships or co‐
investment of medium/large companies from the energy sector. Low rate loans must also be considered as well as tax reduction mechanisms or public financial warranty system. These mechanisms should take into account the possibility of flexible pay back levels taking into account the periodical variability of the RE production. A specific public warranty mechanism should be put in place to cover geological exploration risks for geothermal exploitation (EGS, but also geothermal heat). Tax reduction mechanisms for individuals should not be limited to a few technologies (like PV, Solar thermal and geothermal) but also allow small scale wind technologies, hydroelectricity, aero‐ and hydrothermal heat pumps and bio‐CHP. Should applications be continuously received and granted or are there periodical calls? If it is periodical, what should be the frequency, conditions? Continuous. Operational aid: If your country has a tradable certificates system: Should there be an obliged share of total supply? Who would have the obligation? Should there be technology specific bands? Which technologies should be covered by the scheme? Should an international trade of certificates be allowed? What would be the conditions? Should there be a floor / bottom price? Should there be a penalty for non‐fulfilment? How long should a plant be able to participate in the scheme? What start and end dates (duration) are foreseen for the whole scheme? Should the scheme be periodically revised? EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 20 Who should be managing the scheme? Green certificate system could be optimized by reviewing the support level in relation to the real additional cost of each technology. This will allow to take into account the learning curves of each technology and the evolution of raw material costs. Increased support to emerging or small scale technologies must be considered in addition to the PV increased support. However, existing mechanism (GC) must be maintained but finely optimized. The support level could be periodically reviewed at the only condition that the system remains predictable on the long term in order to create a favorable climate for investors (e.g. 15 years). Equilibrium of the system must be closely monitored in order to avoid unexpected GC market crash if stocks become excessive. Market player participation to the green certificate exchange market should be encouraged in order to increase liquidity of the system. Congruency in support mechanism schemes must be improved between regions in order to favor exchangeability of GC (penalty and minimum price levels). Clear and fair rules must be found to allow injection of offshore GC on the regional markets without market distortion due to higher offshore support. Support should be adapted to allow the development of large scale photovoltaic installations in Wallonia. The 20MW installed power limit for biomass needed to benefit from production support in Wallonia could be re‐considered taking into account logistics (CO2) and emission reduction optimization in large scale installations. Reduced support could be an option to counter market distortion. The support mechanism for biomethanisation should take into account the avoided CO2 emission of the whole process (e.g pellets drying, concentration of digestat…) 3.10. Support schemes for renewable heating and cooling What measures could be best to ensure development of heating and cooling renewable energy sources? An obligatory share of renewable heat should be laid for all new constructions (private and public buildings) for 2012. Financial support for investing in individual heating systems should be added up in case of installation of collective heating system. Production support mechanism for heat could be similar to that of electricity support but with adapted levels (based on CO2 avoided emissions and not on MWh production in order to avoid over‐
subsidization of heat technologies compared to electricity). Small scale renewable heating systems must be supported in remote areas where the development of collective plants is not possible in the short term. Heat pumps support mechanism must take into account the advantages of cooling. These support mechanisms will need the implementation of simple and reliable metering mechanisms. What support schemes could best encourage the use of district heating and cooling using renewable energy sources? ‐ An obligation to connect to district heating when available should be planned and supported with a financial mechanism (prime) if needed and emphasized with a prohibitive penalty in case of non connection. ‐ A support mechanism for the construction of district heating should take into account the raw material cost and energetic density of the network in order to promote highly efficient systems (high density of habitations and/or high energy consumption facilities or industries). ‐ Public support should be compatible with public‐private partnerships and third party financing. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 21 3.11. Support schemes for renewable resources in transport What should be the concrete obligations / targets per year (per fuel or technology)? Since July 09 there is an obligation to incorporate 4% v/v of bioethanol in gasoline and 4% v/v biodiesel in the gazole. For 2020, we should set also intermediate binding targets for biofuels. The difficulties experienced until now in implementing long term targets at national level not only suggest the need for mandatory targets, but also the necessity that those targets are detailed over shorter periods of time, certainly not over a decade. A sustained and progressive growth in the use of biofuels could be best achieved by establishing intermediate targets for biodiesel and bioethenol in line with the trajectory exposed before in the table (contribution of renewable to transport fuel consumption).Consequent measures should be enforced. Should there be a differentiation of the support according to fuel types (biodiesel, bioethanol) and technologies (second generation biofuels, renewable electricity)? As there is a technology gap between the first and the second generation biofuels, the support should be focused on R&D to further develop the second generation fuels, by financing the development of the technology using raw material like wastes, residues, non‐food cellulosic material, and ligno‐
cellulosic material whose contribution shall be considered to be twice. This must decrease the production cost and increase the competitivity of those new fuels. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 22 3.12. Biomass availability Table 6 : Biomass availability in 2006 Imported Sector of origin ktoe Amount of domestic resource A) Biomass from 14
1. direct supply of wood biomass from forestry : forests and other wooded land for energy generation Exported Primary energy production (value in ktoe) Final energy use (value in ktoe) 419,7 Net amount (ktoe) Non‐
EU EU/non‐EU 283 54,8 109,5 100 EU 206,3 213,4 2. indirect supply of wood biomass for 283 energy generation B) Biomass Of which: from 1. agricultural crops and fishery 54,8 agriculture products directly provided for and fisheries: energy generation 2. Agricultural by‐products / processed residues and fishery by‐products for energy generation 100 C) Biomass from waste: 1. Biodegradable fraction of municipal 79 ,8 solid waste 2. Biodegradable fraction of industrial waste (including paper, cardboard, pallets) Total 79,8 21 21 3. Sewage sludge 744,8 268,2 1013 Sources: PMDE 2007, Projet d’actualisation du Plan pour la Maîtrise Durable de l’Energie (PMDE) en Wallonie à l’horizon 2020, ICEDD, ECONOTEC, Ibam, 2009 and IEA BIOENERGY – TASK40, “Sustainable International Bioenergy Trade Securing Supply and Demand Country report Belgium” VITO/CRA‐W, Guisson and Marchal, 2009. 14
Biomass from forestry should also include biomass from the forest‐based industries. Under the category of biomass form forestry processed solid fuels, like chips, pellets and briquettes should be included in the corresponding subcategories of origin. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 23 Table 7 : Biomass availability in 2020 Imported Sector of origin ktoe Amount of domestic resource A) Biomass from 15
1. direct supply of wood biomass from forestry : forests and other wooded land for energy generation Exported Net amount (ktoe) Primary energy production (value in ktoe) Final energy use (value in ktoe) Non‐
EU EU/non‐EU 558 558 610 1451 2061 620 1002 929 EU 2. indirect supply of wood biomass for energy generation B) Biomass Of which: from 1. agricultural crops and fishery agriculture products directly provided for and fisheries: energy generation 382 2. Agricultural by‐products / processed residues and fishery by‐products for energy generation 929 610 C) Biomass 610 from waste: 1. Biodegradable fraction of municipal solid waste 2. Biodegradable fraction of industrial waste (including paper, cardboard, pallets) Total 3. Sewage sludge 3089 2071 5160 What measures could best encourage the use for energy purposes of unused arable land, degraded land, etc. planned? 15
Biomass from forestry should also include biomass from the forest‐based industries. Under the category of biomass form forestry processed solid fuels, like chips, pellets and briquettes should be included in the corresponding subcategories of origin. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 24 Not applicable What measures could ensure a higher productivity of currently used lands or harvesting more than once on the same land per year – if applicable‐ planned? After the cereals harvesting in summertime, there is often time to seed a soil cover that can be harvested in late autumn as energy biomass (forage grass, mustard...). To develop this practice, an incentive for farmers is needed to compensate the over‐ cost of production due to the yield decrease in autumn. Moreover, R&D extra‐fundings are then a priority to allow scientific bodies to develop new improved cultivation methods with respect to environmental objectives. How should one encourage the energy use of certain primary material already available (like animal manure)? To make full use of the existing biomass potential, incentives are also required to create a legally binding and permanently secure framework for power generation from biomass. This includes further mobilization of animal manure for biogas plant with return of the biomass distillate to the soil, with viable economics for both farmers and biogas plant owners. In this regards, Federal and Regional Authorities should encourage the use of biowaste from agriculture (pig, cow and chicken manure, crops co‐products) to be transformed into small‐scale biogas plant with small biomass heat injection into the grid for short distance public uses (heat grids). How could the impact of energy use of biomass on other sectors based on agriculture and forest be detected? The setting of an observatory platform biomass is essential. This platform should collect statistics on biomass availability and use, and have a better idea of the total biomass production potential and flow transfer in our country. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 25 4. FLEXIBILITY / JOINT PROJECTS / EUROPEAN PERSPECTIVES Table 8: Estimated excess and deficit production of renewable energy compared to the indicative trajectory 2005
Gross final energy
consumption
RES share in gross final
energy consumption
Indicative trajectory to reach
the 13% mandatory target
Estimated excess
Estimated excess in RES
generation (ktoe)
2011-2012 2013-2014
2015-2016
2017-2018
2020
39.150 38.333
38.097
37.913
37.807 37.695
2,27% 5,72%
7,83%
9,99%
12,49% 15,76%
2,20% 0 4%
1,36%
5%
2,39%
7%
2,93%
9% 3,27% 13%
2,76%
0 521
911
1111
1236 1040
Only the moderate energy demand scenario has been taken into account. On basis of this moderate scenario, the RES consumption trend presented in table 1 has been compared to the indicative trajectories proposed in Annex I of the Directive 2009/28/EC in order to reach the mandatory 13% Belgian target. The excess RES generation can be virtually exported by means of e.g. statistical transfers to other EU member states possessing a deficit in RES deployment compared to their given RES targets. This would lead to additional incomes for Belgium in order to contribute in the financing of the further Belgian renewable energy development. 5. ESTIMATED COSTS AND BENEFITS OF RES POLICY SUPPORT MEASURES In Annex I, the results arising from the model calculations are linked to some cost and benefit estimations on basis of the parameters explained in Annex II. No extensive cost and benefit analysis has been performed in the context of this study. Firstly, the analysis provided in annex I is conservative (e.g. on projected energy prices) and non exhaustive, as numerous positive externalities (e.g. air quality, health cost reduction…) and other significant benefits (e.g. job creations, industrial development…) have not been taken into account. In addition, incomes from the excess in RES production compared to the 13% mandatory Belgian target have not been considered here. Secondly, the cost and benefit analysis in Annex I is related to the results arising from the model calculations and are not linked to the proposed targets in sections 3.2 and 3.3 (tables 1‐5), some figures differing from the model calculation. The cost and benefit analysis presented in Annex I deals with: capital expenditures, policy costs, additional generation costs, total avoided CO2 emissions and avoided fossil fuels in monetary terms. As comparison, the calculated total avoided CO2 emissions and fossil fuels benefits would cover more than 82% of the additional policy cost linked to the RES deployment proposed in the model. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 26 Contacts Noémie Laumont, General Secretary, EDORA, [email protected], + 32 498 16 89 00 Fawaz Al Bitar, wind energy advisor, EDORA, [email protected], + 32 496 12 22 31 Guy De Mol, biomass energy advisor, EDORA, [email protected] , + 32 2 217 96 82 Acknowledgments Edora is grateful to ODE Vlaanderen for their active participation compiling the demands of the renewable sector in Flanders and helping in the general consultation leading to the elaboration of this document. Edora also thanks Valbiom and VITO for their specific advices in order to decide on a biomass target for 2020 and the necessary measures to reach them. Edora is also very grateful to EEG for their flexibility taking the sector demands into account while calculating the 2020 targets with Primes and Green‐X. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 27 ANNEX I 2020 targets calculated by the GreenX and Primes models !!! The following figures don’t constitute the renewable sector targets for 2020 !!!! Energy Economics Group (EEG) used Green‐X model and database together with the PRIMES model to calculate the 2020 targets, assessing the future deployment of renewable energies on country‐, sectoral‐ as well as technology level. An economic cost & benefit analysis was also performed. A first calculation has been reviewed by the renewable sector in order to take into account the last sectoral trends and to portray the vision of the renewable sector for 2020. Taking the renewable sector’s comments into account, a new calculation has been performed as the Green‐X model can allow assessing various policy options. The results of this calculation are presented in this Annex I and were used as basis for the proposed targets presented in tables 3‐5 (section 3.3). Scenarios on the future RES deployment up to 2020
Gross final energy demand
Electricity sector
Heat sector
Transport sector
Total
Diesel and gasoline
[Unit]
RES-E
RES-H
RES-T
RES-T
ktoe
ktoe
ktoe
ktoe
ktoe
2005
7.912
21.312
9.926
39.150
8.401
Moderate energy demand scenario 2007° 2011-2012 2013-2014 2015-2016 2017-2018
8.109
8.327
8.501
8.693
8.927
17.867
19.666
19.243
18.863
18.534
9.586
10.341
10.352
10.358
10.346
35.562
38.333
38.097
37.913
37.807
8.113
8.611
8.562
8.515
8.476
2020
9.230
18.135
10.331
37.695
8.428
Key results on Belgian RES deployment (at aggregated level - incl. biofuel trade)
ACT (proactive support - realisable deployment)
Total RES deployment
RES-Electricity
RES-Heat
Biofuels
RES TOTAL
RES share on gross final energy
demand
[Unit]
RES-E
RES-H
RES-T
ktoe
ktoe
ktoe
ktoe
%
2005
187
689
0
875
2007 2011-2012 2013-2014 2015-2016 2017-2018
279
706
947
1.199
1.555
668
1.207
1.592
1.967
2.356
87
381
510
568
651
1.034
2.294
3.050
3.734
4.562
2,2%
2,9%
6,0%
8,0%
9,8%
12,1%
2020
2.209
2.603
843
5.655
15,0%
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 28 Deployment in terms of capacities
Breakdown by RES-electricity
category
Biogas
(Solid) Biomass
Biowaste
Geothermal electricity
Hydro large-scale
Hydro small-scale
Photovoltaics
Solar thermal electricity
Tide & Wave
Wind onshore
Wind offshore
RES-E TOTAL
Installed capacities (cumulative)
[Unit]
BG
MW
BM
BW
MW
MW
GE
MW
HY-LS
MW
HY-SS
MW
SO-PV
MW
SO-ST
MW
TW
MW
WI-ON
MW
WI-OFF
MW
RES-E
MW
2005°
56,0
293,0
52,8
0,0
55,0
62,0
2,0
0,0
0,0
167,0
0,0
809,7
2007° 2011-2012 2013-2014 2015-2016 2017-2018
68,0
142,9
215,0
295,7
405,3
329,0
670,0
774,8
837,1
866,3
60,1
84,4
90,3
96,5
103,5
0,0
0,0
0,0
0,1
0,4
55,0
55,4
55,9
56,3
56,7
58,0
71,0
71,0
71,0
71,0
20,0
144,6
361,3
790,2
1.628,7
0,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
276,0
1.351,1
2.010,0
2.377,5
2.469,4
0,0
72,8
216,7
579,9
1.380,8
809,7
2.592,2
3.794,8
5.104,3
6.981,9
2020
590,1
1.001,0
112,8
0,9
56,7
71,0
3.439,9
0,0
0,0
2.494,9
2.824,6
10.591,7
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 29 Capital expenditures
Capital expenditures (new plants)
category
2010
44,4
124,1
14,3
0,0
0,0
15,9
0,0
0,0
0,0
394,4
0,0
593,1
[Unit]
Biogas
(Solid) Biomass
Biowaste
Hydro large-scale
Hydro small-scale
Photovoltaics
Tide & Wave
Wind onshore
Wind offshore
RES-E TOTAL
BG
M€
BM
M€
BW
M€
GE
M€
HY-LS
M€
HY-SS
M€
SO-PV
M€
SO-ST
M€
TW
M€
WI-ON
M€
WI-OFF
M€
RES-E
M€
2015
114,5
11,9
16,8
0,0
0,8
0,0
524,8
0,0
0,0
223,3
376,7
1.268,7
2020
204,5
77,2
18,3
1,0
0,0
0,0
1.669,7
0,0
0,0
10,9
1.290,9
3.272,4
Cumulative
(06-20)
1.540,5
931,5
347,4
3,3
5,5
32,3
7.805,7
0,0
0,0
3.329,8
6.268,1
20.264,2
Yearly
average
102,7
62,1
23,2
0,2
0,4
2,2
520,4
0,0
0,0
222,0
417,9
1.350,9
Policy cost - consumer expenditures due to RES support
Consumer expenditures (new plants)
category
[Unit]
Biogas
(Solid) Biomass
Biowaste
Hydro large-scale
Hydro small-scale
Photovoltaics
Tide & Wave
Wind onshore
Wind offshore
RES-E TOTAL
BG
M€
BM
M€
BW
M€
GE
M€
HY-LS
M€
HY-SS
M€
SO-PV
M€
SO-ST
M€
TW
M€
WI-ON
M€
WI-OFF
M€
RES-E
M€
2010
34,5
186,7
26,8
0,0
0,0
3,1
0,0
0,0
0,0
173,5
0,2
424,9
2015
110,8
267,3
30,3
0,0
0,2
3,4
162,5
0,0
0,0
273,3
69,6
917,3
2020
183,7
122,4
7,1
0,4
0,2
0,3
736,0
0,0
0,0
109,1
407,4
1.566,6
Cumulative
(06-20)
1.252,3
2.640,7
307,3
1,0
1,8
34,2
2.729,0
0,0
0,0
2.612,6
1.427,0
11.005,9
Yearly
average
83,5
176,0
20,5
0,1
0,1
2,3
181,9
0,0
0,0
174,2
95,1
733,7
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 30 Heat sector (results referring to national RES deployment)
Deployment in terms of generation
Heat production
Breakdown by RES-heat category
[Unit]
Biogas (grid)
Biowaste (grid)
Geothermal heat (grid)
Solid biomass (non-grid)
Solar thermal heating and hot
water
Heat pumps
RES-H TOTAL
BG
ktoe
BM
ktoe
BW
ktoe
GE
ktoe
BM-NG
ktoe
SO-TH
ktoe
HP
ktoe
RES-H
ktoe
2005
25,0
34,0
0,0
2,6
616,0
2007 2011-2012 2013-2014 2015-2016 2017-2018
3,0
35,5
40,9
43,5
43,8
4,0
87,8
133,0
166,3
186,5
0,0
65,5
70,6
75,9
81,8
2,6
7,2
10,7
15,6
21,9
645,0
932,1
1.186,0
1.427,4
1.659,8
2020
45,5
247,6
90,2
31,7
1.604,7
3,0
8,0
688,6
5,0
8,5
668,1
241,0
342,1
2.602,7
30,6
48,2
1.207,0
68,3
82,4
1.592,0
107,0
131,7
1.967,4
156,2
205,8
2.356,0
Deployment in terms of capacity
Installed capacity (cumulative)
[Unit]
Biogas (grid)
Biowaste (grid)
water
Heat pumps
RES-H TOTAL
BG
MW
BM
MW
BW
MW
GE
MW
BM-NG
MW
SO-TH
MW
HP
MW
RES-H
MW
2007° 2011-2012 2013-2014 2015-2016 2017-2018
13,3
206,6
286,6
332,9
337,2
14,0
316,6
484,2
591,8
651,6
0,0
357,1
381,8
407,5
436,1
4,7
19,8
37,1
68,0
100,1
5.209,3
7.528,1
9.578,7
11.528,1
13.405,1
2020
369,0
866,3
471,4
147,2
12.960,4
132,5
69,0
5.442,7
6.383,7
2.763,2
23.961,2
812,0
389,1
9.629,3
1.810,0
665,5
13.243,9
2.833,9
1.063,3
16.825,4
4.138,9
1.662,4
20.731,4
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 31 Capital expenditures
[Unit]
Biogas (grid)
Biowaste (grid)
water
Heat pumps
RES-H TOTAL
BG
M€
BM
M€
BW
M€
GE
M€
BM-NG
M€
SO-TH
M€
HP
M€
RES-H
M€
2010
0,0
0,8
0,0
3,0
143,8
2015
0,0
2,4
0,0
12,9
594,3
2020
0,0
2,3
0,0
37,8
95,6
Cumulative
(06-20)
0,0
26,6
0,0
175,3
5.279,0
Yearly
average
0,0
1,8
0,0
11,7
351,9
0,0
83,7
231,4
178,6
130,7
918,9
438,2
391,8
965,7
2.474,3
1.937,5
9.892,8
165,0
129,2
659,5
BG
M€
BM
M€
BW
M€
GE
M€
BM-NG
M€
2010
0,0
0,2
0,0
0,6
13,5
SO-TH
M€
0,0
[Unit]
Biogas (grid)
Biowaste (grid)
water
Heat pumps
RES-H TOTAL
2015
0,0
4,4
0,0
9,0
680,4
2020
0,0
8,0
0,0
25,1
474,9
Cumulative
(06-20)
0,0
49,6
0,0
117,2
6.174,2
Yearly
average
0,0
3,3
0,0
7,8
411,6
142,3
351,9
1.911,5
127,4
HP
M€
17,0
119,3
360,5
1.685,8
112,4
RES-H
M€
31,3
955,4
1.220,4
9.938,2
662,5
Transport sector
Deployment in terms of consumption
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 32 Energy consumption in transport
Breakdown by RES-transport
category
Bioethanol**
Biodiesel**
2nd generation biofuels**°
Net biofuel import*
Biofuel TOTAL
[Unit]
BE
ktoe
BD
ktoe
2BF
ktoe
RES-T
ktoe
ktoe
2005
0,0
0,0
n.a.
n.a.
0,0
2007 2011-2012 2013-2014 2015-2016 2017-2018
0,0
12,4
29,1
50,4
80,0
87,0
75,5
78,1
9,3
0,0
n.a.
0,0
0,0
0,0
0,0
n.a.
293,4
403,0
507,8
571,0
87,0
381,3
510,2
567,5
650,9
2020
102,3
18,6
4,4
717,4
842,8
Deployment in terms of capacity (referring to generation based on national feedstocks)
Installed capacity (cumulative)
category
Bioethanol
Biodiesel
2nd generation biofuels
Biofuel TOTAL
[Unit]
BE
MW
BD
MW
2BF
MW
RES-T
MW
2007° 2011-2012 2013-2014 2015-2016 2017-2018
0,0
18,1
42,3
73,3
116,3
148,7
129,9
133,5
131,7
129,9
n.a.
0,0
0,0
0,0
0,0
148,7
148,0
175,8
205,0
246,2
2020
148,8
127,7
6,4
282,8
Capital expenditures
category
2010
0,0
0,0
0,0
0,0
[Unit]
Bioethanol
Biodiesel
Biofuel TOTAL
BE
M€
BD
M€
2BF
M€
RES-T
M€
2015
10,0
0,0
0,0
10,0
2020
0,0
0,0
9,1
9,1
Cumulative
(06-20)
96,3
24,7
9,1
130,2
Yearly
average
6,4
1,6
0,6
8,7
category
[Unit]
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 33 Bioethanol
Biodiesel
Net biofuel import*
Biofuel TOTAL
BE
M€
BD
M€
2BF
M€
RES-T
M€
M€
2010
0,0
0,0
0,0
0,0
0,0
2015
8,5
3,6
0,0
95,9
108,0
2020
17,2
3,1
0,7
120,9
142,0
Cumulative
(06-20)
93,6
145,2
0,7
1.065,1
1.304,6
Yearly
average
6,2
9,7
0,0
71,0
87,0
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 34 Summary - Results on selected costs and benefits
Capital expenditures
Breakdown by RES sector
RES-E
RES-H
RES-T
M€
M€
2007°
223,3
0,0
0,0
RES
M€
223,3
[Unit]
Electricity sector
Heat sector
Transport sector
Total (national RES
deployment)
M€
2010
593,1
231,4
0,0
2015
1.268,7
918,9
10,0
2020
3.272,4
965,7
9,1
Cumulative
(06-20)
20.264,2
9.892,8
130,2
Yearly
average
1.350,9
659,5
8,7
824,5
2.197,6
4.247,2
30.287,1
2.019,1
Electricity sector
Heat sector
Transport sector
Total (national RES
deployment)
Impact of cooperation
mechanisms
Total (corrected)
2010
424,9
31,3
0,0
2015
917,3
955,4
108,0
2020
1.566,6
1.220,4
142,0
Cumulative
(06-20)
11.005,9
9.938,2
1.304,6
Yearly
average
733,7
662,5
87,0
RES-E
RES-H
RES-T
M€
M€
2007°
133,1
0,0
0,0
RES
M€
133,1
456,2
1.980,8
2.929,1
22.248,7
1.483,2
M€
0,0
133,1
0,0
456,2
-1,4
1.979,4
-1,4
2.927,6
-14,9
22.233,8
-1,0
1.482,3
[Unit]
RES
M€
M€
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 35 Additional generation costs
Additional generation costs (new plants)
RES-E
RES-H
RES-T
M€
M€
2007°
2,1
0,0
0,0
RES
M€
2,1
[Unit]
Electricity sector
Heat sector
Transport sector
Total (national RES
deployment)
M€
2010
7,0
0,0
0,0
2015
223,0
0,7
33,6
2020
860,9
5,8
37,4
Cumulative
(06-20)
3.341,9
28,5
262,4
Yearly
average
222,8
1,9
17,5
7,0
257,3
904,1
3.632,7
242,2
Total avoided CO2 emissions
Total avoided CO2 emissions (new plants)
RES-T
[Unit]
Mt[CO2] /
a
Mt[CO2] /
a
Mt[CO2] /
a
RES
Mt[CO2] /
a
Electricity sector
RES-E
Heat sector
RES-H
Transport sector
Total (national RES
deployment)
2007°
2010
2015
2020
Cumulative
(06-20)
Yearly
average
0,7
2,1
5,7
12,2
73,6
4,9
0,0
0,3
3,0
4,9
31,9
2,1
0,0
0,0
0,7
1,2
6,7
0,4
0,7
2,4
9,4
18,4
112,2
7,5
Total avoided CO2 emissions in monetary terms
Avoided CO2 emissions (monetary expression - new plants)
RES-E
RES-H
RES-T
M€
M€
2007°
14,4
0,0
0,0
RES
M€
14,4
[Unit]
Electricity sector
Heat sector
Transport sector
Total (national RES
deployment)
M€
2010
41,6
6,4
0,0
2015
154,8
80,7
20,0
2020
418,0
168,9
42,6
Cumulative
(06-20)
2.108,6
934,8
193,2
Yearly
average
140,6
62,3
12,9
48,0
255,5
629,4
3.236,6
215,8
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 36 Avoided fossil fuels in energy terms
Avoided fossil fuels (energy terms - new plants)
RES-E
RES-H
RES-T
ktoe
ktoe
2007°
245
0
0
RES
ktoe
245
[Unit]
Electricity sector
Heat sector
Transport sector
Total (national RES
deployment)
ktoe
2010
700
122
0
2015
2.015
1.104
270
2020
4.259
1.922
481
Cumulative
(06-20)
25.616
12.060
2.286
Yearly
average
1.708
804
152
822
3.389
6.662
39.962
2.664
Avoided fossil fuels in monetary terms
Avoided fossil fuels (monetary terms - new plants)
RES-E
RES-H
RES-T
M€
M€
2007°
51,0
0,0
0,0
RES
M€
51,0
[Unit]
Electricity sector
Heat sector
Transport sector
Total (national RES
deployment)
M€
2010
194,7
43,7
0,0
2015
690,7
446,7
139,6
2020
1.598,2
882,5
282,4
Cumulative
(06-20)
8.752,9
5.093,7
1.229,2
Yearly
average
583,5
339,6
81,9
238,5
1.276,9
2.763,1
15.075,9
1.005,1
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 37 Biomass use
Biomass use (in terms of primary energy)
Breakdown by feedstock category
[Unit]
Total 2015
Imports*
2015 Total 2020
Agricultural products
AP
ktoe
264
Agricultural residues
AR
ktoe
515
929
Forestry products
FP
ktoe
548
558
Forestry residues
FR
ktoe
591
Biowaste
Total Biomass availability
BW
ktoe
509
ktoe
3.996,5
571
998,8
382
610
Imports*
2020
620
1.451,0
610
5.160,3
EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 38 ANNEX II Method of approach / key assumptions The models, database and key parameters used in this study are briefly described hereafter (source: Energy Economics Group). 1 The policy assessment tool: the Green‐X model As in previous projects such as FORRES 2020, OPTRES or PROGRESS the Green‐X model was applied to again perform a detailed quantitative assessment of the future deployment of renewable energies on country‐, sectoral‐ as well as technology level. The core strength of this tool lies on the detailed RES resource and technology representation accompanied by a thorough energy policy description, which allows assessing various policy options with respect to resulting costs and benefits. A short characterisation of the model is given in Annex III, whilst for a detailed description we refer to www.green‐x.at. 2 Overview of key parameters In order to ensure maximum consistency with existing EU scenarios and projections the key input parameters of the scenarios presented in this report are derived from PRIMES modelling and from an updated edition of the Green‐X database on RES potentials and cost as initially assessed within the ‘FORRES 2020’ study (see Ragwitz et al., 2005). Table B‐1 shows which parameters are based on PRIMES and which have been defined for this study. More precisely the PRIMES scenarios used are: ‐ The PRIMES scenario on meeting both EU targets by 2020 – i.e. on climate change (20% GHG reduction) and renewable energies (20% RES by 2020) / 2008 (PRIMES target case) (NTUA, 2008) ‐ The European Energy and Transport Trends by 2030 / 2007 / Efficiency Case (NTUA, 2007b) ‐ The European Energy and Transport Trends by 2030 / 2007 / Baseline Case (NTUA, 2007a) EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 40 2.1 Energy demand Figure B‐1 depicts the projected gross final energy demand development for Belgium according to the different PRIMES scenarios. For the conducted policy assessment the following assumptions are taken: With respect to an ambitious RES exploitation (i.e. 20% RES by 2020 at EU‐27 level) the PRIMES target case appears suitable as (default) reference for the policy assessment, whereby an increase in energy efficiency (compared to baseline) is preconditioned. case
Figure B-1 Comparison of projected gross final energy demand development up to 2020 inBelgium.
Source: PRIMES scenarios
2.2 Conventional supply portfolio The conventional supply portfolio, i.e. the share of the different conversion technologies in each sector, has been based on the PRIMES forecasts on a country specific basis. These projections on the portfolio of conventional technologies have an impact in particular on the calculations done within this study on the avoidance of fossil fuels and CO2 emissions. As it is at least out of the scope of this study to analyse in detail which conventional power plants would actually be replaced by for instance a wind farm installed in the year 2014 in a certain country (i.e. either a less efficient existing coal‐
fired plant or a possibly new high‐efficient combined cycle gas turbine), the following assumptions are made: ‐ Keeping in mind that, besides renewable energies, fossil energy represents the marginal generation option that determines the prices on energy markets, it was decided to stick on country level to the sector‐specific conventional supply portfolio projections as provided by PRIMES. Sector‐ as well as country‐specific conversion efficiencies, as derived on a yearly basis, are used to derive the amount of avoided primary energy based on the renewable generation figures obtained. Assuming that the fuel mix stays unaffected, avoidance can be expressed in units of coal or gas replaced. ‐ A similar approach is chosen with regard to the avoidance of CO2 emissions, where yearly changing average country‐ as well as sector‐specific CO2 intensities of the fossil‐based conventional supply portfolio forms the basis. In the following the derived data on aggregate conventional conversion efficiencies and the CO2 intensities characterising the conventional reference system is presented. Figure B‐2 shows the dynamic development of average conversion efficiencies as projected by PRIMES for conventional electricity generation as well as for grid‐connected heat production. Thereby, conversion efficiencies are shown for both the PRIMES baseline and PRIMES efficiency case. Error bars indicate the range in country‐specific average efficiencies between EU member states. For the transport sector, where efficiencies are not explicitly expressed in PRIMES results, the average efficiency of the refinery process to derive fossil diesel and gasoline was assumed to be 95%. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 41 The corresponding data on country‐ as well as sector‐specific CO2 intensities of the conventional energy conversion system are shown in Figure B‐3. Error bars again illustrate the variation over countries. 2.3 Fossil fuel and reference energy prices National reference energy prices used in this analysis are based on the primary energy price assumptions as used in the EU energy outlook (as of 2007). The PRIMES data provide two different scenarios on future fossil energy prices: the so called default case and the high price case (as shown in Table B‐2). The latter case was used as (default) reference for all calculations. Compared to energy prices as observed in 2007 and the first three quarters of 2008 the price assumptions are for both PRIMES scenarios low for the later years up to 2020. In the high price case the oil price for instance goes up to 100 $ per barrel, which is still significantly below past energy prices as observed throughout 2008. The CO2‐price in the scenarios presented in this report is exogenously set as shown in Table B‐3, again similar to corresponding EU scenarios (as for example in the impact assessment of the Energy and Climate package of the EU). Actual market prices (for 2006 EU Allowances) have fluctuated EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 42 between 7 and 30 €/t, with averages fluctuating roughly between 15 and 20 €/t. In the model, it is assumed that CO2‐prices are directly passed through to electricity prices. This is done fuel‐specific based on the PRIMES CO2‐emission factors. Increased RES‐deployment can have a CO2‐price reducing effect as it reduces the demand for CO2‐
reductions. As RES‐deployment should be anticipated in the EU Emission Trading System and the CO2‐price in the Green‐X scenarios is exogenously set, this effect is not included, which represents a rather conservative approach. Reference prices for the electricity sector are taken from the Green‐X model. Based on the primary energy prices, the CO2‐price and the country‐specific power sector, the Green‐X model determines country‐specific reference electricity prices for each year in the period 2006 to 2020. Reference prices for the heat and transport sector are based on primary‐energy prices and the typical country‐
specific conventional conversion portfolio. Default sectoral reference energy prices for the ambitious policy pathways are illustrated in Table B‐4. More precisely, these prices represent the average at European level (EU‐27) and refer to an energy demand development according to the PRIMES target case and the PRIMES high energy prices. Note that heat prices in case of grid‐connected heat supply from district heating and CHP‐plant do not include the cost of distribution – i.e. they represent the price directly at defined hand over point. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 43 2.4 Interest rate / weighted average cost of capital ‐ the role of (investor’s) risk Determining the necessary rate of return is based on the weighted average cost of capital (WACC) methodology. WACC is often used as an estimate of the internal discount rate of a project or the overall rate of return desired by all investors (equity and debt providers). This means that the WACC formula17 determines the required rate of return on a company’s total asset base and is determined by the Capital Asset Pricing Model (CAPM) and the return on debt. Formally, the pre‐tax cost of capital is given by: WACC pre‐tax = gd • rd + ge • re = gd • [rfd + rpd] + ge • [rfe + β • rpe] / (1 ‐ rt) Table B‐5 illustrates the determination of the WACC exemplarily for two differing cases – a default and a high risk assessment. Within the model‐based analysis a range of settings is applied to reflect investor’s risk appropriate. Thereby, risk refers to two different issues: ‐ A ‘policy risk’ related to uncertainty on future earnings caused by the support scheme itself – e.g. referring to the uncertain development of certificate prices within a RES trading system. As shown in Table B‐5, with respect to policy risk two different settings are used in the analysis, ranging from 6.5 % up to 8.8 %. The different values are based on a different risk assessment, a standard risk level and a set of risk levels characterized by a higher expected market rate of return. 6.5 % is used as the default value for stable planning conditions as given, e.g. under advanced fixed feed‐in tariffs. The higher value is applied in scenarios with lower stable planning conditions, i.e. in the cases where support schemes cause a higher risk for investors as associated e.g. with RES trading (and related uncertainty on future earnings on the certificate market). ‐ A ‘technology risk’ referring to uncertainty on future energy production due to unexpected production breaks, technical problems etc.. Such deficits may cause (unexpected) additional operational and maintenance cost or require substantial reinvestments which (after a phase out of operational guarantees) typically have to be born by the investors themselves. In this context, Figure (below) illustrates the default assumptions applied to consider investor’s technology risk. As default both policy and technology risk are considered in the assessment, leading to a higher WACC than the default level of 6.5%. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 44 2.5 Assumptions for simulated support schemes A number of key input parameters were defined for each of the model runs referring to the specific design of the support instruments as described below. ► General scenario conditions Consumer expenditure is heavily dependent on the design of policy instruments. In the policy variants investigated, it is obvious that the design options of the various instruments were chosen in such a way that expenditure is low. Accordingly, it is assumed that the investigated schemes are characterised by: ‐ a stable planning horizon ‐ a continuous RES‐E policy / long‐term RES‐E targets and ‐ a clear and well defined tariff structure / yearly targets for RES(‐E) deployment. In addition, for all investigated scenarios the following design options are assumed: ‐ financial support is restricted to new capacity only, ‐ the guaranteed duration of financial support is limited. With respect to model parameters reflecting dynamic aspects such as technology diffusion or technological change, the following settings are applied: ‐ Removal of non‐financial barriers and high public acceptance in the long term. In the scenario runs it is assumed that the existing social, market and technical barriers (e.g. grid integration) can be overcome in time. Nevertheless, their impact is still relevant as is reflected in the BAU‐settings (referring to a BAU scenario based on current RES support) compared to, e.g. the more optimistic view assumed for reaching an accelerated RES deployment as preconditioned in the policy assessment referring to the ambitious target of 20% RES by 2020. ‐ A stimulation of ‘technological learning’ is considered – leading to reduced investment and O&M costs for RES‐E and increased energy efficiency over time. Thereby, moderate technological learning is preconditioned as default for all policy cases. In the following, the model settings and assumptions are described for each type of support instrument separately. These assumptions refer to advanced support schemes as applied in the discussion of strengthened national and harmonized European wide policy instruments. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 45 ► Feed‐in tariffs Premium feed‐in tariffs are defined as technology‐specific; settings are applied so as to achieve an overall low burden for consumers. Tariffs decrease over time reflecting the achieved cost reductions on a technology level, but this annual adjustment in the level of support applies only to new installations. More precisely, whenever a new plant is installed, the level of support is fixed for the guaranteed duration (of 15 years as commonly applied in the case of generation‐based support). A low risk premium (leading to a WACC of 6.5 %) is applied to reflect the small degree of uncertainty associated with the well defined design of this instrument. ► Quota obligations with tradable green certificates (TGC) / guarantees of origin (GO) In general, the assumption is taken that an advanced RES trading system where technology‐
specification of support is introduced via a banding approach will be applied in the future (from 2011 on). Advanced RES trading systems are used in both the NAT and the EU case in those countries which have already implemented a RES trading system to support RES‐E, namely Belgium, Italy, Poland, Romania, Sweden and the UK. Thereby, different weighting is given to different RES technologies in terms of the number of green certificates / guarantees of origin granted per MWh generation, e.g. wind offshore obtains twice the weighting as wind onshore – aiming to reflect the differing cost level or stages of market maturity, respectively, among the involved RES technology options. This approach would be inline with the proposed adaptation of UK’s ROC’s scheme. The applied assumptions with respect to technology‐
specific weighting factors are illustrated in Figure B‐5. Thereby, ranges indicate a further graduation of weighting factors by fuel (biomass) or technology (biomass (cofiring), biogas). Please note further that as default a penalty payment of 33 €/TGC is preconditioned. Generally, in case of RES trading schemes ‘policy risk’ is assumed to be at a higher level (leading to a WACC of 8.8 %). Thereby, risk refers to the uncertainty about future earnings (on the power as well as on the TGC / GO market). EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 46 Annex III Short characterization of the GreenX model (source: Energy Economics Group) The model Green‐X has been developed by the Energy Economics Group (EEG) at Vienna University of Technology in the research project “Green‐X – Deriving optimal promotion strategies for increasing the share of RES‐E in a dynamic European electricity market”, a joint European research project funded within the 5th framework program of the European Commission, DG Research (Contract No. ENG2‐CT‐ 2002‐00607). Initially focussed on the electricity sector, this tool and its database on RES potentials and costs have been extended within follow‐up activities to incorporate renewable energy technologies within all energy sectors. Green‐X covers geographically the EU‐27, and can easily be extended to other countries such as Turkey, Croatia or Norway. It allows to investigate the future deployment of RES as well as accompanying cost – comprising capital expenditures, additional generation cost (of RES compared to conventional options), consumer expenditures due to applied supporting policies, etc. – and benefits – i.e. contribution to supply security (avoidance of fossil fuels) and corresponding carbon emission avoidance. Thereby, results are derived at country‐ and technology‐level on a yearly basis. The time‐horizon allows for in‐depth assessments up to 2020, accompanied by concise out‐looks for the period beyond 2020 (up to 2030). Within the model, the most important RES‐Electricity (i.e. biogas, biomass, biowaste, wind on‐ & offshore, hydropower large‐ & small‐scale, solar thermal electricity, photovoltaics, tidal stream & wave power, geothermal electricity), RES‐Heat technologies (i.e. biomass – subdivided into log wood, wood chips, pellets, grid‐connected heat ‐, geothermal (grid‐connected) heat, heat pumps and solar thermal heat) and RES‐Transport options (e.g. first generation biofuels (biodiesel and bioethanol), second generation biofuels (lignocellulotic bioethanol, BtL) as well as the impact of biofuel imports) are described for each investigated country by means of dynamic cost‐resource curves. This allows besides the formal description of potentials and costs a detailed representation of dynamic aspects such as technological learning and technology diffusion. Besides the detailed RES technology representation the core strength of the model is the in‐depth energy policy representation. Green‐X is fully suitable to investigate the impact of applying (combinations of) different energy policy instruments (e.g. quota obligations based on tradable green certificates / guarantees of origin, (premium) feed‐in tariffs, tax incentives, investment incentives, impact of emission trading on reference energy prices) at country‐ or at European level in a dynamic framework. Sensitivity investigations on key input parameters such as non‐economic barriers (influencing the technology diffusion), conventional energy prices, energy demand developments or technological progress (technological learning) typically complement a policy assessment. EDORA – National Renewable Source Industry Roadmap – Rev. : February 2010 47

national renewable energy source industry roadmap belgium

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