D. Sc. Igor Kovačević Energy Sector Ministry of Economy of Montenegro

RENEWABLE ENERGY SOURCES IN MONTENEGRO

Investing in Energy Efficiency and Renewable Energy in the Energy Community Conference Hofburg Congress Center Heldenplatz 1, Vienna 18 March 2010

CONTENTS OF THE PRESENTATION 1. 2. 3. 4. 5.

Introduction Legislative RES framework RES projects Analysis of implementation of RES target Conclusions

Abbreviation: RES - Renewable Energy Sources EE – Energy Efficiency

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

1. INTRODUCTION 1.1. Major Strategic Commitments ƒ Reasonable valorization of available potentials ƒ Achieving a balance between energy development and environmental protection ƒ Regulatory, legislative and operational integration in the process of approaching the EU in the fields of energy and environment

ƒ Continuation of energy reform, while respecting sustainable development and market operation principles ƒ Ensuring social protection in the process of reform changes in energy sector

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

1. Introduction

ƒ Implementation of obligations under theTreaty establishing the Energy Community

ƒ Energy sector is recognized in Montenegro (MNE) as an important driving force of the economic growth ƒ Energy Development Strategy of Montenegro until 2025 (2007) (EDS) and Action Plan 2008-2012. ƒ The Strategy sets guidelines for energy progress and sustainable development: - improving EE - better use of RESele (hydro, wind, biomass) - revitalization of existing and construction of new electro-energy structures and - Montenegro as RESele investment challenge

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

1. Introduction

1.2. Energy Sector

2. LEGISLATIVE RES FRAMEWORK 2.1. New Energy Law ƒ Directive 2001/77/EC of the European Parliament and of the Council on promotion of electricity produced from RES in the internal electricity market ƒ Directive 2009/28/EC of the European parliament of the Council on the promotion of the use of energy from RES (Directive 2009/28/EC) New Energy Law: ƒIncentives for energy produced from RES and cogeneration ƒMandatory target for energy produced from RES ƒ Guarantees of origin of electricity, heating and cooling produced from RES ƒ Preferential producers ƒ Joint Projects and Joint support schemes Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

2. Legislative RES Framework

Obligations under the Energy Community Treaty

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

2. Legislative RES Framework

2.2. Directive 2009/28/EC

2.3. Methodology for Calculating RES Target ƒ National RES target [% ] is calculated by

% RES =

Total energy produced form RES = GFEC

RESele + RESth + REStra GFEC

ƒ Mandatory national target for RES to 2020 for EU countries:

National target % RES= S2005

+ 5,5 % + GDP factor

ƒ Contracting parties of the Energy Community Treaty are also under obligation to calculate a mandatory RES target Renewable Energy Target Calculation - Montenegro 29,5 % ( S2005 = 23,0 % and GDP factor = 1,0 %) Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

2. Legislative RES Framework

GFEC – gross final energy consumption

2.3. Methodology for Calculating RES Target (cont.) RES Target EU overall national target

EU Nacionalni target according to Directive 2009/28/EC

20 % from RES in gross primary energy consumption

Energy Development Strategy of Montenegro until 2025

•

Action Plan for implementation of Energy Development Strategy 20082012 – 60 MW wind farms until 2025. – 80 MW small hydro power plants (sHPP) until 2025. – 5 MW generated from biomass until 2025.

•

Update Energy Development Strategy of Montenegro until 2025

•

National RES Action Plan

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

2. Legislative RES Framework

•

~ 30 % RES target, including heating/cooling energy and biofuels

2.4. Incentives for Electrical Energy Generation from RES Methodology for calculation of the price of electrical energy generated from RES P Type of generation

ƒ Inflation rate is included ƒ Calculation is made for sHPP, wind farms and biomass ƒ The price for sHPP is depend from the annual production of electrical energy

od 0.5 – 3 GWh

104,02

od 3 – 15 GWh

74,37

iznad 15 GWh

38,42

Wind farms

95.99

Biomass Wood-processing industry Forestry and agriculture

123,10 137,06

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

2. Legislative RES Framework

ƒ Guaranteed price for 12 years

[€/MWh] Small hydro power plants do 0.5 GWh 114,41

2.4. Incentives for Electrical Energy Generation from RES (cont.) Invst CFO

Energy Balance 2005 CGOR

P 8% o l 12 years Feed-in Tariffs i c Other incentives y

P o l i c y

5.5 % 1.0 %

GDP factor

National RES Target (%) sHPP Action Plan

Wind farms Biomass

Planned power plants

Other

P o l i c y

With/ without KAP

Economic impact Electrical energy price increase for the consumers

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

2. Legislative RES Framework

Incentive scheme

3. RENEWABLE ENERGY PROJECTS 3.1 HPPs on Morača Žuti Krš

HPP Andrijevo; HPP Raslovići HPP Milunovići; HPP Zlatica ƒ

HPP Andrijevo

ƒ HPP Raslovići

HPP HPP Milunovići Milunovići

HPP HPP Zlatica Zlatica

ƒ ƒ

Total installed capacity 238,4 MW Annual production 721 GWh Time frame for construction of all power plants 6 years Construction costs 540 million €

HPP Podgorica

HPP Botun

PODGORICA

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

3. Renewable Energy Projects

HPP Koštanica

3.1 HPPs on Morača (cont.) Existing technical documentation - Conceptual design (pre-feasibility study) for all four hydro power plants, Energoprojekt, Belgrade and Elektroprojekt, Ljubljana,1987 - Main Project designs for upstream cofferdam and diversion tunnel for all hydro power plants, Energoprojekt, Belgrade and Elektroprojekt, Ljubljana,1987 - Program of research works as for the Main design of the project, Energoprojekt, Belgrade, 1988 - Update of investment-technical documentation, Energoprojekt, Belgrade, 1998 ƒ ƒ

Recommended structuring option (shareholding): - Mixed public and private capital www.minekon.gov.me

[email protected] Timing - Prequalification – first quarter 2010 - Tender for qualified bidders – second quarter 2010 Tender process is underway! Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

3. Renewable Energy Projects

ƒ

ƒ ƒ ƒ ƒ

Total installed capacity 168 (2 x 84) MW Annual production 232 GWh Time frame for construction 7 years Construction costs 160 million €

www.minekon.gov.me Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

3. Renewable Energy Projects

3.2. HPP Komarnica

3.3. Small HPPs List of water streams for which concessions are awarded Number of Installed Production sHPP capacity [MW] [GWh]

Bistrica

Berane

8

10,00

37,00

Šekularska

Berane

5

5,00

21,00

Bistrica

Bijelo Polje

2

17,00

50,00

Bjelojevićka

Mojkovac

2

15,00

48,00

Crnja Zaslapnica

Kolašin Nikšić

1 3

3,00 1,00

10,00 3,60

Grlja

Plav

1

1,70

5,70

Plav

2 24

9,45 62,15

24,20 ~200,00

Babinopoljska Total:

Spatial plans and construction permit

www.oie-cg.me

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

3. Renewable Energy Projects

Water stream Municipality

3.3. Small HPPs (cont.)

Tender process is underway! III Public announcement for awarding concessions for exploitation of water streams for construction of SHPPs in September 2010 www.oie-cg.me Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

3. Renewable Energy Projects

II Public announcement for awarding concessions for exploitation of water streams for construction of SHPPs in Montenegro

3.4. Wind Farms ƒ Theoretical research of wind potentials ƒ The one year on-situ measurements are finished on six locations ƒ Measured wind potentials more than 240 MW on two locations ƒ Capacity factor more than 2000 h/year limited capacity on 50 MW on both locations ƒ Ministry of Economy issued Public Announcement

for the Selection of Investors for Wind Power Plants and Lease of the State Owned Land for 100 MW Study of absorption of the transmission system in Montenegro is underway!

www.oie-cg.me

Technical energy potential of wind [W/m2] at 50 m i.n.t..

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

3. Renewable Energy Projects

ƒ Preliminary opinion of transmission system operators

3.5. 400 kV HVDC Cable Italy – Montenegro ƒ 375 km of undersea cable ƒ 1000 MW capacity ƒ HVDC bipolar cable, 2x500 MW ƒ Project is developed in cooperation with TERNA (Italy) and PRENOS (Montenegro) ƒ

Inception date 2013

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

3. Renewable Energy Projects

ƒ 700 million € investment

3.5. 400 kV HVDC Cable Italy – Montenegro (cont.)

ƒ

90 million € investment

ƒ

Transformation station in Tivat

Transmission and distribution network Capacity [MVA]

Long [km]

400 kV

1.400

254

220 kV

700

400

110 kV

774

657

35 kV

584

1.150

10 kV

1.000

4.230

0.4 kV

-

14.000

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

3. Renewable Energy Projects

ƒ Line 400 kV Pljevlja-Tivat

MW Hydro Piva Perucica Hydro Tender I Hydro Tender II Komarnica Moraca Wind Mozura, Ulcinj Krnovo, Niksic Biomass Wood Berane elec. Waste Solar thermal Sum RES EC-targets for RES (GFEC-EE), IPA II data, 30% RES in 2020 EC-targets for RES (GFEC), IPA II data, 30% RES in 2020

360,0 365,5 62,2 18,0 168,0 238,4 46,0 50,0

old 860 971

new 1.150,0 200,0 77,1 231,8 693,7

2008 860,0 971,0

105,8 115,0

105,8 115,0

851,6 14,9 14,9 58,5 58,5 5,0 17,0 35,0 83,0 2.646,8 2.446,5 2.687,8 3.228,7 3.487,7 3.755,9 4.347,7

908,7 14,9 58,5 140,0 4.555,5

1.321,1

2.684,4 2.940,3 3.193,8 3.517,7 3.922,1

4.524,5

2.699,7 2.975,3 3.250,5 3.598,2 4.029,6

4.666,1

656,8

105,8 115,0

105,8 115,0

105,8 115,0

700,9 14,9

747,9 14,9

798,1 14,9

2020 860,0 1.150,0 200,0 77,1 231,8 693,7

105,8 115,0

615,5

3,0 10,0

2010 860,0 971,0 200,0

GWh 2012 2014 2016 2018 860,0 860,0 860,0 860,0 1.150,0 1.150,0 1.150,0 1.150,0 200,0 200,0 200,0 200,0 77,1 77,1 77,1 77,1 231,8 200,0 400,0 600,0

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

4. Analysis of Implementation RES Target

4. ANALYSIS OF IMPLEMENTATION RES TARGET 4.1. Planned RES and RES target

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

4. Analysis of Implementation RES Target

4.1. Planned RES and RES target (cont.)

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

4. Analysis of Implementation RES Target

4.2. Influence of RES Projects on Electrical Energy Price

4.3. Energy Efficiency Measures

National EE Action Plan 2010-2012 Obligations under the Energy Community Treaty National EE target is 9 % reduction of FEC until 2018 RES target (GWh) = RES target (%) × GFEC (GWh) Montenegro : Increase EE of 1 GWh decreases RES target for 0.3 GWh!

% RES =

Total energy produced form RES = GFEC

RESele + RESth + REStra GFEC

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

4. Analysis of Implementation RES Target

Directive 2006/32 of the European Parliament and of the Council on energy end-use efficiency and energy services

4.4. Potentials for RESth ƒ High potential for using solar radiation in Montenegro ƒ Number of sunny hours for most part of Montenegro is above 2000 h/year, and more than 2500 h/year on the coast ƒ Podgorica has annual sun radiation 1602 kWh/m2 ƒ Specific heat from solar-thermal collectors: - Households ~700 kWh/m2 - Turisam ~900 kWh/m2

Global sun radiation – mean daily values at monthly level (May)

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

4. Analysis of Implementation RES Target

Solar radiation

4.4. Potentials for RESth (cont.)

Sector

Units

Quantity

Forestry- 25% moisture Wood-processing industry 12% moisture Forest cultured plantations25% moisture Residuals from viticulture 25% moisture Husk from grape trees -10% moisture Husk from olive trees -10% moisture

t

Total

Energy KWh/t

Σ GWh

470,057

3,085

1,450

t

298,306

4,000

1,193

t

455,600

3,000

1,367

t

31,791

3,000

95

t

15,795

5,500

87

t

1,044

5,500

6

t

1,272,593

3,300

4,200

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

4. Analysis of Implementation RES Target

Biomass potential

5. CONCLUSIONS ƒ The new Energy Law in Montenegro implemented the new Directive 2009/28/EC of the European parliament of the Council on the promotion of the use of energy from renewable energy sources (not in transport sector) ƒ The RES target calculated by the methodology in Directive 2009/28/EC can be achieved in Montenegro ƒ The KAP destiny and HPPs projects have the big influence on the increasing electrical energy price due to RES projects ƒ Montenegro has a high potential for utilization of renewable energy sources

ƒ The heat production from renewable energy sources (RESth) has the great potential in Montenegro and decrease the RESele target ƒ The RES potentials in Montenegro can be used for joint RES projects

Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010

5. Conclusions

ƒ The energy efficiency measures influence on RES target

Igor Kovačević Ministry of Economy Energy Sector +38269617790; +38220482136 [email protected] www.oie-cg.me Investing in Energy Efficiency and Renewable Energy in the Energy Community – Conference Hofburg Congress Center, 18 March 2010