EU Directives, Energy Development Plan and use of Structural Funds in Estonia.

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1 EU Directives, Energy Development Plan and use of Structural Funds in Estonia. Aare Vabamägi Regional Energy Centres, Estonia Banská Bystrica

2 General information about Estonia Population 1,4 million Area km² Capital: Tallinn Inflation about 3.5% in 2005 Final electricity consumption 5,89 TWh in 2004 Final heat consumption 8,86 TWh in 2004 Degree days ca 4000

3 Fuel Consumption for Power Production Puidujäätmed / Wood waste 0,01% Turvas / Peat 0,15% Põlevkiviõli / Shale oil 0,40% Diislikütus / Diesel 0,01% Maagaas / Natural gas 2,12% Muud (põlevkivi- ja biogaas, must leelis) / Other (Shale oil gas and biogas, black liquor) 2,14% Põlevkivi / Oil shale 95,17%

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5 Fuels used in Heat Only Boiler Houses Põlevkiviõli / Shale oil 13,1% Muu kütus / Other fuels 1,3% Kerge kütteõli / Light fuels 5,4% Raske kütteõli / Heavy fuels 1,7% Kivisüsi / Coke 1,3% Turvas ja biokütused / Peat and biofuels 32,3% Põlevkivi / Oil shale 0,3% Maagaas / Natural gas 40%

6 Indicative target Estonian government agreed on an indicative target of 5.1% penetration of renewable electricity in 2010 from domestic consumption in Estonia. This means GWh electricity and ca 10 MEUR support for green electricity purchase contribution.

7 2001/77/EC on the Promotion of Electricity Produced from Renewable Energy Sources in the Internal Electricity Market a a Primary energy supply (PJ) 189 <200 Oil shale consumption (mln t) 13, Proportion of renewables in primary energy supplies (%) 10, Proportion of renewables in electricity production (%) 0,1 5,1 Final consumption of electric energy (TWh) 5,4 6,5 8,0 Required net capacity of power stations (MW) Proportion of combined production in electricity production (%) Maximum base load of Estonian power system (MW) Rate of electricity market openness (%) Heat consumption (TWh) 8,5 8 Proportion of combined production in heat production (%) Environmental pollution caused by SO 2 (% of the permitted level by 2008) Environmental pollution caused by CO 2 (% of the permitted level by 2008)

8 Wind Installed wind turbines -18 ones with capacity ca 30 MW Potential is high. To achieve 5,1 % from electricity consumption to 2010 is needed additional wind power production capacity MW. Investment for turbines and grid connections 175 MEUR, regulation capacity ca 80 MW gas turbines ca 40 MEUR, modernization of regulators in Narva PP 11 MEUR.

9 Hydro Hydro stations 28 ones with capacity 3,7 MW Potential - additional 5 MW capacity Production in GWh annually, share from total Estonian consumption 0,5-0,7%. Investment need 12,5 MEUR

10 Political problem In border river Narva with Russia standing hydro power station. Political agreement would give us 41 MW capacity means ca 200 GWh annually, and share 2,8-3,3% from Estonian consumption in Additional benefit would be the wind turbines compensation capacity.

11 Tahkuna 150kW 2006 Rõuste 4 x 2000kW Hiiumaa Kotka 160kW Pakri 8x2,4 MW Joaveski 300kW Linnamäe 1126kW Peenra 250kW Kunda 200kW Kunda-Silla 330kW Harjumaa Tammiku 50kW Vetla 110kW Raplamaa Järvamaa Läänemaa Lääne-Virumaa Ida-Virumaa Koseveski 40kW Tudulinna 150kW Virtsu 3x600kW Pärnumaa Väike-Kamari 200kW Jõgevamaa Saesaare 240kW Saaremaa Viljandimaa Hellenurme 40kW Tartumaa Leevaku 210kW Peenra 250kW Kaarli 3kW Tõrve 92kW Valgamaa Põlvamaa Räpina 75kW Võrumaa Leevi 250kW Hüdroenergia Lauküla 50kW Oruveski 18kW Tuuleenergia Kakkoveski 20kW Saarlasõ 30kW

12 2004/8/EC on the Promotion of Cogeneration based on a useful Heat Demand in the Internal Energy Market Changes in Estonian Electricity Market Act in accordance with EU Directive are prepared and sent to the government.

13 Forest Area covered with forest 2,25 milj. ha (51,5%) and forest resource 462 milj. m 3. Ownership: State forest 37% Private forest 37% Under privatisation 25% Other owners 1%

14 Wood based CHP Potential for additional heat production ca 830 GWh and electricity 164 GWh. Potential - additional 31 MW electrical capacity. In 2010 share from total Estonian consumption 2,2-2,7%. Investment need 57 MEUR.

15 Biogas CHP Today 6-7 GWh electricity annually. Potential - additional 3 MW capacity Production in GWh annually, share from total Estonian consumption 0,3-0,4%. Investment need 10 MEUR.

16 2002/91/EC on the Energy Performance of Buildings. Transition period to implement following articles in to Estonian legislation Art 7 Energy labeling Art 8 Boilers Art 9 - Air conditioning 2007 Changes in legislation are under preparation.

17 ESTONIAN NATIONAL DEVELOPMENT PLAN FOR THE IMPLEMENTATION OF THE EU STRUCTURAL FUNDS SINGLE PROGRAMMING DOCUMENT Measure 4.2: Development of Environmental Infrastructure (ERDF) Measure 4.6: Local Socio-Economic Development (ERDF)

18 Measure 4.2: Development of Environmental Infrastructure (ERDF) The specific objectives of the measure are: Reducing the environmental impact of the energy sector, improving efficiency and increasing the share of renewable energy; The main problems in the Estonian energy sector are related to high spatial concentration of the electric power production and the considerable environmental burden caused by it.

19 Measure 4.2: Development of Environmental Infrastructure (ERDF) Eligible Operations: Renewable Energy Introducing renewable energy, emphasis is on increasing the share of electric power produced from renewable sources. This measure fosters the use of renewable energy sources like biomass, wind and small hydro, which gives rise to decentralization of the electric power production and reduces the use of fossil fuel sources that helps to save the environment.

20 Measure 4.2: Development of Environmental Infrastructure (ERDF) Biomass activities are of special importance for Estonia due to its significant forest potential and due to the fact that 25% of agricultural land is unused in this country. EIC Environmental Information Centre Projects financed 2,1 MEUR.

21 Measure 4.6: Local Socio- Economic Development (ERDF) The specific objectives of the measure are: improving the availability and quality of public services (mainly concerning basic education, district heating) increasing the economic efficiency of local public infrastructure

22 Measure 4.6: Local Socio- Economic Development (ERDF) Eligible Operations The measure will support following operations: Education and social infrastructure for employment: investments for developing comprehensive schools and kindergartens; Municipal technical infrastructure: investments into boiler plants/houses, district heating networks, street lightning systems. Enterprise Estonia - Projects financed 19 MEUR

23 Estonian Housing Stock dwellings, floor in 1000 m² Dwellings per inhabitants 464 Average floor area per inhabitant in m² 28 Expected space heat consumption ca 1,5 TWh multi-apartment buildings ~ % of population are living in the multi-apartment buildings

24 New residential buildings Floor area, m²

25 Major problems related to apartment buildings According to Estonian Housing Development Plan for Technical problems: Structural defaults Water-supply, heating and electrical system defaults Poor energy-performance 2. Social problems: Owners responsibility - rights and obligations Different household incomes Different cultural background

26 Financial mechanisms for reconstruction of apartment buildings - Credit and Export Guarantee Fund KredEx. Purpose: to preserve the existing housing stock Description of activity: The state supports the reconstruction of the main structures of pre-1990 apartment buildings and work to restore the electrical and gas system 10% of the cost Conducting technical inspections (energy audit, project) 50% of the cost

27 Grants for multi-apartment buildings Grants for reconstruction 2003.a. 12 mil EEK ( euro) 2004.a. 16,4 mil EEK (~1 mio euro) 2005.a. 21 mil EEK (~1,3 mio euro) Grants for technical Grants for technical inspection a. 1 mil EEK ( euro) a. 2,4 mil EEK ( euro) a. 2 mil EEK ( euro) REC AUDIT

28 Loan guarantee for multi-apartment buildings Target group: apartment associations, apartment cooperatives, community of apartment owners (represented by manager) Purpose: building renovation Amount of guarantee: 75% of the loan amount proportionally until the end of the loan period. KredEx can take over loan payments for up to 12 months Guarantee fee: % a year on the amount of the guarantee

29 Loan for renovation Interest: from 3,8% per year Term of a loan up to 10 years. Repayment of a loan monthly. Self-financing from 0%. Loan is given against cash flow. Now collateral is needed. If needed bank is using guarantee of KredEx. For community of apartment owners guarantee is obligatory.

30 Average loan amount (th. euro) 50,0 49,8 45,0 40,0 35,2 35,0 30,0 25,0 25,0 20,7 20,0 15,0 14,0 10,0 5,0 0, (8 months)

31 How is it going for the buildings, which have taken the loan? Energy audits are showing that approximately 20% saving from heating costs is accomplishable Renovated walls and roof are significant factor for apartment market value; With repayments have so far now problems; Associations are coming to the bank to ask new loan amount it shows that taking a loan is positive experience.

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