REGIONAL INTEGRATION OF ENERGY NETWORKS IN THE BALKAN AREA. Gas & Power Business Forum 2012 Sofia, May 11, 2012

Transcription

1 REGIONAL INTEGRATION OF ENERGY NETWORKS IN THE BALKAN AREA by Dimitrios Kardomateas Division Director, Strategy, Development & Regulation, DESFA S.A. Member of the Board of ENTSOG Member of the Board of GIE Gas & Power Business Forum 2012 Sofia, May 11, 2012

2 THE FUTURE ENERGY PICTURE NECESSITY FOR ENERGY INTERCONNECTIONS ENERGY INTERCONNECTIONS OF GREECE E.U. POLICIES TO FOSTER ENERGY INTERCONNECTIONS 2

3 FUTURE ENERGY PICTURE Electricity Generation Heating Nuclear Energy? Oil? Coal? Gas? Oil? RES? Gas? Renewables (RES)? 3

4 Nuclear Energy Fukushima accident of 2011 has proved that there are no safe standards for seismic areas Japan closed down all its nuclear power stations (54) Italy and Greece have already decided, since Chernobyl accident of 1986, to be nuclear free. Bulgaria decided recently to cancel development of further nuclear plants Aseismic States also worried on possible terrorist actions Germany closed down 8 nuclear power plants in 2011; the remaining 9 (of totally MW) will be closed down by

5 Nuclear plants in Europe 5

6 Coal EU decision to cancel CO 2 rights of the power industry from E.U. targets on CO 2 emissions + public environmental awareness will lead to gradual decrease of the share of coal/lignite. Target on CO 2 emissions: Reduction by 20% by 2020 compared to 1990 levels, on a E.U. level Bulgaria: +20%, Greece: 4% compared to 2005 levels ample breathing air for Bulgaria CO 2 emissions is a derivative index resulting from both energy consumption level and type of fuels 6

7 Oil Already largely abandoned in electricity generation due to high prices and environmental issues Remaining only in islands, under abandonment there too to be replaced by offshore electricity / gas interconnections and LNG terminals: e.g. Aegean islands interconnection plan of Greece, Canary islands gasification plan of Spain, Cyprus gasification plan, etc. Remaining also in the transportation sector efforts to develop alternative fuel vehicles 7

8 Gas Conventional energy source of choice due to environmental and adequacy advantages Worries on cost due to link with oil prices Worries on security of supply and monopolistic issues E.U. strategy to deal with these problems rather than to abandon gas 8

9 RES The source of the future, esp. aeolic, solar, biomass, geothermal (hydros already almost developed) Aeolic plants costs reasonable growth expected Photovoltaic energy still expensive needs grants Biomass projected to develop significantly in heating sector due to high oil/gas prices Main disadvantage is the discontinuity of supply E.U. Target: to increase the share of RES in gross final energy consumption to 20% by 2020 (from 9% in 2005). Target for Greece: 18% Target for Bulgaria: 16%. 9

10 Energy Conservation The invisible source E.U. target: 20 % on annual consumption of primary energy by 2020 (compared to the energy consumption forecasts for 2020). This objective corresponds to achieving approximately a 1.5 % saving per year up to Most difficult target 10

11 Energy Conservation (cont.) Policies: Energy prices reflective of costs Smart Grids initiative Encourage co generation Energy consumption labeling and specifications in all appliances Programs for energy conservation in buildings already in place in most member states Ecological transportation patterns and targets for the automobile industry 11

12 Source: DG ENER 12

13 CONCLUSIONS Energy policy in E.U. is driven by Environmental policy Long term solution for electricity generation in seismic regions (i.e. Balkans): RES + GAS Gas is necessary since RES production inherently intermittent Gas power plants & infrastructure will operate in a more peaky way Cost of electricity will rise 13

14 CONCLUSIONS (cont.) For industrial sector: ENERGY CONSERVATION + COGEN + GAS For urban heating: LOW ENERGY BUILDINGS + BIOMASS + GEOTHERMAL + GAS For transportation sector: MASS TRANSPORT + LOW ENERGY VEHICLES + ELECTRICITY + HYBRID + GAS + OIL 14

15 CONCLUSIONS (cont.) Gas will remain in the picture, although the volume trend will be downward due to substitution by RES Gas will be the back up fuel for electricity generation. Gas networks will be important for security of energy supply. The role of gas storages and LNG terminals is important Gas to gas competition is vital to stabilize prices. The role of LNG Terminals has been recognized 15

16 CONCLUSIONS (cont.) The transition to the new Energy Picture requires also massive investments in Electricity and Gas Networks and Interoperability of the networks of the member states. DG ENER estimates that over 1 trillion will need to be invested in the electricity and gas sector: 500 b in power generation (out of which in RES), 140 b in electricity transmission lines, 70 b in gas transmission lines and 400 b in electricity and gas distribution networks. The role of the State /E.U. is vital : facilitating permits, financial support of investments in infrastructure, financial support of investments in RES, security of basic regulation principles E.U. Energy Infrastructure Package 16

17 WHY ENERGY INTERCONNECTIONS? To mitigate the effect of the imbalance between aeolic & photovoltaic production and market demand in a specific member state To increase security of supply of electricity and gas in the whole region To decrease monopolistic effects in the gas supply in a member state BENEFIT TO ALL THE INTERCONNECTED STATES 17

18 ELECTRICITY INTERCONNECTIONS OF GREECE WITH EXISTING PLANNED BULGARIA Thessaloniki Blagoevrad (400kV) N. Santa Maritsa (400 kv) FYROM Thessaloniki Dubrovo (400kV) Meliti Bitola (400 kv) Kardia Elbasan (400 kv, 250 MW) ALBANIA Mourtos Bistrica (150 kv, 100 MW) TURKEY N.Santa Babaeski (400kV) ITALY Arachtos Galatina Nr.1 (HVDC 400kV, 500 MW) Arachtos Galatina Nr.2 (HVDC 400kV, 500 MW) 18

19 Electricity Interconnections in the Balkans (Source: Greek Electricity TSO, 2010) 19

20 Planned Electricity Interconnections in Balkan area (Source: UCTE, 2008) 20

21 GAS INTERCONNECTIONS OF GREECE WITH EXISTING PLANNED BULGARIA TURKEY ALBANIA/ ITALY Karperi Petrich (3,94 bcm/y) Komotini Karacabey (1,7 bcm/y) Komotini Stara Zagora (IGB) (3 5 bcm/y) Bi directional flow of Karperi Petrich ( ~1 bcm/y) Expansion to 11 bcm/y Komotini Albania Brindisi (TAP) (10 20 bcm/y) or Komotini Perdika Otranto (IGI) (8 12 bcm/y) with branch to Albania Note: Annual capacities refer to load factor 0,9 m3 refer to 0 o C and 1 atm 21

22 GAS INTERCONNECTIONS OF GREECE 22

23 REVITHOUSSA LNG TERMINAL 23

24 REVITHOUSSA LNG TERMINAL: Entrance of gas supplies from 6 producing countries 24

25 GREEK GAS IMPORT POINTS UTILIZATION IN 2011 Entry Point Technical capacity (Nm 3 /d) Actual Volume passed (Nm 3 /Y) Actual load factor/utilization rate with ref. to technical capacity Greek/Bulgarian Border ,75 Greek/Turkish Border ,67 Agia Triada (LNG Terminal) ,25 TOTAL ,49 peak market demand total market load factor with ref. to peak demand 0,67 Note: Nm 3 refer to 0 o C and 1 atm 25

26 Future Technical Capacities of Gas Entry Points of Greek Gas Network (Nm 3 /d) Entry Point Step 1 After the operation of the Existing capacities CS at N. Messimvria (expected mid. 2012) Step 2 After the 2 nd Upgrade of the LNG Terminal (expected in 2016) Step 3 After installation of CS at Kipi, upgrade of the CS at N. Messimvria and upgrade of the Turkish Network Step 4 After implementation of the transit project(s), upgrade of the CS at Kipi and upgrade of the Turkish Network Greek/Bulgarian Border Greek/Turkish Border Agia Triada (LNG Terminal) TOTAL Note: Nm 3 refers to 0 o C and 1 atm 26

27 E.C. INFRASTRUCTURE INITIATIVE To face the delays in infrastructure implementation, in view of their importance in the future energy picture, E.C. proposed, in October 2011, a new draft Regulation for the implementation of trans European energy networks ( Infrastructure Regulation ) This initiative identifies a limited number of trans European priority corridors. It then aims at implementing these priorities by: Streamlining permit granting procedures Facilitating the regulatory treatment concerning investment recovery and return Provide necessary financial support under the Connecting Europe Facility. 27

28 (Source: DG ENER) 28

29 Projects of Common Interest (PCI) Selection Process Projects by TSOs will be included in the TYNDP (prepared every 2 years) and will be evaluated through a system wide Cost Benefit Analysis (CBA). CBA methodology will be proposed by ENTSOG Project promoters will propose their projects together with their CBA The Regional Groups composed by E.C., M Ss, NRAs, TSOs, Project promoters, ACER and ENTSOG will select a preliminary list of projects These projects will have to be approved by the relevant M Ss. ACER will express its opinion Final decision on a Union wide list of PCIs will be taken by the E.C. 29

30 Pilot PCI selection process For the 1 st application of the process, in order to save time before the adoption of the Regulation text, a pilot selection process will be followed. Pilot Regional Groups were established in all regions (ad hoc Working Groups) Objective: to test the proposed PCI selection process and to prepare the first list of PCI projects for formalization once the Regulation is adopted Kick off meetings have all taken place for all regions, with the participation of M Ss, TSOs, NRAs, Agency, ENTSOG 30

31 Projects of Common Interest Selection principles Gas projects: Diversification: giving priority to diversification of sources, diversification of counterparts and diversification of routes increase in interconnection level reduction of market concentration (Source: DG ENER) 31

32 Quantifying effect on market concentration HERFINDAHL HIRSCHMAN INDEX σ i : the market share of supplier i HHI = Monopolistic market HHI> Highly concentrated 1.800<HHI<5.000 Concentrated 1.000<HHI<1.800 Adequately competitive HHI<1.000 Fully competitive 32

33 The future european energy picture cannot function properly without integration of the electricity & gas networks Balkan states have mutual benefit to interconnect and cooperate in the energy sector Europe is ready to support interconnections and facilitate them financially 33

34 Thank you for your attention! e mail: d.kardomateas@desfa.gr 34