New direction in energy and climate change Conference of the Federal Environmental Ministry Berlin, 13-14 February 2004 Poland s strategy and Poland s market for Renewable Energy Sources Grzegorz Wisniewski EC Baltic Renewable Energy Centre EC BREC www.ecbrec.pl
Plan of this Presentation Status Poland in comparison to EU and ACC-10 Strategies and programmes Market Law Institutions Summary
Utilisation of renewable energy sources in 2002 Source Capacity (MW) Electricity Production (GWh) Heat production (TJ) Total energy production (TJ) Contribution to total energy production Biomass ~6500 310 102056 103173 92.0 Solar 17-37 37 0.0 Geothermal + heat pumps 89-526 526 0.5 Wind 29 60-216 0.2 Hydro (small plants 524 (185) 2276 (698) - 8192 (2511) 7.3 (2.2) <5 MW) Total ~7100 2646 102619 112146 100.0 *Biomass 98% of total production of renewable energy (large hydro-electric power plants not included)
Utilisation of Renewable Energy Sources in 2002 7,3% 0,5% 0,2% 92,0% Biomass Hydro Geothermal Wind
Accession Geography Cyprus Czech Republic Estonia Hungary Latvia Lithuania Malta Poland Slovakia Slovenia
Contribution of RES to Prim ary Energy Consumption in 2001 [%] Country Czech Republic RENEWABLE ENERGY (INCL. LARGE HYDRO) 1.5 BIOMASS 0.9 Estonia Hungary Latvia Lithuania Poland Slovakia Slovenia 11 1.6 36 8.4 4.5 3.8 12 11 1.5 30 8 4.1 1.5 7 REGION 7 5 Source: IEA 2003 Due to the lack of statistical research into the consumption of biomass by small users (over 80% of the total consumption of biomass) estimated contribution of primary energy from RES may be very different from the actual level.
RES Consumption Structure in ACC, 2001, [PJ] 120 100 PJ 80 60 40 Hydro Hydro Solar Geothermal Wind Biomass 20 0 Cyprus Czech Republic Estonia Hungary Latvia Lithuania Malta Poland Slovakia Slovenia Source: Reiche D, 2003, Handbook of Renewable Energies in the European Union II
Policy & legaldrivers forres Country RES targets (primary energy) RES-E targets 2010 Biofuel Act or national programme Environmenta l funds Feed-in tariff Cyprus 9% 2010 6%? Czech Republic 4% 2010 7% 2030 8% National Program Estonia - 5,1% Hungary 7,2 % 2010 3,6%? Latvia 12% 2010 49,3% Lithuania - 7% National Program Malta - 5%? Poland 7% 2010 14% 2020 7,5% Act quota targets Quota obligation Slovakia 4% 2005 31%? Slovenia 12% 2010 33,6%
Targets ofthe Development Strategy of Renewable Energy Sector 2001 Strategic target in 2020 14% in primary energy balance Strategic target in 2010 7,5% in primary energy balance Necessary investments in years 2000-2010: 14,5-19,1 mld zł Average yearly share of public funds in RES investments : 230 310 mln zł/yer (15,7-16,4 % total RES investment) Share of RES-E in the electrcity consumption 7,5-9,0-12,5%
Generation ofenergy from RES in Development Strategy of Renewable Energy Sources Total production of energy in 2010, TJ Solar water collectors Solar air collectors Geothermal heating plants Bioethanol Rape oil methyl esters Independent biomass-fired boilers Automatic straw-fired heating plants Automatic wood-fired heating plants Wood-fired combined heat and power plants Landfill gas Farm biogas plants Town biogas plants Photovoltaic systems Small hydro-electric power plants Wind power plants 0 10000 20000 30000 40000 50000 60000 70000 80000
Structure of CapacityIncrease in RES in Poland by 2010 in MW, Development Strategy forrenewable Energy Sources Geothermal heating plants Wood CHP Small biomass boilers Straw-fired heating plants Wood-fired heating plants Solar woter collectors Solar collectors Landfill gas Agricultural biogas plants Municipal biogas plants Photovoltaic systems Small hydropower plants Wind power plants 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 [MW]
80 70 60 50 40 30 20 10 0 Structure ofcapacity Increase in Renewable Energy Sources in Poland and EU by 2010 Additional capacity in Poland, 2000-2010, % Additional capacity in EU in 1998-2010, % Small hydro Wind power plants Photovoltaics Biogas plants Solar collectors Biomass-fired boilers Biomass-fired CHP s Geothermal heating plants
ActualCapacity Increase of Renewable Energy Sources from 1999 Kind of installation Capacity in MW in 1999 Capacity in MW in 2002 Capacity increase in MW Growth rate in %/year Wood-fired heating plants 350 450 100 8.7 Straw-fired heating plants 13 92 79 92.0 Biomass-fired boilers 7 23 16 48.7 Town biogas plants 38.9 61.5 22.6 16.5 Landfill gas plants 9 15.4 6.4 19.6 Solar collectors 6.5 17 10.5 37.8 Geothermal energy 26.8 55.75 28.9 27.6 Wind energy 4 28.5 24.5 92.4 Small hydro-electric plants 156 184.9 28.9 5.8 Total 611.2 928.05 316.8 Average: 15 Capacity increase in wood-fired installations at small consumers and in industry is unknown.
Share of RES in electricity production in Poland in 2010 ac. SAFIR E m odel,ec BR E C 2001 RES Scenario 7,5% Environment Scenario 12,5 % other wind 33 % 0% other 0% biomass 39% wind 49% biomass 60% biogas 4% hydro 3 % biogas 7% hydro 5%
Current Utilisation of Renewable Energy Sources inpoland Source Production of energy from renewable sources PJ % of potential Biomass 107 12% Hydro (small hydro-electric plants) 2 5% Geothermal energy 0.2 0.1% Wind energy 0.05 0.1% Solar radiation 0.03 0.002% Total 109 4.3% Contribution to primary energy balance 2.75%
Market 1: Prices of Green Electricity in 2002,(PLN/MW h) 250 200 150 100 50 0 Biogas Biomass Hydro-electric plants Small hydro Wind Average price for RES Average price in generation sector
Market 2: Bioenergy develop m entin Poland - shortand m e dium term problem s CO-FIRING (biomass+coal), large power plants, industry BIOMASS DISTRICT HEATING (municipalities) CHP (small and medium scale, industry, municipalities) TRANSPORT (biodiesel, bioethanol) Problem: development of solid biofuels market BIOGAS (from agriculture) BIOMASS GASIFICATION Problem: market maturity of technologies
Market-3 co-firing(1) Quantitative Goals and OrganisationalProblems Accession Treaty an indicative goal for Poland (7.5%) Governemnt apprach - 4% of green electricity from biomass co-firing in 2010. 4% of green electricity from biomass = 65 PJ of chemical energy of biomass = 10-12 million m 3 of fuel (fresh) wood should be logged 27-33 million cubic meters (loose).
Market 4:biomass co-firing (2) Quantitative Goals and Organisational Problems Continued Biomas from sustainable forestry sector - maximum 4 million m 3 of wood for energy purposes. Present logging of wood by State Forests for energy purposes - approximately 2.5 million m 3( an additional volume somewhat in the region of 1.5 million m 3 can be logged) The missing 8.5-10.5 million m 3 should therefore come from energy crops (an area of land area necessary for producing such a large volume of wood is ca. 300 thousand hectares) or from import? Problems: Will the creation of a sufficient biomass market be successful? Will allocation of land for energy crops be successful? Will the price of produced green energy not be too high in view of the current demand for biofuels?
Bioenergy m arket 5: Opportunities for energy crops in Poland and A C C 120 Fuel import dependancy, % of all fuels 100 80 60 40 20 0 Ma lta Cyprus Slovakia Slovenia Hungary La tvia Lithuania Estonia Czech Republik Poland - 1,00 2,00 3,00 4,00 5,00 6,00 7,00 8,00 9,00 10,00 Agricultural area per capita, ha
Market 6: Wind Power - Short-and Middle-Term Possibilities and Problems to be Resolved On-shore wind power (60 MW 2003) benefits for local governments Off-shore wind power stepwise increase in the production of green energy Problems! Environmental impact and social acceptance social image Influence on power system forecasting and balancing Reduction in import of plant and involvement of national industry
Overcoming Barriers to Development of RES in Poland Market stimulation by subsidies and legal instruments VICIOUS CIRCLE OF RENEWABLE TECHNOLOGY SMALL SCALE OF PRODUCTION HIGH COSTS Area of cooperation with industry and scientific centres R&D of renewable technologies Area of cooperation with local governments in implementation of projects
Financing: Available External Funds fordevelopment of RES in Poland Estimated External Public Aid to Renewable Energy Sources in Poland in 2003-2006 (EUR m) Bilateral funds 180 160 140 120 100 80 60 40 20 0 2002 2003 2004 2005 2006 Year Environmental swap of Polish debt Flexibility mechanisms of Kyoto Protocol Global Environmental Facility (GEF) EU structural and cohesion funds EU 6th Framework Programme for R&D EU Energy Programme Intelligent Energy for Europe SAPARD pre-accession programme PHARE assistance programme Based on estimates ofthe EC BalticRenewable Energy Centre.
Government Activities 2002-2003 to Provide Legal Supportof Development of RES Minister of Environment appointed the Inter-Departmental Group for Implementation of Development Strategy for Renewable Energy Sources Ministry of Environment drafted the government s Wind Energy Development Programme for Poland Ministry of Economy in negotiations on Directive 2001/77/EC with the European Commission the Polish government adopted an indicative quantitative goal concerning green electricity for Poland for 2010 (7.5 %) Ministry of Economy updated the Energy Law and ordinance on obligation to purchase green energy and started work on certification of green energy Minister of Environment recognised renewable energy as one of 10 priorities of the Ministry Ministry of Environment started work on the Renewable Energy Sources Development Act Ministry of Agriculture developed and Polish Parliament passed the Biofuel Market Organisation Act. Council of Ministers issued the ordinance concerning minimum quantity bio-components in 2004 Ministry of Economy draft update of Energy Law - certification of orygine introduction
Grounds for Com m encementofw ork on Drafting of the RES Act Regulation process of renewable energy sources in EU: White Paper ( 97), directive 2001/77/EC ( 2001), directive 2003/30/EC ( 2003), draft directive on green heat agreement with European Commission on implementation plan for directive 2001/77/EC in Poland undertaking of Office for European Integration Committee to develop government draft of act on renewable energy sources tardy development of renewable energy sources in Poland
Underlying Ideas ofdraft Act on Supportof DevelopmentofRenewable Energy Sources
Institutional Structure Local governments Power companies Agricultural sector Independent investors and energy suppliers Industry / plant manufacturers Scientific circles Associations and NGO s Polish government Polish parliament
Summary Renewable resources are sufficient (large in the scale of members of EU-25). Political goals are ambitious but a gap between political and legal documents exists (implementation programmes missing). The pace of development of the sector is slower than expected. Support systems are incoherent and unstable. Coherent long-term vision of the development of the sector and adequate support mechanisms are necessary in order to create a renewable energy market. In RES, big does not always mean better or cheaper. In the sector, it is not the economy of scale but rather a plant mass production effect which works (dispersed resources and eco-development) Poland will benefit from accession to the EU if it has a strategy, implementation plans and programmes coinciding with EU s policy but recognising strong points of RES in Poland.
Further information: Thank you for your attention EC Baltic Renewable Energy Centre EC BREC Contact: EC BREC/IBMER Rakowiecka 32, 02-532 Warszawa tel/fax (+48 22) 848 48 32, 646 68 50, 646 68 54 e-mail: ecbrec@ibmer.waw.pl Internet: http://www.ecbrec.pl