Transcript Rules of the game - lansstyrelsen.se

Rules of the game
National, EU and global regulations, and
their possible effects on the wood energy
and district heating sector.
Daniel Friberg
Swedish Energy Agency
Wood Energy and Cleantech,
Linköping, 24 August 2011
Purpose and scope of presentation
• Overview of the Swedish district heating market.
• How district heating and woodfuels are affected by:
- Political goals, directives and policy instruments.
Energy usage in the residential sectors, TWh
50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Oil
District heating
Electrical heating
Biomass
Gas
Pellets to the housing market
Source: SCB and Swedish Energy Agency
•
•
•
Oil usage is down with 90 per cent since 1990
Electricity used for heating is down with 30 per cent since 1990
District heating is up with 40 per cent!
Actual commercial energy prices in Sweden (taxes included) 1970–2010,
öre/kWh
180.0
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
Oil
Coal
Wood chips
Electric heating (domestic)
Gas, residential
District heating
Source: SCB and Swedish Energy Agency
•
Electricity prices have doubled in 10 years!
•
Wood chips have almost doubled in 10 years.
•
District heating prices increasing more sharply since 1996 (deregulation)
Usage of district heating, TWh
60
50
40
30
20
10
Industry
Residential, service etc
Losses
Source: SCB and Swedish Energy Agency
•
Usage primarily in the housing sector
•
Share of losses has diminished from around 19 per cent in the 1980s to
around 11-12 per cent today.
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
1979
1978
1977
1976
1975
1974
1973
1972
1971
1970
0
Share of renewable energy increasing in district heating, TWh
60
50
40
30
20
10
Oil
Natural gas, including LPG
Coal, including coke oven gas, b-f gas
Biomass,refuse, waste, peat etc,
Electric boilers
Heat pumps
Waste heat
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
1979
1978
1977
1976
1975
1974
1973
1972
1971
1970
0
Source: SCB and Swedish Energy Agency
• Year 1980 oil = 90 percent of district heating production , year 2009 oil = 4 percent!
• Year 2009 biomass, refuse, peat and waste heat = 66 percent. (2010 = 73 percent)
• Electricity consumption in the district heating sector is declining
Wood fuels and refuse on the increase
• 2009 wood fuels = 55 procent!
• Refuse (Waste) = 22 procent!
Policy measures and incentives behind the development
Energy taxation the most important - Energy, CO2 and SOx
•
Introduction of CO2 tax in 1991
•
Major tax increases on fossil fuels (heating, motor fuels)
•
Increased energy tax rates, but focus on gradually increased CO2 tax rate
•
Two levels of taxation for heating fuels, per ton CO2
–
high for households and service (24 € in 1991; 113 € in 2011)
–
low for industry, forestry and CHP (in 1991: 6 €; in 2011: 34 € outside EU
ETS, 0/ 8 € within EU ETS)
Housholds and services
CO2
Energy tax
Industry, agriculture, forestry
CHP Heat
Heat only
CO2
Energy tax
CO2
Energy Tax
CO2
Energy Tax
EU-ETS 2010
-
-
15% * 105 öre/kg
0 öre/kg
15% * 105 öre/kg
1-8 öre/kWh
94%*105 öre/kg 1-8 öre/kWh
EU-ETS 2011
-
-
0 öre/kWh
2,4 öre/kWh
7% * 105 öre/kg
2,4 öre/kWh
94%*105 öre/kg 8 öre/ kWh
EU-ETS 2015
-
-
0 öre/kg
2,4 öre/kWh
7% * 105 öre/kg
2,4 öre/kWh
94%*105 öre/kg 8 öre/ kWh
Outside EU-ETS 2010 105 öre/kg 1-8 öre/kWh 21% * 105 öre/kg
0 öre/kWh
-
-
-
-
Outside EU-ETS 2011 105 öre/kg 8 öre/kWh
30% * 105 öre/kg
2,4 öre/kWh
-
-
-
-
Outside EU-ETS 2015 105 öre/kg 8 öre/ kWh
60% * 105 öre/kg
2,4 öre/kWh
-
-
-
-
Source: Proposition 2009/10:41
…EU-ETS - European Emission Trading Scheme (Cap and trade, 2009/29/EC)
Purpose of reducing green house gas emissions (in synch with Kyoto/UN)
Ca. 730 Swedish facilities within energy and industry
Ca. 13 000 facilities on EU-level = 40 % CO2 emissions
Most DH-production in Sweden included
•
2005-2007
•
2008-2012
•
2013-2020
Majority of emission allowences allocated for free
- National allocation plans are replaced by EU-wide allocations: Emission reductions (within EUETS) with 21 percent by year 2020 compared to 2005
- Electricity production have to buy emission rights (mainly by auction)
- Heat and industry allocated free allowences (specifics under discussion)
- Product benchmarking for most installations
- Allowances decreasing from 80% yearly to 30% of product benchmark by 2020
- Carbon leakage get 100% allowances based on product benchmark until International
agreement
Source: Swedish Energy Agency and Swedish Environmental Protection Agency
…The Electric Certificate System 2003-2035
•
a market-based system to support the expansion of electricity production in
Sweden from renewable energy sources and peat.
•
Increase by 25 TWh “green” electricity by 2020 (relative to 6,5 TWh 2002)
•
Current level (2010)18TWh
•
Entitled: Wind, Solar, Geothermal, Wave, Bio, Peat, small scale hydro
Quotas to be fulfilled by electricity suppliers
25
15
10
5
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Percent
20
Source: Swedish Energy Agency
Political goals and directives
EU strategy for climate and energy 2020: 20-20-20
• 20 % increase in energy efficiency (compared to projections)
• 20 % less green house gas emissions (compared to 1990)
• 20 % renewable energy
Source: http://ec.europa.eu/europe2020/targets/eu-targets/index_en.htm
Renewable Energy Directive - RED (2009/28/EC)
– EU target, 20% renewable energy in 2020
• 20% renewable energy of the total final energy consumption
• 10% renewable energy of the total final energy consumption in the transport
sector
Member states have different binding targets
Binding target
2020
Current level
(2008)
Sweden
49%
44,4%
Latvia
40%
29.9%
Estonia
25%
19.1%
EU (27)
20%
10.3%
Source: Eurostat
The RED 2020 target for Sweden is 50% (49%)
How do we reach
the target?
Business as
usual!
•
The increase since 1990 is largely due to increased usage of
biomass for heat and electricity production.
•
Increased usage of heat pumps is another factor.
…and more directives
•
Energy performance of buildings directive (2010/31/EU)
Energy efficient buildings – less demand for DH (and electricity)
•
Ecodesign directive (2009/125/EC)
More efficient products – less demand for electricity (ca. 2 TWh in Sweden)
•
Cogeneration (CHP) (2004/8/EC)
Promotion of high-efficient cogeneration – More efficient use of primary energy
•
Proposal - Merging of Energy of services directive (2006/32) and CHP directive
Turning power plants (combustion installations) in to CHP-plants - Increased supply of DH on EUlevel (in Sweden very little effect)
•
Proposal – New directive for the taxation of energy products and electricity (2003/96/EC)
No CO2 tax within the EU-ETS? – removed CO2 tax on DH? Swedish position?
Development of the EU energy- and environmental policies
•
Renewable Directive (RED)
- Sustainability criteria for biofuels for transportation – already in progress
- Sustainability criteria for solid biofuels – a recommendation is already presented
Purpose?
•
Reduction of greenhouse gas emissions
– 35% by time of introduction (60% 2018)
•
Protection of high biodiversity areas
– Natural forests (Primary forest and other wooded land)
– Protected areas (Reserves etc.)
– Grasslands (Natural and non natural)
•
Effects on woodenergy?
(could have big effect)
Protection of high carbon stock areas
– Wetlands
– Peatlands
– Continuously forested areas
Swedish response to criteria for solid biofuels: ”Sustainability criteria for biomass should be set
nationally, rather than being EU-wide.” (Supported by the Baltic States, Finland, Slovenia, Austria)
Some further explanations to the development concerning biofuels
and renewables:
Large Forest Industry
•
Continuous supply of domestic biofuels, logistical benefits etc. (forest residues)
•
Large potentials
Incentives for Combined Heat and Power production (CHP)
•
the Electric Certificate system
•
High electricity prices
•
Favourable taxation
35 new plants planned 2009-2015
Source: Fjärrvärmen 2015, branschprognos
Availability of district heating networks
•
District heating is highly versatile in using different fuels
•
Prerequisite for producing heat in CHP production
Other international aspects affecting the market
•
Price development of fossil fuels (peak oil?)
•
Price development of electricity (EU-ETS, input fuels etc.)
•
International agreements about environment and emissions – e.g.
Kyoto
•
Increased biomass trade
•
Energy crises etc.
Challenges and opportunities
District heating market
•
A market with low profitability and increasing prices
•
Decreasing demand prognosis by ca 10-13 TWh 2007-2025 in houses with DH 2007 (Energy
Performance of Buildings Directive, heat pumps, climate). - Svensk fjärrvärme Rapport 2009:21
- A decreasing heat demand can negatively affect the electricity production and hence
supply (CHP)
TPA (Third Party Access)
•
Increased competition between DH-actors
•
Increased possibility of marketing bio/renewable-DH (wood energy demand)
•
Increased DH-prices?
•
Effects on investments in DH?
•
Waste heat instead of biofuel/wood energy?
Wood fuels
•
Wood vs. Refuse/Waste
•
Increased wood energy prices due to increased bio fuel demand
District Cooling
•
Increasing market
Thanks for Your Attention
Email: [email protected]
Swedish Energy Agency
Eskilstuna, Sweden
http://www.energimyndigheten.se