Panel: Country Readiness for Energy Transition
Moderators
Abstract
Strategic energy and climate policies of the EU are contained in the EU Green Deal plan. For non-member states of Southeast Europe (SEE) the EU is preparing the EU Green Agenda for the Western Balkans (WB). However, many of the WB countries and some of the EU member states of the SEE region have energy strategies which are not fully based on decarbonization pathways. Hence, the issue to be explored is which opportunities and challenges green transformation presents to the SEE region? This panel will focus on discussing readiness for energy transition of several SEE countries, taking into account different starting positions and specifics of their power sectors. Key elements in NECPs, especially regarding deployment of RES and Coal Phase Out aspects, will be in the focus of discussion.
Speakers
What if one country decides to continue with coal power and other starts transition to renewables? Due to lower variable costs, renewables mostly win in merit order, or if coal plays must take, coal looses money. When certain threshold penetration is reached, coal cannot cover OPEX and shuts down. Game theory allows for option that both countries choose coal power, since collusion is possible, but since in Southeast Europe some countries are EU members, they are obliged to choose renewables, so that option is actually not available. If both choose renewables, they will be in level playing field. Option to use hydro proceeds to subsidise coal, as most countries in region do, is obvious destruction of value, so taxation and market rules should be modified to discourage it. Even if it is not, renewables will push coal into not covering OPEX.
The role of hydrogen in the future energy system is crucial both in terms of climate neutrality goals set by the European Green Deal 2050 strategy, but also in terms of security of supply. Hydrogen economy can considerably contribute to socio-economic growth, boosting economies and employment, especially in South East Europe. On one hand blue hydrogen can find wide applications in thermal power, industrial and transport sector supporting the inherent fluctuation of renewable power and enhancing the efficiency and flexibility of the energy system. Green hydrogen can help balancing the electricity demand and supply during over supply of renewable electricity. Its use can be broadened from thermal power meeting low demand periods to conversion into fuels and chemicals decarbonising hard to bate sectors. The well established European gas grid infrastructure could accelerate the transition to EU hydrogen economy, transporting the energy carrier in different countries, regions and allow its use in wide range of centralised and decentralised applications and industrial to household consumers.
The recent context-changing developments are in favor of the country taking determined and accelerated steps on the decarbonization pathway. Namely, it is the first contracting party of the Energy Community which adopted an Energy Strategy based on the five pillars of the EU Energy Union depicting three scenarios - Reference, Moderate Transition and Green which reflect different dynamics of energy transition and enable flexibility into Macedonian response to relevant EU policies and governance for modern, competitive and climate-neutral economy by 2050. Capitalizing on the domestic analytical capacities, participatory practice, experience, tools and knowledge base that have been created even before, and maintained and enhanced over the Energy Strategy timeline, the National Energy and Climate Plan is in final phase of preparation. The analyses of the mitigation potential have shown that in 2030, with 47 policies and measures (32 in energy sector, 11 in agriculture, forestry and land use change and 4 in the waste sector) the greenhouse gas emissions can be reduced for 82% compared to 1990 levels. Furthermore, these measures predominantly are with negative costs (win-win) meaning that over 20-year period, the decarbonization scenario is cheaper than the fossil fuel based scenario. In addition, given the almost depleted reserves of domestic lignite and the oil and gas import, it seems that there is no other option, but it is a matter of time when meeting the energy needs could be realized only with renewable energy sources combined with intensive energy efficiency – meaning phase out of coal and gas only for industry and combined heat and power plants in the cities. Sector coupling – electrification of heat and transport sectors, also plays a considerable role in the decarbonization pathway.
“Country Readiness for Energy Transition – trends in Serbia”.
Nikola Rajaković, Foundation SDEWES – Belgrade, Serbia
Just in the immediate neighborhood of European Union (EU), Western Balkan
(WB) countries are lagging behind in the energy transition regardless
technological advances and policy instruments available. EU recently
created a momentum for the energy transition acceleration with the
European Green Deal, which is forwarded to the WB through the Energy
Community secretariat and in general, the response in the form of National
Energy and Climate Plans (NECPs) is expected in the short to midterm.
Recently presented the new Republic of Serbia’s Low Carbon Development
Strategy with Action plan (LEDS) will be analyzed, commented and
improvements suggested for the acceleration of the energy transition,
based on the newest findings from the simulation-based optimization
techniques using the sectors coupling approach. Furthermore, integrated
assessment modeling (IAM) techniques, exploring the climate and energy
cross impacts with the more details will be included. The purpose of the
research is to provide the decision makers in the WB with the best
available insights regarding sustainable energy systems, and citizens of
the WB with better chance to benefit from adoption of these strategies in
transition.
Montenegro as one of the candidate for EU membership is a country fully dedicated to achieve ambitious plans of EU related with decarbonization and increasing of RES and EE in most of its sectors. As a small Mediterranean country with dominant service and tourism sector, consumption of energy is highly unsteady. On the other hand most of energy production lies on hydro power plants and recently with wind and solar based energy sources, which determinate our energy sector as quite unstable in terms of balancing between production and consumption side. It would be very challenging in the recent future how to project and achieve this demanding balance between two highly unsteady sides in energy sector. As one of the problems we currently have are strong dependence on energy import, low efficiency in energy production and use, and high percentage of use of fossil fuels as a primary energy. Montenegro has a large hydropower potential which is exploited less than 30%, BUT still with a significant share in the production of electric energy. In the future special attention will be given to integration of variable renewable energy sources (RES) like wind and solar energy. Some very first case analysis shows that pathway toward the 100 % of renewable energy system is possible with careful implementation of additional energy efficiency measures, appropriate energy storage systems, synergies between energy and transportation sectors and good balancing through demand response.
