Institutional framework and the role of sector players...
Transcript of Institutional framework and the role of sector players...
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Institutional framework and the role of sector players
(local, regional and central)
By Morten Stobbe M.Sc. Energy Planning, Head of Dept. for Renewable Energy, Copenhagen Energy
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The sector players
European Union
Central Government (ministries and agencies)
Local Government (Cities / municipalities)
Utilities, energy companies
Knowledge institutions (universities, R&D centers, etc)
Businesses
Individual household / citizens
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The Danish Energy Action plan
• CO2 reduction of 40% by 2020
• Energy consumption reduced by 12% by 2020
• 30% of energy production from RE by 2020
• 50% of electricity producion from wind turbines by 2020
• RE support schemes for wind, solar PV, biogas, etc. are
established and financed via PSO
(public service obligation)
– part of the payment from
consumers of heat and electricity is
channeled back as support)
(level: bill of 1.687 kWh ~ 500 USD, PSO 16 USD)
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… just do as Copenhagen (quote: Bill Clinton, 2011)
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….Copenhagen Carbon Neutral 2025
Copenhagen will become the first carbon
neutral capital by 2025
Reduction in Carbon emissions of 1.16m ton
Plan has been developed in close cooperation with
businesses, the citizens of Copenhagen, NGOs and knowledge
institutions.
The climate plan will be
processed at a
City of Copenhagen
City Council meeting
on August 23rd.
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Energy Consumption
Copenhagen City plan…
2025 targets
• 20 % in heat consumption
• 20 % reduction in eletricity consumption in commerce sector
• 10 % reduction in electricity consumption in households
• Installation of solar PV equivalent to 1% of electricity
consumption (280.000 m2)
Main initiaitves
• Improve framework for building and construction sector
• Energy efficient buildings
• Introduce and support solar PV
• (architecture/permits, etc.)
• Innovation and information
• Smart city / smart grid
Expectations for CE: • Wireless metering
• Efficient heating installations
• Save energy / energy efficiency
• Develoment projects and business
development
• Smart grid
• Develop business model for solar
PV 6
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Energy Production
Copenhagen City plan..
2025 targets
• District heating in CPH is carbon neutral
• Electricity production is based on wind and biomass and exceeds
total electricity consumption in Copenhagen
• Plastic waste from households and business is separated
• Biogasification of organic waste
Main initiatives
• 360 MW wind turbines
• Wind turbines ownership made available by
• shares to citizens and business in Copenhagen
• Biomass in two major CHP plants in Copenhagen
• New biomass CHP plant
• 50 MW geothermical heating introduced
• Peak load heating on biomass
• New strategy for handling of plastic waste
Expectation for CE • 360-500 MW wind turbines
• BC on heat storage, heat pumps and
solar heating by 2015 Wind turbines
ownership made available by shares to citizens and business in Copenhagen
• Biomass in two major CHP plants in Copenhagen
• New biomass CHP plant • 50 MW geotermical heating
introduced • Peak load heating on biomass • Expansion of District cooling
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Copenhagen Energy - Market Position
Copenhagen Energy is the largest utility company in
Denmark
Copenhagen Energy is a shareholding company
owned 100% by Copenhagen City Council
Copenhagen Energy is organised in a holding
company struture
We have a monopoly of the supply of water, sewerage
services and district heating in Copenhagen
We compete with other suppliers of town gas and
district cooling, wind and solar PV
The various utilities are regulated by legislation
Income and expenditure must balance over time for
the monopolies
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Copenhagen Energy – A Few Facts
1 m water customers
½ m sewerage customers
½ m district heating customers
¼ m town gas customers
700 employees
900 mio USD turnover
Annual piping investments totalling
almost 200 mio USD
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Activating the market players…
Wind example from DK:
Large off-shore projects (1000 MW): Large scale national and international
commercial energy companies (IRR>10%, high risk, high capex)
Contracts based on bids on electricity price
Near coast projects (500 MW): Utilities, medium energy companies,
businesses, citizens (IRR>7%, less risk, medium capex)
RE scheme based on bids and FIT
On-shore (1200 MW): Utilities, medium energy companies, citizens
(IRR>10%, but less risk and capex requirement)
RE scheme based on FIT/Premium tariff
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Wind Strategy in Copenhagen Energy
• By 2010 – start from scratch on developing wind projects
• By 2015 140 MW under construction or in operation
• By 2025 min. 360 MW under construction or in operation
• City of Copenhagen provides Copenhagen Energy with a loan
gurantee of 5,500 mio DKK ~ 1,000 mio USD
• New business area – close cooperation between CE and CC
Strategy element 2015 2025
On shore – City of Copenhagen 18 MW ??
On shore - Outside Copenhagen Min. 50 MW 50-100 MW
Off shore – Near Coastal parks Min. 72 MW 150-180 MW
Off shore – Traditional Ready to bid Max 200 MW
Target Min.140 MW 360-500 MW 11
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Decision process and cooperation..
Political Admin
City Council (1-3 weeks)
Financial Board (1-3 weeks) Financial Admin (1-2 weeks)
(Technial/Environmental Board) (Tech/Env Admin)
Copenhagen Energy (2-6 weeks)
Board of CE
CEO/CFO Management
Dept. of RE ….(5-14 weeks ahead)
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Business Case on Wind Project?
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Involving local players in wind projects
• Great importance to achoring activities and initiatives in the local
community as well as involving citizens
• Copenhageners and businesses can buy shares in wind turbines
(approx. 20% of the projects)
• More than 80% of the Copenhageners are positive towards wind
projects
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Solar example…
Develop business model for solar PV
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• Net meter scheme – meter is running backwards
when producing
• Good BC – payback of 8-10 years – operate for 25
• Easy decision proces for private households (villas)
and businesses
The problem….
• Housing associations
• Complex decision process
• Complex economy – typically under pressure…
• How can they be approached and activated?
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Business model….
Advantage for HA:
•Solid trust worthy partner
•Professionel handling of permits
and contact to CC admin
•Good prices
•Professional project management
• Attractive financing
• Developing BC for new
Business area…
Testing financing model and
decision model
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CE
1. Feasibility and
business case
2. Design
3.Installation
4. M&O, guarantees
5. Financing
Housing Association
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Experience in other EU countries
• In May 2012 the German solar production hit 22 GW – more
than 20 nuclear power plants!
• Good examples of national frameworks and support schemes
boosting, but also ”over” heating, the market development
(Germany on PV)
• Examples of administration reducing market players
engagement (Spain on PV)
• National and international electricity grid structures must be
able to develop accordingly (international interconnections,
smart grids, etc) – Maybe the biggest challenge in EU!!
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Thank-you for your Attention
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Morten Stobbe, e-mail: [email protected], mobile +45 2795 4696 17