Petras Punys & Tomas Söderlund

Brussels

12 February

The current situation of the SHP sector in the EU

The presentation is based on the SHERPA study finished in year 2008.

1st PART (Tomas Söderlund)

1.State of the Art (2006)

2.SHP Potential in the EU

3.EU Directives and their impact on SHP

4.Support systems

5.Economics

6.Conclusions and recommendations

2nd PART (Petras Punys)

1.SHP general Policy framework

2.SHP and Environment

3.SHP Manufacturing industry

4.Social acceptance

5.Conclusions and recommendations

Contents

State of the Art

RES-E in the EU-27, 2006 (percentage of GWh)

9%

17%1%1%

55%

17%

Large Hydro

Small Hydro

Wind

Biomass

PV

Geothermal

487215 GWh

SHP Potential in the EU

Electricity Generation 2006 and Potential for SHP with

Economic and Environmental Constraints

0

5000

10000

15000

20000

25000

30000

AT BE DK FI FR DE EL IE IT LU NL PT ES SE UK BG CY CZ EE HU LV LT MT PL RO SK SI HR MK TR NO CH BA ME

GW

h

2006 Upgrading New SHP

EU Directives and their impact on SHP

RES-E Share in gross electricity consumption

0

10

20

30

40

50

60

70

80

90

100

AT BE DK FI FR DE EL IE IT LU NL PT ES SE UK BG CY CZ EE HU LV LT MT PL RO SK SI E

U-

27

%

1997 2006 RES-E % target in 2010

Support systems

Tenders

Certificate systems

Quota obligation

SI

Fiscal incentives

Feed - in tariffs

SK PL

CY

LA

CZ

LT

MT

HU

EE BG

SI RO

BE

UK

IT SE

IE

FI UK

AT DK FR

DE

ES

PT LU GR

NL

FR

DK

IT

Economics

0 50 100 150 200

Costs of electricity (LRMS – Payback time: Lifetime) [€/MWh]

Cost range (LRMC)

Wind offshore

Wind onshore

Tide & Wave

Solar thermal electricity

Photovoltaics

Large Hydro

Small Hydro

Geothermal electricity

Biowaste

(Solid) Biomass co-firing

(Solid) Biomass

Biogas

Cu

rre

nt m

ark

et p

rice

PV 340 to 1260 €/MWh

Conclusions and recommendations

State of the art (year 2006)

•The SHP contribution to the overall RES-E in the EU is nearly 10 %.

•The SHP can highly contribute in reaching the targets of the RES Directives.

SHP Potential in the EU

•The electricity production from SHP in the EU can double from the level of year

2006 taking environmental and economical constraints in consideration.

•Most likely the potential is larger than is known today.

•More careful examinations should be performed in the EU countries to evaluate the

true SHP potential (good examples can be found from Scotland and Norway)

Conclusions and recommendations cont.

•EU Directives and their impact on SHP

•The directive is very important for the development of SHP

•Follow up to what extent the Directives has been implemented to reduce the

obstacles to increasing production and to rationalise and speed up

administrative procedures. According to this study there are still many obstacles

and not much have changed.

•Support systems

•Support systems is absolutely necessary for existing SHP and the development

of new SHP.

•Economics

•SHP is very competitive to other RES-E.

•All RES-E need support system to be able to compete with established

electricity production and the price in the market.

Policy framework

Energy law

Environmental

law

Granting

procedures

Power pricing

Water rightsLEGAL FRAMEWORK

Classification of barriers

Administrative and

regulatory

Environmental barriers

Grid related barriers

Social barriers

Financial barriersMain barriers for the

development of SHPMarket barriers

Most crucial

Scenarios: existing and improved conditions

Scenarios for SHP

10000

12000

14000

16000

18000

20000

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

MW

EU-27 improved conditions EU-27 existing conditions

EU-27 Observed data

Environment

Environmental Integration - Resistance to SHP

development EU-27 & CC

0%

20%

40%

60%

80%

100%

AT BE DK FI FR DE EL IE IT LU* NL PT ES SE UK BG CY* CZ EE HU LV LT MT* PL RO SK SI HR MK TR

Visual impact Fishery Water regulation

Environmental Regulation Competition with other uses Other kinds of resistance

*Information not available due to too small number SHPP

Manufacturing industry

Classification of SHP Turbine Manufacturers EU-27 & CCs

1

2

3

4

5

AT BE DK FI FR DE EL IE IT LU NL PT ES SE UK BG CY CZ EE HU LV LT MT PL RO SK SI HR MK TR

(1) no turbine manufacturers

(2) turbine manufacturers exist, but are not able to cover domestic demand

(3) turbine manufacturers exist, are able to cover domestic demand w ith limited export capacities

(4) turbine manufacturers exist, are able to cover domestic demand w ith some export capacities

(5) turbine manufacturing industry is w ell developed, w ith high export capacities

Social acceptance

0%

20%

40%

60%

80%

100%

AT BE DK FI FR DE EL IE IT LU* NL PT ES SE UK BG CY* CZ EE HU** LV LT MT* PL RO SK SI HR MK TR

NGOs General public Politicians Environm. Groups RES- support groups

*Information not available due to too small number SHPP

NGOs: opposition (F, IT,

PT). Positive (AT, DE,SE,

PL, MK)

General public: reserved (AT,

UK, MK), positive (DE,

IE,BG,PL, HR)

Politicians: positive (DK,

FR, IT, PT, SK, HR), less

active (EL, PL)

Environ. bodies: big opposition

(ES, FR), positive (AT, BE,FI, EL,

UK, PL, RO)

Conclusions and recommendations

Long term

•Decrease barriers

•Decrease the barriers for developing SHPP by setting up clear rules and

timeframes in the licensing process.

•Support the manufacturing industry by increasing the research of finding new,

more efficient and more environmental friendly ways to generate electricity from

hydropower. This in order to secure that the SHP manufacturing industry will still

be international competitive in the future.

Conclusions and recommendations cont.

Finally it is of vital importance that the Commission gives

concrete guidelines in order to follow the development

towards the renewable targets of year 2020.

For further information:

Country overview on SHP (SHERPA Project Report)

32 European countries are represented (6 to 10 p.)

1. Geography and Water Resources

2. Current Energy Sector

3. Renewable Energy SourcesRES-E Supporting Policies; RES Targets; SHP Status within RES-E Generation Mix

4. Current SHP Data and PotentialsCurrent Status and Forecasts; Potentials

5. SHP General Policy FrameworkLegal Conditions and Support Policy; Impact of EU Directives

6. SHP Sector DevelopmentEconomic Issues; SHP Manufacturing Industry; Technological Advancements;

Environmental Integration and Social Acceptance; Barriers for SHP Development

Available at: http://www.esha.be