Analysis of necessary subsidy levels for renewable energy projects in the Baltic countries

Abstract

A thorough description of the current state of play in the energy sector, RE policies at the EU as well as national level and support measures used in all three Baltic countries were gathered as a background information. Subsequently feasibility calculations for different theoretical CHP plants and wind parks in the Baltic countries were conducted based on real life input data. The main aim was to find the optimal payment scheme and level of the feed-in tariffs to ensure the attractiveness of large-scale renewable energy projects for power companies. In the feasibility calculations in the thesis only the feed-in tariff support scheme was considered.

The feasibility studies for CHP plants were performed for 3 different electrical capacities: 2 MWel, 10 MWel and 22 MWel. The CHP plants were considered in three different scenarios and based on real heat loads from different cities the working hours were estimated. In the first scenario the CHP plant provides the base load at full capacity. In the second scenario the heat and electricity is produced only during heating period. In the third scenario the CHP plant works at partial load during summer and at full capacity during prime heating season.

The feasibility studies for wind parks were also performed for 3 different capacities: 9 MW, 50 MW and 120 MW. As there are no offshore wind parks in the Baltic countries at the moment, the feasibility calculation in this thesis cover only onshore wind parks. Two different scenarios for park location were considered: first further away from the coast, where the wind conditions are poorer, resulting in a load factor of 21%. Second location is on the coast, where the wind conditions are very good, resulting in a load factor of 34%.

As a result the necessary feed-in premiums and fixed feed-in tariffs were calculated and compared. Sensitivity analysis was conducted to find the most influential variables. Based on the results policy recommendations for a general subsidy scheme in the three Baltic countries were developed.