Jamshid Heidarian, Ph.D. Senior Energy Advisor US Agency for International Development

1. Strategic Planning and Demand Forecasting in Southeast Europe and the Black Sea Region – A Look at Renewable Energy and Energy EfficiencyUSAID/Hellenic Aid Cooperative Energy Program - SYNENERGY Jamshid Heidarian, Ph.D. Senior Energy Advisor US Agency for International Development Europe and Eurasia Bureau on behalf of the SSP National Planning Teams BSTP Kiev, Ukraine June 15-16, 2010

2. SYNENERGY Targets: Major Energy Challenges Facing the Region • Securing and diversifying energy supply • Delivering reliable energy to sustain economic growth • Increasing energy efficiency to cope with rising prices • Promoting a low-carbon evolution of the energy system

3. SSP Participating Countries • Contracting Parties • Albania, BiH, Croatia, Macedonia, Serbia • Observer Countries • Georgia, Moldova, Ukraine • EU Countries (voluntary participants) • Bulgaria, Romania

4. SYNENERGY Objectives • Strengthen capacity for Energy Efficiency and Renewable Energy (EERE) at key institutions in the Energy Community • Contracting Parties • Observer Countries • Forge a technical and policy network in the region • Establish and promote capacity for integrated energy planning • Identify policies and strengthen capacity to increase deployment of EERE systems and technology • Foster the exchange of experience and best practices • Four Activity Areas • Regional Assessment of Renewable Energy • Energy Efficiency in Residential and Public Buildings • Strategic Planning for Renewables and Energy Efficiency • Capacity Building and Institutional Network Development

5. SSP Project Activities Activity1: Establish the Planning Teams Activity 2: Obtain and develop the necessary data 2009 Activity 3: Describe the current energy system Activity 4: Data and model assumptions review Activity 5: Prepare Reference (BAU) scenario Activity 6: Identify key policy issues for analysis Activity 7: Transfer capacity to Host Institution(s) Activity 8: Conduct EE&RE and selective analyses 2010 Activity 9: Disseminate data, Reference scenario and analysis results Activity 10: Establish means for sustaining the Planning Teams

6. SSP (SYNENERGY Strategic Planning) Activity Status • Planning Teams established and moving up the learning curve • Updating of National Models • Models calibrated, data sources documented and preliminarily reviewed, Reference scenarios in place • Several looking to integrate the modeling with upcoming planning activities in NEEAPs and NREAPs • Preliminary analyses conducted and being refined {illustrative results for various countries to follow} • Data assumptions and analysis being prepared for expert/Ministry review • Preparation for dissemination of the project accomplishments underway

7. Reference (Business-as-usual) Scenario • Calibrated to 2006 Energy Balance • National assumptions of economic growth and demographics, and their relationship to future demand for energy services • IEA-WEO 2009 international energy prices • Firm power plant builds (and retirements) • Continued use of conventional fuels and technologies • Limited introduction of conservation or demand management measures • Known national policies (e.g., feed-in tariffs for wind/solar)

8. Renewable Energy Target Scenario • Renewable Energy (RE) share in base year (2005) • Based on national data sources, cross-checked with IEA and other public statistics • US EIA data used to inform ‘normalised’ hydro levels • Flat rate increase of 5.5% on base year RE share • Figure based on EU 27 equally sharing half of their total ambition • Additional requirement based on relative level of GDP per capita in 2005 • Assumes additional effort per capita adjusted to account for relative GDP level • Percentage increase calculated as additional effort divided by forecast final energy in 2020 • Determine the optimal mix of power sector and demand shift to renewable sources, and what it displaces and costs

9. Comparison of SSP Renewables Shares vs IPA Targets in 2020 (owing to differences in initial year biomass estimates)

10. Energy Efficiency Economic Potential • Reference scenario assumption is that mainly conventional demand devices and limited conservation the norm • Two levels of improved demand technology options for each demand service allowed them to reach up to 50-90% of the market share for new device purchases in 2030 • Reflects policies to set appliance and building standards and limit the use of inefficient devices (e.g., prohibiting incandescent bulbs) • Determine the economic optimal penetration level of the efficient and conservation options, and the resulting energy savings and costs

11. Change in new power plant builds (GW) • Additional hydro and wind built in place of some coal and gas-fired power plants • Promotion of energy efficiency substantially lowers the future power sector investment requirements

12. Enhanced Energy Security (PJ) • Reduction in oil and substantial reduction of imported gas once the renewable power plants in place and as energy efficiency increased • A large increase in biofuels is required to meet this renewable target

13. Decrease in the Consumption of Final Energy by Sector (%) • Promotion of energy efficiency results in +10% overall savings in energy, with commercial and residential sector benefitting most

14. Decrease in the Consumption of Final Energy by Sector (%) • Promotion of energy efficiency results in +10% overall savings in energy, with commercial and residential sector benefitting most

15. Costs and Savings (2003MEuro) • Achieving the RE Target has only a modest impact on the overall cost of the energy system, due mainly to be ability to add additional hydroelectric capacity • Increased penetration of efficient devices reduces overall system cost owing to less investment in power plants, substantial fuel savings, despite the higher costs of the individual devices

16. Policy Insights • Increasing the share of Renewable Energy in the gross final consumption is economical doable, resulting in increased energy security and supply diversification; appropriate feed-in tariffs and regulations need to be established • Promoting Energy Efficiency has substantial benefits in terms of energy security and economic competiveness; appropriate regulations and subsidies need to be established

17. Activities … e