Development and Assessment of M/A Climate Change policy portfolios for R . of Moldova

1. 6th International Scientific Conference Policy portfolios for emerging economies EU FP-7 ROMITHEAS -4 Project “Knowledge transfer and research needs for preparing mitigation/adaptation policy portfolios” Development and Assessment of M/A Climate Change policy portfolios for R. of Moldova Dr. Ion Comendant, Institute of Power Engineering ASM 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

2. Content Introduction • IPE Profile • Moldova National Workshop • Project Team Members • Moldova Climate Change policies applied Climate Change policy mixtures • Data collection • Characteristics of Scenarios • Results of three scenarios • Assessment of the policy mixtures • Best policy mixture • Needs and gaps observed Further actions 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

3. Institute of Power Engineering • IPE ASM was founded in 1991, public institution: - 28 scientific researchers: including 2 Full Member of the Academy of Sciences, 8 Doctors of sciences and 9 PhDs. - Laboratories&Departments: controlled power transmission lines; simulation and diagnostics of power equipment; Electric- power equipment and power electronics; Energy efficiency and RES • Research Domain: - Energy system development planning and optimal operation - Elaboration of new methods, devices, tools and equipment for increasing energy efficiency and RES promotion • IPE Scientific Journal: Regional Energy Problems - http://ieasm.webart.md/home_ro/ 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

4. Moldova National Workshop • On May 14, 2013 in the framework of PROMITHEAS-4 Project the National Workshop „Development and evaluation of the M/A policy portfolios for the R. of Moldova” was organized by IPE in Chisinau, Hotel “Codru” - 48 participants, including: Gheorghe Salaru, Ministry of Environment; Victor TVIRCUN, Ambassador, BSEC-PERMIS General Secretary; Vladimir Berzan, IPE Director; Prof. DimitrisMavrakis, Project Coordinator; Dr. PopiKonidari 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

5. PROMITHEAS-4 Moldova Team ■Total number of Moldova team in the PROMITHEAS-4 project – 6: ● Prof. MihaiChiorsac, Moldova team general coordinator, tel. 373 69095046, e-mail: kiorsak@mail.ru ● Dr. Ion Comendant, Scientific coordinator, management, Evaluation of policy portfolios, tel. 373 69217004, e-mail: icomendant@gmail.com ● Dr. VasileScorpan, Scenarios and policy portfolios, tel. 373 79469883, e-mail: v.scorpan@yahoo.com ● Marius Taranu, Evaluation of available data and information, tel. 373 69684528, e-mail: tsaranu@yahoo.com ● SergiuRobu, Choice and implementation of models, tel. 373 79477978, e-mail: sergiu.robu@asm.md ● Iulia Panfilchina, Choice and implementation of models, tel. 373 68277550, e-mail: panfilchina@hotmail.com 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

6. Data collection • National Bureau of Statistics, Statistical Yearbooks of the R. Moldova and Energy Balance for 1990 – 2011; • National Bank of Moldova; • State Hydrometeorological Service of Moldova; • Government Decisions; • Ministry of Environment and Natural Resources; • National Agency for Energy Regulation; • Climate Change Office; • World Energy Outlook 2010, IEA; • World Bank; • UNDP; • United Nations Economic Commission for Europe; • UNEP/Ministry of Environment and Natural Resources; • IPCC, Climate Change. 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

7. Moldova climate change policies applied ■No specific climate change policies documents are approved up to now. The existing normative acts are oriented to resolve country priorities, M/A impact is considered as tangible result. ■In 2013 both the Low Emission Development Strategy and Climate Change Adaptation Strategy are planned to be approved. They gather the actions from all existing first level legal documents that have M/A impact as well. ■ The main climate mitigation impact is expected to have from the realization of Energy Strategy up to 2030 approved in 2012, that promote energy efficiency and RES, including to reach by 2020: - energy intensity reduction by 10%; - grid electricity losses reduction up to 11%, grid gas losses by 39%, grid heat losses by 5%; - energy consumption reduction in buildings by 20%; - 10% of public buildings renovated; - the share of annual electricity from renewable energy sources up to 10%. - the use of energy from renewable sources relative to total gross domestic consumption: 20%; - the share of biofuels in total transport fuel consumption: 10%. 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

8. Scenarios developed • Three Scenarios ● Business as Usual(BAU); ● Optimistic (OPT); ● Pessimistic (PES). • Time horizon: 2000-2050 • OPT and PES scenarios are oriented to the following national objectives: - 20% share of RES in the total energy mix by 2020 - 20% reduction of the total primary energy consumption by 2020, compared to that of year 2009. • Only the territory of right bank of river Nistru is considered in calculation Model is applied for calculation 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

9. Sectors Review Key Assumptions Resource Transformation Demand • - Population • - GDP • GDP per capita • GDP real growth • GDP per Sector • Annual • Household • Income • Climate Statistic • World Prices for • Resources • PRIMARY: • Coal • Gasoline, Dieel • Fuel Oil, LPG • Hydro • SECONDARY: • Electricity • Heat • Natural Gas • Agriculture • Household • Industry • Transport • - Non Specified • - Electricity • Generation • District Heating • Losses 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

10. Key Assumptions for the BAU Scenario • Population: -0.69% by 2050; • GDP: +5.0% by 2030; • GDP distribution for Industry Sector: 2.5%by 2050; • GDP distribution for Agriculture Sector: 1.5%by 2050; • Import electricity from Ukraine and Transnistria (76%); • No intensification of renewable energy resources usage; • No energy efficiency policy; • Excessive dependence (100%) on natural gas imported from a single supplier.Natural gas is widely used for electricity generation; • Energy dependence will grow; • Emissions of greenhouse gases and oxides will increase; • The BAU scenario is only a mitigation policy portfolio. 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

11. Key Assumptions for the OPT Scenario • Population and GDP as in BAU Scenario; • GDP distribution for Industry Sector: 3.5%by 2050; • GDP distribution for Agriculture Sector: 2.0%by 2050; • Energy reduction in buildingsup to 10% until 2020; • The share of biofuel consumption is expected to reach the levelof4%in the transport sector by 2015 and by10%in 2020; • Rehabilitation of existing CHPs with electricity generation growth; • Electricity imported from Ukraine and Transnistria will decrease • Electricity, heat and natural gas losses in T&D will decrease • Mini hydro stations with a capacity of 1.2 MW are planned to be built on the Reut River; • Effective energy efficiency policy promotion. 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

12. Key Assumptions for the PES Scenario • Population and GDP as in BAU Scenario; • GDP distribution for Industry Sector: 2.0%by 2050; • GDP distribution for Agriculture Sector: 1.5%by 2050; • Partial rehabilitation of existing CHPs and growth of electricity generation; • Electricity imported from Ukraine and Transnistria will decrease; • Electricity, heat and natural gas losses in T&D will decrease; • Developing renewable energy resources for own needs (small HPP, wind, biogas and solar power). 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

13. LEAP Results: Evolution of the Global Warming Potential 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

14. Assessment of the policy mixtures Results of AMS Method applied: • OPT is distinguished by a better performance (grade) in responding to the climate change policy needs of the country taking into consideration the national framework. 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

15. OPT: Best Policy Mixture • It is assumed that the share of RES in the electricity generation will be the following: • Wind – 600MW by 2050; • Solar – 600MW by 2050; • Biogas – 50MW by 2050. • The total efficiency of the cogeneration power plant will not be less than 80% and for electricity production efficiency 45-50% 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

16. Needs and gaps observed: MITIGATION & ADAPTATION POLICY DATA • To develop country specific emission factors and methodologies, specifically for key source and sink categories; • To reduce the inventory uncertainties by improving the statistical data collection system; • To Enhance quality assurance (QA), quality control (QC) and verification activities, by setting-up a sustainable MRV system; • RM needs to develop data collection forms and detailed procedures to establish the legal foundation, guidelines and procedures for annual preparation of energy balances and other statistic datasets, required for MARKAL and LEAP models application, according to International Energy Agency (IEA) and Eurostat guidelines; • RM should develop the required legislation to require the electricity and natural gas distribution companies to include NACE codes in customer records for non-residential customers and report energy consumption to National Bureau of Statistics (NBS) and Ministry of Economy (MoE) by NACE categories; • For the following sectors the data are not available and need extra analyses: “Frequency of extreme events” index; GDP for the 1990-1998 periods is not available; “Energy water use (km³)” index is not covered by RM statistical system; Information about financial incentives, Carbon Taxes, Feed in tariffs, Penalties are not available for the whole studied period; energy demand cost (in EUR) is not available; Primary and Secondary fuels lack for the years 1990-1999; a lot of data is lack for Transformation. 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

17. Needs and gaps observed: MITIGATION & ADAPTATION SCENARIOS AND POLICY PORTFOLIOS • As the country is distinguished by low energy security (70% electricity import) and low capacity to pay for energy consumed specific studies are needed to demonstrate the share of affordable renewable electricity to cover power demand during the years; • The potential for CHP promotion should be determined on country territory taking into consideration that 4500 hours of high and constant heat demand is needed to make such PP economical; • Centralize heating demand for the years up to 2050 needs to be revised because of persisting factors leading the consumers to select autonomous heating systems; • The total energy demand in BAU scenario is easily estimated, as it is proportionate to the GDP per capita in the Household sector and to GDP in all other sectors. However, this estimation is much more complicated in OPT and PES scenarios, as the effect of specific mitigation measures has to be added. According to the Energy Strategy up to 2030 the shares of renewable energies, energy losses and power capacities are pre-established in the national balance by 2020, but neither the time horizon is sufficient, nor these shares are differentiated per economic sector; • there is no studies that would show the limits of sectors technologies dissemination and what may be the speed of their implementation during the years up to 2050, Other 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

18. Needs and gaps observed: EVALUATION OF MITIGATION & ADAPTATION POLICY INSTRUMENTS • Because of big import of energy resources in the RM, the case study developed with LEAP model was refined in order to obtain correct outputs: It was needed to fix the negative production problem in the energy balance, to add a new “Transformation” module for oil production; the capacity variable was used in that module to limit the domestic production and set the module to use gap filling imports for any demand not met by domestic production; the data that specifies natural gas imports have been removed, etc. • Build capacities for gathering, analyzing and disseminating climate risk information, including weather data, climate modeling and impact assessment. Needs:Study tours and research stays organized with relevant international centers for climate assessment; Risk maps generated for the three regions of the country (South, Centre, North), and by sector; High-risk areas identified and prioritized. • Develop regional climate change scenarios in the Republic of Moldova for mid (2020s) and long term (2050s and 2080s) based on Atmosphere Ocean General Circulation Models (AOGCMs) and Regional Climate Models (RCMs) • Assess risks/opportunities to sustainable development of certain sectors (agriculture, livestock, water resources, forestry, human health, energy and transport sectors) due to the increased number and intensity of extremes events as result of climate change 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

19. Future opportunities • The results obtained will be used in the preparation of National Communication: LEAP Model, Data collected, Gaps and Needs observed, AMS Method, etc.; • The list of research needs and gaps identified would help the national experts to promote new studies and works, in order to ensure pragmatic platform for more accurate outcomes on GHG emissions calculation in the future; • The data based compiled will be useful in the process of restructuring of national official statistical system, in order the last be in compliance with the EU one 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece

20. Thank you for your attention icomendant@gmail.com

21. Status of renewable electricity promotion • Wind Farms (WF) in the world and Moldova: ■24GW în 2001 97 GW în 2010; 37,6 GW in 2010 42 GW in 2011 ■In Moldova no WF electricity generated to the grid is recorded until now • WF promotion in Moldova: • To reach 10% renewable electricity by 2020, i.e. around 200MW • Renewable electricity produced is mandatory for buying on the market • Renewable electricity tariff calculation is regulated by the appropriate Tariff Methodology published in 2009 • Until now WF investors have requested access to the grid for around 800MW • Wind technical reserves are around 600-1000MW

22. Wind Farm promotion challenges • WF main challenges in Moldova: ■May the consumers support the WF electricity price? (See: Ion Comendant. The identification of solutionstocoverenergydemandfromrenewables. Regional Energy Problems, no. 2(16), 2011, IPE ASM, pages 39-52) ■ What is the impact of WF promotion for National Power Sector Development and Operation? Is WF contributing to fuel consumption reduction when operating in the power system? If yes, how much? If fuel reduction is recorded how it influences the price for electricity produced? How much WF contributes to energy security increase?

23. WF main features • WFs are distinguished by: ■ very low credit power for the conditions of the R. of Moldova, where the territory is small and spaces for feasible wind is limited ■ limited interval of working wind speed : 2.5 - 25 m/s. If the speed is higher than 25 m/s WF is disconnected from the grid, producing power imbalance in the system ■ for one WF the error for wind forecast is 10-20% for a forecast horizon of 48 hours and reach up to 100% if the horizon is higher than 48 h ■ when the wind is lack, another PP should replace WF power, so that the implementation of WF in Moldova require to ensure such compensation: In medium and long term In short term

24. WF operation in time horizon • Short term impact: • WF power Imbalance provoked can be covered by balancing power, that is mainly from import or, partially, from MGRES; The price for balancing power is very expensive: in 2011 the balancing power higher than 50 MW cost twice more than predicted power. CONCLUTION: in short term WFs neither contribute to electricity price decreasing nor to energy security increase. Even more, WFs construction leads to decreasing of existing small level of country energy security • Medium and Long term impact: • The impact depends on how power sources development will follow: Two way: 1. Energy strategy way: it establish CHP mainly be built. Lack of heat demand and practical difficulties to implement cogeneration PPs impede to realize Energy Strategy option 2. IPE ASMscenario: it combines the construction of diverse PPs (See: I. Comendant, A. Sula. Impactul factorilor de influenţă asupra scenariilor de dezvoltarea a surselor de energie electrică. Analele Institutului de Energetică al AŞM. Fascicola 2. Ch.: TAŞM, 2010..207-231. ISSN 1853-9247. www.ie.asm.md)

25. What the PPs should be built to cover WF imbalance? • Gas turbines and combine cycle – the most appropriate PPs:

26. Combined Cycle in tandem with WFs • The results obtained:

27. WF+CCPP verses Coal PP • The results obtained: ■ Investment effort: from 1500 US$/kW (WF) to 2150 US$/kW +650 US$/kW (CCPP) Performant Coal PP of 200MW • ■ Coal PP has higher CO2 emissions then WF+CCPP tandem, But it: • leads to diversification of the fuel used in the country • Diminish significantly natural gas consumption, coming from one source • Ensure a price for electricity 24% lower than tandem WF+CCPP • Increase country energy security, as coal can be bought around the • world and the reserves are enough for the following 200 years

28. WF+CCPP verses Coal PP (CPP) • Coal PP CO2 emission problem ■ CPP emits 1304 th. tone CO2 versus 507 th. tone CO2 of CCPP+SE ■ Moldova has the obligation to diminish by 25% CO2 emissions in 2020 in comparison with 1990. In order to be in compliance with the engagement: To Build capturing CO2 installation at CPP To Buy CO2 on the world market ■ Question: At what price for CO2 the price of CPP=price WF+CCPP Answer:57 US$/tCO2while on the world market it is 8,6 US$/tCO2

29. Conclusions • For Moldova actual conditions it is much reasonable to develop Coal PP than to promote Wind Farms or Photovoltaic Power Plant • Only when own electricity production will reach around 100% of demand capacity WF promotion should become a goal for country energy strategy

30. Conclusions (2) • In the OPT scenario the total primary energy consumption is reduced only by 4%. This low percentage is attributed to the following reasons: • there is limited information within the country regarding energy efficient technologies • and practices that does not allow the achievement of the required amount of energy • savings; • aged equipment and infrastructure are responsible for losses and without the necessary • amount of investments there will be gradually higher losses; • there are not yet official reports concerning the estimation of the potential in energy • savings per sector and activity. • The GHG emissions in 2020 are 8,7MtCO2eq, which is less compared to those of the BAU scenario. 6th International Scientific Conference. 9-12 October, 2013, Athens, Greece