Wind farm in eastern Bulgaria. Photo: World Bank Photo Collection/ BY-NC-ND

Solar and wind – an untapped resource in south-eastern Europe

There is a 740 GW potential for cost-competitive renewable power generation across South East Europe.

The International Renewable Energy Agency (IRENA) has published a survey about the renewable power generation potential in the south-east Europe states of Albania, Bosnia and Herzegovina, Kosovo, Montenegro, Republic of Moldova, Serbia, the former Yugoslav Republic of Macedonia, Ukraine, Bulgaria, Croatia, Romania and Slovenia. In these countries there is a risk that new coal-fired power stations are being planned without proper discussion about the alternatives. The IRENA report is an important tool that surveys how renewable energy can be used in the region. The report summarises the potential as follows:

“The region’s power sector comprises over 118 gigawatts (GW) of installed capacity, out of which renewables accounted for 36 GW in 2015. Hydropower accounts for 75% of this renewable capacity, however, with most of it constructed several decades ago.

South East Europe possesses vast technical renewable energy potential – equal to some 740 GW. The region’s wind energy (532 GW) and solar PV (120 GW) potential is largely untapped, as illustrated by IRENA’s suitability mapping of the region. This analysis revealed that 126.9 GW of the overall renewable energy potential could be implemented in a cost-competitive way today. The additional cost-competitive potential could be even higher – above 290 GW if low-cost capital is available.

Wind energy is the most abundant resource in the region, with an overall technical potential amounting to over 532 GW. This compares to only 4.9 GW installed in the region at the end of 2015, with most of this in Bulgaria, Romania and Ukraine. Over 18% of this potential, or 98 GW, could be additionally deployed today in a cost-effective manner. Out of 120 GW of technical potential, solar PV could provide an additional 5.2 GW of cost-competitive renewable energy capacity. The additional cost-competitive biomass potential in the region amounts to up to 4.7 GW.

As for the projections for 2030 and 2050, with the expected further decline in technology costs, as well as the expected lower cost of capital in the mid- to long-term, the cost-competitive wind and solar PV potential of the region is expected to further grow to more than 650 GW by 2030. This means that almost the entire technical potential of those technologies will be cost-effectively exploitable. Given its size and potential, Ukraine can develop the largest part of this cost-competitive capacity, with an additional 70 GW of solar PV and 320 GW of wind. The high shares of renewables in the power sectors, however, can be also achieved in other parts of SEE.

The sensitivity analysis conducted for different levels of cost of capital revealed this as one of the determining factors significantly influencing the cost-competitiveness of a technology option; therefore, lower figures could render additional renewable capacities accessible. Strengthened enabling policy, regulatory and institutional conditions, and strong support schemes for renewables, among other measures, could improve the risk perception of the region. These would give positive signals to investors in the non-EU part of the region, in particular. The major identified barriers include: the absence of a long-term strong and stable renewable energy policy environment in the region; inadequately designed Power Purchase Agreements (PPAs) that do not meet investor requirements; high administrative barriers, adding to transaction costs for businesses; and a lack of sufficiently attractive and consistent renewable energy support systems. In addition, several technical challenges exist, such as grid limitations and insufficient experience with the grid integration of variable renewables.

The region has, however, already stepped up its efforts to improve the investment framework and tackle the major challenges hindering a more accelerated renewables deployment. At the same time, the region is taking steps to introduce more market-based support schemes, moving from feed-in-tariffs (FITs), largely implemented in the region, to feed-in-premium (FIP) systems (in Albania and Croatia, for example). Due to limited competition in the energy markets and the early stage of renewable energy development, there are, however, concerns about the auction scheme being a suitable model.”

Compiled from IRENA Report by Reinhold Pape



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