Fast energy transition and potential challenges in the Baltics

What do the decarbonizing possibilities look like in the Estonian, Latvian, and Lithuanian energy systems in the upcoming decade? The answer to this question will be closer at hand this autumn, as the FasTen project – funded by Nordic Energy Research – is finalizing its first results.

Five key findings

In this interview, Researcher Jana Teremranova from Riga Technical University (RTU), and Junior Research Associate Eimantas Neniškis from LEI give us an insight into the objectives and preliminary conclusions of the project. To begin with, Neniškis tells us about their key findings up until now.

“We have so far analyzed the potential impacts if national plans are followed, and preliminary identified five key outcomes,” says Neniškis. “The first is a rapid transition from fossil-fuels to renewable energy sources in electricity production. In 2017, more than half of generated electricity was from fossil-fuels, but it is likely that this number will be reduced to less than 10 % by 2030, because of Estonian oil shale-based electricity becoming too expensive for the market conditions, and of substantial investments in wind and solar power plants, especially in Lithuania. The second is related to challenges in energy security. We are also worried about energy security. The Baltics plan to disconnect from the BRELL-circle in 2025 – a synchronous grid that covers Russia, Belarus, and the Baltics – which will decrease the total transfer capacity. As fossil capacity is decommissioned or becomes unfeasible, the Baltics are more vulnerable to Nordic and Central European electricity price fluctuations unless new, replacing capacities become available. The third is slow changes in transport and building sectors. As for transport, fossil fuel consumption rises as the traffic volume in passenger kilometers increases faster than the use of alternative fuels. As for buildings, decarbonizing will happen mostly through emission reduction in power and heat sectors. The fourth is that the modelled emissions halved by 2030 (10.5 MtCO2) compared to 2017 (21.8 MtCO2). The fifth is a decrease of overall annualized system costs for electricity production in Estonia, but an increase in Latvia and especially Lithuania.”

These key findings are relevant to observe. “The old paradigm of stable energy infrastructure is not working well,” says Teremranova, and notes that energy development involves inclusion and implementation of renewable sources, which in turn requires well-balanced and calculated steps.

According to Neniškis, significant changes will have to happen if we want to reach Baltic ambitious targets of emission reduction and energy independence. “Unfortunately, everything comes at a certain cost. Therefore, each step must be well-calculated and observed. We shouldn’t dive in headfirst. For this reason, we have modelled measures, described the Baltics’ National Energy and Climate Plans (NECPs), and analyzed outcomes in the FasTen project,” he says.

Different roles for different sectors

On the Baltics’ journey towards decarbonization, Teremranova explains that “all sectors are important, though there are differences. Heat and power generation currently account for most of the emissions from the energy sector, which is why it is of greatest interest to restructure and model the replacement of fuels with renewable energy sources.”

Neniškis agrees. “Decarbonizing the power sector first is of great importance, as it determines the effectiveness of electrification and emission reduction measures in other sectors, such as the buildings sector. Most likely, the decarbonization of the power sector will happen through greater use of variable renewable sources,” he says. “As for the district heating sector, already more than half of the heat is produced from biomass or waste in Lithuania and Latvia. In Estonia, however, about a third of the heat is produced from oil shale and should be replaced by biomass.”

When it comes to the transport sector, “substantial changes are not expected within the next ten years,” says Neniškis. This is “due to the high costs of replacing fuel-powered vehicles with electric ones, and to the need for additional rules and regulations,” according to Teremranova.

Considerations on national level and as a Baltic whole

In addition to the roles of different sectors in the Baltic energy system, the different countries in the Baltic region play their own parts. Simultaneously, Estonia, Latvia, and Lithuania need to make considerations as a Baltic whole.

“Regarding the power system, we are all in the same boat,” says Neniškis. “Changes in one Baltic country affect all three. The biggest and most impactful changes that await us include the disconnection from the BRELL-circle, a rapid increase of variable renewable sources in electricity generation and phasing out of oil shale power plants in Estonia.”

Teremranova concurs on the closure of Estonian oil shale factories and the planning of new power generation capacities, but also emphasizes the role of transport. “For the Baltics as a whole, the decarbonization of the transport sector is one of the most crucial to achieve climate goals. It is necessary to implement new policies and constraints to limit fossil fueled cars in favor of electric hybrid vehicles,” she says. As for Latvia, “a lot of natural gas is used to generate heat, which emits CO2 and increases the country’s dependence on import”, while in Lithuania “the closure of several old Combined Heat and Power plants (CHP) brings about an acute issue of capacity to cover the demand for heat and power. This is planned to be taken care of through installation of new wind farms,” elaborates Teremranova.

The future after FasTen

“In each of the sectors, more detailed observation and modelling is needed, as well as the expansion of the modelling horizon until 2050,” says Teremranova. She is planning to “model Riga’s energy supply and consumption in detail, in order to predict the best way for Riga to move onto a new, green path towards becoming a smart city.”

Neniškis expands on what will succeed the FasTen project. “We are going to continue our work in a follow-up Amber project, where we aim to find long-term policy pathways to achieve national and EU emission targets in the coming decades. The analysis of the Amber project will surpass FasTen in both scope and detail,” he concludes.

Background: FasTen

FasTen is short for Fast, flexible, and secure decarbonization of the Baltic states – possible progress in the next Ten years, and like the name suggests, the project seeks to investigate the prospects of speeding up the journey towards a decarbonized Baltic region. This FasTened journey explores the potential to make the data and modelling methods more reliable, to deepen the Nordic-Baltic co-operation by sharing know-how, and to reach out to key stakeholders of the Baltic energy policy with the project findings.

The FasTen project is part of The joint Baltic-Nordic Energy Research Program and funded by Nordic Energy Research, and its project partners are Technical Research Center of Finland (VTT), Riga Technical University (RTU), Lithuanian Energy Institute (LEI), and Tallinn Technical University (TalTech).

Kevin Johnsen