Efficiency Assessment of Support Mechanisms for Wood-Fired Cogeneration Development in Estonia

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Efficiency Assessment of Support Mechanisms for Wood-Fired Cogeneration Development in Estonia

There are various support mechanisms for wood-fired cogeneration plants, which include both support for cogeneration development and stimulation for increasing consumption of renewable energy sources. The efficiency of these mechanisms is analysed in the paper. Overview of cogeneration development in Estonia is given with the focus on wood-fired cogeneration. Legislation acts and amendments, related to cogeneration support schemes, were described.

For evaluating the efficiency of support mechanisms an indicator - fuel cost factor was defined. This indicator includes the costs related to the chosen fuel influence on the final electricity generation costs without any support mechanisms.

The wood fuel cost factors were compared with the fuel cost factors for peat and oil shale. For calculating the fuel cost factors, various data sources were used. The fuel prices data were based on the average cost of fuels in Estonia for the period from 2000 till 2008. The data about operating and maintenance costs, related to the fuel type in the case of comparing wood fuel and oil shale fuel were taken from the CHP Balti and Eesti reports. The data about operating and maintenance costs used for peat and wood fuel comparison were taken from the Tallinn Elektrijaam reports.

As a result, the diagrams were built for comparing wood and its competitive fuels. The decision boundary lines were constructed on the diagram for the situation, when no support was provided for wood fuels and for the situations, when various support mechanisms were provided during the last 12 years.

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