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Energy Strategy Reviews 30 (2020) 100509
2211-467X/© 2020 Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
Implications of carbon price paths on energy security in four Baltic
region countries
Arvydas Galinis
a
, Linas Marti
sauskas
a
,
*
, Jaakko J€
a€
askel€
ainen
b
, Ville Olkkonen
b
, Sanna Syri
b
,
Georgios Avgerinopoulos
c
, Vidas Lekavi
cius
a
a
Lithuanian Energy Institute, Breslaujos str. 3, LT-44403, Kaunas, Lithuania
b
Aalto University, School of Engineering, Department of Mechanical Engineering, P.O. Box 14100, FIN-00076, Aalto, Finland
c
Division of Energy Systems Analysis, Royal Institute of Technology – KTH, Brinellv€
agen 68, 10044, Stockholm, Sweden
ARTICLE INFO
Keywords:
Energy transition
Energy security
Carbon price
Reserve services
Baltic region
ABSTRACT
Energy security is one of the critical priorities of energy policy in the European Union and particularly in the
Baltic region that is currently transforming itself from an isolated energy island to a highly interconnected area.
In this paper, a comprehensive analysis of energy security in Estonia, Finland, Latvia, and Lithuania in the
context of the energy transition is presented. The paper explores regional implications of two paths of carbon
price (gradual and delayed carbon price increase). The analysis is performed by linking an energy system
optimisation model with a probabilistic model of energy security. This modelling suite is used to assess the
resilience of the planned energy system to possible disruptions. The results demonstrate that carbon price paths
have a modest impact on energy security in Baltic countries if energy security measures are implemented in an
optimal way. The research is based on the case study conducted in the framework of the European Union’s
Horizon 2020 project REEEM.
1. Introduction
Along with sustainability, affordability and efciency, energy secu-
rity is considered as one of the key issues in provision of energy services.
Energy security is also one of the most important priorities of energy
policy in the European Union (EU): European strategic long-term vision
for a prosperous, modern, competitive and climate neutral economy
highlights energy security among overriding priorities [1]. Energy se-
curity is a crucial issue particularly in the Baltic region that is trans-
forming itself from an isolated energy island to a highly interconnected
area. The peculiarities of this region cover dependence on natural gas
imports from Russia in Finland, power system synchronous operation
with the area of the former Soviet Union in the case of Estonia, Latvia,
and Lithuania (often referred to as the Baltic countries).
The development of energy systems in the region thus covers
sometimes contradicting tasks to ensure cost-effectiveness, increase
share of renewables, reduce greenhouse gas (GHG) emissions, maintain
competitiveness of local industries, and increase energy security.
Although providing many decarbonisation opportunities, the expansion
of variable renewables causes certain technical challenges to the energy
system [2]. High proportions of variable generation have considerable
impacts on ancillary services required in a power system [3] but this
aspect is often overlooked in both market design [4] and long-term
energy planning models [5].
There is a wide variety of denitions of energy security [6] empha-
sising „low vulnerability of vital energy systems“ [7], availability,
affordability, reliability, efciency, little environmental impact, proac-
tive governance, and social acceptability of energy services provided to
end-users [8] and other aspects. The multidimensional and complex
nature of energy security imposes difculties in measuring energy se-
curity, and the number of proposed indicators is continually increasing.
Moreover, a money-metric translation of changes in energy security
indicators that could make these amenable for a rigorous economic
cost-effectiveness assessment is also missing [9]. An essential part of
such economic analysis is modelling of energy system development as it
denes how the energy system adapts to the changing conditions, such
as decarbonisation targets and increasing carbon prices. Moreover,
single models are often unable to cover all the important dimensions of
the changes and thus model linking and multi-model approaches are
* Corresponding author.
E-mail addresses: arvydas.galinis@lei.lt (A. Galinis), linas.martisauskas@lei.lt (L. Marti
sauskas), jaakko.j.jaaskelainen@aalto. (J. J€
a€
askel€
ainen), ville.olkkonen@
aalto. (V. Olkkonen), sanna.syri@aalto. (S. Syri), georgios.avgerinopoulos@desa.kth.se (G. Avgerinopoulos), vidas.lekavicius@lei.lt (V. Lekavi
cius).
Contents lists available at ScienceDirect
Energy Strategy Reviews
journal homepage: http://www.elsevier.com/locate/esr
https://doi.org/10.1016/j.esr.2020.100509
Received 29 July 2019; Received in revised form 30 April 2020; Accepted 1 June 2020
Energy Strategy Reviews 30 (2020) 100509
2
used to provide new insights on the development of energy [10] and
related systems [11]. In this research, energy security is dened as
ability of the energy system to uninterruptedly supply energy to con-
sumers under acceptable prices and to resist potential disruptions arising
due to technical, natural, economic, socio-political and geopolitical
reasons [12]. Such denition is in line with the approaches proposed by
Cherp and Jewell [7] as well as Valentine [13] who distinguishes
availability, affordability and resilience criteria.
Previous energy security-related research covering Baltic region
countries paid primary attention to generation adequacy, the roles
played by cogeneration and imports, energy security evaluation
applying various methodologies, and sustainability of energy develop-
ment. Generation adequacy topics cover modelling the resilience of the
system in case one or more major power system components fail at the
peak time [14], evaluating the impacts of a severe drought [15] and
Monte-Carlo simulations in adequacy assessments [16]. Due to climatic
conditions and existing district heating infrastructure, cogeneration
technologies are particularly attractive power production option in the
cities of the region [17]. On the contrary, possible decommissioning of
cogeneration plants might have negative energy security impacts that
need to be neutralised by new generation capacities and in-
terconnections [18]. Biomass-based cogeneration is seen as a replace-
ment of fossil fuels in electricity production [19], but certain limits on
biomass quantity are imposed by sustainability and ecosystem impacts
[20].
To ensure generation adequacy, continuous investments to genera-
tion sources are needed, but the current market conditions are not
favourable for new investments as electricity import is more attractive
than majority of local generation sources [21]. For instance, most of
electricity consumed in Lithuania is imported from neighbouring
countries [22]. The dependence on energy imports is a widely discussed
topic in energy security literature. Bompard et al. developed a frame-
work with methodologies to assess the electricity independence of the
Baltic countries [23], J€
a€
askel€
ainen et al. analysed energy trade between
Finland and Russia and whether Finland’s notable dependence is an
energy security threat [24]. The studies of Lithuanian case concluded
that maintaining installed capacities are preferred as an energy security
measure [21] while an economically unjustied increase of domestic
electricity generation would have negative economy-wide impacts [25].
Indicator approach which is based on various energy security indexes
is the most common when evaluating energy security in general. Indexes
particularly for the Baltic countries are evaluated across different di-
mensions by Zeng et al. [26], Augutis et al. [27], World Energy Council
[28], World Economic Forum [29], Wang and Zhou [30], Radovanovi
c
et al. [31], Erahman et al. [32], Le Coq et al. [33], Badea et al. [34] and
other. Although energy security evaluation based on historical data
dominates in the energy security literature, there is a clear need to
foresee measures that ensure energy security at the planning stage to be
able timely put them into practice. Also, the selection and imple-
mentation of energy security measures need to be carried out following
the real conditions of the functioning of the energy system. Environ-
mental restrictions associated with climate change mitigation as well as
country-specic and international policy trends shall also be considered.
Therefore, research on energy security implications of increasing carbon
prices within different paths is especially relevant from the practical
point of view.
Practical relevance is further strengthened by the diverse current
situation in four inter-connected Baltic countries under consideration.
The Finnish energy system is very dependent on imports from Russia:
Finland imported 64.0% of its primary energy in 2016 and 63.0% of this
amount originated in Russia [24]. There are two important high-voltage
direct current (HVDC) connections between Finland and Estonia, and in
recent years, electricity imports from Finland to the Baltic region have
been signicant. Finland is also growingly dependent on electricity
imports: in 2018 23% all consumed electricity was imported, about 13
TWh from Sweden and about 8 TWh from Russia. In 2018, the total
production of electricity in Lithuania amounted to 3.2 TWh while the
total consumption for electricity was 12.1 TWh. Thus, 73% of consumed
electricity was imported, the largest import share being from Russia (4.6
TWh) [35]. In Latvia, total consumption of electricity in 2018 was 7.4
TWh, electricity import constituted 12% [36]. In 2018, Estonia’s elec-
tricity production was 18% higher than consumption and it was a net
electricity exporter [36].
In this paper, a comprehensive analysis of energy security in the
Baltic region (Estonia, Latvia, and Lithuania) and Finland in the context
of energy transition and carbon price paths is presented. Energy security
analysis in this study is based on the enhanced mathematical model of
prospective energy sector development and functioning linked with a
simplied probabilistic model used to assess resilience of the planned
energy system to possible disruptions. The usage of the simplied
probabilistic model is considered as a solution to overcome computa-
tional limitations that could appear in case if a detailed model is used to
reect a broad variety of possible energy security threats.
The research is based on Baltic energy security case study conducted
in the framework of the EU Horizon 2020 project REEEM [37]. As shown
by literature review, energy security in the region is in most cases
considered either as additional argument in the analysis of energy sys-
tem development or as a phenomenon that is analysed separately from
the development of energy sector. In the present study, we focus on
energy security in Finland and the Baltic countries as an important
determinant of energy development and analyse it in line with the
modelling of energy development scenarios. The analysis mainly focuses
on electricity system that is the most vulnerable in the region; however,
it takes into account district heating and fuel supply systems as they are
tightly coupled with electricity. Such approach allows not only ana-
lysing energy security under certain energy development paths but also
integrating energy security measures to energy development scenarios.
For this, the models used in the analysis are employed with additional
features that allow both the assessment of changes in the system and
foreseeing necessary energy security measures. The major enhance-
ments presented in this paper are related to the modelling of reserve
provision in the system (the need and supply of frequency containment
reserves, frequency restoration reserves and replacement reserves are
modelled in detail), balancing of intermittent electricity generation from
renewable energy sources (modelling is based on renewable energy
generation probability curves), as well as to detailed representation of
Abbreviations
CHP Combined Heat and Power
ESC Energy Security Coefcient
ETS Emission Trading Sector
EU European Union
FCR Frequency Containment Reserve
FIBEM Finnish-Baltic Energy Model
FRR Frequency Restoration Reserve
GHG Greenhouse Gas
HVDC High-Voltage Direct Current
IPS/UPS Integrated Power System/United Power System
MESCA Model for Energy Security Coefcient Assessment
MESSAGE Model for Energy Supply Strategy Alternatives and
their General Environmental Impact
OSeMOSYS Open Source Energy Modelling System
REEEM Role of technologies in an energy efcient economy –
model based analysis policy measures and
transformation pathways to a sustainable energy system
RES Renewable Energy Sources
RR Replacement Reserve
TIMES The Integrated MARKAL-EFOM System
A. Galinis et al.
Energy Strategy Reviews 30 (2020) 100509
3
energy system operation regimes. Different carbon price paths are
analysed and the impact on energy security is discussed as well.
The remaining part of the paper is structured as follows: Section 2
discusses the research methodology and two models used; Section 3
presents scenarios analysed and relation of the present study with Eu-
ropean energy development scenarios; the modelling results are dis-
cussed in Section 4. Conclusions in Section 5 summarize the main
ndings of the conducted study.
2. Methodology for energy security analysis
Study of energy security is based on mathematical modelling of the
development and operation of energy systems in Finland, Estonia, Latvia
and Lithuania, and subsequent testing of energy systems to determine
their resilience to various disruptions using the probabilistic model.
Resilience in the methodology is dened as the ability of energy system
to absorb, limit or defeat the impact of the disruption. The technical-
economic analysis of the development and operation of energy sys-
tems (see Fig. 1, where solid lines represent direct links, while dashed
lines show indirect and soft relations) is performed by the Finnish-Baltic
Energy Model (FIBEM) created in the environment of the MESSAGE
software package [38,39]. It provides detailed results of energy systems’
performance in the long-term perspective. In order to supplement case
study results with energy security measure (indicator), the energy sys-
tem resilience to various disruptions is examined by the Model for En-
ergy Security Coefcient Assessment (MESCA) mainly built in the Open
Source Energy Modelling System (OSeMOSYS) modelling generator [40,
41]. The MESCA is the probabilistic model of energy security, which
using Monte Carlo simulations in many runs determines the ability of
energy system to resist disruptions, generated in a probabilistic way.
This regional modelling activity, performed with FIBEM and MESCA
models, is harmonized with modelling of energy system development
and functioning conducted in the REEEM project [42] on the EU level
using the TIMES PanEU model [43]. It should be noted that modelling
with TIMES PanEU is not done in this energy security study but only
assumptions from the modelling results are taken as input parameters to
the FIBEM and MESCA models (Fig. 1). Harmonization (see Section 3) is
accomplished by iterative adjustments of model input parameters ac-
cording to the results of other models.
Technical-economic analysis of the development and operation of
energy systems carried out with the FIBEM is a key activity in energy
security analysis. The mathematical model of technical-economic anal-
ysis of the development and operation of energy systems FIBEM does not
differ in essence from other mathematical models used for this purpose
and built in an environment of MESSAGE, TIMES or MARKAL pro-
gramming packages. However, much more attention is paid to more
detailed representation of operation regimes of the energy system,
reserve provision needs and means, diversication of energy supply
chains, electricity trade between countries, balancing of intermittent
electricity generation from the renewable energy sources (RES), energy
security ensuring measures, etc. The links with the TIMES PanEU model
is made by using similar technical-economic parameters for energy
technologies, as well as using RES targets and CO2 prices from
mentioned model as an input parameter in FIBEM and MESCA. Addi-
tionally, MESCA probabilistic model enables to determine the energy
security quantitively, which directly refers to the energy system resil-
ience measure.
2.1. The structure of the energy system model FIBEM
Principal structure of regional mathematical model for technical-
economic analysis of the energy sector development and operation
FIBEM is shown in Fig. 2.
The model covers electricity, district heating and fuel supply systems
in three Baltic countries (i.e. Estonia, Latvia and Lithuania) and Finland.
The supply of different fuels to each country is modelled taking into
account country peculiarities of fuel supply infrastructures and other
country-specic factors. All existing and new power plants, electricity
transmission and distribution grids, energy accumulation options (hydro
pumped storage plants, electric batteries) are included into the elec-
tricity system. The main technical-economic parameters of all elements
of the model as well as modelling outputs are stored in the database of
Open Energy Platform [44]. Electricity system links between countries
in the region as well as links with energy systems of the third countries
are represented by throughput capacities of the power lines. They
change in time due to reorientation of the Baltic power systems from
synchronous operation with IPS/UPS towards synchronous operation
with power systems of the Continental Europe. The IPS/UPS is a wide
area synchronous transmission grid consisting of Independent Power
Systems of 12 countries bordering Russia and the Unied Power System
of Russia. Throughput capacities can also be extended if corresponding
investments are made. Correct representation of international lines is
very important not only for modelling electricity ows between coun-
tries, but also for proper assessment of reserve provision options of large
generating and transmitting units that already exist or may be intro-
duced into the relatively small system of the Baltic countries. In this
Fig. 1. Involvement of mathematical models into energy security analysis.
A. Galinis et al.
Energy Strategy Reviews 30 (2020) 100509
4
relation, reserve provision options of large units were analysed in detail
by putting into mathematical model special approaches designed for
explicit modelling of reserves, which in more detailed is discussed in
Subsection 4.3.
District heating systems in the analysed countries are tightly coupled
with the electricity system. Combined heat and power (CHP) plants
supply or can supply a large share of the required district heat in the
largest towns. At the same time, they may supply corresponding amount
of electricity to the national electricity grid. In this relation, the analysis
of power system development cannot be done separately from analysis
of CHP contribution to the future district heat supply. Therefore,
modelling of development of district heating systems was analysed in
parallel with analysis of electricity system development. The close
integration of these systems makes it possible to assess their potential
interoperability in real-time and to provide rational solutions at State
level. Taking into account the local character of district heating systems
(individual district heating systems of particular towns do not have
physical connections) supply of district heat is modelled explicitly for
each larger town within the analysed countries, while district heating
systems of smaller towns were aggregated into one equivalent system of
particular country. District heating systems contain all existing and
possible new heat production technologies, CHP plants, heat accumu-
lation means and heat transmission-distribution networks. The devel-
opment of these heat generating technologies is selected taking into
account the costs of heat production, and the cases of cogeneration
plants are additionally evaluated for their competitiveness in the elec-
tricity system.
2.2. Reserve modelling in FIBEM
In order to avoid disruptions in generation and consumption balance
and to guarantee stable operation of the energy system, reserve capac-
ities are necessary to compensate those, who go out of order. Most of
existing scientic literature dealing with power reserves focus on
operating reserves and balancing of renewable generation. It has been
shown that operating reserves are important cost determinants of re-
newables integration [45] which has to be considered at the planning
stage to avoid sub-optimal solutions and shortages of exible resources
[46].
Fluctuations of electricity production from renewables can be rep-
resented by increasing time granularity in long-term energy planning
models (it allows getting realistic capacity and generation structures).
More specic case is the provision of reserves against extraordinary
disturbances that is especially relevant in case of large units (big thermal
plants, wind parks, transmission lines). Large energy units inevitably
cause reserve problems: the larger unit fails, the more reserve capacity
must start operating to replace it.
Power reserve provision principle and requirement of reserve ca-
pacities are shown in Fig. 3.
Disturbance “n-1” in Fig. 3 indicates the possible outage of the largest
unit (power plant or interconnector) that operates in the system at a
given moment of time. Similarly, disturbance “n-2” indicates the
possible outage of the second-largest unit that operates in the same
moment of time. If for some reason, the largest unit suddenly stops
working, its power has to be immediately (maximum within 30 s) [47]
replaced by power from other units, which can offer frequency
containment reserve (FCR). These power plants, for a short time period,
can increase the output of electrical power. Reserve requirement is of the
same size as the unit, which went out of order. In this case, the FCR
equals the power of the largest unit (power plant or interconnector
depending on which of them stopped working).
The FCR within 15 min has to be replaced by a frequency restoration
reserve (FRR), and then released to be able to respond to another
possible disturbance. Thus, the size of the FRR is also equal to the size of
the largest unit. After (in 12 h) activation of the replacement reserve
(RR) the FRR has to be also released to be able to respond to the possible
“n-2” disturbance. Therefore, the total size of the reserve power should
be approximately three times the power of the largest unit (more pre-
cisely, it has to be equal to the power of “n-1” disturbance plus 2*power
of the “n-2” disturbance). If the system operates isolated, all this reserve
has to be deployed inside the system. Hence, the total installed capacity
of power plants in isolated system has to exceed the consumers’
maximum demand by approximately three times the largest unit ca-
pacity. If the system is connected with neighbouring power systems,
reserve provision services (by contract) can be obtained via cross-border
lines. Of course, in this case, the required reserve must exist in neigh-
bouring countries and the cross-border lines have to be able to transmit
the required reserve capacity.
Currently, the biggest possible “n-1” disturbance in the Baltic
countries may occur due to the outage of fully loaded Lithuania-Sweden
interconnector (700 MW). The higher “n-1” disturbance in the future
can happen due to possible construction of large nuclear unit or due to
commissioning of larger interconnector. In Finland, the biggest “n-1”
disturbance can happen due to the outage of Olkiluoto NPP (1600 MW),
operation of which is planned to start soon. Currently, the biggest “n-2”
disturbance in the Baltic countries can be related to the outage of the
Estonia-Finland interconnector (650 MW). In Finland, the biggest “n-2”
disturbance can happen due to outage of fully loaded 880 MW nuclear
unit.
Introduction of reserve provision to long-term energy planning
models is a challenging task not only due to their temporal aggregation
as it is the case with intermittent renewables [48,49] but also because of
the lack of prevailing market design for ancillary services [50,51].
Despite of their importance on for both development and operation of
Fig. 2. Structure of the FIBEM used in the energy security analysis.
A. Galinis et al.
Energy Strategy Reviews 30 (2020) 100509
5
energy systems, reservation issues are still neglected in the most of en-
ergy planning models. A specic modelling approach [52] was used in
this energy security study in order to implement the above-described
reserve provision principle into the mathematical model. In contrast
to other studies that assume certain reserve margins based on yearly
averages or extreme days [53], FIBEM determines reserve requirements
dynamically for each time-slice modelled. To model reserve provision,
all power plants, which usually are represented in energy system plan-
ning models as having only one main output – electricity, have three
additional outputs to represent reserve supply in FIBEM: FCR, FRR and
RR. Reserve provision options reect technology peculiarities and
ability to provide reserves [54]. Interconnectors are also considered for
reserve provision. To analyse the benets and possibilities of
cross-border reserve procurement [55], it was assumed that all kinds of
reserves can be provided by HVAC. The maximum value of each type of
reserve size, in this case, was limited by the line throughput capacity
unused for commercial electricity import. Similarly, the maximum value
of each type of reserve size was limited by the value of exported power if
electricity is exported through the line. For HVDC lines additional lim-
itations were assumed – the value of each type of reserve was limited by
10% from commercial power ow thorough the line. This assumed
limitation is based on the operational practice of power companies. In
addition, in 2025 synchronization of Estonian, Latvian and Lithuanian
power systems with the European Continental Network (ECN) is fore-
seen. It was assumed that status of some interconnectors linking power
systems of Baltic States with the power system of Continental Europe
and former IPS/UPS is changing in 2025 due to planned
resynchronisation process.
2.3. Energy security coefcient
The methodology for quantitative assessment of energy security aims
to expand capabilities of conventional energy system modelling tools in
order to assess energy security comprehensively and proposes an energy
security metric in terms of energy system resilience. In this step, the
scenario results of the FIBEM are checked in terms of energy security by
an uni-directional soft link with the MESCA probabilistic model, intro-
duced in Section 2.
The methodology is based on the analysis of various emerging
threats, disruptions arising from threats and associated consequences to
energy system in the case of potential disruptions. It seeks to quantita-
tively estimate energy security for future development scenarios. Energy
system modelling is employed to determine the ability of the energy
system to overcome or resist the emerging disruptions. An integral
characteristic of disruption consequences is represented by energy se-
curity coefcient (ESC), which is a quantitative metric of energy security
derived from the cost of energy generation and unserved energy.
Detailed description of the methodology used in the MESCA model and
quantitative justication of ESC is provided in the study [12], therefore,
will not be discussed in detail further in this paper.
The ESC aims to evaluate the ability of the energy system to over-
come resulting disruptions and indicates the level of energy system
resilience to these disruptions. The ESC is calculated from the conse-
quences of disruptions, which directly reveals vulnerability of the
Fig. 3. Reserve requirements for large units in power systems.
A. Galinis et al.
Energy Strategy Reviews 30 (2020) 100509
6
energy system:
ESC ¼exp(– w
1
∙ c
1
∙ exp(t) – w
2
∙ c
2
∙ exp(t))
where w
1
and w
2
indicate weights of each consequence, c
1
and c
2
indi-
cate disruption consequences (unserved energy and energy cost increase
respectively), t refers to OSeMOSYS parameter YearSplit.
Values of the ESC are estimated within the range from 0 to 1. If the
ESC is equal to 1 (maximum ESC), then the energy system is considered
as resilient to disruptions with high energy security level. If the ESC is
equal to 0 (minimum ESC), then the energy system is considered as not
resilient (vulnerable) to disruptions with low energy security level. In
short, higher ESC value indicates higher energy security level. The ESC
enables the comparison of energy system development scenarios from
energy security perspective taking into account energy system resilience
measure.
3. Assumptions and scenarios
To reect the European energy development trends, the assumptions
about carbon prices and renewable energy targets were synchronised
with the outputs of TIMES PanEU [43] model runs. Data harmonization
in this study was done for both FIBEM and MESCA models (Fig. 1). It
should be noted that in this study no modelling is carried out using
TIMES PanEU model. As indicated in Fig. 1, the energy security analysis
was carried out using FIBEM and MESCA models. However, the initial
assumptions concerning carbon prices and RES targets from the TIMES
PanEU model results are used as input parameters to FIBEM and MESCA
models.
The main factors dening energy sector development pathways in
the TIMES PanEU model are emissions of greenhouse gases (GHG) and
use of RES. The emission reduction target for the emission trading sector
(ETS) was set for the entire EU. It was assumed that GHG emissions in
the ETS should be reduced by 21% in 2020, by 43% in 2030, and by 83%
in 2050. All reduction rates are compared to the 2005 emission level.
The GHG emission targets for non ETS were slightly different among
Member States. The highest GHG emission target for 2050 is set for
Finland (80% reduction), while for all the Baltic countries it stands at
60%. Regarding the RES targets, by 2050, the share of RES in nal
electricity consumption should reach 85% in Finland and 75% in the
Baltic countries.
Two initial pathways are considered in the TIMES PanEU model:
Base, which represents current trends, and High RES that assumes higher
RES generation targets [43]. Following the results and assumptions of
the abovementioned pathways, it was assumed in this study that a
common target for RES based energy generation will be used for the
entire region, i.e., common target for Finland and the Baltic countries. In
addition, for simplicity reasons this target was converted into RES share
in total use of primary energy sources for electricity and district heat
production. Therefore, for the purpose of harmonization of the energy
security research with the research carried out using TIME PanEU the
RES target shares given in Table 1 were considered.
The CO
2
prices taken from the TIMES PanEU model results, are also
harmonized across the two studies and are presented in Table 2.
As it is presented in Table 2, TIMES PanEU Base and TIMES PanEU
High RES scenarios result in very similar carbon prices, having a
considerable jump in 2050. Therefore, it was decided that faster carbon
price growth will be represented by additional BaseCO2Lin scenario.
To sum up, further analysis includes the Base scenario, which has the
same CO
2
price and RES targets as the Base used in TIMES PanEU model,
and the BaseCO2Lin, which assumes linear growth from 10 EUR/t in
2020 up to value estimated in TIMES PanEU High RES scenario for 2050.
4. Results and discussion
In order to illustrate the situation in the Finnish and Baltic energy
sectors corresponding to the scenarios under consideration, this section
will rst review the dynamics of installed capacities in the analysed
countries, the modelling results showing expected changes in power
generation and reserve provision while Subsection 4.4 will provide en-
ergy security assessment for the scenarios considered. The results of
installed capacity, electricity generation and provision of reserve ser-
vices are presented for Finland and Baltic countries (all together) while
results of energy security coefcient are presented for each analysed
country separately.
4.1. Installed capacity
Installed capacities of power plants and interconnectors in Finland
are presented in Fig. 4.
Presented results show a substantial drop in installed capacity of
power plants in the time period until 2035. This is related to the
decommissioning of existing capacities after the end of their technical
lifetime and expected low electricity price in the market, which does not
guarantee enough return on investments for new power plants. In such
circumstances, new investments are postponed. The absence of other
instruments that could encourage new investments may lead to a situ-
ation where energy security may decrease (see Subsection 4.4 for more
information). In such situation, existing fossil fuel power plants that
currently are not competitive in the electricity market might still be a
cost-effective option for reserve provision and ensuring energy security.
It is necessary to keep this in mind when a decision about the decom-
missioning of existing plants is made. The changing role of existing
technologies can be considered as an important aspect of exibility that
increases energy security. Such cost-effective solutions may accelerate a
real energy transition by ensuring energy security at a lower cost.
Shrinking diversity of fuels used by power plants is observed with
decommissioning of old plants. At the beginning of the study period,
power plants were running on nuclear fuel, coal, peat, biomass, fuel oil,
hydro and wind energy. By the end of the study period, the most
polluting fuels like coal and peat disappeared from the list of fuels.
Nevertheless, even at the end of the study period electricity production
is based on four major primary energy forms – nuclear fuel, fuel oil, wind
and hydro energy. In addition, a smaller contribution comes from
biomass and solar energy.
Growth of installed capacity in Finland is expected with rapid
development of wind power plants followed by fast penetration of
manoeuvrable gas turbine CHP. Gas turbine CHPs are used for the
balancing of variable wind generation.
It is also necessary to mention that dynamics of available power in
the system will signicantly differ from the installed capacity shown in
Fig. 4, especially after 2035. The difference between available power
and installed capacity will appear because available power of wind
power plants and balancing power plants cannot be added together
arithmetically while installed capacities can be summed.
Another important factor is increasing throughput capacity of in-
ternational lines. This is linked to growing capacity of wind power plants
and increasing demand for balancing services in the system. Study
Table 1
RES target shares in primary energy consumption for electricity and district heat production.
Scenario 2015 2020 2025 2030 2035 2040 2045 2050
TIMES PanEU Base 0.326 0.329 0.432 0.594 0.672 0.697 0.742 0.758
TIMES PanEU High RES 0.327 0.329 0.430 0.581 0.672 0.742 0.819 0.852
A. Galinis et al.
Energy Strategy Reviews 30 (2020) 100509
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Table 2
CO
2
prices, EUR/t.
Scenario 2015 2020 2025 2030 2035 2040 2045 2050
TIMES PanEU Base 0 0 1.6 28.9 32.2 27.6 52.8 501.1
TIMES PanEU High RES 0 0 0 25.1 29.7 24.1 30.1 489.1
Additional (BaseCO2Lin) 0 10 89.8 169.7 249.6 329.4 409.3 489.1
Fig. 4. Installed capacity of electricity generation sources in Finland in analysed scenarios.
Fig. 5. Installed capacity of electricity generation sources in the Baltic countries.
A. Galinis et al.
Energy Strategy Reviews 30 (2020) 100509
8
results show that total throughput capacity of international links in 2040
is already ~14% higher than in 2015 and in the future, it will be growing
up to ~21% in 2045 and later years.
Dynamics of installed capacity of power plants and interconnectors
providing electricity to the Baltic countries are shown in Fig. 5.
Modelling results demonstrate high diversication among power
plant types but lower diversity among primary energy forms used for
electricity generation. Major part of installed capacity of power plants,
especially at the end of the study period, comes from wind power plants
and plants which run on natural gas. Hydropower plants and power
plants running on various types of biomass also make a notable contri-
bution. It is also expected that total installed capacity of power plants in
the Baltic countries will start growing from the period 2025–2030.
Major contribution is expected from wind power plants, CHP using
natural gas and CHP running on biomass.
The analysis also revealed that increased throughput capacity on
international lines and lines linking the Baltic countries with each other
would be benecial. This growth is especially important for provision of
sufcient reserves and balancing intermittent wind generation.
4.2. Electricity generation
Electricity generation in Finland for the Base and the BaseCO2Lin
scenarios is presented in Fig. 6. Due to high utilization of installed ca-
pacity electricity generation in nuclear power plants makes about 30%
from total electricity requirement in 2015. After commissioning of the
Olkiluoto NPP this share increases to 36–37%. The peak of electricity
generation from nuclear plants is expected during the period
2020–2035. In later years, with decommissioning of existing nuclear
units, the share of electricity generation from nuclear fuel will start
declining and at the end of the study period will make only about 15%
from total electricity requirement.
Electricity generation from hydropower plants is expected to remain
stable contributing about 13–19% to the total electricity requirement.
Some generation decline occurs in the middle of the study period due to
the rehabilitation of existing plants, which according to the results of the
analysis is an economically attractive option for all countries in the re-
gion under analysis. In addition, higher CO
2
prices (BaseCO2Lin
scenario) result in earlier retrotting of some hydroelectric plants and
increasing their efciency, which results in earlier increase of electricity
production in these plants.
Increasing requirements for climate change mitigation will stipulate
the growth of electricity generation in wind power plants. This gener-
ation is expected to exceed 15 TWh per annum by 2050 and will cover
nearly 18% of the total electricity requirements in Finland. It is also
expected that signicant increase of electricity generation from wind
power plants will occur in line with the declining electricity generation
from nuclear plants. As in the case of hydropower, higher CO
2
prices
(BaseCO2Lin scenario) lead to faster development of wind power plants
over the period 2030–2050, which allows for more than 20% increase in
power generation in these plants, compared to the Base scenario.
Electricity generation by manoeuvrable gas turbine CHP will be
growing in parallel with growing electricity generation from wind
power plants. This phenomenon can be explained by necessity for
balancing intermittent electricity generation from wind power plants.
Manoeuvrable gas turbine CHP will make a signicant contribution to
balancing of intermittent generation after exploiting the balancing ca-
pabilities provided by the grid. Electrical batteries will also contribute to
balancing of variable electricity generation at wind power plants. Their
annual electricity output will wary in a range of 2.9–5.9 TWh. This will
cover ~3.8–7.5% of the total electricity requirements in Finland. The
utilization of these technologies is very similar for both scenarios
considered.
Growing electricity import to Finland will contribute to the
balancing of variable wind generation. It also will substitute the
declining electricity generation from power plants running on fossil fuel,
as well as declining generation from nuclear plants. Thus, the electricity
import/export balance is expected to increase from about 19% in 2015
to about 32% in 2050. However, electricity import after 2030 in the
BaseCO2Lin scenario is 12–18% lower than in the Base scenario. This is
explained by the increased electricity production in hydro and wind
power plants, as well as the reduced utilization of installed capacities of
interconnectors due to their higher utilization for reserve provision
services and balancing of variable wind power generation.
Summarising, electricity supply in Finland is and will remain suf-
ciently diversied both in terms of primary energy sources and supply
Fig. 6. Electricity production in Finland in analysed scenarios.
A. Galinis et al.
Energy Strategy Reviews 30 (2020) 100509
9
channels. Nuclear fuel, hydro, wind resources, gas and biomass can be
mentioned in case of primary energy sources are concerned. Electricity
import is also possible from different countries-suppliers (Sweden,
Norway, Estonia and Russia). This makes a good basis for energy secu-
rity, whose quantitative characteristics are discussed in Subsection 4.4.
Electricity generation in the Baltic countries for analysed scenarios is
summarized in Fig. 7. Electricity import and generation from oil shale
are dominant in the Baltic countries at the beginning of the study period.
The share of imported electricity covers ~29% of the total electricity
requirements in the Baltic countries. Electricity generation from oil
shale is valued at ~26% level. It is expected in the future electricity
import and electricity generation from oil shale will be declining to ~7%
and less than 1% by 2050, correspondingly. Electricity import will be
mainly declining due to expressed energy policy, while electricity gen-
eration from oil shale will decline due to environmental concerns.
Therefore, a much faster decline is observed in the BaseCO2Lin scenario
in which CO
2
prices are signicantly higher in the middle of the study
period, if compared with the price in the Base scenario. On the opposite
side, electricity generation from wind and gas will be growing in order to
compensate these reductions. Thus, depending on scenario, electricity
generation from wind power plants is expected to be reaching ~2.8–7.5
TWh in 2030 and about 19 TWh in 2050. This will cover ~7.5–20% and
~40% of the total electricity requirements in the region
correspondingly.
Electricity generation from gas will grow from ~20% in 2015 to
~32–33% in 2050. As it is the case in Finland, these power plants will
signicantly contribute to the balancing of variable electricity genera-
tion from wind power plants. However, electricity grid (i.e. varying
electricity import/export from/to neighbouring countries) will make
major contribution to balancing of variable wind generation in the Baltic
countries. Use of hydro pumped storage power plant in comparison to
the aforementioned options is an economically less attractive option
used for balancing electricity supply and demand due to comparatively
big losses.
As far as individual Baltic countries are concerned, oil shale-based
electricity production is typical for Estonia. In the Base scenario, elec-
tricity generation from oil shale is dominant in Estonia, almost during
the entire study period. Only at the end of the period, this is substituted
by electricity generated from wind. In the BaseCO2Lin scenario, this
electricity generation source practically disappears already in 2030. The
growing environmental burdens (CO
2
price, in particular) are the main
cause of this rapid change. Reduced electricity generation from Estonian
oil shale power plants has only a minor impact on electricity generation
in Finland, as well as to net electricity imports to the Baltic countries.
Energy policy target can explain the fact that the impact on electricity
imports/exports is minor in this case for decreasing electricity imports to
the Baltic countries which is common for both scenarios analysed.
Three main types of power plants are used for electricity generation
in Latvia: CHP running on gas, CHPs running on biomass and hydro-
power plants. The remaining part of electricity requirement is covered
by electricity imports. Higher CO
2
prices (BaseCO2Lin scenario) would
lead to higher electricity generation from biomass burning power plants.
This increase is mainly observed in period 2020–2025. Additionally,
produced electricity is partly exported to Estonia.
The electricity requirements in Lithuania to a large extent are met by
electricity imports at the beginning of the study period. Local generation
is deeply diversied both in terms of power plants and primary energy
resources, including gas, wind, biomass and municipal waste as the main
ones. Over time, electricity generation from gas and wind will be
growing in order to help implement the agreed energy policy provisions
on the reduction of electricity imports. Signicant increase in electricity
generation from wind is expected after 2030. Higher CO
2
price (Base-
CO2Lin scenario) has the biggest impact on electricity generation from
CCGT CHP in Lithuania. Higher electricity generation at these power
plants is observed since 2030. Part of this additionally produced elec-
tricity is exported to Estonia which has electricity supply shortage due to
the earlier closure of oil shale power plants.
Climate change mitigation associated with growing CO
2
prices re-
sults in the transition from fossil fuel-based to carbon-free electricity
generation that comes from domestic resources (wind, solar, domesti-
cally produced biomass). Growing share of domestic energy resources in
total primary energy consumption has a positive impact on energy se-
curity. In addition, existing fossil fuel power plants that currently are not
competitive in the electricity market often are a cost-effective option for
reserve provision. Thus, energy security can be also increased by keep-
ing these power plants for reserve provision purposes instead of building
Fig. 7. Electricity production in Baltic countries in analysed scenarios.
A. Galinis et al.
Energy Strategy Reviews 30 (2020) 100509
10
new ones.
4.3. Provision of reserve services
Reserve provision services play an important role in energy security.
Modelling results regarding possible reserve provision in Finland and
the Baltic countries for the Base scenario are summarized in Table 3 and
Table 4 respectively.
Reserve provision amount expressed in GWh (ordered reserve ca-
pacity multiplied by order time) does not mean actually activated re-
serves. This shows the ability of plants for provision of the reserves if
such would be required or, in other words, the readiness of plants and
international lines for reserve provision. Total reserves of particular type
provided by power plants and interconnectors together, according
methodology applied, are always greater or equal to the utilized power
of the largest unit. Therefore, the neutralisation of n-1 disturbance is
always guaranteed.
The results clearly show that major part of FCR is provided by
interconnectors, especially AC lines. Depending on the year, even in
Finland, where the contribution of power plants plays bigger role, FCR
provided by interconnectors cover 80–87% of the total requirements of
FCR. This implies that certain throughput capacity of lines should be
always available for reserve provision services and that not full capacity
can be used for commercial electricity trade. Modelling results show that
on average only 56%–72% of installed throughput capacity of inter-
connectors is used for commercial electricity ows.
Provision of FRR is much more diversied and can be obtained from
majority of power plants. In Finland, the contribution of interconnectors
varies in a range of up to 32% of the total FRR requirements. This is also
the case with the provision of RR in Finland, where power plants are the
main contributors to this kind of reserve.
Regarding the provision of reserves, Baltic countries, in principle,
give similar results as it does for Finland. Practically all FCR is provided
by interconnectors, and all the requirements for FRR and RR are fullled
by power plants, located within the region. As implied by the modelling
methodology (see Subsection 2.2), if all capacity expansion options (see
Subsection 4.1) are implemented, the electricity systems of Finland and
the Baltic countries will have sufcient reserves in order to withstand “n-
1” disturbance and be ready to overcome disturbance “n-2”. There is no
single time slice within the long time period analysed in which there
would be not enough reserve capacities in the system. Thus, in theory,
the power systems should not encounter any serious disruptions. How-
ever, in practice, certain elements that ensure the provision of reserve
services may not be implemented or their functioning may not corre-
spond to the real threats. Therefore, the disruption of the operation of an
important element (line or generator) may cause a major disturbance to
the entire power system, especially in the case where throughput ca-
pacity of interconnectors was reduced due to various reasons.
4.4. Energy security coefcient
This subsection highlights main results obtained from the modelling
exercise performed with the probabilistic model MESCA (Fig. 1). The
ESC dynamics during the modelling period, for each country are pre-
sented with insights and interpretation of the impact on energy security.
Having analysed the results, major energy security assurance measures
were determined within different scenarios. The modelling results are
presented for each of the analysed countries separately, comparing the
ESC within different scenarios. Fig. 8 demonstrates the yearly average
ESC in the analysed scenarios during the modelling period in the ana-
lysed countries. Since Base and High RES scenarios give practically the
same results in terms of energy security, the ESC results only for Base
and BaseCO2Lin scenarios are presented in this Subsection.
4.4.1. Finland
Until 2025, the ESC is at the same level as at the start of the study
period, quite stable and relatively high in both analysed scenarios. The
installed capacity of energy generation does not differ until 2025 be-
tween the scenarios. The capacity of fossil fuel red PPs is gradually
been reduced in both cases; however, nuclear power (also new unit of
Olkiluoto NPP from 2020) allows the system to maintain the ESC at the
same level.
From 2025 to 2030, in the Base case, loss of capacity is observed,
while in the BaseCO2Lin scenario, lost capacity is replaced mostly by
biomass and wind technologies. Thus, a difference in the ESC is also
recorded. However, a unique situation is observed in the Base scenario
from 2030 to 2035 when a signicant amount of capacity is faced out
and practically none is installed to compensate in this period. As a result,
in 2035, total installed capacity of energy generation technologies is
even 27% lower than nal capacity demand. This signicantly decreases
the ESC in the Base case since the energy system becomes vulnerable to
various disruptions mainly due to lack of generation capacity. In the
BaseCo2Lin scenario, loss of capacity is also recorded, but not to such
large extent. Also, signicantly increased capacity of power connection
lines with Sweden allows to partially compensate generation capacity
losses. From 2035, mostly wind power is installed in the energy system,
which stabilizes the ESC to 2040 and increases from 2040 to the end of
the modelling period in the Base scenario. From 2040, new wind PPs
also appear in the BaseCO2Lin scenario and performance of the ESC is
relatively higher in comparison with the Base scenario (Fig. 8. (a)).
4.4.2. Estonia
The ESC in the Base scenario is quite stable until 2025, since no
major events appear in the Estonian energy system: electricity genera-
tion from oil shale dominates with some additions from RES. Also, total
installed capacity (mostly of fossil fuel PPs) gradually decreases. How-
ever, in the BaseCO2Lin scenario the ESC is lower since high CO
2
prices
lead to a sudden decrease of oil shale PP capacity. In addition, this lost
capacity is not suddenly replaced by other alternatives of the same type
but rather by wind and biomass CHP plants. For a country that has a high
share of power generation from a local fuel source, switching to other
alternatives in a short-term period under market conditions is
unbearable.
One of the most characteristic years in the analysed period is 2025,
where signicant increase in the ESC is observed (Fig. 8. (b)). This is
related to synchronization of Estonian, Latvian and Lithuanian power
systems with the ECN. This measure ensures higher energy security since
this would prevent from a possible total “black-out” of power network of
the Baltic countries or unreliable work of the network and would remove
possible geopolitical threats from the Eastern countries. Fig. 8.
Table 3
Reserve provision in Finland for the Base scenario (GWh).
Type of reserve Reserve provided by 2020 2025 2030 2035 2040 2045 2050
FCR Power plants 1547 1387 897 1059 913 684 652
Interconnectors 9864 9864 11652 11976 12302 12967 13702
FRR Power plants 10565 27860 13772 15024 11636 12819 11541
Interconnectors 2985 0 0 0 2753 5101 5462
RR Power plants 10678 18772 12903 13379 10504 7977 8037
Interconnectors 2757 516 0 0 4051 7839 7233
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Energy Strategy Reviews 30 (2020) 100509
11
From 2025 to 2045, the ESC in the Base scenario remains similar
with relatively slight uctuations due to various minor factors, e.g.
relatively small loss of capacity is replaced by new. Nevertheless, from
2045, the ESC is improved due to additional RES (mostly wind power)
capacity installed, which ensures more diversied electricity generation
during the period 2045–2050.
In the BaseCO2Lin scenario, the ESC during 2025–2035 slightly de-
creases due to loss of capacity and in 2035 reaches its lowest point when
there is no oil shale capacity left at all and total installed capacity of
energy generation technologies is only 6% higher than nal capacity
demand, while in the Base scenario this ratio is 35% at the same time.
From 2035 to 2045, the ESC in the BaseCO2Lin scenario performs much
better when energy system starts to install new wind power capacity.
However, in 2045–2050, wind power is dominant in total installed ca-
pacity which cannot ensure stable power generation and diversity, while
in the Base scenario the energy mix is more diversied and ensures
slightly higher ESC in the end of the study period.
4.4.3. Latvia
Only minor differences between the scenarios are observed when
analysing the ESC of Latvian energy system (Fig. 8. (c)). The ESC is quite
stable until 2025 since no major events appear: electricity generation is
mainly based on hydro power complemented by natural gas red plants
and electricity imports. Increased CO
2
price in the BaseCO2Lin scenario
does not drastically change the mix of energy system; only some addi-
tional capacity of hydro and biomass CHP technologies is observed
during the study period.
As in the case of Estonia, 2025 is the year in which synchronization of
the Baltic power system with the ECN is implemented and energy se-
curity is improved. The justication for this matter is detailed in the case
of Estonia. The ESC during the period 2025–2050 remains almost at the
same level with a slight increasing trend. The total installed capacity of
energy generation technologies is on average 114% higher (more than
twice) than the nal capacity demand during the modelling period in the
Base case. When taking into account capacity of power lines with other
countries, this ratio increases to approximately 400% on average. For
the BaseCO2Lin scenario, these numbers are even slightly higher.
4.4.4. Lithuania
The ESC in both scenarios for Lithuania is increased in 2016 by
introducing new power connections with Sweden and Poland (Fig. 8.
(d)). Interconnectors have exerted a positive impact upon the ESC,
mainly due to improved resilience of energy system in the case of
electricity supply disruptions. In addition, diversication of electricity
Table 4
Reserve provision in the Baltic States for the Base scenario (GWh).
Type of reserve Reserve provided by 2020 2025 2030 2035 2040 2045 2050
FCR Power plants 34 29 23 22 24 25 22
Interconnectors 762 971 1121 1094 1081 1094 1059
FRR Power plants 796 1001 1128 1109 1086 1107 1082
Interconnectors 0 0 0 0 0 0 0
RR Power plants 1070 1034 1153 1151 1132 1156 1139
Interconnectors 0 0 0 0 0 0 0
Fig. 8. Energy security coefcient in the analysed scenarios.
A. Galinis et al.
Energy Strategy Reviews 30 (2020) 100509
12
import routes and electricity market was improved.
Until 2025, the BaseCO2Lin scenario performs better in terms of
energy security in comparison to the Base scenario, since loss of capacity
is observed in the Base case while this capacity is replaced mainly by
biomass CHP and wind PPs and remains stable in the BaseCO2Lin case.
However, in 2020 and 2021, both scenarios show a slight increase in the
ESC due to increased capacity of power lines with Poland; also, Gas
Interconnection Poland-Lithuania starts its operation.
Signicant increase of the ESC is observed in 2025 when synchro-
nization of power systems of the Baltic countries with the ECN is
implemented and related to that, the capacity of the power connection
lines in Lithuania with Poland is signicantly increased. Aspects of the
impact of synchronization on energy security are explained in the case of
Estonia.
From 2025 onwards, in both scenarios installed capacity (mainly
wind PP and gas CHP due to balancing) increases, however, at a
different level, which allows to ensure a stable ESC. In the Base case,
starting from 2030, more rapid development of wind PPs is observed,
which increases the ESC to a certain level and maintains it till the end of
the study period. In the BaseCO2Lin scenario from 2034, the ESC has a
minor decrease until 2042 mainly due to the slight loss of capacity
during this period. However, the ESC in both scenarios equalizes due to a
similar energy mix at the end of the modelling period.
The total installed capacity of energy generation technologies is on
average 155% higher than the nal capacity demand during the study
period in the Base case, while in the BaseCO2Lin scenario is 200%. The
Lithuanian energy system in this modelling exercise in both scenarios
has a quite stable and increasing capacity of energy generation in the
whole study period. In addition, the system remains diversied and not
dependent only on a single energy source or supply.
The modelling exercise on the evaluation of ESC for the Baltic
countries and Finland revealed that the ESC performance is highly
dependent on generation adequacy in the country. Since old generation
technologies are facing decommissioning during the study period, in
order to ensure energy security, new technologies need to be installed.
Lack of capacity might lead the energy system to face some failures and
renders it insufcient to cope with technical and other disruptions.
However, not always the emergence of these technologies under market
conditions is feasible without promotion. In fact, too large penetration of
new capacity in a short-term period might also lead to problems since
there is a huge economic burden for the energy system to cope with
severe consequences of economic risks due to over-investment risk.
Diversication of energy supply sources is also a signicant measure
to increase energy security. This measure might also be implemented
through power interconnectors with other countries by increasing the
capacity of power lines. It also enables higher power market integration
and diversication of supply routes, which helps to further enhance
energy security.
5. Conclusions
The research presented in this paper demonstrates that coupling
detailed energy system model with the probabilistic model allows not
only to foresee energy security measures depending on the de-
velopments of carbon price paths and other relevant factors but also to
evaluate the energy system’s resilience to various disruptions and
compare different energy system scenarios in terms of the energy se-
curity quantitative measure.
The obtained results indicate that faster increase of carbon price
(BaseCO2Lin carbon price path) has the most signicant impact on the
development of Estonian energy system due to the phase-out of existing
oil shale power plants. Refurbishment of existing hydro power plants,
construction of wind power plants, CHPs running on biomass and
municipal waste, CHPs running on natural gas and biogas are the most
attractive electricity generation options in the Baltic countries and
Finland regardless of the carbon price path. Biomass boilers and heat
pumps are economically preferable for heat production. The develop-
ment of other technologies in the nearest future is economically less
justiable, due to electricity import driven by relatively low electricity
market prices and environmental limitations.
Energy security issues in the Baltic countries are mainly related to
electricity system. Although positive from the diversication point of
view, a signicant share of intermittent electricity generation (in
particular from wind) also imposes additional energy security chal-
lenges as it requires the power system to maintain sufcient balancing
capacities.
The most economically attractive balancing options in the Baltic
countries and Finland are: a) generation compensation obtained via
interconnectors from available sources in neighbouring countries; b) gas
turbine CHPs; c) gas turbine power plants and plants with internal
combustion engines; d) electricity storages (hydro pumped storage
power plant, electric batteries).
The Baltic countries have powerful electrical connections with
neighbouring power systems from which they import large amount of
required electricity. The capacity of a separate power line may exceed
30–50% of each country’s total power demand. Possible malfunctions of
such line may cause signicant energy security problems if required
reserve capacities are not available.
In theory, the power system should not face any serious disruptions.
However, in practice, certain elements that ensure the provision of
reserve services may not be implemented or their functioning may not
correspond to the real threats that can appear due to failure of powerful
line, especially in the case where throughput capacity of interconnectors
could be reduced due to various reasons. Looking at the current situa-
tion, the biggest problems are related to the provision of frequency
containment and replacement reserves.
Climate change mitigation targets associated with higher CO
2
prices
result in earlier decommissioning of power plants using oil shale, coal
and oil, faster growth of installed capacities and electricity production of
wind power plants, earlier upgrade of hydropower plants and increased
their efciency, increased installed capacity of interconnectors and
more intensive their use for balancing intermittent generation in RES
plants.
Existing fossil fuel power plants that currently are not competitive in
the electricity market often are a cost-effective option for reserve pro-
vision and ensuring energy security. The changing role of such existing
technologies is an important aspect of exibility that increases energy
security and accelerate the transition from fossil fuel-based to carbon-
free electricity generation.
When comparing the performance of energy security coefcient
between countries within analysed carbon price paths, it was observed
that the highest average (in terms of modelling period) ESC is recorded
in the BaseCO2Lin scenario for Finland and Lithuania (0.74) while the
lowest average (in terms of modelling period) ESC is observed in the
BaseCO2Lin scenario for Estonia (0.66). In addition, all analysed sce-
narios in this case study demonstrate that the average ESC is higher than
0.65. The results demonstrate that carbon price paths have modest
impact on energy security in Baltic countries if energy security measures
are implemented in optimal way. An acceptable energy security level
can be maintained despite the carbon price path.
The choice of energy security measures is a challenging task due to
both broad variety of threats to be addressed and the need to ensure that
the costs of energy security measures are exceeded by the benets for
national economy due to increased energy security. Moreover, the
implementation of energy security measures is a challenge itself, since
some measures require additional policy measures or market mecha-
nisms to be implemented. In this relation policy and market mechanisms
have to be looked through in order to nd a way for implementation of
foreseen energy security measures in practice.
A. Galinis et al.
Energy Strategy Reviews 30 (2020) 100509
13
Declaration of competing interest
The authors declare that they have no known competing nancial
interests or personal relationships that could have appeared to inuence
the work reported in this paper.
CRediT authorship contribution statement
Arvydas Galinis: Conceptualization, Methodology, Software,
Investigation, Data curation, Writing - original draft, Writing - review &
editing, Visualization. Linas Marti
sauskas: Conceptualization, Meth-
odology, Software, Investigation, Data curation, Writing - original draft,
Writing - review & editing, Visualization, Project administration.
Jaakko J€
a€
askel€
ainen: Data curation, Writing - original draft. Ville
Olkkonen: Data curation, Writing - original draft. Sanna Syri:
Conceptualization, Data curation, Writing - original draft, Writing - re-
view & editing. Georgios Avgerinopoulos: Writing - original draft,
Writing - review & editing. Vidas Lekavi
cius: Conceptualization,
Methodology, Investigation, Writing - original draft, Writing - review &
editing, Supervision, Project administration.
Acknowledgements
This research has received funding through REEEM project from the
European Union’s Horizon 2020 research and innovation programme
under Grant Agreement No. 691739.
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