Environmental and economic aspects of higher RES penetration into Macedonian power system

The energy sector in Macedonia is the main emitter of greenhouses gases (GHG) with share of about 70% in the total annual emissions. Furthermore, within the energy sector, 70-75% of emissions are associated with the electricity generation due to the predominant role of the lignite fuelled power plants. This makes the electricity sector the most significant key source and, at the same time, the main target for CO2 emissions reduction. Recently, the government has adopted a strategy for the use of RES which identifies a target of 21% of final energy consumption from RES by 2020. The main goal of this paper is to investigate environmental and economic aspects of higher penetration of renewables into energy system of Macedonia. For this purpose a reference energy scenario for the power system expansion is developed by making use of EnergyPLAN model. The reference energy system was developed for the year 2020, and then used in the scenario analyses. The analyses of four 'RES' scenarios reveal that renewables can reduce CO2 emissions between 0.84% and 9.54% compared to reference scenario. Increase of CO2 price for double, compared to today's price, will lead to increase of annual operating costs over 26% in all the scenarios considered. In the case of doubling the lignite price, annual operating costs in scenarios will be increased between 6.5% and 7.6%. (C) 2011 Elsevier Ltd. All rights reserved.