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This article was downloaded by: [McMaster University]On: 19 December 2014, At: 19:54Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK
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Renewable Energy in the Baltic SeaRegion 2025Petri Tapio a , Vilja Varho a & Hanna Heino aa Finland Futures Research Centre, University of Turku , Turku ,FinlandPublished online: 14 May 2013.
To cite this article: Petri Tapio , Vilja Varho & Hanna Heino (2013) Renewable Energy in the Baltic SeaRegion 2025, Journal of East-West Business, 19:1-2, 47-62, DOI: 10.1080/10669868.2013.779544
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Renewable Energy in the BalticSea Region 2025
PETRI TAPIO, VILJA VARHO, and HANNA HEINOFinland Futures Research Centre, University of Turku, Turku, Finland
The renewable energy market doubled in the Baltic Sea Regionbetween 1999 and 2010. The trends are especially driven by globalclimate agreements as well as European Union target shares ofrenewable energy. The purpose of this article is to make futurescenarios of the developing renewable energy system in the BalticSea Region up to 2025. Five qualitative scenarios are made usingthe futures table method: laissez-faire, nuclear renaissance, fossildependence, light green, and renewable prosperity. The scenariosform a continuum from lowest to highest renewable energy market.Political, economic, social, technological, and environmentaldrivers of each scenario are defined and described.
KEYWORDS Baltic Sea Region, renewable energy, scenario
THE NEED FOR RENEWABLE ENERGY IN THEBALTIC SEA REGION
The need for a rise in renewable energy production is great, both in theBaltic Sea Region and globally. The environmental risks that are linked tofossil fuel use, combined with the estimated growth of the world economy,transport sector, and population, make it imperative to use more sustainableenergy forms. As fossil fuels are limited to a relatively small number ofcountries, some of which are in politically volatile areas, reducing geopoliti-cal risks calls for increasing renewable energy production. A well-balancedenergy market includes a variety of energy sources, where the share ofrenewables grows.
Received October 17, 2012; revised January 11, 2013; accepted January 11, 2013.Address correspondence to Petri Tapio, Finland Futures Research Centre, University of
Turku, Turku 20014, Finland. E-mail: [email protected]
Journal of East-West Business, 19:47–62, 2013Copyright # Taylor & Francis Group, LLCISSN: 1066-9868 print=1528-6959 onlineDOI: 10.1080/10669868.2013.779544
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The positive aspects related to renewable energy production are mani-fold: A large supply of renewable energy takes many forms (e.g., biomass,hydropower, wind, photovoltaics, wave and tidal energy, geothermal energy,and heat pumps) that ultimately rely on solar radiation (Demirbas 2005). Forexample, the European Environment Agency’s (EEA) technical report (2009)indicates that the wind power potential in the Baltic Sea area is significant. Ofthe Baltic Sea Region countries, Sweden has the highest technical potential ofonshore wind energy, about 5,000 TWh in 2030. Finland, Germany, andPoland each have some 4,000 to 4,500 TWh (1 TWh¼ 109 kWh; EEA 2009).In the EEA report, technical potential means ‘‘the highest potential level ofwind energy generation, based on overall resource availability and themaximum likely deployment density of turbines, using existing technologyor practices’’ (EEA 2009).
Technical potential exists, but the harnessing of the diffuse renewableenergy sources makes the matter technologically, operationally, and sociallyproblematic. Still, it can be argued that the innovation and construction ofrenewable energy technology is a case example of green growth potential (i.e.,sources of sustainable development ensuring more jobs and growth oppor-tunities without trading off the quality of the environment) in the future asthe German case shows (Weidner and Metz 2008). For example, the growingwind turbine industry has been a significant motive and a strong lobbying groupfor wind power supporting policies (e.g., Michaelowa 2005; Varho 2007).
Recently, the negative impacts or threats of increasing renewableenergy production have received a lot of attention. No energy productionmethod is without its negative impacts. For example, the environmentalfootprint of solar photovoltaics has suffered from either energy-intensive orrare raw materials (Varho 2002). Wind power has been criticized, in parti-cular, for its impact on scenery, but local participation and ownership ofturbines has been shown to significantly increase their acceptability (e.g.,Toke 2005; Toke and Strachan 2006). Location problems for especially largeparks are likely to be easier offshore, where also the wind speed is higher.The Baltic Sea has very promising offshore wind energy potential; theaverage wind velocity is high, and the shallowness of the sea results inlow construction costs (EEA 2009).
The use of biofuels in transport has also been considered problematic.Currently, to a great extent, the raw materials for biofuels come from devel-oping countries, such as palm oil and sugarcane ethanol. The fear is that thefuel plant production interferes with food production, risking food securityand possibly causing unrest due to rising food prices (e.g., Liska and Perrin2009). Some doubts have been raised whether the benefits of biofuels toclimate are certain, as these seem to depend greatly on the calculationpremises (Soimakallio 2012). Furthermore, new innovations generally andrenewable energy in particular suffer from systemic problems related tothe innovation and production cycle (Negro, Alkemade, and Hekkert 2012).
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Nevertheless, the renewables will continue to play an important andprobably increasing role. As energy consumption is very likely to continuegrowing globally—even with various energy efficiency improvements—asa result of the growing human population and economies, all sources ofenergy are likely to be in great demand. It is not certain that the relative shareof renewables will grow in the Baltic Sea Region, but it is difficult to envisiona future where the absolute production of renewable energy would notcontinue rising up to the year 2025.
TRENDS IN RENEWABLE ENERGY IN THE BALTIC SEA REGION
The trends in the share of renewable energy during the last two decadesare presented in figure 1 and table 1. Sweden and Latvia have been steadyleaders with their relatively abundant resource of hydropower. Finland hasconstantly had a rather high share of renewables due to efficient use ofside-streams of the forest industry and rather extensive use of hydropoweras well. Denmark has increased especially wind power production and, tosome extent, the combustion of straw and wood. Germany introduced astrong governmental policy to upgrade the use of renewables, which canbe seen as a constant rise during the last decade, and it can be considereda world leader in biogas production (Weiland 2010). Data for Estonia,Lithuania, and Poland show a recent rise from very low figures to about10%. Thus, the general trend shows a more rapid growth in renewableenergy than the total energy market.
FIGURE 1 The share of renewable energy (%) in the electricity consumption 1990–2010 foreight Baltic Sea Region countries (Eurostat 2012).
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The outlook is different for each renewable energy source. For example,there remains limited potential for hydropower in the Baltic Sea Region, andone of the most important new fields has been wind power. In 2000–2011,the share of wind power of all installed new electricity production capacityin the European Union (EU) was 28% (EWEA 2012). Wind power has beendominantly a western European field, starting particularly from Denmarkand Germany. Germany remains in the lead with 29,060MW of installedcapacity by the end of 2011 (which represents 31% of the EU-27 total and76% of the capacity installed in the eight EU countries of the Baltic SeaRegion), but Poland has had a large and growing wind power market forseveral years. On the other hand, the Danish market has grown slowly lately.Wind power has developed in individual countries as a result of particularpolicies. Therefore, the market in the Baltic Sea Region does not providestable conditions for practitioners across the countries.
Recently, the photovoltaic market has taken a huge leap forward, as21,000 MW of capacity was installed in the EU in 2011 alone, accountingfor 47% of all new power installations in the EU that year (EWEA 2012). Inthe Baltic Sea Region countries, Germany is the forerunner of solar poweras it generated over 15 times more solar power than any other country inthe region in 2010 (table 1). A major part of this growth has naturallybeen accomplished in southern Germany but northeastern Germany hada higher amount of new annual installation of photovoltaics per capitathan Germany on average between 2009 and 2011 (Renewable EnergiesAgency 2013).
TABLE 1 Renewable Energy Forms and the Final Energy Consumption in the Baltic SeaRegion EU Countries in 1999 and 2010
Country Year
Gross inlandconsumption
MtoeAll
renewables Hydro Wind Solar Ocean Biomass Geothermal
Denmark 1999 20.3 1.7 (8%) 0.0 0.3 0.0 0.0 1.4 0.02010 19.3 3.9 (20%) 0.0 0.7 0.0 0.0 3.2 0.0
Estonia 1999 5.0 0.5 (10%) 0.0 0.0 0.0 0.0 0.5 0.02010 6.1 0.8 (13%) 0.0 0.0 0.0 0.0 0.8 0.0
Finland 1999 33.3 7.3 (22%) 1.1 0.0 0.0 0.0 6.2 0.02010 37.0 9.1 (25%) 1.1 0.0 0.0 0.0 7.9 0.0
Germany 1999 341.5 8.1 (2%) 1.7 0.5 0.1 0.0 5.7 0.12010 336.1 32.6 (10%) 1.8 3.2 1.5 0.0 25.6 0.5
Latvia 1999 4.0 1.3 (33%) 0.2 0.0 0.0 0.0 1.0 0.02010 4.5 1.6 (36%) 0.3 0.0 0.0 0.0 1.3 0.0
Lithuania 1999 7.9 0.6 (8%) 0.0 0.0 0.0 0.0 0.6 0.02010 6.9 1.1 (16%) 0.0 0.0 0.0 0.0 1.0 0.0
Poland 1999 93.5 3.8 (4%) 0.2 0.0 0.0 0.0 3.6 0.02010 101.7 7.3 (7%) 0.3 0.1 0.0 0.0 6.9 0.0
Sweden 1999 50.2 13.4 (27%) 6.2 0.0 0.0 0.0 7.2 0.02010 51.4 17.4 (34%) 5.7 0.3 0.0 0.0 11.4 0.0
Source: EC (2012).
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Renewable power has been (and is likely to continue) growing becauseelectricity is in very high demand. The pressures such as climate change andthe German decision to phase out nuclear power further increase thedemand for new renewable electricity production. The EU policies are likelyto emphasize renewable energy production, but Russian policies willprobably be less supportive in the near future.
Russia is faced with great demands for expanding its energy productioninfrastructure and, at the same time, increasing efficiency of both energyproduction and consumption in various sectors (International Energy Agency2011). Current Russian energy strategy does not emphasize renewable energyvery much but does include a target to increase the share of renewable energyfrom 0.5% to 4.5% of power generation by 2020, hydropower excluded (PACEnergiya 2010, 110–111) and from about 16% to 18% or 19% by 2030, hydro-power included (PAC Energiya 2010, 148). As for heat and transport fuelproduction, the strategy does not provide any details on renewable energyshares.
Because of the ongoing development of the renewable energy technol-ogies, the precise palette of the renewable energy forms in each countrycannot be predicted. In addition, political forces particular to each countrycan significantly affect the development of individual energy forms, as canbe seen of the strong growth of photovoltaic energy production in Germany.A further element of uncertainty is caused by emerging issues. Theyare something that has not been experienced in the past but that may havea significant potential in the future. This is a special case of a ‘‘weak signal’’of change or a ‘‘wild card’’ that is difficult to see before it comes true(Mendonca et al. 2004).
An example of a weak signal is wave power. It is an emerging energyform that may well become an important part of the renewable energy pal-ette in the Baltic Sea Region, especially in a high-growth renewable energyscenario. About 100 different technologies to harvest wave energy exist inthe world, with many devices in the research and design stage. Renewableenergy is a field where many technically sound options have needed tostruggle from innovation to best available technology and then to massproduction phase.
It is estimated that wave energy could have the same potential as windor hydropower globally. The energy potential of the Baltic Sea has beencalculated to be 24 to 56 TWh (Bernhoff, Sjostedt, and Leijon 2006). Wavepower is suitable for local electricity production in coastal areas of the BalticSea and can be an answer to energy security in the archipelago. Compared tosolar and wind power, wave energy has some benefits; waves have higherenergy density and more predictable occurrence and persist even after windhas stopped blowing over the sea.
The Baltic Sea Region countries use a variety of renewable energypolicies. For example, Latvia has a mandatory procurement system and a
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renewable electricity quota. Also, Sweden has a green certificate system forrenewable electricity production, and it was recently extended to includeNorway (Ministry of Petroleum 2010). Several countries use some sort offeed-in tariffs, including Finland and Germany, and recently Poland. Invest-ment subsidies are also in use in several countries. Estonia, for example, hasinvestment support mechanisms for wind and biomass. RD&D funding alsoexists, particularly for energy forms that are yet not commercial.
Although electricity production has gained most attention, also heatingand to a lesser extent cooling remain fundamental areas. For example,Germany aims at harnessing public buildings as an example of how to userenewables for heating and cooling. An increasingly significant field is intransport, where, for example, the EU target is to increase the use of biofuelsto 10% by the year 2020 (EC 2009).
In this article, we make alternative scenarios for the Baltic Sea Regionup to 2025, focusing on the role of renewable energy as part of the energypalette. The Baltic Sea Region is defined here to include Belarus, Denmark,Estonia, Finland, Germany, Latvia, Lithuania, Poland, Russia, and Sweden.Countries having only a very small area in the Baltic Sea drainage area (CzechRepublic, Norway, Slovakia, and Ukraine) are excluded. Here, we reduce theenergy system to include the volume of the economic output (measured asGDP), the volume of energy production generally and electricity in parti-cular, the shares of renewable energy, fossil fuels and nuclear energy, andthe amount of environmental harm (measured as carbon dioxide [CO2] emis-sions). As for the drivers of change in the energy system, we consider a widevariety of qualitatively expressed changes in political, economic, social, tech-nological, and environmental factors. The research approach is qualitativeand explorative. We will not make forecasts of the most probable futurebut outline a few crystallized paths of possible development.
METHODOLOGY: THE FUTURES TABLE METHOD
The scenarios were constructed using the futures table method. The futurestable owes much to the field anomaly relaxation (FAR) method that was cre-ated in the 1970s and developed over several decades (see Rhyne 1995). TheFAR method involves a multidisciplinary research team to form sectors (orthemes or topics depending on the application) of the system under scrutinyand to qualitatively describe alternative future states of the sectors in tableform. Scenarios are constructed by combining future states that seem to forma coherent whole.
In order to ensure the interdisciplinarity of the study, we used the com-mon PESTE (or STEEP) categorization of drivers affecting the energy system(see Vinnari 2008 for the history of STEEP). It discerns political, economic,social, technological, and environmental factors affecting the system. The
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authors had two brainstorming sessions of defining the factors (i.e., qualitat-ive variables in the futures table) affecting the renewable energy system andthe possible future states of the factors. Each factor and state was criticallydiscussed before final approval. In a qualitative study, it is not possible totake into account a high number of factors, but the quality of the study isdependent on the relevance rather than detail of the factors.
The political factors mainly focused on global, the EU, and nationalclimate and energy policy that set targets for CO2 emissions and for the shareof renewable energy. Political stability between Baltic Sea Region’s EU coun-tries and Russia was also considered important as the EU is heavily depen-dent on Russian oil and gas. The strategic time frame of politics also seemsto have important consequences to the success of renewable energy.
The economic factors included, obviously, energy prices and the pro-duction structure in terms of energy-intensive production. International tradebetween three sub-regions in the Baltic Sea Region was also consideredimportant: non-EU countries (Belarus and Russia), new EU countries (Estonia,Latvia, Lithuania, and Poland), and old EU countries (Denmark, Finland,Germany, and Sweden). The role of Asian trade was also considered, mainlyfocusing on Russian energy exports. Since renewable energy has in somecountries, and particularly in times of economic uncertainty, suffered fromlow willingness to invest, the time horizon of renewable energy investmentswas included in the table. This is a qualitative variable but has importantquantitative dimensions in discount rates affecting acceptable payback timesof investments.
The social factors consist of public attitudes toward nuclear energy andto energy efficiency and the specific demand for sustainable energy. As socialchange is always dependent on the level of inertia in the social system,willingness to change was also defined as a relevant factor.
Technological factors include here the technical development rateof renewable energy production and the way energy consumption tech-nology will evolve. This is not only a matter of speed but a matter ofwhether increased efficiency will result in lower energy consumption orwhether increased efficiency will result in higher use of energy when thesaved money is used to buy additional products. This is the ‘‘reboundeffect’’ (Greening, Greene, and Difiglio 2000; Binswanger 2001), alsoknown as the Jevon’s paradox in energy production economics (Jevons1865). Another technical question is the long-lasting debate of peak oil,meaning a realized or expected reduction in oil production. Although oilis a non-renewable resource and the amount of non-used oil is a questionof fact, the technical availability of oil is definitely a variable that changesover time. The discussion is fluctuating whether peak oil has already beenreached or whether we are just about to reach it or whether we have plentyof unused oil reserves, such as shale oil (Maugeri 2012; Sorrell et al. 2011;Sorrell and McGlade 2012). This discussion, rather than the factual oil
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reserves, affects oil prices, public attitudes, and the competitiveness ofrenewable energy. We, therefore, consider peak oil as a variable in ouranalysis.
Many environmental factors affect the future of renewable energy, butwe considered that the speed of climate change is most important. Climatechange has direct consequences, such as increasing wood growth in North-ern Europe and increased winds but also indirect consequences to climatepolicies. The clearer the public and decision makers can see climate changein the forms of increased floods, storms, and dark winter months withoutsnow, the more likely they are to discuss and decide to promote the useof renewables (Lyytimaki 2012).
The volumes of GDP, energy production, electricity production, andCO2 emissions and the shares of renewable, fossil, and nuclear energy wereconsidered using a 7-point Likert scale (�3 . . .þ 3). The negative values (�3,�2, �1) described fast decrease, medium decrease, and slow decrease,respectively. The middle alternative, 0, represented the ‘‘current level.’’ Thepositive alternatives (1, 2, 3) stood for slow growth, medium growth, and fastgrowth, respectively.
Once the futures table is compiled, it must be reorganized so that cellsrepresenting a scenario are brought together. The alternative future stateswere grouped in MS Excel using same color fill in mutually consistent statesof factors. Taking an important theme as the starting point helps this work.We started with energy prices and proceeded through the driver variables.Finally, the driver scenarios were combined with the future states of theenergy system variables.
Sometimes, it was necessary to use the same alternative state in morethan one scenario if a variable had fewer alternative future states than theemerging set of scenarios. A few future states of the variables were left outof the scenarios as they were beyond the scope of the study (such as‘‘war’’ in East-West political relations) or if they were considered irrelevant(such as a complete collapse of GDP).
Once all future states were grouped, the table was arranged so that eachscenario was placed in its own column (see table 2). The order reflects thecontinuum of what would be beneficial to renewable energy. The final stepwas to name and describe the scenarios.
FIVE SCENARIOS OF RENEWABLE ENERGY IN THEBALTIC SEA REGION
Laissez-Faire
The laissez-faire scenario is based on a global economy that is as littleregulated as possible. Climate agreements will be overrun by the desirefor free markets. Climate targets and renewable policies will be abolished.
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TABLE2
FiveScenariosfortheFuture
ofRenewab
leEnergyin
theBalticSeaRegion
Drivers
Variables
Laissez-faire
Nuclear
renaissan
ceFossil
dependence
Lightgreen
Renewab
leprosperity
Political
Global
clim
ate
agreements
Less
agreements
Nonew
agreements
Nonew
agreements
More
binding
targets
More
binding
targets
EU
renewab
lepolicy
Targets
lowered
Targets
remain
Targets
remain
Targets
raised
Targets
raised
National
renewab
lepolicies
Nosubsidies
Presentsubsidies
continue
Less
subsidies
than
present
More
subsidies
More
subsidies
East-West
political
relations
Strainedrelations
Goodrelations
Strainedrelations
Goodrelations
Goodrelations
Policiestime
horizo
nSh
ortterm
strategy
Middle
term
strategy
Shortterm
strategy
Longterm
strategy
Longterm
strategy
Eco
nomic
Production
structure
Energyintensive
industry
moves
outsideof
Europe
Energyintensive
industry
moves
from
West
toEast
Energyintensive
industry
increases
Energyintensive
industry
decreases
Energyintensive
industry
decreases
Asian
energy
deman
dAsiaoutbids
Europefor
growth
inRussianenergy
Russia
sellsenergy
toboth
Europe
andAsia
Russia
sellsenergy
toboth
Europe
andAsia
Asiaoutbids
Europefor
growth
inRussianenergy
Russia
sellsenergy
toboth
Europe
andAsia
Russia-EU
energy
trad
eRussia
only
exportsenergy
Russian
import-exportin
balan
ce
Russia
only
exportsenergy
Energytech
nology
exportto
Russia
Energy
import-exportin
balan
ceWillingness
toinvest
inrenewab
leenergy
Shortterm
strategy
Middle
term
strategy
Shortterm
strategy
Longterm
strategy
Longterm
strategy
Energyprices
Remainat
current
level
Increaseslowly
Increasefast
Increaseslowly
Increasefast
Social
Energyefficiency
attitudes
Noeffort
Someeffort
Someeffort
Higheffort
Higheffort
(Continued
)
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TABLE2
Continued
Drivers
Variables
Laissez-faire
Nuclear
renaissan
ceFossil
dependence
Lightgreen
Renewab
leprosperity
Deman
dfor
sustainab
leenergy
Nosectorrises
Household
deman
drises
Nosectorrises
Publicdeman
drises
Allsectors
rise
Willingness
toch
ange
Low
Medium
Low
High
High
Attitudesto
nuclear
power
Ascu
rrently
Renaissan
ceAscu
rrently
Nuclear
reduction
Nuclear
reduction
Tech
nological
Tech
nical
developmentin
renewab
leenergy
production
Slow
Medium
Slow
Medium
Fast
Energy
consumption
tech
nology
development
Rebound
Nodevelopment
Rebound
Lowerenergy
consumption
Lowerenergy
consumption
Peak
oil
Slow
Medium
Fast
Fast
Fast
Environmental
Climatech
ange
Proceedsslower
than
expected
Proceedsas
expected
Proceeds
slowerthan
expected
Proceedsas
expected
Proceedsfaster
than
expected
Energysystem
Volume
GDP
02
11
2Energyproduction
01
20
�1
Electricity
production
03
21
0
EnergyCO
20
01
�1
�2
Structure
Shareof
renewab
les
�1
10
23
Shareofnuclear
01
0�1
�1
Shareoffossil
fuels
1�1
0�2
�3
Note.�1¼slow
decrease;�2¼moderatedecrease;�3¼fast
decrease;0¼cu
rrentlevel;1¼slow
growth;2¼moderategrowth;3¼fast
growth.
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A short-term strategy will dominate in political decision making, leading tostrained relations between Russia and the EU. Energy-intensive industrymoves outside Europe due to lower production costs, which leads Russiato increasingly direct its investments and pipelines to Asia. Due to lowerdemand in the old EU countries, energy prices will stay on current level,however. Incentives to invest in renewable energy are minimal due to bothshort-term policy and short-term investment strategy. Accordingly, attitudesand demand are not favorable to renewables. Technical development inrenewable energy is slow. Peak oil or climate change cannot be seen asclearly as in the other scenarios.
As a result, Northern European economy as well as energy and elec-tricity markets will stagnate as a whole. Share of renewable energy willdecrease, nuclear energy production will remain constant, and renewableenergy will be substituted by fossil fuels, which would mean a reverse ofthe trends in the EU countries of the Baltic Sea Region. Belarus and Russiawould continue on the business-as-usual fossil path.
Nuclear Renaissance
The nuclear renaissance scenario is based on a status quo climate andrenewable energy policy but moderately high economic growth. Here,energy-intensive industry would move within the Baltic Sea Region fromold to new EU countries and to Belarus and Russia. In line with good inter-national relations, Russia sells energy to both Asia and the EU. Energyimports and exports are, thus, less imbalanced than in the previous scenario.Energy prices increase slowly, and a middle-term strategy is used in renew-able energy investments. Energy efficiency is an acknowledged but nota very strong goal. Some consumer demand for sustainable energy will beseen, but public renewable policies will stay on current level. Nuclear powerrisks are considered generally acceptable and, therefore, most growth inenergy production will happen in nuclear power generation. Renewableenergy technology proceeds at an earlier rate, but large nuclear power plantsdominate investments, especially in countries historically rather nuclear–favorable: Finland, Lithuania, Russia, and Sweden. Peak oil is acknowledged,and climate change proceeds as expected.
As a result, energy production grows slowly, electricity productionrather quickly, and the share of renewables a little in the Baltic Sea Region.Share of fossil fuels decreases slowly. These trends balance each other out sothat CO2 emissions stay at the current level.
Fossil Dependence
The fossil dependence scenario is between the two earlier scenarios inclimate policy but less growth-oriented than nuclear renaissance. Political
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relations between Russia and the EU as well as between old and new EUcountries are rather strained, and short-term strategic decisions are madedue to paralyzing insecurity. Energy-intensive industry increases throughoutthe Baltic Sea Region, and Russia sells energy to both Asia and Europe butwith a rising price. Poland and Estonia will rise in intra-EU energy exportsdue to abundance of coal. Some effort is put to improving energy efficiency,but demand for more sustainably produced energy is insignificant. Willing-ness to change current practices and habits is low, also reflected in short-terminvestments and policies. Peak oil will be recognized rather rapidly but,as climate change proceeds slower than expected, a shift from oil to gasand coal will be the major fuel shift.
As a result, the economy grows rather slowly, energy and especiallyelectricity production moderately, and CO2 emissions more quickly than inany other scenario. The shares of renewables, nuclear power, and fossil fuelswill not change. EU renewable policy keeps the renewables still inside theenergy palette, but technological transfer from old to new EU countriesis slow.
Light Green
The light green scenario is more favorable to renewable energy than thethree earlier scenarios. Binding climate targets are adopted, and EU climatepolicy and national policies are longer term–oriented to limit climate change.Energy-intensive industry decreases as more material-efficient solutions aredeveloped, and people are more interested in consuming services thangoods, especially in the more well-off old EU countries. The energy tradebetween the old and new EU is characterized by renewable technology trans-fer and actual energy sales from Russia to the EU decline. Due to reducingdemand, the energy prices increase only moderately. Energy efficiency ishighly valued, and public demand for renewable energy rises. Willingnessto change the energy system is rather high, which is reflected in long-terminvestments. Attitudes toward nuclear energy become more negative.Technical development of renewable energy will be moderately fast, andenergy consumption will be reduced by more efficient consumer goods.Peak oil is acknowledged rapidly, and climate change proceeds as expected.
As a result, GDP will grow moderately. Energy production will notincrease at all, and electricity generation will grow slowly. Share of renew-able energy will rise quickly, nuclear energy will decrease slowly, especiallyin Germany and Sweden, and fossil fuels decrease moderately.
Renewable Prosperity
Renewable prosperity is rather similar to the light green scenario butstronger in promoting renewable energy. Political factors are similar, but
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some economic differences can be observed. Energy-intensive industrydecreases, perhaps a little more quickly in the old EU countries, and theboom in service economy begins also in the new EU countries. Russia sellsenergy to both Europe and Asia, and energy imports and exports are rela-tively balanced in the EU countries of the Baltic Sea Region due to relianceon domestic energy production. Energy prices increase rapidly. Environmen-tal thinking will penetrate the whole economy, and the whole society in thewhole region, resulting in high demand for renewable energy that becomesthe generator of the next economic boom. The Baltic Sea Region will bea forerunner in this boom, especially due to high investments in wind andsolar power and the use of forest growth surplus in Belarus, Finland, Russia,and Sweden. Accordingly, technological development in renewable energyis faster than in any other scenario. This scenario might be possible in lightof fast recognition of peak oil and a faster climate change than expected.
As a result, the economy will grow as fast as in the nuclear renaissancescenario, energy production will be decreased, electricity production willstay at current level, and CO2 emissions will decrease fastest of the scenarios.Share of renewables will rise more rapidly than in the other scenarios, fossilfuels use will decrease dramatically, and nuclear energy slowly.
DISCUSSION: A RECIPE TO PROMOTE RENEWABLE ENERGY INTHE BALTIC SEA REGION
The future of a society is fundamentally uncertain for two reasons: First, thefuture does not yet exist and, second, the society can make decisions shapingthe future (deJouvenel 1967). Therefore, the role of futures studies is toestimate probable futures, explore possible futures, and create preferredfutures (Amara 1981).
Considerable differences exist between the stakeholders of renewableenergy about what the most preferable future would look like, but herewe consider only what would be beneficial for an expanding renewablemarket in the Baltic Sea Region; that is what would lead toward the renew-able prosperity scenario. We discuss each of the systemic problems forrenewable energy diffusion identified by Negro et al. (2012), adapted hereto the Baltic Sea Region.
Hard Institutional Requirements
Volatile decisions of temporary regulations and subsidy schemes need to bechanged to long-term focus that reduces the uncertainties in the investmentin renewable energy. It seems that the EU is the only player in the field thatcan considerably boost this policy.
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Flexible Market Structures
Contemporary energy systems are designed mostly for mass production,which slows down the adoption and development of decentralized energyforms typical in renewable energy. Flexible technical and regulatory solu-tions need to be enforced to change this oligopoly that is the case in mostof the countries in the Baltic Sea Region. A clear solution would be openingup the electricity grid for small producers. Renewable energy works best indistributed systems. Large energy producers often resist this and, therefore,political courage is needed.
Soft Institutional Requirements
The legitimacy of renewable energy needs to be up-surged; perhaps themost powerful arguments are self-sufficiency and a foreseeable growth inthe renewable energy market. This is true especially for countries that arecurrently heavily dependent on energy imports, such as Belarus, Finland,Germany, Lithuania, and Sweden. In the case of Russia, a good argumentmight be that if Russia produces renewable energy for the domestic market,it will have more oil and gas to sell abroad.
Adequate Capabilities and Capacities
Small-scale producers of renewable energy technology and producers ofheat and power should collaborate in order to form an effective lobbyfor renewable energy. This could raise the demand above a threshold thatwould make purchasers and policy makers consider renewable energy as astandard solution. Direct contacts between entrepreneurs in different coun-tries would work best in the EU context and gain visibility in the nationalmedia.
Transparent Knowledge Infrastructure
Adequate information of the economic and energy payback times forrenewable energy investments should be shared between researchers andpractitioners. International projects demonstrating the best available tech-nology in countries like Estonia, Lithuania, and Poland might work well.
Balanced Interaction between Stakeholders
In order to keep the development of renewable energy open for both earlyadopters and their successors, the discussion forums need to be open anddynamic: not too closed or too unfocused. The EU-Russia energy dialogue
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seems too general, and it is too obvious that the EU wishes only to haveplenty of gas with affordable price.
Each of the points in the foregoing list aims at an efficient, open marketwhere the EU and governmental policies have a clear long-term consistencein promoting renewable energy. Deliberate human decisions affect theformation of the future. A lot has happened during the last few years, andwe think that the time is ripe for more radical changes on the shores ofthe Baltic Sea.
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