Grid Issues for Electricity Production
Based on Renewable Energy Sources in Spain, Portugal, Germany, and United Kingdom
Annex to Report of the Grid Connection Inquiry
Stockholm 2008
SOU 2008:13
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Preface
This report is an underlying report to the Inquiry established by the Swedish Government on connection to the grid of electricity production based on renewable energy sources. The aim of this report is to give an insight on how different issues regarding connec- tion to the grid have been regulated in Spain, Portugal, Germany, and the United Kingdom.
This report is based on interviews and legislation. The focus of this report relies on network issues but in order to give an overall insight on the circumstances in which renewable energies are deve- loped in the studied countries even a description of the economical promotion schemes is done.
We would like to thank all those who have contributed to this report:
•In Spain: Asociación Empresarial Eólica – AEE, Comisión Nacional de la energía – CNE, Ministerio de Industria, Turismo y Comercio – MITYC, Instituto para la Diversificación y Ahorro de la Energía – IDAE, Endesa, Iberdrola, and REE – Red Electrica de España.
•In Portugal: REN – Rede Eléctrica Nacional, EDP – Energías de Portugal, APREN – Associação de energias renováveis, DGEG
– Direcção Geral de Energia e Geologia, and Centro de Estudos em Economia da Energia, dos Transportes e do Ambiente – CEEETA.
•In Germany: German Federal Ministry for the Environment (BMU), Federal Ministry of Economics and Technology (BMWi), Federal Network Agency (Bundesnetzagentur), German Wind Energy Association (BWE), RWE Transportnetz Strom GmbH, German Network Association (VDN), Enercon.
•In the United Kingdom: Ofgem, Department of Trade and Industry (DTI), National Grid, Xero Energy, Garrad Hassan, British Wind Energy Association (BWEA), University of Strathclyde.
Stockholm, November 2007
Eva Centeno López |
Thomas Ackermann |
Table of Contents
List of Abbreviations .......................................................... |
11 |
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List of Figures ................................................................... |
13 |
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List of Tables .................................................................... |
17 |
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1 |
Spain........................................................................ |
21 |
1.1 |
Introduction............................................................................. |
21 |
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1.1.1 Overview of the Transmission System........................ |
23 |
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1.1.2 Overview of the Distribution System ......................... |
24 |
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1.1.3 Relevant Legislation for Renewable Electricity |
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Production .................................................................... |
24 |
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1.1.4 Regulatory Framework for Network Companies ...... |
26 |
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1.1.5 Development of the Wind Power Sector in Spain...... |
27 |
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1.1.6 Possible Barriers for the Future Development of |
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the Wind Power Sector in Spain .................................. |
32 |
1.2 |
Payment Scheme for Renewable Electricity Production....... |
32 |
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1.2.1 Development of payment schemes.............................. |
42 |
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1.2.2 Agents Opinions on different Payment Schemes |
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for Renewable Electricity Production......................... |
42 |
1.3Application Procedure for Access and Connection to
the Grid .................................................................................... |
43 |
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1.3.1 Definition of the Capacity of a Production |
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Installation .................................................................... |
46 |
1.3.2 |
Permitting Entities ....................................................... |
47 |
1.4 Obligations of Grid Companies regarding Grid Access ....... |
49 |
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1.4.1 |
Available capacity ......................................................... |
49 |
5
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1.4.2 Priority Access for Renewable Electricity |
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Producers....................................................................... |
51 |
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1.4.3 Reservation of Transmission Capacity ........................ |
52 |
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1.5 |
Costs Associated to the Connection to the Grid .................. |
52 |
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1.5.1 Costs for the Connection Installations....................... |
53 |
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1.5.2 Costs for Reinforcement of the Transmission |
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Grid................................................................................ |
55 |
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1.5.3 Costs for Reinforcement of the Distribution |
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Grid................................................................................ |
56 |
1.6 |
Costs and Obligations related to measurement..................... |
57 |
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1.6.1 |
57 |
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1.6.2 |
Hourly measurement.................................................... |
58 |
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1.6.3 |
Measurement costs........................................................ |
59 |
1.7 |
Grid tariffs ................................................................................ |
60 |
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1.8 |
Rights and Obligations regarding |
60 |
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1.9 |
Conclusions Spain.................................................................... |
62 |
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2 |
Portugal..................................................................... |
67 |
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2.1 |
Introduction ............................................................................. |
67 |
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2.1.1 Overview of the Transmission System........................ |
68 |
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2.1.2 Overview of the Distribution System ......................... |
69 |
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2.1.3 Relevant Legislation for Renewable Electricity |
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Production..................................................................... |
70 |
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2.1.4 Regulatory Framework for Network Companies ...... |
70 |
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2.1.5 Development of the Wind Power Sector in |
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Portugal ......................................................................... |
71 |
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2.1.6 Possible Barriers for the Future Development of |
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the Wind Power Sector in Portugal ............................. |
74 |
2.2 |
Payment Scheme for Renewable Electricity Production....... |
74 |
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2.2.1 |
Wind Power................................................................... |
76 |
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2.2.2 |
Solar Power.................................................................... |
78 |
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2.2.3 |
Biomass.......................................................................... |
79 |
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2.2.4 |
Hydropower.................................................................. |
80 |
2.3Application Procedure for Access and Connection to
the Grid and Evaluation on Environmental Impact............... |
81 |
2.3.1 Permitting Entities........................................................ |
84 |
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Table of Contents |
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2.4 |
Obligations of Grid companies regarding Grid Access ........ |
85 |
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2.4.1 Available Capacity ........................................................ |
85 |
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2.4.2 Priority Access for Renewable Electricity |
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Producers ...................................................................... |
87 |
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2.4.3 Reservation of Transmission Capacity........................ |
88 |
2.5 |
Costs associated to the Connection to the Grid ................... |
89 |
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2.5.1 Costs for the Connection Installations ...................... |
89 |
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2.5.2 Costs for Reinforcement of the Transmission |
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Grid................................................................................ |
90 |
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2.5.3 Costs for Reinforcement of the Distribution |
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Grid................................................................................ |
92 |
2.6 |
Costs and Obligations Related to Measurement ................... |
92 |
2.7 |
Grid tariffs................................................................................ |
92 |
2.8 |
Rights and Obligations regarding |
92 |
2.9 |
Conclusions Portugal .............................................................. |
93 |
3 |
Germany ................................................................... |
97 |
3.1 |
Introduction............................................................................. |
97 |
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3.1.1 Overview of the Transmission System...................... |
100 |
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3.1.2 Overview of the Distribution Systems...................... |
101 |
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3.1.3 Relevant Legislations for Renewable Energy............ |
102 |
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3.1.4 Regulatory Framework for Network Companies .... |
106 |
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3.1.5 Development of the Wind Power Sector in |
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Germany...................................................................... |
107 |
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3.1.6 Future Plans and Possible Barriers for the |
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Further Development of Wind Power ...................... |
110 |
3.2 |
Payment Scheme for Renewable Energy Sources ................ |
113 |
3.3Application Procedure for Access and Connection to
the Grid .................................................................................. |
119 |
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3.3.1 Definition of the Capacity of a Production |
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Installation .................................................................. |
124 |
3.3.2 |
Permitting Entities ..................................................... |
125 |
3.4 Obligations of a Grid Company Regarding Grid Access.... |
125 |
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3.4.1 |
Available Capacity ...................................................... |
126 |
3.4.2 Reservation of Transmission Capacity...................... |
127 |
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3.5 |
Costs Associated with the Connection to the Grid ............ |
127 |
3.6 |
Costs and Obligations Related to Measurement ................. |
128 |
3.7 |
Grid Tariffs............................................................................. |
129 |
3.8 |
Rights and Obligations Regarding Real Time Operation.... |
129 |
3.9 |
Conclusions Germany ........................................................... |
130 |
4 |
United Kingdom ....................................................... |
133 |
4.1 |
Introduction ........................................................................... |
133 |
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4.1.1 Overview of the Transmission System...................... |
138 |
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4.1.2 Overview of the Distribution Systems...................... |
141 |
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4.1.3 Relevant Legislations .................................................. |
143 |
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4.1.4 Regulatory Framework for Network Companies .... |
149 |
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4.1.5 Development of the Wind Power Sector in the |
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UK................................................................................ |
151 |
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4.1.6 Future Plans and Possible Barriers for the |
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Further Development of Wind Power....................... |
153 |
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4.1.7 Payment Scheme for Renewable Energy Sources ..... |
155 |
4.2Application Procedure for Access and Connection to
the Grid................................................................................... |
167 |
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4.2.1 |
Definition of the Capacity of a Production |
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Installation................................................................... |
172 |
4.2.2 |
Permitting Entities...................................................... |
172 |
4.3 Obligations of a Grid Company Regarding Grid Access.... |
174 |
4.4Grid Access, Available Capacity and Queue
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Management ........................................................................... |
175 |
4.5 |
Reservation of Transmission Capacity ................................. |
180 |
4.6 |
Costs Associated with the Connection to the Grid ............ |
181 |
4.7 |
Costs and Obligations Related to Measurement ................. |
183 |
4.8 |
Grid Tariffs............................................................................. |
183 |
4.9 |
Rights and Obligations Regarding Real Time Operation.... |
188 |
4.10 |
Conclusions United Kingdom .............................................. |
188 |
8
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Table of Contents |
|
5 |
Summary of Findings................................................ |
193 |
5.1 |
General Renewable Energy Promotion Scheme .................. |
193 |
5.2 |
Network Connection Procedure .......................................... |
197 |
5.3 |
Network Investment Costs................................................... |
200 |
5.4Capacity Limits in the Regulations for Renewable
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Energy..................................................................................... |
203 |
5.5 |
Network Concessions ........................................................... |
205 |
5.6 |
Metering ................................................................................. |
208 |
5.7 |
Network Tariff Structure ...................................................... |
209 |
5.8 |
Priority Production and Curtailment Policy ....................... |
211 |
5.9 |
Current Policy Challenges Related to Network Issues ...... |
213 |
5.10 |
Summary and Conclusion ..................................................... |
214 |
9
List of Abbreviations
BEGA |
Bilateral Embedded Generation Agreement |
BELLA |
Bilateral Embedded License Exemptable Large |
|
Power Station Agreement |
BETTA |
British Electricity Trading and Transmission |
|
Arrangement |
BSUoS |
Balancing Services Use of System charges |
CNE |
Comisión Nacional de la Energía, (Regulator Spain) |
CUSC |
Connection and Use of System Code |
CHP |
Combined Heat and Power |
DCLF |
DC Loadflow |
DGGE |
Ministry of Economy and Innovation through its |
|
Directorate of Energy |
LECs |
Levy Exemption Certificates |
DGE |
Dirección General de Energía |
DL |
Decree Law (Portugal) |
DNC |
Declared Net Capacity |
DNO |
Distribution Network Operators |
HEDP |
Energias de Portugal |
GB |
Great Britain |
IDNO |
Independent Distribution Network Operator |
NETA |
New Electricity Trading Arrangement |
NFFO |
|
NFPA |
|
Ofgem |
The Office of Gas and Electricity Markets |
OFTO |
Offshore Transmission Owner |
PER |
Plan de Energías Renovables |
|
11 |
List of Abbreviations |
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PFER |
Plan de Fomento de las Energías Renovables |
RECs |
Regional Electricity Companies |
REE |
Red Eléctrica de España |
REN |
Rede Eléctrica (Portugal) |
RES Act |
Renewable Energy Source Act |
RO |
Renewable Obligation |
ROCs |
Renewables Obligation Certificates |
SRO |
Scottish Renewable Orders |
NGET |
National Grid Transmission |
RD |
Royal Decree (Spain) |
SPTK |
Scottish Power Transmission Limited |
SHETL |
Scottish |
TEC |
Transmission Entry Capacity |
TIRG |
Transmission Investment for Renewable |
|
Generation |
TO |
Transmission Owner |
TSO |
Transmission System Operator |
TNUoS |
Transmission Network Use of System Charges |
UK |
United Kingdom |
12
List of Figures
Figure |
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production .................................................................. |
21 |
Figure |
22 |
Figure |
23 |
Figure |
26 |
Figure |
|
capacity (MW) in Spain |
29 |
Figure |
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are connected by March 2007.................................... |
31 |
Figure |
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distribution grid. ........................................................ |
54 |
Figure |
55 |
Figure |
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equipment................................................................... |
58 |
Figure |
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the end of year 2006................................................... |
67 |
Figure |
68 |
Figure |
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year 2000 to February 2007 ....................................... |
71 |
Figure |
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producer...................................................................... |
76 |
Figure |
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production .................................................................. |
77 |
13
List of Figures |
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Figure |
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Transmission grid until 2010 ..................................... |
91 |
Figure |
98 |
|
Figure |
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Network and its TSOs. ............................................ |
100 |
Figure |
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distribution companies............................................. |
101 |
Figure |
||
Figure |
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electrical energy consumption for the Federal States |
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of Germany............................................................... |
109 |
Figure |
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Germany.................................................................... |
111 |
Figure |
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hold sector, 2005 ...................................................... |
119 |
Figure |
||
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system........................................................................ |
122 |
Figure |
133 |
|
Figure |
||
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from 1997 to 2006 …. ..............................................134 |
|
Figure |
||
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since 1990.................................................................. |
135 |
Figure |
The High Voltage Transmission Network in England |
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& Wales and Scotland............................................... |
139 |
Figure |
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England, Wales and Scotland................................... |
140 |
Figure |
||
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in Great Britain......................................................... |
141 |
Figure |
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wind farms to 2010................................................... |
152 |
Figure |
153 |
|
Figure |
154 |
14
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Figure |
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former NFFO contracts.......................................... |
156 |
Figure |
Breakdown of ROCs issued by technology type in |
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2006........................................................................... |
165 |
Figure |
Eligible capacity by technology in kW. .................. |
166 |
Figure |
Process for connection to the transmission system in |
|
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the UK. ..................................................................... |
168 |
Figure |
Generation Use of System Tariff Zones as at 1 April |
|
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2006........................................................................... |
185 |
15
List of Tables
Table |
Payment scheme for renewable electricity |
|
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production according to RD 661/2007..................... |
35 |
Table |
Payment scheme for renewable electricity |
|
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production according to RD 436/2004..................... |
38 |
Table |
Payment scheme for renewable electricity |
|
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production according to RD 2818/1998................... |
41 |
Table |
Voltage levels at which wind power installations |
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are connected.............................................................. |
72 |
Table |
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producers .................................................................... |
78 |
Table |
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producers based on solar energy ............................... |
79 |
Table |
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producers using biomass............................................ |
80 |
Table |
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plants........................................................................... |
80 |
Table |
Development of electricity production from |
|
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renewable energy........................................................ |
97 |
Table |
Development of installed capacity by source from |
|
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1990 to 2006 ............................................................... |
98 |
Table |
Development of renewable electricity production |
|
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by source from 1990 to 2006..................................... |
99 |
Table |
||
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Energy Sources Act 2004......................................... |
115 |
17
List of Tables |
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Table |
||
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Energy Sources Act 2004 ......................................... |
116 |
Table |
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Energy Sources Act 2004 ......................................... |
116 |
Table |
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Energy Sources Act 2004 ......................................... |
117 |
Table |
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Part 1 ......................................................................... |
117 |
Table |
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Part 2 ......................................................................... |
118 |
Table |
Installed capacity of Renewable Energy Sources in |
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the UK from 1998 to 2006....................................... |
136 |
Table |
Electricity generated from Renewable Energy |
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Sources in the UK from 1998 to 2006..................... |
137 |
Table |
Overview of |
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& Wales and operational capacity 2006 .................. |
157 |
Table |
Successful NFFO bidding prices in British |
|
|
pence/kWh. ............................................................... |
158 |
Table |
Overview of Scottish Renewable Orders (SRO) |
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and operational capacity 2006.................................. |
159 |
Table |
Overview of NFFO Auction Results ..................... |
160 |
Table |
How suppliers complied with their obligations in |
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England & Wales ...................................................... |
163 |
Table |
ROC prices from 2002 to 2007 based on eroc |
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Auctions.................................................................... |
164 |
Table |
Overview of proposed bands................................... |
167 |
Table |
Overview of deadlines for distribution |
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companies ................................................................. |
171 |
Table |
Fixed Prices for New Bilateral Agreements. .......... |
182 |
Table |
Comparison of renewable energy regulations and |
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its impact on wind power and solar photovoltaic |
|
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development.............................................................. |
194 |
18
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List of Tables |
Table |
Comparison of network connection procedures for |
|
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producers using renewable energies........................ |
197 |
Table |
Comparison of network investment costs for |
|
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producers using renewable energies........................ |
200 |
Table |
Comparison of capacity limits for producers using |
|
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renewable energies ................................................... |
203 |
Table |
Overview of policy issues related to the |
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construction/ownership of new power lines.......... |
205 |
Table |
Comparison of metering requirements. ................. |
208 |
Table |
Comparison of network fees................................... |
209 |
Table |
Comparison of curtailment policy.......................... |
211 |
Table |
Comparison of current policy challenges related to |
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network issues. ......................................................... |
213 |
19
1 Spain
1.1Introduction
Spain has a total installed capacity in electric power production of 82,336 MWFTPF1FPT by the end of 2006. A Breakdown of total installed capacity by technology by the end of 2006 can be seen in Figure
Figure
1TP PT Source: Wind Power 2007, Spanish Wind Power Association, http://www.aeeolica.org/ varios/AEE_Anuario_2007_ING.pdf
Source: REE & AEE
21
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The total installed capacity in renewable electricity production excluding large hydropower stations (installed capacity larger than 10 MW) was 13,959 MW by the end of year 2006. Figure
Figure
Source: CNE & AEE
Therefore, even though the aim of this chapter is to give an insight on the Spanish renewable sector as a whole, it focuses on the wind power sector. During the last two years it has been an important increase of solar photovoltaic producers and the total installed capa-
2TP PT
22
SOU 2008:13 |
Spain |
city of this technology was by the end of year 2006 equal to 118 MWTPF4FPT. Even though the installed capacity of solar photovoltaic installations is not comparable with the installed wind power capacity it might be interesting to get an idea of what is behind the development of solar photovoltaic.
1.1.1Overview of the Transmission System
The typical voltage levels for the transmission grids in Spain are 400 kV and 220 kV. The international connections are also consi- dered as a part of the transmission system. Red Eléctrica de España, REE, is the Transmission System Operator (TSO) and owns about 99.8% of the 400 kV power lines and 98.5% of the 220 kV power linesTPF5FPT.
Figure
Source: REE
4TP PT Source: Trends in photovoltaic applications. Survey report of selected IEA countries be- tween 1992 and 2006
5TP PT CNE, Información básica de los sistemas energéticos 2006, Electricidad.
23
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1.1.2Overview of the Distribution System
The typical voltage levels for the distribution grids in Spain are 132 kV (very high voltage), 66 kV, 45 kV, 30 kV (high voltage), 20 kV, 15 kV, 13.2 kV, 11 kV (medium voltage) and 380 V (400 V in the latest regu- lation, RD 842/2002, low voltage).
In Spain the main distribution companies are Iberdrola, Endesa, Unión Fenosa, Hidrocantábrico, and Viesgo with a market share of 40%, 39%, 15%, 2.5%, and 2.5% each, which represent 99% of the total distribution activity. During the last years the number of distri- bution companies has increased considerably even if they have a negligible market share.
1.1.3Relevant Legislation for Renewable Electricity Production
Electricity producers in Spain are subjected to different legislation depending on the producing technology and energy source used. Producers are classified in two main groups; special regime and ordi- nary regime. Renewable energy sources are included in the special regime while the ordinary regime consists of conventional power plants such as nuclear power stations and is therefore left out of this study.
The special regime has been regulated by different royal decrees named in the following. Royal Decrees in Spain are legal orders proposed by the government, instead of being proposed by the parliament as in the case of laws, and have a lower range than laws. Royal decrees are named with a number followed by the year they are published.
Royal decrees regulating the special regime are Royal Decree (RD) 2366/1994 which was modified by the RD 2818/1998 in order to adapt the legislation to the Law of the electricity sector 54/1997. The RD 2818/1998 was modified by the RD 436/2004 and recently, May 2007, by the RD 661/2007. Aspects related to the connection of the production installations are regulated in the RD 1955/2000 partially modified by the RD 661/2007, by its annex XI regarding connection and by its “disposición final segunda” regarding de- posits for licensing. There is specific legislation, RD 1663/2000, for the connection to the low voltage grid of solar photovoltaic in- stallations with an installed capacity lower than 100 kVA.
24
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Spain |
There have been some changes in the different royal decrees regarding the groups in which producers in the special regime are divided. The RD 436/2004 established for the first time a division of the solar category into solar photovoltaic and thermal solar and of the wind category into
The group with producers using renewable energy sources is called group b and is divided into 8 subgroupsTPF6FPT as follows:
•b.1: solar energy
•b.2: wind energy
•b.3: waves, geothermic, tides
•b.4: and b.5: hydropower
•b.6, b.7, and b.8: biomass and biogas
Installations with an installed capacity larger than 50 MW are not included in the special regime. However, when these installations use renewable energies, except for hydro power, they receive a pre- mium equal to the premium obtained by a similar installation with a capacity below 50 MW multiplied with a factor. That factor de- creases linearly with the installed capacity from 0.8 for 50 MW to 0.2 when the installed capacity is larger than 100 MW, see Figure
6TP PT For more details on which energy sources that are included in each subgroup see RD 661/2007, article 2.
25
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Figure
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Currently, most of the producers included in the special regime are regulated by the RD 436/2004 even though there are still some producers regulated by the RD 2818/1998. There are transitory periods established in every Royal Decree in order to switch to a new regulatory frame established by a new Royal Decree. In some cases it is possible for producers to stay in the former legislation and in others there is no transitory period as for example for solar photovoltaic producers that automatically have switched into the new RD 661/2007 by June, 2007.
1.1.4Regulatory Framework for Network Companies
The income of the distribution activity is established
7TP PT The income for the different distribution companies for year 2007 was established in the RD 1634/2006 (annex VII).
26
SOU 2008:13 |
Spain |
which means that companies with large demand increase (as for example Iberdrola in the Levante region) get the same incentives to make investment as companies with a stable demand. Not all invest- ment costs are included when calculating the income for each distri- bution company, it is only those investment costs dedicated to the expansion of the grid to cover the natural increase in demand that are included.
A new model for payment of the distribution activity has been defined in a proposal of Royal Decree made by the Ministry of Industry, Tourism and Trade. One of the major changes to be introduced by the new model is that different rates of the demand growth will be used for different regions. According to the current legislation if the demand growth for the whole country was for instance 4%, then that value was applied to all distribution com- panies even if there were areas were the demand growth was higher. Reference grids will be used to compare different distribution com- panies according to the new model which will probably be applied from year 2008.
The costs recognized to the distribution companies are collected by the distribution companies and retailers by means of tariffs and access fees paid by the consumers. Those tariffs and access fees are sent to the regulatory body, Comisión Nacional de la Energía, CNE, who splits them into the different costs associated to the electricity system of which one is the distribution cost. The distribution costs represented year 2005 approximately 74% of the regulated costs. Other regulated costs are for example transmission costs and pe- manent costs defined as costs associated to the market operator (OMEL), the transmission system operator (REE) and the regula- tory body (CNE) among others.
Besides the state regulation there is a different legislation for each region which can establish different requirements for example re- garding quality of supply. This might create economical imbalance since the payment to the distribution companies is determined by the central government and not by the regional authorities.
1.1.5Development of the Wind Power Sector in Spain
It is important to point out that the development of the wind power sector in Spain has taken place in a very different way than in other countries with large installed wind power capacity such as
27
Spain |
SOU 2008:13 |
Germany and Denmark. In Spain the population density in large areas with good wind resource is much lower than in Germany and Denmark. This has made it possible to build larger wind farms in Spain than in Germany and Denmark. In Germany and Denmark it has been smaller investors who have carried out this development, while in Spain the development has taken place through much larger investors such as electricity and construction companies. In Spain, approximately 60% of the wind power capacity is property of electric power companies. The fact that approximately 40% of the owners are not electrical companies might be a risk since the sector is getting more and more technical with requisites on production manage- ment and forecasting for example, therefore the
The regulatory measures behind the great development of the wind power sector in Spain during the last seven years, see Figure
8TP PT According to several interviewed agents of wind power sector in Spain.
9TP PT The support of electricity from renewable energy sources, Communication from the European Commission, COM (2005) 627
28
SOU 2008:13 |
Spain |
Figure
Source: AEE
The plan for renewable energies, “Plan de Fomento de las Energías Renovables”TPF10FPT (PFER), was published in December 1999 by the Institute for Energy Diversification and Saving, IDAE. This plan identified a technical potential for wind power in Spain in the range of
The PFER was updated with the Plan de Energías Renovables, PER, approved in the year 2005. The PERTPF11FPT defines the political targets for the period
During the years
10TP PT www.idae.es
11TP PT Plan de Energías Renovables en España
29
Spain |
SOU 2008:13 |
all political parties have supported the development of renewable energies. The political stability has played a crucial role for the development of the wind power sector in Spain.
In Spain the development of the wind power sector goes in the direction of larger wind farms connected directly to the transmission grid. There are two reasons behind this development. The first reason is the technical development and the second reason is the available capacity in the transmission grid to transport the produced electric power from the connection points. The first wind farms from the year 1997 and 1998 were composed of wind turbines with a capacity of 600 kW connected to the distribution grid. Nowadays, the tur- bines have an installed capacity of around 2 MW which means that it is possible to connect significantly larger capacity in the same location. By connecting larger capacity, more electric power is ex- pected to be produced and therefore a larger income is expected. This means that larger investments to connect the wind farm to the transmission grid can be made. However, since there is a limitation of 50 MW to get the highest payment (see Section 1.1.3), larger installations are divided into several 50 MW installations.
One reason for investing in larger wind farms is to take advantage of scale economies regarding for example the licensing procedure, since the number of licenses required are almost the same indepen- dently of the capacity to be installed.
The first wind farms were located at the mountain peaks but the technical improvements led to an increase of the efficiency of the wind turbines that made it possible to also build wind farms in other locations with less wind resource.
In Spain wind power developers have tried to utilize those loca- tions with best wind resource such as mountain chains in the North, Aragón and basins of the Ebro River concentrating the greatest number of wind farms in those areas.
Year 2001 there were about 3,200 MW installed wind power capa- city and the proportion of wind farms connected to the transmission and the distribution grid was very different compared to the situa- tion in March 2007. By year 2001, only 10%TPF12FPT of all wind farms were connected to the transmission grid while by March 2007, according to Figure
12TP PT Personal communication with REE
30
SOU 2008:13 |
Spain |
Figure
Potencia eólica puesta en servicio (MW) en el SEPE, según el nivel de tensión (kV) de conexión
4.005,9
3.440,8
2.947,3 |
|
|
|
|
|
|
0,0 |
1.088,9 |
|
|
|
|
322,6 |
|
|
||
|
|
|
|
||
|
17,5 |
25,5 |
|
|
|
|
|
|
|
||
400 kV |
220 kV |
Conexión a: |
MW |
% |
|
|
|
||||
132/110 kV |
66 kV |
RdT |
6.953,3 |
58,68% |
|
45 kV |
30 kV |
||||
|
|
|
|||
20 kV |
Desconocido |
RdD |
4.895,2 |
41,32% |
Source: REE, March 2007
The different regions have developed different policies regarding the development of the wind power sector. The region of Galicia has the largest amount of wind power capacity installed followed by Castilla León and Aragón while Andalucía, Cataluña, and Extremadura remain last in this development. There are regions where the environmental issues have stopped the development of the wind power sector like for example Cataluña. There have been different ways of allocating the connection capacity in the different regions to the different project developers such as tender procedure.
Most of the regions in Spain compete to develop wind projects be- fore the national target of 20,155 MW installed capacity is reached.
The wind power sector has created approximately 35,000TPF13FPT job opportunities in Spain. The regions have different requisites relating the creation of employment for giving the administrative licenses, i.e. the licenses for constructing, modifying, or closing wind farms. Wind power production gives increased incomes to the municipality where the installations are located since they have to pay a tax on economical activities of about 1% of the income of the installation.
13TP PT Eólica 2007, page 87. Asociación empresarial eólica, http://www.aeeolica.org
31
Spain |
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This might play a role in increasing the local acceptance of wind power.
1.1.6Possible Barriers for the Future Development of the Wind Power Sector in Spain
According to the interviewed agents of the wind power sector in Spain the target of 20,155 MW installed wind power capacity is most likely to be fulfilled. However, it is more uncertain whether this capacity is going to be build by 2010 as stated in the political target in the PER. The reason behind a possible delay is not the lack of investment but the possible lack of transport capacity in the grid to transport the produced electric power. The construction of the required infrastructure takes long time to complete.
The bottleneck in the development of wind power projects have changed according to a project developer in Spain. In the earlier stage, the bottleneck was the administrative licensing issue while nowadays the bottleneck is the connection issue. In the PFER it was already established a target for wind power of approximately 10,000 MW to year 2010. Some of the reinforcement works in the transmission system, necessary to transport the electricity produced by those 10,000 MW, have been delayed. This means that even if there are investors, some projects cannot be materialized as con- sequence of the lack of capacity in the grid.
In the region of Castilla León, for example, there are project developers that have started to build wind farms but these will not be able to start producing electric power until the infrastructure between Castilla León and Madrid has been built.
1.2Payment Scheme for Renewable Electricity Production
After the Royal Decree 2818/1998 was approved electricity producers based on renewable energy sources with a capacity below 50 MW have the possibility to choose between two different payment options since. These options are:
•Fixed regulated
•Market option (combination of the electricity market price together with a fixed premium).
32
SOU 2008:13 |
Spain |
However, solar producers have only the possibility to receive feed- in tariffs. Producers in the special regime can freely choose pay- ment option but the decision taken is for at least one year.
Up to year 2004, the number of wind power producers choosing the market option was very smallTPF14FPT. However, the publication of the RD 436/2004 including an incentive for the market option and rising electricity prices led to a huge increase of wind power producers choosing the market option. The high electricity prices resulted in much higher payments than expected for the producers who had chosen the market option. This has led to one of the major changes introduced by the new legislation adopted in June 2007, RD 661/2007, namely the establishment of price caps and price floors for the payment to the producers included in the special regime choosing the market option. Those caps and floors secure a mini- mum income necessary to recover investment costs and limit the premium to zero when electricity prices exceed the cap value.
In order to illustrate how the market option is constructed let us look at an example of an
The retroactivity of the tariffs and premiums has been a very con- troversial issue. The new Royal Decree 661/2007 defines a transitory period until year 2012 after which installations have to go over to the new payment scheme established in the new legislation.
Electricity production from solar photovoltaic producers is grow- ing rapidly in Spain since year 2005. As mentioned earlier, solar photovoltaic producers have only the possibility to receive
14TP PT Eólica 2007, Asociación Empresarial Eólica, Page 82.
33
Spain |
SOU 2008:13 |
tariff. There are three different
There is a direct connection between the political targets for each technology and the payment schemes defined in the new Law, RD 661/2007. This Law establishes that when 85% of the political target is reached, then the Secretary General of Energy will establish a period within which registered installations will have the right to receive the
In the following, Table
15TP PT In the final hourly market price it is included the market price (pool price) together with the prices of all other markets,
34
SOU 2008:13 |
Spain |
Table
Group |
Subgroup |
Capacity |
Period |
Premium |
Cap |
Floor |
|
|
|
|
|
Tariff |
c€/kWh |
c€/kWh |
c€/kWh |
|
|
|
|
c€/kWh |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b.1 Solar |
Photovoltaic |
P≤ 100 kW |
First 25 years |
44.0381 |
|||
(871 MW) |
(371 MW) |
|
Thereafter |
35.2305 |
|||
|
|
|
|||||
|
|
100 kW |
First 25 years |
41.7500 |
|||
|
|
|
|||||
|
|
10 MW |
Thereafter |
33.4000 |
|||
|
|
|
|||||
|
|
10 |
First 25 years |
22.9764 |
|||
|
|
50 MW |
Thereafter |
18.3811 |
|||
|
|
|
|||||
|
Thermal |
|
First 25 years |
26.9375 |
25.4000 |
34.3976 |
25.4038 |
|
(500 MW) |
|
Thereafter |
21.5498 |
20.3200 |
|
|
|
|
|
|
|
|||
b.2 Wind |
|
First 20 years |
7.3228 |
2.9291 |
8.4944 |
7.1275 |
|
(20155 MW) |
|
|
Thereafter |
6.1200 |
0.0000 |
||
|
|
|
|||||
|
|
|
≤ 8.43 |
16.40 |
|||
b.3 Waves, |
|
|
First 20 years |
6.8900 |
3.8444 |
||
tides |
|
|
Thereafter |
6.5100 |
3.0600 |
|
|
|
|
|
|
|
|||
b.4 Hydro |
|
|
First 25 years |
7.8000 |
2.5044 |
8.5200 |
6.5200 |
power |
|
|
Thereafter |
7.0200 |
1.3444 |
|
|
P≤ 10 MW |
|
|
|
|
|||
|
|
|
|
|
|
|
|
(2400 MW) |
|
|
|
|
|
|
|
b.5 Hydro |
|
|
First 25 years |
=6.60+1.2* |
2.1044 |
8.0000 |
6.1200 |
|
|
|
|||||
power10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50 MW |
|
|
Thereafter |
=5.94+1.0 |
1.3444 |
||
|
|
|
|||||
|
|
|
|
80*((50- |
|
|
|
|
|
|
|
P)/40) |
|
|
|
b.6 |
b.6.1 |
P≤ 2 MW |
First 15 years |
15.8890 |
11.5294 |
16.6300 |
15.4100 |
Biomass |
energy crops |
|
Thereafter |
11.7931 |
0.0000 |
|
|
|
|
|
|
|
|||
|
|
P>2 MW |
First 15 years |
14.6590 |
10.0964 |
15.0900 |
14.2700 |
|
|
|
Thereafter |
12.3470 |
0.0000 |
|
|
|
b.6.2 |
P≤ 2 MW |
First 15 years |
12.5710 |
8.2114 |
13.3100 |
12.0900 |
|
biomass from |
|
Thereafter |
8.4752 |
0.0000 |
|
|
|
residues in the |
|
|
|
|||
|
|
|
|
|
|
|
|
|
agricultural |
P>2 MW |
First 15 years |
10.7540 |
6.1914 |
11.1900 |
10.3790 |
|
sector and |
|
Thereafter |
8.0660 |
0.0000 |
|
|
|
|
|
|
|
gardening
35
Spain |
|
|
b.6.3 |
|
biomass from |
|
residues in |
|
forestry sites |
b.7 |
b.7.1 |
Biogas |
biogas from |
|
landfills |
|
b.7.2 |
|
biogas |
|
generated in |
|
digesters |
|
b.7.3 |
|
animal dung |
|
or liquid |
|
biofuels |
b.8 |
b.8.1 |
Biomass |
biomass from |
from the |
industrial |
industrial |
installations |
sector |
in the |
|
agricultural |
|
sector |
|
b.8.2 |
|
biomass from |
|
industrial |
|
installations |
|
in the forestry |
|
sector |
|
b.8.3 |
|
black liquor |
|
from paper |
|
industry |
|
|
|
|
|
|
SOU 2008:13 |
|
P≤ 2 MW |
First 15 years |
12.5710 |
8.2114 |
13.3100 |
12.0900 |
||
|
Thereafter |
8.4752 |
0.0000 |
|
|
||
P>2 MW |
First 15 years |
11.8294 |
7.2674 |
12.2600 |
11.4400 |
||
|
Thereafter |
8.0660 |
0.0000 |
|
|
||
|
First 15 years |
7.9920 |
3.7784 |
8.9600 |
7.4400 |
||
|
Thereafter |
6.5100 |
0.0000 |
|
|
||
P≤ 500 kW |
First 15 years |
13.0690 |
9.7696 |
15.3300 |
12.3500 |
||
|
Thereafter |
6.5100 |
0.0000 |
|
|
||
P>500 kW |
First 15 years |
9.6800 |
5.7774 |
11.0300 |
9.5500 |
||
|
Thereafter |
6.5100 |
0.0000 |
|
|
||
|
First 15 years |
5.3600 |
3.0844 |
8.3300 |
5.1000 |
||
|
Thereafter |
5.3600 |
0.0000 |
|
|
||
P≤ 2 MW |
First 15 years |
12.5710 |
8.2114 |
13.3100 |
12.0900 |
||
|
Thereafter |
8.4752 |
0.0000 |
|
|
||
P>2 MW |
First 15 years |
10.5740 |
6.1914 |
11.1900 |
10.3790 |
||
|
Thereafter |
8.0660 |
0.0000 |
|
|
||
P≤ 2 MW |
First 15 years |
9.2800 |
4.9214 |
10.0200 |
8.7900 |
||
|
Thereafter |
6.5100 |
0.0000 |
|
|
||
P>2 MW |
First 15 years |
6.5080 |
1.9454 |
6.9400 |
6.1200 |
||
|
Thereafter |
6.5080 |
0.0000 |
|
|
||
P≤ 2 MW |
First 15 years |
9.2800 |
5.1696 |
10.0200 |
8.7900 |
||
|
Thereafter |
6.5100 |
0.0000 |
|
|
||
P>2 MW |
First 15 years |
8.0000 |
3.2199 |
9.0000 |
7.5000 |
||
|
Thereafter |
|
6.5080 |
|
0.0000 |
|
|
|
|
|
|
|
The values of the
Renewable energy producers receive an incentive for consuming reactive power during low demand periods in which the circulation of reactive power, and therefore the losses in the lines, increases. At the same time they have to pay a penalization if they consume re- active power during peak load hours. The incentive or penalization is calculated as a percentage of a reference value that is updated
36
SOU 2008:13 |
Spain |
every year. The RD 661/2007 (article 29) established a reference value of 7.8441 c€/kWh and a percentage (annex V) that goes from
Producers using renewable energy sources without storage capa- bilities such as wind power or solar will no longer receive capacity payment according to the RD 661/2007. Year 2006, the average capa- city payment for wind power producers, amounted to 4.81 c€/kWh. Other producers included in the special regime can receive capacity payment but only when choosing the market option.
Below, Table
37
Spain |
SOU 2008:13 |
Table
Group |
Subgroup |
Capacity |
Period |
Premium |
Market- |
|
|
|
|
|
c€/kWh |
c€/kWh |
incentive |
|
|
|
|
|
||
|
|
|
|
|
(for all groups in |
(for all groups |
|
|
|
|
|
|
|
|
|
|
|
|
this table except |
0.10* TRF) |
|
|
|
|
|
|
|
|
|
|
|
|
solar and b.8, the |
|
|
|
|
|
|
formula is |
|
|
|
|
|
|
0.40*TRF) |
|
|
|
|
|
|
|
|
Solar |
Photovoltaic |
P≤100 kW |
First |
5.75*TRF= |
||
|
|
|||||
(350 MW) |
(150 MW) |
|
25 years |
41.4414[2004] |
|
|
|
|
|
|
42.1475[2005] |
|
|
|
|
|
|
44.0381[2006] |
|
|
|
|
|
Thereafter |
4.60*TRF= |
||
|
|
|
|
|
|
|
|
|
|
|
33.1531[2004] |
|
|
|
|
|
|
33.7180[2005] |
|
|
|
|
|
|
35.2305[2006] |
|
|
|
|
P>100 kW |
First |
3.00*TRF= |
2.50*TRF= |
|
|
|
|
25 years |
21.6216[2004] |
18.0180[2004] |
0.7207 [2004] |
|
|
|
|
21.9900[2005] |
18.3250[2005] |
0.7330 [2005] |
|
|
|
|
22.9764[2006] |
19.1470[2006] |
0.7659 [2006] |
|
|
|
Thereafter |
2.40*TRF= |
2.00*TRF= |
|
|
|
|
|
17.2973[2004] |
14.4144[2004] |
0.7207 [2004] |
|
|
|
|
0.7330 [2005] |
||
|
|
|
|
17.5920[2005] |
14.6600[2005] |
|
|
|
|
|
0.7659 [2006] |
||
|
|
|
|
18.3811[2006] |
15.3176[2006] |
|
|
|
|
|
|
||
|
Thermal |
|
First |
3.00*TRF= |
2.50*TRF= |
|
|
(200 MW) |
|
25 years |
21.6216[2004] |
18.0180[2004] |
0.7207 [2004] |
|
|
|
|
21.9900[2005] |
18.3250[2005] |
0.7330 [2005] |
|
|
|
|
22.9764[2006] |
19.1470 2006] |
0.7659 [2006] |
|
|
|
Thereafter |
2.40*TRF= |
2.00*TRF= |
|
|
|
|
|
17.2973[2004] |
14.4144[2004] |
0.7207 [2004] |
|
|
|
|
17.5920[2005] |
14.6600[2005] |
0.7330 [2005] |
|
|
|
|
18.3811[2006] |
15.3176[2006] |
0.7659 [2006] |
Wind |
P≤5 MW |
First |
0.90*TRF= |
|
|
|
|
|
|
||||
(13000 MW) |
|
|
15 years |
6.4865[2004] |
2.8829 [2004] |
0.7207 [2004] |
|
|
6.5970[2005] |
2.9320 [2005] |
0.7330 [2005] |
||
|
|
|
|
|||
|
|
|
|
6.8929[2006] |
3.0635 [2006] |
0.7659 [2006] |
|
|
|
Thereafter |
0.80*TRF= |
|
|
|
|
|
|
5.7657[2004] |
2.8829 [2004] |
0.7207 [2004] |
|
|
|
|
5.8640[2005] |
2.9320 [2005] |
0.7330 [2005] |
|
|
|
|
6.1270[2006] |
3.0635 [2006] |
0.7659 [2006] |
16TP PT RD 436/2004, disposicion adicional sexta.
17TP PT RD 2392/2004, article 2.
18TP PT 1556/2005, article 2.
38
SOU 2008:13 |
|
|
|
P>5 MW |
First 5 years |
|
|
From 5 to |
|
|
15 years |
|
|
Thereafter |
P≤5 MW |
First |
|
|
|
15 years |
|
|
Thereafter |
|
P>5 MW |
First 5 years |
|
|
From 5 to |
|
|
15 years |
|
|
Thereafter |
Waves, tides |
|
First |
|
|
20 years |
|
|
Thereafter |
|
|
Spain |
0.90*TRF= |
|
|
6.4865[2004] |
2.8829 [2004] |
0.7207 [2004] |
6.5970[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.8929[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.85*TRF= |
|
|
6.1261[2004] |
2.8829 [2004] |
0.7207 [2004] |
6.2305[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.5100[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.80*TRF= |
|
|
5.7657[2004] |
2.8829 [2004] |
0.7207 [2004] |
5.8640[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.1270[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.90*TRF= |
|
|
6.4865[2004] |
2.8829 [2004] |
0.7207 [2004] |
6.5970[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.8929[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.80*TRF= |
|
|
5.7657[2004] |
2.8829 [2004] |
0.7207 [2004] |
5.8640[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.1270[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.90*TRF= |
|
|
6.4865[2004] |
2.8829 [2004] |
0.7207 [2004] |
6.5970[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.8929[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.85*TRF= |
|
|
6.1261[2004] |
2.8829 [2004] |
0.7207 [2004] |
6.2305[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.5100[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.80*TRF= |
|
|
5.7657[2004] |
2.8829 [2004] |
0.7207 [2004] |
5.8640[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.1270[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.90*TRF= |
|
|
6.4865[2004] |
2.8829 [2004] |
0.7207 [2004] |
6.5970[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.8929[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.80*TRF= |
|
|
5.7657[2004] |
2.8829 [2004] |
0.7207 [2004] |
5.8640[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.1270[2006] |
3.0635 [2006] |
0.7659 [2006] |
39
Spain
Hydro power P≤10 MW (2400 MW)
Hydro power 10
Biomass |
b.6 |
(3200 MW) |
energy crops, |
|
biomass from |
|
residues in the |
|
agricultural |
|
sector, |
|
gardening, and |
|
forestry sites |
|
b.7 |
|
biomass from |
|
animal dung, |
|
biofuels and |
|
biogas |
b.8
biomass from industrial installations in the agricultural and forestry sector
10
25
First
25 years
Thereafter
First
25 years
Thereafter
First
15 years
Thereafter
First
20 years
Thereafter
First
20 years
Thereafter
|
|
SOU 2008:13 |
0.90* TRF |
2.8829 [2004] |
0.7207 [2004] |
6.4865[2004] |
2.9320 [2005] |
0.7330 [2005] |
6.5970[2005] |
3.0635 [2006] |
0.7659 [2006] |
6.8929[2006] |
|
|
0.80*TRF= |
|
|
5.7657[2004] |
2.8829 [2004] |
0.7207 [2004] |
5.8640[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.1270[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.90*TRF= |
|
|
6.4865[2004] |
2.8829 [2004] |
0.7207 [2004] |
6.5970[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.8929[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.80* TRF |
|
|
5.7657[2004] |
2.8829 [2004] |
0.7207 [2004] |
5.8640[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.1270[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.90*TRF= |
|
|
6.4865[2004] |
2.8829 [2004] |
0.7207 [2004] |
6.5970[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.8929[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.80*TRF= |
|
|
5.7657[2004] |
2.8829 [2004] |
0.7207 [2004] |
5.8640[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.1270[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.90*TRF= |
|
|
6.4865[2004] |
2.8829 [2004] |
0.7207 [2004] |
6.5970[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.8929[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.80*TRF= |
|
|
5.7657[2004] |
2.8829 [2004] |
0.7207 [2004] |
5.8640[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.1270[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.90*TRF= |
|
|
6.4865[2004] |
2.8829 [2004] |
0.7207 [2004] |
6.5970[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.8929[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.80*TRF= |
|
|
5.7657[2004] |
2.8829 [2004] |
0.7207 [2004] |
5.8640[2005] |
2.9320 [2005] |
0.7330 [2005] |
6.1270[2006] |
3.0635 [2006] |
0.7659 [2006] |
0.80*TRF= |
0.3*TRF= |
|
5.7657[2004] |
2.1622 [2004] |
0.7207 [2004] |
5.8640[2005] |
2.1990[2005] |
0.7330 [2005] |
6.1270[2006] |
2.2976 [2006] |
0.7659 [2006] |
40
SOU 2008:13 |
Spain |
Besides the
Below, Table
Table
Group |
Capacity |
Premium |
||
c€/kWh |
c€/kWh |
|||
|
|
|||
|
|
|
|
|
Solar |
P≤5kW (up to 50 MW) |
39.6668 |
36.0607 |
|
|
P>5kW |
21.6364 |
18.0303 |
|
Wind |
|
6.6231 |
3.1613 |
|
Waves, tides |
|
6.7313 |
3.2755 |
|
Hydro power |
|
|
|
|
P≤10 MW |
|
6.7313 |
3.2755 |
|
Hydro power |
|
|
=3.2755* |
|
10 |
|
|
||
Primary* Biomass |
|
6.5090 |
3.0471 |
|
Secondary** Biomass |
|
6.2866 |
2.8248 |
*All vegetables with a growing period no longer than one year. Those can be used directly or after a transformation procedure.
**Residues of the transformation of primary biomass such as biogas and biofuels.
Besides the
The
41
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1.2.1Development of payment schemes
By comparing the payment schemes in the last three royal decrees on the special regime the following conclusions can be drawn:
•Solar photovoltaic power production has experienced a great in- crease regarding payment. Installations with a capacity below 5 kW have almost the same payment as 10 years ago but large installations have got a much higher payment according to the new legislation. A solar photovoltaic installation with an installed capacity of 150 kW received according to the RD 2818/1998 a payment of 21.6 c€/kWh and according to the new royal decree, RD 661/2007 a payment of 41.8 c€/kWh is received.
•Wind power producers choosing the
•Electricity production from energy crops and biogas receive much higher payment according to the new legislation. An installation using energy crops with an installed capacity of 1.5 MW earlier received according to the RD 2818/1998 a payment of 6.5 c€/kWh and according to the new legislation, RD 661/2007 will receive a payment of 15.9 c€/kWh.
1.2.2Agents Opinions on different Payment Schemes for Renewable Electricity Production
According to several interviewed agents in the Spanish wind power sector, payment schemes based on market mechanisms such as green certificates, need price setting mechanisms capable of reflecting real investment costs in order to work as effective payment schemes. This is only possible in a wide and deep market where the participa- ting agents have equal access to the price relevant information. The wind power sector is still emerging and, according to the interviewed, is still not prepared for a payment scheme based only on market mechanisms. However, this kind of
42
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can be adequate when the sector is more established. There is a risk with those
1.3Application Procedure for Access and Connection to the Grid
The application procedure for the connection to the grid is defined in the Royal Decree 1955/2000 in its Title IV. There are two different procedures depending on whether the production installation is to be connected to the transmission system or to the distribution system. The procedures are outlined below.
Procedure for connection to the transmission system (RD 1955/2000 article 53 and 57)
1.The project developer sends the access application to the trans- mission system operator, TSO. The application has to include the information defined in the operating procedure 12.1 published by the TSOTPF19FPT.
2.The TSO sends a report with the eventual anomalies or mistakes to the project developer so that those are corrected.
3.The project developer corrects the anomalies or mistakes within a month from the reception of the report of the TSO.
4.After receiving the correct access application, the TSO has two months to communicate the project developer on the access license depending on whether there is available capacity for the connection or not. If the TSO does not inform the project developer on time, then the project developer can appeal to the regulatory body CNE. If the project developer does not agree with the proposed connection point by the TSO then he can appeal to the CNE who has a period of three months to decide on the conflict. The TSO´s report on available capacity has a validity of six months.
19TP PT http://www.ree.es/cap03/pdf/po/PO_resol_11feb2005.pdf (only Spanish version available)
43
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5.The project developer sends the basic project and the program of execution to the transmission company in order to get the con- nection license.
6.The transmission company has to send within a month a report to the TSOTPF20FPT regarding the fulfillment of the technical require- ments as well as a copy of the basic project and the program of execution.
7.The TSO will write a report within a month.
8.The access and connection licenses can be processed at the same time but to get the connection license the project developer has to have the access license.
Project developers of installations which are to be connected to the transmission grid have to hand in a deposit of 2% of the cost of the whole installation (for example 2% of the cost of the wind farm) to the Ministry, MITYC according to the Law RD 1454/2005 which added a new article to the RD 1955/2000 (article 59 bis). That is a requisite to initiate the procedure for access and connection to the grid. That deposit is given back to the project developer when he/she gets the administrative license for the installation or when, due to reasons beyond his responsibility, the administrative license cannot be obtained.
However, the new legislation, RD 661/2007, modifies the amount of the deposit defined by the former Law, RD 1454/2005, which for the transmission system becomes:
•500 €/kW for solar photovoltaics
•20 €/kW for all other producers included in the special regime.
Procedure for connection to the distribution system (RD 1955/2000 article 62, 63 and 66)
1.The project developer sends the access application to the operator of the distribution system, DSO, in the area. Each distribution company has an application model.
2.The DSO sends within 10 days a report with the eventual ano- malies or mistakes to the promoter so that those are corrected.
3.The promoter corrects the anomalies or mistakes within 10 days from the reception of the report of the DSO.
20TP PT As it was described in Section 1.1.1, Red Electrica de España, REE, is the Spanish TSO and the largest but not the only transmission company. Therefore, the transmission company and the TSO are referred to as two different entities even though in most of the cases they are the same entity, REE.
44
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4.After receiving the correct access application, the DSO has 15 days to communicate the project developer on the access license depen- ding on whether there is available capacity for the connection or not. The report of the DSO on available capacity has a validity of six months. If the DSO does not inform the project developer on time, then the project developer can appeal to the Regulatory Body CNE. The DSO has to inform the TSO about access appli- cations for capacities larger than 10 MW (that is a change intro- duced by the RD 661/2007 in its annex XI. Earlier the limit was 50 MW or a capacity lower than 5% or 10% of the
5.The project developer sends the basic project and the program of execution to the distribution company in order to get the connection license.
6.The distribution company, in case the connection can affect the transmission system as defined earlier in point 4, has to send within a month a report to the TSO regarding the fulfillment of the technical requirements as well as a copy of the basic project and the program of execution.
7.The TSO will write a report within a month.
8.The access and connection licenses can be processed at the same time but to get the connection license the project developer has to have the access license.
The environmental assessment of the projects is a part of the admi- nistrative licensing process and is a requirement to get the admini- strative license necessary to build the installations. The administrative license can be processed at the same time as the access and connec- tion licenses. The environmental assessment process takes in practice about six or seven months according to one Spanish project developer.
The RD 661/2007 (disposicion final segunda) adds a new article to the RD 1955/2000, called article 66 bis. This new article defines a deposit to be paid by project developers of installations which are to be connected to the distribution grid. The amount of the deposit is:
45
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•500 €/kW for solar photovoltaics.
•20 €/kW for all other producers included in the special regime.
It is important to note that solar photovoltaic installations located in residential, commercial, service or industrial premises do not have to hand in the deposit defined in the list above. The payment of the deposit is a requisite to initiate the application procedure of access and connection to the distribution grid. That deposit is given back to the developer when the developer gets the administrative license for the installation or when, due to reasons beyond its responsi- bility, that administrative license cannot be obtained. Installations which do not need any administrative license for being built will get back the deposit when the installation has been definitively included in the register for special regime.
1.3.1Definition of the Capacity of a Production Installation
The Law for the special regime establishes a capacity limit of 50 MW to receive the highest payment, see Figure
Different generating units are considered, according to the Law RD 2818/1998 (article 3), as one single installation when they inject their energy in the same transformer with a voltage output equal to the voltage of the grid to which they are connected. The capacity of
21TP PT
46
SOU 2008:13 |
Spain |
the installation is the sum of the capacity of the individual gene- rating units. This definition has remained unchanged in posterior legislation. If different generating installations use the same connec- tion installations, then the definition described earlier in this para- graph will be understood relating to the transformer before the one that is used by the different installations. This means for instance that 30 wind turbines of 2 MW each will be considered as a 60 MW wind park if they use the same transformer to connect to the grid. If 15 turbines are connected to one transformer and the other 15 to another transformer, then there will be two installations of 30 MW each.
1.3.2Permitting Entities
The operating procedure 13.1 published by the TSOTPF22FPT establishes minimum capacity limits for the connection of a producing installa- tion to the transmission grid. Those limits are 100 MW for the con- nection to the 220 kV grid and 250 MW for the connection to the 400 kV grid. These limits were applied even before this operating procedure was approved. The system operator REE has been flexible with the limit of 100 MW for the connection to the 220 kV grid. If for example a wind park with an installed capacity of 50 MW applied for connection to the 220 kV grid and had plans to later enlarge the capacity to 100 MW, then they have got access to the 220 kV grid.
It might sound confusing to combine the limit of 50 MW to get the payment for the special regime as the same time as the mini- mum capacity is 100 MW to connect to the transmission grid. In practice what is done is that several project developers make a joint application for connection to the transmission grid in order to reach the requisite on minimum capacity for the connection and at the same time receive the highest possible payment. To make the joint application the Law RD 661/2007 establishes the requirement of a node representative that is selected by the regional government or the competitive authority when several project developers ask on access to the transmission grid. It is usually the project developer that has been a longer time at the location or the one developing the largest installation that is selected by the authorities which com- municate the decision to the system operator and the transmission company. This speeds up the licensing process.
22TP PT http://www.ree.es/cap03/pdf/po/PO_resol_22Mar2005.pdf (only Spanish version available)
47
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The administrative licenses, i.e., the licenses for construction, modifying or closing transmission installations are given by the Ministry. Those administrative licenses are public and are published in the State official bulletin, BOE. Administrative licenses for distri- bution installations are given by the regional authorities. The defini- tion of what is included in the transmission installations and distri- bution installations can be found in article 5 of the RD 1955/2000. It is important to point out that according to that RD, producing installations, transformers to those installations, and connecting in- stallations such as power lines are included in neither the transmission nor the distribution grid. However, it is quite common for producers which are about to connect to the distribution grid, to give the power line and the position at the substation to the grid company (see Section 1.5).
The administrative license for generating installations with either an installed capacity over 50 MW, located in more than one munici- pality, or in the sea is a responsibility of the Ministry of Industry, Tourism and Trade through its Dirección General de Energía, DGE. This is established in the Royal Decree 661/2007 article 4.
The administration wants that project developers process the administrative licenses for the wind farm and the connecting line together. It can be a single dossier or several depending on whether the line is to be used by a single producer or by several. According to a Spanish project developer the negotiation with the owners of the land necessary to build a wind farm is usually fast while nego- tiations with the owners of the land necessary to build a connecting line are more difficult. When no agreement can be reached with the land owners then it is possible to expropriate the land if the installa- tions are declared by the administration as of public usefulness. The administrations use to require the project developers agreement with at least 50% of the involved owners in order to expropriate. Expro- priation facilitates considerably the construction of lines since they can be built even if no agreement is reached with all the land owners.
48
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1.4Obligations of Grid Companies regarding Grid Access
1.4.1Available capacity
Access and connection to the grid are regulated by the Royal Decree 1955/2000. According to its article 20 the only reason to deny access to the grid is the lack of capacity. The lack of capacity will be justi- fied exclusively according to criteria of security, regularity and quality of the supply.
Moreover the general criteria of security, regularity and quality of the supply, there are also other specific criteria for the producers included in the special regime when deciding on access to the grid. These specific criteria, which are given below, were already defined in the RD 436/2004 and are stated again in the RD 661/2007 (an- nex 11) with some modifications:
1.The capacity of a generating installation or group of installations included in the special regime connected to one power line of the distribution grid cannot exceed 50% of the capacity of the power line at that point.
2.The capacity of a generating installation or group of installa- tions included in the special regime connected to one substation or transformer cannot exceed 50% of the capacity of the trans- formers installed for that voltage level.
3.For producers without storage capabilities, such as wind power and solar photovoltaic producers, it is also established that the capacity of the producer or group of producers sharing connec- tion point, will not exceed 1/20 of the grid
In practice, the criteria above are only being restrictive in the con- nection to the distribution grid and are not actual in the connection to the transmission gridTPF23FPT. For the connection to the distribution grid, the limits expressed in criteria 1 and 2 are limiting the capacity to be connected in about 10% of the cases while the limit expressed in criteria 3 is limiting in approximately 90% of the cases when there is not available capacity in the distribution grid. There is still not much experience with the connection to the distribution grid of generating capacity. Therefore it might be wise to be conserva- tive at the beginning and maybe in four or five years loosen those
23TP PT Personal communication with the Spanish system operator, REE.
49
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limitsTPF24FPT. The limits above are considered quite conservative by the TSO. For example in Australia, for criterion 3, values of 1/5 instead of 1/20 are being used.
The largest difference between the RD 436/2004 and the RD 661/2007 regarding limits in the capacity to be connected to the grid is that in the first one the limits apply for each individual pro- duction installation while in the second one the limits apply for each individual production installation as well as for the total of installa- tions connected at the same point (power line or substation) to the grid. This means that the RD 661/2007 is more restrictive than the RD 436/2004. However, the criteria that the restriction applies not only for each individual production installation but also for groups of installations connected at the same point has been used even before the establishment of the RD 661/2007TPF25FPT.
The transmission system operator, REE, is allowing the installation of 25% larger capacity from producers based on renewable energy sources without storage capabilities than the grids capacity at the connection point. This is due to the fact that it is very unlikely that all such producers will be producing at full capacity at the same time. Therefore, if the grid capacity at the connection point is X, it is possible to connect 1.25*X capacity from electricity producers based on renewable energy sources without storage capabilities.
The new RD 661/2007 establishes in its annex XI that all access applications to the distribution grids for installations, or group of installations, with a capacity larger than 10 MW have to be sent to the transmission system operator after having got the acceptability by the distribution grid operator. The transmission system operator has to inform on its acceptability. This is a great change since RD 1955/2000 (article 63) established that only access applications for installations with an installed capacity larger than 50 MW or with a capacity larger than 5% of the grid
There is a significant number of wind farms located between the region of Galicia and Madrid producing below their full capacity since the necessary reinforcements of the transmission grid to trans- port all energy produced at full capacity have not been materialized
24TP PT Personal communication with a distribution company.
25TP PT Personal communication with a distribution company.
50
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Spain |
yet. This means lower payment than what they could get since they don’t receive any compensation for the reduced production.
1.4.2Priority Access for Renewable Electricity Producers
Since the Spanish Law uses the criterion of
In the case of Escombreras, if all generating units have offered a price below the marginal cost to the market operator, OMEL, then they get paid for all offered capacity. Then when the TSO makes the viability study, their production program will be reduced with a prorate scheme since the limit is 1,800 MW, and will have to pay back to OMEL for the decreased production. In this example, all units are conventional power plants which means that they have the same priority order. In the case of having a conventional power plant and a renewable based production plant, then the conventional power
26TP PT This is described in the operating proceedings 3.2 and 14.4 published by the TSO. Operating proceeding 3.2 “Solving Technical Constraints” available in English version at
51
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plant will have to reduce all production if needed to remove the re- striction in the grid, and only after the conventional power plants have reduced their production to zero the renewable based power plants will reduce their production since they have higher priority. Within renewable energy sources it is renewable energy sources with- out storage capability that have the highest priority according to the new Royal Decree 661/2007 published in June 2007. This means that if for example there is a restriction in a node where conventional power plants, hydropower plants with storage capabilities and wind farms are connected, then the conventional plants will decrease their production first; if it is not enough to remove the limitations in the grid then the hydropower plants with storage capabilities will decrease its production. The wind farms will decrease their production only after all other generating units have stopped producing. This means that power plants that have been connected at that point will have to reduce their production when generating units using renewable energy without storage capabilities are connected at the same point and there are limitations in the grid.
1.4.3Reservation of Transmission Capacity
The Spanish electrical system uses the criterion of
1.5Costs Associated to the Connection to the Grid
There is no clear legislation in this issue, on one hand in the RD 436 (disposición transitoria tercera) it is said that costs of the installa- tions required for the connection to the grid will be paid, generally, by the producer. On the other hand, the RD 1955/2000 (article 32) establishes that reinforcement associated to the development of the grid or to the change of equipment will be included in the planning process. Finally, the RD 661/2007 (annex XI) establishes that costs related to reinforcements in the grid are to be paid by the producers unless these reinforcements are not to be used solely by the pro- ducer. Current legislation leaves possibilities for different interpre-
52
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tations since it is not closely defined what solely use of the reinforce- ment of the grid means and, in case of that the reinforcements of the grid are to be used by other producers or the distribution com- pany, how the cost sharing should be carried out. According to the Spanish Wind Power Association, AEE, this is especially problematic with
It is not specified in the legislation how the costs due to the re- inforcement of the grid should be split between different produ- cers. However, the new Law, RD 661/2007, asks the TSO and the different DSOs to send within a year a description of the mecha- nisms to follow in order to share costs for connecting installations and necessary reinforcements between different project developers. This requirement is a result of implementing the articles 7.4 and 7.5 of the EU directive 2001/77/CE.
1.5.1Costs for the Connection Installations
The payment that renewable electricity producers have received until now has been sufficient to finance reinforcement costs that have been necessary for the connection, but the fact that distances from locations with good wind resource to the electrical grid becomes larger makes the required investments also larger and therefore it becomes more difficult for producers to finance reinforcements of the grid. Hence, according to the Spanish Wind Power Association, AEE, it is important to establish a regulatory frame that defines objective criteria to make an equitable assignment of the associated costs to these investments. It is necessary to clearly analyse specific cases to define which costs are specific costs and which are not and to standardize the specific costs.
There are many examples when connecting installations are not to be used solely by the producer. One such example is when more than one connecting power line is built in order to get a more inter- connected grid instead for building just one radial power line (see Figure
53
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SOU 2008:13 |
Figure
Substation Substation
Line A |
Line B |
Wind farm
According to one of the Spanish DSOs, it is common that for volt- ages between 45 and 132 kV producers give the connecting power line and even the position at the substation to the distribution com- pany in order to avoid its operation and maintenance and the associ- ated costs.
A common practice is to give provisional access license to the distribution grid so that new producers can begin to produce elec- tricity even though the power lines or necessary reinforcements to transport all the energy produced at full capacity are not built (see Figure
54
SOU 2008:13 |
Spain |
Figure
Substation
132 kW, 20 MW
20 km
Wind farm |
2 km |
Substation |
|
||
20 MW |
|
60 kW, 10 MW |
|
|
|
In the RD 1955/2000 (article 32) it is established a time horizon of 5 years within which new producers, using connection installations already paid by another producer or producers, have to pay to those, in proportion to the capacity to be connected.
1.5.2Costs for Reinforcement of the Transmission Grid
Generally, cost due to reinforcement of the transmission grid, besides the new position at the substation, are socialized while in the distri- bution grid these costs are paid by the project developers according to the agreements reached with the distribution company. Since costs are socialized when it comes to reinforcements in the trans- mission grid, problems such as sharing between current and future producers as well as identification of costs applicable to solely one producer are avoided. It is important to note that transmission costs are a small part of the total electricity cost paid by consumers.
According to the RD 1955/2000 article 54 when reinforcements in the transmission grid are necessary in order to connect a new production installation then the promoter has to hand in a deposit to the transmission system operator of 20% of the costs associated to the reinforcement. However, according to the transmission system
55
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SOU 2008:13 |
operator, such deposits have never been handed in since reinforce- ments in the transmission grid are socialized.
As mentioned earlier costs due to reinforcement of the trans- mission grid are usually socialized in Spain, i.e., they are financed through the tariff paid by consumers. However, in order to speed up the process, project developers can make agreements with the transmission company according to which the project developer pay the reinforcement costs and the transmission company pays back the same quantity to the project developer when receiving the tariffs paid by the consumers. These kinds of agreements are voluntary and not included in the legislation.
It is the Ministry who decides which costs associated to the construction/expansion of the transmission installations (power lines and transformers among others) are to be socialized.
1.5.3Costs for Reinforcement of the Distribution Grid
Up to date, costs due to reinforcement of the distribution grid have been paid in some cases by the project developers, in other cases by the project developers and the grid owner and in some other cases they have been socialized. There has not been a clear criterion or a detailed legislation in this matter. Specific problems have been solved through the regional government or by the regulatory body, CNE.
According to the legislation, all costs originated by the connec- tion of a generating installation are to be paid by the owner of the generating installation. However, it might be difficult to identify which costs are originated by a single installation when several installations are connected in the same area. A way to handle this question is what has been done in the region of Castilla la Mancha where recently all connection applications from solar photovoltaic installations have been processed as a group. In this way, the grid companies in the region has been able to identify and optimize the necessary reinforcements of the grid in order to transport all the production from these producers instead of designing a
56
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the installed capacity of renewable production cannot exceed 50% of the demand in the area in order to avoid voltage variations above what is permitted in the legislation on quality of supply. It has been done by Iberdrola Distribución, Unión Fenosa Distribución (the distribution companies in the region), and the regional government which has welcomed this initiative.
1.6Costs and Obligations related to measurement
In Spain measurement points are classified in different types and there are different requirements for the different types.
Measurement points of type 1 regarding generationTPF27FPT are defined as those points where the energy flow during the year is equal or larger than 5 GWh or where the installed capacity is equal or larger than 12 MVA. For measurement points of type 2 the corresponding limits are 750 MWh and 1,800 kVA. Measurement points of type 4 and 5 are defined as those points with a voltage lower than 1 kV and a production capacity larger respectively lower than 15 kW.
1.6.1
The Law defining the measurement requirements for installations connected to the low voltage gridTPF28FPT, i.e. measurement points of type 4 and 5, establishes that when a generating installation also consumes electricity, then the installation will be considered as a generating or a consuming installation depending on whether the installed generating capacity is larger than the retailed consuming power or vice versa. In that case
27TP PT Royal Decree 385/2002,
28TP PT Royal Decree 1433/2002,
57
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Figure
Photovoltaic installation |
Measurement equipment production
Connection point
Measurement equipment consumption
Consumption
1.6.2Hourly measurement
According to the legislation regulating measurement requirements in the low voltage grid, measurement equipment of producing in- stallations using renewable energy sources has to fulfill atU least oneU of the following characteristics:
For the produced energy:
•A single register for the whole active energy delivered to the grid
•Two registers for the active energy delivered in the
•Hourly register of the active power and register for the whole reactive power consumed when delivering active power to the grid
For the consumed energy:
•Equipment according to the contract that can be at the integral tariff or at the market price.
58
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According to the requirements listed above, generating installa- tions connected to the low voltage grid do not need to have hourly measurement; it is enough to have a single register for the delivered active power to the grid.
1.6.3Measurement costs
The costs for hiring measurement equipment for measurement points of type 5, i.e., connected to the low voltage grid and with an installed capacity lower than 15 kW, are regulated by the legislation and for year 2007TPF29FPT go from 0.47 €/month to 2.79 €/month. These prices include maintenance, operation, installation, and verification. The range depends on whether the counter is connected to a one- phase or
The cost for hiring the measurement equipment for a measure- ment point of type 4 is, according to one of the Spanish distri- bution companies, 12 €/month or 144 €/year, i.e., approximately 1,400 SEK/year. It is also possible to own the equipment but in that case verification, maintenance and recalibration of the equip- ment must be paid separately to an authorized agent. The cost of buying the counter/register machine is about 350 € and the costs of the modem for communication is about 300 €.
For calculating the cost for hiring measurement equipment for other measurement points than of type 4 and 5, network companies should apply a factor of 1.125 per cent to the cost of the counter/re- gister, the communication equipment, maintenance, operation, in- stallation and verification according to the legislation.
A solar photovoltaic installation with an installed capacity of 10 kW receives approximately 9,000 € per year (with a
29TP PT Royal Decree 1634/2006 (annex II), http://www.boe.es/boe/dias/2006/12/30/pdfs/
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1.7Grid tariffs
In Spain power producers do not pay grid tariffs to get access to the grid and for using the grid. The Law of the electrical sector, 54/1997, defines grid tariffs and access costs in its article 17 and 18 but only for agents buying electricity. In the Spanish market, under- stood as the pool, bilateral contracts, and
By excluding power producers from paying grid tariffs, no locali- zation signals are given to producers, i.e., there are no incentives to locate production in those points which improve the performance of the whole electricity system by for example reducing losses or minimizing restrictions in certain areas. Such system with grid tariffs giving locational signals is used for example in Sweden where pro- ducers in the North have to pay to inject their production to the grid while producers in the South get paid for doing the same. Up to date, in Spain it has been considered that the calculation of loca- tion signals is too complex compared to the benefit that they can deliver. However, the regulatory body CNE has to present a pro- posal to the ministry on such location signals by year 2007.
1.8Rights and Obligations regarding
According to several interviewed agents, Spain is at the forefront of the technical performance of the wind farms as well as of its manage- ment. The reason for that is that wind power generation in Spain takes place at large scale since there is a high concentration of wind power in some points of the grid. In approximately 30 or 40 con- necting points of the grid
The management of the wind energy is necessary to assure the security of the electric power system. Therefore the new Law regu- lating the special regime in which wind power is included, establishes in its article 18 the obligation for all generating installations based on renewable energy sources with a capacity larger than 10 MW to be connected to an operation centre. Those operation centers make
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it possible to manage the production from the renewable producers and constitutes an important element in the cooperation between renewable producers and the system operator. These centers help to change the concept of renewable producers as a source of un- certainty for the electricity system into power production which is possible to control. At the same time the operation centers consti- tutes an important tool for the producer to manage its assets re- ducing the personal required for maintenance and shortening the reparation times. All costs related to the operation centers have to be paid by the connected renewable power producers themselves.
Renewable electricity producers have priority compared to con- ventional power producers as it was introduced in Section 1.4.2. This means that when for security reasons the power production has to be decreased, then renewable power producers will be the last to re- duce their electricity production. Renewable power producers with- out storage capabilities such as wind power producers, solar and hydropower producers without dam have the highest priority accord- ing to the new Royal Decree 661/2007, published in June 2007. If despite their priority, renewable producers have to decrease their production in real time, i.e. the reduction was not programmed in advance, then they get paid 15% of the market price for the reduced production. If the reduction was programmed then they do not get any payment for the reduced production.
Protection elements in wind farms have to be calibrated to keep the installation connected to the grid as long as the frequency is be- tween 48 and 51 Hz according to the RD 661/2007. These are new values for the calibration of the protections at wind farms compared to the former legislation and are necessary in order to avoid events such as the one that took place November 4, 2006 in Germany. That event led to a frequency decrease below 49 Hz in Spain, making the protections to disconnect wind farms which worsened the problem.
Besides, the RD 661/2007 establishes the obligation for wind farms to stand voltage dips. A calendar to fulfill this requirement has been defined. The machines that can be adapted in order to fulfill this requirement have to do these adaptations before January 1, 2010 and those that cannot be adapted have to communicate this before January 1, 2009. A subsidy of 0.38 c€/kWh will be given to those wind farms that will be adapted and that are registered before January 1, 2008. That subsidy can be obtained after the adaptation works have been accomplished and no longer than during 5 years and in any case no longer than December 31, 2013. The operating
61
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procedure 12.3TPF30FPT published by the TSO defines the requirements in this respect.
All power producers have to send their offers to the market operator independently of the payment option they choose accord- ing to the new RD 661/2007. However, producers choosing the
1.9Conclusions Spain
General renewable Energy Promotion Scheme
•Renewable producers in Spain can choose between two different payment schemes, the
•There is a strong connection between the political targets de- fined for each technology and the corresponding promotion scheme by means of
30TP PT http://www.ree.es/cap03/pdf/po/PO_resol_12.3_Respuesta_huecos_eolica.pdf (only Spanish version available)
62
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Key factors for the development of the wind power sector in Spain
•The key factors behind the great development of the wind power sector in Spain have been a stable investment environment by means of fixed regulated
Are there any size limits in the regulation for renewable electricity production?
•Installations with an installed capacity larger than 50 MW are not included in the special regime and get lower payment than installations with the same technology and energy source but installed capacity lower than 50 MW.
•There are capacity limits for the access to the transmission grid and the distribution grid. To be able to access the transmission grid it is required a minimum capacity of 100 MW for the 220 kV grid and 250 MW for the 400 kV grid. In order to fulfill this re- quirement several project developers make a joint application to the TSO.
•There are some specific requirements for renewable electricity producers regarding the capacity that they can connect to the grid. For example the capacity of renewable power production without storage capabilities (wind, solar and hydropower stations with- out dam) to be connected cannot exceed 1/20 of the grid’s short- circuit capacity at that point. The capacity of renewable power production at a point cannot be larger than 50% of the capacity of the power line. Those requirements are typically limiting the connection to the distribution grid and not to the transmission grid.
63
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Tariff Structure
•Power producers do not pay any tariffs for using the grid. This has always been like that in Spain and the same applies for conven- tional power producers and for power producers using renewable energy sources. Therefore, this issue has not been the factor that has triggered the development of the wind power sector in Spain.
•In Spain it is regulated
Network connection costs
•Project developers have to pay for the construction of the power line, transformer and all other necessary installations for the con- nection to the grid. There is no difference in this matter between conventional power producers and power producers using re- newable energy sources.
•There are no well defined Laws regarding deep costs, i.e., costs associated to reinforcement of the grid necessary to connect new producers. However, in practice, costs for reinforcement in the transmission grid are socialized while costs for reinforcement in the distribution grid are mostly paid by the project developer.
Metering
•Power producers connected to the low voltage grid (<1 kV) which also consumes electric power, mainly solar photovoltaic, have the possibility to choose between measuring production and consumption separately and measuring
64
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choose to have two different measurement equipments since the payment for the produced power is almost three times larger than the cost for the consumed power. There is no obligation on hourly measurement for these producers.
Priority access for renewable electricity production
•It is not possible to reserve transmission capacity in the Spanish Grid. It means that conflicts in access are solved according to a priority order defined in the operating procedures published by the TSO. Renewable electricity production without storage capabilities has the highest priority followed by other renewable production, thirdly all other production included in the special regime as combined heat and power production and at last con- ventional power plants. If producers get their production reduced in advance then they do not get any payment for that reduced production but if the reduction is ordered in
•According to an operation procedure on the management of electric power produced with renewable energies without stor- age capabilities, if such a producer is curtailed more than 3 times during a month or ten times during a year then the grid company has to elaborate an investment plan within 6 months.
Network Concessions
•In Spain the power lines within a generating installation and from the installation to the connection point can be built by the pro- ducer himself without needing to establish a network company for this purpose. The producer does not have the obligation to connect
Network Connection Procedures
•Application procedures are very well described in Spain as well as the deadlines associated to different steps of the application procedure. The regulatory body CNE is responsible for deciding
65
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in conflicts such as connection points and has also a defined time to resolve on those conflicts.
Technical requirements
•As the share of wind power has grown in Spain, new technical requirements have been established in the new Law regulating the special regime as for example
66
2 Portugal
2.1Introduction
The total installed power capacity in Portugal by the end of year 2006 was 13,607TPF31FPT MW. A breakdown of the total installed capacity can be seen in Figure
Figure
15% |
|
|
1% |
|
Hydro power |
2% |
37% |
Natural Gas |
|
|
Fuel |
13% |
|
Coal |
|
|
|
|
|
Fuel/Natural gas |
|
|
Gasoelo |
14% |
|
Renewables |
|
18% |
|
The total installed capacity in renewable electricity production excluding large hydropower stations (installed capacity larger than 10 MW) was 2,448TPF32FPT MW by the end of year 2006. Figure
31TP PT Source: REN, INFORMAÇÃO MENSAL DEZEMBRO 2006 SISTEMA ELECTROPRO- DUTOR, http://www.ren.pt/content/587E8DD885674BCB8E8DC317D81625C2.PDF
32TP PT Estatísticas rápidas, Fevereiro 2007. Direccao Geral de Geologia e Energia.
67
Portugal SOU 2008:13
Figure
|
4% |
12% |
16% |
|
|
|
Small hydro |
|
|
|
|
|
|
(<10MW) |
|
|
Wind |
|
|
Biomass |
|
|
Waste |
|
|
68% |
Wind power is the renewable source that has experienced the largest development in Portugal. During the last four years the installed wind power capacity has grown from 289 MW year 2003 to 1,698 MW by the end of year 2006TPF33FPT. Therefore, even though this chapter tries to give an insight on the Portuguese renewable sector as a whole, it focuses on the wind power sector.
The wind resource is larger in the interior and in the North part of the country while the consuming areas are in the south. That means that the transmission grid has to be developed in order to transport the electric power from the producing nodes to the consuming ones through the country even if most wind farms are connected to the distribution grid.
EDP – Energias de Portugal was, twenty years ago, the only pro- duction, transmission and distribution company. Nowadays EDP has a share on power production of about 57%, almost the total distribution activity, 99%, and does not participate in the trans- mission business.
2.1.1Overview of the Transmission System
In Portugal the transmission grid is composed by all elements at the voltage of 132 kV, 220 kV and 400 kV. There are also some substations with transformers with a low voltage side of 60 kV in- cluded in the transmission system. International interconnections are also a part of the transmission system. The capacity of the inter-
33TP PT Source: IEA Wind 2003 Annual Report and IEA Wind Energy 2006 Annual Report.
68
SOU 2008:13 |
Portugal |
national interconnections for commercial purposes during the first quarter of 2007 was 1,333MW.
The transmission system operator is REN – Rede Eléctrica, which holds a 50 year concession to operate the electricity transmission system in Portugal. This concession was originally granted in September 2000 and renewed for a 50 year period commencing in June 2007. Furthermore, REN is the only transmission company in Portugal and is responsible for planning, constructing, operating and maintaining the electricity transmission network and managing the technical aspects of the national electricity system. The state has the majority of the capital in REN. The Portuguese law does not allow REN to operate lines of lower voltage than 130 kV.
About 95% of the required financing of REN consists on a per- centage, of about 7%, of the liquid value of the grid defined by the regulatory body ERSE. The rest of REN´s needed financing, i.e., approximately 5%, is related to the operation cost of the transmission grid. REN sends to ERSE every year a plan for the investments to be done but from 2007 the plan is to be sent to the Ministry.
2.1.2Overview of the Distribution System
The national distribution grid is operated through an exclusive con- cession granted by the Portuguese State. The national distribution grid consists of low, medium, and high voltage networks. Presently, the exclusive concession for the activity of electricity distribution in medium and high voltage, i.e. for voltage levels between 1 kV and 60 kV, has been awarded to EDP Distribuição. The low voltage distribution grids continue to be operated under concession agree- ments awarded by municipalities primarily to EDP Distribuição.
Until the 31 December 2006, EDP carried out also retail activity. From January 2007 EDP has created, according to the new legisla- tion, a new company for retail. This new company is called EDP servicio universal, EDPSU, and has the obligation to buy all renew- able electricity. Renewable electricity is still a very small part of all the electricity EDPSU has to buy to satisfy the demand paying the
69
Portugal |
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the market prices. This means that tariffs paid by consumers do not cover the payments to power producers.
2.1.3Relevant Legislation for Renewable Electricity Production
In Portugal, as in Spain, producers are classified in two main groups depending on the energy source and the technology used, the special regime and the ordinary regime. Renewable energy sources are in- cluded in the special regime while the ordinary regime consists of conventional power plants and is therefore left out of this study.
The special regime was first established by the Decree Law (DL) 189/88. In the special regime it is included cogeneration, renewable energies and waste. The cogeneration has been regulated by a spe- cific Decree Law 186/95 while the electricity production based on renewable sources and waste has been regulated, since the special regime was established, by several Decrees; the DL 313/95, DL 168/99, 312/2001 (connection issues),
There are no limits regarding installed capacity to belong to the special regime. However, for hydro power installations there was a capacity limit of 10 MW, for each installation, according to the decree law
All producers using renewable energy sources are at the moment paid according to the RD 168/99 with its modification made by the DL
2.1.4Regulatory Framework for Network Companies
The regulatory body, ERSE, establishes every year the tariffs to be paid by all those agents buying electric power. EDPSU collects the tariffs paid by consumers and pays EDP the corresponding access tariffs.
In the DL 90/2006 it is stated that from year 2007 the additional cost associated to renewable based power production will be paid by consumers in proportion to the number of consumers in each
70
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Portugal |
voltage level. Before, the payment of each consumer was propor- tional to the consumed energy. This makes the cost of renewable supported by consumers with low consumption relatively larger than for consumers with high consumption.
2.1.5Development of the Wind Power Sector in Portugal
The wind power sector has grown very rapidly under the last seven years in Portugal, especially since the year 2004 as it can be seen in Figure
Figure
|
2000 |
|
|
|
|
|
|
|
|
|
1800 |
|
|
|
|
|
|
1681 |
1747 |
|
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|
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|
1600 |
|
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1400 |
|
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1200 |
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1047 |
|
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MW |
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1000 |
|
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800 |
|
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600 |
|
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|
537 |
|
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|
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|
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|
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|
|
|
|
400 |
|
|
|
253 |
|
|
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|
|
|
|
175 |
|
|
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|
|
|
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|
76 |
114 |
|
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|
200 |
|
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||
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0 |
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|
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
Source: Estatísticas rápidas, Fevereiro 2007. Direccao Geral de Geologia e Energia.
On July, 2007 there are 3,750 MW wind power authorized in Portugal, and 1,500 MW that are being allocated through a public tender procedure (see Section 2.4.1). This means a total wind power capacity of 5,250 MW what is above the target of 3,750 MW estab- lished in the Resolution of the Council of Ministries RCM 63/2003 for year 2010 and the target of 5,100 MW for year 2013 established in the RCM 169/2005. The political target for wind power in Portugal is comparable with the target in Spain since 5,100 MW with a population of 10.3 million people is about the same as in Spain with an objective of 20,000 MW in 2010 and about 44 million people.
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Wind farms in Portugal have an average installed capacity of 12 MW by February 2007TPF34FPT. Approximately 75% of all wind farms have an installed capacity between 1 and 25 MW. Wind turbines have an average installed capacity of about 1.6 MW. That is larger than the average in Spain mainly due to the fact that wind turbines in Portugal were installed later than in Spain and a technical develop- ment had taken place during that time.
The 60 kV grid is the grid where the main wind power capacity is connected, as it can be seen in Table
Table
Installed wind power with capacity > 10 MW by 31 March 2007
|
|
|
|
|
|
|
|
|
|
|
Total installed |
Voltage level (kV) |
220 |
150 |
60 |
30 |
10 |
capacity (MW) |
|||||
total |
154 |
226 |
993 |
46 |
26 |
1445 |
|||||
average |
39 |
38 |
18 |
8 |
9 |
|
|||||
max |
81 |
114 |
84 |
12 |
14 |
|
|||||
min |
20 |
2* |
2* |
2* |
2* |
|
|||||
% |
|
11% |
|
16% |
|
69% |
|
3% |
|
2% |
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
*In first phase only 2 MW is installed, but the plan is a wind farm larger than 10 MW
Source: REN
In Table
According to the TSO to fulfill the target of 5,100 MW approxi- mately 60% of the wind power capacity will be connected to the
34TP PT Estatísticas rápidas, Fevereiro 2007. Direccao Geral de Geologia e Energia.
72
SOU 2008:13 |
Portugal |
distribution grid and 40% to the transmission grid. Currently, more than 75% of all wind power capacity is connected to the distribu- tion grid.
Portugal follows a more centralized approach for the development of the wind power sector than for example the Nordic countries since there is one single transmission company and one single distribution company and the Ministry is responsible for allocating the connec- tion capacity both in the transmission grid and in the distribution grid (see Section 2.3.1).
The crucial factor behind the great development of the wind power sector in Portugal is the political desire to create a strong wind power sector materialized in a very attractive payment. The publica- tion of the DL
Another important factor contributing to the development of the wind power sector in Portugal is, according to the TSO, the connection between the development of the grid infrastructure and the political objective of 5,100 MW wind power installed capacity.
Furthermore, the fact that wind power producers have to pay 2.5% of the incomes from their electricity production to the muni- cipality were the wind farms are located might facilitate the installa- tion of wind farms since they imply an income to the municipality.
In Portugal, it is possible to expropriate land in order to build power lines, substations, and power production installations as long as they are considered as of public usefulness. To build power lines it is not necessary to own the land under it since power lines in Portugal are seen as temporary properties, it is only necessary to buy the land for the support points. In other countries, as for instance Holland, it is necessary to buy even the land under the lines.
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2.1.6Possible Barriers for the Future Development of the Wind Power Sector in Portugal
According to several of the interviewed agents in Portugal, local opposition to visual impact and environmental issues can become barriers for the future development of the wind power sector and for the fulfillment of the political target of 5,100 MW installed capacity wind power by 2013. Up to date, there is no much local opposition but it is growing. According to the interview the lack of investment and technical requirements are not seen as barriers for the develop- ment of the wind power sector.
The recently published Decree of Law 225/2007 for electricity production based on renewable sources introduces some changes in order to speed up the process of the environmental impact evaluation. The decree clarifies some procedures and gives time delays for them, however there is no time limit for DGGE (the authority where the process starts) to sent the environmental study to the environment agency (see Section 2.3).
According to the Portuguese Association for Renewable Energies, APREN, project developers see administrative procedures as brakes for the development of the renewable energy sector in Portugal. Time horizons associated to the different procedures and established by Law are not always fulfilled.
2.2Payment Scheme for Renewable Electricity Production
The payment scheme for producers included in the special regime in Portugal is determined by a quite complex formula that was first introduced year 1988 in the Decree Law 189/88. That formula has been modified by the DL 168/99, DL
Besides, producers included in the special regime receive/pay a term for reactive power. Typically, the income/cost due to reactive
74
SOU 2008:13 |
Portugal |
power is very small, of about 0.01% of the payment producers re- ceive for their production.
As mentioned in Section 2.1.3, all producers using renewable energy sources are at the moment paid according to the RD 168/99 with its modification made by the DL
The DL
According to the Portuguese Association for Renewable Energies, APREN, the comparisons that are made for example by IEA and EUROELECTRIC between conventional power plants and re- newable based production regarding production costs and the feed- in tariffs are unfair. For instance, it is not included the fact that emission rights have been donated to a lot of conventional power plants without paying for it, renewable producers have not got such emissions rights. The expectation for electricity prices in the future is that they are going to be higher, that means that conventional elec- tricity producers are going to receive more money while renewable producers are to get the
According to APREN it is important to give subsidies to the pro- duction and not to the installed capacity since the important thing is that renewable energies cooperate to the production of electri- city, there is no meaning of installing wind turbines if they are not efficient or are not producing. In Portugal there were subsidies to installed capacity until year 2005 by means of a program called
75
Portugal |
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PRIME. These subsidies were generally 20% of the total investment cost but no larger than 1.5 million € per project.
2.2.1Wind Power
The development of the yearly average
Figure
|
100 |
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89 |
92,8 |
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87,1 |
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90 |
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79,8 |
78,6 |
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€/MWh |
80 |
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70 |
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61 |
63,3 |
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56,1 |
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60 |
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Tariffs |
50,5 |
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50 |
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40 |
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30 |
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20 |
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10 |
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0 |
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1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
Source: IEA Wind Energy 2006 Annual Report.
The formula defined by the DL 168/99 with the modifications made by the DL
76
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Portugal |
Figure
Source: A energia eólica em Portugal 2006, REN.
The Decree Law
The new Decree Law 225/2007 for the special regime maintains the
77
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Table
|
DL |
DL |
DL 225/2007* |
|
|
|
|
Wind |
|
|
|
power P≤5 MW |
MWh per MW <2,000: 9.1 |
7.5 |
7.5 |
|
2,000< MWh per MW <2,200: 8.9 |
|
|
|
2,200< MWh per MW <2,400: 8.7 |
|
|
|
2,400< MWh per MW <2,600: 8.5 |
|
|
|
MWh per MW >2,600: 8.2 |
|
|
P>5 MW |
MWh per MW <2,000: 8.9 |
7.3 |
7.3 |
|
2,000< MWh per MW <2,200: 8.7 |
|
|
2,200< MWh per MW <2,400: 8.5 2,400< MWh per MW <2,600: 8.3
MWh per MW >2,600: 8.1
*That
Source: International Energy Agency, Standard Review Portugal 2006 and Portuguese Associa- tion for Renewable Energies, APREN.
2.2.2Solar Power
Before the new Decree 225/2007 was published, no distinction was made between photovoltaic installations on buildings or on the ground. Furthermore, thermal solar installations were not included in the special regime. These were first introduced by the DL 225/2007. According to the DL
78
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Portugal |
Table
|
|
DL |
DL |
DL 225/2007 |
|
|
|
|
|
|
|
Photovoltaic |
P≤5 kW |
55.0 |
44.7* |
44.7* |
|
P>5 kW |
31.9 |
31.6* |
31.6* |
||
|
|||||
Photovoltaic located |
P≤5 kW |
47.0 ** |
|||
on residential, com- |
5 kW |
35.5 ** |
|||
mercial, services or |
|||||
|
|
|
|
||
industrial premises |
|
|
|
|
|
|
P≤5 MW |
27.3 |
|||
Thermal solar |
5 MW |
26.8 |
|||
|
P>10 MW |
19.8*** |
|||
|
|
|
|
|
*That
**That
***The government can change this.
Source: Centro de Estudos em Economia da Energia dos Transportes e do Ambiente, CEEETA and Portuguese Association for Renewable Energies, APREN.
2.2.3Biomass
As it can be seen in Table
According to the DL
79
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SOU 2008:13 |
Table
|
DL |
DL |
|
DL 225/2007 |
|
|
|
|
|
|
|
Forestry biomass |
7.6 |
11* |
10.7*** |
|
|
Animal biomass and landfill biogas |
7.6 |
10.5* |
10.2*** |
|
|
Biogas generated in digesters |
|
5.0** |
|
11.5**** |
|
7.6 |
|
|
|||
|
|
|
|
|
|
*That
**That
***That
****That
Source: Centro de Estudos em Economia da Energia dos Transportes e do Ambiente, CEEETA and Portuguese Association for Renewable Energies, APREN.
2.2.4Hydropower
Hydropower producers receive according to DL
Table
|
DL |
DL |
|
DL 225/2007 |
|
|
|
|
|
|
|
P<5 MW |
8.98 |
8.1* |
8.1** |
|
|
5 MW |
8.80 |
7.5* |
7.5** |
|
|
P=30 MW |
|
6.4* |
|
6.4** |
|
|
|
||||
|
|
|
|
|
|
*That
80
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Portugal |
** That
Source: Centro de Estudos em Economia da Energia dos Transportes e do Ambiente, CEEETA and Portuguese Association for Renewable Energies, APREN.
2.3Application Procedure for Access and Connection to the Grid and Evaluation on Environmental Impact
According to the Association for Renewable Energies, APREN, from the day a project developer for a wind farm sends the first paper to the General Direction of Geology and Energy DGGE,
1.The project developer sends an application for
2.DGGE sends the applications to the TSO (if above 50 MVA) and DSO (if below 50 MVA) who will give a
3.No later than 70 days after having got favorable
4.DGGE has 30 days to answer to the application on connection point. The content of the application for connection point is defined in annex II, Section II in the DL 312/2001. The article 12
81
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in DL 312/2001 establishes the reasons why the application on connection point can be dismissed.
5.The project developer has to make a study of the environmental impact of the wind farm, this study is send to the DGGE who sends it forward to the environmental institute. In practice, from the day the DGGE gets the environmental study until the en- vironmental institute gets it can take between 1 and 6 months.
6.The environmental institute elaborates an evaluation of the environmental impact of the wind farm based on the environ- mental study and sends to the project developer the so called DIA including a list of restrictions and recommendations.
7.As a response to the DIA the project developer sends the so called RECAP to the environmental institute for its approval.
8.The project developer has to send the application for establish- ment to the DGGE. According to annex 1 in the DL 168/99, the Ministry of Economy will decide on installations with a capacity larger than 1MW and the Secretary General of Energy will decide when the capacity is below 1 MW.
9.The DGGE gives the authorization for establishment once the environmental institute has written the DIA.
10.With the authorization for establishment and the RECAP approved, the project developer can send to the municipality a request for the authorization of the construction.
11.When the construction of the wind farm is ready then it is time to ask the DGGE for authorization for production. For large farms there are two different authorizations to start producing, the provisional and the definitive. Once the project developer gets the provisional permit it is allowed to start producing. It can take up to several years to get the definitive authorization. According to article 6 in annex 1 in the DL 168/99, authorization for pro- duction is evaluated by the regional government when the capa- city of the installation is below 10 MW and by the DGGE when the capacity is larger than 10 MW.
As mentioned in Section 2.1.6 the recently published Decree of Law 225/2007 for the special regime introduces some changes in order to speed up the process of the environmental impact evaluation.
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There is a special Law for the connection of power installations with a capacity below 150 kW, so called
The DL 312/2001 established in its article 23 that project de- velopers have to pay certain deposits and fees associated to the appli- cation procedure. The Ministry of Economy defines these deposits and fees through governmental decision, by means of a legal docu- ment called Portaria.
The Portaria 62/2002 defines the deposits to be handed in by project developers in the cases established in the DL 312/2001:
•15 days after having got answer to the
•15 days after receiving the establishment license to assure that the developer will build the installations, 5,000 €/MW to be paid to the operator of the grid to which the promoter will connect the installation.
•When project developer and grid operator reach an agreement to accelerate the construction of the needed reinforcements of the grid to transport the electricity produced, the amount of the de- posit will be agreed between grid operator and project developer. If no agreement is reached then the DGGE will decide but the fee will never exceed half the investment associated to the re- inforcement of the grid. The deposit will be paid to the correspon- ding grid operator.
The deposits will be returned to the project developers no later than 30 days after the condition upon which the deposit was requested is fulfilled or when the obligation cannot be fulfilled by the project developers due to reason beyond its responsibility.
The Portaria
• Before sending the
•Before sending the application for allocation of the connection point, 500 €/MW with a maximum of 10,000 €.
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2.3.1Permitting Entities
There is a limit of 50 MW defining which generation plants are to be connected to the transmission grid or the distribution grid. For installed capacity larger than 50 MW the connection is to be done to the transmission grid
It is the Ministry of Economy and Innovation through its General Direction of Geology and Energy (DGGE) who decides on the access to the grid. REN and EDP are technical advisors to the Ministry but it is the Ministry who takes the decision. Both REN and EDP, in the evaluation of available capacity to connect a new producer which they send to the Ministry, can state the lack of capacity as a reason to deny a connection request. The Ministry do not use to question these evaluations. The Laws regulating the connection to the grid are DL 312/2001, DL 68/2002 and DL 172/2006.
The authorization of installations for the production of electric power is, according to annex I in DL 168/99, responsibility of the DGGE. The Ministry of Economy will decide when the installa- tions have an installed capacity larger than 1 MW. Otherwise, the Secretary General will decide.
There is a continuous interaction between DGGE, REN and EDP. They inform each other about available capacity in the grid, new connection points, and applications for capacity. The fact that REN and EDP were a single entity years ago makes the exchange of in- formation between them a natural part in their activity. EDP has more resources available for the evaluation of applications for capa- city made by new producers since there are more such applications to the distribution grid than to the transmission grid (see Table
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2.4Obligations of Grid companies regarding Grid Access
2.4.1Available Capacity
The DL 312/2001 removed the previous constraint in the 168/99 and previously in the 189/88 imposed to the maximum installed capacity as 8% of the
After the payment for wind power defined in the DL 168/99 was increased through the DL
The allocation of capacity is done by the Ministry through the DGGE, not directly by the TSO, REN, or the DSO, EDP. The DGGE takes applications for PVI (see Section 2.3) regarding capa- city for the connection to the grid every fourth month getting a certain fee in order to administrate the applications.
It is the DGGE who decides where the different installations for power production are to be connected, that is based on the technical report done by the grid operator. When several project developers want to connect their installations at the same point, it is the DGGE who decides how to allocate the available capacity to the different project developers.
The capacity for the connection of new wind power farms was during the first stage of the wind power development allocated by the so called “prorata” method. This means that if there was a capa- city available of 100 MW at the connection point and there were two project developers willing to connect 100 MW each then they got a capacity of 50 MW each.
After the prorata method the Government opened a tender pro- cedure for wind power capacity on February 2005, projects partici- pating in the tender procedure had to be sent to the DGGE by January 2006. The DL
35TP PT Despacho
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tender procedure that was first established in the DL 312/2001 article 14. The detailed selection criteria in the tender procedure were established by the Ministry of Economy and Innovation through its Department of energyTPF36FPT.
The tender procedure for wind power was divided in two different phases, phase A with a total capacity of 800 MW to be extended to 1,000 MW and with overcapacity of 20% up to 1,200 MW and phase B of 400 MW to be extended to 500 MW and with overcapacity of 20% up to 600 MW. The first phase is concluded and the second phase is being handled at the time, June 2007. Another tender pro- cedure has been done for biomass and it is possible that in the future even a tender procedure for photovoltaic energy is opened.
The tender procedure had four main selection criteria: discount on the
The selection criteria for the tender procedure have been chang- ed since they were published the first time. That due to two main reasons, the first one that some imperfections were identified and the second one that the Government changed just two months after the tender procedure was published.
The selection criteria in the tender procedure are considered by APREN as unfair since the requirements for phase A and phase B are quite different. An example of such difference is that if in the phase A a contribution to the research fond of 35 M€ is expected where the capacity to be allocated is that phase A is 800 MW plus 200 and the requirement for phase B is also 35 M€ even though the capacity to allocated in that phase B is much lower than in phase B, namely of 400 MW plus 100 MW. This means that for phase A, the contribution to the research fond is equivalent to a discount in the
36TP PT Concurso para atribução de capacidad de injecção de potência na rede do sistema eléctrico de serviço público e pontos de recepção associados para energia eléctrica produzida em centrais eólicas, http://www.dgge.pt/wwwinclude/ficheiro.aspx?tipo=0&id=8557&ambiente =WebSiteMenu
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There are some differences in the legislation regulating power production in the ordinary regime and the legislation regulating power production in the special regime. The main difference is that producers in the special regime are treated by the TSO more as a group since they are many more than the number of producers in the ordinary regime. Another difference is that REN can accelerate the construction of for example substations and lines in the case of lack of capacity for the connection of producers in the ordinary regime while this is not done with producers in the special regime since they are so many. However, the main principle that new pro- ducers can be connected only when there is capacity at the connec- tion point is the same.
The new decree of law for the special regime DL 225/2007 estab- lishes in its article 3 the possibility for wind power farms with wind turbines able to stand voltage dips to have an overcapacity of 20% at the connection point. The limit in the electric power that can be injected at the connection point is the original capacity limit with- out taking into account the overcapacity. The Ministry was already applying that criterion even before it was stated in the legislation.
In case of conflicts between the project developer and REN or EDP regarding available capacity in the connection point, it is the DGGE who decides.
2.4.2Priority Access for Renewable Electricity Producers
In Portugal there is the implicit assumption that installed power plants have priority over newcomers which is rather different than the Spanish approach. By using this
During the licensing process for new generation, whether re- newable or conventional, to the transmission grid, REN is asked about the ability of the network to transport the energy of the new unit(s). If the installation of a new generator is expected to lead to overloads which would require lowering the production of an existing generator, REN would state that the network cannot accommodate the new entrant and that new investment in the transport infra- structure is needed before the license is granted. If new investments are needed, REN does an assessment of the part of the new invest-
87
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ment directly caused by the new generation and the part correspond- ing to a general improvement of the transport network.
The Portuguese TSO, REN, has not experienced yet (October 2007) the need to restrict wind power production. However, the TSO is concerned about the possibility to have in the future some occasions where the wind power production will be greater than the existing electricity consumption. The restriction in that case will not come from the network but from the system power balance. In the last licensing procedure by means of a tender procedure, see Section 2.4.1, it has been included the possibility for the system operator to require the reduction of wind power during not more than 50 hours per year. Wind power producers will not receive any compensation for these reductions.
Solar power, waves and other renewable electricity production have almost no impact in the Portuguese system. Anyway, they are entitled to produce the licensed power without being interrupted.
2.4.3Reservation of Transmission Capacity
According to article 12 in DL 312/2001, applications on connection point that cannot be directly approved due to lack of transmission capacity in the grid, can reserve transmission capacity until the con- struction of the installations included in the plans for the develop- ment of the transmission and the distribution grid are carried out. To reserve capacity a deposit has to be handed in by the developer to the DGGE (see Section 2.3).
According to article 7 in DL 312/2001, DGGE can give connec- tion point even when there is not available capacity at the moment if an agreement is reached between the TSO or the DSO and the project developer in order to accelerate the needed reinforcement. In that case the project developer has to pay the additional costs due to the acceleration of the construction of the installations necessary for the reinforcement. When the project developer pays these costs then no deposit is required to reserve that capacity. If no agree- ment is reached then it is the DGGE who decides the amount of the costs to be paid by the promoter and the TSO or the DSO respectively.
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2.5Costs associated to the Connection to the Grid
In this Section it is described how the different costs associated to the connection to the grid, such as costs for connection installations and upgrades in the distribution or transmission grid are treated in Portugal.
2.5.1Costs for the Connection Installations
All costs associated to the connecting installations such as line and transformer between the production installation and the connec- ting point are to be paid by the project developer.
In Portugal the legislation allows the existence of power lines owned by the producer. This is the case with some power lines of 60 kV connecting wind parks to the grid in Portugal. The reason for that is that according to the Law REN cannot operate and maintain any power line with a voltage level below 130 kV. At the same time the distribution company, EDP, does not want to own those lines since there are no customers in the area so the owner of the wind farm has to operate and maintain those power lines. If the power lines were to be owned by the distribution company EDP then they have to maintain the line also.
Regarding cost sharing between different project developers to connect to the transmission grid, there is no law defining the cri- terion to follow even thought this problem might come up.
According to EDP new producers who take benefit of already existing connecting installations to the distribution grid, should pay proportional to their capacity if they are connected within 5 years after the connecting installations were build.
The installations for connecting the wind farm to the grid are to be paid by the project developers. In the case of lines if there come consumers after the producers have built the line they can be con- nected to the line and EDP does not pay anything to the producer. In the DL 312/2001 it is written that there is a period of time within which if a new producer connects to the line that other developer has paid then costs for the line have to be shared.
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2.5.2Costs for Reinforcement of the Transmission Grid
Reinforcement of the transmission grid are socialized and financed through the tariff paid by consumers.
Plans for the development of the transmission grid are developed every second year. The different elements of the transmission grid have different aims. REN estimated in which proportion each element contributes to the different aims such as implementation of renewable production to the system, higher degree of interconnection between the lines and so on. There is no mathematical model used to make the assignation of the different shares.
The last plan for the development of the transmission grid, “Trans- mission Network Investment Plan for
The main installations to be introduced in the transmission system in order to achieve the political target for wind power in Portugal are shown in Figure
90
SOU 2008:13 |
Portugal |
Figure
Source: RENTPF37FPT.
37TP PT Article “National Goals for Renewable Generation in Portugal. An Organizational and Technical Challenge from the point of view of the Transmission System Operator2, Cigré 2006.
91
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2.5.3Costs for Reinforcement of the Distribution Grid
When connecting to the distribution grid if reinforcements of the grid are needed then the project developer has to pay them even if EDP gets some benefit from the reinforcement. EDP tries to not make agreements with different project developers so that they cannot complain about unfair treatment.
2.6Costs and Obligations Related to Measurement
Costs associated to measurement for generating units connected to the high voltage grid can be neglected. When it comes to small units connected to the low voltage grid there are no requirements on hourly measurement.
2.7Grid tariffs
Producers do not pay any tariffs for using neither the distribution grid nor the transmission grid. This has always been like this in Portugal and has nothing to do with the political target of increasing renewable electricity production.
2.8Rights and Obligations regarding
The DL 168/99 establishes in its article 22 that grid companies have the obligation to buy the produced electricity by producers in the special regime. It is EDPSU who buys the electricity from the special regime.
Wind farms installed according to the call for capacity might be disconnected up to 50 hours without being paid. All wind parks might be disconnected when the security of the system is on danger.
At the moment in Portugal there is no obligation for the wind producers to send their planned production to REN. In the tender procedure it was a positive factor but not a requisite. There is how- ever a discussion to make projections obligatory for farms with an installed capacity over 10 MW.
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Portugal |
Another very important issue regarding technical requirements is the performance during voltage dips. REN in Portugal and REE in Spain made a study together for 2010 assuming that the targets for installed wind power capacity where to be fulfilled in both countries. Wind turbines are newer in Portugal than in Spain, accord- ing to the study in Portugal it was sufficient that new farms had resistance to voltage dips while in Spain it was necessary to modern- ize 75 % of installed capacity. Those requirements were also based on the assumption that the capacity in the interconnection between Spain and France was increased but since that can take a long time REE and REN decide to impose a common target of 85% of in- stalled capacity with resistance to voltage dips in both countries. This requirement has not been transposed into any Law in Portugal yet. In Spain there are such requirements.
It is important to note that periods with low consumption, good wind conditions and hydro resources are going to be a problem for Spain and Portugal and wind farms are going to need to reduce their production then. That problem would not take place if there was a much larger interconnection capacity with France.
2.9Conclusions Portugal
General renewable Energy Promotion Scheme
•Renewable electricity producers in Portugal are paid according to a
Key factors for the development of the wind power sector in Portugal
•The key factors behind the great development of the wind power sector in Portugal have been a stable investment environment by means of fixed regulated
93
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ing the support to renewable power production, and expansion of the grid in line with the political target for wind power.
Are there any size limits in the regulation for renewable electricity production?
•There are capacity limits for the connection to the transmission grid and the distribution grid. Installations with an installed capacity larger than 50 MW are typically connected to the trans- mission grid
•There are some specific requirements for renewable electricity pro- ducers regarding the capacity that they can connect to the grid. For example the capacity of installations connected to the low voltage grid cannot exceed 4% of the grids
Tariff Structure
•Power producers do not pay any tariffs for using the grid. This has always been like that in Portugal and the same applies for conventional power producers and for power producers using renewable energy sources. Therefore, this issue has not been the factor that has triggered the development of the wind power sector in Portugal.
•In Portugal there is only one distribution company, EDP. It is regulated
Network connection costs
•Project developers have to pay for the construction of the power line, transformer and all other necessary installations for the con-
94
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Portugal |
nection to the grid. There is no difference in this matter between conventional power producers and power producers using re- newable energy sources.
•In practice, costs for reinforcement in the transmission grid are socialized and paid by consumers by means of network tariffs while costs for reinforcement in the distribution grid are mostly paid by the project developer.
Priority access for renewable electricity production
•In Portugal there is the implicit assumption that installed power plants have priority over newcomers independently of the energy source used. So far it has not been necessary to curtail wind power production but the last tender procedure for allocating connec- tion capacity allows the Portuguese TSO to curtail wind power producers up to 50 hours without giving them any compensation.
Network Concessions
•In Portugal the power lines within a generating installation and from the installation to the connection point can be built by the producer himself without needing to establish a network com- pany for this purpose. The producer does not have the obligation to connect
Metering
•There is no obligation on hourly measurement for producers connected to the low voltage grid (<1 kV).
Network Connection Procedures
•Application procedures are well described in Portugal as well as the deadlines associated to different steps of the application pro- cedure. The General Direction of Energy and Geology gives the access permits and is, at the same time, responsible for deciding
95
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on conflicts between project developers and grid companies re- garding for example connection points.
•Grid capacity for connection to the grid is allocated by the General Direction of Geology and Energy. For wind power two different methods for the allocation have been used. Firstly a pro- rate method (up to 2005) and later (after 2005) a tender proce- dure. The selection criteria in the tender procedure have been mainly four: discount on the
Technical requirements
•There is now legal requirement on
96
3 Germany
3.1Introduction
Germany has a long successful history of developing renewable power generation. A look at the statistics reveals the extent to which the different renewable energy technologies are used in Germany and the dynamic nature of its development, see Table
Table
2006TPF38FPT
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
|
|
|
|
|
|
|
|
|
4.80% |
5.50% |
6.30% |
6.70% |
7.80% |
7.90% |
9.30% |
10.40% |
12% |
In 2006, 12 % (in total 74 TWh) of the total electricity consump- tion in Germany was generated by renewable energy. Figure
38TP PT “Erneuerbare Energien in Zahlen – nationale und internationale Entwicklung”, June 2007, Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU),
97
Germany |
SOU 2008:13 |
Figure
Share of Renewable Electricity Generation
2006
Bio waste; 4,90% |
|
||
Waste gas; 2,60% |
|
|
|
|
|
||
Bio gas; 7,30% |
|
||
Biomass (liquid); 2,20% |
|
||
Biomass (solid); 9,70% |
Wind power; |
||
|
|
|
|
|
|
|
41,30% |
Photovoltaic; 2,70% |
|
||
Hydro power; |
|
||
29,30% |
|
|
|
Table
|
Hydro |
Wind |
|
Biomass |
|
PV |
|
Geothermal |
|
Total |
|
|
[MW] |
[MW] |
|
[MW] |
|
[MW] |
|
[MW] |
|
[MW] |
|
|
|
|
|
|
|
|
|
|
|
|
|
1990 |
4,403 |
56 |
190 |
2 |
0 |
4,651 |
|
||||
1991 |
4,403 |
98 |
|
n.a |
3 |
0 |
4,504 |
|
|||
1992 |
4,374 |
167 |
227 |
6 |
0 |
4,774 |
|
||||
1993 |
4,520 |
310 |
|
n.a |
9 |
0 |
4,839 |
|
|||
1994 |
4,529 |
605 |
276 |
12 |
0 |
5,422 |
|
||||
1995 |
4,521 |
1,094 |
|
n.a |
16 |
0 |
5,631 |
|
|||
1996 |
4,563 |
1,547 |
358 |
24 |
0 |
6,492 |
|
||||
1997 |
4,578 |
2,082 |
400 |
36 |
0 |
7,096 |
|
||||
1998 |
4,601 |
2,875 |
409 |
45 |
0 |
7,930 |
|
||||
1999 |
4,547 |
4,444 |
604 |
58 |
0 |
9,653 |
|
||||
2000 |
4,572 |
6,112 |
664 |
100 |
0 |
11,448 |
|
||||
2001 |
4,600 |
8,754 |
790 |
178 |
0 |
14,322 |
|
||||
2002 |
4,620 |
11,965 |
952 |
258 |
0 |
17,795 |
|
||||
2003 |
4,640 |
14,609 |
1,137 |
408 |
0 |
20,794 |
|
||||
2004 |
4,660 |
16,629 |
1,550 |
1,018 |
0.2 |
23,857 |
|
||||
2005 |
4,680 |
18,428 |
2,192 |
1,881 |
0.2 |
27,181 |
|
||||
2006 |
|
20,622 |
|
2,740 |
|
2,831 |
|
0.2 |
|
30,893 |
|
4,700 |
|
|
|
|
|
39TP PT ibid.
98
SOU 2008:13 |
Germany |
Table
Table
|
|
Hydro |
|
Wind |
|
Biomass |
|
Biowaste |
|
PV |
|
Geothermal |
|
Total |
|
|
|
[GWh] |
|
[GWh] |
|
[GWh] |
|
[GWh] |
|
[GWh] |
|
[GWh] |
|
[GWh] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1990 |
17,000 |
40 |
222 |
1,200 |
1 |
0 |
18,463 |
|
|||||||
1991 |
15,900 |
140 |
250 |
1,200 |
2 |
0 |
17,492 |
|
|||||||
1992 |
18,600 |
230 |
295 |
1,250 |
3 |
0 |
20,378 |
|
|||||||
1993 |
19,000 |
670 |
370 |
1,200 |
6 |
0 |
21,246 |
|
|||||||
1994 |
20,200 |
940 |
570 |
1,300 |
8 |
0 |
23,018 |
|
|||||||
1995 |
21,600 |
1,800 |
670 |
1,350 |
11 |
0 |
25,431 |
|
|||||||
1996 |
18,800 |
2,200 |
853 |
1,350 |
16 |
0 |
23,219 |
|
|||||||
1997 |
19,000 |
3,000 |
1,079 |
1,400 |
26 |
0 |
24,505 |
|
|||||||
1998 |
19,000 |
4,489 |
1,642 |
1,750 |
32 |
0 |
26,913 |
|
|||||||
1999 |
21,300 |
5,528 |
1,791 |
1,850 |
42 |
0 |
30,511 |
|
|||||||
2000 |
24,936 |
7,550 |
2,279 |
1,850 |
64 |
0 |
36,679 |
|
|||||||
2001 |
23,383 |
10,509 |
3,206 |
1,859 |
116 |
0 |
39,073 |
|
|||||||
2002 |
23,824 |
15,786 |
4,017 |
1,945 |
188 |
0 |
45,76 |
|
|||||||
2003 |
20,350 |
18,859 |
6,970 |
2,162 |
313 |
0 |
48,654 |
|
|||||||
2004 |
21,000 |
25,509 |
8,347 |
2,116 |
557 |
0.2 |
57,529 |
|
|||||||
2005 |
21,524 |
27,229 |
10,495 |
3,039 |
1,282 |
0.2 |
63,569 |
|
|||||||
2006 |
|
|
30,500 |
|
16,138 |
|
3,600 |
|
2,000 |
|
0.4 |
|
73,874 |
|
|
|
21,636 |
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Similar to the other countries, the German Chapter of this report will concentrate on the issues related to wind power but will also include experience related to network connection/integration learned from other renewable energy technologies.
40TP PT ibid.
99
Germany |
SOU 2008:13 |
3.1.1Overview of the Transmission System
Germany presently consists of four transmission system operator (TSOs) which own and operate the high voltage network within their respective regions. The four TSOs are:
•Vattenfall Europe Transmission
•
•RWE Transportnetz Strom
•EnBW Transportnetze AG
The regional responsibility of each TSO is shown in Figure
Figure
100
SOU 2008:13 |
Germany |
3.1.2Overview of the Distribution Systems
Germany has around 700 operators of distribution networks and 50 operators of regional networks, see Figure
Figure
Source: VDN (German Network Association)
41TP PT http://www.boeckler.de/pdf/wsi_pj_piq_sekstrom.pdf.
101
Germany |
SOU 2008:13 |
The network companies have a mixed ownership, but most of them are municipal companies. They used to have their own power genera- tion (mainly local CHP) and sold the generated power, mainly within the local communities. Nowadays they are unbundled (accounting- wise), so typically a local network company, generator and retailer are still municipal. The deregulation in Germany, however, has increased the number of mergers in the network sector; hence the number of local network companies has decreased from around 900 to around 700 in the past years.
3.1.3Relevant Legislations for Renewable Energy
The following legislations impact the development of renewable energy in Germany:
•Renewable Energy Sources Act (2004)TPF42FPT: In April 2000 the first version of the Renewable Energy Sources Act (RES) was put into force by the German parliament, the Bundestag. The Bundestag amended it again on 1 August 2004 with the “Act Revising the Legislation on Renewable Energy Sources in the Electricity Sector”. Another update of the RES Act is scheduled for early 2009.
The Renewable Energy Source Act replaced the Electricity Feed Act,TPF43FPT which was in place from 1991 to 2000. In principle the Electricity Feed Act started the development of wind power in Germany by granting priority to wind power by forcing ope- rators of power grids to give priority to electricity
The amendment of the Renewable Energy Act (EEG) from 1 August 2004 continued with the basic principle – i.e. compul- sory and priority connections of plants generating electricity from renewable energy sources, as well as compulsory and priority purchase and transmission of, and payment for such electricity; but several new articles reinforce consumer protection and aim
42TP PT
English:
102
SOU 2008:13 |
Germany |
at increasing transparency and reducing the costs inherent to the system. One of these regulations, for example, provides for a public register of plants generating electricity from renewable sources. Also renewable power generation has, in principle, gained the legal right to be connected to the power system, i.e. no sepa- rate agreement or contract between a network operator and an operator of a renewable energy plant is required anymore.
•National Energy Act: This regulation of the electricity system in Germany prior to start of the liberalization process was based on the National Energy Act of 1935TPF44FPT. The central aim of this law was the establishment of a
In 1998, two years after the EU Directive regarding deregula- tion was passed, Germany introduced the National Energy Act 1998TPF45FPT. The Energy Act defined the legal and regulatory basic principles of the German electricity supply system, hence this Act sets the framework for all
-complete liberalization of all segments of the electricity sector.
-access to the transport network had been regulated by the “negotiated access” through “association agreements between energy producers and industrial consumers” (without a special regulatory agency);
-unbundling of production and supply segments from the net- work segment through “separation of accounts”.
With the National Electricity Act of 1998 also the regulation of the electricity network was given over to the network companies. The network companies used so called “associations´ agreements” to regulate network access and tariffs. The “associations’ agree- ments”, however, caused many legal conflicts concerning the entry to the transmission network for new power producers. In 2003, the Federal Council of Germany demanded an effective control concerning the regulation of the network access, transmission tariffs and demanded a participation of the Federal States in its regulation which was achieved through the National Energy Act of 2005. With the implementation of the regulated access, the
44TP PT Energiewirtschaftsgesetz von 1935 / EnWG 1935.
45TP PT Energiewirtschaftsgesetz von 1998.
103
Germany |
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legal unbundling was fixed and a regulatory agency (“Bundes- netzagentur”) was determined.
Since July 2005, the new regulatory agencies have been re- sponsible for regulating and unbundling of the electricity and gas transport segments. One regulatory agency at federal level (“Bundesnetzagentur”) is part of the Federal Ministry of Eco- nomics and works under its supervision. Additionally, on the level of the Federal States, the respective regulatory agencies are part of the Ministries of Economics of the Federal States (“Landes- regulierungsbehörden”). The regulator on Federal State level are responsible for regulating network companies with less than 100,000 electricity or gas customers (incl. end customers), but the Federal States may delegate responsibility to the Bundesnetz- agentur.
However, even today questions remain about the detailed tasks of the regulatory agency, i.e. which areas fall within its respon- sibility. In addition, as the regulatory agency is still in its start- up phase, it currently focuses on certain key tasks and puts very low emphasis on issues related to the Renewable Energy Sources Act such as network upgrade or connection policy related to the RES.
The National Energy Act states that the German government has to develop four additional regulations, which replace issues formerly mainly defined in the “associations´agreements”. Three of the four have already been implemented. These are:
•Electricity Network Access OrdinanceTPF46FPT: It defines the general methods of how network companies should measure, document and calculate the actual power flow in the different networks as well as the needed balancing services. This method includes specific regulations of how to include imbalances caused by renewable energies connected to the grid under the RES Act.
•Electricity Network Charges OrdinanceTPF47FPT: It sets the general approach of how to define network charges for transmitting power and how to calculate imbalances between scheduled power deli- very and actual delivery.
46TP PT Verordnung über den Zugang zu Elektrizitätsversorgungsnetzen, or
47TP PT Verordnung über die Entgelte für den Zugang zu Elektrizitätsversorgungsnetzen, or StromNEV from 25.07.2005, see
104
SOU 2008:13 |
Germany |
•Electricity Network Connection OrdinanceTPF48FPT: It defines the legal requirements for network companies to connect customers, i.e. end user, to the distribution network and the corresponding responsibilities such as metering and costs. The ordinance does not apply to generation sources defined in the RES Act.
Finally, the only missing additional regulation is related to the defi- nition of the network tariffs. The German government has suggested to introduce – instead of a cost plus regulation scheme – an incentive regulation scheme starting from January 2009. So far, the German government has only formulated a first draft of this regulation defining the incentive regulation.TPF49FPT
Infrastructure LawTPF50FPT: The law is supposed to speed up infra- structure projects including railway project, motorways and con- nections to offshore wind farms. It reformulates certain paragraphs in a number of other laws, including the National Energy Act.
In principle the law follows approaches that are similar to those used in Denmark and are under development in the UK, i.e. TSOs are obliged to cover the cost of connecting offshore wind farms to the grid between the offshore substation and the nearest transmission line. This also means that connections to offshore wind farms can be shared by a number of projects, avoiding a situation where each development consortium tries to arrange its own link. Since many farms are planned for a distance of more than 20 kilometres off the coast, grid connection represents a substantial part of their capital cost.
CHP LawTPF51FPT: The
The bonus payment is different for different generation and de- creased from 1.53 c€/kWh p.a. in 2002 to 0.97 c€/kWh in 2006 for
48TP PT Verordnung ubre Allgemeine Bedingungen für den Netzanschluss und dessen Nutzung für die Elektrizitätsversorgung in
49TP PT
50TP PT Gesetz zur Beschleunigung von Planungsverfahren für Infrastrukturvorhaben vom 9. Dezember 2006, see http://217.160.60.235/BGBL/bgbl1f/bgbl106s2833.pdf (in German). 51TP PT
105
Germany |
SOU 2008:13 |
existing
3.1.4Regulatory Framework for Network Companies
The German regulator, the Bundesnetzagentur, is responsible for regulating and authorizing network companies, including approving network tariffs. Today, the German network companies are regulated on the basis of an
Starting in 2009, network tariffs will not be regulated any more on cost basis, but on the basis of an incentive regulation (based on a
The
This point was discussed with the German regulator, VDN (the German network association) and the German wind energy asso- ciation, and none of these three parties considered this an important issue.TPF52FPT The reason for this might be that the required network up- grades are rather limited so far, due to the rather oversized network in former
Nevertheless, VDN pointed out that occasionally network com- panies complain about significant investment costs, resulting in higher
52TP PT Based on a phone discussion with VDN in June 2007.
106
SOU 2008:13 |
Germany |
network tariffs.TPF53FPT However, these are typically individual cases that are not important enough for all network companies to lobby for a different approach. However, with the introduction of an incentive- based regulation approach this will change and VDN already has pointed out that the new regulation approach has to specially include the specifics of network upgrades caused by renewable energy ex- pansion.
In addition, the Bundesnetzagentur commented that higher net- work tariffs due to network upgrades are not considered an important aspect as public complaints are very limited.TPF54FPT
The situation is different for the network connection of offshore wind farms. According to the infrastructure law, the four TSOs are obliged to build and operate the connection between the offshore wind farm and the nearest transmission line onshore. As only the two coastal TSOs are affected by the law, i.e. E.on Netz and Vattenfall Transmission, the additional investment costs would lead to signi- ficant differences in network tariffs between those two and the remaining two TSOs. Hence, the infrastructure law (§ 4) requires that the TSOs share the cost proportional to its customers, i.e. each electricity customer in Germany is supposed to pay a similar share of the network connections of the offshore wind farms.
3.1.5Development of the Wind Power Sector in Germany
In Germany, the development of wind power started as an indepen- dent development of small and
The installation of wind farms took mainly place in form of single wind turbines or clusters of wind turbines, only in the last
53TP PT According to the VDN, those complains focused on Northern Germany in the late 1990, later the impacted network companies were mainly in Eastern Germany and today network companies in South Germany start to complain due to increase number of PV installations.
54TP PT Based on a phone discussion with, the Bundesnetzagentur in June 2007.
107
Germany |
SOU 2008:13 |
In the beginning of the German wind power development, most of the installations were along the costal lines, later wind power moved more and more inland. Figure
Figure
55TP PT Source: http://www.dewi.de/dewi/fileadmin/pdf/publications/Magazin_30/05.pdf
108
SOU 2008:13 |
Germany |
Figure
Figure
56TP PT Source: http://www.dewi.de/dewi/fileadmin/pdf/publications/Magazin_30/05.pdf
109
Germany |
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Today the wind power industry is an important economic factor in Germany. In 2004, around 64,000 people worked in the German wind sector (57,000 in the
About half of all employees are involved in the production and operation of systems and the other half are employed by suppliers or upstream economic sectors like engine construction and electrical device manufacturers, but also including the steel industry as well as
3.1.6Future Plans and Possible Barriers for the Further Development of Wind Power
Onshore Wind Power
The annually installed wind power in Germany has dropped from around 3,247 MW in 2002 to about 2,100 MW in 2006. The current predictions for installation of onshore wind power foresee a drop of the annually installed wind power to around 1500 MW. Reasons for this are:TPF58FPT
•Limited number of areas that could be used for additional wind power installations;
•The most economic locations are already utilized, it becomes difficult to find economic locations;
•Larger turbine heights, which probably would make some locations economic for wind power installations, are more and more limited by building codes;
•The annual decrease of the
•Network companies have not been able to upgrade the power systems as fast as wind power was growing, hence more and more congestions in the power system slow down the development of wind power. Due to the congestions, curtailment of wind power
57TP PT Renewable Energy: Employment Effects, Federal Ministry for the Environment, Nature Con- servation and Nuclear Safety (BMU), see
58TP PT
110
SOU 2008:13 |
Germany |
can now be used by network companies to reduce bottlenecks, hence wind farm operators face for the first time the risk of not being able to feed its power generation into the grid, which increases the economic risks for the wind farm operator;
•Repowering, i.e. replacement of old wind turbines with more efficient new wind turbines, often faces similar obstacles i.e. limited network capacity and building codes which limit the possibility to install larger turbines;
Offshore Wind Power
Figure
Figure
50.000 |
|
|
|
|
|
|
|
|
45.000 |
|
|
|
|
|
|
|
|
40.000 |
|
|
Onshore and Offshore |
|
|
|
||
|
|
|
Onshore and Offshore |
|
|
|
||
35.000 |
|
|
|
|
|
|
|
|
30.000 |
|
|
|
|
|
|
|
|
25.000 |
|
|
|
|
|
|
|
|
20.000 |
|
|
|
|
|
|
|
|
15.000 |
|
|
|
|
Onshore |
|
|
|
|
|
|
|
|
|
|
|
|
10.000 |
|
|
|
|
|
|
|
|
5.000 |
|
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
|
|
1990 |
1995 |
2000 |
2005 |
2010 |
2015 |
2020 |
2025 |
2030 |
|
|
|
|
Year |
|
|
|
|
Source: Deutsches Windenergie Institut.
111
Germany |
SOU 2008:13 |
Earlier estimates assumed that by 2010 a few thousand MW of off- shore wind power will be installed in German water, but so far hardly any project has been built. The first larger offshore project (60 MW) is scheduled for construction in 2008. The early estimates influenced the price setting of the
The reason for the slow development of offshore wind farms in Germany are:
•Very high initial investment costs due to long distance to shore (~100 km) and large water depth for suitable locations; econo- mics of the projects very uncertain particularly due to rising wind turbine prices;
•Long, complicated and costly permitting process. Nevertheless, so far around 10 projects have been approved for building which would lead to around 3,000 MW (in the first phase). Additional projects currently applying for a building permit could add another 13,000 MW.TPF60FPT
•Grid connection issues and responsibility for building a connec- tion to shore was long an open issue. This has changed now with the introduction of the Infrastructure law, see Section 3.1.3.
59TP PT The first government documents related to 2009 RES Act formulate a renewable energy target in the electricity sector of 27% for 2020 and 45% for 2030.
60TP PT See also
112
SOU 2008:13 |
Germany |
3.2Payment Scheme for Renewable Energy Sources
Since 1991, electricity produced from renewable energy has been reimbursed via a so called fixed
In the 1990s additional reimbursement, i.e. in addition to Electricity Feed Act payments, could be obtained by joining select projects within the framework of its “250MW of Wind” program. In some cases, the states also granted investment cost subsidies, i.e. using certain wind turbine prototypes in a wind project. This meant that in the early 1990s it was often possible to combine subsidy schemes at the national and state level. The
59%.TPF61FPT
Renewable Energy Sources Act (2004)
For onshore wind power, an initial rate of 8.36 c€/kWh has been set for a minimum of five years for wind turbines which come into operation in 2006. Subsequently, dependent on the specific wind resources on site, the
61TP PT
113
Germany |
SOU 2008:13 |
rate of 8.19 c€/kWh, which will be reduced to 5.17 c€/kWh after 5 years if they have reached 150% of the reference yield at the plan- ned site. The reference yield is the power production in kWh that a certain wind turbine will produce at a typical inland location with an average wind speed of 5.5 m/s at 30 meters above ground in 5 years. The reference yield is defined for each wind turbine type available in Germany and varying with hub height. The Renewable Energy Sources Act foresees special regulations for
Table
The
114
SOU 2008:13 |
Germany |
consumers. Only certain energy intensive industries receive a special treatment, which means their share of renewable energy is lower.
Table |
||||||
|
Act 2004 |
|
|
|
|
|
|
|
|
|
|
|
|
Year of |
|
Onshore |
|
Offshore |
||
Installation |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial |
|
Final* |
Initial |
|
Final** |
|
[c€/kWh] |
|
[c€/kWh] |
[c€/kWh] |
|
[c€/kWh] |
|
|
|
|
|
|
|
2004 |
8.70 |
5.50 |
9.10 |
6.19 |
||
2005 |
8.53 |
5.39 |
9.10 |
6.19 |
||
2006 |
8.36 |
5.28 |
9.10 |
6.19 |
||
2007 |
8.19 |
5.17 |
9.10 |
6.19 |
||
2008 |
8.03 |
5.07 |
8.92 |
6.07 |
||
2009 |
7.87 |
4.97 |
8.74 |
5.95 |
||
2010 |
7.71 |
4.87 |
8.57 |
5.83 |
||
2011 |
7.56 |
4.77 |
5.71 |
5.71 |
||
2012 |
7.41 |
4.67 |
5.60 |
5.60 |
||
2013 |
7.26 |
|
4.58 |
5.49 |
|
5.49 |
*Exact time of final reimbursement depends on the reference yield and really achieved yield, at the earliest after five years, though. The initial reimbursement can be extended if the new plant replaces other plants in the same county and at least triples the effect.
**Time of the final reimbursement at the earliest after 12 years and only for plants that have become operative prior to 31 December 2010. An extension of the timeframe depends on the distance to shore and water depth.
Note: Based on the 2000 version of the Renewable Energy Sources Act, the
115
Germany SOU 2008:13
Table |
|||||||||
|
|
Act 2004 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
Year of |
Installed on or part of a building |
Not part of a building |
Special |
||||||
Installation |
Cases |
||||||||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
up to |
|
> 30 kW to |
> 100 KW |
up to |
> 30 kW to > 100 KW |
|
||
|
30 kW |
100 kW |
|
30 kW |
100 kW |
|
|
||
|
[c€/kWh] [c€/kWh] [c€/kWh] |
[c€/kWh] |
[c€/kWh] [c€/kWh] [c€/kWh] |
||||||
|
|
|
|
|
|
|
|
|
|
2004 |
57.40 |
|
54.60 |
54.00 |
62.40 |
59.60 |
59.00 |
45.70 |
|
2005 |
54.53 |
|
51.87 |
51.30 |
59.53 |
56.87 |
56.30 |
43.42 |
|
2006 |
51.80 |
|
49.28 |
48.74 |
56.80 |
54.28 |
53.74 |
40.60 |
|
2007 |
49.21 |
|
46.82 |
46.30 |
54.21 |
51.82 |
51.30 |
37.96 |
|
2008 |
46.75 |
|
44.48 |
43.99 |
51.75 |
49.48 |
48.99 |
35.49 |
|
2009 |
44.41 |
|
42.26 |
41.79 |
49.41 |
47.26 |
46.79 |
33.18 |
|
2010 |
42.19 |
|
40.15 |
39.70 |
47.19 |
45.15 |
44.70 |
31.02 |
|
2011 |
40.08 |
|
38.14 |
37.72 |
45.08 |
43.14 |
42.72 |
29.00 |
|
2012 |
38.08 |
|
36.23 |
35.83 |
43.08 |
41.23 |
40.83 |
27.12 |
|
2013 |
36.18 |
|
34.42 |
34.04 |
41.18 |
39.42 |
39.04 |
25.36 |
Note: Based on the 2000 version of the Renewable Energy Sources Act, the
Table
Year of |
For units permited |
|
For existing units that increase its efficency by 15%; |
|
|||||||||
|
payment only for the additional power production due |
|
|||||||||||
Installation |
until end of 2007 |
|
|
||||||||||
|
|
|
to efficency improvement |
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
up to |
> 500 kW |
|
up to |
|
> 500 kW |
|
> 10 MW |
|
> 20 MW |
|
> 50 MW to |
|
|
500 kW |
to 5 MW |
|
500 kW |
|
to 10 MW |
|
to 20 MW |
|
to 50 MW |
|
150 MW |
|
|
[c€/kWh] [c€/kWh] |
|
[c€/kWh] |
|
[c€/kWh] [c€/kWh] [c€/kWh] |
|
[c€/kWh] |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
9.67 |
6.65 |
7.67 |
6.65 |
6.10 |
4.56 |
3.70 |
|
|||||
2005 |
9.67 |
6.65 |
7.59 |
6.58 |
6.04 |
4.51 |
3.66 |
|
|||||
2006 |
9.67 |
6.65 |
7.51 |
6.51 |
5.98 |
4.46 |
3.62 |
|
|||||
2007 |
9.67 |
6.65 |
7.43 |
6.44 |
5.92 |
4.42 |
3.58 |
|
|||||
2008 |
9.67 |
6.65 |
7.36 |
6.38 |
5.86 |
4.38 |
3.54 |
|
|||||
2009 |
9.67 |
6.65 |
7.29 |
6.32 |
5.80 |
4.34 |
3.50 |
|
|||||
2010 |
9.67 |
6.65 |
7.22 |
6.26 |
5.74 |
4.30 |
3.47 |
|
|||||
2011 |
9.67 |
6.65 |
7.15 |
6.20 |
5.68 |
4.26 |
3.44 |
|
|||||
2012 |
9.67 |
6.65 |
7.08 |
6.14 |
5.62 |
4.22 |
3.41 |
|
|||||
2013 |
|
6.65 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
9.67 |
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
116
SOU 2008:13 Germany
Table |
|||||
|
Act 2004 |
|
|
|
|
|
|
|
|
|
|
Year of |
|
up to 5 MW |
> 5 MW to |
> 10 MW to |
> 20 MW |
|
10 kW |
20 MW |
|||
Installation |
|
|
|
||
|
[c€/kWh] |
[c€/kWh] |
[c€/kWh] |
[c€/kWh] |
|
|
|
||||
|
|
|
|
|
|
2004 |
15.00 |
14.00 |
8.95 |
7.16 |
|
2005 |
15.00 |
14.00 |
8.95 |
7.16 |
|
2006 |
15.00 |
14.00 |
8.95 |
7.16 |
|
2007 |
15.00 |
14.00 |
8.95 |
7.16 |
|
2008 |
15.00 |
14.00 |
8.95 |
7.16 |
|
2009 |
15.00 |
14.00 |
8.95 |
7.16 |
|
2010 |
14.85 |
13.86 |
8.86 |
7.09 |
|
2011 |
14.70 |
13.72 |
8.77 |
7.02 |
|
2012 |
14.55 |
13.58 |
8.68 |
6.95 |
|
2013 |
|
14.40 |
13.44 |
8.59 |
6.88 |
Note: Based on the 2000 version of the Renewable Energy Sources Act, the
Table
Year of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Biomass |
|
|
|
|
Biomass excluding the use of wood |
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|
|
|
|
including |
|
|||||||
Installation |
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|
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||||||||
|
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|
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|
|
|
|
|
|
|
|
|
wood |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
up to |
up to |
|
> 150 kW |
|
> 150 kW |
|
> 500 kW |
|
> 500 kW |
|
> 5 MW |
|
> 5 MW |
|
up to |
|
|
150 |
150 kW |
|
up to |
|
up to |
|
up to |
|
up to |
|
up to |
|
up to |
|
|
|
|
|
|
500 kW |
|
|
5 MW |
|
|
20 MW |
|
20 MW |
|
|||||
|
kW |
(CHP) |
|
500 kW |
|
|
5 MW |
|
|
20 MW |
|
|
|
||||
|
|
|
(CHP) |
|
|
(CHP) |
|
|
(CHP) |
|
|
|
|||||
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|||
|
[c€/kWh] [c€/kWh] |
|
[c€/kWh] [c€/kWh] |
|
[c€/kWh] [c€/kWh] |
|
[c€/kWh] |
|
[c€/kWh] [c€/kWh] |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
11.50 |
2.00 |
9.90 |
2.00 |
8.90 |
2.00 |
8.40 |
2.00 |
|
|
|
||||||
2005 |
11.33 |
2.00 |
9.75 |
2.00 |
8.77 |
2.00 |
8.27 |
2.00 |
|
|
|
||||||
2006 |
11.16 |
2.00 |
9.60 |
2.00 |
8.64 |
2.00 |
8.15 |
2.00 |
3.78 |
|
|||||||
2007 |
10.99 |
2.00 |
9.46 |
2.00 |
8.51 |
2.00 |
8.03 |
2.00 |
3.72 |
|
|||||||
2008 |
10.83 |
2.00 |
9.32 |
2.00 |
8.38 |
2.00 |
7.91 |
2.00 |
3.66 |
|
|||||||
2009 |
10.67 |
2.00 |
9.18 |
2.00 |
8.25 |
2.00 |
7.79 |
2.00 |
3.61 |
|
|||||||
2010 |
10.51 |
2.00 |
9.04 |
2.00 |
8.13 |
2.00 |
7.67 |
2.00 |
3.56 |
|
|||||||
2011 |
10.35 |
2.00 |
8.90 |
2.00 |
8.01 |
2.00 |
7.55 |
2.00 |
3,51 |
|
|||||||
2012 |
10.19 |
2.00 |
8.77 |
2.00 |
7.89 |
2.00 |
7.44 |
2.00 |
3.46 |
|
|||||||
2013 |
|
2.00 |
|
8.64 |
|
2.00 |
|
7.77 |
|
2.00 |
|
7.33 |
|
2.00 |
|
3.41 |
|
10.04 |
|
|
|
|
|
|
|
|
Note: Based on the 2000 version of the Renewable Energy Sources Act, the
117
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20 MW, the
Table
Categories a1 |
b |
a1b |
a1 |
b |
a1b |
a2 |
b |
a2b |
a3 |
a3b |
Year of up to |
up to |
up to |
Installation 150 kW |
150 kW |
150 kW |
> 150 kW > 150 kW > 150 kW >150 kW >150 kW |
>150 kW >150 kW |
>150 kW |
|||||
up to |
up to |
up to |
up to |
up to |
up to |
up to |
up to |
500 kW |
500 kW |
500 kW |
5 MW |
5 MW |
5 MW |
5 MW |
5 MW |
|
|
[c€/ |
|
[c€/ |
|
[c€/ |
|
[c€/ |
|
[c€/ |
|
[c€/ |
|
[c€/ |
|
[c€/ |
|
[c€/ |
|
[c€/ |
|
[c€/ |
|
|
|
kWh] |
|
kWh] |
|
kWh] |
|
kWh] |
|
kWh] |
|
kWh] |
|
kWh] |
|
kWh] |
|
kWh] |
|
kWh] |
|
kWh] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
17.50 |
13.50 |
19.50 |
15.90 |
11.90 |
17.90 |
12.90 |
10.90 |
14.90 |
11.40 |
13.40 |
|
|||||||||||
2005 |
17.33 |
13.33 |
19.33 |
15.75 |
11.75 |
17.75 |
12.77 |
10.77 |
14.77 |
11.27 |
13.27 |
|
|||||||||||
2006 |
17.16 |
13.16 |
19.16 |
15.60 |
11.60 |
17.60 |
12.64 |
10.64 |
14.64 |
11.14 |
13.14 |
|
|||||||||||
2007 |
16.99 |
12.99 |
18.99 |
15.46 |
11.46 |
17.46 |
12.51 |
10.51 |
14.51 |
11.01 |
13.01 |
|
|||||||||||
2008 |
16.83 |
12.83 |
18.83 |
15.32 |
11.32 |
17.32 |
12.38 |
10.38 |
14.38 |
10.88 |
12.88 |
|
|||||||||||
2009 |
16.67 |
12.67 |
18.67 |
15.18 |
11.18 |
17.18 |
12.25 |
10.25 |
14.25 |
10.75 |
12.75 |
|
|||||||||||
2010 |
16.51 |
12.51 |
18.51 |
15.04 |
11.04 |
17.04 |
12.13 |
10.13 |
14.13 |
10.63 |
12.63 |
|
|||||||||||
2011 |
16.35 |
12.35 |
18.35 |
14.90 |
10.90 |
16.90 |
12.01 |
10.01 |
14.01 |
10.51 |
12.51 |
|
|||||||||||
2012 |
16.19 |
12.19 |
18.19 |
14.77 |
10.77 |
16.77 |
11.89 |
9.89 |
13.89 |
10.39 |
12.39 |
|
|||||||||||
2013 |
|
|
12.04 |
|
18.04 |
|
14.64 |
|
10.64 |
|
16.64 |
|
11.77 |
|
9.77 |
|
13.77 |
|
10.27 |
|
12.27 |
|
|
|
16.04 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
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||||||||||||
|
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|
|
Categories:
a1: Exclusively biomass from a) plants and parts of plants without processing, b) liquid manure and malt residuum/slop c) substance mix a+b and if the plant is authorized for such substances and if the plant is authorized for such substances and there is no biomass plants of a different variety on the premises for the proportion up to including 500 kW;
a2: Exclusively biomass from a) plants and parts of plants without processing, b) liquid manure and malt residuum/slop c) substance mix a+b and if the plant is authorized for such substances and if the plant is authorized for such substances and there is no biomass plants of a different variety on the premises for the proportion of 500 kW up to including 5 MW
a3: Use of wood for the proportion of 500 kW up to 5 MW.
b: Exclusively biomass according to biomass regulation without spec. matured timber and plant in CHP operation or biomass production through thermochemical gasification or dry fermentation or if biogas has natural gas quality or if the power is produced through fuel cells, gas turbines, steam engines,
Figure
118
SOU 2008:13 |
Germany |
to 0.7 c€/kWh or about 2.10 € per months for an average household with an annual electricity consumption of 3,500 kWh per year.
Figure
3.3Application Procedure for Access and Connection to the Grid
In Germany,
Due to its importance, the complete Paragraph § 4 of the Re- newable Energy Sources Act is included below:TPF63FPT
62TP PT Source:
63TP PT Source:
119
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Article 4
Obligation to purchase and transmit electricity
1)Grid system operators shall immediately and as a priority connect plants generating electricity from renewable energy sources or from mine gas to their systems and guarantee priority purchase and transmission of all electricity from renewable energy sources or from mine gas supplied by such plants. After establishment of a register of installa- tions pursuant to Article 15(3), such obligation for the purchase pur- suant to the first sentence above shall apply only if the plant operator has submitted an application for entry into the register. Notwith- standing Article 12(1), plant operators and grid system operators may agree by contract to digress from the priority of purchase, if the plant can thus be better integrated into the grid system. When determining the charges for use of the grid, grid system operators may add any costs incurred in accordance with a contractual agreement pursuant to the third sentence above, provided that such costs are substantiated.
2)The obligation under paragraph (1) first sentence above shall apply to the grid system operator that is most closely located to the plant site and is in possession of a grid technically suitable to receive electri- city if there is no other grid with a technically and economically more suitable grid connection point. A grid shall be deemed to be techni- cally suitable even if – notwithstanding the priority established under paragraph (1) first sentence above – feeding in the electricity requires the grid system operator to upgrade its grid at a reasonable economic expense; in this case, the grid system operator shall upgrade its grid without undue delay, if so requested by a party interested in feeding in electricity. If the plant must be licensed in accordance with any other legal provisions, the obligation to upgrade the grid in accordance with the second sentence above shall only apply if the plant operator sub- mits either a license, a partial license or a preliminary decision. The obli- gation to upgrade the grid shall apply to all technical facilities required for operating the grid and to all connecting installations which are owned by or passed into the ownership of the grid system operator.
3)The obligation for priority connection to the grid system pursuant to paragraph (1) first sentence above shall apply even if the capacity of the grid system or the area serviced by the grid system operator is temporarily entirely taken up by electricity produced from renewable energy sources or mine gas, unless the plant does not have a technical facility for reducing the
120
SOU 2008:13 |
Germany |
electricity, the grid system operator shall, if so requested by the plant operator, provide proof of fulfillment of the conditions set out in the second sentence above in writing within four weeks and produce veri- fiable calculations.
4)The relevant data on the grid system and on the electricity generation plants, which are required to test and verify the grid compatibility, shall be presented upon request within eight weeks where this is necessary for the grid system operator or the party interested in feeding in elec- tricity to do their planning and to determine the technical suitability of the grid.
5)The obligation for priority purchase and transmission of electricity in accordance with paragraph (1) first sentence above shall also be applied, if the plant is connected to the grid of a plant operator or a third party who is not a grid system operator within the meaning of Article 3(7) and if the electricity is offered to a grid system in accordance with Article 3(6) via a merely budgeted transit through this grid system.
6)The upstream transmission system operator shall guarantee priority purchase and transmission of the quantity of energy purchased by the grid system operator in accordance with paragraph (1) or (5) above. If there is no domestic transmission system in the area serviced by the grid system operator entitled to sell electricity, the most closely located domestic transmission system operator shall purchase and transmit electricity in accordance with the first sentence above. The first sen- tence above shall apply mutatis mutandis to other grid system operators.
In principle under the Renewable Energy Sources Act a renewable power generation has the legal right to be connected to the power system, i.e. in principle not even a separate agreement or contract should be required anymore between a network operator and an operator of a renewable energy plant. However, based on a recent court decision this legal right applies only to an already installed renewable energy generator, i.e. a renewable energy generator must still negotiate an access agreement if it wants to be sure in advance of how much it can connect and when. This small difference is im- portant, because a network upgrade takes time and no investor will build a wind farm without knowing in advance how much wind power can be connected and when.
From the network operator’s perspective the contractual agree- ment is important because the Renewable Energy Sources Act 2004 (for the first time) allows the network companies to, in principle, curtail renewable energy if this allows more wind farms to be con- nected to the grid and if both parties agree in advance on this (RES
121
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Act: …agree by contract to digress from the priority of purchase, if the plant can thus be better integrated into the grid system.).
Particular E.on Netz, the TSO with the largest share of wind power has defined a number of bottlenecks within its transmission network for times with high wind production and low local load, see Figure
Figure
Source: E.on
122
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Germany |
Network connection costs, i.e. from the wind farm to the connec- tion point have to be paid by the wind farm operator. The network companies are required to upgrade the network and cover the cor- responding costs. This typically results in a conflict regarding the best connection point. According to § 17, paragraph (1) and (2) of the National Energy Act 2005, grid operators are obligated to give access to generation units (and others) as long as no technical or economic reasons object against it. This paragraph allows a wide range of interpretation and has caused a large number of court cases. The wind farm lobby argues that in principle even a low voltage system must be upgraded to allow the connection of wind farms, while the network companies typically argue that this is not economically reasonable. The general rule for defining the grid connection point applied for many years was based on the understanding that the total network connection costs, i.e. connection plus upgrade costs, should be minimized independent of who covers which part of the costs.TPF64FPT
A new court decision from July 2007 followed the same principle but also defined that a low voltage network must be upgraded to accommodate wind power even if it required the construction of new overhead lines from the connection point to another substation as long as this leads to the lowest overall network connection costs.TPF65FPT The argument of the network company was that the new connec- tion is not a network upgrade but part of the network connection, however the court did not accept this argument.
In practice, the network upgrade issue is often solved differently, because the network upgrade based on overhead lines can take years due to very long
64TP PT Clearingstelle nach §10 Abs.3
65TP PT
123
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100 MW) and then connect these networks to the high voltage system. Legally, even though some of these connections are 30 to 40 km long, these cable networks are considered part of the wind farm so they are not considered a public grid, i.e. they do not fall under the legal regulations for medium or high voltage networks.
The various laws do not define a clear application process for grid access with timelines or deadlines,TPF66FPT but the German Association of network companies has published a guideline for the application and connection of renewable energy systems under the RES Act.TPF67FPT The guideline clearly defines which data have to be submitted to the net- work company and which methods network companies should apply to calculate the possible interconnection capacity for possible inter- connection points.
3.3.1Definition of the Capacity of a Production Installation
While other countries have certain clear definitions what maximum capacity can be connected to which voltage level, such definitions do not exist in Germany. From the technical perspective the VDN guidelineTPF68FPT regarding network connection is typically used to define the suitable capacity, however, the final decision for a suitable connection point typically depends on the available capacity and the overall costs for network connection and upgrade, see last Section.
The German wind power association, however, points out that often the published data from the network companies are not suffi- cient to independently verify the technical calculations regarding the available capacity. The regulator points out that in case of com- plaints, it is the network companies’ responsibility to demonstrate how the results where obtained.
66TP PT A principle timeline is outlined in Artikel 4, paragraph 4, RES Act: “The relevant data on the grid system and on the electricity generation plants, which are required to test and verify the grid compatibility, shall be presented upon request within eight weeks where this is necessary for the grid system operator or the party interested in feeding in electricity to do their planning and to determine the technical suitability of the grid.”
67TP PT
68TP PT ibid.
124
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Germany |
3.3.2Permitting Entities
No generation licence or similar is needed for starting up a renewable energy generation unit. Of course a building permit etc. is needed, but from the power system side only an interconnection agreement is needed (which is – as discussed earlier – legally not really re- quired), which is negotiated with the local network company.
3.4Obligations of a Grid Company Regarding Grid Access
According to § 19, paragraph (1) of the National Energy Act from 2005 (EnWG 2005) grid operators are obligated to define detailed minimum technical requirements for the grid connection of genera- tion units (both conventional and renewable) and to publish these requirements on the internet. The technical minimum requirements mentioned above differ for each voltage level. At transportation level (110 to 380 kV) the TransmissionCode 2003 and at distribution level (< 110 kV) the DistributionCode sets the requirements.TPF69FPT
In addition, according to § 19, paragraph (3), of the same law these requirements must be communicated to the regulatory body (Bundes- netzagentur). According to § 17, paragraph (1) and (2) National Energy Act 2005 grid operators are obligated to give access to genera- tion units (and others) as long as no technical or economic reasons object against it.
According to § 18 II National Energy Act, an entity that operates a power generation facility in order to cover its own demand does not fall under the general obligation of a network connection according to Section 1 Clause 1 of National Energy Act. As opposed to this, it results from § 4 V RES Act, that the obligation to purchase and transmit renewable energies even applies if the facility is connected to the network of the facility operator or of a third party that is not a network operator according to § 3 Clause 7 and if the power will
69TP PT TransmissionCode:
DistributionCode:
125
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be commercially transmitted through this network to a network according to § 3 Clause 6.
In Case of Conflicts
The Bundesnetzagentur, the German regulator, is the arbitrating entity in case of conflicts. According to § 13 I of the National Energy Act individuals and associations of individuals whose interests are substantially affected by the behavior of the operator of a power supply network can request the regulating authority to examine such behavior. The authority has to examine whether the behavior of the operator of power supply networks corresponds to the requirements of the regulations.
Such a claim has to include name, address and signature of the claimant as well as company and headquarters of the respective net- work operator. Furthermore the behavior of the respective network operator that has to be examined, a list with the individual reasons of why there are serious doubts regarding the legality of the net- work operator’s behavior, and a list with individual reasons of why the claimant is affected by the network operator’s behavior. Unless the claim complies with these prerequisites the regulating authority will not admit the claim.
According to § 13 III of the National Energy Act, the regulating authority will make a decision within two months after receiving the complete claim. This period can be extended by another two months after receiving the complete claim. Given the consent of the claimant, this period can be further extended. If – according to Clause 1 – the claim refers to the grid connection of larger new generation faci- lities, the regulating authority may further extend the period.
3.4.1Available Capacity
As mentioned before, there are no clear legal rules regarding the de- finition of available capacity, except the legally
70TP PT ibid.
126
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limitations are related to § 11 I 1 National Energy Act, which de- fines that operators of power supply networks are obligated to ope- rate, maintain and – based on demand – extend without discrimina- tion a safe, reliable and efficient power supply network.
3.4.2Reservation of Transmission Capacity
In principle it is not possible to reserve transmission capacity in the German system. However, renewable energy sources receive a priority treatment, i.e. conventional power plants must reduce their power output or must even shut down in case of network limitation in order to guarantee priority access to renewable power generation. This even applies to large generation plants such as nuclear power stations. This way, renewable energy sources can feed into the power system until the bottleneck is entirely created by renewable energy sources. Hence, earlier connection of conventional power plants does not result in any preference in the access to the grid. A slight con- flict occurs between renewable energy sources and CHP sources, which are both guaranteed priority treatment in the relevant laws, however it is not clear which ranks higher in a case where a bottle- neck is entirely created by renewable energy sources and CHP.
3.5Costs Associated with the Connection to the Grid
This is regulated in general in the directive on the access to power supply networks (Strom NEV). According to § 10 I RES Act, also the operators of renewable energy facilities have to bear the grid connection costs themselves. The legal regulations state that the decisive point of reference regarding a decision on who will bear which costs when connecting renewable energy generation facilities is whether it is a grid connection or a grid upgrade.TPF71FPT The facility operator has to pay for the grid connection; the distribution as well as the transmission network operator has to pay for a network exten- sion. This rule which is in principle clear is unclear regarding indi- vidual cases. Whether an individual case constitutes a network exten- sion or a network connection is not defined by the law and requires an interpretation. Such disputes are typically solved in civil courts. This results from § 102 I National Energy Act, which states that
71TP PT Different for offshore wind farms, see below.
127
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civil legal disputes resulting from this law fall under the exclusive jurisdiction of the district courts, regardless of the value of the matter of dispute.
§ 4 II 3,4 RES Act also determines that the obligations regarding the network extension include all technical facilities required for network operation as well as connection facilities that are owned by the network operator or that will be transferred to the ownership of the network operator. Also according to § 13 II RES Act, the network operator has to bear the costs required only for network extensions due to newly connected, reactivated, extended or other- wise renewed facilities for power generation from renewable energies or firedamp corresponding to § 4 paragraph 2 on the purchase and transmission of renewable energies.
Currently, network companies can recover the costs for network upgrades via higher network consumer tariffs, see Section 3.1.4. Costs related to network extensions related to offshore wind farms are shared by all transmission companies and recovered via higher network tariffs, see Infrastructure law in Section 3.1.3.
3.6Costs and Obligations Related to Metering
According to § 21 b I of the National Energy Act the operator of a power supply network is responsible for installing, operating and maintaining the metering equipment as well as for metering the supplied power. However, for renewable energies, the facility ope- rator has, according to § 13 I RES Act, to bear the costs for the metering equipment required for recording the supplied and con- sumed electric work.TPF72FPT The actual metering installation can be done by the network company or any other company.
In principal the metering code 2006TPF73FPT of the German network association treats conventional power plants and renewable units similar. The equipment required for installations larger than 500 kW must be capable of providing 15 minute metering. For units smaller than 500 kW the readings will be done once a year. Even for a stand alone renewable energy unit, e.g. a wind farm, the metering equip- ment must be capable of metering delivered electricity and electricity taken from the grid separately. This also applies for
72TP PT RES Act: ... measuring devices for recording the quantity of electrical energy transmitted and received shall be borne by the plant operator.
73TP PT
128
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Germany |
i.e. residential house with PV equipment; however an aggregated metering (the metering equipment runs backwards in case of de- livery of energy into the grid) is in principal possible but requires a special agreement between network company and the operator of the renewable energy unit. Typically, renewable energy operators prefer two separate meterings because the
3.7Grid Tariffs
Generators in general are not required to pay network fees or net- work tariffs in Germany. Until July 2005 there was no legal definition about network tariffs in general in Germany. Until then everyone followed the definition outlined in the associations´ agreement (Verbändevereinbarung II plus)TPF74FPT of the German network association that power plants in general are not required to pay any network fee. With the introduction of the National Energy Act of June 2005 and the Electricity Network Charges OrdinanceTPF75FPT, this definition has become legally binding.
3.8Rights and Obligations Regarding Real Time Operation
This topic is not relevant in Germany because renewable energy operating under the RES Act are not required to consider real time operation, i.e. transmission system operators have to balance renewable energy. The only exception is defined in the grid codes which requires
74TP PT
75TP PT See § 15 Abs. 1 S. 3 StromNEV (Verordnung über die Entgelte für den Zugang zu Elek- trizitätsversorgungsnetzen), from 25.07.2005, see
129
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3.9Conclusions Germany
General Renewable Energy Promotion Scheme
•A special law for renewable energy grants priority access to renew- able energy by forcing operators of power grids to give priority to electricity
Any size limit in the regulations for renewable energy?
•In general, there are no size limitations such as the 1.5 MW re- gulation in Sweden. However, the
Tariff Structure
•Generators in general are not required to pay network fees or net- work tariffs in Germany. This rule was always applied for con- ventional as well as for renewable power generators, hence grid tariffs played historically no role in the energy policy to pro- mote renewable energy technologies.
Network upgrade costs
•In principal renewable energy generators are required to pay the costs for the grid connection, i.e. all costs from the wind farm to the connection point, and grid companies are required to pay all network upgrading costs. The issue is typically the definition of the best grid connection point. The general rule for defining the grid connection point applied is based on the understanding that the total network connection costs, i.e. connection plus up-
130
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Germany |
grade costs, should be minimized independent of who covers which part of the costs. This could mean that a low voltage net- work must be upgraded to a high voltage network if this is the most economic solution, but it is also possible that the wind farm operator must build a long line itself to a suitable connec- tion point if this is more economic than upgrading the existing network.
Network concessions
•Network concessions also exist in Germany, however, wind farms can build their own network for the sole purpose of connecting the wind farm to the power system. These wind farm networks are treated as industrial networks, i.e. the rules and regulations of distribution or transmission networks do not apply to these industrial networks.
Network Connection Procedure
•The procedure is not clearly described, but the network associa- tion has developed a guideline for the network companies of how to deal with applications. The relevant law defines that “Grid system operators shall immediately and as a priority connect plants generating electricity from renewable energy sources”, hence appli- cations can complain to the German regulator in case of delays and the network company then has to explain to the regulator what caused the delays.
Metering
•Renewable generators larger than 500 kW need 15 minute mete- ring systems, metering im/export separately. For small genera- tors only a continuous metering system is required but also measuring im/export separately.
131
4 United Kingdom
4.1Introduction
The United Kingdom (UK) has currently around 76 GW of electri- city generation capacity to meet an annual consumption of about 350 TWh and winter peak demand of about 63 GW. The UK has also a diverse electricity generation mix. In 2006, 36% was generated by
Figure
Source: http://www.berr.gov.uk/files/file39569.pdf.
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Figure
Source: http://www.restats.org.uk/capacity.htm.
Figure
In 2006, renewables provided 4.55 per cent of the electricity gene- rated in the UK and total electricity generation from renewables amounted to 18,133 GWh, an increase of 7.5 per cent on 2005. This number includes the electricity generation of large hydro power stations, see also Figure
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Figure
Source: http://www.berr.gov.uk/files/file40156.pdf
The main contributors to the 7.5 % increase in renewable energy pro- duction between 2005 and 2006 were onshore wind (+43 per cent), offshore wind (+62 per cent), landfill gas (+3 per cent) and muni- cipal solid waste combustion (+12 per cent). There was no increase in
Due to the importance of wind power and similarly to the other countries, the UK Chapter of this report will concentrate on the issues related to wind power but will also include experience related to network connection/integration gathered from other renewable energy technologies.
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Table
Installed Capacity |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
|
(MWe) |
||||||||||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
Wind: |
|
|
|
|
|
|
|
|
|
|
Onshore |
331.3 |
357.0 |
408.0 |
423.4 |
530.6 |
678.4 |
809.4 |
1 351.2 |
1 650.7 |
|
Offshore |
- |
- |
3.8 |
3.8 |
3.8 |
63.8 |
123.8 |
213.8 |
303.8 |
|
Shoreline wave |
- |
- |
0.5 |
0.5 |
0.5 |
0.5 |
0.5 |
0.5 |
0.5 |
|
Solar photovoltaics |
0.7 |
1.1 |
1.9 |
2.7 |
4.1 |
6.0 |
8.2 |
10.9 |
9.9 |
|
Hydro: |
|
|
|
|
|
|
|
|
|
|
Small scale |
171.1 |
176.7 |
183.6 |
188.7 |
194.2 |
130.0 |
142.9 |
157.9 |
153.0 |
|
Large scale 1) |
1 413.0 |
1 413.0 |
1 419.0 |
1 440.0 |
1 396.0 |
1 354.5 |
1 355.9 |
1 343.2 |
1 368.6 |
|
Biofuels and wastes: |
|
|
|
|
|
|
|
|
|
|
Landfill gas |
245.1 |
343.3 |
425.1 |
464.7 |
472.9 |
619.1 |
722.2 |
817.8 |
856.2 |
|
Sewage sludge |
89.8 |
91.3 |
85.3 |
85.0 |
96.0 |
100.6 |
119.0 |
127.9 |
122.8 |
|
digestion |
|
|
|
|
|
|
|
|
|
|
Municipal solid |
204.1 |
229.6 |
253.2 |
260.0 |
278.9 |
298.8 |
307.4 |
321.4 |
326.5 |
|
waste combustion |
|
|
|
|
|
|
|
|
|
|
Other 2) |
108.0 |
108.0 |
157.0 |
157.0 |
176.5 |
183.9 |
176.3 |
186.1 |
221.3 |
|
Total biofuels and |
647.0 |
772.2 |
920.6 |
966.8 |
1 024.3 |
1 202.4 |
1 324.8 |
1 453.2 |
1 526.8 |
|
wastes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
2 563.1 |
2 720.0 |
2 937.4 |
3 025.9 |
3 153.6 |
3 435.5 |
3 765.4 |
4 530.7 |
5 013.3 |
|
|
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
- |
.. |
92.4 |
146.2 |
308.8 |
310.2 |
1)Excluding pumped storage stations. Capacities are as at the end of December.
2)Includes the use of farm waste digestion, waste tyres, poultry litter, meat and bone, straw combustion, and short rotation coppice.
3)This is the proportion of fossil fuelled capacity used for
76 Source: http://www.dti.gov.uk/energy/statistics/source/renewables/page18513.html
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United Kingdom |
Table
Generation (GWh) |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
|
|
|
|
|
|
|
|
|
|
Wind: |
|
|
|
|
|
|
|
|
|
Onshore 1) |
877 |
850 |
945 |
960 |
1 251 |
1 276 |
1 736 |
2 501r |
3 574 |
Offshore 3) |
- |
- |
1 |
5 |
5 |
10 |
199 |
403 |
651 |
Solar photovoltaics |
- |
1 |
1 |
2 |
3 |
3 |
4 |
8 |
7 |
Hydro: |
|
|
|
|
|
|
|
|
|
Small scale 1) |
206 |
207 |
214 |
210 |
204 |
150r |
283 |
444r |
477 |
Large scale 2) |
4 911 |
5 128 |
4 871 |
3 845 |
4 584 |
2 987r |
4 561r |
4 478r |
4 128 |
Biofuels: |
|
|
|
|
|
|
|
|
|
Landfill gas |
1 185 |
1 703 |
2 188 |
2 507 |
2 679 |
3 276 |
4 004 |
4 290 |
4 424 |
Sewage sludge digestion |
386 |
410 |
367 |
363 |
368 |
343 |
379 |
400 |
463 |
Municipal solid waste |
|
|
|
|
|
|
|
|
|
combustion 4) |
849 |
856 |
840 |
880 |
907 |
965 |
971 |
964 |
1 083 |
- |
- |
- |
- |
286 |
602 |
1 022 |
2 533 |
2 528 |
|
Other 5) |
234 |
460 |
487 |
776 |
840 |
937 |
927 |
849r |
797 |
Total biofuels |
2 654 |
3 429 |
3 882 |
4 526 |
5 080 |
6 122 |
7 302 |
9 036r |
9 295 |
|
|
|
|
|
|
|
|
|
|
Total generation |
8 648 |
9 616 |
9 914 |
9 549 |
11 127 |
10 548r |
14 085r |
16 870r |
18 133 |
|
|
|
|
|
|
|
|
|
|
583 |
559 |
519 |
528 |
545 |
579 |
583 |
578 |
651 |
|
|
|
|
|
|
|
|
|
|
|
Load factors (per cent) 7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Onshore wind |
30.7 |
28.2 |
28.2 |
26.4 |
29.9 |
24.1 |
26.6 |
26.4r |
27.4 |
Offshore wind (from 2004 |
.. |
.. |
.. |
.. |
.. |
.. |
24.2 |
27.2 |
27.2 |
|
|||||||||
only) |
|
|
|
|
|
|
|
|
|
Hydro |
36.8 |
38.4 |
36.4 |
28.7 |
34.0 |
23.3r |
37.1r |
37.5 |
34.8 |
Biofuels and wastes |
|
|
|
|
|
|
|
|
|
(excluding |
65.7 |
64.1 |
58.6 |
61.1 |
61.2 |
62.5 |
62.0 |
58.2 |
56.8 |
Total (including wastes) |
42.5 |
44.0 |
41.9 |
38.6 |
42.1 |
36.5r |
43.3r |
41.0r |
38.9 |
Load factors on an unchanged |
|
|
|
|
|
|
|
|
|
configuration basis (per cent) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Onshore wind |
30.9 |
30.5 |
29.1r |
25.6 |
28.4r |
26.2r |
29.2 |
28.1r |
26.7 |
Offshore wind (from 2006 |
.. |
.. |
.. |
.. |
.. |
.. |
.. |
.. |
27.5 |
|
only)
1)Actual generation figures are given where available, but otherwise are estimated using a typical load factor or the design load factor, where known.
2)Excluding pumped storage stations. Capacities are as at the end of December.
3)Latest years include electricity from shoreline wave but this amounts to less than 0.05 GWh.
4)Biodegradable part only.
5)Includes the use of farm waste digestion, poultry litter combustion, meat and bone com- bustion, straw and energy crops.
77 Source: http://www.dti.gov.uk/energy/statistics/source/renewables/page18513.html
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6)
7)Load factors are calculated based on installed capacity at the beginning and the end of the year.
4.1.1Overview of the Transmission System
The power system in Great Britain (GB), i.e. England, Wales and Scotland, can be considered almost an island power system, taking into account the rather small connections to Northern Ireland (500 MW HVDC) and to France (2000 MW HVDC) in compari- son to the overall installed capacity of 76 GW in GB.
The transmission system in England and Wales is owned by National Grid Transmission (NGET) and the transmission system in Scotland is owned by two companies, Scottish Power Trans- mission Limited (SPTL) for Southern Scotland, and Scottish Hydro- Electric Transmission Limited (SHETL) for Northern Scotland. Figure
National Grid is the transmission system operator in GB, i.e. National Grid is responsible for managing the operations of its own transmission network in England and Wales as well as, since April 1, 2005 the electricity transmission network in Scotland.
A detailed map of the transmission system in England, Wales and Scotland is shown in Figure
138
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United Kingdom |
Figure
The transmission system operator and each transmission owner operate based on a license from Ofgem (Office of Gas and Elec- tricity markets), the regulatory body in the GB. They are subject to regular price controls, see Section 4.1.4.
139
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Figure
Source: http://www.berr.gov.uk/files/file32776.pdf
140
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4.1.2Overview of the Distribution Systems
Ofgem has licensed 13 distribution network operators (DNOs) in GB (14 including Northern Ireland) each responsible for a distri- bution service area. DNOs came into existence on 1 October 2001, evolving from
Figure
141
United Kingdom |
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In addition, there are four independent licensed network operators that own and run smaller networks embedded in the DNO networks, called Independent Distribution Network Operators (IDNO). An IDNO is any electricity distributor with a license granted after 1 October 2001. The Utilities Act 2000 amended the Electricity Act 1989 and introduced distribution as a separate activity requiring authorisation. Ofgem is responsible for granting licenses to distri- bution companies. IDNOs own and operate electricity distribution networks which will predominately be network extensions connected to the existing distribution network, e.g. to serve new housing de- velopments. IDNOs do not have general distribution service areas.
Ofgem has issued four distribution licenses to IDNOs so far:78
•Laing O’Rourke Energy Ltd
•Independent Power Networks Limited
•Energetics Electricity Ltd
•The Electricity Network Company Ltd
An alternative arrangement is a private network. This private net- work allows distributed generation to be connected directly to this network and allows a certain amount of unlicensed generation and supply to take place completely outside the main market. A private network is exempt from the licensing regime when it:79
•distributes without any limitation electricity over private wires to business customers, and up to 2.5 MW to domestic customers
– exemption from the requirement of a distribution license;
•supplies electricity directly to customers up to a maximum of 5 MW in aggregate of which no more than 2.5 MW can be supp- lied to domestic customers – exemption from the requirement of a supply license.
•generates no more than 50 MW (or no more than 100 MW with Secretary of State approval) – exemption from the requirement of a generating license;
The benefit of this approach is that the unlicensed operator is able to avoid a number of costs that a licensed energy supplier usually would incur. In particular, the unlicensed operator avoids the costs
78Applications from ECG (Distribution) Ltd and UK Utilities (Electricity) Ltd are currently being considered. http://www.ofgem.gov.uk/Networks/ElecDist/Policy/IDNOs/Pages/ IDNOs.aspx
79
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related to the Renewables Obligation, the Climate Change Levy, and the Energy Efficiency Commitment.
4.1.3Relevant Legislations
The United Kingdom consists of four constituent countries: England, Wales, Scotland and Northern Ireland. In the following, only England, Wales and Scotland, i.e. Great Britain – which partly have different legislations related to the electricity sector – will be analyzed. Statistical data may, however, include all four countries.
The deregulation and liberalisation in the UK power industry started with the Electricity Act of 1983 which abolished the legal monopoly by opening up the grid and allowing wholesale wheeling between independent generators and retail customers. However, no competitive market developed. In February 1988, the British govern- ment published a White Paper regarding a further increase of com- petition in the electricity industry. In July 1989, the revised White Paper became law as the Electricity Act of 1989.80 The new approach focused particularly on the introduction of a mandatory Power Exchange as well as on splitting up and privatizing the power indu- stry.
A.
Part of the Electricity Act of 1989, was the
Under the NFFO system, the difference between the premium price paid to ”green” electricity suppliers and the market price has
80
81
143
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been financed by the Fossil Fuel Levy,82 a tax paid by licensed elec- tricity suppliers and ultimately passed on to consumers.
In October 1998, the Government published a new White Paper that focused on a new approach to the wholesale electricity market.83 As a result of this White Paper and further – rather long – discussions, a new regulation approach was developed. Part of the discussion process was carried out by a joint working group for embedded generation84 (EGWG). The EGWG report concluded that there were a number of obstacles for distributed generation (DG) regarding their participation in the market, but that further investigations were needed to better address the relevant requirements. In addition, the EGWG report concluded that distributed network operators had no economic incentives to connect DG. As a result of the report DTI and Ofgem set up the Distributed Generation
B. New Electricity Trading Arrangement
The new overall approach is known as the New Electricity Trading Arrangement (NETA) and finally became operational on 27 March 2001.87 The NETA approach moved the overall market approach closer to the Scandinavian approach, i.e. the mandatory pool system was removed and buyers and sellers can use a wide range of contracts, e.g. bi- as well as multilateral contracts. Furthermore, a market for the settlement of system imbalance was introduced. The Office of Gas and Electricity Regulation (Ofgem) is currently the main regu- latory authority for the electricity and gas sector. The Department of Trade and Industry (DTI) is the responsible organization within the Ministry. DTI's approval is required for key regulatory decisions. The NETA arrangement was initially only applied to England and
82
83A Fair Deal for Consumers: Modernising the Framework for Utility Regulation: Response by the Director General, Office of Electricity Regulation, June, 1998.
84Embedded generation = distributed generation = power generation installed in the distri- bution network. Many small scale renewable generation is typically connected to the distri- bution system.
85http://www.ofgem.gov.uk/Networks/ElecDist/Policy/DistGen/disenwg/Pages/
Disenrgworgrp.aspx
86http://www.ofgem.gov.uk/Networks/ElecDist/Policy/DistGen/Pages/DistGen.aspx
87The New Electricity Trading Arrangements, Office of Gas an Electricity Markets, August 2002.
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Wales, but then extended to Scotland and is now known as British Electricity Trading and Transmission Arrangements (BETTA).
C. Renewable Obligations
In parallel to introducing NETA, the renewable energy policy was changed. Since February 2000, the United Kingdom’s renewables policy has consisted of four key strands:
•a new Renewable Obligation (RO) on all electricity suppliers in Great Britain to supply a specific proportion of electricity from eligible renewables. The Renewable Obligation and associated Renewables (Scotland) Obligation came into force in April 2002 as part of the Utilities Act (2000)88. It requires power suppliers to derive from renewables a specified proportion of the electricity they supply to their customers. This started at 3% in 2003, rising gradually to 10.4% by 2010, and 15.4% by 2015. The cost to consumers will be limited by a price cap and the Obligation is guaranteed in law until 2027. The system is know as certificate system or renewable obligations (ROCs) system with fixed quotas.
•exemption of
•an expanded support programme for new and renewable energy including capital grants and an expanded research and develop- ment programmes;
•development of a regional strategic approach to the planning of and targets for renewables.
In March 2003, the government's White Paper “Energy future- creating a low carbon economy” was published. It outlines the future energy policy.89 It formulates the
88 Utility Act:
89 Energy White Paper: Our energy future – creating a low carbon economy, Department of Trade and Industry (DTI)- Energy Group, London, UK, March 2003.
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the Energy Challenge – A White Paper on Energy”.90 It confirms the original energy policy of a 60% cut of CO2 emissions by about 2050, but it also considers nuclear power an option, in addition to renewable energy. Regarding renewables, it particularly requires a re- view and update of the current transmission access arrangements, in order to support the timely and
As the government has identified distributed generation, which includes distributed renewable energy, as an important part of its environmental agenda, Ofgem – the regulator – has put a lot of em- phasis on distributed generation, including Combined Heat and Power (CHP), wind farms, hydro electric power and micro genera- tion technologies. Its main emphasis is on ensuring that the develop- ment of distributed generation facilities is not unfairly treated by the way networks are operated and regulated. Ofgem’s work in this area is of great importance, because it aims at developing a fair treatment of all generation sources within a deregulated market.92
In October 2006, a discussion process was started regarding a Reform of the Renewables Obligation System.93 The discussion pro- cess focuses on two main issues (see also Section 4.1.6):94
•brand the RO to provide differentiated levels of support for different technologies;
•introduce a mechanism intended to maintain Renewable Obliga- tion Certificate (ROC) prices in a situation of ROC oversupply.
In addition to these longer term changes, the consultation document contained proposals for a small number of more limited and detailed changes to the Renewable Obligation legislation which have partly been included in a draft 2007 Amendment Order which is still sub- ject to Parliamentary approval.95 Currently, the main focus of the discussion is around branding the Renewable Obligations (different
90http://www.dti.gov.uk/energy/whitepaper/page39534.html
91http://www.ofgem.gov.uk/Networks/Trans/ElecTransPolicy/tar/Documents1/070816_Ex _TAR%20Call%20for%20Evidence_FINAL.pdf
92For details see http://www.ofgem.gov.uk/Networks/ElecDist/Policy/DistGen/Pages/Dist Gen.aspx
93http://www.berr.gov.uk/consultations/page34162.html and http://www.berr.gov.uk/energy/
94http://www.berr.gov.uk/files/file34470.pdf
95http://www.berr.gov.uk/files/file34450.pdf
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number of ROCs for different technologies), which is supposed to start in 2009.96
D. Offshore Networks
The Government has announced that transmission networks offshore should be licensed on the basis of a competitive approach. Hence, an initial proposal for a licensing and regulatory framework that will apply to offshore electricity transmission networks was developed.97 The new regulatory arrangements are expected to be in place by 2008.
The key parts of the current proposals are:98
•An Offshore Transmission Owner (OFTO) would have the re- sponsibility for designing, building, financing and maintaining the offshore transmission network required to connect an offshore generator. The OFTO would be selected by competitive tender and awarded a transmission license which enables the OFTO to receive a regulated revenue stream from the network user (the off- shore wind farms) in return for meeting its license obligations for a predetermined regulatory period (20 years), and would be in- centivised to achieve specified performance requirements during this period.
•The proposal for the OFTO tender process suggests a compe- titive tender process that includes an annual tender application window and which starts all the qualifying tenders simultaneously for coordination purposes. Bidders would not need to be pre- licensed to operate in the offshore area before being entitled to bid. Instead, any company meeting the
96http://www.berr.gov.uk/files/file39497.pdf; http://www.berr.gov.uk/files/file39038.pdf and http://www.berr.gov.uk/files/file39039.pdf
97
98http://www.berr.gov.uk/files/file40629.pdf
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which results in the award of an offshore transmission license to the winning OFTO.
There is no clarity regarding the future procedure for already existing connections between an offshore generator and an onshore distri- bution network using a transmission voltage of 132 kV or lower. Currently, 132kV connections between an offshore generator and an onshore distribution system are classed as medium voltage lines. Onshore distribution licenses have been treating offshore generators seeking connections to the onshore distribution system as distri- buted generator connections. When the new proposed offshore transmission arrangements are introduced, 132kV circuits between offshore generators and onshore distribution systems will be classed as high voltage lines. This would require the owner to hold a trans- mission license. However, a framework for this issue and the general connection of offshore wind farms to distribution networks is still under development.
E. Independently Owned Transmission Networks
Due to the large demand for grid access of renewable energy installa- tions in Scotland, Ofgem currently reviews options to speed up the installation of new transmission lines.99 Today the exiting trans- mission network license holder in the area is the responsible for building new transmission lines.
A new option discussed would be to allow a new party to apply for a license which would allow the party to build, own and operate a section of a line to the main transmission network (similar to the interconnection between England and France). Under this option, no regulated revenues would be provided to finance the connection, the investor would have to enter into negotiations with the user of the line in order to determine the user fee.
Another option would be to tender the rights to build a connec- tion and to obtain a regulated revenue. Under this option the win- ning party would receive the right to build a transmission line and Ofgem would allow the party to apply transmission network use of system charges for using the line. Ofgem currently favours this app- roach as it results in the
99 http://www.ofgem.gov.uk/Networks/Trans/ScottishIslands/Documents1/Connecting% 20the%20Islands%20of%20Scotland.pdf
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4.1.4Regulatory Framework for Network Companies
The regulator Ofgem is responsible for licensing and regulating the distribution and transmission network companies.
A. Licensing
To qualify for a license, the relevant company must meet the criteria set out in the Guidance Documents.100 For distribution net- work companies, the license requires, among others, that the electri- city distributors:
•develop and maintain an efficient,
•facilitate competition in the supply and generation of electricity.
An electricity distributor also has, for the purpose of enabling elec- tricity to be conveyed, a duty to provide a connection between its own distribution system and any premises, when required to do so by:
•the owner or occupier of the premises, or
•an authorised supplier acting with the consent of the owner or occupier of the premises.
B. Price Control
Ofgem regulates the transmission and distribution companies through
Distribution network companies are regulated through incentive based RPI – X price control schemes that control prices, not pro- fits, with the retail price index – the rate of inflation – as its bench- mark and subtracting X – an efficiency factor – from it.101 The price control approach provides incentives for
•improving efficiency (reducing losses);
•improving quality of service;
100
101See http://www.ofgem.gov.uk/Markets/RetMkts/Metrng/Metering/Documents1/8944- 26504.pdf as well as http://www.ofgem.gov.uk/Networks/ElecDist/PriceCntrls/RevandPrice/ Documents1/Revenue%20Rigs%20V3.12(for%20publication).pdf
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•responding to the challenge raised by the Government’s objec- tives for renewable energy, for instance, by connecting renewable distributed generation.
Transmission network companies are regulated through revenue cap regulations, i.e. the controls set the maximum amount of revenue which transmission network owners can receive through charges they levy on users of their networks to cover their costs and earn a return in line with agreed expectations. The users in this case could be electricity generators that are connected to the network, retailers or end customers.
For the 2007 to 2012 price control, Ofgem has approved an in- vestment of £5 billion for transmission networks that want to replace ageing assets and for helping to connect renewable generators in northern England and Scotland.102 In addition, Ofgem has introduced an innovation funding incentive to encourage transmission network companies to invest 0.5 per cent of their revenue in research and development for programs targeted on environmental improvement. This equates to a minimum of £500,000 per year for each company.
In addition, the transmission licenses explicitly include special expenditure allowances for Transmission Investment for Renewable Generation (TIRG), i.e. in order to speed up the process of building transmission lines for renewable energy, the TIRG mechanism pro- vides funding to connect a large volume of renewable generation that was not forecast at the time the relevant price controls were set for the transmission licensees.103
C. Offshore Networks
The Offshore Transmission networks are expected to be subject to the same price control approach used for onshore distribution net- works.104
102http://www.ofgem.gov.uk/Networks/Trans/Offshore/Oteg/Documents/FP%20Press%20 Release%20Suatainability_56.pdf
103http://www.ofgem.gov.uk/Networks/Trans/ElecTransPolicy/TIRG/Pages/TIRG.aspx
104http://www.berr.gov.uk/files/file40629.pdf and http://www.ofgem.gov.uk/Networks/ Trans/Offshore/Oteg/Documents/Offshore%20Scoping%20Doc%202006.pdf
150
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D.
4.1.5Development of the Wind Power Sector in the UK106
The first commercial wind farm in the UK was commissioned at Delabole in Cornwall in 1991, comprising 10 turbines with a project capacity of 4 MW. Throughout the 1990s, there was a slow and steady delivery of 50 new wind farms, and by 1999 the installed operational capacity was 344 MW, averaging 38 MW of new ope- rational capacity per year. During this period the
Following the achievement of the UK’s first GW of wind energy in 14 years, the second GW took just 20 months, compri- sing 1,696 MW onshore and 304 MW offshore developments.
105http://www.iop.org/activity/policy/Publications/file_21079.pdf
106All data for the UK in this Section include Northern Ireland.
151
United Kingdom |
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Figure
Source: http://www.bwea.com/pdf/realpower/rp08onshore.pdf
By July 2007, England had 395 MW wind power installed onshore and 244 MW offshore; Wales had 300 MW onshore and 60 MW offshore and Scotland had 1082 MW onshore. In total, England, Wales and Scotland had 2,081.19 MW wind power capacity in- stalled (2,203 MW including Northern Ireland).
152
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Figure
Source: http://www.restats.org.uk/maps.htm.
4.1.6Future Plans and Possible Barriers for the Further Development of Wind Power
It is anticipated that offshore wind will make a significant contri- bution of
153
United Kingdom |
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additional 2,000 MW of wind power is needed to receive building permits before the end of 2007.107 This additional necessary capacity, plus the already operational or consented capacity, would meet about half of the UK 2010 renewable electricity target (4.5% of UK supply), and would result in the installation of approximately 3,500 turbines in total (about twice the current number installed).
Figure
Source: http://www.bwea.com/pdf/OnshoreWindPoweringAheadFull.pdf
A key problem, however, is the rather slow approval rate of building applications as well as limited transmission capacity in parts of the country, in particular between the very windy Scottish locations and the Southern part of the UK. At present nearly 8 GW of capacity are held up in the onshore planning system, equivalent to nearly 6% of potential UK electricity supply. A further 9 GW from offshore projects is awaiting decision or due to be submitted for consent. In 2006 it took local authorities an average of 16 months to decide on wind farm applications – even though the statutory time period for decisions is 16 weeks.
Furthermore, in the past only a few offshore wind farms were installed as they had to deal with low ROCs prices and technical diffi- culties, hence the realization of offshore wind farms in the rather harsh offshore environment around the UK was very difficult and came almost to a standstill 2 years ago. With increasing ROC prices and more suitable wind turbine technology the interest in offshore wind power picked up again. However, due to the high
107 http://www.britishwindenergy.co.uk/pdf/briefings/ukwindstatusJan07.pdf and http://www. bwea.com/energyreview/ and http://www.bwea.com/pdf/OnshoreWindPoweringAheadFull.pdf
154
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4.1.7Payment Scheme for Renewable Energy Sources
The following section discusses the old scheme of
A. Non Fossil Fuel Obligations (NFFO)
Before 2002 the renewable energy policy in England and Wales was based on
In total five NFFO Orders were made, of which the first in 1990 was set for a total of 102 MW declared net capacity (DNC). This first order resulted in contracts for 75 projects for 152 MW DNC. The second Order, made in late 1991, was set for 457 MW DNC. This resulted in 122 individual contracts (for a total of 472 MW DNC) between the generators and the
The third Order covers the period 1995 to 2014; this was for 627 MW DNC of contracted capacity at an average price of 4.35 p/kWh. The lower bid prices reflect the
The fourth Order was announced in February 1997. The contracts comprised 195 projects with a total DNC of 843 MW, at an average price of 3.46 p/kWh. In the fifth and largest Order, which was an- nounced in September 1998, contracts included 261 projects with a total DNC of 1,177.1 MW, at an average price of 2.71 p/kWh.
108
155
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Table
Figure
Souce: http://stats.berr.gov.uk/energystats/dukes07_c7.pdf
Due to the changes in regulations, only the price development be- tween the last three bidding processes can be compared. It is sum- marised in Table
156
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Wales spot market was between 3 and 3.5 p/kWh
Table
|
|
Contracted projects |
Live projects operational at |
|||
|
Technology band |
31 December 2006 1) |
||||
|
|
|
||||
|
|
|
|
|
|
|
|
|
Number |
Capacity MW |
Number |
Capacity MW |
|
|
|
|
|
|
|
|
England |
|
|
|
|
|
|
and Wales |
|
|
|
|
|
|
Hydro |
26 |
11.85 |
13 |
4.83 |
||
(1990) |
||||||
|
|
|
|
|
||
|
Landfill gas |
25 |
35.50 |
13 |
25.09 |
|
|
|
|||||
|
Municipal and industrial waste |
4 |
40.63 |
4 |
40.63 |
|
|
|
|||||
|
Other |
4 |
45.48 |
3 |
45.38 |
|
|
|
|||||
|
Sewage gas |
7 |
6.45 |
4 |
4.08 |
|
|
|
|||||
|
Wind |
9 |
12.21 |
5 |
8.14 |
|
|
|
|||||
|
Total 2) |
75 |
152.11 |
42 |
128.16 |
|
|
|
|||||
Hydro |
12 |
10.86 |
9 |
10.43 |
||
(late 1991) |
||||||
|
|
|
|
|
||
|
Landfill gas |
28 |
48.45 |
21 |
34.64 |
|
|
|
|||||
|
Municipal and industrial waste |
10 |
271.48 |
2 |
31.50 |
|
|
|
|||||
|
Other |
4 |
30.15 |
1 |
12.50 |
|
|
|
|||||
|
Sewage gas |
19 |
26.86 |
17 |
18.56 |
|
|
|
|||||
|
Wind |
49 |
84.43 |
22 |
51.97 |
|
|
|
|||||
|
Total 2) |
122 |
472.23 |
72 |
159.60 |
|
|
|
|||||
Energy crops and agricultural and |
3 |
19.06 |
- |
- |
||
|
|
|||||
(1995) |
forestry waste – gasification |
|
|
|
|
|
|
Energy crops and agricultural and |
6 |
103.81 |
2 |
69.50 |
|
|
|
|||||
|
forestry waste – other |
|
|
|
|
|
|
Hydro |
15 |
14.48 |
8 |
11.74 |
|
|
|
|||||
|
Landfill gas |
42 |
82.07 |
40 |
79.03 |
|
|
|
|||||
|
Municipal and industrial waste |
20 |
241.87 |
9 |
126.32 |
|
|
|
|||||
|
Wind – large |
31 |
145.92 |
12 |
50.50 |
|
|
|
|||||
|
Wind – small |
24 |
19.71 |
15 |
13.52 |
|
|
|
|||||
|
Total 2) |
141 |
626.90 |
86 |
350.61 |
|
|
|
109 http://stats.berr.gov.uk/energystats/duke6s07_c7.pdf
157
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|
|
|
|
|
|
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|
||
|
|
|
|
|
|
|
|
|
|
|
|
Hydro |
31 |
13.22 |
9 |
2.49 |
|
||||
|
|
Landfill gas |
70 |
173.68 |
62 |
160.51 |
|
|||
|
|
Municipal and industrial waste – CHP |
10 |
115.29 |
4 |
33.48 |
|
|||
|
|
Municipal and industrial waste – |
6 |
125.93 |
- |
- |
|
|||
|
|
|
|
|||||||
|
|
fluidised bed combustion |
|
|
|
|
|
|
|
|
|
|
Wind |
48 |
330.36 |
6 |
38.67 |
|
|||
|
|
Wind – small |
17 |
10.33 |
6 |
4.03 |
|
|||
|
|
Anaerobic digestion of agricultural |
6 |
6.58 |
1 |
1.43 |
|
|||
|
|
|
|
|||||||
|
|
waste |
|
|
|
|
|
|
|
|
|
|
Energy crops and forestry waste |
7 |
67.34 |
- |
- |
|
|||
|
|
|
|
|||||||
|
|
gasification |
|
|
|
|
|
|
|
|
|
|
Total 2) |
195 |
842.72 |
88 |
240.62 |
|
|||
|
Hydro |
22 |
8.87 |
- |
- |
|
||||
|
|
Landfill gas |
141 |
313.73 |
84 |
180.49 |
|
|||
|
|
Municipal and industrial waste |
22 |
415.75 |
- |
- |
|
|||
|
|
Municipal and industrial waste – CHP |
7 |
69.97 |
- |
- |
|
|||
|
|
Wind |
33 |
340.16 |
- |
- |
|
|||
|
|
Wind – small |
36 |
28.67 |
9 |
7.45 |
|
|||
|
|
Total |
261 |
1,177.15 |
93 |
187.94 |
|
|||
|
NFFO Total |
|
794 |
|
3,271.11 |
|
381 |
|
1,066.92 |
|
|
|
|
|
|
|
|
1) Sites that have been closed and sites that are not currently using renewables as fuel have been excluded.
Table
|
NFFO3 |
NFFO4 |
NFFO5 |
|
|
|
|
Large Wind |
3.11– 4.95 |
||
Small Wind |
- |
- |
|
Hydro |
|||
Landfill Gas |
|||
Waste System |
|||
Biomass |
- |
In Scotland, the first Scottish Renewable Order (SRO) in 1994 in- cluded approximately 76 MW DNC of new capacity and comprising 30 projects. At the end of December 2006, 19 schemes were com- missioned with a capacity of 40 MW DNC. A second SRO was launched in 1995, and in March 1997, it comprised 114 MW DNC
110 Source: Fifth Renewable Order for England and Wales; Office of Electricity Regulation, UK, September 1998.
158
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of new capacity within 26 schemes. Under this Order, at the end of 2006 there were 13 commissioned projects with a capacity of 50 MW DNC. A third SRO for 145 MW DNC of new capacity comprising 53 project was submitted to Parliament in February 1999. Under this Order, at the end of 2006 there were 16 commissioned schemes with a capacity of 34 MW DNC. Table
Table
|
|
Contracted projects |
Live projects operational |
||
|
|
|
|
||
|
Technology band |
|
|
at 31 December 2006 1) |
|
|
|
Number |
Capacity MW |
Number |
Capacity MW |
|
|
|
|
|
|
Scotland |
|
|
|
|
|
Biomass |
1 |
9.80 |
- |
- |
|
|
Hydro |
15 |
17.25 |
10 |
10.75 |
|
Waste to Energy |
2 |
3.78 |
2 |
3.78 |
|
|
||||
|
Wind |
12 |
45.60 |
7 |
25.13 |
|
Total 2) |
30 |
76.43 |
19 |
39.66 |
Biomass |
1 |
2.00 |
- |
- |
|
|
Hydro |
9 |
12.36 |
2 |
1.46 |
|
Waste to Energy |
9 |
56.05 |
6 |
17.65 |
|
|
||||
|
Wind |
7 |
43.63 |
5 |
31.29 |
|
Total |
26 |
114.04 |
13 |
50.40 |
Biomass |
1 |
12.90 |
- |
- |
|
|
Hydro |
5 |
3.90 |
- |
- |
|
Waste to Energy |
16 |
49.11 |
10 |
22.36 |
|
|
||||
|
Wave |
3 |
2.00 |
1 |
0.20 |
|
Wind – large |
11 |
63.43 |
1 |
8.29 |
|
Wind – small |
17 |
14.06 |
4 |
3.43 |
|
Total 2) |
53 |
145.40 |
16 |
34.28 |
SRO Total |
|
109 |
335.87 |
48 |
124.34 |
B. The
The
111 http://stats.berr.gov.uk/energystats/dukes07_c7.pdf
159
United Kingdom |
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output from NFFO generators in England & Wales at the contract price and of selling the electricity suppliers via
Hence, presently NFPA conducts green power auctions bi- annually. These auctions are for electrical output that will be pro- duced by NFFO generators during a
The latest
Table
|
27 July 2007 |
21 Feb. 2007 |
10 Aug. 2006 |
20 Feb. 2006 |
22 Aug. 2005 |
||||||
|
p/kWh |
c€/kWh |
p/kWh |
c€/kWh |
p/kWh |
c€/kWh |
p/kWh |
c€/kWh |
p/kWh |
c€/kWh |
|
|
|
|
|
|
|
|
|
|
|
|
|
MIW |
4.54 |
6.50 |
2.58 |
3.69 |
5.48 |
7.84 |
4.02 |
4.02 |
5.75 |
6.64 |
|
Wind |
9.1 |
13.03 |
7.36 |
10.54 |
10.23 |
14.65 |
8.48 |
8.48 |
12.14 |
12.96 |
|
Hydro |
9.35 |
13.39 |
7.47 |
10.69 |
9.24 |
13.23 |
8.43 |
8.43 |
12.07 |
13.47 |
|
Landfill |
9.77 |
13.99 |
7.47 |
10.69 |
10.83 |
15.51 |
8.92 |
8.92 |
12.77 |
13.33 |
|
Gas |
|||||||||||
|
|
|
|
|
|
|
|
|
|
Source: http://www.nfpa.co.uk/
160
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United Kingdom |
C. Renewables Obligation
The first Renewables Obligation Order in England & Wales came into force in April 2002, as did the first Renewables Obligation Order (Scotland).112 These Orders were subject to review in 2004, 2005 and 2006. These Orders place an obligation on licensed elec- tricity suppliers in England and Wales as well as in Scotland to source an increasing proportion of electricity from renewable sources. In order to provide a stable and
Yearly targets have been set up until the 2015/2016 period. In
Currently eligible renewable generators receive Renewables Obli- gation Certificates (ROCs) for each MWh of electricity generated. The Renewable Obligation scheme is currently defined as a techno-
The eligible generators are:
•wind, wave, tidal stream, PV, landfill gas, sewage gas and biogas from anaerobic digestion unless they were built before 1990;
•Biomass is only eligible as long as the fuel is less than 10% conta- minated by fossil fuels (and various other restrictions). The bio- mass fraction of waste gets ROCs, provided that an ”advanced technology” is used, i.e. gasification or pyrolysis.
•hydro qualifies whatever its size if built after 1990, and if it is refurbished and under 20MW;
•all
The certificates can be sold separately from the electricity to which they relate, i.e. suppliers can purchase these certificates in order to fulfill their obligation. This allows for open trading of certificates.
112
113An increase to 20% on a headroom base is discusses, see also http://www.berr.gov.uk/ files/file39497.pdf (Chapter 5).
161
United Kingdom |
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To fulfill their obligation, suppliers can either present enough certi- ficates to cover the required percentage of their output, or they can pay a
The fixed
The ROCs have increased the profitability of renewable energy generation as the certificates have an additional value over and above the price of electricity itself. This is especially true for wind power. Furthermore, the renewable obligation scheme has delivered consi- derably more renewables than the previous support mechanism of the
Table
114
115http://www.berr.gov.uk/files/file39497.pdf
162
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Table |
How suppliers complied with their obligations in England & Wales |
||||
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
Total Obligation (MWh) |
8,393,972 |
12,387,720 |
14,315,784 |
16,175,906 |
|
Total number of ROCs |
|
|
|
|
|
presented |
|
4,973,091 |
6,914,524 |
9,971,851 |
12,232,153 |
Percentage obligation met by |
|
|
|
|
|
ROCs |
|
59% |
56% |
70% |
76% |
Total |
|
|
|
|
|
redistributed |
|
£79,251,930 |
£158,466,502 |
£136,169,914 |
£127,167,900 |
What a ROC was ”worth” to a |
|
|
|
|
|
|
|
|
|
||
supplier116 |
|
£45.94 |
£53.43 |
£45.05 |
£42.54 |
Source: http://www.ofgem.gov.uk/Sustainability/Environmnt/RenewablObl/Documents1/17098- 3607.pdf
Table
116 When combined with the
163
United Kingdom |
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Table
Auction Date |
Average ROC Price |
Lowest ROC Price |
Total Number of |
||||
|
|
|
|
ROCs |
|||
£ |
€ |
£ |
€ |
||||
|
|
||||||
|
|
|
|||||
17 |
July 2007 |
48.12 |
68.92 |
47.50 |
68.03 |
51,787 |
|
24 |
April 2007 |
47.51 |
68.05 |
47.50 |
68.03 |
74,343 |
|
22 |
January 2007 |
46.17 |
66.13 |
46.00 |
65.88 |
49,446 |
|
24 |
October 2006 |
44.81 |
64.18 |
44.50 |
63.74 |
54,263 |
|
20 |
July 2006 |
40.62 |
58.18 |
40.60 |
58.15 |
227,909 |
|
20 |
April 2006 |
40.65 |
58.22 |
40.60 |
58.15 |
261,201 |
|
19 |
January 2006 |
38.42 |
55.03 |
37.75 |
54.07 |
197,930 |
|
20 |
October 2005 |
39.16 |
56.09 |
35.40 |
50.70 |
216,177 |
|
20 |
July 2005 |
45.72 |
65.48 |
45.50 |
65.17 |
197,944 |
|
20 |
April 2005 |
46.07 |
65.98 |
45.00 |
64.45 |
180,083 |
|
20 |
January 2005 |
47.18 |
67.57 |
46.90 |
67.17 |
151,348 |
|
26 |
October 2004 |
46.12 |
66.06 |
45.90 |
65.74 |
129,919 |
|
21 |
July 2004 |
52.07 |
74.58 |
51.76 |
74.13 |
176,759 |
|
20 |
April 2004 |
49.11 |
70.34 |
48.80 |
69.89 |
166,643 |
|
20 |
January 2004 |
47.46 |
67.98 |
47.30 |
67.75 |
96,449 |
|
21 |
October 2003 |
45.93 |
65.78 |
44.80 |
64.17 |
123,979 |
|
16 |
July 2003 |
48.21 |
69.05 |
47.71 |
68.33 |
158,512 |
|
15 |
April 2003 |
46.76 |
66.97 |
46.75 |
66.96 |
191,897 |
|
16 |
January 2003 |
47.46 |
67.98 |
45.51 |
65.18 |
64,337 |
|
17 |
October 2002 |
47.12 |
67.49 |
47.00 |
67.32 |
85,404 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
2,856,330 |
Source:
Figure
164
SOU 2008:13 |
United Kingdom |
Figure
When the RO was first introduced, the most prevalent technology type (in terms of the number of accredited generating stations) was landfill gas with 202 projects accredited at 1 April 2002. The most prevalent technology in the
117 Source: http://www.ofgem.gov.uk/Sustainability/Environmnt/RenewablObl/Documents1/
165
United Kingdom |
SOU 2008:13 |
Figure
D. Renewables Obligation 2008 and Beyond
Subject to Parliamentary approval, further changes will be made to the Renewables Obligation (Scotland) Order to introduce a Marine Supply Obligation (MSO), i.e. a supplier who supplies customers in Scotland will be obliged to meet a certain supply with ROCs issued to generating stations that generate electricity from wave and tidal devices.
Furthermore, some key changes are proposed to be implemented in 2009 (see also Section 4.1.3) such as:119
•to brand the RO to provide differentiated levels of support for different technologies;
•to introduce a mechanism intended to maintain Renewables Obli- gation Certificate (ROC) prices in a situation of ROC oversupply.
118Source: http://www.ofgem.gov.uk/Sustainability/Environmnt/RenewablObl/Documents1/
119http://www.berr.gov.uk/files/file34470.pdf, also http://www.berr.gov.uk/energy/
166
SOU 2008:13 |
United Kingdom |
Table
Table |
Overview of proposed bands. |
|
|
|
|
|
|
Band |
|
Technologies |
Level of support |
|
ROCs/MWh |
||
|
|
|
|
|
|
|
|
Established |
|
Sewage gas; landfill gas; |
0.25 |
|
crop (regular) biomass |
||
|
|
|
|
Reference |
|
Onshore wind; hydro; |
1.0 |
|
|
||
Offshore wind; dedicated regular biomass |
1.5 |
||
|
|||
|
|
Wave; tidal stream; advanced conversion |
|
Emerging |
|
technologies (anaerobic digestion, gasification |
|
|
and pyrolysis); dedicated biomass burning |
2.0 |
|
|
|
technologies
energy crops (with or without CHP), dedicated regular biomass with CHP; solar photovoltaics; geothermal
Source: http://www.berr.gov.uk/files/file39497.pdf
4.2Application Procedure for Access and Connection to the Grid
A.Transmission System
Anyone interested in connecting to the different transmission systems in the UK needs to get in contact with National Grid, the trans- mission system operator. Figure
167
United Kingdom |
SOU 2008:13 |
Figure
120
168
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United Kingdom |
All potential applicants, renewable energy generators or conven- tional generators, are treated equally in the connection process. Any applicant that wishes to connect directly to the transmission system will be offered to enter into a Bilateral Connection Agreement (BCA) with National Grid within 3 months (i.e. in box “NGET issues the offer to the applicant” in Figure
The relevant application fees are discussed in Section 4.6. Queue management, i.e. handling of large numbers of connection applica- tions is discussed in Section 4.4.
B.Distribution System
Any customer wishing to connect to a distribution system should initially contact the Distribution Network Operator in its area to discuss the proposed connection. For the type of interconnection agreement, the size of the power station and its location is important. The size is dependent on the network area, i.e. in which Transmission Owner’s network the site is located, see below:
Transmission Owner - National Grid: |
Large =>100 MW |
(NGET) |
Medium <100 =>50 MW |
|
Small <50 MW |
Transmission Owner - Scottish Power: |
Large =>30 MW |
(SPTL) |
Small <30 MW |
Transmission Owner - Scottish Hydro: |
Large =>10 MW |
(SHETL) |
Small <10 MW |
121 http://www.nationalgrid.com/uk/Electricity/GettingConnected/TransmissionConnected/ agreements/
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Small or medium sized power stations that do not wish to have access rights to the transmission system do not need an agreement with the TSO National Grid to facilitate their connection. Hence all agreements will be with the Distribution Network Operator.
Large generators that want to connect to the distribution system in Scotland can choose between obtaining a Bilateral Embedded Generation Agreement (BEGA) or a Bilateral Embedded License Exemptable Large Power Station Agreement (BELLA). Large gene- rators that want to connect in England and Wales can only apply to National Grid for a BEGA agreement. This is because a BELLA Agreement can only be signed by a customer that is classed as a large power station and exempted from obtaining a generation license. In England & Wales however a large power station is equal to or greater than 100 MW, and only power stations between
The key difference between BEGA and BELLA is that only gene- rators that have signed a BEGA agreement have the right to use the transmission system and have to pay Transmission Use of System charges.
Bilateral Embedded Generation Agreement (BEGA)
The BEGA Agreement sets out the provisions for generators to comply with the Connection Use of System Code (CUSC), Grid Code and Balancing & Settlement Code. This agreement will be offered to customers that have requested access to the GB Trans- mission System, but that are not directly connected to the GB Trans- mission system. This type of agreement is therefore applicable to embedded (distributed) generators that wish to export to the GB Transmission system. The BEGA will also provide the customer with Transmission Entry Capacity (TEC), see also Section 4.5. The agreement also sets out provisions for any Balancing Services as the agreement gives the customer rights to operate in the energy balan- cing market.
122 The application procedure and deadline is identical to transmission application, see also Figure 4 14.
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Bilateral Embedded Licence Exemptable Large Power Station
Agreement (BELLA)
The BELLA Agreement sets out the provisions for generators to comply with the CUSC and Grid Code. This agreement does not commit users to adhere to the Balancing and Settlement Code as a BELLA does not give the customer rights to operate in the electri- city balancing market, i.e. another party may be responsible for the output under the CUSC and BSC.
According to the distribution network licence requirements, the distribution network company must follow the deadlines for the connection application as outlined in Table
Table
Service |
Standard |
|
|
Provision of quotations |
|
|
|
Provide a quotation for a new generation connection where the |
within thirty working |
highest voltage of the assets at the point of connection and any |
days of receiving the |
associated works is not more than one kilovolt. |
request |
Provide a quotation for a new generation connection where the |
within fifty working days |
highest voltage of the assets at the point of connection and any |
of receiving the request |
associated works is more than one kilovolt but not more than 22 |
|
kilovolts. |
|
Provide a quotation for a new connection that is not included |
within three months of |
within the preceding categories. |
receiving the request |
Information and design submissions |
|
Provide the technical information necessary to enable the applicant to identify the proposed location and characteristics of the point of connection of the premises to the licensee's distribution system, where the highest voltage of the assets at that point or any associated works is more than 22 kilovolts but not more than 72 kilovolts
In response to a design submitted for low voltage and high voltage connections by the applicant, outlining a new proposal for connecting premises to the licensee's distribution system, provide a written approval of the proposed design, or a written rejection stating reasons for rejection.
within thirty working days of receiving the request
within ten working days of receiving the proposed design (unless any part of it would require the use of extra high voltage assets)
123 http://www.ofgem.gov.uk/Networks/Connectns/CompinConn/Documents1/SLC4F%20 searchable%20Licence%20mod.pdf
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Service |
Standard |
|
|
In response to a design submitted for an extra high voltage |
within twenty working |
connections by the applicant, outlining a new proposal for |
days of receiving the |
connecting premises to the licensee's distribution system, |
proposed design |
provide a written approval of the proposed design, or a written |
|
rejection stating reasons for rejection. |
|
|
|
Final works and phased energisation |
|
|
|
Complete the final works for a low voltage connection. |
within ten working days |
|
of receiving the request |
Complete the final works for a high voltage connection. |
within twenty working |
|
days of receiving the |
|
request |
Inform the applicant of the date by which it is proposed to complete the final works for an extra high voltage connection.
within twenty working days of receiving the request (and complete the works as soon as reasonably practicable)
Complete low voltage phased energisation works |
|
within five working days |
|
|
|
of receiving the request |
|
Complete high voltage phased energisation works. |
|
within ten working days |
|
|
|
||
|
|
of receiving the request |
|
The relevant applications fees are discussed in Section 4.6.
4.2.1Definition of the Capacity of a Production Installation
While other countries have certain clear definitions what maximum capacity can be connected to which voltage level, there are no such definitions in the UK. The actual capacity that can be connected to a certain voltage level depends only on the technical feasibility. As seen in the last chapter, regulations in the UK include the option that generation units larger than 100 MW are connected to the distri- bution system.
4.2.2Permitting Entities
The Electricity Act of 1989 Section 4(1) introduces a system of licensing for electricity generators, which allows connection to the power system and entry to the electricity generation market. Any generation of electricity without a license is expressly prohibited in the Electricity Act, however Section 5(1) of the Electricity Act provides that the Secretary of State may, by order, grant exemption
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from Section 4(1)(a). Section 5(2) of the Electricity Act sets out the procedure for making such an order.
On 1 October 2001, the Electricity “Class Exemptions from the Requirement for a License” Order 2001 (“the Class Exemptions Order”) came into force.124 Among other things, this Order exempts small generators that do not at any time provide more electrical power from any one generating station than:
1)10 megawatts; or
2)50 megawatts in the case of a generating station with a declared net capacity of less than 100 megawatts
3)as well as offshore generators and
Generation units between 50 MW – 100 MW, including renewable generation, need a license. However, typically the Secretary of State grants exemption from section 4(1)(a) based on Section 5(1) for re- newable generators larger than 50 MW, for instance for wind farms.125 Hence, it is quite common for the capacity of a distributed gene- ration project to be set at or limited to 99 MW to avoid requiring a license.126
The generators that need a license must apply to Ofgem for the license. All generators that wish to become a licensed generator will be required to become parties to the BSC, the Grid Code, the CUSC (for transmission system) and/or the distribution code and must comply with the BSC, the Grid Code and the CUSC and/or distri- bution code.127
It is important to emphasize that unlicensed generators operate in a very different commercial environment to their licensed counter- parts. Generation licensing affects both trading arrangements and a distributed generator’s relationship with the transmission system. For example, a licensed generator has to be party to the Balancing
124http://www.statutelaw.gov.uk/content.aspx?LegType=All+Legislation&title=The+
Electricity+(Class+Exemptions+from+the+Requirement+for+a+License)+Order+2001
&searchEnacted=0&extentMatchOnly=0&confersPower=0&blanketAmendment=0&sort
Alpha=0&TYPE=QS&PageNumber=1&NavFrom=0&parentActiveTextDocId=2536280
&ActiveTextDocId=2536293&filesize=436
125See for example http://www.berr.gov.uk/files/file34526.pdf and http://epr.ofgem.gov.uk/ document_fetch.php?documentid=9358 as well as http://www.berr.gov.uk/energy/markets/
126
127
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and Settlement Code. This defines and describes the trading arrange- ments for a generator selling their electricity into the market. More- over, a licensed generator also has to enter an agreement with the transmission system operator National Grid for using the trans- mission system. An unlicensed generator avoids the costs and burdens associated with the Code and the need, in most cases, for an agree- ment with NGET. Unlicensed distributed generators also potentially have access to “embedded benefits”. These reflect the fact that distri- buted generators have a shorter delivery path to consumers. Under current arrangements, an unlicensed generator is effectively treated as negative demand on the system and the electricity they generate is not subject to National Grid’s charges relating to the use of the transmission system.
In addition Ofgem is responsible for licensing transmission net- work operators, distribution network operators and independent distribution network operators.
4.3Obligations of a Grid Company Regarding Grid Access
The transmission license conditions state the following obligations:128
•not to discriminate between any persons or class or classes of per- sons in providing use of the GB system or in carrying out works for connection;
•to offer terms for connection to and use of the GB system or for the modification of an existing connection within three months of application;
•to offer terms for use of the GB system only within 28 days of application;
•that compliance with the Connection Charging Methodology facilitates effective competition in the generation and supply of electricity and (so far as consistent therewith) facilitates com- petition in the sale, distribution and purchase of electricity;
128
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Hence, the transmission system owners have to treat renewable energy and conventional generators equal in regards to connection and have to offer a connection when technically feasible (see also Section 4.4).
Similar conditions are outlined in the DNOs’ licenses, i.e. the distribution network operators are required to offer connections to any generation within a set timeframe. The DNOs design these con- nections to ensure that the distributed generator does not cause the quality of electricity supply to fall below agreed standards, poten- tially affecting other generators and customers. However, a recent Ofgem document states that “despite progress in recent years, some argue it is still
Finally, private networks do not need a license, hence the regu- lator cannot put any obligations on these networks.
4.4Grid Access, Available Capacity and Queue Management
Access Transmission System
The Connection and Use of System Code (CUSC) sets out the standard commercial terms between the TSO and users of the trans- mission system. This is supplemented by a number of bilateral agree- ments, including construction agreements, which set out works required to accommodate a user’s access rights. The CUSC uses the concepts of Transmission Entry Capacity (TEC). TEC reflects the capability of the wider transmission system and defines the user’s access rights to the transmission infrastructure, i.e. a generator cannot export more than its TEC.
Generators can ask the TSO to offer terms for connection to and/or use of the transmission system at any stage of their gene- ration project (provided that sufficient data can be provided to the TSO about the proposed development). The available transmission capacity will be calculated by the TSO (in cooperation with the transmission owners) using certain technical aspects
129
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accepted an offer for connection, i.e. the TSO follows the approach “first come first served”. In case the requested network capacity is not available, the TSO will offer terms for connection based on an ”invest then connect” approach. The TSO will detail in its offer, the works on the transmission system that are required to provide connection to and/or use of the transmission system.
The connection date offered reflects the customer's request but also the time required to complete transmission system works (con- nection and/or system reinforcement works). In general, connections will not be made until transmission system reinforcement works are complete. However, there have been circumstances where the TSO has been able to agree with customers specific arrangements to facilitate an earlier connection date on a constrained basis (i.e. their access may be limited without compensation).
The key part of the offer from the TSO that includes transmission network upgrades is the construction agreement. The construction agreement sets out the provisions for construction or modification of a direct connection to the GB Transmission system or to facili- tate the connection of embedded generation. The construction agree- ment will primarily set out the responsibilities of each party and the timescales and key milestones in which each party are required to complete each of their areas of work.
Furthermore, the construction agreement provides the necessary financial security that a party must provide to secure against the cost of the appropriate works. Initially, generators that had entered into a contractual agreement with the TSO were required to provide finan- cial security against the transmission system reinforcement works identified in its bilateral agreement. The financial security regime ensures that the TSO and its customers (consumers) are protected from the risk of stranded assets if the project does not go ahead, i.e. the applicant only has to pay for the network upgrade if the project is not going ahead. If the project is going ahead as planned the network upgrade costs are socialized, i.e. recovered via network tariffs paid by all customers.
However, such financial security regime caused a lot of problems particularly for groups of smaller, renewable generators. Hence, the approach was changed and currently applicants must provide a finan- cial security equal to a certain share of the overall investment – typi- cally 2 years of the expected Transmission Network Use of System charge. In addition, they have to prove to the TSO that the project
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completes certain milestones so that the TSO can be sure that the project is going ahead as planned.
The situation, however, is not considered satisfactory. Therefore Ofgem has started a
•short term access arrangements;
•access trading arrangements;
•development of a “Spill” product to allow projects to connect and operate without enduring access rights.
These suggestions reflect that intermittent renewable generation (principally
A number of selected options developed by ARODG are listed below:
•An Interim TEC product would allow users to use the trans- mission system in all but a specified number of periods. During these periods, the TSO would be able to curtail a user at zero bid price, or the generator would be required to declare down its output. (This option might already be implemented at the end of 2007);
•”Deemed Access Rights to the GB Transmission System for Renewable Generators” would allow a renewable generator to export onto the system without wider transmission system re- inforcements needing to be in place. Where there is insufficient transmission capacity, it is proposed that other
130 http://www.ofgem.gov.uk/Networks/Trans/ElecTransPolicy/tar/Pages/Traccrw.aspx and http://www.ofgem.gov.uk/Networks/Trans/ElecTransPolicy/TransAccess/Pages/Transmiss ionAccess(ARODG).aspx
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charges and not Balancing Services Use of System (BSUoS) charges. (Proposal is currently discussed at the working group stage);
•”Transmission Entry Capacity with restricted access rights”
•TEC Transfer – arrangements to further facilitate the transfer of previously allocated transmission access rights between power stations;
•Extra TEC (ETEC) – the TSO would identify additional trans- mission access available in operational timescales, which could be purchased before real time and priced
•Overrun (with
•Shared TEC (subject to discussion) – TEC would be shared be- tween two nodes. The primary party has TEC liability, and the secondary party has rights through a bilateral contract. Charges would be calculated on a
Treatment of Wider Reinforcement
A number of new connection applications can trigger wider reinforce- ment works (sometimes called ”deep”) on the transmission system, i.e. more than one project can be dependent on a specific set of transmission system reinforcement works. This can result in a 'queue' of projects dependent on major network reinforcements such as most network upgrades between Scotland and England. Due to the costs and number of possible projects involved it is very complicated to include such projects in
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ned and financed via the Transmission Investment for Renewable Generation (TIRG) mechanism.131
Queue Management
Due to large numbers of applications for grid access, largely in Scotland, a queue management discussion has emerged in the UK.132 Over 150, mainly renewable projects, totaling around 12 GW of generating capacity, currently seek connection in Scotland where the network is already constrained. Many of these projects emergerd at an early stage of development in order to take advantage of transitio- nal arrangements under the British Electricity Trading and Transmis- sion Arrangements (BETTA). In all likelihood, only a proportion of the projects currently in the queue will actually connect to the network. The most significant factor is likely to be whether the generator obtains planning consent, but other commercial and tech- nical factors may contribute. The large majority of projects in the queue do not yet have the necessary consents.
The queue management by National Grid focuses on suggesting and discussing new flexible methods with the regulator to deal with the queue, i.e. not necessarily follow the approach “first come first served” but focusing on the progress of the various projects and allowing more generators access to the grid based on suggestions that are similar to the ones developed by the above mentioned TIRG working group. National Grid is particularly focusing on matching progress in the development of generator projects with transmission network upgrades which can only be achieved with regular com- munication/milestones between applicant and National Grid.133
Distribution Network Access
For grid access to the distribution system requiring transmission up- grades, the same method as described above applies regarding the transmission upgrades. In case the connection to the distribution system requires any distribution network upgrades, the applicant must
131http://www.ofgem.gov.uk/Networks/Trans/PriceControls/TPCR4/ConsultationDecisions
132http://www.nationalgrid.com/uk/Electricity/gb_agreements/gbqueue/
133
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pay 80% of the costs.134 These 80%, less any relevant connection charge associated with reinforcement, would be recoverable by the DNO from the applicant over the assumed asset life of 15 years on an annuity basis, starting in the year after the expenditure has been incurred. In addition, the applicant must pay £1/kW/year to cover the
In addition, generators have to pay connection charges – inde- pendent of whether the connection has caused any network upgrade
– and possible fees related to the transmission system, see also Section 4.8.
4.5Reservation of Transmission Capacity
Within the Connection and Use of System Code (CUSC), a Trans- mission Entry Capacity (TEC) is defined which sets the generator's maximum allowed export capacity into the transmission system at any point during the financial year. The TEC is subject to the pay- ment of Transmission Network Use of System (TNUoS) charges calculated in accordance with the Statement of the Use of System Charging Methodology. The TEC is purchased for one year, but procuring TEC in one year gives the User a free option to secure the same level of access in the subsequent charging year.
Hence, as outlined in Section 4.2, distributed generation which has not signed the CUSC also has no TEC and therefore cannot use the transmission system, i.e. they have to sell the power within the distribution network.
If a generator seeks additional TEC or a new generator seeks an initial allocation of TEC this may be done by completing an app- lication and sending it to National Grid. If the TSO considers that
134
135
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the additional generator capacity will require network reinforcement for its system to continue to comply with its security standards, National Grid will typically provide a connection offer on an invest-
4.6Costs Associated with the Connection to the Grid
Transmission Connection Charges
Application fees are payable in respect to applications for new connec- tion agreements based on the reasonable costs transmission licensees incur in processing these applications. Users can opt to pay a fixed price application fee (derived from analysis of the historical costs of similar applications) in respect of their application or pay the actual costs incurred. The fixed price fees for applications are detailed in the Statement of Use of System Charges.137 An example of selected fixed application fees is shown in Table
Also distributed generators which want to use the transmission system, see Section 4.2, have to pay transmission connection charges.
136http://www.nationalgrid.com/uk/Electricity/Codes/systemcode/tectrading/
137
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Table
Zone |
MW |
Fee (£’000) |
Agreement Type |
|
(as table C) |
||||
|
|
|
1
Directly connected generation
Directly connected generation
Directly connected generation
Directly connected generation
Directly connected generation
Directly connected generation
|
<100 |
25 + VAT |
|
|
=>100<300 |
25 + VAT |
|
NGC South |
=>300<500 |
50 + VAT |
|
|
=>500<1000 |
50+ VAT |
|
|
=>1000 |
70 + VAT |
|
|
<100 |
55 + VAT |
|
|
=>100<300 |
55 + VAT |
|
NGC North |
=>300<500 |
110 + VAT |
|
|
=>500<1000 |
110 + VAT |
|
|
=>1000 |
160 + VAT |
|
|
<100 |
41 + VAT |
|
|
=>100<300 |
51 + VAT |
|
SPT South |
=>300<500 |
92 + VAT |
|
|
=>500<1000 |
122 + VAT |
|
|
=>1000 |
160 + VAT |
|
|
<100 |
51 + VAT |
|
|
=>100<300 |
71 + VAT |
|
SPT North |
=>300<500 |
127 + VAT |
|
|
=>500<1000 |
172 + VAT |
|
|
=>1000 |
230 + VAT |
|
|
<100 |
61 + VAT |
|
SHETL |
=>100<300 |
81 + VAT |
|
=>300<500 |
157 + VAT |
||
South |
|||
=>500<1000 |
182 + VAT |
||
|
|||
|
=>1000 |
250 + VAT |
|
|
<100 |
61 + VAT |
|
SHETL |
=>100<300 |
81 + VAT |
|
=>300<500 |
157 + VAT |
||
North |
|||
=>500<1000 |
182 + VAT |
||
|
|||
|
=>1000 |
250 + VAT |
Bilateral
Connection
Agreement
Bilateral
Connection
Agreement
Bilateral
Connection
Agreement
Bilateral
Connection
Agreement
Bilateral
Connection
Agreement
Bilateral
Connection
Agreement
Distribution Connection Charges
If a generator connects to the distribution system and is not using the transmission system, it only has to pay the reasonable costs that DNOs incur in processing the application. The connection charging methodology can be defined by each DNO but must be approved by Ofgem.139 If the generator is using the transmission system, the applicant must pay distribution and transmission connection charges.
Annual connection charges are discussed in Section 4.8.
138
139http://www.ofgem.gov.uk/Networks/ElecDist/Policy/DistChrgMods/Pages/DistChrg
Mods.aspx
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4.7Costs and Obligations Related to Metering
Typically any generation asset must have
If all or part of the electricity that is generated is used
4.8Grid Tariffs
Annual Connection Charges
The annual connection charges are individually calculated for each connected asset. The calculation considers the maintenance and trans- mission running costs including
140
141
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Transmission use of System Charges
Transmission Network Use of System (TNUoS) charges reflect the cost of installing, operating and maintaining the transmission system for the Transmission Owner (TO) and must be paid by all users that have signed the Connection and Use of System Code (CUSC), see also Section 4.2. Hence, all generators connected to the transmission system as well as most distributed generators have to pay TNUoS charges.
In April 2004 National Grid introduced a DC Loadflow (DCLF) ICRP based transport model for the England and Wales charging methodology. The DCLF model has been extended to incorporate Scottish network data with existing England and Wales network data to form the GB network in the model. The gene- ration TNUoS depend now on the area in which the generator is connected, see also Figure
The underlying rationale behind the TNUoS charges is that efficient economic signals are provided to users when services are priced to reflect the incremental costs of supplying them. Therefore, charges reflect the impact that users (generators and consumers) of the transmission system at different locations would have on the transmission owner's costs, if they were to increase or decrease their use of the respective systems. These costs are primarily defined as the investment costs in the transmission system, maintenance of the transmission system and maintaining a system capable of providing a secure bulk supply of energy.
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Figure
142
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One special treatment exists for small generators in Scotland which are eligible for a reduction in the listed Generation TNUoS tariffs. This discount has been calculated in accordance with direction from the Authority and equates to 25% of the combined generation and demand residual components of the TNUoS tariffs.
The details of the calculation method for the TNUoS are outlined in “The Statement of the Use of System Charging Methodology”143 from June 2007 and the current calculation method in the “The Statement of Use of System Charges.144
Balancing Services Use of System charges
The TSO recovers the costs of balancing the System through Balancing Services Use of System (BSUoS) charges. The BSUoS charges have to be paid by all parties that have signed the Balancing & Settlement Code, see also Section 4.2.
The Statement of the Use of System Charging Methodology includes a detailed methodology for the calculation of daily BSUoS charges, some working example, and information on BSUoS charge settlement.145
Tariffs Related to Distribution Networks
Each DNO licence holder has the obligations to have in place three charging statements:146
•the statement of Use of System (UoS) charging methodology,
•the statement of UoS charges and
•the connection charging methodology. The connection charging methodology outlines the method by which connection charges are calculated.
143
144
145
146http://www.ofgem.gov.uk/Networks/ElecDist/Policy/DistChrgMods/Pages/DistChrg
Mods.aspx
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The proposed methodologies of each DNO will be reviewed and approved by Ofgem. As many charging methods are rather old, Ofgem is pressing the distribution companies to develop charging models that reflect the benefits and costs of distributed genera- tors.147
As an example the Use of System Charging Methodology of Northern Electric Distribution is here considered.148 According to this method, generators connected prior to April 2005 will have to pay no UoS charges as they paid a higher connection charge to direct- ly cover the required deeper connection assets. The situation post- 2010 is still under review and no decision has yet been taken.
Generators connected from April 2005 will have paid a lower con- nection charge to cover the shallower connection assets and hence a separate UoS charge to cover reinforcement costs will be imple- mented in respect to the electricity that the generator exports to the system. The calculation of the UoS charges includes:
•Annuity
•OR&M – based on an allowance for each kW of installed gene- ration capacity (£1/kW/year);
•Revenue Driver – based on an allowance for each kW of in- stalled generation capacity (£1.50/kW/yr)
•NGC Exit charges to the transmission network– a proportionate share of the NGC Exit charges apportioned on an agreed capa- city basis.
Hence, distributed generators which did not cause any network up- grades and are not using the transmission system will only be charged the revenue driver (£1.50/kW/yr), which was created by Ofgem as an incentive for DNOs to connect as much distributed generation as possible in an economic and efficient way.
147
148
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4.9Rights and Obligations Regarding Real Time Operation
Renewable energy is treated exactly the same way as conventional generation in the UK, i.e. renewable energy has the same rights and obligations as other forms of generation. Renewable generation can in principal participate in all ancillary service markets if it fulfils the technical requirements outlined for the different ancillary markets by National Grid.149 However, as renewable energy generation will only receive the ROCs for the actual electricity produced, renewable energy generators typically have little interest to participate in any market that may result in a reduction of power output, such as markets related to frequency control.
4.10Conclusions United Kingdom
General Renewable Energy Promotion Scheme
•The UK has a Renewable Obligation scheme which came into force in April 2002. It requires power suppliers to derive from renewables a specified proportion of the electricity they supply to their customers. This started at 3% in 2003, rising gradually to 10.4% by 2010, and 15.4% by 2015. The Obligation is guaranteed in law until 2027. The certificates can be sold separately from the electricity to which they relate, i.e. suppliers can purchase these certificates in order to fulfill their obligation. This allows for open trading of certificates. To fulfill their obligation, suppliers can either present enough certificates to cover the required per- centage of their output, or they can pay a
149 http://www.nationalgrid.com/uk/Electricity/Balancing/services/
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Any size limit in the regulations for renewable energy?
•In the UK, there are capacity limits for generators connected to the distribution grid regarding the payment of Transmission Net- work Use of System charges (TNUoS). These limits vary between different areas in the UK, but in most cases the limit is 50 MW in England and Wales and 30 MW in the Scottish Power trans- mission area and 10 MW in the Scottish Hydro transmission area. Most generators connected to the distribution network with a capacity below these limits are exempted of TNUoS in recogni- tion of the reduced demand in a zone served by the transmission system. However, generators that have been connected to the distribution network after 1 April 2005 have to pay Distribution Network Use of System charges if their connection required a distribution network upgrade. The Distribution Network Use of System charge should then recover some of the network upgrade costs.
Tariff Structure
•In the UK, generators pay network tariffs (known as Use of System charges) if they are connected to the transmission system. The charges do not distinguish between renewable energy and conventional energy, but they vary based on the location of the connection point. Hence, the connection charges to the trans- mission grid are high in Scotland, which has low load but many generation sources, and low (in some cases even negative) in South England which has high load and limited local generation sources. In addition, small power stations connected to the distri- bution network, independent of their technology, do not have to pay Transmission Use of System charges (See above). In prin- ciple, power stations are defined as small if they have a total capacity of up to 50 MW in England and Wales, up to 30 MW in the Scottish Power transmission area and up to 10 MW in the Scottish Hydro transmission area. However, generators that have been connected to the distribution network after 1 April 2005 and which have caused reinforcement on the distribution grid have to pay Distribution Network Use of System charges.
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Network Upgrade Costs
•In the UK, costs for transmission upgrades are typically socialized. In principle, transmission reinforcements are only performed if sufficient requests for network connections are submitted. How- ever, this approach leads to long delays in cases where ‘strategic works’ are needed. Recognizing this, the regulator Ofgem recently approved £560 millions for ‘Transmission Investment for Re- newable Generation’. When it comes to upgrades in the distri- bution grid, producers in the UK connected to the distribution network after the 1 April 2005, have to pay a Distribution Net- work Use of System charge (DUoS) which generally reflects the upgrading costs for the exclusive use of the generator. For connections to the distribution grid prior to 1 April 2005, costs for distribution network reinforcement were charged upfront. In the UK, the creation of independent Offshore Transmission Owners (OFTO) are proposed. The OFTO would be selected by competitive tender and awarded a transmission licence which enables it to receive a regulated revenue stream in return for meeting its licence obligations for a predetermined regulatory period (20 years), and would be incentivised to achieve specified performance requirements during this period. OFTO would have the responsibility for designing, building, financing and main- taining the offshore transmission network required to connect an offshore generator.
Network Concessions
•Ofgem has licensed 13 distribution network operators (DNOs) in the UK (14 including Northern Ireland) each responsible for a distribution service area (similar to a concession area). DNOs came into existence on 1 October 2001, evolving from
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United Kingdom |
IDNOs do not have general distribution service areas. Finally,
Network Connection Procedure
•All potential applicants, renewable energy generators or conven- tional generators, are treated equally in the connection process. There are very detailed network connection procedures in the UK, with detailed time lines and definitions of the relevant fees. The procedures were developed by National Grid, the transmission system operator and reviewed and approved by the regulator Ofgem. Any applicant that wishes to connect directly to the trans- mission system will be offered to enter into a Bilateral Connec- tion Agreement (BCA) with National Grid within 3 months of application. Any customer wishing to connect to a distribution system should initially contact the Distribution Network Operator in its area to discuss the proposed connection. For the type of interconnection agreement, the size of the power station and its location is important.
Metering
•Typically any generation asset must have
191
5 Summary of Findings
The following sections provide a brief comparison between Sweden, Spain, Portugal, Germany, and United Kingdom regarding issues that are important for Sweden. In the following chapter, we refer to Spain, Portugal, Germany and United Kingdom as the four studied countries.
Each section starts with a table comparing the situation in Sweden and in the four studied countries, followed by a brief analysis of the differences and similarities between the different countries. At the end, we will present the conclusions.
5.1General Renewable Energy Promotion Scheme
This section focuses on wind power and solar photovoltaics since these energy sources have had a remarkable increase in the four studied countries. For details on other types of renewable energies for the studied countries, please see the
193
Summary of Findings |
SOU 2008:13 |
Table
|
|
Sweden |
|
Spain |
|
Portugal |
|
Germany |
|
UK |
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulation |
|
Electricity |
|
|
|
|
Renewables |
|
|||
Scheme |
|
Certificates |
|
market option |
|
|
|
|
|
Obligation |
|
|
|
|
|
(market price + |
|
|
|
|
|
Certificates |
|
|
|
|
|
premium) |
|
|
|
|
|
(ROC) |
|
Total Payment |
150 |
|
|
|
|
151 |
|
||||
|
=69.12TPF FPT |
|
|
|
|
|
= |
|
|||
Level for wind |
|
Certificate=21 |
|
Market option: 91.01 |
92.8 |
|
83.6 for first |
|
ROCs |
|
|
power 2006 |
|
Energy=48.12 |
|
(Premium 31 plus |
|
|
|
5 years, |
|
(buy out: 47.9) |
|
[€/MWh] |
|
|
|
energy 48 plus |
|
|
|
then 52.8 |
|
plus ~65 for |
|
|
|
|
|
market incentive 7 |
|
|
|
|
|
energy |
|
|
|
|
|
plus other |
|
|
|
|
|
|
|
|
|
|
|
complements) |
|
|
|
|
|
|
|
Total Installed |
|
|
|
|
|
|
|
|
|
|
|
Generation |
33,819 |
82,336 |
13,607 |
111,000 |
83,045 |
|
|||||
Capacity end |
|
|
|
|
|
|
|
|
|
|
|
2006 [MW] |
|
|
|
|
|
|
|
|
|
|
|
Total Installed |
|
|
|
|
|
|
|
|
|
|
|
Wind Capacity |
572 |
11,615 |
1,716 |
20,622 |
1,958 |
|
|||||
end 2006 [MW] |
|
|
|
|
|
|
|
|
|
|
|
Wind Capacity |
|
|
|
|
|
|
|
|
|
|
|
added in 2006 |
80 |
1,587 |
692 |
2,195 |
616 |
|
|||||
[MW] |
|
|
|
|
|
|
|
|
|
|
|
Total Payment |
|
=69.12TPF FPT |
|
|
|
= |
|
||||
Level for Solar |
|
|
P<100kW:440 |
|
P<5kW:447 |
|
|
||||
|
152 |
|
|
|
|
|
|
|
|
|
|
Photovoltaics |
|
|
|
P>100kW:230 |
|
P>5kW:316 |
|
30kW |
|
|
|
2006 [€/MWh] |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
Installed PV |
|
|
|
|
|
|
|
|
|
|
|
Capacity[MW] |
4.8 |
118 |
2.3 |
2,863 |
9.9 |
|
|||||
end 2006 |
|
|
|
|
|
|
|
|
|
|
|
PV added in 2006 |
|
0.6 |
|
60 |
|
0 |
|
953 |
|
1 |
|
|
|
|
|
|
|
||||||
[MW] |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150TP PT In addition, wind power producers
151TP PT Exchange rate of 1£ = 1.4 Euro.
152TP PT This payment is obtained when selling the production to the grid which is done only by a few installations (less than 5). Commonly in Sweden, solar photovoltaic installations use their electricity production to reduce their own consumption and not to sell it to the grid since the network costs (including compensation for reduction of network losses) to be able to inject electricity to the grid are typically higher than the payment they receive. When re- ducing their consumption, the payment can be assumed to be equal to the cost of electricity which is about 110 €/MWh for domestic consumers.
194
SOU 2008:13 |
Summary of Findings |
It is important to take into account when comparing different pro- motion schemes for renewable energies that each country has spe- cific national conditions that can be very different. This means that different promotion schemes may be needed to get the same power production. For example, the average wind conditions in Germany are quite low, in 2006 each installed MW wind power generated on ave- rage an electric power of 1,560 MWh. In the same year, in Spain each installed MW corresponded to a power production of 2,160 MWh, while in Sweden each installed MW generated 1,850 MWh and in the UK 2,780 MWh on average.
The values shown in Table
Table
Table
An interesting example of combining a
195
Summary of Findings |
SOU 2008:13 |
can be much higher than in the
In summary, the countries that have experienced the largest development in the wind power sector, i.e. Germany and Spain, use fixed
196
SOU 2008:13 |
Summary of Findings |
5.2Network Connection Procedure
Table
|
Sweden |
Spain |
Portugal |
Germany |
UK |
|
|
|
|
|
|
Procedure |
Detailed |
Detailed |
Detailed |
The procedure is |
Detailed |
Description |
procedure for |
procedure |
procedure |
not clearly out- |
procedure for |
|
connection to the |
|
|
lined in law, but |
transmission and |
|
transmission grid |
|
|
legally renewable |
distribution |
|
but not well |
|
|
generation has |
connection |
|
described for |
|
|
the right to be |
defined by |
|
connection to the |
|
|
connected. |
National Grid, |
|
regional/local |
|
|
|
approved by |
|
grid |
|
|
|
Regulator |
Deadlines |
Defined dead- |
Defined |
Defined |
Delays can cause |
Max. 3 months |
|
lines for con- |
deadlines |
deadlines |
complaints to |
time to deal with |
|
nection to trans- |
|
|
regulator |
application |
|
mission grid but |
|
|
|
|
|
not for connection |
|
|
|
|
|
to other grids. |
|
|
|
|
Fees |
None for trans- |
|
mission grid. For |
|
other grids it |
|
depends on the |
|
grid owner. |
Yes, both for con- nection to the transmission and the distribution grid. 500 €/kW for solar photo- voltaicTPF153FPT and 20 €/kW for other renewables.
Yes, both for con- No |
Yes (depend |
nection to the |
upon size, type |
transmission and |
and location) |
the distribution |
|
grid. 400 €/MW |
|
for study on avail- |
|
able capacity |
|
and 500 €/kW for |
|
allocation of |
|
connection point. |
|
A
153TP PT Solar photovoltaics installed on residential buildings or industrial premises are exempted of paying such application fees.
197
Summary of Findings |
SOU 2008:13 |
regulator Ofgem. Spain and Portugal are also examples of countries with very detailed connection procedures. The procedures are pre- scribed by law and are not only a conduct code between grid com- panies and producers’ associations.
Countries without clearly defined methods and procedures, in- cluding Sweden, frequently report very long response times for net- work connection applications and communication problems between applicants and network companies.
In Germany, the procedure is not clearly described, but the net- work association has developed a guideline for the network companies how to deal with applications, but most importantly the relevant law defines that “Grid system operators shall immediately and as a priority connect plants generating electricity from renewable energy sources”. Hence in case of delays the network companies have to explain to the regulator what caused the delays. That causes addi- tional costs to the network companies if the application is not pro- cessed reasonably fast. In Germany, the evaluation methods that determine how much additional generation can be connected at a certain point are not considered to be sufficiently transparent as net- work data are typically not published. An independent evaluation of the response to an application is therefore rather complicated.
In summary, to ensure that the application procedure is conduc- ted in a clear, unbiased and consistent manner, irrespective of the network company, the renewable energy technology or the applicant, it is necessary to have a clear definition of the connection appli- cation procedure with clear requirements of what is needed for the application, a clear timeframe regarding the reply of the network company, and defined basic principals for the interconnection analysis.
Nevertheless, conflicts may arise, hence a clear procedure of how to deal with such conflicts should be developed. Germany, for in- stance, used to have a specific organisation that helped to settle such interconnection disputes. Today this task is part of the newly started regulator in Germany, similar to the approach in Spain.
Regarding fees for processing connection applications, there are several countries that apply such fees: Spain, Portugal and UK. A reason for such fees is to avoid unserious applications and the work related to them. However, the fees might be a barrier for very small projects such as solar photovoltaics on residential buildings. An option would be to exclude such projects from paying the fees, which is the case in Spain. In Spain, Portugal and the UK, the fees
198
SOU 2008:13 |
Summary of Findings |
are well defined and do not depend on the owner of the grid to which the installation is connected. This is very important in order to improve transparency and to not discriminate against certain pro- ducers. In Sweden, fees depend on the grid owners and are only paid when connecting to the distribution grid, even though the amount of the fees paid is typically discounted from the total connection cost to be paid by the producer.
199
Summary of Findings |
SOU 2008:13 |
5.3Network Investment Costs
Table
Who pays the |
Sweden |
Spain |
Portugal |
Germany |
UK |
|
costs for… |
||||||
|
|
|
|
|
||
|
|
|
|
|
|
|
Connection |
Wind Farm |
Wind Farm |
Wind Farm |
Wind Farm |
Wind Farm |
|
installations |
Owner |
Owner |
Owner |
Owner |
Owner |
|
from wind farm |
|
|
|
|
|
|
|
|
|
|
|
||
network con- |
|
|
|
|
|
|
nection point |
|
|
|
|
|
|
Connection |
Wind Farm |
Wind Farm |
Wind Farm |
Transmission |
Independent |
|
installations |
Owner |
Owner |
Owner |
Company |
Transmission |
|
from wind farm |
|
|
|
|
Company (if the |
|
|
|
|
|
connection |
||
network con- |
|
|
|
|
voltage is 130kV |
|
nection point |
|
|
|
|
or higher) |
|
Upgrades in |
Upgrades that |
Mainly paid by |
Mainly paid by |
Network |
Generator and |
|
the distribution |
benefit only the |
new power |
new power |
companies |
grid owner |
|
network and |
wind farm |
plant |
plant |
|
share costs |
|
regional net- |
owner are paid |
|
|
|
|
|
work |
by the wind farm |
|
|
|
|
|
|
owner. When |
|
|
|
|
|
|
upgrades |
|
|
|
|
|
|
benefit others |
|
|
|
|
|
|
then costs are |
|
|
|
|
|
|
shared. |
|
|
|
|
|
Upgrades in the |
Upgrades that |
Upgrades are |
Upgrades are |
Network com- |
Upgrades are |
|
transmission |
benefit only the |
paid by trans- |
paid by trans- |
panies (Costs |
paid by trans- |
|
network |
wind farm |
mission |
mission |
are socialized |
mission |
|
|
owner are paid |
company |
company |
between all |
company |
|
|
by the wind farm |
(socialized) |
(socialized) |
customers in |
|
|
|
owner. When |
|
|
Germany) |
|
|
|
upgrades bene- |
|
|
|
|
|
|
fit others (mainly |
|
|
|
|
|
|
in the 400 kV |
|
|
|
|
|
|
grid) then SvK |
|
|
|
|
|
|
pays a part or |
|
|
|
|
|
|
all costs. |
|
|
|
|
|
Fees or de- |
No |
Yes, but only |
Yes, both for |
No fees |
Deposit equal |
|
posits to be |
|
for upgrades in |
transmission |
|
to 2 year Use of |
|
paid in relation |
|
the transmission |
and distribution |
|
System charge |
|
to upgrade |
|
grid. 20% of the |
grid when up- |
|
for transmission |
|
works |
|
upgrading costs. |
grading costs |
|
network up- |
|
|
|
|
are accelerated, |
|
grades |
|
|
|
|
agreed between |
|
|
|
|
|
|
grid owner and |
|
|
|
|
|
|
wind farm |
|
|
|
|
|
|
owner. |
|
|
|
|
|
|
|
|
|
|
200 |
|
|
|
|
|
SOU 2008:13 |
Summary of Findings |
In all studied four countries, and also in Sweden, project developers have to pay for the construction of the line, transformers and all other necessary installations for the connection to the grid. There is no difference between conventional power producers and power producers using renewable energy sources. However, in 2007 Germany adopted a law which states that grid companies have to pay for power lines connecting
In the studied countries and in Sweden, there are no laws giving a clear definition of what deep costs, i.e. costs associated to upgrades of the grid necessary to connect new producers, can be considered to benefit just one producer and which can be considered to benefit several producers. This is crucial since this determines who is to pay these upgrades in all studied countries except Germany where upgrades are always paid for by the grid owner. If the upgrades are considered to benefit just one producer, then this producer has to pay the whole cost associated to the upgrade. If they are considered to benefit more than one producer costs are shared between the pro- ducer and the grid owner or between the different producers. Spain, for example, follows the criterion that upgrades in the transmission grid benefit more than one producer and are therefore socialized, i.e., paid by all consumers, while, for example, Sweden considers that upgrades in radial power line parts of the transmission grid only benefit one producer and are therefore to be paid for by that pro- ducer.
In Germany, grid companies are required to pay all network up- grading costs while in principal renewable energy generators are required to pay the costs for the grid connection, i.e. all costs from the wind farm to the connection point. The main issue is typically to define the best grid connection point. The general rule for de- fining the grid connection point is based on the understanding that total network connection costs, i.e. connection plus upgrade costs,
201
Summary of Findings |
SOU 2008:13 |
should be minimized independent of who covers which part of the costs. This could mean that a
In the UK, costs for transmission upgrades are typically sociali- zed. In principle, transmission reinforcements are only performed if sufficient requests for network connections are submitted. How- ever, this approach leads to long delays in cases where ‘strategic works’ are needed. Recognizing this, the regulator Ofgem approved £560 millions for ‘Transmission Investment for Renewable Genera- tion’ in 2007. When it comes to upgrades in the distribution grid, producers in the UK connected to the distribution network after 1 April 2005, have to pay a Distribution Network Use of System charge (DUoS) which generally reflects the upgrading costs for the exclusive use of the generator. For connections to the distribution grid prior to 1 April 2005, costs for distribution network reinforce- ment were charged upfront.
Table
Both in Spain and Portugal, project developers have to pay de- posits to transmission companies if upgrade works are necessary to connect them. The reason is to avoid that projects are not realized and the upgrade works are carried out. In Sweden, no such deposits are paid to the transmission company since project developers have to pay network tariffs and upgrade costs (in case the upgrades exclu- sively benefit the project developer) to the transmission company.
154TP PT Network upgrade costs in Germany are paid by network companies, which partly causes higher network tariffs for network users, however, these higher network tariffs are currently not considered a major issue by the different stakeholders.
202
SOU 2008:13 |
Summary of Findings |
In summary, upgrades in the transmission grid and in the distri- bution/regional grid are treated differently in the studies countries. Costs related to the upgrade of the transmission grid are generally socialized, i.e. network companies pay for it and can recover the costs via network tariffs. However in Sweden, project developers pay the costs if the upgrade refers to a radial line; while costs are shared be- tween the owner of the production plant and Svenska Kraftnät when the upgrade is done in the meshed grid. Distribution network up- grades have to be paid in most of the studied countries by the com- pany which causes the upgrade, except in Germany where they are socialized as well. In comparison with the studied countries, project developers in Sweden have to pay most network investment costs.
5.4Capacity Limits in the Regulations for Renewable Energy
Table
|
Sweden |
Spain |
Portugal |
Germany |
UK |
|
|
|
|
|
|
Capacity |
155 |
No |
No |
No |
Not for trans- |
Yes, 1.5 MWTPF FPT |
|||||
limits for |
|
|
|
|
mission grid, |
payment of |
|
|
|
|
but for distri- |
network |
|
|
|
|
bution grids |
tariffs |
|
|
|
|
|
Capacity |
No |
No |
|||
limits for |
|
vary depending |
can vary depen- |
can vary depen- |
|
support |
|
on project capa- |
ding on project |
ding on project |
|
scheme |
|
city, projects with |
capacity |
capacity |
|
|
|
capacity >50MW |
|
|
|
|
|
get much lower |
|
|
|
|
|
payment |
|
|
|
Capacity |
No |
At least 100 MW |
Installations with |
No |
Might come for |
limits for |
|
to connect to |
installed capa- |
|
offshore wind |
connection |
|
220 kV and |
city >50 MW |
|
farms (new rules |
to the grid |
|
250 MW to con- |
connect to the |
|
regarding the |
|
|
nect to 400 kV. |
transmission |
|
grid connection |
|
|
|
grid, others to |
|
of offshore wind |
|
|
|
the distribution |
|
farms under |
|
|
|
grid |
|
discussion) |
155TP PT The capacity limit of 1.5 MW in Sweden applies to individual units of an installation. This means that a wind farm with 50 wind turbines of 1 MW each is exempted from paying network tariffs, while a wind farm with 10 wind turbines of 2 MW each has to pay network tariffs.
203
Summary of Findings |
SOU 2008:13 |
Only the UK and Sweden have networks tariffs for producers. In all other countries, producers do not pay such network tariffs, see also Section 5.7. Sweden and UK are the only countries of the five included in this report which have limits related to the installed capacity for the payment of network tariffs, see also Table
In the countries using promotion schemes based on
Regarding the connection to the grid, only Spain and Portugal have defined limits for the connection to the different voltage levels. The reason for setting up such limits has been to simplify the pro- cessing of connection applications and to clarify the different re- sponsibilities of the grid owners. The definition of such limits has nothing to do with the promotion scheme chosen. In Spain, for in- stance, several project developers submit a joint application to the TSO in order to fulfil the minimum capacity requirement for a con- nection to the transmission grid. Additional size definitions are used in the definitions for metering requirements, see Section 4.
204
SOU 2008:13 |
Summary of Findings |
In summary, in most countries, i.e. Germany, Spain and Portugal, there are no capacity limits for the payment of network tariffs similar to those used in Sweden. Capacity limits are either used to define connection voltage levels (Spain and Portugal) or to differentiate the
5.5Network Concessions
Table
|
Sweden |
Spain |
Portugal |
Germany |
UK |
|
Can wind power producers |
|
|
|
|
|
|
build/own the power cables |
No |
Yes |
Yes |
Yes |
Yes |
|
connecting the turbines |
||||||
|
|
|
|
|
||
within a wind farm? |
|
|
|
|
|
|
|
|
|
|
|
|
|
Can wind power producers |
|
|
|
|
|
|
build the power lines |
|
|
|
|
|
|
connecting a wind farm to |
No |
Yes |
Yes |
Yes |
Yes |
|
the distribution/ |
|
|
|
|
|
|
transmission grid? |
|
|
|
|
|
|
|
|
|
|
|
|
Network concessions are legal authorizations that are required in some countries in order to build power lines. The origin of these network concessions is the centrally planned electricity system that
– with the deregulation – has developed into the current system with several network companies. In Sweden, for instance, there are concessions for an area which allow those that have the concession to build power lines in that area (typically for voltage levels up to 20 kVTPF156FPT). In principle no one else can build power lines with a lower or equal voltage level than 20 kV in that area except power lines that are exempted from concessions as, for example, the power lines of industrial networks. To build power lines with a higher voltage level than typically 20 kV, another type of concession called line con- cession is needed in Sweden. As mentioned before, network con- cessions give the right to build power lines, but together with the obligation to give access to everyone who wants to connect an in- stallation there. In Sweden, in order to get a network concession the applicant must not work with electricity production or retail of electricity.
156TP PT There are approximately 330 area concessions in Sweden of which only 10 have a voltage level over 20 kV, all others have a voltage limit of 20 kV.
205
Summary of Findings |
SOU 2008:13 |
Producers in Sweden have two possibilities regarding the building of the connecting lines within the wind farm and from the wind farm to the connection point. One, to pay the network company in the area for building those lines and two, to form a network com- pany in order to get line concessions and be able to build the lines themselves. In both cases it is the project developer that pays for the power line but the ownership of the line and the responsibilities associated to it depend on which option is chosen.
A drawback with network concessions is that they increase bureaucracy and makes it more difficult for small project developers to find more economical solutions to build these power lines. This is due to the fact that only in the case of creating a network com- pany the owner of the wind farm can build the lines, otherwise it is only the grid company with the concession for that area that can build power lines. To form a network company has, under current legislation, a lot of consequences for example regarding reporting obligations, which are difficult to meet for small investors.
In all studied four countries, wind power producers can build the lines between the individual wind turbines in the wind farm without needing concession. The main consequence of this is that in these countries grid companies do not have a monopoly over such lines. As opposed to this, it is necessary in Sweden to have a network con- cession in order to build the lines between the wind turbines of a wind farm.
Regarding the power lines from the wind farm to the connection points in the transmission grid or in the distribution/regional grid, in all the four studied countries wind farm owners do not need any concession for building them. In Spain, wind project developers can build such lines once they are granted the necessary building permits that are the same as the permits required for distribution companies or transmission companies including studies on environmental impact and public consultation. It is common practice that – regarding voltage ranges of between 45 and 132 kV – producers transfer the connecting line and even the position at the substation to the distri- bution company in order to avoid their operation and maintenance and the associated costs. In Portugal, it is also quite common on the distribution level that project developers transfer the line to the distribution company in order to avoid maintenance and operation of the line. The distribution company has in that case the obligation to give access to consumers and other producers if there is available capacity. By transfering the connecting line to the grid company in
206
SOU 2008:13 |
Summary of Findings |
Spain and Portugal, producers avoid operation and maintenance costs for that line since they do not pay any network tariffs (see Section 5.7). However, in Sweden even if the producer transfers the line to the distribution company he will still pay for its opera- tion and maintenance since these costs are included in the network tariffs that producers pay in Sweden.
In summary, in all four studied countries wind farm owners can build the power lines within the wind farm and between the wind farm and the transmission/ distribution grid without needing a con- cession. Sweden is different since it requires concessions in order to build such lines. The requirement of network concessions increases bureaucracy and makes it more difficult to find more economical solutions to build the power lines since only by creating a network company the owner of the wind farm can build the lines, otherwise it is only the grid company with the concession for that area can build power lines. In the studied countries, lines within a power production installation and from the installation to the distribu- tion/transmission grid are treated differently to lines that are part of the distribution/transmission grid. This applies to all kinds of power producing installations and is not specific for those using re- newable energy sources. In the studied countries, sometimes the wind power producer and the grid company of the area enter into special agreements in order to transfer the ownership of the line up to the connection point to the grid company. This way, the pro- ducer can avoid operation and maintenance of the lines and the grid company can connect other customers/producers.
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5.6Metering
Table
Sweden |
Spain |
Portugal |
Germany |
UK |
|
|
|
|
|
Metering Requirement of |
No requirement |
No requirement |
15 min im/export, |
30 min im/export |
hourly measure- |
of hourly |
of hourly |
active/reactive |
active/reactive |
ment for all pro- |
measurement |
measurement |
metering for units |
metering; if |
duction. |
and possibility |
for small pro- |
larger 500 kW; for |
export less than |
|
to choose |
jects connected |
units smaller 500 |
16 amps/phase |
|
between net- |
to the low |
kW only yearly |
im/export meter- |
|
metering and |
voltage grid |
energy metering |
ing required. |
|
im/export |
(<1 kV). |
required; net- |
|
|
metering for |
|
metering for |
currently not |
|
small |
|
smaller units |
possible, but |
|
157 |
|
possible with |
discussed. |
|
projectsTPF FPT. |
|
||
|
|
|
agreement. |
|
|
|
|
|
|
Metering costs can be neglected for large generation plants in the megawatt range; all countries typically have identical metering re- quirements for conventional power plants and renewable energy plants in the megawatt range. Metering costs, however, become a very important issue for small installations in the kW range, e.g. PV, as the metering costs can have a significant impact on the overall project economics.
For small projects, Germany, Portugal and the UK distinguish between
In addition, power producers in Germany as well as in Spain that are connected to the
– can also choose to have two different measurement equipments, one for the produced power and one for the consumed power since the payment for the produced power is almost three times larger than the cost for the consumed power.
157TP PT Here, small project means projects that are connected to the
208
SOU 2008:13 |
Summary of Findings |
Small
5.7Network Tariff Structure
Table
|
Sweden |
Spain |
Portugal |
Germany |
UK |
|
|
|
|
|
|
|
|
Network Tariff |
Yes, but also |
|
|
|
Yes (Use of System charges) |
|
remuneration |
No |
No |
No |
if connected to transmission |
||
for Power |
||||||
from grid |
|
|
|
system, but also remuneration |
||
Producer |
|
|
|
|||
owner* |
|
|
|
from grid owner* |
||
|
|
|
|
* Network tariffs in Sweden are defined in order to give locational signals which means that pro- ducers which reduce network losses receive economic compensation. This can result in negative network tariffs. This system is also used in the UK.
Network fees can be used to allocate certain costs, e.g. network up- grade costs, power system losses, operation and maintenance of power lines, to the power system participants that mainly have caused these costs. In practice, a clear allocation is difficult due to the complexity of clearly identifying who caused what costs in the power system. Hence, some countries such as Spain, Portugal and Germany decided a long time ago that power producers do not need to pay any tariffs for using the power grid. This has always been the case for both conventional power generators and renewable power generators. That means that historically grid tariffs did not play any role in energy policy in order to promote renewable energy tech- nologies.
It is, however, important to emphasize that the network owner- ship situation in Spain and Portugal differs from that in Sweden. The whole distribution system in Portugal is owned by a single company, and in Spain by five companiesTPF158FPT. In Spain, distribution companies are regulated
158TP PT There are around 300 small distribution companies in Spain, but their share in the distribution activity is lower than 1%.
209
Summary of Findings |
SOU 2008:13 |
in the transmission grid, for instance due to required network up- grades, since these cost will be shared equally by all customers within Spain or Portugal, respectively.
Similar to Sweden, Germany has a large number of distribution and regional network companies (around 900) plus four transmission companies. That means that any costs caused by power generators are not distributed equally among all customers. However, interviews with network companies, customer organisations and the regulator in Germany revealed that this is generally not considered an im- portant issue. Only for the connection of offshore wind farms in Germany, which is the responsibility of the transmission system operators, a special mechanism was developed to equally distribute the costs among all network customers in Germany.
In the UK, generators pay network tariffs (known as Use of System charges) if they are connected to the transmission system. The charges do not distinguish between renewable energy and con- ventional energy, but they vary based on the location of the con- nection point. Hence, the connection charges to the transmission grid are high in Scotland, which has low load but many generation sources, and low (in some cases even negative) in South England which has high load and limited local generation sources. In addi- tion, small power stations connected to the distribution network, independent of their technology, do not have to pay Transmission Use of System charges (see also Section 5.4). In principle, power stations are defined as small if they have a total capacity of up to 50 MW in England and Wales, up to 30 MW in the Scottish Power transmission area and up to 5 MW in the Scottish Hydro trans- mission area. However, generators that have been connected to the distribution network after 1 April 2005 and which have caused reinforcement of the distribution grid have to pay Distribution Network Use of System charges.
In summary, network tariffs for generators are not used in Germany, Spain and Portugal. In the UK, all power plants connected to the transmission system pay a network fee. However, most plants connected to the distribution system pay no Transmission Use of System charge and no Distribution Use of System charge. Hence, many power plants connected to the distribution network can avoid paying any network fee, while in Sweden particularly power plants connected to the distribution network pay rather high fees for using the distribution system. It is important to note that in Sweden net- work tariffs are defined in order to give locational signals which
210
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Summary of Findings |
means that producers which reduce network losses (mainly in the South of Sweden) receive economic compensation. This can result in negative network tariffs. This system is also used in the UK. As opposed to this, in the studied countries where producers do not pay any network tariffs, the producers do not receive any compen- sation from the grid owner for reduced system losses.
Nevertheless it should be mentioned that network tariffs can provide significant locational signals where to build new generation capacity and therefore could be useful in countries with significant locational mismatch between load and generation.
5.8Priority Production and Curtailment Policy
Table
|
Sweden |
Spain |
Portugal |
Germany |
UK |
|
|
|
|
|
|
When is |
Only via counter |
When there are |
When there are |
Only possible if |
Only if wind farm |
curtailment |
buying by SvK |
nodes with capa- |
nodes with capa- |
wind farm owner |
has submitted a |
possible? |
when wind farm |
city restrictions |
city or security |
has agreed to |
bid for the regu- |
|
owner has |
and security of |
restrictions |
principal curtail- |
lating market for |
|
agreed to |
the system. |
|
ment in advance |
down regulation |
|
principal curtail- |
|
|
|
|
|
ment in advance |
|
|
|
|
Payment |
Based on |
For curtailment |
No payment |
No payment |
Based on the |
for curtailed |
market price |
on real time |
|
|
bid price for |
energy |
|
operation: 15% |
|
|
|
|
|
of the electricity |
|
|
submitted by the |
|
|
market price. For |
|
|
wind farm |
|
|
planned curtail- |
|
|
|
|
|
ment: no pay- |
|
|
|
|
|
ment. |
|
|
|
Normally any power generation connected to a power system can be curtailed by the system operator during power system emergency situations. This normally also applies to power generation from re- newable energy sources. However, the scheduling and curtailment procedure during normal operation is more important. Conventional power generation is typically scheduled based on prices (based on bidding prices in the wholesale market) and bilateral contracts, taking into account local transmission capacity.
In Spain, Portugal and Germany renewable energy is treated differently, i.e. it is defined as priority production. This means con- ventional power generation must always reduce generation in case
211
Summary of Findings |
SOU 2008:13 |
of transmission congestions in order for renewable energy generation sources to be able to generate power as long as they do not exceed the existing transmission capacity.
In Germany, network operators are required to upgrade the distri- bution, regional and transmission network in order to make sure that renewable energy generation is not affected by any network congestions, independent of the actual location of the renewable energy sources. As network upgrades can take years, the additional connection of new renewable energy sources has been put on hold in some areas, because the existing network capacity is not large enough to guarantee priority production of new renewable energy resources. However, renewable energy generators can enter into an agreement with the network operator that they can be curtailed in situations where all transmission capacity is already used up by other renewable energy sources. That means that such an agreement makes it possible to connect new renewable generation systems earlier, however, such new units can be curtailed without any payment.
In Spain such a separate agreement for curtailment is not needed; renewable generation can be curtailed as a last option, i.e. after con- ventional power plants have been regulated down. In Spain renewable energies without storage capabilities such as wind power, solar energy and hydropower stations without dam, have the highest priority.
In the UK, renewable energy power sources are not treated as priority production. Curtailment is based on bidding prices in a special regulating market which the transmission system operator has set up to determine the generation source that has the lowest curtailment costs. Renewable energy sources can participate in this market, i.e. they will be curtailed in case of transmission congestions if no other cheaper generation technology is willing to be curtailed. How- ever, as renewable energy sources need to generate power to receive the renewable energy certificates (ROCs), they typically require much higher payment for curtailment than conventional generation resources.
In summary, even though the different countries in Europe have different methods to determine which generation source will be curtailed, the outcome is the same, i.e. renewable energy sources are typically the last generation source to be curtailed. As the current Swedish approach for curtailment is similar to the approach in the UK, also in Sweden new renewable energy sources would typically be the last generation source to be curtailed as renewable energy
212
SOU 2008:13 |
Summary of Findings |
generation would ask for high payments in case of curtailment to offset certificate and energy payments.
5.9Current Policy Challenges Related to Network Issues
Table
|
Sweden |
Spain |
Portugal |
Germany |
UK |
|
|
|
|
|
|
Distribution/ |
Related policy |
Policy in place |
Not an issue |
Policy in place |
Policy was recently |
Regional |
under discussion |
but a better |
|
for a long time |
adjusted, start to |
Network |
|
definition of |
|
now, but legal |
gain experience |
Upgrades |
|
|
details for certain |
with new approach |
|
|
|
under discussion |
|
cases still under |
|
|
|
|
|
discussion |
|
Transmission |
Related policy |
Policy in place |
Not an issue |
Policy in place |
Policy was recently |
Network |
under discussion |
but update of |
|
for a long time, |
adjusted; further |
Upgrades |
|
policy discussed |
|
but recently |
discussion regard- |
|
|
to better co- |
|
adjusted to |
ing cheapest net- |
|
|
ordinate trans- |
|
speed up the |
work upgrade |
|
|
mission and |
|
construction of |
(independently |
|
|
distribution net- |
|
new lines |
owned) |
|
|
work upgrades |
|
|
|
Offshore |
Related policy |
Related policy |
Not an issue |
Recent policy |
Policy change |
Connection |
under discussion |
under discussion |
yet |
||
|
|
|
|
responsibility of |
for independent |
|
|
|
|
transmission |
transmission com- |
|
|
|
|
companies |
panies proposed |
Best |
Related policy |
Not an issue |
Not an issue |
Policy in place |
Policy was recently |
Connection |
under discussion |
|
|
for a long time |
adjusted, start to |
Point |
|
|
|
now, but legal |
gain experience |
|
|
|
|
details for certain |
with new approach |
|
|
|
|
cases still under |
|
|
|
|
|
discussion |
|
Technical |
Grid code |
Grid code |
Grid code |
Grid code |
Grid code |
Performance/ |
implemented |
implemented |
implemented |
implemented, |
implemented |
Grid Code |
|
|
but further |
but updated |
|
|
|
|
needs dis- |
every |
|
|
|
|
cussed |
|
|
The
213
Summary of Findings |
SOU 2008:13 |
Interestingly enough, all countries continuously adapt and im- prove their relevant regulations. The changes mainly aim at developing a regulatory environment that allows a development of renewable energy in order to achieve the national targets, and therefore mainly aim at reducing barriers, i.e. connection barriers, and thereby provi- ding an acceptable investment environment. At the same time, how- ever, policy development typically tries to adjust the regulations in a way that additional costs are equally shared by all customers and that renewable energy development does not lead to windfall profits for its developers.
Currently the connection costs related to
5.10Summary and Conclusion
Germany and Spain are the countries that have experienced the largest development in the wind power sector. Both Germany and Spain have used fixed
214
SOU 2008:13 |
Summary of Findings |
The four studied countries have well defined application pro- cedures to ensure that the application procedure is conducted in a clear, unbiased and consistent manner, irrespective of the network company, the renewable energy technology or the applicant. In Germany, however, the application procedure is not as clearly defined in a law as in other countries, but the German law gives renewable energy generation the legal right to be connected, which forced the German network association to outline a recommendation for the application procedure for all German network companies.
A well defined procedure is characterized by giving clear re- quirements of what data is needed for the application, a clear time- frame regarding the reply of the network company, and defined basic principals for the interconnection analysis, costs associated to the processing of the application, and even a clear description of how to deal with potential conflicts. Sweden has, at the moment, no well described application procedure for the connection to the local and regional grid which in some cases lead to longer administrative times.
The four studied countries except Germany apply fees for pro- cessing connection applications. In Spain, Portugal and the UK these fees are well defined and do not depend on the grid company. This is very important in order to improve transparency and to not discriminate against certain producers. In Sweden, fees depend on the grid companies and are only paid when connecting to the distri- bution grid, even though the amount of the fees paid is typically discounted from the total connection cost to be paid by the pro- ducer. A reason for using such fees is to avoid unserious applica- tions and the work related to them. However, these fees might be a barrier for very small projects such as solar photovoltaics on resi- dential buildings. An option is to exclude such small projects from paying these fees, as it is done in Spain.
Upgrades in the transmission grid and in the distribution/regional grid are treated differently in the studied countries. Costs related to the upgrade of the transmission grid are generally socialized, i.e. network companies pay for it and can recover the costs via network tariffs. However in Sweden, owners of the installation pay the costs if the upgrade refers to a radial line; while costs are shared between the owner of the production plant and Svenska Kraftnät when the upgrade is done in the meshed grid. Distribution network upgrades have to be paid in most of the studied countries by the company which causes the upgrade, except in Germany where they are sociali-
215
Summary of Findings |
SOU 2008:13 |
zed as well. In comparison with the studied countries, project deve- lopers in Sweden have to pay most network investment costs.
In all studied countries except the UK producers neither pay any network tariffs for using the grid nor get any compensation for reducing network system losses. In the UK, all power plants con- nected to the transmission system pay a network fee, however, most plants – depending on their capacity – connected to the distribution system pay no Transmission Use of System charge and no Distri- bution Use of System charge. Hence, many power plants connected to the distribution network can avoid paying any network fee, while in Sweden particularly power plants connected to the distribution network pay rather high fees for using the distribution system. In addition it should be mentioned that renewable based producers in the UK receive currently a comparatively higher payment compared to Sweden.
Network tariffs for generators in general are not very common in the four studied countries. However, network tariffs can provide significant locational signals where to built new generation capacity and therefore could be useful in countries with significant locational mismatch between load and generation.
In Germany, Spain and Portugal there are no capacity limits for the payment of network tariffs similar to those used in Sweden (in- stallation with an installed capacity below 1500 kW do not pay any network tariffs). Capacity limits are either used to define connec- tion voltage levels (Spain and Portugal) or to differentiate the feed- in tariff.
In all four studied countries, wind power producers can build the power lines within the wind farm and between the wind farm and the transmission/ distribution grid. Sweden is different since it re- quires concessions in order to build such lines and producers cannot get concession. A drawback with the requirement of network con- cessions is that they increase bureaucracy and make it more diffi- cult for small project developers to find more economical solutions to build these power lines. This is due to the fact that only in the case of creating a network company the owner of the wind farm can build the lines, otherwise only the grid company with the con- cession for that area can build the power lines. To form a network company has, under current legislation, a lot of consequences for example regarding reporting obligations, which are difficult to meet for small investors. In Spain and Portugal, sometimes the wind power producer and the grid company of the area enter into special agree-
216
SOU 2008:13 |
Summary of Findings |
ments in order to transfer the ownership of the line up to the con- nection point to the grid company. This way, the producer can avoid operation and maintenance costs of the lines, since producers do not pay any tariffs for using the grid to the grid companies, and the grid company can connect other customers/producers.
In all four countries there are no requirements of hourly measure- ments for small installations. Yearly measurements appear to be per- fectly suitable for such installations (up to 500 kW) as they have a very small impact on the actual power flow in the power system. As opposed to this Sweden has the requirement of hourly measure- ments in order to be able to get payment from the certificate system. In addition, in Germany, Spain and Portugal it is not necessary to measure production independently; i.e.
The four studied countries have different methods to determine which generation source will be curtailed when there are physical restrictions in the grid. However, the outcome is the same, i.e. re- newable energy sources are typically the last generation source to be curtailed. As the current Swedish approach for curtailment is similar to the approach in the UK, also in Sweden new renewable energy sources would typically be the last generation source to be cur- tailed as renewable energy generation would ask for high payments in case of curtailment to offset certificate and energy payments.
Currently the connection costs related to
It should be mentioned that some of the studied countries initially had a rather generous payment scheme which made some investments very profitable, but these frameworks were
217
Summary of Findings |
SOU 2008:13 |
to create a new industrial sector. The approach applied to network tariffs, network upgrade costs and curtailment of renewable energy should take into account the overall economic situation for renew- able energy.
Finally, it should be mentioned that all four studied countries have shown a flexibility to adjust their energy policy, rules and re- gulations depending on the technical and economical development in order to create a
Policies that help to reduce the risk for project developers regar- ding connection procedures, connection costs and upgrade costs will facilitate the development of more renewable energy projects as long as the general payment scheme for renewable generation provides a profitable and
218
Statens offentliga utredningar 2008
Kronologisk förteckning
1.Barlastvattenkonventionen – om Sveriges anslutning. N.
2.Immunitet för stater och deras egendom. UD.
3.Skyddet för den personliga integriteten. Bedömningar och förslag. Ju.
4.Omreglering av apoteksmarknaden. S.
5.Könsdiskriminerande reklam. Kränkande utformning av kommersiella meddelanden. N.
6.Fastighetsmäklaren och konsumenten. Ju.
7.Världsklass! Åtgärdsplan för den kliniska forskningen. U.
8.Bidrag på lika villkor. U.
9.Transportinspektionen. En myndighet för all trafik. + Bilagor. N.
10.21+12. En ny myndighet för tillsyn och effektivitetsgranskning av social- försäkringen. S.
11.Frihet för studenter – om hur kår- och nationsobligatoriet kan avskaffas. U.
12.Finansiella sektorn bär frukt. Analys av finansiella sektorn ur ett svenskt perspektiv. Fi.
13.Bättre kontakt via nätet – om anslutning av förnybar elproduktion.
+ Annex: Grid issues for electricity production based on renewable energy sources in Spain, Portugal, Germany, and United Kingdom. N
Statens offentliga utredningar 2008
Systematisk förteckning
Justitiedepartementet
Skyddet för den personliga integriteten.
Bedömningar och förslag. [3]
Fastighetsmäklaren och konsumenten. [6]
Utrikesdepartementet
Immunitet för stater och deras egendom. [2]
Socialdepartementet
Omreglering av apoteksmarknaden. [4]
21+12. En ny myndighet för tillsyn och effektivitetsgranskning av social- försäkringen. [10].
Finansdepartementet
Finansiella sektorn bär frukt.
Analys av finansiella sektorn ur ett svenskt perspektiv. [12]
Utbildningsdepartementet
Världsklass! Åtgärdsplan för den kliniska forskningen. [7]
Bidrag på lika villkor. [8]
Frihet för studenter – om hur kår- och nationsobligatoriet kan avskaffas. [11]
Näringsdepartementet
Barlastvattenkonventionen – om Sveriges anslutning. [1]
Könsdiskriminerande reklam.
Kränkande utformning av kommersiella meddelanden. [5]
Transportinspektionen. En myndighet för all trafik. + Bilagor. [9]
Bättre kontakt via nätet – om anslutning av förnybar elproduktion.
+ Annex: Grid issues for electricity production based on renewable energy sources in Spain, Portugal, Germany, and United Kingdom. [13]