Royal Decree 661/2007 of 25 th May, regulating the electricity production under the special scheme

Transcription

1 Royal Decree 661/2007 of 25 th May, regulating the electricity production under the special scheme Hugo Lucas IDAE International Relations Department 1

2 Wind energy capacity (MW) in the European Union (EU-27) - 31/12/ ,620 GERMANY 11,730 SPAIN 3,135 DENMARK 2,125 1,965 1,715 ITALY UK PORTUGAL TOTAL EU-27 (ENDING 2006) 48,175 MW 1,570 FRANCE 1,560 3,755 NETHERLANDS REST Source: EWEA and IDAE Provisional Data

3 Development of Wind Energy in Spain (MW) ACCUMULATED MW YEARLY INSTALLED CAPACITY IN OPERATION ACCUMULATED Source: IDAE Provisional Data TOTAL SPAIN (ENDING 2006) 11,730 MW '06 0 IN OPERATION 0,4 1,2 0,8 1,5 2,7 0, ACCUMULATED 0,4 1,6 2,4 3,9 6,6 7,

4 Yearly investment in the wind energy sector in Spain , INVESTMENT (M ) Source: IDAE Provisional Data YEAR 1,390 1,196 1,

5 Evolution of cost per kw of installed capacity / kw Average Average Cost Cost ,100 /kw inst. 890 EURO/kW inst. Estimated value for 2006 Source: IDAE '00 '01 '02 '03 '04 '05 '06 Year 5

6 Worldwide market share in 2006 (15,016 MW) % % 14.6 % 14.5 % % 6.9 % 3.2 % 3.0 % 2.6 % 2.6 % 4.3 % 0 VESTAS (DEN) GAMESA EÓLICA (SPA) G. ELECTRIC (USA) ENERCON (GER) SUZLON (IND) SIEMENS (GER) NORDEX (GER) REPOWER (GER/FRA) ACCIONA WP (SPA) GOLDWIND (CHI) OTHERS Source: BTM Consult 6

7 Wind turbines manufacturers (Spain) Manufacturer GAMESA EÓLICA ECOTÉCNIA ACCIONA WP M TORRES Accumulated capacity in Spain, ending ,947 MW (59.2%) 957 MW (8.2%) 730 MW (6.2%) 25 MW (0.2%) Commercial Wind Turbines G /2000 G /850 G 128 /4.5 (2008) Ecot /1670 Ecot. 100 /3000 (2008) AW /1500 AW 1xx /3000 (2009) TWT /1650 TWT 92 /2.5 (2009) Plants in Spain (wind turbines assembly) 6 (Navarra -2-, Soria, La Coruña, Zaragoza, Valladolid) 2 (La Coruña, Navarra) 2 (Navarra, Castellón) 1 (Soria) NAVANTIA - SIEMENS 469 MW (4.0%) Navantia-Siemens (La Coruña) EOZEN - VENSYS 0 Eozen-Vensys / (Granada) VESTAS G. ELECTRIC 1,470 MW (12.5%) 785 MW (6.7%) V 90 /3000 V /2000 V 120 /4.5 GEWE 1.5 sl GEWE (Lugo, León) 1 (Toledo) 7

8 Key elements for wind energy success in Spain Existence of significant wind resources. Stable regulatory framework for electricity generated (Feed-in tariffs system; reasonable return on investment). Regional support: planning, simple administrative procedures. Technological maturity. Creation of a strong industrial sector. Large scale production permits costs reduction (construction, operation and maintenance). 8

9 Wind Energy Target: MW at the end of 2010 Increment of MW during the period : Wind Energy development expected [ ] - Average capacity: 2,000 MW/yr - Average Investment: 1,960 mill. /yr Wind energy contribution to reach 45,000 GWh/yr in 2010: % of national electricity market share ,800 2,000 2,200 14,155 2,200 16,355 2,000 18,355 20,155 1, % of electrical production with renewable energies. Improvement of access & connection to grid (quality, requirements,...) ,955 11,955 YEARLY CAPACITY (MW) ACCUMULATED (MW)

10 PER : Main measures in wind energy area Proposed Measures: Development of transport grid. Updating and improvement of the regulatory procedures regarding grid access and operating conditions. Establishment of a single operation centre for the Special Regime. Improvement of wind generators behaviour, regarding network. 10

11 Lines of technological innovation Advanced systems to control the quality of the power fed into the grid. Development of wind turbines with more than 2 MW. Research on the use of new materials. Adaptation of high capacity wind turbines to the off-shore requirements. Implementation of demonstration off-shore wind farms. 11

12 Electric Power Act (Law 54/1997, 27 November) Main aim: Full liberalisation of electricity market. Activities regulated by the Law: - System Management: Market Operator (OMEL). - Transport activity: System Operator (REE). Establishes: Market: - Special Regime for renewable energy sources (< 50 MW). - Guaranteed grid access. - Producers not obliged to submit bids to the pool. - Premium price for electricity from RES. Pool based system. Regulatory Independent body: National Electric Regulatory Commission. 12

13 LEARNING BY DOING RD 2366/1994 Feed-In Tariff Small capacity facilities. RD 2818/1998 Feed-In Tariff Revision of the tariffs and technologies. Increase maximum capacity. RD 436/2004 Feed-In Tariff Premium Revision of the tariffs and technologies. Windfall profits in the market option. Insufficient development of biomass and cogeneration. RD 661/2007 Feed-In Tariff Premium Cap & Floor. 13

14 RD 661/2007. MOTIVATIONS The modification of the economic and legal scheme regulating the special scheme in force so far (RD 436/2004) becomes necessary for several reasons: The growth undergone by the special scheme in the last years has pointed to the need to regulate some technical aspects to contribute to the increase of these technologies, safeguarding the system s security and guaranteeing its supply quality, as well as the restrictions to the production of the said generation. The economic scheme established in Royal Decree 436/2004 of 12th March, because of the behaviour undergone by the market prices where some variables not considered earlier have become more remarkable, makes it necessary to modify the payment system. To state the regulatory changes derived from the European regulation, which introduces important modifications as regards the legal scheme of the cogeneration activity. Objectives of reference installed capacity are established in compliance with the objectives in the Renewable Energies Plan and the Energy Saving and Efficiency Strategy for Spain (E4), to which the retribution scheme set out in this Royal Decree shall apply. 14

15 SCOPE OF APPLICATION Category a): Producers using cogeneration or other ways of electricity production from waste energy. Category b): Installations using any of the non-consumable renewable energies, biomass or any kind of biofuel as primary energy, whenever their titleholder do not carry out production activities under the ordinary scheme. Category c): Power plants that use waste with energy recovery not stated in category b) as primary energy. 15

16 REMUNERATION MECHANISMS The titleholders of the facilities should choose one of the following options: Transfer electricity to the system through the transport or distribution grid, therefore being paid a feed-in tariff for it, unique for all the programming periods. Sell the electricity on the wholesale electricity market. In this case, the electricity sale price will be the hour price resulting in the wholesale market supplemented if any, with a premium. In this last case, a new feature is introduced for some technologies, a higher and a lower limit (cap and floor). The titleholders of the facilities may choose the most suitable sale options for periods no shorter than a year. Nevertheless, the participation in the market is encouraged as it is deemed that in this way, a lower administrative intervention is achieved as regards the establishment of electricity prices as well as a better, more efficient allocation of the system s costs, particularly regarding the imbalance management cost and the provision of supplementary services. 16

17 WHOLESALE ELECTRICITY MARKET 17

18 PREMIUM (1) The premium to be paid every hour is calculated as follows: a) For values of the reference market price plus the reference premium lower or equal to the lower limit, the premium value to be paid shall be the difference between the lower limit and the daily market hourly price at that hour. b) For the reference market price values plus the reference premium included between the higher and the lower limits, established for a given group or subgroup, the value to be paid shall be the reference premium for this group or subgroup, at that hour. c) For the reference market price values included between the higher limit and minus the reference premium and the higher limit, the value of the premium to be paid shall be the difference between the higher limit and the reference market price at that hour. d) For the reference market price values higher or equal to the higher limit, the price of the premium to be paid shall be zero at that time. 18

19 PREMIUM (2)?kWh /kwh 8,49 7,13 2,93 Bottom limit Bottom 7,13 limit WIND WIND ONSHORE 2007 Top limit Top 8,49 limit Premium of reference 2,93 Premium + Pool Premium 4,20 5,56 8,49 Pool?kWh /kwh This new system protects the promoter when the income derived from the market price is too low, and removes the premium when the income is high enough to ensure breaking even, leaving out the irrationalities in the payment of technologies whose costs are not directly linked to oil prices on international markets. 19

20 FEED-IN TARIFFS AND PREMIUMS Two options to selling power: Option a) Option b) Free sale on the organized Fixed price = Reference Maximum Minimum Regulated tariff premium limit limit c /kwh c /kwh c /kwh c /kwh b.2 b.2.1 First 20 years 7,3228 2,9291 8,4944 7,1275 Wind Onshore Afterwards 6,1200 b.1.1 Photovoltaic Q 100 kw 100 kw<q 10 MW First 25 years 44,0381 Afterwards 35,2305 First 25 years 41,7500 Afterwards 33,4000 b.1 10<Q 50 MW First 25 years 22,9375 Solar Afterwards 18,3811 b.1.1 Thermoelectric First 25 years 26, ,4000 Afterwards 21, , , ,

21 UPDATING AND REVISION OF TARIFFS, PREMIUMS AND SUPPLEMENTS The amounts of tariffs, premiums, supplements and cap & floor limits will be annually updated having the consumer price index (CPI) as a reference minus 0.25 until the 31st of December 2012 and minus 0.5 since then. During 2010, in view of the result of the follow-up reports on the extent of fulfilment of the Renewable Energies Plan (PER) and of the Spanish Energy Saving and Efficiency Strategy, as well as the new objectives that may be included in the following Renewable Energies Plan for the period, the review of tariffs, premiums, supplements and cap & floor limits will take place, bearing in mind the costs associated with each of these technologies, the extent of participation in the special scheme in the meeting of the demand and its effect on the technical and economical system, always guaranteeing reasonable profitability rates with reference to the price of money on the capital market. Every four years and from then on, a new revision will be done maintaining the criteria above. 21

22 OTHER ASPECTS (1) Facilities included in special scheme have priority in the access and connection to the electricity grid, if there is not any technical restriction. All the installations with capacity over 10 MW under the special scheme must be connected to a generation control centre, which will act as an interlocutor with the system operator, sending information about the installations in real time and having their instructions executed so as to guarantee the reliability of the electricity system at all times. The installation and maintenance costs of the generation control centres, inclusive of the installation and maintenance of communication lines with the system operator, will be at the expense of the generators under the special scheme attached to the said centres. 22

23 OTHER ASPECTS (2) Wind facilities are subject to the compliance of the operational procedure P.O Response requirements against voltage dips in wind installations. The wind facilities already operating and whose technology is considered technologically adaptable, have until 1 January These facilities will have the right to receive a specific complement, once they have implemented the necessary technical equipment to commit with the P.O This complement will have the value of 0.38 cent /kwh for a maximum period of five years, and which may be extended at most to 31 December Wind facilities operating before 31 December 2001, when re-powering, may have the right to an additional premium, specific to each facility, be determined with a maximum of 0.7 c /kwh, to be received until 31 December

24 OTHER ASPECTS (3) For new production facilities in special system, before making the application for access to the transport system, the applicant must submit a bank guarantee for a sum equivalent to 500 /kw installed for photovoltaic facilities or 20 /kw for the remaining facilities. The submission of this bank guarantee will be an essential requirement for starting the procedures for access and connection to the transport system by the system operator. The new feed-in Law includes a premium for Biomass and/or biogas co-combustion in thermal power plants under the ordinary scheme. The agreement, reached in Cabinet Meeting with a prior consultation to the Autonomous Communities, may determine the right to receive a premium, specific for each installation, all along the first fifteen years since its commissioning. The calculation of the premium for each installation will be established case by case. Ministry of Industry, Tourism and Commerce is authorised specifically to issue the technical instructions that are necessary to establish a biomass and biogas certification system, which includes their traceability. Facilities using biomass and/or biogas shall send the information to be determined in the corresponding certification procedure. 24

25 Thank you for your attention 25