Consulting Services for Development of the Renewable Energy Sector Training on Sustainable Development

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1 EU-IPA12/CS02 Development of the Renewable Energy Sector Consulting Services for Development of the Renewable Energy Sector Training on Sustainable Development 11 May

2 DEVELOPMENT DEFINITIONS: THE POINT OF VIEW OF ITALIAN TSO SUPPORT MECHANISMS FOR RES GENERATION & GRID ITALIAN EXPERIENCE: LESSON LEARN 2

3 Overview Terna is......the sixth Transmission System Operator (TSO) in the world...the owner of the National High Voltage Transmission Grid...responsible for the transmission and dispatching of the electricity all over the Country Grid Demand ~ 72,300 Km of electric lines 25 interconnections (NTC ~ 9.2 GW ) 841 substations 315 TWh energy demand (2015) 59.3 GW highest peak of demand (21 st July 2015) Generation 3 Asset 75 GW Conventional (gas, coal, oil, hydro pumping) 60.5 GW RES (PV, wind, hydro, biomass, geothermal) Electricity Market 62% Conventional (gas, coal, oil, hydro pumping) 38% RES (PV, wind, hydro, biomass, geothermal) 3

4 ITALY: RES growning & Thermal decommissionig FURTHER INCREASE EXPECTED Further growth driven by competitive tenders with long term contracts Further decommissioning driven by efficiency 2017 target +1.4 GW 4

5 ITALY RES: main impacts on the security of the energy system Fast and massive growth of RES make system operation more complex: Cause Effect 1 RES do not contribute to power reserves 1 Loss of available reserves, especially critical in low consumptions situations 2 Replacement of the spinning reserves with «static» elements 2 Reduction of the system s inertia and, consequently, of the stability of the grid 3 RES plants disconnect from the grid due to change in such a way to be a threat to the security of the system 3 Repercussions on the grid defense plan and wide risk of disruption 4 Non-programmability of RES production 4 Greater need for replacement sources, higher adequacy margins needed The system needs more flexibility 5

6 DEVELOPMENT DEFINITIONS: THE POINT OF VIEW OF ITALIAN TSO SUPPORT MECHANISMS FOR RES GENERATION & GRID ITALIAN EXPERIENCE: LESSON LEARN 6

7 Investment in ENERGY SECTOR Generation, distribution and transmission investments, 2015 (USD billion) Source: IEA $bn global investments in the electricity sector in 2015, of which 40% on networks (distribution and transmission). RES development covered 70% of the total investments in electricity generation 7

8 European Target EU aims to reduce GHG emissions by 20% and get 20% of its energy from renewable energy source by 2020 EU set ambitious target to reduce gree ouse gas emission, % by 2050 EU set aim to increase the SoS and reduce other air pollutions How to guarantee (incentives schemes) sufficinet invetsment towards Europena policy goals 8

9 RES Deployment PRE DEPLOYMENT POST DEPLOYMENT Since 1990, many countries have considerad various potcy unstrument to increase RES Two main groups: Price based, such Feedin tariffs (FIT) Quantity based, as green Certifiactes (GC) or Res Obligations (RO) Pre- Deployment Post- Deployment RES deployment poses severals technological challenges. Three main groups: operational, due to variable output Economic, different cost, high fixed cost and low variable cost Geographical, RES located where ther is thhe source 9

10 RES Deployment Pre - deployments Feed in tariffs (or FIT) are long term contract in wich the producers of RES gets an extrapayment for each kwh generated (some times is different for technology, sometimes the tariff is a fixed premim) -> attract investements Quantity Based (RO o GC) instruments are adopted in order to goal of building RES through market oriented (economic efficiency) Post deployments: market design Intermittency : the RES source is low predicatble and high variable Intraday Market: is a possible solution to manage the low predicatbility Balacing market is managed by TSO and gives an oppotunity to the electricity system (European Network code go to this direction 10

11 DEVELOPMENT DEFINITIONS: THE POINT OF VIEW OF ITALIAN TSO SUPPORT MECHANISMS FOR RES GENERATION & GRID ITALIAN EXPERIENCE: LESSON LEARN 11

12 Stakeholders Authority for Electricity, Gas and Water REGUL ATOR Local Authority RES GSE GSE gestore dei servizi elettric is in charge to manage support schemes for RES; it is a comapny whose staheholders is the Ministry of Economic Development Policy Makers TSO Ministry of Economic Development DSO 12

13 Incentives schemes Decree 28/2011: geneal framework of the incentive ssheme Three main heteogenous support mechanism: So called Feed in scheme for PV So called Feed in scheme for Thermodinamic generation So called incentives by Ministry Decree June 2012 Whithin the same support there are different for level installed or capacity GC Feed in for PV All inclusive feed-in in tariff Feed in for themodinamic 6 July 2012 decree 13

14 Feed in for PV Differents for: Capacity technolgies (building integrated, other) conventional, innovative and concentrating Feed in for Solar thermodinamic plan Include an additional premium tariff 14

15 Incentives by Ministry Decree June 2012 Source and capacity with direct access With auctions access 15

16 Legislative Framework European Directives and National Laws DIRECTIVE 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the promotion of electricity from renewable energy sources in the internal electricity market Legislative decree n. 387/2003 Introducing simplified procedures for the authorization with the aim of promoting the development of RES Single authorisation For plants and connection facilites Conference of Services Gathers all interested authorities to formulate a common authorisation National Guidelines D.M. September 10, 2010 DIRECTIVE 2009/28/EC of the European Parliament and of the Council on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC Legislative decree n. 28/2011 Sets specific sectoral targets in order to achieve the overall national target of 17% share of energy from RES in the gross final consumption of energy in Regulates the construction and operation of renewable power plants according to specific administrative procedures for each type of installation. 16

17 Legislative Framework National Laws - Authorisation procedures The current national framework sets out three types of authorisation procedures for installations using renewable energy sources (RES), depending on the power thresholds : Single Authorisation (Autorizzazione Unica - AU) Simplified Authorisation Procedure (Procedura Abilitativa Semplificata - PAS) Notification to the Municipality of minor works not requiring a building licence (Edilizia Libera - CAEL) AU is required for installations exceeding specific power thresholds Legislative Decree n. 28/2011 allows Regions to apply PAS to RES electricity installations having an installed capacity up to 1 MW Notification is applied for minor works Wind-power Solar-power Hydro-power Biomass Biogas 60 kw 20 kw 100 kw 200 kw 250 kw 17

18 Authorization process Timeline of the single authorization procedure Not include Enviromental Impact assessemt (EIA), time line 150 days. Other kind of authorization Simplified Authoirzation (30 days) or Municipalities Comunication 18

19 DEVELOPMENT DEFINITIONS: THE POINT OF VIEW OF ITALIAN TSO SUPPORT MECHANISMS FOR RES GENERATION & GRID ITALIAN EXPERIENCE: LESSON LEARN 19

20 Key factors Regulator Grid connection requirements Policy Maker System Needs Incentives scheme Singole authrization for generation, trasmission and distribution device 20

21 Procedure for connection to RTN Focus on generation STMG Connection project approval STMD Application for the connection STMG acceptance Submission of connection project Authorization Application for STMD STMD acceptance Connection contract 90 days 120 days Depends on applicant. Up to several months 90 days Depends on authorization procedure and applicant. Up to several years 90 days 60 days Works execution and start of production 21

22 EU-IPA12/CS02 Development of the Renewable Energy Sector Consulting Services for Development of the Renewable Energy Sector Training on Sustainable Development 11 May