sou · GWB313d2 · 2009-01-01 00:00:00 — 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 of the costs associated to the reinforcement. However, according to the transmission system 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 , 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 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 one-by- one solution. The total installed capacity included in this procedure has been 510 MW and the installations will be mainly connected to the grid. The costs for these reinforcements will be shared between the different producers according to the connected capa- city. In this global treatment the distribution companies have used moreover the criteria expressed in Section 1.4.1, the criterion that the installed capacity of renewable production cannot exceed 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 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 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 and a production capacity larger respectively lower than 15 kW. The 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 net-metering is used. However, it is possible to have two measurement equipments to measure the pro- duced and consumed energy separately. Solar photovoltaic produ- cers typically choose two different measurement equipments (see Figure 1-9) since the tariff they receive for their production, 44 c/kWh (see Table 1-1), is much higher than what they pay for their consumption, approximately 17 c/kWh. 27TP PT Royal Decree 385/2002, (only Spanish version available) 28TP PT Royal Decree 1433/2002, (only Spanish version available) Figure 1-9 Solar photovoltaic generator with measurement equipment for the delivered energy and for the consumed energy. 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 energy delivered to the grid Two registers for the energy delivered in the low-demand periods and the high-demand periods and one register for the re- power consumed when delivering energy to the grid. Hourly register of the power and register for the whole reactive power consumed when delivering 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. 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 power to the grid. 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 three-phase circuit and whether the counter can separate the measurement in different time periods such as low-demand periods and peak-load periods or not. 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 /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 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 feed-in tariff of 44.0381 c/kWh) for its power production. This means that the cost for the measurement equipment is negligible. 29TP PT Royal Decree 1634/2006 (annex II), A46656-46679.pdf (only Spanish version available) In power producers do not pay grid tariffs to get access to the grid and for using the grid. The 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 long-term contracts, energy is sold in what is called barras de central, i.e., at the output of the producing installation. 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 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 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 Real-Time Operation According to several interviewed agents, 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 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 60–of the total wind power produc- tion is concentrated. The installed wind power capacity at the end of year 2006 amounted to of the total installed generating capa- city and to about of the total power production in the country. The management of the wind energy is necessary to assure the security of the electric power system. Therefore the new 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 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 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 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 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 4, 2006 in . That event led to a frequency decrease below in , 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 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 , 2013. 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 feed-in tariff payment option and that not have hourly measurement requirements, as for example solar photovoltaic installations con- nected to the low voltage grid (see Section 1.6.2), will not pay for the deviations between the offers sent to the market operator and the real production. Installations without hourly measurement will use the best available data to elaborate their offers to the market operator; however, if there is a lack of such data, hourly profiles will be used. Such hourly profiles are given in the RD 661/2007 (annex XII). General renewable Energy Promotion Scheme Renewable producers in can choose between two different payment schemes, the feed-in tariff and the market option (market price plus fixed premium). The feed in tariff level for wind power year 2006 was 6.89 c/kWh and the market option resulted in an average payment for wind power producers of 9.10 c/kWh. There is a strong connection between the political targets de- fined for each technology and the corresponding promotion scheme by means of feed-in tariffs or premiums, since installa- tions which start producing after a defined period after having reached of the political target established for the correspond- ing technique, will not get feed-in tariff or premium but just the market price. 30TP PT (only Spanish version available) factors for the development of the wind power sector in The key factors behind the great development of the wind power sector in have been a stable investment environment by means of fixed regulated feed-in tariffs and political stability re- garding the support to renewable power production. issues have become more important as the number of applications for transport capacity has increased and the upgrading of the grid takes several years and slows down the development of the wind power sector. 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 grid and 250 MW for the 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 grids short- circuit capacity at that point. The capacity of renewable power production at a point cannot be larger than of the capacity of the power line. Those requirements are typically limiting the connection to the distribution grid and not to the transmission grid. producers do not pay any tariffs for using the grid. This has always been like that in 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 . In it is regulated ex-ante by how much distribution companies are paid every year. This is financed by the grid tariffs paid by all agents buying electric power to the distribution com- panies. All tariffs paid the buying agents of the distribution com- panies are sent to the regulatory body CNE which splits the part of the tariffs that correspond to the distribution activity between the different grid companies. Up to date, five of the distribution companies in accumulate a total share in the distribution activity of . 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. 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 net-production or net- consumption, so called net-metering. 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 . 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 real-time operation then they get of the hourly market price. 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. In 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 third-parties to these power lines. Application procedures are very well described in as well as the deadlines associated to different steps of the application procedure. The regulatory body CNE is responsible for deciding in conflicts such as connection points and has also a defined time to resolve on those conflicts. As the share of wind power has grown in , new technical requirements have been established in the new regulating the special regime as for example fault-ride-trough and obligation for all installations with a capacity larger than 10 MW to be con- nected to control centers. The total installed power capacity in by the end of year 2006 was 13,607TPF31FPT MW. A breakdown of the total installed capacity can be seen in Figure 2-1. Figure 2-1 Breakdown of total installed capacity in by the end of year 2006. Fuel/Natural gas 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 2-1 shows the share of the different renewables technologies to the total installed capacity in renewable electricity production. 31TP PT Source: , INFORMAÇÃO MENSAL DEZEMBRO 2006 SISTEMA ELECTROPRO- DUTOR, 32TP PT Estatísticas rápidas, Fevereiro 2007. Direccao Geral de Geologia e Energia. Figure 2-2 Renewable energy breakdown by 31/12/2006 power is the renewable source that has experienced the largest development in . 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 was, twenty years ago, the only pro- duction, transmission and distribution company. Nowadays EDP has a share on power production of about , almost the total distribution activity, , and does not participate in the trans- mission business. In the transmission grid is composed by all elements at the voltage of , and . There are also some substations with transformers with a low voltage side of 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 2003 Annual Report and IEA 2006 Annual Report. national interconnections for commercial purposes during the first quarter of 2007 was 1,333MW. The transmission system operator is – Rede Eléctrica, which holds a 50 year concession to operate the electricity transmission system in . This concession was originally granted in and renewed for a 50 year period commencing in 2007. Furthermore, is the only transmission company in 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 . The Portuguese law does not allow to operate lines of lower voltage than . About of the required financing of consists on a per- centage, of about , of the liquid value of the grid defined by the regulatory body ERSE. The rest of REN´s needed financing, i.e., approximately , is related to the operation cost of the transmission grid. 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. The national distribution grid is operated through an exclusive con- cession granted by the . 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 and , 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 , EDP carried out also retail activity. From January 2007 EDP has created, according to the new legisla- tion, a new company for retail.