sou · GWB313d2 · 2009-01-01 00:00:00 — This new company is called EDP servicio , , 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 ex-ante tariff. EDPSU has to pay EDP for using the distribution grid since EDPSU acts as a consumer to EDP. EDPSU delivers about half the energy consumed in the country since the residential con- sumers choose to stay in the ex-ante tariff since this is lower than the market prices. This means that tariffs paid by consumers do not cover the payments to power producers. In , as in , 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 (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 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), 339-C/2001 (feed-in tariffs), 33-A/2005 and recently by the DL 225/2007. 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 339-C/2001. This limit of 10 MW was changed by the DL 33-A/2005 to 30 MW which has been maintained in the new decree law published in 2007. All producers using renewable energy sources are at the moment paid according to the RD 168/99 with its modification made by the DL 339-C/2001. Only producers using biomass or biogas have chosen to move to the DL 33-A/2005. 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 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 Sector in The wind power sector has grown very rapidly under the last seven years in , especially since the year 2004 as it can be seen in Figure 2-3. Figure 2-3 Installed wind power capacity in from year 2000 to February 2007. Source: Estatísticas rápidas, Fevereiro 2007. Direccao Geral de Geologia e Energia. On , 2007 there are 3,750 MW wind power authorized in , 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- in the Resolution of 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 is comparable with the target in since 5,100 MW with a population of 10.3 million people is about the same as in with an objective of 20,000 MW in 2010 and about 44 million people. farms in have an average installed capacity of 12 MW by February 2007TPF34FPT. Approximately of all wind farms have an installed capacity between 1 and 25 MW. turbines have an average installed capacity of about 1.6 MW. That is larger than the average in mainly due to the fact that wind turbines in were installed later than in and a technical develop- ment had taken place during that time. The grid is the grid where the main wind power capacity is connected, as it can be seen in Table 2-1. Table 2-1 Voltage levels at which wind power installations with an installed capacity larger than 10 MW are connected by 31 , 2007. Installed wind power with capacity > 10 MW by 31 2007 Voltage level (kV) capacity (MW) *In first phase only 2 MW is installed, but the plan is a wind farm larger than 10 MW In Table 2-1 only connected farms with an installed capacity larger than 10 MW are included. Besides, there is capacity that has been allocated but that is not producing yet. Of those allocated farms 32 will be connected to the grid accounting for a total capacity of about 600 MW, 2 to the with an installed capacity of 240 MW. This means that the majority of the installed capacity and even the allocated capacity is or will be connected to the grid. The allocation of capacity from the tender procedure is not includ- ed in the previous analysis. By now, 2007 there are no wind parks connected to and 6 connected to . However, new wind farms tend to be connected to the grid and in the future it is possible that wind farms will connect to the transmission grid. According to the TSO to fulfill the target of 5,100 MW approxi- of the wind power capacity will be connected to the 34TP PT Estatísticas rápidas, Fevereiro 2007. Direccao Geral de Geologia e Energia. distribution grid and to the transmission grid. Currently, more than of all wind power capacity is connected to the distribu- tion grid. 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 is the political to create a strong wind power sector materialized in a very attractive payment. The publica- tion of the DL 339-C/2001 increasing considerably the feed-in tariff for wind power producers constitutes a milestone in the de- velopment of the wind power sector in . Applications for about 7,000 MW wind power were made after the publication of that decree. Not all applications were accepted since there was not enough available capacity in the grid to connect all these wind farms and the political target was lower than the capacity of the appli- cations. Another important factor contributing to the development of the wind power sector in 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 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 , 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 are seen as temporary properties, it is only necessary to buy the land for the support points. In other countries, as for instance , it is necessary to buy even the land under the lines. 2.1.6Possible Barriers for the Future Development of the Sector in According to several of the interviewed agents in , 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 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 , , project developers see administrative procedures as brakes for the development of the renewable energy sector in . Time horizons associated to the different procedures and established by are not always fulfilled. The payment scheme for producers included in the special regime in is determined by a quite complex formula that was first introduced year 1988 in the Decree 189/88. That formula has been modified by the DL 168/99, DL 339-C/2001, DL 33-A/2005 and recently, 2007, by the DL 225/2007. The formula defining the payment includes a fixed term which is function of the installed capacity, a variable term which is a function of the produced electric power, and a term to compensate for the environmental impact that is avoided by producers included in the special regime and which depends on the energy source used. Feed-in tariffs are updated every year taking into account the inflation rate. Besides, producers included in the special regime receive/pay a term for reactive power. Typically, the income/cost due to reactive power is very small, of about 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 339-C/2001. Only producers using biomass or biogas have chosen to move to the DL 33-A/2005. Installations which get their licenses for producing electricity after the publication of the 33-A/2005 are paid according to that DL, however, no such wind farms are producing yet. Installations which obtain their licenses from , 2007 will get paid according to DL 225/2007. The DL 33-A/2005 modifies the previous legislation on payment schemes for the special regime in some points as for instance, it is established a limit up to which producers can receive the feed-in tariff, the limit is based on produced energy as well as on operating time being the longest 15 years. Beyond that limit, producers in the special regime, according to the DL 33-A/2005, will receive for their electricity production the market price and the price for the green certificates associated to the guarantees of origin. If those certificates are not functioning by the time the limit is reached, then the producers can receive during an additional period of 5 years the feed-in tariff established in the DL 33-A/2005. According to , , 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 feed-in tariff at an almost level. For nuclear power there are many terms that are not included when making such comparisons. 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 there were subsidies to installed capacity until year 2005 by means of a program called These subsidies were generally of the total investment cost but no larger than 1.5 million per project. The development of the yearly average feed-in tariff paid to wind power producers can be seen in Figure 2-4. Note that the increase of the feed-in tariff for wind power production from year 2002 is a result of the of the DL 339-C/2001 which modi- fies the DL 168/99. power producers under the DL 168/99 moved to the new feed-in tariff established by the DL 339-C/2001 on January 2002 since the feed-in tariff was significantly higher. Figure 2-4 Yearly average feed-in tariff paid to wind power producer during the period 1998–2006. Source: IEA 2006 Annual Report. The formula defined by the DL 168/99 with the modifications made by the DL 339-C/2001 establishes that the payment for wind power production decreases as the energy production [MWh] per installed megawatt [MW] of the increases. Up to 2,000 MWh per MW the payment is at its maximum, between 2,000 and 2,600 the pay- ment decreased to remain at a lowest level after 2,600 MWh per MW. That can be seen in Figure 2-5 where the payment for wind power decreases significantly after October each year, when most wind farms have been producing during more than 2,000 MWh per MW. Figure 2-5 Monthly average payments for wind power production during years 2005 and 2006. Source: A energia eólica em 2006, . The Decree 33-A/2005 establishes a new feed-in tariff for wind power of about 75 /MWh, lower than the feed-in tariff established in the DL 339-C/2001. It is the fixed term of the tariff which is reduced in the DL 33-A/2005. Furthermore, the DL 33-A/2005 makes the payment for wind power independent of the energy production per installed megawatt. Note that the lower feed-in tariff introduced by the DL 33-A/2005 cannot be seen in Figure 2- 5 since no wind farms are being paid according to that decree yet. The new Decree 225/2007 for the special regime maintains the feed-in tariff for wind power production defined in the DL 33- A/2005, see Table 2-2. Table 2-2 Feed-in tariffs (c/kWh) paid to wind power producers according to different legislation. DL 339-C/2001 DL 33-A/2005* DL 225/2007* MWh per MW <2,000: 9.1 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 MWh per MW <2,000: 8.9 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 feed-in tariff will be obtained until a production of 33 GWh per installed MW is reached but no longer than 15 years after the wind farm started producing. Source: , 2006 and Portuguese Associa- tion for Renewable Energies, APREN. Before the new Decree 225/2007 was published, no distinction was made between photovoltaic installations on 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 339-C/2001 the defined feed-in tariffs will be paid to photovoltaic installations until a total installed capacity of 50 MW is reached in the country. That capacity limit was increased by the DL 33-A/2005 which established a new limit of 150 MW. According to the DL 225/2007 the defined feed-in tariffs will be paid to photovoltaic and thermal installations until the total installed capacity in such installations is below 150 MW. For photovoltaic installations on residential, commercial, services or industrial premises the capacity limit of total installed capacity in the country in order to get the feed-in tariff is 50 MW. Table 2-3 Feed-in tariffs (c/kWh) paid to electricity producers based on solar energy according to different legislation. DL 339-C/2001 DL 33-A/2005 DL 225/2007 on residential, com- mercial, services or 19.8*** *That feed-in tariff will be obtained until a production of 21 GWh per installed MW is reached but no longer than 15 years after the wind farm started producing. **That feed-in tariff will be obtained during the first 15 years after the wind farm started producing. ***The government can change this. Source: Centro de Estudos em Economia da Energia dos Transportes e do Ambiente, CEEETA and , . As it can be seen in Table 2-4 no distinction was made for the different categories of biomass in the legislation from 2001. It was first year 2005 with the DL 33-A/2005 that distinction was made between forestry biomass and animal biomass and landfill gas. This decree of law increased significantly the feed-in tariffs for these energy sources while the feed-in tariff for biogas from digesters was lowered. The recently published decree of law on renewable energy sources, DL 225/2007, distinguishes for the first time biogas generated in digesters and establishes the feed-in tariff for this cate- gory double as high as in the former legislation. According to the DL 33-A/2005 the defined feed-in tariffs will be paid to installations using forestry and animal biomass until the total installed capacity in such installations is below 150 MW. That capacity limit was increased with 100 MW by the DL 225/2007 which establishes a limit of 250 MW. For landfill gas the capacity limit was 50 MW according to the DL 33-A/2005 and has been de- creased to 20 MW according to the DL 225/2007. The new decree of law establishes also a capacity limit of 150 MW for biogas gene- rated in digesters. Table 2-4 Feed-in tariffs (c/kWh) paid to electricity producers using bio- mass according to different legislation. DL 339-C/2001 DL 33-A/2005 DL 225/2007 10.7*** Animal biomass and landfill biogas 10.2*** Biogas generated in digesters 11.5**** *That feed-in tariff will be obtained during the first 15 years after the installation started pro- ducing. That period can be prolonged with 10 more years by the General of Geology and Energy, DGGE. Installations using landfill gas cannot receive feed-in tariff more than 15 years. **That feed-in tariff will be obtained during the 12 first years after the installation started pro- ducing. ***That feed-in tariff will be obtained during the first 25 years after the installation started pro- ducing. For installations using landfill gas that period will be 15 years. ****That feed-in tariff will be obtained during the first 15 years after the installation started pro- ducing. Source: Centro de Estudos em Economia da Energia dos Transportes e do Ambiente, CEEETA and , . Hydropower producers receive according to DL 339-C/2001 a pay- ment of approximately 8.9 c/kWh. With the legislation adopted in 2005 the feed-in tariffs for hydropower producers with installed capacity between 5 and 10 MW decrease with while hydro- power producers with installed capacity larger than 10 MW not ex- ceeding 30 MW can receive a feed-in tariff of 6.4 c/kWh, see Table 2-5. The new decree law published in 2007 maintains the feed-in tariffs established in the former decree law from 2005 and introduces some changes regarding the period within which hydropower pro- ducers can receive feed-in tariffs. Table 2-5 Feed-in tariffs (c/kWh) paid to hydropower plants according to different laws. DL 339-C/2001 DL 33-A/2005 DL 225/2007 *That feed-in tariff will be obtained until a production of 42.5 GWh per installed MW is reached but no longer than 15 years after the installation started producing. This period can be prolonged by the DGGE for 10 more years. ** That feed-in tariff will be obtained until a production of 52 GWh per installed MW is reached but no longer than 20 years after the installation started producing. This period can be prolonged by the DGGE for 5 more years. Source: Centro de Estudos em Economia da Energia dos Transportes e do Ambiente, CEEETA and , . 2.3Application Procedure for Access and Connection to the and Evaluation on Environmental Impact According to , , from the day a project developer for a wind farm sends the first paper to the General of Geology and Energy DGGE, pre-viability information, until the project developer gets the authorization to start constructing the wind farm, license, it can take between 3 and 7 years (in this period it is included not only the connection procedure but also the environmental impact study and permission from municipalities). For mini hydropower the same period is between 10 and 18 years. The DL 312/2001 regu- lates the procedures for connection to the grid. The steps to follow are the following: 1.The project developer sends an application for pre-viability infor- mation regarding available capacity of the grid to know whether it is possible to connect the wind farm or not. The content of the application for pre-viability information is defined in annex I in the DL 312/2001. 2.DGGE sends the applications to the TSO (if above 50 MVA) and DSO (if below 50 MVA) who will give a pre-viability in- formation (PVI) to DGGE. DGGE has 40 days to give the PVI to the project developer. 3.No later than 70 days after having got favorable pre-viability in- formation, the project developer has to send to DGGE the appli- cation on connection point. farms and hydro power stations to be located on sensible environmental areas have a period of a year to send the application on connection point. 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. 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 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 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 once the environmental institute has written the DIA. 10.With the authorization for 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 225/2007 for the special regime introduces some changes in order to speed up the process of the environmental impact evaluation. There is a special for the connection of power installations with a capacity below 150 kW, so called micro-generation, to the low voltage grid (voltage<1kV). 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 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: