sou · GWB313d2 · 2009-01-01 00:00:00 — For instance, small grid-con- nected applications up to a certain size (500 kW, UK 16amps/phase) only have to install simple – cheaper – metering equipment, without 15 or 30 minute metering capabilities. Table 5-7: Comparison of network fees. Yes, but also Yes (Use of System charges) if connected to transmission system, but also remuneration from grid owner* * Network tariffs in 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. , some countries such as , and 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 and differs from that in . The whole distribution system in is owned by a single company, and in by five companiesTPF158FPT. In , distribution companies are regulated ex-ante which means that the Government decides every year on the income for each distribution company and the tariffs they can charge consumers. In both countries the transmission system is almost completely owned by one transmission company. Therefore, it is easier to socialize any costs caused by one generator 158TP PT There are around 300 small distribution companies in , but their share in the distribution activity is lower than . in the transmission grid, for instance due to required network up- grades, since these cost will be shared equally by all within or , respectively. Similar to , 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 . However, interviews with network companies, customer organisations and the regulator in revealed that this is generally not considered an im- portant issue. Only for the connection of offshore wind farms in , which is the responsibility of the transmission system operators, a special mechanism was developed to equally distribute the costs among all network in . 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. , the connection charges to the transmission grid are high in , which has low load but many generation sources, and low (in some cases even negative) in South 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 and , up to 30 MW in the 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 and which have caused reinforcement of the distribution grid have to pay Use of System charges. In summary, network tariffs for generators are not used in , and . 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. , many power plants connected to the distribution network can avoid paying any network fee, while in particularly power plants connected to the distribution network pay rather high fees for using the distribution system. It is important to note that in net- work tariffs are defined in order to give locational signals which means that producers which reduce network losses (mainly in the South of ) 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 5-8: Comparison of curtailment policy. Only if wind farm bid for the regu- ment: no pay- 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 , and 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 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 , 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 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 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 new renewable energy sources would typically be the last generation source to be curtailed as renewable energy generation would ask for high payments in case of curtailment to offset certificate and energy payments. 5.9Current Related to Network Issues Table 5-9: Comparison of current policy challenges related to network issues. for a long time adjusted, start to now, but legal for a long time, for a long time adjusted, start to now, but legal every 2–3 years The network-related issues emerging with increasing renewable energy penetration are not unique to , all countries face similar challenges, but have already longer experience with developing the related energy policy, see also Table 5-9 for a brief summary as well as the detailed country chapters for a detailed discussion. 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 and that renewable energy development does not lead to windfall profits for its developers. Currently the connection costs related to off-shore wind farms are one of the biggest challenges when it comes to policy-making in the studied countries. However, and the UK have come quite far in this matter and have recently published new laws and regulations. and are the countries that have experienced the largest development in the wind power sector. Both and have used fixed feed-in tariff promotion schemes. However uses also a market-based payment option with a price floor to pro- vide a minimum secure payment level and a price cap to avoid wind- fall profits. Even has experienced a remarkable development during the last years also by means of a feed-in tariff system. Feed- in tariffs provide a stable investment environment as it sets clear power purchase prices for a defined time horizon (15-20 years). The UK is the country with most similarities to when it comes to promotion scheme for renewable based electricity production since they have chosen a certificate system. However, a big diffe- rence is that the certificate system in the UK provides a rather high buy-out price. In comparison to the four studied countries, wind power producers in receive the lowest payment, which means that in all other costs such as connection cost, network upgrades and network tariffs become even more important than in the other studied countries. It must be noted though that in the electricity certificate system has lead to a significant increase of biomass-based electricity production, but biomass has not been in- cluded in this international comparison. The four studied countries have well defined application pro- cedures to ensure that the application procedure is conducted in a clear, unbiased and consistent , irrespective of the network company, the renewable energy technology or the applicant. In , 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. 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 apply fees for pro- cessing connection applications. In , 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 , 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 . An option is to exclude such small projects from paying these fees, as it is done in . 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 , 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 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 where they are sociali- zed as well. In comparison with the studied countries, project deve- lopers in 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. , many power plants connected to the distribution network can avoid paying any network fee, while in 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 . 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 , and there are no capacity limits for the payment of network tariffs similar to those used in (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 (and ) 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. 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 and , sometimes the wind power producer and the grid company of the area enter into special agree- 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 /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 has the requirement of hourly measure- ments in order to be able to get payment from the certificate system. In addition, in , and it is not necessary to measure production independently; i.e. net-metering can be used by small scale installations. However, in practise most producers choose to measure production independently since the payment for the production is much higher than the cost for the consumption. 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 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 off-shore wind farms are one of the biggest challenges when it comes to policy-making in the studied countries. However, and the UK have come quite far in this matter and have recently published new laws and regulations. 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 step-by-step adjusted within the different national schemes. Within these adjustments, the different countries made sure that existing power plants were not affected by the changes, which helped to increase the confidence in the national renewable energy policy (stable investment environ- ment), even though the reimbursement was lowered for new in- stallations. Furthermore, it should be mentioned that the national policy makers partly created the initial generous payment schemes on purpose to kick-start the development of renewable energy and 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 low-risk environment for renewable energy pro- jects, without allowing windfall profits as it is very difficult to get all relevant regulatory details right at the first attempt. This flexi- bility and openness to change has been based on a continuous dia- logue between policy makers, regulator, network companies and the renewable energy lobby. 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 low-risk framework. 1.Barlastvattenkonventionen – om anslutning. 2.Immunitet för stater och deras egendom. 3.Skyddet för den personliga integriteten. Bedömningar och förslag. 4.Omreglering av apoteksmarknaden. Kränkande utformning av kommersiella meddelanden. 6.Fastighetsmäklaren och konsumenten. Åtgärdsplan för den kliniska forskningen. 8.Bidrag på lika villkor. En myndighet för all trafik. En ny myndighet för tillsyn och effektivitetsgranskning av social- försäkringen. 11.Frihet för studenter – om hur kår- och nationsobligatoriet kan avskaffas. 12.Finansiella sektorn bär frukt. Analys av finansiella sektorn ur ett svenskt perspektiv. 13.Bättre kontakt via nätet – om anslutning av förnybar elproduktion. + : issues for electricity production based on renewable energy sources in , , , and . Skyddet för den personliga integriteten. Bedömningar och förslag. Fastighetsmäklaren och konsumenten. Immunitet för stater och deras egendom. Omreglering av apoteksmarknaden. En ny myndighet för tillsyn och effektivitetsgranskning av social- försäkringen. [10]. Finansiella sektorn bär frukt. Analys av finansiella sektorn ur ett svenskt perspektiv. Åtgärdsplan för den kliniska forskningen. Bidrag på lika villkor. Frihet för studenter – om hur kår- och nationsobligatoriet kan avskaffas. Barlastvattenkonventionen – om anslutning. Kränkande utformning av kommersiella meddelanden. En myndighet för all trafik. Bättre kontakt via nätet – om anslutning av förnybar elproduktion. + : issues for electricity production based on renewable energy sources in , , , and .