March 2011 Opening session: the Spanish TSO experience on renewable integration Dirección de...

March 2011

Opening session: the Spanish TSO experience on renewable integration

Dirección de Operación

Contents

Spanish TSO presentation

Overview of the Spanish electric sector

Current regulatory framework of Spanish renewable units

Challenges

RED ELÉCTRICA DE ESPAÑAWho is Red Eléctrica?

Red Eléctrica de España (REE) is the Spanish transmission system operator (TSO)

REE is operating the mainland system and the island systems

REE was the first company in the world dedicated exclusively to power transmission and the operation of electrical systems.

RED ELÉCTRICA DE ESPAÑA

FREE-FLOAT

80%

Operates the system to guarantee the power supply.

Since 2006 also in the extra-peninsular systems

Designs, builds and maintains the transmission network.

Since 2007 as exclusive transmission company

Red Eléctrica de España (REE): Mission and principles.

SEPI: Spanish Stated Owned Holding Company

SEPI 20 %

SHARE CAPITAL (Aprox.):

4

Transmission GridMain magnitudes (SPPS)

Closure 2010

Lines400 kV [km ct] 18,576

220 kV [km ct] 17,221

Subst.Transformers 400/X kV [MVA] 69,059

220 & 400 kV [nº bays] > 3,500

It has proved fundamental for the fast and secure implementation of electricity market and integration of RES


Spanish transmission system

Lines and cables Total 400kV 220kV Total 400kV 220kVNew ones [km] 12656 7488 5168 4465 3504 961Refitting [km] 8308 3850 4458 1730

Substations Total 400kV 220kV Total 400kV 220kVNew bays 3476 1163 2313New substations 399 106 293 39 20 19Extension of substations 405 76 329 59 18 41

Transformers Total 400 / 220 kV 400 / 132 kV Total 400 / 220 kV 400 / 132 kVAdditional capacity [MVA] 68540 52450 16090 5305 3500 1805

Reactances and Capacitors[MVAR] 3900 11002800

Whole planned infrastructureSpecific infrastructure planned to

integrate RES

220kV400kVTotal

Lines and cables Total 400kV 220kV Total 400kV 220kVNew ones [km] 12656 7488 5168 4465 3504 961Refitting [km] 8308 3850 4458 1730

Substations Total 400kV 220kV Total 400kV 220kVNew bays 3476 1163 2313New substations 399 106 293 39 20 19Extension of substations 405 76 329 59 18 41

Transformers Total 400 / 220 kV 400 / 132 kV Total 400 / 220 kV 400 / 132 kV

Additional capacity [MVA] 68540 52450 16090 5305 3500 1805

Reactances and Capacitors[MVAR] 3900 11002800

Whole planned infrastructureSpecific infrastructure

planned to integrate RES

220kV400kVTotal

REE: Spanish Transmission System Operator. 34000 km of lines and 60000 MW of transforming capacity. Spanish peak demands 45 GW and off-peak demands of 19-25 GW. Planned reinforcements 2009-2016, partly due to RES integration:

Highlighted lines correspond to planned lines from 2008-2016.

RED ELÉCTRICA DE ESPAÑASpanish inteconnection capacity

Limited interconnection capacity with France, security link with the European Interconnected system. In practice almost an “electrical

island”.

PO ES = 1,5%

FR ES =1,5%

Potencia Inst. ESPAÑA = 94 604 MW

MA ES = 0,6%

UE 10%05

101520253035404550Interconnection capacity compared to installed capacity


7

Spanish energy context

The 20/20/20 European Strategy is the key driver of the Spanish energy model change

20 / 20 / 20 Strategy

The development of renewable energy

sources and the reduction in consumption

imply a reduction in GHG emissions.

Renewable energy integration into the

electric grid produces an improvement in

the system efficiency.


Installed capacity January 2011Technology MW %

Hydro-power 16 657 17.5

Nuclear 7 .455 7.8

Coal 10.789 11.3

Fuel-Gas 1 849 1.9

Combined cycles 24.641 25.9

Total (ordinary regime) 61.391 64.3

Wind power generation 19976 20.9

Solar PV 3.634 3.8

Solar CSP 630 0.7

Biomass 684 0.7

Special regime hydro 1 965 2.1

Cogeneration 5 946 6.2

Waste treatment 1 204 1.3

Total (special regime) 33.791 35.7

Total 95.430

Hydro17,5%

Nuclear7,8%

Coal11,3%

Fuel-Gas1,9%

Combined cycle25,8%

Wind20,9%

Solar PV3,8%

Solar CSP0,7%

Mini-hydro2,1%

Biomass0,7%

Cogeneration6,2%

Waste Treat.1,3%


260.230 GWh = 189.071 Net Ordinary Regime + 90.513 Net Special Regime

-4.412 Hydro-pump storage -8.338 International exchanges

Demand supply 2010

Special Regulation RegimeRenewable:

Minihydro

Biomass

Wind

Industrial waste

Urban waste

Solar

Non Renewable:

Cogeneration

Coal

Fuel - Gas oil

Refinery gas

Natural gas

Hydro-power14,0%

Nuclear21,6%

Coal7,6%

Fuel-Gas0,6%

Combined cycle23,0%

Wind15,6%

CHP and other RES

12,8%

Solar2,4%

Small Hydro2,40%

RED ELÉCTRICA DE ESPAÑAPresent wind power capacity and evolution

Renewable Energies’ Plan for Spain (August 2005): ~20,000 MW by the year 2010.

Official Network Planning for 2016 contemplates ~29,000 MW.

Renewable Energies Plan for Spain 2010-2020 ~38,000 MW.

10

183 428798

1.5252.298

3.4424.927

6.138

8.304

9.653

11.099

13.908

15.873

18.390

19.976

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

22.000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

MW

Installed Wind power generation evolution 1996-2010

Installed Wind Capacity January 2011

kW/km2


11

- Development of Spain-France Interconnection with a new 2 x 1000 MW DC underground line

-1st step for objective of 4.000 MW of commercial capacity-Necessary for building the IEM-Fundamental for RES integration in Spain -(& Portugal)

Development of the Spain-France Interconnection: A priority

500-

600

170

0-28

00

1200

-140

0 26

00-3

000

Spain –and Portugal- form a peninsula, also electrically, with weak electrical interconnections with the rest of European Union.


Rights To deliver energy to the grid through the distribution company or to sell it

in the market receiving regulated retribution (regulated tariff or premium)

Priority of access to the grids.

To deliver all the produced energy

Duties To deliver energy in suitable conditions which doesn’t cause disruptions

in the system.

To be adhered to a generation control center. (Power Plants > 10 MW). This control center will be the intermediary and speaker with the System Operator

To carry out the rule about avoiding the problem of tension holes1. It’s a condition to receive the regulated tariff or premium.

Current regulation: RD 661/2007. Rights and Duties

(1) Operation Procedure 12.3. This is a problem which occurred with the old wind machines.


Possibilities

To deliver the energy to transmission or distribution network with a regulated tariff (c€kWh)

To sell the energy in the market: Retribution= Market price + premium

Regulated tariff

Fixed amount of money for all periods for each type of energy

Hydroelectric, biomass, biogas: they could have hourly discrimination.

Market : Retribution= Reference Price + Premium

Cup and Floor are established for the total amount of price+ premium

Premium is variable: Total amount to receive > Cup and > Floor.

Power Plants >50MW must go the market

Economic Regime in current regulation: RD 661/2007


0

20

40

60

80

100

120

140

0 10 20 30 40 50 60 70 80 90 100 110 120

(€/M

Wh

)

Marginal Market Price (€/MWh)

Wind Market Price (€/MWh) Wind Bonus (€/MWh) Fixed tariff price

Market integration of wind energy

Possibility of accessing the daily wholesale market and updating the schedules in the intra-day markets according to new production forecasts.

As for any type of generation, agents are penalized for their deviations and pay for the balancing energy needed to counteract their deviation.

Reserve bands are calculated by the TSO and paid by the final consumers.

14


For renewable energy there is a retribution table for the first 25 year and other for after.

After 25 years

For photovoltaic it isn’t possible to go to the market, there is only tariffs:

RD 661/2007. Economic Regime

c€/kWh Superior Inferior

Wind Onshore 7.8183 3.1273 9.0692 7.6098Wind Offshore 9.0004 16.9494

Regulated Tariff

Reference Premium

Limits

c€/kWhWind Onshore 6.5341Wind Offshore

Regulated Tariff

<100 kW 47.0181100 kW-10 MW 44.575110-50 MW 24.5311

Fotovoltaic c€/kWh


Recently, National regulation oriented to control of generation to be connected per year,

securing economic and technical sustainability

RD1578/2008 for Solar FV, extending RD661 objectives with quotas of 500-400 MW per year with progressive reduction of tariffs

emphasis on roof plants over floor plants

RDL6/2009 for the rest of SRG, establishing quotas per year for plants to be commissioned (upto ≈ 2,5 GW Solar Thermal in 2013; upto ≈ 23 GW WP in 2012), demonstrating some pre-requisites:

Access and connection authorization issued by REE or distribution company

Administrative authorization for power plants > 100 kW

License for Commissioning

Deposit of a bank guarantee (for wind: 20€/kW; for Solar Thermal: 100€/kW)

Financial resources at least for 50% of the total

Purchase -or contract- at least for 50% of the equipment

Authorisation for gas access and water supply (when applicable)

Recent modifications of regulation for SRG


Installed power: It will be updated every year The Register of Pre-establishment of retribution is created to enter all of the

requested power plants.

A quota of installed power is established for the first year and it will be updated. First year:

Facades: 267 MW

Floor : 133 MW

Retribution:

Photovoltaic updatings. RD 1578/2008

c€/kWhType I <20 kW 34 <100 kW 47.0181

>20 kW 32 100 kW-10 MW 44.5751Type II All 32 10-50 MW 24.5311

RD 1578/2008 RD 661/2007


R.D 2366/1994, establishes a new regulation for special regime R.D 2366/1994, establishes a new regulation for special regime

R.D. 2818/1998, adequates special regime regulation to new Act 54/97, of electric power system

R.D. 2818/1998, adequates special regime regulation to new Act 54/97, of electric power system

R.D. 841/2002, regulates and incentives special regime participation in generation market

R.D. 841/2002, regulates and incentives special regime participation in generation market

1994

2002

2004

1998

1980

Development of Special Regime Regulation

2007

2008

Act 82/1980, determines, for the first time, distributors obligation of purchasing renewable energy at a regulated price forAct 82/1980, determines, for the first time, distributors obligation of purchasing renewable energy at a regulated price for

R.D. 436/2004, merges all the existing regulationa and defines a new economical framework for special regimen

R.D. 436/2004, merges all the existing regulationa and defines a new economical framework for special regimen

R.D. 661/2007, updates economical and legal framework for special regime generation, including installed power goals

R.D. 661/2007, updates economical and legal framework for special regime generation, including installed power goals

R.D.1578/2008, modifies, reducing incentives and increasing requirementts, fotovoltaic energy regulation

R.D.1578/2008, modifies, reducing incentives and increasing requirementts, fotovoltaic energy regulation

R.D.6/2009, creates a special registration mechanism in order to reach the objectives of installed power in an efficient way

R.D.6/2009, creates a special registration mechanism in order to reach the objectives of installed power in an efficient way 2009


Payment of Technical Services

Units which deviate from their programs

Deficits and surpluses are paid by final demand proportionally to metered energy (excepting pumping units and exports)

UPWARD UPWARD

UNBALANCESUNBALANCES

(less consumption,

more generation)

Receive DMPReceive minimum of:•DMP•Average price of DOWNWARD energy used (SR + TR + DM)

DOWNWARD DOWNWARD

UMBALANCESUMBALANCES

(more consumption,

less generation)

Pay DMPPay Maximum of: • DMP• Average price of UPWARD energy used (SR + TR + DM)

IN FAVOUR OF THE IN FAVOUR OF THE SYSTEMSYSTEM IN OPOSSITION TO THE SYSTEMIN OPOSSITION TO THE SYSTEM

TECHNICAL TECHNICAL CONSTRAINTSCONSTRAINTS

SECONDARY SECONDARY RESERVERESERVE

Final demand depending on the metered energy

(excepting pumping units and exports)

SECONDARY SECONDARY ENERGYENERGY

TERTIARY TERTIARY ENERGYENERGY

DEVIATION DEVIATION MANAGEMENTMANAGEMENT


Influence of solar photovoltaic in system operation 2% of the total energy demand in 2009. Present installed capacity: 3 392 MW. Reduced observability by the SO. Must be solved. Behavior in summer in accordance to demand requirements. In winter, peak demand is in the evening. No contribution. Connection to Transmission/Distribution: 2/98%

YEARSOLAR PV PRODUCTION

(GWh)

2005 40

2006 103

2007 466

2008 2 477

2009 5 347

Source CNE

RED ELÉCTRICA DE ESPAÑAIntegration of solar thermoelectric in system operation

Present installed capacity 481 MW. In the short term: increase of 500 MW per year. Two technologies: parabolic trough and tower. Connection to Transmission/Distribution: 63/37%

Year 2007: first commercial solar thermoelectric plant installed (PS-10) Installed capacity: 11 MW (as a part of the

Solucar project with expected 300 MW en 2013).

Generated energy in 2009 : 125 GWh. Planning 2010-2012: 500 MW per year of new installed capacity. Positive correlation with demand in summer. In winter molten salt storage and hybridation with natural gas allow production

during the daily load peaks becoming mostly manageable generation.

Planta PS-10

21


Legal framework (I)

Definition of Special Regime Law 54/1997

Article 27: Special regime of electricity generation

Electricity generation activities shall be regarded as generation under the special regime system in the following cases whenever they are carried out from installations whose installed power is no greater than 50 MW:

Cogeneration or other forms of electricity generation associated with non-electricity operations, provided they involve high efficiency output

Whenever non-consumable renewable energies, biomass or biofuels of any type are used as primary energy, provided their holder does not engage in generation activities under the ordinary system

Whenever non-renewable waste is used as primary energy

22


Legal framework (II)

Royal Decree 661/2007 Legal and economic framework for Special Regime production which

includes: Type of installations that can be considered as Special Regime

Procedure to include plants in the Special Regime Register

Rights and obligations of the Special Regime producers

Priority of dispatch over conventional generation

Market integration. Two options:

Regulated rate: Constant feed-in tariff per MWh produced

Selling the electricity on the electricity production market: price established in the day-ahead and intraday organised market (OMEL) or the price that has been freely negotiated by the owner or the installation representative (bilateral contract), complemented by a premium dependent on the technology of the installation.

Economic framework

Requirements to participate in the system adjustment services

Cost of deviations

23


Art 24.1.a: Sell trough distributor or transport grid

Feed-in tariff

For some technologies (CHP, mini-hydro, biomass…) depends on the periods they generate.

Reactive energy supplement

If P>=10MW units may receive instructions from the OS

High efficiency supplement (for CHP)

Supplement for voltage dip ride through capabilities (maximum period 5 years, until 31/12/2013) For wind only.

Art 24.1.b: Sell in the electricity energy production market

Price of the organized market

Premium:

For renewable energies: With upper and lower limits for the sum of the reference market price an the reference premium

For non renewables: Fixed premium

Reactive energy supplement

If P>=10MW may receive instructions from the operator of the system.

High efficiency supplement (for CHP)

Supplement for voltage dip ride through capabilities (maximum period 5 years, until 31/12/2013) For wind only.

Economic Framework (I)

24


Art 24.1.a: Sell through distributor or transport grid

Directly or through a representative or trader

Cost of deviations

If have the duty to have hourly measuring equipment: As established in PO 14.4

If not: exempt

Participation in the system adjustment services

Mandatory ones: Such as “Technical constraint management”Technical constraint management”

Art 24.1.b: Sell in the electricity energy production market

Directly or through a representative or trader

Cost of deviations

As established in PO 14.4

Participation in the system adjustment services

Mandatory ones: Such as “Technical constraint management”Technical constraint management”

Manageable installations may participate in optional services (subject to prior authorization by the administration and technical authorization by the SO)

Economic framework (II)

25


Challenges

The current high penetration of RES must be significantly increased due to ambitious national objectives (2020: 20% of Efinal ≈ 40% Eelectric)

• Market/Regulatory changes

• TSO management of new RES connections

(queues mangement) and tests for more

dispatchable resources

•Technical Requirements (voltage dips, freq.

regulation, voltage control, …)

Technical challenges motivated by particular features of new generation:

Location far from load and sometimes grid

Vulnerability to incidents(voltage dips)

Primary energy: Lack of firmness and control

* Power installed Dec 2010** NAP for 2020 submitted to EC in June10

(Under review)

38.000 MW** 8.367 MW** 5.079 MW**

19.975 MW* > 3.500 MW* 630 MW*

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