Secretary General ANEV - Italian Wind Energy Association ... fileDr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association Wind power and 2020 objectives in

Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association

Wind power costs and benefits: The Italian scenario

An economic approach

Dr. Davide Astiaso Garcia

Secretary General

ANEV - Italian Wind Energy Association

[email protected]

A study realized by


Wind power and 2020 objectives in Italy

780 874 1.131 1.639 1.908

2.714 3.538

4.898 5.814

6.936 8.119 8.550 8.623 8.623

12.000

1.143

680

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (nov)

- 2020 (PAN)

MW

Aventi diritto (aste

+ reg) non ancora

in esercizo 2.234 MW

Off-shore

Plants selected in Auctions/Registers but

not commissioned yet


Auctions (Plants > 5 MW)

Total assigned power (2012, 2013, 2014)

Total assigned

power

1180 MW

Built

193 MW

In construction

149 MW ???

838 MW


Auctions: Built and incentivated powers

59 59

www.elemens.it

Chart 26: State of arts of plants winning the first 2 wind auctions, depending on the typology of operator [eLeMeNS]

All things considered, we believe that – if new auction procedures will be approved by the Ministry - such a clear signal should be

taken into account. The circumstance that most of the winning plants were not so far commissioned and that commissioning rate

were close to zero for smaller / less structured operators (which, in addition, were more aggressive in terms of reduction bid)

suggests that both the selection process before the procedure could be improved and that the commitment for operators

should be enhanced: referring to other countries experiences, this could happen also through the introduction of a pre-qualification

phase or providing a solid guarantee (as a deposit).

410,5

81

302,3

142

59,2

96

14

355,5

282,4 73,1

0

200

400

600

800

1000

Assigned Built - in construction On hold For sale

MW

Medium - big RES producers

Small RES

producers

Developers

908 MW

250 MW 342 MW

316 MW

State of the art of the first and the second auction winners


12 15 38

125

221

319 324

492

706 760

986

1.160

1.395 1.419 1.403

1.295

1.171

1.044

1.040 1.026

1.012

825

608

525

347

224

70 68 67 66 63 61 50 29

-

200

400

600

800

1.000

1.200

1.400

1.600

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

Mili

oni d

i euro

CV TO Aste Registri Sotto soglia Direct access Registers Auction

Mill

ions

euro

s

Wind power incentives costs – low scenario Low scenario: only a part of the auction winners will get the incentives

High Scenario: all the auction winners will get the incentives

The main driver for cost reduction is the end of incentives for Green Certificates (CV) plants1


Wind power benefits

‣ Reduction of the energy National Single Price (NSP)

[beneficiaries: electric energy consumers]

‣ Tax Revenue

[beneficiaries: public finance / taxpayers]

‣ Local royalties

[Beneficiaries: Municipalities with wind farms]

‣ This study does not take into account other benefits such as:

‣ Direct and indirect Occupazione

‣ Health and environmental benefits (Reduction of toxic and

greenhouse gases emissions)


-

50

100

150

200

250

300

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Mili

oni d

i Euro

ICI / IMU

ROBIN TAX

IRES + IRAP

Wind power benefits – tax revenue

-

50

100

150

200

250

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Mili

oni d

i Euro

IMU + TASI

IRES + IRAP


Wind power benefits – Local Royalties

0

10

20

30

40

50

60

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Mili

oni d

i Euro

0

20

40

60

80

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Mili

oni d

i Euro

Low

High


Wind power benefits

National Single Price (NSP) 2013

2.8 3.4 2.3 3.0 2.5 1.9 3.2 2.9 4.4 2.9 1.0 2.2 2.2 2.1 0.5 2.4 2.5 4.9

1.9 2.3 3.4 2.5 2.0 2.4

0

20

40

60

80

100

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

€/M

Wh

Spread

Simulated NSP 2013 w/o Wind

Real NSP 2013

62.99

65.21

+2.22 +4.41

7.20

Real NSP 2013 Simulated NSP 2013 without Wind

Simulated PUN 2013 without PV

Simulated PUN 2013 without intermittent RES

€/M

Wh

Average NSP increase assessment

without wind energy in 2013

TOTAL ANNUAL SAVING: 743

MILLIONS €

Hourly average NSP in 2013


Wind power effect on NSP

2014 – 2035 Scenario

-

0,5

1,0

1,5

2,0

2,5

3,0

3,5

0

200

400

600

800

1000

1200

1400

1600

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Red

uct

ion o

f av

erag

e N

SP [€/

MW

h]

Mill

ions

Euro

Benefit for consumers - Low Benefit for consumers - High Reduction on average NSP - Low Reduction on average NSP - High

Reduction of Wind energy

penetration due to

decommisioning of part of

total Wind capacity

The benefit connected to

Wind energy increases

together with the increase of

NSP

For the period 2014-2035 the total benefit estimated is

between:

13 billions € (low scenario)

15 billions € (High scenario)


Total support scheme

cost 5,16 Billions €

0,82 Billions €

0,34 Billions €

0,74 Billions € NSP reduction

[year 2013]

Tax revenue

Local Royalties

3,26 Billions € Net cost

2002 - 2013

Wind power Costs Vs Benefits

Historical data (2002-2013)


1393,1 1414,3 1396,6

1288,5

1164,3

1037,8 1033,5 1019,7 1006,4

819,3

603,2

520,3

342,2

219,1 65,1 63,9 62,7 61,3 59,5 57,1

46,6

27,0

214,1 196,0 196,1 187,7 186,2 173,7 175,9 178,5 180,0 162,8 133,2 113,7 89,0 61,8 52,2 54,5 51,9 51,4 46,7 41,7 33,7

28,0

70,0 71,2 71,5 70,1 67,3 65,8 61,7 61,9 62,4 63,0 59,3 52,8 48,4 42,7 36,9 34,1 32,4 31,7 28,8 25,8 20,0 15,9

505,7 526,7 540,4 545,3 552,1 559,1 579,2 596,6 627,5

663,6 695,0 714,0 726,2 731,5 737,9 731,4

703,8 696,5 643,8

589,4

481,9

412,8

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Mill

ions

Euro

Support scheme costs Tax Revenue Local Royalties NSP reduction

-603,3 -620,5 -588,6 -485,5 -358,7 -239,2 -216,7 -182,7 -136,5 70,1 284,4 360,1 521,4 616,9 761,9 756,1 725,3 718,3 659,8 599,8 488,9 429,6

Costs/

Benefiits

Annual net [Milion Euro]


Prospectives 2014-2035 (Low Scenario)


1393,3 1433,9

1460,5

1354,6

1231,2

1104,4 1098,1 1082,8 1066,4

875,6

656,4

572,0

393,1

268,9

113,9 111,6 109,2 106,5 102,9 98,3 76,4 48,6 214,1 205,1 204,6 193,8 192,3 179,6 181,7 184,1 185,4 167,7

137,7 118,1 93,6 67,4 58,4 58,7 61,1 62,3 57,4 52,0 43,5 37,1 70,0 73,6 75,2 73,8 71,0 69,6 65,4 65,6 66,1 66,7 63,0 56,5 52,1 46,4

40,6 37,8 36,1 35,4 32,5 29,6 23,7 18,9

505,7 551,3

582,7 591,8 603,1 614,7 641,0

664,6 703,6

748,9 789,5

816,3 835,7 848,1 861,8 861,7 838,5 838,0

787,4 735,0

622,6

554,2

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Mili

oni d

i Euro

Costo Incentivazione Gettito Fiscale Misure Compensative Riduzione del PUN

1393,1 1414,3 1396,6

1288,5

1164,3

1037,8 1033,5 1019,7 1006,4

819,3

603,2

520,3

342,2

219,1 65,1 63,9 62,7 61,3 59,5 57,1

46,6

27,0

214,1 196,0 196,1 187,7 186,2 173,7 175,9 178,5 180,0 162,8 133,2 113,7 89,0 61,8 52,2 54,5 51,9 51,4 46,7 41,7 33,7

28,0

70,0 71,2 71,5 70,1 67,3 65,8 61,7 61,9 62,4 63,0 59,3 52,8 48,4 42,7 36,9 34,1 32,4 31,7 28,8 25,8 20,0 15,9

505,7 526,7 540,4 545,3 552,1 559,1 579,2 596,6 627,5

663,6 695,0 714,0 726,2 731,5 737,9 731,4

703,8 696,5 643,8

589,4

481,9

412,8

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Mill

ions

Euro


Costs/

Benefiits

Annual net [Milion Euro]


Prospectives 2014-2035 (High Scenario)

-603,4 -603,8 -598,0 -495,2 -364,8 -240,5 -210,1 -168,4 -111,3 107,6 333,8 418,9 588,4 693,0 846,8 846,6 826,6 829,3 774,4 718,3 613,5 561,6


Total support

scheme cost 13,80 – 14,95 Billions

€

2,61 – 2,76 Billions €

1,09 – 1,17 Billions €

13,05 – 15,09 Billions

€ NSP reduction

Tax revenue

Local Royalties

2,95 – 4,06 Billions € Net Benefits

2014-2035


2014 – 2035 prospectives


Could be possible to have new auctions?

500 500 500 500 500 442 466

356

0

100

200

300

400

500

600

2012 2013 2014 2015 2016 2017 2018 2019

MW

Ince

ntiva

ti

DM 6 luglio 2012

Nuove aste

Decree

6/7/2012

New

auctions

MW

wit

h in

ce

nti

ve

s

Five new auctions simulation with the following assumptions:

• One auction a year from summer 2015

• 500 MW for each auction

• The base price is 115 €/MWh for the first 3 auctions and 110 €/MWh for the last

two (instead of 127 €/MWh)


780 874 1.131 1.639 1.908

2.714 3.538

4.898 5.814

6.936 8.119

8.650 8.623 8.623 9.766

12.000

1.143

2.500

680

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (nov)

DM 6 luglio

Futuro DM

2020 (PAN)

MW

Contingenti

2012 - 2014

Contingenti

2015 - 2019

Supported MW

2012-2014

Supported MW

2015-2019

Decree 6/7/12

Future Decree

2020 NREAP

Wind power to be installed with new

auctions (high scenario)

Low scenario (50% of the auction winners will be installed):

10.200 MW in 2020 - 1800 MW (or 2.480 MW including offshore) to the 2020 target


1.395 1.419 1.403

1.302

1.193

1.087 1.105 1.105 1.095

903

681

595

415

290

133 130 126 122 116 108 92 63

-

200

400

600

800

1.000

1.200

1.400

1.600

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

Mili

on

i di e

uro

Vecchi incentivi Nuove aste New schemes Old schemes

Mill

ions

euro

s

Wind energy cost with new auctions (low

scenario)


1.395 1.440

1.473

1.380

1.286

1.198 1.231 1.241 1.228

1.027

797

705

523

394

234 227 219 211 199 184

149 104

-

200

400

600

800

1.000

1.200

1.400

1.600

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

Mili

oni d

i euro

Vecchi incentivi Nuove aste New schemes Old schemes

Mill

ions

euro

s

Wind energy cost with new auctions

(high scenario)

The total costs of new auctions from 2017 to 2015 will be 1,89 billions €


108

232

359 363 377 391

578

7 22 43

65 80 83 78

-

100

200

300

400

500

600

700

2017 2018 2019 2020 2021 2022 2023

Mili

oni d

i euro

Risparmio uscenti CV (su 2016) Maggior costo nuove aste (su 2016)

Mill

ions

euro

s

Savings for CV phasing out Costs for new auctions

Major costs Vs Minor costs (low scenario)

‣ Major costs for new auctions will be in 2022 (83 Millions €)

‣ That cost will represent between 6% and 21% of the savings for GCs

phasing out


Major costs Vs Minor costs (high scenario)

106

229

356 363 379

396

587

13 43

81 121

147 151 141

-

100

200

300

400

500

600

700

2017 2018 2019 2020 2021 2022 2023

Mili

oni d

i euro

Risparmio uscenti CV (su 2016) Maggior costo nuove aste (su 2016)

Mill

ions

euro

s

Savings for CV phasing out Costs for new auctions

‣ Major costs for new auctions will be in 2022 (151Millions €)

‣ That cost will represent between 12% and 38% of the savings for

GCs phasing out


6,7

22,4

43,1

65,3 79,8

82,8 78,5

73,3 69,9 68,1 65,8 63,7 61,4 58,8 56,0 52,2

47,4 41,5

34,5

2,3 4,6 7,3 9,0 10,3 9,5 9,8 9,6 9,5 9,5 9,5 9,5 9,4 9,3 9,3 10,2 11,1 13,2 14,7

0,8 2,0 3,6 5,1 6,5 7,2 7,6 7,6 7,6 7,6 7,6 7,6 7,6 7,6 7,6 7,6 7,6 7,6 7,6

8,2 21,7

41,0

63,1

87,1

106,2

118,4

130,5

140,8

150,1

159,6

169,4

178,6 186,1

196,0 201,8

208,1 208,2 214,7

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Mill

ions

Euro


New auctions: Costs Vs Benefits

Prospectives 2014-2035 (Low Scenario) ‣ To the annual level benefits will be immediately higher than costs

‣ From 2021, the incentives costs will constantly decrease and NSP

reduction will constantly increase

4,7 5,9 8,8 11,9 24,1 40,1 57,3 74,4 88,0 99,1 110,8 122,8 134,1 144,2 156,9 167,3 179,3 187,4 202,5 Costs/ Benefiits

Annual net [Milion Euro



Prospectives 2014-2035 (High Scenario) ‣ To the annual level benefits will be immediately higher than costs

‣ From 2021, the incentives costs will constantly decrease and NSP

reduction will constantly increase

Costs/ Benefiits

Annual net [Milion Euro

12,7 42,7 81,1

121,4

146,8 151,1

141,4 130,7 123,9 120,4 115,8 111,5 106,8 101,7 96,1 88,6

79,0 67,2 53,0

4,4 8,6 13,3 16,0 18,0 16,6 17,1 16,8 16,8 16,8 16,8 16,8 16,6 16,1 15,9 17,4 19,0 20,7 21,6

1,6 4,0 7,1 8,7 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5

16,7 44,0 83,6

129,7

180,3

221,5

258,6

286,2

310,2 332,4

355,6

379,8

403,5 425,1

451,7 472,0

495,0 508,4

536,4

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Mili

oni d

i Euro


10,0 13,9 22,9 33,0 60,9 96,4 143,7 181,8 212,6 238,3 266,1 294,5 322,7 348,9 380,9 410,3 444,4 471,4 514,4


Total support

scheme cost 1071 – 1892 Millions

€

178 – 305 Millions €

124 – 238 Millions €

2590 – 5891 Millions

€ NSP reduction

Tax revenue

Local Royalties

1.820 – 4.542

Millions € Net Benefits

2014-2035


2014 – 2035 prospectives


Next steps: Global Wind day 2015

Rome, June 11, 2015 – Wind power in Italy,

costs and benefits

To participate please contact:

[email protected]


Next steps:

Key Wind 2015

Rimini November 3rd - 6th , 2015

For information please contact:

Barbara Padovan

[email protected]

Documents

Secretary General ANEV - Italian Wind Energy Association ... fileDr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association Wind power and 2020 objectives in