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System integration of DG / RESin different European countries

Summary of Final Results

January, 2009, update March 2010

ECI - Brussels

http://www.leonardo-energy.org/report-renewables-support-schemes-and-grid-integration-policies


Content page

Deliverables – short overview

Aims and results

Concluding remarks

Important sources of information



Deliverables – short overview

1. EU goals

2. Overview of different types of DG/Renewables

3. Different schemes for promotion of DG/Renewables

4. Lessons learned up to now

5. Incentives on grid development



Aims and Results- 1. EU goals -



EU-goals

Aim: provide overview of RE-targets and what this means to each member state (MS)

Results – overview of: Kyoto targets of EU-27 Targets for the share of energy from RES in final energy

consumption in 2020 The 2010 RES-E targets of EU-27



source: http://www.energy.eu/#renewable

EU-goals: Kyoto targets of EU-27



EU-goals: RES-targets in final energy consumption in 2020

MSs are preparing plans how to achieve the proposed targets (due 30 June 2010)



EU-goals: the 2010 RES-E targets of EU-27

Status: progress made in the different MSs varies

RES-E target 2010

0

10

20

30

40

50

60

70

80

90

AU BE BL CY CR DM ES FI FR DE GR HU IE IT LV LT LU MA NL PL PT RO SK SI SP SE UK

Country

Tar

get

(%

)



Aims and Results- 2. Overview of different types of

DG/Renewables -



Overview of different types of DG/Renewables

Aim: provide overview of individual sources of DG/RES that will be put into action.

Results: Fact sheets were composed for all EU-27 on the

European set Kyoto, RES and RES-E targets Their progress so far Their planning to fulfil these targets nationally



Fact Sheet – example Germany



country wind onshore wind offshore biomass solar hydro geothermal wave energy

Austria

(2015)

(700 MW)

(100 MW)

(700 MW)

Belgium

(2010)

(40 MW)

(330 MW)

Bulgaria

(2015)

Cyprus

(2010)

Czech

Republic

(700 MW)

(200 MW)

(100 MW)

Denmark

(2012)

(1300 MW)

(14 PJ)

Estonia

(2010)

(90 MW)

Finland

France

Germany

Greece

(2010)

(2020)

(2795 MW)

(187 MW)

(700 MWp)

(525 MW)

Hungary

Ireland

(2020)

(800 MW)*

(500 MW)

RES main focus of each EU‑27 MS and their expected goals (if available)



country wind onshore wind offshore biomass solar hydro geothermal wave energy

Italy

Latvia

Lithuania

Luxembourg

Malta

Netherlands

(2020)

(3,500 MW)

(6,000 MW)

(500 MW)

Poland

Portugal (2012:

5,100 MW)

(2010:

5,575 MW

2020:

6,960 MW)

Romania

Slovakia

Slovenia

Spain

Sweden

UK

RES main focus of each EU‑27 MS and their expected goals (if available) (contd.)




The following sheets provide an overview of:

The realisable potential for RES-E in the EU-27 countries Renewable energy in final energy consumption (2020

target)




The realisable potential for RES-E in the EU-27 countries

source: FORRES 2020




RE in final energy consumption (2020 target)

source: http://www.energy.eu/#renewable



Aims and Results- 3. Different schemes for promotion

of DG/Renewables -



Different schemes for promotion of DG /Renewables

Aim: description of several schemes for promotion of DG/renewables

ResultsThe following schemes for promotion were discussed (concept,

(dis)advantages and conclusions): Feed-in-Tariff and premiums Quotas Tradable Green Certificates Tendering / bidding systems Fiscal and Financial Incentives



Different schemes for promotion of DG / Renewables

Feed-in-Tariff: take the form of a total price per unit of electricity

paid to the producers and premiums (bonuses) are paid to the

producer on top of the electricity market price. Quotas: where minimum shares of RES are imposed on

consumers, suppliers or producers Tradable Green Certificates: can be sold in the market allowing

RES-E generators to obtain revenue. Tendering / bidding systems: competition either for a certain

financial budget or a certain RES-E capacity Fiscal and Financial Incentives: rebates, tax refunds, lower VAT,

etc.




Overview of primary renewable electricity support systems in place in the EU-27 MSs

source: OPTRES



Summary of some important features of the different incentive schemes(green: suitable; red: not suitable and grey: neutral or depends on how policy is set)

FIT quota + TGC tendering/bidding

systems

fiscal/financial

incentives

suitable to

encourage specific

technology

depends on form

(i.e. technology

specific FIT

tariffs (banding))

yes, this is

possible

yes, this is

possible

yes, this is

possible

take technology

learning into

account

depends on

form; e.g. in

Germany: tariff

degression

system

depends on

form

depends on form depends on form

suitable for

immature RE market

especially for

immature RE

market

no, it is a more

market conform

system

no, it is a more

market conform

system

instrument for

stimulating new

technologies

and

demonstration

projects



Summary of some important features of the different incentive schemes (contd.)(green: suitable; red: not suitable and grey: neutral or depends on how policy is set)

FIT quota + TGC tendering/bidding

systems

fiscal/financial

incentives

compatibility with

electricity market:

supply forecasts

no, it is not

entirely certain a

priori how much

renewable

electricity will be

produced.

depends yes yes

long term

confidence for

investors

yes no depends on form no, terms can

change quite

easily

administrative

burden

depends on form depends on

form

yes, and complex yes, and

complex

cost for community/

market efficiency

yes no, for investors no, for investors no, for investors




Results and conclusions The majority of the MSs have opted for FIT-regimes as

the main support mechanism. MSs are setting up their own system. MSs are continuously fine-tuning existing policy

measures with the aim of improving the performance of these measures.

The majority of MSs are not using a single one system, but a combination.




Results and conclusions (contd.) Research has shown that there is not a system which is

better than others but key success factors can be identified which are a requirement for any support mechanism to be successful: – A support mechanism is successful if it is able to attract investors

and financial institutions by providing sufficient confidence and

financial incentives over a longer period. In order to be successful

in the long run not only the low hanging fruits should be

supported, but a wider range of technologies should be eligible.



Aims and Results- 4. Lessons learned up to now -



Lessons learned up to now

Aim: four countries are being analysed and lessons learned from their experiences with their incentive scheme(s)

ResultsThe following countries have been investigated: Germany: front runner in Europe in the development of

RES, using feed-in tariffs Spain: also using feed-in tariffs, but also feed-in premiums

and is a front runner this area as well but with an expected additional value for solar energy



Lessons learned up to now

The following countries have been investigated (contd.) : UK: even though this country has a large wind potential

the development of this energy source lags behind in the UK

the Netherlands: has had different schemes and is using a mixed system at the moment

The following issues are being discussed per country:system used, (dis)advantages of the system, results andconclusions.



Lessons learned up to now - Germany

An early feed‑in law for wind electricity has existed in Germany since 1991. They are using a tariff degression system, as well as a stepped tariff design

Germany is the front runner on developing RE, not only in Europe, but world-wide

The stable support system and parallel political framework conditions are the main reasons for this result

Germany has made great progress towards achieving its European targets

It remains to be seen if the FIT-system in their matured RE market will remain sufficient or will ask for a more market-based system in the future



Lessons learned up to now – Spain

Spain is using a FIT system with an overall remuneration (a fixed tariff) or alternatively a premium on top of the electricity market price (a premium tariff)

Spain achieved good results as well and is obtained by their clear national incentive framework for RE, as well as strong regional targets

Regarding PV; a lot administrative barriers exist to obtain the necessary permits from the autonomous regions and the energy utility companies

Another drawback of the Spanish system is that the very attractive FIT system was the reason to create bad practices (PV in Spain)



Lessons learned up to now - UK

The RO-system (Renewables Obligation) in the UK is a quota system

A new law is expected to come into force in Q1 2010, where electricity

produced from solar will receive a guaranteed price per unit, a feed-in

tariff.

Although the RO has been successful in supporting more renewable

generation this has come at a very high cost to customers

Reasons are manifold: regional differences hinder project development;

no sufficient interconnection capacity but also planning problems are an

important obstacle

A recent success strategy is the site leasing arrangement for offshore

wind farms in the UK



Lessons learned up to now – the Netherlands

Is using a feed-in tariff system and the system has just recently been adapted (Oct 2007: SDE)

Premiums will vary with the wholesale electricity price and the level of the premium and the duration of support will vary with each technology as well. This makes it a more market-based system

Also in the Netherlands too many departments are involved and very long procedures exist. It is getting attention now to improve the procedures



Aims and Results- 5. Incentives on grid development -



Incentives on grid development

Aim: provide a short description on the four countries on grid development and grid integration of RES

ResultsFor each country a description is provided on: Grid Development

– The main players– Grid development/structure

Grid Integration of RES– Which system is being used and how is the grid integration

developed?– Legislation



Incentives on grid development – Germany

Three of the four TSOs agreed to work more closely together regarding grid balancing. In this way the grid in the different areas should become more reliable, faster and less bureaucratic.

For the further integration of RES into the interconnected power system, an extension of the extra high voltage transmission network will be necessary. Currently a study on further development of the power grid and the best way of integrating wind energy by increasing the flexibility of the electricity system is carried out (results to be expected in 2010).



Incentives on grid development – Germany

In Germany RE is defined as priority production. There is no specific legislation in Germany on grid

development. The Renewable Energy Act (Erneuerbare-

Energien-Gesetz/EEG) is the most important law. Relevant legislation regarding connection is: the Energiewirtschafts-gesetz (EnWG: describes the long-term aims of the energy supply) and the Kraftwerks-Netzanschluss-verordnung (KraftNAV:

connection policy for conventional production units of 100 MW on

110 kV and up).



Incentives on grid development – Spain

In Spain RE is defined as priority production. Spain attains high penetration of wind energy despite the limited

grid interconnection with the neighboring grids Spain is one of the countries with a forecast obligation: operators

of RES‑E plants are obliged to predict the amount of electricity they plan to feed into the grid.

In the past years a strong co-operation between the system operator and the whole wind power sector has struggled to find the best possible way to ensure grid security and develop technological solutions for new challenges presented. This has resulted in some new legislation (e.g. O.P. 12.3).



Incentives on grid development – Spain

Red Eléctrica introduced a Control Centre for the Special Regime (CECRE) in June 2006, a worldwide pioneering initiative to monitor and control energy resources. Needed to achieve a greater supervision and control of special regime generation which would then help to reach a higher level of integration of the RES. CECRE is an operation unit integrated into the Power Control Centre (CECOEL). This CECRE is able to control every aspect of the assets and this Centro de Operación de Energía Renevables (CORE) monitors around 300 variables of each single wind turbine.



Incentives on grid development – UK

The UK introduced two DG incentive schemes IFI and RPZ. The primary aim of these two new incentives is to encourage the DNOs to apply technical innovation in the way they pursue investment in and the operation of their networks

The Government has a range of policies which support the take up of DG. Additionally, Ofgem is working to remove barriers to DG more widely.

RE is not being prioritized in the UK; it is only being fed into the grid if sufficient transport capacity exists. If this is not the case a first-come/first-served approach is being applied.



Incentives on grid development – UK

There exist some barriers in the UK which hinder especially the wind energy development. A fair treatment of connecting all interested parties is under constant debate between project developers and the TSO. It is being expected that the next two years major changes regarding the connection procedure will be carried out. Despite of these barriers the UK is also busy preparing its grid for DG.



Incentives on grid development – theNetherlands

A Working Group Decentralised Infrastructure was introduced recently; a very Dutch approach as its participants are from a large number and a variety of organizations (public and private).

Additionally, TenneT is currently fine-tuning the congestion management system in collaboration with the Ministry of Economic Affairs and the Office of Energy Regulation as there have occurred severe problems regarding insufficient capacity to transmit the supply of electricity at all times.



Incentives on grid development – theNetherlands

The situation on RE being prioritized is somewhat uncertain in the Netherlands because of the recent fall of the government. Earlier the Lower Chamber agreed on the new law, but it still needs to be evaluated by the Senate. It is not sure if this will happen before or after the new elections (June 2010). So far RE is only being fed into the grid if sufficient transport capacity exists. If this is not the case a first-come/first-served approach is being applied.

There is no specific legislation in the Netherlands on grid development; the most important Energy law is the 1998 Electricity Law.



Concluding remarks

It was stated that a move from a national approach to a more harmonized European approach regarding incentives is needed. It is concluded that such an incentive scheme will not be operational in the near future.

Every country found its own solution for increased RES feeding into the grid system. So countries have found different mechanisms to evolve from a centralized generation system to a DG-system.



Concluding remarks (contd.)

Setting up research programs trying to provide answers for questions on DG and smart grids have only recently been set up. Therefore, the systems introduced in the analyzed countries are too new to draw conclusions from.

However, it can be concluded that a continuous dialogue between several stakeholders, national, but also at European or even at global level, is very important as this results in flexibility and openness to changes which are required in the future.

Also a stable incentive scheme is very important as well.



Sources of information

European websites on RE: http://ec.europa.eu/energy/climate_actions/doc/2008_res

_directive_en.pdf http://ec.europa.eu/energy/energy_policy/doc/

factsheets/renewables/renewables_ro_en.pdf (available for

all MSs)

http://ec.europa.eu/environment/climat/climate_action.htm (currently under construction)

http://www.energy.eu/#renewable



Sources of information Important players in four analyzed countries: www.bundesnetzagentur.de www.ree.es www.nationalgrid.com/uk www.tennet.org

Interesting studies: http://www.eu.fraunhofer.de/forres www.green-x.at http://www.iea.org/textbase/pm/index_clim.html http://www.iea.org/textbase/pm/grindex.aspx. http://www.optres.fhg.de

Experience you can trust. 46http://www.leonardo-energy.org/report-renewables-support-schemes-and-grid-integration-policies


Thank you for your attention.

www.kema.com

For more information:Jitske Burgers

Consultant

[email protected]

+ 31 26 356 24 81



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