07 vicente guna fa 0073-feasibility of pvp_ps in spain-20110913_ed01

Supported by:Supported by:

Feasibility of PVPPs in Marginal Terrains in Spain

Final International Conference PVS in BLOOMFinal International Conference PVS in BLOOM

Budapest - 22 September, 2011Budapest - 22 September, 2011

Feasibility of Photovoltaic Power PlantsFeasibility of Photovoltaic Power Plantsin Marginal Terrains in Spain in Marginal Terrains in Spain

Alberto Rodrigo, José Enrique Sánchez, Vicente Guna





Framework of the study

Power ranging: from 50 kWp to 2-3 MWp

Areas characterized by intrinsic, induced or latent marginality

The PVs in Bloom Project was created with the aim of supporting the installation by public and private investors of ground photovoltaic plants of small and medium dimensions (Photovoltaic Panel Plantations – PVPPs)

In this framework, Chamber of Commerce, Industry and Shipping of Valencia has lead a “Feasibility study of PVPPs in Marginal Terrains in Spain”

This presentation is about the exposure of the study, its findings and conclusions





Objectives

Previous considerations:

The main goal of this study is the definition of the broadlines of a proposal with legislative changes, to present to Spanish competent authorities, wich considers:

•It is supposed that there are plenty of land suitable for declaration as marginal.•In countries with greater sun exposure (Italy, Greece, Spain), these areas can accommodate a large quantity of photovoltaic power

•Definition of the features of a terrain to be declared as a MARGINAL TERRAIN

•Definition of administrative procedures to obtain the declaration

•Definition of possible economic incentives to apply to these facilities

This proposal is intended to promote the introduction of such facilities.





Objectives

This study has evaluated the following aspects:

•Definition of the features of a terrain to be suitable for being declared as MARGINAL: “MARGINAL AREAS: APPROACH AND METHODOLOGY OF LOCATION AND CLASSIFICATION”.

•Estimation of potentially suitable terrains to be declared as MARGINAL.

•Study of a “test case” to compare the costs of an environmental restoration (in mines or landfills) with the inversion to make in a PV power plant facility

•Economic analysis of investment returns under different assumptions

•All this will lead to evaluate the possible incentives to be applied to promote such facilities on marginal land





General approach of the work

The study is structured in three phases:

Phase I: a compilation of legislative backgroundOriented to study other cases in Europe that could serve as a help to pose the broadlines of the final proposal.

Phase II: Identification of potentially marginal terrainsDefinition of criteria and geographical, economical and social variables to be analyzed through Geographic Information System (GIS), to obtain an estimation of power that could hold these lands

Phase III: Technical and economic study in a pilot areaTo study the benefits of the impantation of a PV facility in a closed landfill, making a comparison in a scenario of environmental ristoration

To study different incentives to promote the installation of that facility





Phase I: a compilation of legislative background

There are several kinds of legislation in the form of laws, decrees dispositions that regulate various aspects of the PV market in Europe

A background has been compiled in this study:

European countries:

GermanyFrance

United KingdomItaly

Spain

Spanish regions:

AndalucíaBalearesCataluñaCanarias

European countries:

GermanyFrance

United KingdomItaly

Spain

Spanish regions:

AndalucíaBalearesCataluñaCanarias





Phase I: a compilation of legislative background

CASE 1: Instalation of PVPPs in degraded natural terrainsCASE 3: Laws for regulating the development of administrative procedures for the installation of photovoltaic solar panels

INTERNATIONALItalyIncentives for the investment in solar energy in landfills in the Region of Piamonte

REGIONALAndalucíaActions needed to implement the regeneration project and suitability for public

use of “Green Corridor of Guadiamar"

INTERNATIONALItalyGuidelines for the identification of possible impacts of solar plants and

inclusion in the territory of Sardinia.

REGIONALIslas Baleares, Law 6/1997, of Rural land in Balearic Islands.Islas Canarias, urgent measures in land management

and planning

Catalonia, regulation of administrative procedures for the implementation of

eolic plants and photovoltaic installations in Catalonia.CASE 2: Grants for the development and implementation of energetic efficiency measures of renewable energy

CASE 4: Laws on tax deductions for activities that promote renewable energy use

SPAIN

Energetic efficiency measures and development of renewables energies in the

municipalities of Spain promoted by FEMP (Spanish Federation of Municipalities

and Provinces) and IDEA

Financing Agreement ICO-IDEA to promote investment in renewable energy

and energy efficiency, 2005

INTERNATIONALItaly, promotion of photovoltaics and criteria and methods to promote the

production of electricity using photovoltaic conversion

Germany, law for the preference of renewable energiesFrance, action plan for the development of renewable energy.United Kingdom, on the regulation of rates

SPAINLAW 35/2006, of november 28, Income Tax of Individuals and partial

modification of the laws of the Corporation Tax on Nonresident Income and

on Capital.





Phase II: Identification of potentially marginal terrains

1) Definition of criteria to accomplish by a terrain2) Transposition of criteria to geographic variables3) Application of GIS for spatial analysis

1) Definition of criteria to accomplish by a terrain

“MARGINAL AREAS: APPROACH AND METHODOLOGY OF LOCATION AND CLASSIFICATION”

Criteria for classification as marginal

•Land uses •Topografy.•Environmental protection

Criteria for rating the ability to accommodate solar photovoltaic plants.

•Proximity to infrastructure.•Natural hazards.•Urban planning.

Criteria for classification as marginal

•Land uses •Topografy.•Environmental protection

Criteria for rating the ability to accommodate solar photovoltaic plants.

•Proximity to infrastructure.•Natural hazards.•Urban planning.

Only the general criteria for the classification of land as marginal in the Iberian Peninsula are to be considered in order to make a generic catalog.

The ability to accommodate solar photovoltaic plants must be given by detailed studies conducted for each case





Phase II: Identification of potentially marginal terrains2) Transposition of criteria to geographic variables

A.1) Land Uses:1. Open cast mines no longer in use2. Open cast mines reaching the end of their useful life3. Every kind of landfill out of use4. Every kind of landfill almost abandoned5. Degraded areas; lack of vegetation, unclassified as urban areas, areas to be transformed (according to CORINE LAND COVER)6. Industrial areas no longer in use7. Polluted areas to be reclaimed and recorded in the register office as Polluted Site (DM 25 October 1999 n. 471)8. Arable land never seeded or without vegetation (in all the dates analysed by CORINE LAND COVER)9. Farm areas unsuitable for arable land, forestry or grazing (class VIII Land Capability Classification)10. Clear zone

10.1 clear zone of infrastructures (streets, railway, gas pipeline, …….)10.2 cemetery clear zone10.3 clear zone around sewage treatment plants10.4 airport clear zone10.5 radio broadcasting clear zone10.6 clear zone around accident risk sites10.7 waste disposal airport clear zone

11. Military areas11.1 abandoned11.2 almost abandoned

A.2) Topografy:Pendientes: land of steep slopes are excluded, although they have an optimal orientation.Orientation: land of steep slopes with orientations North, Northwest, Northeast are also discarded.

A.3) Environmental protection: all those protected areas by some kind of environmental interest are excluded.

(1) CORINE LAND COVER

(2) DEM – S R T M

(3) Environment Ministry






2) Transposition of criteria to geographic variables

(1) CORINE LAND COVER

(2) Digital Elevation Model from Shuttle Radar Topography Mission

(3) Environment Ministry

CORINE land cover project is intended to provide consistent localized geographical information on the land cover of the Member States of the European Community

Obtained elevation data to generate the most complete high-resolution digital topographic database of Earth. SRTM consisted of a specially modified radar system that flew onboard the Space Shuttle Endeavour during an 11-day mission

Layers of Geographic Information with the contours of the protected areas






3) Application of GIS for spatial analysis

CODE USO CORINE2000

11210 Estructura urbana abierta

12110 Zonas industriales

13100 Zonas de extraccion minera

13200 Escombreras y vertederos

23100 Prados y praderas

32111 Pastizales supraforestales templado-oceanicos, pirenaicos y orocantabricos

32112 Pastizales supraforestales mediterraneos

32121 Otros pastizales templado oceanicos

32122 Otros pastizales mediterraneos

33220 Afloramientos rocosos y canchales

33230 Coladas lavicas cuaternarias

33310 Xeroestepa subdesertica

33330 Espacios orofilos altitudinales con vegetacion escasa

33400 Zonas quemadas

41200 Turberas y prados turbosos

Compatible land uses

A selection of valid land uses has been made from the layer CORINE.

These areas hold uses that has been considered as potentially marginal terrains.

CORINE LAND COVER






3) Application of GIS for spatial analysis

Slope mapOrientation map

DEM-SRTM






Slopes Orientations

Valid land uses

Or. S, Slp < 10%Or. N, Slp < 5%

Valid Or&Slp

Protected areasValid LU&Or&Slp

Suitable terrains to be declared as MARGINAL

Layers combination

CORINE DEM

CODE USO CORINE2000

11210 Estructura urbana abierta

12110 Zonas industriales

13100 Zonas de extraccion minera

13200 Escombreras y vertederos

23100 Prados y praderas

32111 Pastizales supraforestales templado-oceanicos, pirenaicos y orocantabricos

32112 Pastizales supraforestales mediterraneos

32121 Otros pastizales templado oceanicos

32122 Otros pastizales mediterraneos

33220 Afloramientos rocosos y canchales

33230 Coladas lavicas cuaternarias

33310 Xeroestepa subdesertica

33330 Espacios orofilos altitudinales con vegetacion escasa

33400 Zonas quemadas

41200 Turberas y prados turbosos





Phase III: Technical and economic study in a pilot area

This area holded landfill wich is nowadays closed.

Two possibilities are considered:•Install PVPPs•Making an environmental ristoration

Superficie: 50.777mSuperficie: 50.777m22 Potencia estimada: 2MWp Potencia estimada: 2MWp

A concrete case of PVPPs installation has been studied on a pilot area, in order to compare the rates investment/benefits of the implantation and the costs of an environmental ristoration.We have chosen a terrain inside the catalog obtained in phase II, potentially marginal terrains.






Civil works to implant the PVPP

dh

dh

The most adequate for this study: ATERSA A-214P






With this configuration of panels, it is been studied the most adequate positions per year, as shown in the table below:

INCLINATION (º) PRODUCTION (kWh) INCLINATION (º) PRODUCTION (kWh) INCLINATION (º) PRODUCTION (kWh)JANUARY 30 78,9 52 82,5 44 82,5FEBRUARY 30 93,5 52 95 44 95,7MARCH 30 135,1 52 129,3 44 132,8

APRIL 30 145,3 18 146,6 44 138,5

MAY 30 161,3 18 164,5 13 164,5JUNE 30 167,6 18 174,4 13 174,4JULY 30 186,3 18 191,8 13 191,8AUGUST 30 174,9 18 173,3 13 171,7

SEPTEMBER 30 150,3 18 145,3 50 147,8

OCOTOBER 30 124,6 52 129,3 50 129,3NOVEMBER 30 93,3 52 100,5 50 100,5DECEMBER 30 72,1 52 77,8 50 77,8SUM.YEAR 1583,2 1610,3 1607,3

1 FIXED POSITION PER YEAR 2 FIXED POSITION PER YEAR 3 FIXED POSITION PER YEARPERIOD

Calculation of optimal configuration of panels






Economic Study

INITIAL DATA

PHOTOVOLTAIC PLANT Macroeconomical dataEURIBOR 2,50%

NAME IPC 3,80%POWER 2 Mw Actualization rate 3,00%

Financial data:Energy prices Differential interest rate 1,00%Regulated rate of sale 0,320 €/kwh Own funds 100%

Carlet-Magro

INITIAL DATA

PHOTOVOLTAIC PLANT Macroeconomical dataEURIBOR 2,50%

NAME IPC 3,80%POWER 2 Mw Actualization rate 3,00%

Financial data:Energy prices Differential interest rate 1,00%Regulated rate of sale 0,320 €/kwh Own funds 100%

Carlet-Magro

Bank guarantee 500 €/kw2000 kw

Total guarantee 1.000.000 € Initial cost 0,5% 5.000 €Financial cost per 3months 0,5% 5.000 €Total Financial cost in 2 years 40.000 €Others

Dismantling cost 500.000 €Residual value 0 €Annual maintenance 222.690 €Operating costs 80.000 €

Network toll 1.469 €

Total operating costs 304.159 €

Bank guarantee 500 €/kw2000 kw

Total guarantee 1.000.000 € Initial cost 0,5% 5.000 €Financial cost per 3months 0,5% 5.000 €Total Financial cost in 2 years 40.000 €Others

Dismantling cost 500.000 €Residual value 0 €Annual maintenance 222.690 €Operating costs 80.000 €

Network toll 1.469 €

Total operating costs 304.159 €

Estimates

Civil works 700.000 €Installations 400.000 €Electric system 5.900.000 €Subtotal 7.000.000 €Terrains 0 €Project 133.000 €Construction Management 140.000 €Additional works 50.000 €Envronmental Ristoration 0 €Management 50.000 €Others 50.000 €Subtotal 423.000 €

Total investment 7.423.000 €

Estimates

Civil works 700.000 €Installations 400.000 €Electric system 5.900.000 €Subtotal 7.000.000 €Terrains 0 €Project 133.000 €Construction Management 140.000 €Additional works 50.000 €Envronmental Ristoration 0 €Management 50.000 €Others 50.000 €Subtotal 423.000 €

Total investment 7.423.000 €





Phase III: Technical and economic study in a pilot areaPHOTOVOLTAIC PLANTFINANCIAL ANALISIS

Hypothesis Annual analisisIPC 3,80% Sales Disp.Ad.1ª Oper+Mant investment Total IRREURIBOR 2,50% years M€/year RD 661/2007 RETURNS EvolutionActualization rate 3,00% 2011 -100.000 €Differential Interest Rate 1,00% 2012 -133.000 €Rate ref.=EURIBOR+DIR 3,50% 2013 -7.190.000 €Regulated rate of sale 0,320000 € €/kwh 2014 1 940.032 € 0,50% 304.159 € 635.873 €

2015 2 971.053 € 0,50% 315.717 € 655.336 €2016 3 1.003.098 € 0,50% 327.714 € 675.384 €

Power 2 MW 2017 4 1.036.200 € 0,50% 340.167 € 696.033 €Investment 7.423.000 € M€ 2018 5 1.070.395 € 0,50% 353.094 € 717.301 €Regulated rate of sale 0,320 €/kwh 2019 6 1.105.718 € 0,50% 366.511 € 739.207 €Equivalent hours 1632,00 hours 2020 7 1.142.206 € 0,50% 380.439 € 761.768 €Efficiency 0,9 2021 8 1.179.899 € 0,50% 394.895 € 785.004 €Production 2.937.600 kwh/year 2022 9 1.218.836 € 0,50% 409.901 € 808.935 €Sales 2011 940.032 € €/year 2023 10 1.259.057 € 0,50% 425.477 € 833.580 € -0,3%Maintenance 222.690 € 2024 11 1.300.606 € 0,50% 441.646 € 858.961 € 1,5%Operating cost 304.159 € €/year 2025 12 1.343.526 € 0,50% 458.428 € 885.098 € 3,0%Financial cost 45.000 € 2026 13 1.387.863 € 0,50% 475.848 € 912.014 € 4,2%

2027 14 1.433.662 € 0,50% 493.931 € 939.731 € 5,2%2028 15 1.480.973 € 0,50% 512.700 € 968.273 € 6,0%

2029 16 1.529.845 € 0,50% 532.183 € 997.662 € 6,7%Return 15 years 2030 17 1.580.330 € 0,50% 552.406 € 1.027.924 € 7,3%

IRR 6,00% 2031 18 1.632.481 € 0,50% 573.397 € 1.059.084 € 7,8%IRR-IPC 2,20% 2032 19 1.686.353 € 0,50% 595.186 € 1.091.167 € 8,2%

Return 20 years 2033 20 1.742.002 € 0,50% 617.803 € 1.124.199 € 8,6%

IRR 7,78% 2034 21 1.799.488 € 0,50% 641.280 € 1.158.209 € 8,9%IRR-IPC 3,98% 2035 22 1.858.872 € 0,50% 665.648 € 1.193.223 € 9,2%

Return 25 years 2036 23 1.920.214 € 0,50% 690.943 € 1.229.271 € 9,4%IRR 9,78% 2037 24 1.983.581 € 0,50% 717.199 € 1.266.383 € 9,7%

IRR-IPC 5,98% 2038 25 2.049.040 € 0,50% 744.452 € 500.000 € 804.587 € 9,8%

Implementation

WO

RK

ING

H0: Calculus based on current administrative system and tariffs






Environmental ristoration

Considering an average cost for an environmental ristoration, with the features of this terrain, we get a cost of 25€/m2.

As we have a surface to make the ristoration of 50.777m2:

It is 1.269.425€ of COST to make the environmental ristoration.

This may cause the owner raises an investment to generate other economic activity

Environmental RistorationAffected area (m2) 50.777Cost per m2 25,00 €

TOTAL 1.269.425,00 €





Analysis and discussion of results: Analysis of the pilot case

Current pricing Incentive on sale rate 5% Incentive on sale rate 10% Incentive on sale rate 15%

Return 15 years Return 15 years Return 15 years Return 15 yearsIRR 6,00% IRR 7,03% IRR 8,03% IRR 9,00%

IRR-IPC 2,20% IRR-IPC 3,23% IRR-IPC 4,23% IRR-IPC 5,20%Return 20 years Return 20 years Return 20 years Return 20 years

IRR 7,78% IRR 9,50% IRR 9,65% IRR 11,23%IRR-IPC 3,98% IRR-IPC 5,70% IRR-IPC 5,85% IRR-IPC 7,43%


IRR-IPC 5,98% IRR-IPC 6,82% IRR-IPC 7,63% IRR-IPC 8,42%

Current pricing Incentive on sale rate 5% Incentive on sale rate 10% Incentive on sale rate 15%






H0 H1 H2 H3

H4 H5 H6 H7Pricing RD661/2007






Current pricing with incentive on the result 5%

Direct subsidy on initial investment 5%

Direct subsidy on operation and maintenance cost

Pricing RD661/2007






Current pricing with incentive on the result 5%

Direct subsidy on initial investment 5%

Direct subsidy on operation and maintenance cost





Analysis and discussion of results: Extrapolating the results

A previous study of University of Jaén, determines that there are 44.602,29Ha of mines and landfills in Andalucía.Under the hypothesis that only a 5% of these terrains could be declared as marginal, it is concluded that the region of Andalucía has a potential power production wih PVPPs of 699MWp.It also concludes that potential in Spain is of 1,183GWp, only in mines and landfills

A previous study of University of Jaén, determines that there are 44.602,29Ha of mines and landfills in Andalucía.Under the hypothesis that only a 5% of these terrains could be declared as marginal, it is concluded that the region of Andalucía has a potential power production wih PVPPs of 699MWp.It also concludes that potential in Spain is of 1,183GWp, only in mines and landfills

An extrapolation can be made to obtain a global indicator of the rate cost/investment:

Considering all the surface of mines and landfills, we have: 284mill€: COST of Envronmental

Ristoration1.321mill€: INVERSION in PVPP

This means a rate of 22%, quite representative to consider making the inversion and not a spending.

This study concludes that TOTAL potential is of 16,79GWp. If we compare that with the previous study it can be seen that both results are consistent. This study considers not only mines and landfills (sites of reduced area), every compatible land uses with the declaration of marginality.

This study concludes that TOTAL potential is of 16,79GWp. If we compare that with the previous study it can be seen that both results are consistent. This study considers not only mines and landfills (sites of reduced area), every compatible land uses with the declaration of marginality.

Mines and landfillsSuitable area (m2) 1139 Ha

Average cost of Envir. Ristoration per Ha 250.000 €TOTAL COST of Envir. Ristoration 284.750.000 €

MW to install 355,94Average cost per MW 3.711.500,00 €TOTAL INVESTMENT 1.321.071.310,00 €

Rate cost/investment 22%









ConclusionsSocio-economic

Installing these facilities has a positive impact on the sustainability of the social model. They generate an increase of the economical activites of the affected municipalities and therefore it supports the economic activity of the country, since they suppose the creation of new and productive companies.

The limited availability of land at a price that these facilities can be viable makes that complicated procedures are used. This makes reasonable the aim of making easier this procedures when we have marginal terrains.

Environmental Impact

In general, the incentives of this type of energy is positive for environment, since it involves the use of degraded areas for the implementation of an economic activity, without negative impact for the environment

Evolution of spanish laws

During lst years, a great number of installations have been afected negatively by changes in legislation and by the current economic and financial juncture. Therefore, invest in the establishment of some kind of incentives to install solar photovoltaic plant on marginal land, should be very positive to reactivate this sector of activity.





ConclusionsSpanish potential in marginal terrains

Comparison with Environmental Ristoration costs

About the incentives

As a result of this study, the available surface to be declared as MARGINAL is of about 53.734Ha, that means an installable potential of 16,8GWp. According to data from National Comission of Energy, in March 2011, it exist in Spain 3.871MWp of installed power. Ministry of Industry has published the PANER 2011-2020 (National Plan of Renewable Energies). It says that in 2020 8.367 MW should be installed. The contribution of these terrains to the objectives of the plan could be very beneficious.









Under the hypothesis of making the environmental ristoration of avery available terrains, we have the table beside. Considering the environmental ristoration as a spending, it is concluded that represents a significant quantity of the inversion to make to implant PVPPs.

It seems that the most reasonable incentives are the H1 or H5 (5% on sales rate or 5% on the result), since the influence of the incentive is sensitive about the productivity of the plant, but does not seem too excessive, and therefore it could be considered acceptable.





Approaching the broad lines of the proposal

Definition of the necessary administrative procedures for the declaration of land as marginal and authorization of the activity

1) Creation of a special process in each organization implementing land management, whose sole purpose is the statement of the marginality of land. The result of this process, should be the Declaration of MARGINALITY of a terrain, to be registered in a catalog of Ministry of Industry.

2) To start the activity, we have to distinguish between urban and non-urban soil. First case it is not necesay an special authorisation. On the second case, the implantation of extraordinary uses in non urban soils, has in Spain concrete proceedings, depending on the region.

Definition of the conditions to accomplish by a terrain to be declared as MARGINAL

A terrain can only be declared as MARGINAL if its landuse is one of the listed in the document: “MARGINAL AREAS: APPROACH AND METHODOLOGY OF LOCATION AND CLASSIFICATION”, and it canot be ffected by any environmental protection.

Specific criteria defined in the same document will be demonstrated to each municipality to obtain a certificartion of Urbanistic Compatibility.

Definition of the technical studies necessary to justify the marginality of land

• Previous urbanistic study

• Study to demonstrate the characteristics of use and ability

to accommodate solar photovoltaic plants.

• Simplied studies of environmental impact.

• Landscape studies.

• Hazard studies depending on the localization.





Approaching the broad lines of the proposal

Definition of incentives to be applied on marginal land site installations

Financial support

Development of the proposal:

Several types of incentives has been analyzed in this study. It seems that the most adequate for its influence in the productivity and for the easyness of application is the Direct incentive over the sales rate of 5%.

It seems also adequate to think in “intervals” to consider posible variations on the sales rates.

This proposal should incorporate special ways of financing through the official credit institution, ICO in Spain.

As far as this study does not comprise an exhaustive analysis of all legislation of the areas: environment, urbanism, taxes, energy,…it is convenient to follow this process:

• Identify every stakeholder that could be involved: Ministrys (Industry, Public Treasury), Regional governments (Urbanism, energy), and general directions to be involved.

• Consultations and negotiations with the stakeholders• Performing various forums involving all the stakeholders • Ellaboration of the final proposal

07 vicente guna fa 0073-feasibility of pvp_ps in spain-20110913_ed01

Technology

feasibility study of

bloom budapest

economic study

marginal land

marginal areas

study power ranging

instalation of pvpps

bloom project