EWEC 2007 Milan 7-10 May 2007 Policies and programmes Wind energy in Italy: national and regional policies, market development and future perspectives.

EWEC 2007 Milan 7-10 May 2007

Policies and programmes

Wind energy in Italy: national and regional policies, market development

and future perspectives

Luciano Pirazzi

ENEA

National actions supporting electricity production from

renewable energy sources Capital cost subsidies

• Law No. 308 was issued in 1982

(limited to 3 MW with a contribution up to 30% of eligible cost)

• Laws No. 9 and 10 were issued in 1991

(contribution up to 30-40% of plant cost)

National actions supporting electricity production from renewable energy sources

Feed-in Tariff

Provision No. 6/92Issued by CIP (the Inter-ministerial Committee for Prices)

in 1992

Premium tariff composed of two items:

- avoided cost

- incentive, granted over the first 8 years of plant operation

CIP 6/92

2006 rates for the first 8 years of operation for different renewable sources

- hydropower plants with a reservoir, and run-of-river plants above 3 MW: from 20,87 €cent/kWh

(peak hours) to 6,07 €cent/kWh off-peak hours

- run-of-river hydropower plants up to 3 MW:

12,35 €cent/kWh

- wind and geothermal plants: 14,94 €cent/kWh

- PV, biomass and waste plants: 20,61 €cent/kWh

Mandatory quota and Tradable Green Certificate

Legislative decree No. 79/99

• Since 2001 a RES (Renewable Energy Sources) quota has been operating.

• Electricity producers or importers from non renewable sources exceeding 100 GWh must feed into the Italian grid, within the end of the subsequent year, an amount of RES electricity equalling a minimum quota of this non-renewable electricity.

• The RES electricity quota was originally 2%, but was subsequently raised by 0.35% a year: specifically, it was 2.35% in 2005 and 2.70% in 2006 and is 3.05 % in 2007). No quota has, as yet, been set for the following years.

Tradable Green Certificate

• To show compliance, obliged operators can either hand in TGC (Tradable Green Certificates) from their own RES plants, or buy TGC from other RES producers on the market.

• Qualified RES electricity producers get one TGC for each 50 MWh of their production over a term that was formerly 8 years, but has, since 2006, been extended to 12 years of plant operation.

• The sale of TGC brings them an additional income besides the proceeds from the sale of energy on the wholesale electricity market.

Green certificate Reference price

TGC relating to the 2006 RES production was set (VAT not including) at 125.28 €/MWh by GSE (Gestore Servizi Elettrici)

This value was calculated as the difference between:

• the average cost of CIP/6 electricity purchased by GSE in 2006 and produced from renewable plants

• The revenue resulting from the sale of the same electricity in 2006

Legislative Decree No. 387/03

(implementing EU Directive 2001/77/EC on RES promotion)

• Production of 76 TWh/y from RES by 2010 (corresponding to a share of 22% of gross electricity consumption)

• No specific target for any type of renewable technology

• Annual increase of the RES quota obligation

• Net-metering for renewable plants not exceeding 20 kW

• National targets are to be allocated among regions

• Permit for renewable plant construction has to be released by the region concerned, through a single authorisation involving all parties concerned, within 180 days

National targets

• 2,500 MW from wind by 2008-2012 (Italian white paper for the exploitation of RES)

• 25% of renewables into the electrical system by 2011 (new energy programme)

• Reduction in annual greenhouse emissions of 6.5% less than 1990 by 2008-2012

Regional policies

Legislative Decree No. 112/98

• Decentralization of administration

• Decision on RES plants must be taken at regional and local level

As a consequence:

Regions are in charge of evaluating wind projects in terms of environmental impact and all other relevant aspects, before authorizing the building of wind plants

Regional energy and environmental plan

• Wind energy has been included in many regional plans

• The Apulia, Sicily, Campania and Calabria regions are currently stimulating wind deployment

• Some regions have issued confusing rules in their wind guidelines as a consequence of the lack of:

- national guidelines- establishment of obligation on regional governments

to contribute in meeting national renewable energy commitments

Other regional support

• Financial support in capital cost to RES initiatives, through European structural funds, has been granted by some southern regions

• In particular, the Apulia, Campania and Sicily regions, have allocated financial resources towards various renewable projects at different percentage of eligible cost

Installed Capacity and Annual Energy Production

2340

3215

14041458

1837

232

402563

1179

1180

100200300400500600700800900

10001100120013001400150016001700180019002000210022002300

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Year

Ins

talle

d C

ap

ac

ity

(M

W)

0

500

1000

1500

2000

2500

3000

3500

An

nu

al E

ne

rgy

Pro

du

cti

on

(G

Wh

)Annual MW

Cumulative MW

Annual EnergyProduction

Number of units and average capacity (kW)

84150

243

402

585

798

1346

65 94159 183 222

411

137 145

389 378 363

1209

1880

1491

2258

2575

260

368403

447482

521561

585607

673

761

823

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Nu

mb

er o

f u

nit

s

0

100

200

300

400

500

600

700

800

900

Ave

rag

e ca

pac

ity

(kW

/un

it)

Number of units(cumulative)Number of units(annual)Average capacity

Market share of wind turbine manufacturers at the end of 2006

Repower 2%

Enercon 12%

Gamesa 20%Vestas Italia

57%

GE Wind 6%

Contribution by electricity producers from wind at the end of 2006

0

5

10

15

20

25

30

35

Market Shares (% rated power)

Wind Energy Producers

% 31 14 13 9 5 5 4 4 2

31 14 13 9 5 5 4 4 2

IVPC Enel Edens FRI-EL Moncada Endesa EnerTAD Sardeol.Sansever.

Annual growth rate

050

100150200250300350400450500

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

years

MW

0%10%20%30%40%50%60%70%80%90%100%

Growth rate MW

Growth rate %

Wind farms ready to be connected to the grid or just connected

• 1 in the Salerno province (Campania) operated by FRI-EL 36 MW composed of 3 MW turbines• 1 in the Lecce province (Apulia) operated by Inergia 36 MW composed of 2 MW turbines• 1 in the Foggia province (Apulia) operated by IVPC 30 MW composed of 2 MW turbines• 1 in the Foggia province (Apulia) operated by Fortore Energia 12 MW composed of 2 MW turbines• 1 in the Foggia province (Apulia) operated by Fortore Energia 20 MW composed of 2 MW turbines

TOTAL 134 MW

Trend

• Installation of large sized turbine

from 1,5 MW to 3 MW

• Large variability of wind farms

from a few MW to 84 MW

• New investors (also foreigners)

• Offshore initiatives

Infancy stage

Future perspectives

• Quite good in the short time (the main developers have ordered aerogenerators for many MW)

• Some uncertainties and constraints still present in many regions have to be solved shortly in order to comply with European commitment

• Many developers have planned important investment in the medium term

• Repowering (replacement of old, small turbines with new and larger ones) will increase power capacity

Regions: Sardinia , Toscana, Marche, Umbria, Lazio, Abruzzo e MoliseRegions: Sardinia , Toscana, Marche, Umbria, Lazio, Abruzzo e Molise

é

#

#

#

#

#

#

#

#

#

#

#

#

##

#

#

# #

SA RL U X

LA R N O

A U R E L A

S LU C I A

S U V E R E T O

RU M IA NC A

ROMA SUD

MO N TA L T O

RO M A ES T

SE L AR G I US

RO M A N O R D

VI LL A N O V A

PR ES E NZ AN O

ROSARA

VA L M O N T O N E

CE PR A N O

CA G L A R I SU D

M O N T A L TO C . L E

T O R R EV AL D A LI G A

FIUME SANTO

PIOMBINO

T O R R EV A L D A L G A N O R D

CODROGIANOS

S G IA C O M O

LATINA

LUCCIANA EDF

#

#

#

##

#TAVARNUZZE

CALENZANOPOGGIO A CAIANO

S. BARBARA

ACCIAIOLO

LA SPEZIA

ROSEN

BARGI

ROMA OVEST

CANDIA

LIVORNO

ENERGIA MOLISE

120 -> 132 kV

SAPEI – Sardinia – Mainland dc 500 kV link

SAPEI – Sardinia – Mainland dc 500 kV link

Substation 380/132 kV in Abbadia (MC)

Substation 380/132 kV in Abbadia (MC)

Grid development

Regions: Campania, Puglia e BasilicataRegions: Campania, Puglia e Basilicata

380 kV single circuit line Foggia - Benevento

380 kV single circuit line Foggia - Benevento

é

#

#

BARI OVEST

LAINO

MONTECORVINO

LARINO

GALATINA

TARANTO NORD

BRINDISIPATRIA

PRESENZANO

GARIGLIANO

S.M. CAPUA V.

BRINDISI NORD

BRINDISI SUD

ANDRIA

MIRANT S. SEVERO 400 MW

ENERGIA TERMOLI 800 MW

ENIPOWER BRINDISI 1170 MW

FOGGIA

BENEVENTO

MATERA

CANDELA

380 kV single circuit line Matera – S.Sofia

380 kV single circuit line Matera – S.Sofia

Substation near BariSubstation near Bari

Substation near Vesuvio (NA)

Substation near Vesuvio (NA)

380 kV double circuit line Montecorvino - Benevento380 kV double circuit line

Montecorvino - Benevento

S. SOFIA

Grid development

Possible new substation 380/150 kV

near Candela

CASALVECCHIOPIETRACATELLA

VOLTURARA

ALBERONA

ROSETO

MONTEFALCONE

COLLE SANNITA

FOIANO

CERCEMAGGIORE

CAMPOBASSO

PRESENZANO

S.SOFIA BENEVENTO 2

BENEVENTO N.

BENEVENTO IND.

APICE FS

ARIANO IRPINO

SAVIGNANO FS

FLUMERI

ACCADIA

LACEDONIA

BISACCIA

ASCOLI SATRIANO

MELFI IND.

EOS 1 TROIA

TROIAORSARA

LUCERA

AVELLINO

AGIP DELICETO

FOGGIA

FOGGIA 380 KV

FOGGIAFS

FOGGIA IND.

ANDRIA

BARI O.

TRINITAPOLI

ALENIA

ORTANOVA

CERIGNOLA FS

S.SEVERO FS

S.SEVERO

S.GIOVANNI ROTONDO

MANFREDONIA

P.D.R. CELLE S.VITO

C.LE EDISON CANDELA

MONTESARCHIO

AIROLA

BOVINO

BOVINO FS

CALITRI

VALLESACCARDA

To streghten

remove transmission

constraint

FOGGIA O.

Grid development in Campania and Puglia

NEW 380 SUBSTATION

Regions Calabria and SicilyRegions Calabria and Sicily

380 kV double circuit line Sorgente-Rizziconi

380 kV double circuit line Sorgente-Rizziconi

380 kV single circuit line Chiaramonte - Ciminna380 kV single circuit line Chiaramonte - Ciminna

PARTANNA

BELLOLAMPO

PARTINICOTERMINI I.

CARACOLI

AGRIGENTO FAVARA

PATERNO’

ANAPO

CORRIOLO

MISTERBIANCO

CATANIA

PRIOLO

SIRACUSA

MELILLI

RAGUSA

PALERMO

TRAPANI

TRAPANI

RAGUSA

S.FILIPPODEL MELA

ENNA

POLIMERI

CALTANISSETTA

DUFERDOFIN

ISAB

CIMINNA

CHIAROMONTE G.

MESSINA

CROTONE

EDISONSimeri Crichi (CZ) – 800 MW

EDISON Altomonte (CS) – 800 MW

MONTECORVINO

da declassare a 150 kV

PISTICCI

tratto da demolire

SCANDALE

FEROLETO 380 kV

MUCONE 1 2

COSENZA

CATANZAROVIBOVALENTIA

REGGIOCALABRIA

MATERA

ROTONDA

ROSSANO – 1600 MW

MERCURE

LAINO

RIZZICONI

EDISON Pianopoli (CZ) – 800 MW

SORGENTE

Grid development

Network development process

The Development Plan is worked yearly out according

to the planning scenarios, on the basis of:

Demand growth per each area

Development of new production units (Thermal + Wind)

Location of new generation on the territory

Signals from the power exchange

New transformersNew transformers (MVA)(MVA) 14.85014.850 2.840 2.840 0 0 17.690 17.690

Short-medium term Short-medium term 10.850 2.430 0

13.280

Medium-long term Medium-long term 4.000 410 0

4.410

Lines (km) Lines (km) 3.2403.240 - 990 1.080 - 990 1.080 3.330 3.330

Short-medium term Short-medium term 2.320 - 260 890

2.950

Medium-long term Medium-long term 920 - 730 190

380

380 kV380 kV 220 kV 120-150 kV 220 kV 120-150 kV Total Total

2006-2015 Network Development Plan in ItalyCharacterization of new investments

Difficulties in building new high voltage lines due to authorisation problemsDifficulties in building new high voltage lines due to authorisation problems

Authorization problems

People opposition linked to increased (excessive) environmental sensitivity

Difficulties in identifying new feasible routes due to intense human territorial penetration

Lack of integration between electrical and territorial/environmental planning

Unsatisfactory results and uncertain timetable of present authorization procedures (EIA)

Main issues related to wind farm development

Mainly distributed in major Islands Sardinia is linked with Italy with a dc 200 kV line

Limited transport capability (300 MW) and operational flexibility (few fast

reversal/Year) and modulation range

Conventional power plant: few units, large size with high technical minimum

difficulty in managing load ramping in case of wind decrease

Big amount “Cip 6/92” Power Plant, with priority dispatching

Wind power plant located in region of low power demand

Wind energy to be transmitted over long distances to the load

centres

Necessity of grid extension

Wind capacity at regional level at the end of 2006 in MW. Wind capacity added in 2006 is indicated in bracket

346 (12)

451 (137)

153 (68) 421 (11) 468 (126)

70 (21)155 (8)

9

Wind capacity added in 2006 = 417 MW

3.5

28 (26)

2.5 (1.3)

6.5 (1.7)

1.5

Total wind capacity2.123 MW

6 (6)

36

326

1.516

1.126

North

Centre

South

Islands

FRANCEFRANCE

SWITZERLANDSWITZERLAND AUSTRIAAUSTRIA

168

158

400

593

533

303

197

616

36

TOTAL (MW) 3.004TOTAL (MW) 3.004

Wind generation capacity in 2008

640

2.547

13.342

8.652

North

Centre

South

Islands

TOTAL (MW) 25.181 TOTAL (MW) 25.181

SLOVENIASLOVENIA

FRANCEFRANCE

SWITZERLANDSWITZERLAND AUSTRIAAUSTRIA

288

377

849

3.0281862

2.828

2.044

5.442

147

201

109

1011

44

70

91

6.790

Total Wind connection applications to transmission grid: 25.181 MW (update December 2006)