Experience you can trust. 1 .leonardo-energy.org/report-renewables-support-schemes-and-grid-integration-policies w.leonardo-energy.org/webinar-support-schemes-renewable-energy-development-and-grid-dev System integration of DG / RES in different European countries Summary of Final Results January, 2009, update March 2010 ECI - Brussels
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Webinar - Support Schemes for Renewable Energy Development and Grid Development
Some fundamental questions for any country willing to introduce renewables and distributed generation are:
* Which are the different incentive schemes for the promotion of distributed generation and renewables? * Feed-in Tariffs, Quota Obligation, Tenders, Fiscal Incentives… What is proved to work and what failed? * Accommodating increasing amounts of distributed generation requires new grid developments; which are the incentives?
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Experience you can trust. 1http://www.leonardo-energy.org/report-renewables-support-schemes-and-grid-integration-policies
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
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)
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 (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.
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
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)
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
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).
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
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).
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.
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.
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.
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.
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.
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.
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.