Selling XRGI in the Spanish Market
Analysis of the peculiarities of the Spanish
market and its effect on sales
Manuel Campillo Sánchez
May 2015
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Author
Manuel Campillo Sánchez
Report Title
Selling XRGI in the Spanish Market
Project type
Bachelor Thesis
Institution
Aarhus School of Marine and Technical Engineering
Tutor
Torben Christensen
External Collaboration (Company)
EC POWER
Deadline
1st of June, 2015
Standard pages
41,8 (100.506 characters)
Pages
57
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Summary
This report carries out the analysis of the most relevant characteristics of the Spanish market,
regarding the micro-cogeneration field. The purpose is to identify the problems affecting the
limited success of the Danish company EC POWER, present in more than a dozen countries, in
Spain.
Specifically, the issue the report works with is selling XRGI, micro-cogeneration units with
different power models. Thus, the project identifies the problems that can be solved by the
company in one way or another and the problems which are intrinsic to the country or
dependent on external factors.
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INDEX
1. Introduction…………………………………………………………………………………………………………………....10
1.1 The project context…………………………………………………………………………………............10
1.1.1 Combined Heat and Power (CHP) and District Heating (DH)………………..10
1.1.2 Combined Heat and Power in Denmark…………………………………………..…..11
1.1.3 Micro Combined Heat and Power: EC POWER & The XRGI…………………..15
1.2 The project objectives……………………………………………………………………………………..….19
2. Pre-analysis………………………………………………………………………………………………………………………20
2.1 Cogeneration & Micro-cogeneration in Spain………………………………………………………20
2.2 EC POWER in Spain………………………………………………………………………………………………26
2.3 Socioeconomic background…………………………………………………………………………………28
2.4 Building & Heating Systems characteristics………………………………………………………….30
2.5 Legal aspects……………………………………………………………………………………………………….33
3. Problem Statement………………………………………………………………………………………………………….40
3.1 Methodology……………………………………………………………………………………………………….40
3.2 Delimitations……………………………………………………………………………………………………….40
4. Analysis…………………………………………………………………………………………………………………………….41
4.1 Techincal issues: Having the tools but not the knowledge……………………………….…41
4.2 Building opportunities: F Class……………………………………………………………………….……43
4.3 Legislation: The eternal inestable point…………………………………………………………….…47
5. Conclusions……………………………………………………………………………………………………………………...51
Annex 1. Guide for main institutions appeared…………………………………………………………………...…54
Annex 2. References…………………………………………………………………………………………………..………....55
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FIGURE INDEX
Figure 1. Basic scheme of a condensing power plant………………………………………………………….….10
Figure 2. The District Heating system……………………………………………………………………………………..11
Figure 3. DH production in Denmark by type of production plant………………………………………..…14
Figure 4. Growing decentralisation of electricity generation……………………………………………..…..15
Figure 5. Cogeneration with XRGI……………………………………………………………………………………….....16
Figure 6. POWER UNIT XRGI 20G-TO……………………………………………………………………………………….16
Figure 7. IQ20-CONTROL PANEL………………………………………………………………………………………….….17
Figure 8. Q60-HEAT DISTRIBUTOR…………………………………………………………………………………………..18
Figure 9. The compaction of the system. Unit: mm……………………………………………………………..….19
Figure 10. Electricity production sources in Spain in 2013……………………………………………………....21
Figure 11. Cogeneration for servicies and industry in 2009…………………………………………………..…23
Figure 12. Spain is not expected to meet the 2020 cogeneration targets…………………………..…..23
Figure 13. Installed <1 MWe cogeneration units in Spain……………………………………………..………..26
Figure 14. EC POWER Sales in Spain…………………………………………………………………………………..…..27
Figure 15. Gross Domestic Product in Spain…………………………………………………………………….....….28
Figure 16. Spanish Average Salary……………………………………………………………………………………..…..29
Figure 17. Picture from a Spanish newspaper about the unemployement……………………..……...29
Figure 18. European and Spanish electricity prices evolution……………………………………….………….30
Figure 19. Energy efficiency classification for the Spanish buildings…………………………….….……..31
Figure 20. Space Heating household systems in Spain……………………………………………….……..…….32
Figure 21. Domestic Hot Water systems in Spain…………………………………………………………………….33
Figure 22. 1HM Hydraulic solution – More than one XRGI………………………….………………………..…43
Figure 23. Installed solar power in Spain…………………………………………………………………….…..………48
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TABLE INDEX
Table 1. General characteristics of POWER UNIT XRGI 20G-TO………………………………………….……17
Table 2. General characteristics of IQ20-CONTROL PANEL…………………………………..…………….17-18
Table 3. General characteristics of Q60-HEAT DISTRIBUTOR…………………………………………….….…18
Table 4. : Chronological data of cogeneration in Spain…………………………………………….………….…22
Table 5. Cogeneration balance 2013/2014…………………………………………………………………….……….22
Table 6. Equivalent Electric Yield according to the different systems ………………………………..……24
Table 7. Overview of Loyal Decrees regarding electricity production from special regime sources…..35-36
Table 8. Subsidies for micro-cogeneration (P<0,5 MW) in 2007……………………………………………...36
Table 9. Current subsidie for micro-cogeneration units…………………………………………………….….…37
Table 10. Grid protection requirements regarding voltage and frequency………………………..……38
Table 11. Micro-cogeneration installation legalization tramits………………………………………..…….39
Table 12. Mandatory percentage of DHW provided by solar energy according to CTE…………….44
Table 13. Scope of application of PV power supply requirements……………………………………………45
Table 14. Interesting building characteristics for micro-cogeneration………………………….…..…….46
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1. Introduction
1.1 The Project context
In order to understand what is going to be studied in this project afterwards, it is important to
have an idea of what Combined Heat and Power & District Heating systems, their development
and situation in Denmark, Micro-cogeneration and EC POWER & XRGI are.
1.1.1 The Combined Heat and Power (CHP) and District Heating (DH)
Combined Heat and Power (also called Cogeneration) is a system which involves the
production of heat and power at the same time. The priority can be either power or heat,
depending on the needs of the area or place the system supplies to.
CHP can be present at any power station or engine, although the final efficiency varies
according to their size. There are also some differences regarding the structure of the power
plant systems (back-pressure turbine, extraction-condensing turbine, combined cycle) but the
operating principle is the same.
Figure 1: Basic scheme of a condensing power plant.
The picture above shows a condensing power plant. The main objective of it is to produce
power with a generator from steam water, although in gas engines and in the first step of the
combined cycles the source to produce it are combustion products (the structures are
different but the principle still the same). But there are also two sources from where heat can
be produced: The exhaust gases and the condenser.
The exhaust gases have a high temperature, normally between 120°C and 180°C. This
temperature is very positive in the cogeneration field, but the mass flow is normally quite low.
Due to that fact, exhaust gases only represent an opportunity regarding cogeneration in some
micro-scale specific projects (See 1.1.3 Micro Combined Heat and Power: EC POWER & The
XRGI). However, the opposite scenario is present in the condenser: the magnitude of the mass
flow used to decrease the temperature to convert steam into liquid is thousands of cubic
meters (always depending on how much energy the system produces) and the temperature
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difference magnitude between the inlet and the outlet of the condenser is around some tens
of degrees.
The last characteristics are perfect for what is called district heating. District heating consists of
a system for distributing heat generated in a centralized location for residential and
commercial heating requirements such as space heating and water heating. It is able to supply
big areas taking the heat from the condenser in condensing power plants, biomass power
plants, geothermal power plants, etc. The mass flow is connected to a heat exchanger, where
the heat is given to long wide water deposits from which the heat requirements of commercial
and residential areas are supplied.
Figure 2: The District Heating system. (Source: origen.ie)
Different technical measures can improve the flexibility of the DH/CHP system and can help
integrate wind power, which will be totally rellevant in a close future:
By use of heat storages, which are already common in Denmark, CHP plants can
decrease their combined heat and electricity production when there is much electricity
in the system from wind turbines and still be able to supply heat.
By using electric boilers and heat pumps, DH plants can use electricity for heat
production (instead of producing electricity).
By bypass of turbines, a CHP plant can avoid generating electricity when there is excess
electricity in the system. Instead, it can produce only heat with the same efficiency as a
heat-only boiler. The flexibility of the DH/CHP system is therefore an important aspect
with regard to wind power integration.
1.1.2 The Combined Heat and Power in Denmark
The European Union generates 11% of its electricity using cogeneration. However, there is a
large difference between Member States, with variations of the energy savings between 2%
and 60% (COGEN Europe: Cogeneration in the European Union’s Energy Supply Security).
Europe has the three countries with the world’s most intensive cogeneration economies:
Denmark, the Netherlands and Finland.
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The geographic features of Denmark have presented an optimal basis for the development of CHP for centralised heating. 80% of the population lives in urban areas (towns with more than 500 inhabitants), the annual heat demand as well as the annual number of heating hours is high, and nearly all large-scale power plants are located close to major cities. CHP for industrial purposes has, however, not been supported by similar structures as Danish industry is dominated by small and medium-sized companies with relatively low energy demands.
The three CHP concepts; large-scale, small-scale and industrial CHP have their individual story and features which roughly spoken relate to different periods in the Danish energy chronology.
Large-scale CHP with district heating
The use of CHP in urban district heating systems is widespread in Denmark, where large, central, coal-fired or gas-fired power plants are sited close to all major cities. The power plants primarily produce electricity for the national grid and instead of using sea-water for cooling, part of the heat thus generated is used to supply hot water or steam for the district heating supply system.
The first steps in the development of CHP were taken in Copenhagen at the beginning of the twentieth century where in 1904 the first CHP plant was commissioned, supplying heat and electricity to a hospital. Four years later it was decided to supply steam from the electricity production of Gothersgade Electricity Plant to the local public baths, but it was not until the establishment of district heating networks during the 20s and 30s that CHP really expanded. In the 1920s several electricity plants in Copenhagen were supplying heat to the district heating network, although mainly to large consumers.
The first plant specifically designed for CHP, a back-pressure turbine, was commissioned in 1934 supplying steam for heating purposes in the winter period and steam for low-pressure turbines in the summer period, producing electricity. Following World War II and the early success of district heating, it was evident that the future demand for electricity in Copenhagen had to be met by CHP.
A feature of the heat planning process, initiated in 1980, was to increase the share of cogenerated heat in the district heating supply system and to promote natural gas. Through the heat planning system, the cities were divided into areas suitable for district heating and areas more suited for individual supply of natural gas (energy districts). District heating was exempted from competition from e.g. natural gas and electric heating.
Today, ten major cities have city-wide district heating systems where almost all of the heat (95 -98 %) is produced in large coal-fired CHP plants and waste incineration plants, with a number of small oil-fired or gas-fired heat-only units for peak-load and emergency. Hot water for district heating from the large CHP units is produced almost exclusively at extraction plants because of their flexibility as regards the relationship between power and heat generation.
Since the early eighties no new power plants have been commissioned unless provided with the ability to perform CHP and to supply heat to the district heating networks. This was due to environmental concerns and the wish to encourage high fuel efficiency.
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Small-scale CHP with district heating
In Denmark small-scale refers to schemes outside the centrally supplied areas. Most of the plants range within the capacities of 0.5-10 MW and supply heat to small communities and institution buildings. Small-scale CHP plants not connected to a district heating network are often referred to as block CHP or mini CHP and rarely exceed an electricity capacity of 1 MW.
In the first decades after the Second World War the majority of the coal and peat-fired stoves were replaced by central heating, mainly supplied from individual oil-fired boilers. Among other things, due to the strong tradition of organising local co-operatives for power production, dairy production, local cooperatives etc. and the fact that heavy fuel oil was relatively cheap in the 60s compared to individual heating, district heating schemes were established in more than 200 towns.
Replacing individual oil- boilers by connection to the district heating network proved to be a flexible and economic solution for at least two reasons: first of all, district heating boilers could utilise heavier and thus cheaper fuels than had been possible in small individual boilers, and secondly the ability of the large boiler to switch to other fuels rendered district heating resistant to price fluctuations. The boost in the economy also played a role in the shift towards district heating (less work and space requirements). The district heating network supplied heat not only to large consumers, apartment blocks and institutions but also to a large extent to modern single-family houses.
The fist significant boost to small-scale CHP came with a Parliament decision from 1986, adopted by the power utilities, on the establishment of 450 MWe small-scale CHP based on indigenous fuels (natural gas, waste, biogas or biomass). The intention was for the first phase of the programme, which is the first 80-100 MW, to serve as a demonstration phase with the purpose of developing and demonstrating a wide range of technologies and plant configurations. The introduction of the state subsidy for small-scale CHP power production in 1992 further accelerated the establishment of small-scale CHP.
Dirunal heat storages are used to improve electricity production during high price periods usually with additional thermal storage capacity for use against subsequent demand. Diurnal storage therefore also improves electricity revenues and thus the economy of the plant.
Industrial CHP
In industrial plants with a high demand for process heat or steam, it may prove profitable to install a CHP unit and get the benefit of the electricity generation as well. Compared to CHP for district heating, industrial CHP has the advantage of avoiding investments in a district heating network. In Denmark most of the power generated through industrial CHP is exported to the grid.
In 1990 there were about 20 industrial CHP plants, mainly coal or oil-based boiler/steam turbine schemes. The total energy demand in the industrial sector has, despite increased production of goods, remained at the same level for decades, but there has been an important shift in energy consumption away from fuel oil towards electricity.
Before 1992 the penetration of industrial CHP was relatively low. The main causes are the following:
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The rather low energy intensity of the Danish industrial sector when compared to their neighbouring countries. The need for process heating in the form of steam is low and concentrated in a few sub-sectors such as the food industry and the chemical industry.
Low electricity prices and reduced energy taxation for industrial purposes. Energy costs constitute only a small share of total production costs.
But In 1992 an industrial CHP programme was launched with the aim of harvesting the potential of an estimated further 400 MW industrial CHP. Introduction of investment subsidies for energy efficiency measures in industry and trade, and the introduction of a bonus on electricity production from gas and biomass CHP marked a turning point in the development of industrial CHP. In 1997 the number of industrial auto-producers consequently passed 100.
The green taxes also introduced in 1992 on energy consumption in industry and trade, and the possibilities for obtaining state grants of up to 30% of investment costs in energy efficiency, including CHP, contributed further to this development.
Current situation
Figure 3: CHP production in Denmark by type of production plant. (Source: Danish Energy Agency)
Today, more than 60% of heating in private Danish houses is provided by district heating - not only for space heating, but also for domestic hot water. Denmark has six large central DH areas with a total heat production of approximately 70 petajoules (PJ) per year. There are also around 400 smaller decentralised DH areas with an annual heat production of approximately 60 PJ. In 2011, the production of district heating in Denmark amounted to 132 PJ. 76.3 % of all district heating was produced in cogeneration with electricity (CHP), thus saving around 30% of fuel compared with separate generation of heat and power (District Heating – Danish and Chinese experience, Danish Energy Agency).
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1.1.3 Micro Combined Heat and Power: EC POWER & The XRGI
As shown in 1.1.2 Combined Heat and Power in Denmark, the general tendency in the Danish
CHP field is to purchase smaller and more decentraliced systems in order to improve the
efficiency and the correct heat and power supply.
Figure 4: Growing decentralisation of electricity generation. (Source: Euroheat & Power)
Micro-CHP is just an extension of the idea of cogeneration to the single/multi family home or
small office building in the range 0.3 - 50 kW. According to COGEN Europe’s Annual
Conference in 2011, the following points are the main drivers for installing micro-CHP in
Denmark:
- Boilers have reached their efficiency limit; new technologies should be introduced in
this market.
- Micro-CHP can be valuable for power balancing issues.
- On-site production saves transmission losses and saves primary fuel elsewhere. It lacks
the 8-10 % energy losses when transporting electricity over long distances and the 10-
15 % energy losses on long distance heat transfer.
- Micro-CHP with intelligent control systems can be valuable in smart grid networks.
- The gas system is important in the future energy system; introduction of micro-CHP
secures the return of investment for connections to individual consumers with
decreasing heating energy needs.
- Micro-CHP paves the way for interesting ownership and operational models.
- Micro-CHP supports the EU Cogeneration Directive, the Energy Service Directive and
more.
- Improves security of supply along with other local producers, cell test/demo projects.
For micro-CHP the exhaust gases an engine produces and the heat from the engine itself are
the source to cogenerate with. In that way, in 1996 a group of Danish engineers decided to
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make use of this experience and teamed up to found EC POWER. One of the goals of EC
POWER is to make optimal use of primary energy in order to cover growing electricity
requirements cost-effectively while lowering the environmental impact. To meet the growing
needs of the market, EC POWER subsequently founded a subsidiary in Germany.
Today, EC POWER is one of Europe’s leading manufacturers of modular CHP units in the 10-50
kWel class, XRGI systems are sold (or will be sold in a close future) in 16 European countries
and in the United States.
Figure 5: Cogeneration with XRGI. (Source: EC POWER)
The XRGI is a CHP unit employing the cogeneration principle. Electricity is always generated
according to the same principle: fuel is burned in a combustion engine. The energy released
during this process drives a generator which also produces a great deal of heat. A cogeneration
unit feeds this heat into a circuit – thus enabling it to be used for space heating or producing
hot water. What makes cogeneration units so efficient is their dual use of the energy input.
The following characteristics are about XRGI20, which is able to produce 20 kWel. XRGI20 is
composed by three main components:
POWER UNIT XRGI 20G-TO
Functions:
- Generates heat.
- Generates electricity.
- Safety functions.
- Power control.
Figure 6: POWER UNIT XRGI 20G-TO
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General characteristics:
Noise level 49 dB(A)
Dimensions (L x W x H) 125 x 75 x 115-125 cm
Weight 750 kg
Service interval 6000 hours
Primary energy factor 0.36
Fuels Natural gas (all qualities), propane, butane
Power output (modulating) 10 – 20 kW
Electrical efficiency 32%
Thermal output excluding optional condenser 25 – 40 kW
Thermal efficiency 64%
Total efficiency excluding optional condenser 96%
Emission levels (new device) CO <50mg/Nm3, NOx<100mg/Nm3 (<
TA air)
Oil capacity 50 l
Generator 4 pole asynchronous
Rated speed 1500 min-1
Exhaust temperature <110 °C
Exhaust flow 70 scm/h
Table 1: General characteristics of POWER UNIT XRGI 20G-TO. (Source: XRGI 20 Manual – System components &
Installations instructions)
IQ20-CONTROL PANEL
Functions:
- Connects to the grid.
- Electrical safety features.
- Controls the XRGI 20G-TO.
- Displays status and output.
- E-mails data.
General characteristics:
Dimensions (L x B x H) 600 x 210 x 600 mm
Weight 40 kg
Power 3 phase + N + earth, 400 V
Max. ambient temperature 40 °C
Soft starter Allan Bradley SMC-3 150-C43NBR
Contactor Allan Bradley 100-C43KF00
RCD Type A Schneider 30MA 63A 4P
Electricity meter Carlo Gvazzi EM24 AV9 P2
Mains monitoring relay Carlo Gavazzi DPC72DM48B002 VDE 0123-01
Figure 7: IQ20-CONTROL PANEL
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Fuse and cable dimensions
Interface cable Fuses Utomatic circuit breaker
63A/ 16M mm2 Cu Neozed GL Type D
Table 2: General characteristics of IQ20-CONTROL PANEL. (Source: XRGI 20 Manual – System components &
Installations instructions)
Q60-HEAT DISTRIBUTOR
Functions:
- Controls engine water temperature.
- Discharges the storage tank.
- Manages the storage tank.
General characteristics:
Dimensions (H x W x D) 1100 x 500 x 390 mm
Weight 68 kg
Connections
Pipe PT 1 ⁄”
Storage tank discharge pump Grundfos: UPS 15-60 (105 W)
Storage tank charge pump Grundfos: Magna 25-100 (185 W)
Engine circuit
Pump Grundfos: Magna 25-100 (185 W)
Plate heat exchanger Danfoss: XB 10-1 50
Q-Network Connections Storage Control Boiler Control Flow Control
Connection Load sharer
Power consumption at full load 254 W
Standby consumption 22.7 W
Table 3: General characteristics of Q60-HEAT DISTRIBUTOR. (Source: XRGI 20 Manual – System components &
Installations instructions)
Figure 8: Q60-HEAT DISTRIBUTOR
HEARDDCFCFDXCGFDCDGFKJFDNVJ
KVCXHEAThearDDISTRIBUTOR
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As shown in Table 1, the system provides 32% power, 64% heat and 4% losses in optimal
operation. The space needed is no longer than 5.5x2.05x2.1m, so regarding space
requirements it can be installed in almost any building.
Figure 9: The compaction of the system. Unit: mm. (Source: XRGI 20 Manual – System components & Installations
instructions)
1.2 The project objectives
XRGI unit is sold (or is expected to be sold soon) in 17 countries: Denmark, Germany, Canada,
United Kingdom, France, Belgium, Hungary, Austria, Switzerland, Slovakia, Slovenia, Polland,
Netherlands, Spain, Portugal, Italy and United States.
Doing business internationally is one of the main spots for EC POWER, and the number of
global sales is increasing and increasing. The market rate is very positive in those countries
from which the company has data: In Germany, EC POWER has more than the 40% of the
market, in United Kingdom more than 50% (as in Canada), in Belgium more than 30%... And
nowadays sells are increasing and increasing. However, although Spain is following the same
tendency (See 2.2 EC POWER in Spain), it is one of the weakest markets for EC POWER.
Karsten Holse, EC POWER Chief after Sales Officer, declares: Spain is a potential market
regarding XRGI sales. But for some reasons, this potential is not growing into the reality.
According to Mr. Holse, the economical crisis still present in Spain is the general problem, but
more detailed issues can be found as well as others unrelated to economy. The function of this
report is to analyse the facts which impede the proper development of XRGI in the Spanish
market and the issues found when trading with it. The analysis is organised according to the
following points:
Pre-analysis: Study of the rellevant characteristics regarding EC POWER and the
Spanish customers, the habits and the system. In addition, perceptions and opinions of
the EC POWER head of sales are deeply taken into account to know which aspects are
the best to be analyzed.
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Analysis: The initial pre-analysis of the main rellevant aspects lead to the evaluation of
what is being an obstacle for improving the XRGI sales in the Spanish market.
Information given in the introduction is also taken into acccount. The analysis must
group all the ideas from the pre-analysis together, interconnecing each other to (try
to) give a reliable answer.
Conclusions/Solutions: The analysis does not necessarily lead to a possible solution (or
at least not a concrete solution which depends on the company), but is the main
objective. The conclusion shows both aspects which depend on external factor which
can not be faced and those ones which represent an opportunity for EC POWER to
improve.
2. Pre-analysis
2.1 Cogeneration & Micro-cogeneration in Spain
Cogeneration (is not normal for the Spaniards to use the term Combined Heat and Power or
CHP) has played an important role in the Spanish industralization, but the sector did not start
to be developed as early as in the Danish case. In fact, was not until the 80s when the Spanish
Transition found the need to extend the industry and to find new energy sources in a country
which had a total lack of energetically useful prime matters (no fossil fuels or bad quality
ones).
The cogeneration fairy fail
The short history of the Spanish Cogeneration has always mainly taken place in the industry
sector. However, although at the starts of the 80s some cogeneration installations were
started to build, the development was quite low. European subsidies were totally determinant
to let the industry develop, as national subsidies were almost non-existent.
As in Spain cogeneration is mainly used in the industry, large-scale cogeneration was (and still
is somehow) practically the only one available in the country.
In 1994 the real engine for the promotion of the cogeneration industry took place: From that
time they will always sell the electricity generated with a more expensive price than the costs
per energy unit.
However, introducing the cogeneration in the industry was not an easy process, and the
electric companies tried to stop some projects at first (as they were ‘losing money’ with the
increasement of the efficiency the cogeneration presents). But as the payback for the new
projects in that moment was quite favourable, they finally invest on them.
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Figure 10: Electricity production sources in Spain in 2013. (Source: Endesa)
After 1998 the new legislation promoted the sector liberalization leading to the abandonment
by the state: the subsidies become lower and the promotion of the industry was practically
inexistent. Besides that, the prohibition to sell all the net production to the grid (increasement
of the mandatory self-conssumption) and the disminution of the instalable power, made
cogeneration doomed to decline. Consequently, it also produced the lack of confidence of
investors and financial companies.
Moreover, for the cogenerators taken in the economic regime of 1994 (which could not sell
the electricity at a higher price than 6 ptas/kWh if they wanted to keep the subsidies) the
radical increasement of the oil and gas prices (which increased their costs) damaged them.
According to the last, the scenario at the end of the 90s for the cogeneration sector was not
good at all. Nevertheless, on 17th December 2001 a fact would change the cogeneration
situation in Spain: It was the record of the electricity demand in the country. 500 MW were
deballasted and 1727 MW were interrupted. But this situation was even when in the balance
they did not take into account the self-consumption of the cogenerators (around 2500MW).
This event showed the importance attached to the cogeneration in the Spanish Electricity
System, as a necessary energy source.
However, although this event had been the cogeneration back again in the spotlight of the
Central Government, the reality was that the main subsidies were given to combined cycles.
Besides that fact, step by step renewables were taking part in the Spanish energy production
share, with the consequent subsidies to the wind power, hidraulic power, biomass and waste
reduction: Cogeneration was discriminated once again.
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YEAR Sold Energy (GWh) Installed Power (MW) Number of installations1990 566 356 -
1991 1.383 597 -
1992 1.816 648 -
1993 3.175 1.150 -
1994 5.476 1.441 -
1995 6.690 1.759 -
1996 9.050 2.350 -
1997 11.232 2.728 -
1998 13.671 3.660 546
1999 16.575 4.201 664
2000 16.757 4.923 770
2001 16.684 5.345 812
2002 18.286 5.561 833
2003 18.992 5.621 840
2004 19.265 5.685 858
2005 18.823 5.687 858
2006 16.778 5.814 861
2007 17.708 6.012 856
2008 21.183 6.058 863
2009 22.035 5.913 953
2010 23.727 6.010 969
2011 25.084 6.121 1.017
2012 26.909 6.060 1.007
2013 17.268 6.033 999
Table 4: Chronological data of cogeneration in Spain. (Source: CNE)
Anyway, the awareness of how important was to raise the national energ sources was
followed by the attempt of improving the efficiency and increasing the energy self-sufficiency.
When the socialists won the elections again in 2008, the Renewable Energy Plan was created,
and it treated cogeneration as another renewable energy. In Table 4 is easy to see the huge
incresement since that year (as happened with all the renewable sources) even though the
economical crisis had a special and fast negative effect in the Spanish economy.
GWh/year 2014 2013 %
Produced electricity 26.000 32.400 -20%
Exported electricity 20.500 25.358 -19%
Power (MW) 4.382 5.978 -27%
Number of installations
626 999 -37%
Table 5: Cogeneration balance 2013/2014. (Source: ACOGEN)
Due to the dramatic effect of the crisis in the Spanish industry, lower and lower energy
consumption was needed. This fact, in addition to the new government’s cuts, showed the
Spanish cogeneration sector inestability again: In 2012 it cut deeply the subsidies to the
renewable energy sector, including the cogeneration. From 2012 to 2013 almost 36% less
energy was sold from cogeneration, the highest decreasement among all the renewable
energies.
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Figure 11: Cogeneration for services and industry in 2009. (Source: IDAE)
Today, the situation is becoming worse and worse for the Spanish cogeneration. Although
cogeneration still supplies around 12% of the electricity demand, some cogeneration power
plants are closing and the load for which are still available is quite far from the optimal one.
Bigger cuts are being waited for this year, and the effect of the general inestability in the
sector has affected naturally to investors and companies: ‘Nobody’ dares to start any project
about cogeneration and there are no perspectives of improvements.
Figure 12: Spain is not expected to meet the 2020 cogeneration targets. (Source: ACOGEN)
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What do ‘cogenerators’ say?
Accoding to the Cogeneration Spanish Association (ACOGEN) there are several reasons for why
cogeneration is not being developed as it should (only 29% of the national potential is
exploited):
Economic barriers
- Cogeneration has a high level of risk which is reflected in the rates of return requirements and the demands of pay-back, but not in payments.
In Spain cogeneration requires the activity of the associated industry to operate normally. It
means that cogeneration activity is intrinsically linked to industrial or residential process heat
demand, so specially when supplying sectors with economic cycles (e.g. textil sector) it entails
a greater risk.
Investors are well aware of that investing in other renewable energies, particularly wind
power, they will obtain a lower pay-back and more security. For example, Equivalent Electricity
Yield (Rendimiento Eléctrico Equivalente, REE = Produced electricity/(Energy input-Harnessed
heat/0,9). See figure Table 6) must be higher than a certain number, which depends on which
kind of energy is the source of cogeneration (gas turbine, steam turbine…): If for any reason
the yield becomes lower, the installation is not allowed to receive any subsidies.
- Much of the new cogeneration is less attractive for the investors (resturn vs. risk) than
what is implicit in the law.
The profitability of the new projects, especially 1-25 MW ones, is limited by legislative obstacles which has a direct impact on the economy (risks, pay-back).
FUEL TYPE REE (%)
Liquid fuels in power plants with boilers 49
Liquid fuels in termal engines 56
Solid fuels 49
Natural gas and liquefied oil gas in termal engines
55
Natural gas and liquefied oil gas in gas turbines
59
Other technologies and/or fuels 59
Biomass (Type I) 30
Biomass (Type II) and/or Biogas 50
Table 6: Equivalent Electric Yield according to the different systems. (Source: Fenercom)
- The lack of incentives for cogeneration of more than 50 MW prevents the realization
of significant potential with a positive impact on improving energy efficiency.
It is contrary to the spirit of the European Directive on cogeneration (See 2.5 Legal Apects) which states that "support for cogeneration based on useful heat demand and primary energy savings" will be ensured.
25
Financing barriers
The current economic crisis has led to difficulties to start new projects and higher borrowing costs for both industrial companies and promoters, further reducing the profitability of new projects.
Administrative barriers
- The registration of pre-assignment power is necessary because - as said before - it is
mandatory the existence of an associated heat demand. This process adds
bureaucratic difficulties.
- In each Autonomous Community there is ambiguity and unequal application in the criteria when applying for the incentives.
- The network access point has a particular difficulty for cogeneration, which joins some
distributors’ barriers to accept solutions which let the islanded operation.
Uncertainty
As explained before, the constant lagislative changes regarding renewable energies or
cogeneration, the uncertainty about future allocations of CO2 emission rights and
compensation framework add more reasons for not investing in cogeneration.
Micro-cogeneration
Although the basic principle is the same, the fact that micro-cogeneration involves a lower
power (at the most 50 kWe) creates lots of differences from the ‘classic’ cogeneration. The
legislation and installation are simplier and the economical risk too.
Ten years before micro-cogeneration was a practically unknown technology in Spain.
Nowadays the situation has changed and is being transformed, but it is still clearly a failure:
According to ECLAREON, at the end of 2009 it was estimated that there were only 150 micro-
cogeneration installations lower than 100 kW, and in 2011 just 67 were enrolled in the Special
Regime Installation Registration (RIPRE).
The situation is similar for small-scale cogeneration units. Official data for the Institute for
Diversification and Saving of Energy (IDAE) shows that at the end of 2013 only 193 units with
less than 1 MW power (which also includes micro-cogeneration) were installed in Spain.
The fact that in Spain the main sector for the cogeneration applications is the industrial sector
has a great importance in the micro-cogeneration failure. It represents a ‘base problem’, as
industry normally needs a large ammount of energy so no small cogeneration systems are
interesting in this field.
26
Figure 13: Installed <1 MWe cogeneration units in Spain. (Source: MINETURIDAE)
The rellevant aspects which can have an influence on the failure of micro-cogeneration in
Spain (as well as the ‘failure’ of EC POWER & XRGI) will be handled in the following points.
2.2 EC POWER in Spain
EC POWER started to sell XRGI in Spain in 2005 when the economical context in the country
was very different from which it is nowadays.
Spain is not a strong market for the company, as only around 1% of the total XRGI production
goes finally to the country.
The dealers
EC POWER does not have any subsidiary in Spain, as it has in Germany. However, XRGI
is sold through three dealers:
Saltoki
With its central offices in Pamplona, Saltoki is a company with more than 35 years whose
activity is based on facility supplies for the professional market. Their products are grouped
into four sectors: Plumbing, heating and cooling; Electricity; Kitchen and contemporary
furniture and Civil engineering and building.
Saltoki has 32 stores spread across Spain, which makes it being the most important Spanish
dealer for EC POWER.
Unión Calor
This Barcelonan company was created as a business project oriented to satisfy the growing
energy saving systems demand which the society requires.
As a global specialist in energy demand, it offers solutions for different segments inside the
industrial, tertiary and residential market.
27
Foresis
The last dealer is situated in Madrid. Foresis fabricates switches, accessories for electrical
installations, automation and intelligent technical systems. Through another company they sell
XRGI, but the information about it is really poor.
Tendencies and expectations
The accurate data about the number of sales in Spain is confidential and could not be provided
by EC POWER. Nevertheless, general ideas and tendencies can be explained. Figure 14 shows
XRGI sales in the Spanish market year after year as a percentage of Jørgen Juul Pedersen’s
forcast for 2020. Jørgen Juul Pedersen is the EC POWER Chairman of the Board, the
responsible for the Spanish market. He explained the tendencies which have taken place along
the years:
Figure 14: EC POWER Sales in Spain. (Source: EC POWER Chairman of the Board)
XRGI was sold in Spain for the first time in 2005. From that time until 2009 the sales increased
heavily, but then suddenly fall: In 2010 only two units were sold. This low sales rate was
increasing quite slowly until 2012 and from then until the present, sales are growing
considerably. EC POWER expects to maintain this annual increasement rate for the following
years.
The increasement in the number of sales in the Spanish market will be possible thanks to the
Mediterranean coast: EC POWER through its dealers has new contracts in Valencia (2), Murcia
(2), Málaga (2), Córdoba (1) and Madrid (3). Except Madrid, the rest are situated in the
28
Mediterranean coast. The reason is that most of the contracts have been signed with hotel
enterprises.
But not only hotels are provided by XRGI. The product has been also installed in Spanish
hospitals, clinics, swimming pools and large buildings.
2.3 Socioeconomic background
The Spanish economic context must be taken into account in any business evaluation.
However, despite the relevance of the economy for EC POWER sells rate, the present report
will not delve into the subject more than the necessary to let a general understanding for the
last and following points. The reason is that EC POWER is completely aware of the political,
economical, social and technological status through PEST annual report which evaluates the
last points. The aim of this project is, nonetheless, to evaluate other ‘micro’ aspects which can
have an influence on the success (or failure) of XRGI units sales in Spain, of whom it is not easy
to notice when residing outside the country.
2008: The border between two tendencies
The economic and social status scenario before and after the economical crisis (end of 2007)
are extremely different. Since the start of the economic crisis the Gross Domestic Product
(GDP) started to decrease along the years. This tendency was present until 2013, analogously
to most of the European economies, when the GDP started to increase in most of the
European countries.
Figure 15: Gross Domestic Product in Spain. (Source: Datosmacro)
More and more poor
However, what has a higher influence for EC POWER and for any company trading abroad is
the purchasing power potential customers have.
€800.000
€850.000
€900.000
€950.000
€1.000.000
€1.050.000
€1.100.000
€1.150.000
2005200620072008200920102011201220132014
GDP Spain
GDP Spain
29
Figure 16 shows that salaries in Spain are almost frozen, while the prices grow at a higher
percentage. Fortunately, the purchasing power increased last year thanks to the Spanish
deflation in 2014. But it is not a tendency, as once the inflation starts again, the purchasing
power will continue decreasing.
Figure 16: Spanish Average Salary. (Source: Datosmacro)
According to a study made by IPMark Magazine, Spain had in 2014 a purchasing power of
12.498 € per year, lower than the European average (13.112 €).
The unemployement is totally relevant to give an explanation to the lasts points. Total
unemployement in 2015 is 23%, still too high, but the tendency is from mid-2013 to decrease.
Figure 17: Picture from a Spanish newspaper about the unemployement, officially the subject that most worries
Spaniards nowadays. (Source: El País)
Unemployement has another effect which has an influence in the people’s consumption
habits: Fear of job loss results in greater tendency to save, and therefore a fall in the
consumption.
€0
€5.000
€10.000
€15.000
€20.000
€25.000
€30.000
Average Salary
Average Salary
30
Electricity and Gas Prices
Another very important and more direct factor for EC POWER is electricity and gas prices. With
micro-cogeneration units the users are able to produce both electricity and heat from natural
gas, so the higher is the difference between electricity and gas prices the better.
Spain has not got a special low price for the gas comparing to other European countries.
However, the price difference named before is quite high. This fact can only be explained by
the high electricity price Spaniards have both for industrial and residential sectors.
Figure 18: European and Spanish electricity prices evolution. (Source: Eurostat)
Between 2008 and 2014 Spanish electricity price increased more than 60% while in the EU-28
agrupation it increased 27%. The tendency is not the same since 2013 for the electricity price
(as now it increases at a lower level) but as the gas price is decreasing slowly, the factor still
represents a great advantage for the Spanish market.
2.4 Building and heating systems characteristics
One of the most famous facts in the Spanish economy history is the last ‘housing bubble’
which took place from 1997 to 2008 (one of the main reasons why the economical crisis
affected Spain that much). According to the Ministry of Housing, only during the period 2003-
2005, 1.723.489 households were built.
But this fact did not help to renovate the Spanish ‘average’ household. Professional
Association of Estate Administrators in Madrid (CAF Madrid) showed last March a
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representative study of what the ‘housing bubble’ meant in Spain: 25% of the built households
in the last ten years present defects.
Poor quality
The Spanish housing stock is still old, low quality. 44% of the houses in 2010 were built before
1979, and only 7% after 2006 (IDAE).
Actually in a marking system ranging from A to G which evaluates the energy efficiency level (A
is the best mark and G the worst), around 60% of the households are E Class, around 30% are F
Class and around 6% are G Class. This means that around 96% of the Spanish households
would not pass the ‘Energy Efficiency Exam’.
Figure 19: Energy efficiency classification for the Spanish buildings (Source: Plan de Ahorro y Eficiencia Energética
2011-2020, Ministerio de Industria, Turismo y Comercio).
Dark scenario for green energies
No matter how huge was the volume of new homes/offices that were built in the last years,
environmentally friendly buildings still are a new concept in Spain (even when pople are aware
of the positive economical impact which they have).
In 2010, only 8% of the companies worked in spaces with sustainable building international
certificates and 76% were in buildings without renewable energy supply (thermal solar,
photovoltaic, biomass…).
Deepening in the cogeneration field, finding out a building in the residential or service sector
which supplies its demand with a micro-cogeneration system would be totally anecdotal in
Spain. Both small-scale cogeneration (<1 Mwe) and micro-cogeneration (<50 kWe) only supply
toguether around 2% of the demand in these sectors (IDAE, 2008). Nowadays the percentage
-not the quantity - is probably lower, as the micro-cogeneration has not had the good
development that other sources (especially photovoltaic panels) have had.
32
Space Heating and Domestic Hot Water (DHW) systems
It is well known that Spain is a warm country. It affects directly to heat demand but still a
heating system is required to provide hot water.
To understand the most common heating systems in Spanish households it should be taken
into account the following data:
- 70% of the households are in flats whereas 30% are single family homes.
- 90% have a heating system and 48,9% a cooling system (mostly in the Mediterranean
area).
- Practically 100% have DHW.
District Heating system does not exist in Spain and in general sharing the heating systems is
not in the culture. In that way, even when most of the population lives in flats, 82% of the
households have individual heating systems.
Figure 20: Space Heating household systems in Spain (Source: IDAE).
50% of the households have common boilers, sometimes complemented with another system
(radiators, heaters…). The average is 1,3 heating units per household.
Predominant energy sources used for heating are electricity (46%) and natural gas (32%).
Regarding DHW, the individual systems are largely more common again. Similarly to the
previous case, boilers are the usual water heating systems: 61% of the total DHW systems are
individual boilers and 6% are collective.
For Domestic Hot Water, contrary to the previous case, only 1 unit/system is available per
household.
33
Figure 21: Domestic Hot Water systems in Spain (Source: IDAE).
Predominant energy sources are in this case natural gas (40%), butane (26%) and electricity
(22%).
2.5 Legal aspects
General cogeneration and micro-cogeneration statements
EC Directive: Directive 2012/27/UE. Promotion of cogeneration based on useful heat
demand
European Commission officially declared in 2012 its support for high efficiency cogeneration in
this Directive.
“High efficiency cogeneration and urban heating and cooling systems have a significant
potential for saving primary energy which, in general, is largely untapped in the Union.
Member States should carry out a comprehensive assessment of potential high efficiency
cogeneration and urban heating and cooling systems.”
Moreover, support to distributed power generation was remarkable. The importance of small-
scale and micro-cogeneration units are explicitally named in several parts of the document.
“It is appropriate that Member States encourage measures and procedures to promote
cogeneration plants with a total nominal heat output of 20 MW or less, in order to promote
distributed power generation.”
“It must be facilitated the access to the grid to the electricity produced by high-efficiency
cogeneration, especially in the case of micro-generation units and small scale”
In fact, some points of the document are more concrete. According to it, not later than December 31, 2015, Member States shall carry out and notify to the Commission a comprehensive assessment of the potential use of high efficiency cogeneration and district heating and efficient cooling.
34
“Member States will adopt policies which encourage the consideration of the potential use of
efficient heating and cooling at a local and regional level, in particular those using high
efficiency cogeneration. The possibility of promoting local and regional heat markets will be
taken into account.”
Regarding energy transformation, transport and distribution the European Union policy is
crystalline: Connections to the electricity grid must be facilitated for the small systems. The
same point in the document even says that, where appropriate, Member States may ask the
operators of transport systems and distribution systems support high-efficiency cogeneration
to be sited close to areas of demand by reducing the connection to the system and user
charges.
“Member States may provide, in particular, the connection to the electricity grid from high
efficiency cogeneration units produced by small-scale cogeneration and micro-cogeneration
units. If appropriate, Member States shall take measures to encourage network operators to
adopt a simple method of "installation and information" for the establishment of micro-
cogeneration units, in order to simplify and shorten the authorization procedure for individuals
and installers.”
Spanish Real Decreto: RD 616/2007, de 11 de mayo. Promotion of cogeneration
This royal decree concerns the creation of a framework for the promotion of high efficiency heat and power cogeneration based on useful heat demand and primary energy savings,
increasing energy efficiency and improving security of supply.
Prior to the (official) statements of the European Union, Spain declared its intention to foment cogeneration in 2007. The Royal Decree is still formally valid, although in eight years lots of changes have been produced in the field of cogeneration and micro-cogeneration (as it has been explained before in the Introduction and it is explained in the following points). “The Ministry of Industry, Tourism and Commerce will ensure that support for cogeneration, of
the existing and future units, is based on the useful heat demand and primary energy savings,
considering the opportunities available to reduce the energy demand through other measures
that are economically viable and environmentally friendly, as well as the possibility of other
energy efficiency measures.”
Again, micro-cogeneration units are present in the official document in an explicit way:
“The production of small-scale and microcogeneration units which provide primary energy
savings may be considered high-efficiency cogeneration. For micro-cogeneration units the
calculation of primary energy savings may be based on certified data.”
35
Spanish Real Decreto: RD 413/2014, de 6 de junio. Regulation of electricity production
under the special regime. Remuneration.
The one which is shown in the tittle is the current Royal Decree, but definitely not the only one. Spain has had several Loyal Decrees and Laws in the last years regarding electricity production under the special regime regulation (See Table 7). All of them have had their influence, to finally end up in Real Decreto 413/2014, de 6 de junio. However, self-consumption is still a controversial and non-clarified issue in Spain as it is explained in the Analysis.
Year Loyal Decree/Law Main characteristics
1997
Ley 54/1997, de 27 de noviembre
Included a chapter dedicated to the special
regime of electricity production (including
cogeneration).
1998 Real Decreto 2818/1998, de 23 de diciembre
Abolished the last. Similar.
2002
Real Decreto 841/2002, de 2 de agosto
Modified the last. Promotion of special regime
energies regarding participation in the production market.
2004
Real Decreto 436/2004, de 12 de marzo
Abolished the last two. Stablish a metodology for
juridic and economic activities regarding
electricity production in special regime.
2007 Real Decreto 661/2007, de 25 de
mayo
Abolished the last. Regulate the electricity production in
special regime. Down subsidies payment.
2009
Real Decreto-ley 6/2009, de 30 de abril
Created the social bonus and the pre-allocation
register for special regime installations (mandatory to
apply for the subsidies stablished in the last named
Loyal Decree)
2010
Real Decreto 1565/2010, de 19 de noviembre
Regulates and modifies some specifications regarding electricity
production activity in special regime.
2012 Real Decreto-ley 1/2012, de 27 de enero
Finish the subsidies for new special regime units/plants.
2013 Real Decreto-ley 2/2013, de 1 de
febrero
Market price + subsidie price not possible any more.
Down subsidies payment dramatically.
36
2013
Real Decreto-ley 9/2013, de 12 de julio
Abolished Real Decreto 661/2007, de 25 de mayo.
Stablish new metodology for juridic and economic activities regarding
electricity production in special regime (‘urgent
measures for the stability of the electric system’)
2014
Real Decreto 413/2014, de 6 de junio
Regulates electricity production from renewable
energy sources, cogeneration and waste.
The current one.
Table 7: Overview of Loyal Decrees regarding electricity production from Special Regime sources. (Various
official sources)
The Loyal Decrees showed in Table 7 are only those ones who are about cogeneration and in
general about renewable sources, but there are also other Laws and Loyal Decrees which
regulate the electric sector and therefore affects cogeneration.
As seen, the general tendency is to destinate less and less public founds to renewable energies
subsidies, which include cogeneration and which include at the same time micro-cogeneration.
Power Regulated tariff
c€/kWh P≤0,5 MW 12,0400
0,5<P≤1 MW 9,8800
1<P≤10 MW 7,7200
10<P≤25 MW 7,3100
25<P≤50 MW 6,9200
Table 8: Subsidies for micro-cogeneration (P<0,5 MW) in 2007. (Source: Ministerio de Industria, Turismo y
Comercio)
The document showed the remuneration whereby the energy under the special regime was
going to be paid. However, in 2012 José Manuel Soria, Minister of Energy, Tourism and
Commerce announced the suspension of bonus for new renewable installations as a
“temporary measure”. As showed in Table 4 before, it affected to the number of cogeneration
power plants.
Since Loyal Decree 9/2013, renewable energies bonus for new energy installations are not
based on the ammount of energy produced, but on the inversion cost of the installation. The
bonus is variable according to the installed capacity. For micro-cogeneration units the category
is P<0,5 MW.
37
Table 9: Current subsidie for micro-cogeneration units. (Micro-motor fed by natural gas: IT-01056) (Source:
Ministerio de Industria, Energía y Turismo)
The last rates (2014) show that for the units install in 2015 it will be 163,223 €/kW. For
example, according to it, for installing XRGI 20 unit in a Spanish large building the owner(s)
would receive around 3.264,46 € anually in 2015 and in 2016, regardless of the ammount of
energy produce. The subsidie is only available for this units it they operate more than 2100 h
per year. It is not a problem for micro-cogeneration units, especially for XRGI whose operation
system allows the constant operation the full year in almost all cases (although not at full load,
but it does not represent a problem anyway).
Electricity network connection conditions
Spanish Real Decreto: RD 1699/2011, de 18 de noviembre. Regulation of grid
connection for small power electricity production installations.
The specific structure of the tertiary and domestic sector should be taken into account to
promote concrete measures to foment greater penetration of renewable energy technologies
and cogeneration technology. Therefore, streamlining and acceleration of administrative
procedures for obtaining permits to allow greater generating capacity is considered as a
priority for achieving the above objectives.
The small size of the installations and the low voltage of the residential and tertiary sectors
and the fact that normally they are placed in cities where connection to the electricity grid is
facilitated and viable, make distributing companies to have a lower ammount of work.
38
Thus, this Decree states:
- The exclusion of administrative authorizations for plants with a rated output not exceeding
100 kW.
- Simplifying procedures for connections at points where supply already exists.
Another advantage of the Royal Decree is the establishment of models of standard connection
and standard contracts with the distributor. In fact, if the installation is less than 10 kW, is
enough informing the distribution company for the connection request together with a technic
memory and the Universal Code Supply Point (CUPS, in Spanish) of the associated supply.
Moreover, in case of equal or lower installed power of 20 kW, connection costs between the
border point to the connection point distribution network and any cost of upgrading to pay for
the applicant are replaced by the actual remuneration system, so they count like a normal
supply.
The Decree also specify that for selling the electricity to the electricity grid the power factor of
the power supplied in any case should be close to 1 (At least 0,98 when generating above 25%
of the nominal potential).
Grid protection requirements
The same Loyal Decree also contains the specifications regarding electricity grid protection
requirements.
According to it, any micro-cogeneration installation must include the following elements:
- General cutting element. - Differential circuit breaker. - Automatic connections switch for switch-off-switch-on connection, along with a
latching relay. - Maximum and minimum frequency and maximum and minimum voltage between
phases connection protections.
Parameter Protection threshold Maximum operating time
Overvoltage – Phase 1 Un + 10% 1,5 s
Overvoltage – Phase 2 Un + 15% 0,2 s
Minimum voltage Un - 15% 1,5 s
Maximum frequency 50’5 Hz 0,5 s
Minimum frequency 48 Hz 3 s
Table 10: Grid protection requirements regarding voltage and frequency (Source: Ministerio de Industria, Turismo y
Comercio).
The Loyal Decree also contains come specifications regarding electricity grid connection, but none of the characteristics is especially unusual. However, in the case we had 5 micro-cogeneration units of 20 kW in serie, we could not connect to the grid without a transformer (which made the unit be connected to 10 kW). Because of the increseament of the price and technical difficulties if installing the transformer, connecting 100 kW should not be an option provided by EC POWER (and is not)
39
Grid connection Legalization Special Regime
Aval (AC)
Conection point (EC)
Technical contract (EC)
Phisical connection (EC)
Verification (EC)
Release of the aval (AC)
Inspections (AC)
Legalization (AC)
Aval (Ministry)
Preallocation registration (Ministry)
Preregistration in RIPRE (AC)
Economic contract (EC)
Final registration in RIPRE (AC)
Release of the aval (Ministry)
AC: Autonomous Community EC: Electric Company
Table 11: Micro-cogeneration installation legalization tramits. (Source: Fenercom)
Emissions
Spanish law: Ley 34/2007 de 15 de noviembre. Air quality and atmosphere protection.
“In order to achieve its objectives and in particular to achieve and maintain a high level of
protection of people and environment from air pollution in a compatible way with sustainable
development, this law addresses the management of air quality and atmosphere protection
with the precautionary principle and preventive action, rectifying pollution at source and
making polluter pay, and from an approach of shared responsibility, a comprehensive and
inclusive approach.”
Acording to this law, micro-cogeneration units operation represent a “potential polluting
activitiy of the atmosphere”. Due to this fact, an authorization is needed when installing a
micro-cogeneration unit.
The procedure depends on the autonomous community in which the installation takes place.
Anyway, even the ‘most pollutant’ XRGI model (XRGI 15) produces less than 150 mg/Nm3 CO2
and less than 350 mg/Nm3. Regarding noise, all models produce only 49 dB(A). To have an idea
of what it means: ordinary refrigerators produce 46 dB (A) and 60 dB (A) is considered a
normal volume for TV.
With those characteristics is logic to stablish that all XRGI models respect the environmental
law and would obtain the environmental authorization, no matter which Autonomous
Community they are in.
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3. Problem Statement
With all the (pre)analized information it is possible to stablish the hot spots. But before
working on that, it is important to comment about the methodology and the delimitations the
analysis part has.
3.1 Methodology
The methodology consists of a desktop study, where the author tries to link the ideas above to
get the highlights. The information has been taken from different routes, the main Internet but
also through consultations on the company mentioned in this report, professors at the
Polytechnic University of Valencia (Valencia, Spain) and dealers who sell the product in Spain.
The criteria of taking a certain information and not other has been stablished by the author,
without any kind of previous index.
Internet sources are mostly official documents of the State or prestigious institutions with
remarkable relevance in their respective fields. Also, different magazines and newspapers have
been consulted to know certain facts and different disputes that some issues have generated.
However, the choice of the ideas analyzed and the findings are subsequently those of the
author, not being another document before it (at least not an available one) about the same
issues addressed in this study.
3.2 Delimitations
The analysis has delimitations regarding the contents which have been pre-analyzed whose
information is used on it. A big deal of factors has an influence on the sales in a global market,
but only the issues which have a direct influence on the subject being treated have been taking
into account. It is, the following subjects have not been investigated: other specific economical
factors, application proccess and accurate calculations about the payback in different contexts.
Furthermore, the Spanish dealers did not want to collaborate. This also leads to delimitations,
as there may be particular problems for them in fields in which the author does not know
about and, because of the unwillingness of cooperation, could not been investigated.
Finally, the aim of the report is not to provide technical or specific solutions, but to show the
where the problems are. How to solve them could perfectly be another thesis.
41
4. Analysis
Once the most important factors which can affect directly or indirectly to XRGI sales in Spain
have been evaluated, it is possible to link them each other in order to stablish the kind of
things which present an opportunity, the ones which are a problem with practically no solution
and the ones whose solution depends at a certain percentage on EC POWER.
4.1 Techincal issues: Having the tools, and the knowledge?
According to what has been evaluated in the pre-analysis about the legislation, it can be seen
that Spain does not represent a particular problem regarding the electricity grid protection and
the pollutant emissions when installing a micro-cogeneration unit. However, other possible
problems should be taken into account.
Connecting to the world
It has to be remembered that according to ACOGEN “the network access point has a particular
difficulty for cogeneration, which joins some distributors’ barriers to accept solutions which let
the islanded operation”. But one of the advantatges of the micro-cogeneration units is that
since the Loyal Decree 1699/2011 the procedures for them are really simplier. It is worth
recalling what this Loyal Decree meant:
- The exclusion of administrative authorizations for plants with a rated output not exceeding
100 kW.
- Simplifying procedures for connections at points where supply already exists (the usual
situation in cities).
- Models of standard connection and standard contracts with the distributor. If the installation
is less than 10 kW, is enough informing the distribution company for the connection request
together with a technic memory and the Universal Code Supply Point (CUPS, in Spanish) of the
associated supply.
Besides that, no special grid protection systems are required (in comparison with other
European countries) and XRGI works, as it is normal, with the standard European voltage and
frecuency for access points: 230 V and 50 Hz.
Small issues: Big problems which are avoided
Going deeper in detail, when XRGI is installed in Spain it must meet the requirements of the
Regulation of Thermal Installations in Buildings (Reglamento de Instalaciones Térmicas en
Edificios, RITE):
Legionnaires’ disease
Legionnaires' disease is a potentially fatal infectious disease caused by Gram-negative aerobic
bacteria of the genus Legionella. In 90% of cases of Legionnaires' disease is caused by
42
Legionella pneumophila, a water ubiquitous organism that thrives between 25°C and 45°C, and
an optimum of 35°C.
RITE says that legislation about Legionnaires’ disease must be met. It is considered that the
bacterium dies at 70°C, so as the storage tank has a temperature around 85°C it does not lead
to a problem.
However it is not the temperature the user will join. Anyway, XRGI allows the adjustment of
the target value for the flow temperature to the heating grid, which in Spain is normally 60°C.
Connection units
RITE also says that generators using conventional energies will hydraulically connected in
parallel and should be able to become independent. Fortunately it also says that in exceptional
cases, which they must be justified, water-cooled generators can be connected hydraulically in
series.
Minimum efficiency
RITE specifies mandatory characteristics for generators using biomass, generators using solid
fuels, gas boilers, fuel-oil boilers and heat pumps. But it does not specify any special
characteristic to the rest (only to follow the current European regulations).
Anyway, RITE mention the following regarding cogeneration:
This analysis must consider and take into account those systems viable technically,
environmentally and economically, depending on the climate and the specific characteristics of
the building and its surroundings, such as […] cogeneration in service buildings where
occupational and functional activity of more than 4,000 hours per year is expected, and whose
energy consumption forecast to have a stable relationship between thermal energy (heat and
cold) and electricity consumed throughout the entire period of occupation.
So installing micro-cogeneration units may leads to more tramits to justify they are valid
installations regarding energy efficiency in RITE specifications, but they will not face any
problem at all with the reglament.
Installing a good solution
Legislation aspects apart (See 4.3 Legislation: The eternal inestable point), it seems that XRGI
can be easily installed in Spain. However, the installation process may face some dificulties and
misunderstandings. A combined heat and power system is still quite new for Spanish people, a
group which also contains the Spanish installers.
Development of solar thermal technology in the last years in Spain has led to a deeper
familiarization with hidraulic solutions with storage tank, storage control system, and boilers
as support systems. But the hydraulic solutions EC POWER designed for XRGI are more
complex than the standard solar thermal hydraulic systems.
43
Figure 22: 1HM Hydraulic solution – More than one XRGI (Source: XRGI 20 Manual – System components &
Installations instructions).
Anyway all components (Storage tank, Storage Control, Flow Master Control…) and the
hydraulic integration of the XRGI 20 (Point 3.4 in XRGI 20 Manual – System components &
Installations instructions) are well explained. The catalogue also explains how the system
works in different types of installation models which makes the comprehesion easier.
It is not explained how other components (header, return header, flow header, additional heat
source…) work, but it is perfectly understandable especially due to the fact that this
components vary depending on the existing hydraulic installation of the building.
The misunderstanding risk is higher taken into account that the catalogue is in English. Six out
of ten Spaniards do not speak English, and for those ones who do, the level is not always
enough good to be able to understand technical vocabulary. The misunderstandings in the
installation proccess do not only lead to greater expenditure of time, but to possible mistakes
which can affect in the long term the EC POWER status. Anyway, due to the low success in the
Spanish market, is understandable that the catalogue is not in Spanish for now.
4.2 Building opportunities: F Class
The characteristics of the Spanish standard houses are not a good chance for micro-
cogeneration units, not at all.
The failed space heating story
First of all, as said before, Spain is a warm country. Even when 90% of the households have a
heating system, it is not used as normal the entire winter in most of the cities of the Spanish
geography. Heating needs is not an issue Spaniards take as consensus, as it depends on each
person and how sensitive they are feeling cold.
Secondly, 70% of the people live in flats. And 82% of the totals which have heating systems are
individual. This is a problem when is about installing XRGI, as share the heating system for the
entire building is not in the culture, and achieve the agreement among the neighbors would be
44
a hard task. Anyway, as also seen before, the existing buildings are poor quality regarding
energy efficiency and maybe too many difficulties will appear when installing XRGI (although,
on the other hand, the same argument can be used to declare that they represent an
opportunity to improve).
Third, the fact that the units could be installed in new buildings, as a measure for energy
efficiency, is also a failed task. In a country with almost one million of empty households which
has suffered the effects of the massive construction, only a few buildings will be constructing
in the following years.
However, RITE still says:
In new or under renovation buildings, with heat demand forecast, part of the thermal energy
needs arising from that demand will be met by incorporating systems that use renewable or
waste heat.
These systems will be designed to achieve the objectives of primary energy savings and CO2
emissions set out in the Technical Building Code. In the selection and solution design criteria for
energy balance and profitability will be considered.
Renewable and residuall heat sources can be integrated into the thermal generation of the building itself or be accessible through a distribution network of district heat energy
So it seems XRGI is an interesting product for environmental and energy efficiency policies, but
in addition to the last issues there are more described in the following sections.
In Sun they trust
It would seem that although there are not big opportunities for heating, warm water is still
required so an opportunity for XRGI remains. But this is also a failed challenge (or at least it
used to be. For more explanations see 4.3 Legislation: Helping bothering the rest).
To explain the last point it is required to have a look into the Technical Building Code (Código
Técnico de la Edificación, CTE), the main set of regulations governing the construction of
buildings in Spain since 2006.
In Saving Energy (Ahorro de Energía) part, HE 4 section, it is said that new buildings must have
a minimum solar contribution for DHW supplying and the same situation for any increasement
in heating demand for already existing buildings, if they have a DHW demand higher than 50
litres per day. Table 12 shows which is that percentage, according to the climate zone and the
litres per day required.
DHW total demand (l/day)
Climate zone
I II III IV V
50 – 5.000 30 30 40 50 60
5.000 – 10.000 30 40 50 60 70
>10.000 30 50 60 70 70
Table 12: Mandatory percentage of DHW provided by solar energy according to CTE (Source: CTE).
45
Although the measure is positive for the environment, it affects directly to XRGI success. To
coordinate solar with micro-cogeneration systems is a hard task (if possibe) which customers
do not want to face. It also provides the building heat, so anyway micro-cogeneration units
would not be interesting.
The measure also affects to swimming pools, which their own percentages of minimum solar
contribution. However, CTE says:
The minimum solar contribution to DHW and / or air of indoor pools may be replaced partially
or completely by an alternative installation of other renewable energy sources, cogeneration
processes or waste energy sources from the installation of heat recovery apart from the
thermal installation of the building; done on the building itself or through a network connection
to urban heating/cooling.
So pools are a good chance for XRGI. This point will be developed at the end of this Analysis
section.
The same Technical Code also states in the following section (HE) that new buildings shown in
Table 13 with a built area bigger than 5.000 m2 will have to install at least a minimum
electricity power covered by photovoltaic panels. The situation is the same if those buildings
make a deep reformation, ampliation, or if they change dramatically their use.
Type of use
Hypermarket Multistore and leisure centers Storage shed and distribution
Indoor sports facilities Hospitals, clinics and nursing homes
Fairgrounds pavilions
Table 13: Scope of application of PV power supply requirements (Source: CTE).
That means that photovoltaic panels have an advantage over micro-cogeneration units, which
makes even more difficult the development of that technology (which does not mean that it is
impossible at all). And this time it does not affect only households, but the most interesting
buildings for installing XRGI: Hospitals, clinics, and indoor sports facilities.
But there are most options – although with the same difficulties-. The following table shows
the optimal buildings for installing micro-cogeneration units in Spain, regarding heat and
electricity requirements and economic feasibility:
46
Table 14: Interesting building characteristics for micro-cogeneration (Source: Fenercom)
Difficult, but not impossible
In any case, both the CTE and the RITE allow exceptions to the contribution of solar energy
provided it is justified that the proposed alternative means savings in CO2 emissions and
primary energy, compared to the solution with DHW. To make this comparison it should be
established a production base of a certain percentage by solar contribution (depending on the
area where we are. See Table 12) and the rest provided by another heat source. In this case,
Field of application
Examples Heat
demand Electricity demand
Economic feasibility
Space Heating
(individual supply)
Apartment buildings
Possible
Hotels and audits
Appropiate
Restaurants and hospitality
Appropiate
Retirement homes and child care
Appropiate
Public Buildings
Administration buildings
Possible
Sport complexes and
schools with tracks
Possible
Indoor/Outdoor pools
Appropiate
Hospitals Appropiate
Heat
Production (industrial
heat generation)
Commercial buildings
(shops, …) Appropiate
Production (galvanized factories,
seedbeds…)
Possible
Cold conversion (absorption
cycles) Appropiate
Local heating (supplying
large areas)
Chalets and townhouses
Appropiate
Residential areas or
apartment blocks
Possible
Business parks, holiday resorts
Appropiate
High Very high Moderate
47
solar contribution carries zero emissions in heat production and is also considered zero
primary energy consumption.
The last should be compared with an alternative case with micro-cogeneration production,
considering the percentage of heat demand produced by micro-cogeneration and the rest with
another source, the primary energy saved for the (none) transportation of electricity and the
CO2 saved both in heat production and (non) transmission of electricity (CO2/kWh).
In Spain, due to the high efficiency of the Spanish electricity network and the significant share
of renewable energies in the electricity production mix, the amount of CO2/kWh is low. This
makes replacing solar energy by micro-cogeneration difficult, but not impossible.
The situation is similar with photovoltaic panels, as it is also considered that electricity
production entails 0 emissions and no use of primary energy. To carry it out, XRGI should cover
a high percentage (better if all) both of the thermal and electricity demand.
The pool market
Finally, RITE clearly manifests the importance of cogeneration for swimming pools thermal
demand:
- Indoor pools:
In indoor swimming pools a part of thermal needs will be met by incorporating systems which use renewable or waste heat.
- Outdoor pools:
For heating swimming pool water outdoors only renewable or residual energy may be used; for
the last case it will be considered that the design has not been made exclusively for this
purpose.
RITE also says the following regarding cooling/heating in open spaces:
The climate control of open space may only be made by using renewable or waste energy.
Conventional energy can not be used for generating heat and cold air conditioning intended for
these spaces.
So definately it seems micro-cogeneration units can be ‘easily’sold for supplying heat to the
pools and for open spaces requiring cooling/heating, but of course an additional electricity
demand in the same buildings is required.
4.3 Legislation: The eternal inestable point
One of the clearliest conclusions which can be extracted from the Pre-analysis is that the
current Spanish legislation is not helping on developing renewable energies. Although it used
to.
48
So, what now?
Cogeneration is valorated as another renewable energy source, as it is in the ‘Special Regime’
sources. Therefore it used to have its own subsidies or bonus which changes constantly,
although in 2013 they disappear for new plants, and now for micro-cogeneration units it is
received until 2016 and based on the installed power and not on the ammount of energy it
produces.
But the problem is not only the fact that less and less money is destinate to renewable
sources. The main problem is that almost every year the legislation changes; actually, finding
the proper legislation was the hardest task for this report. Table 7 showed most of the
legislation (not all, as other legislative measures also affect cogeneration secondarily)
regarding regulation about renewable sources, cogeneration and waste: This is the fourth
Loyal Decree about this topic with the same current Government, in the power since 2011.
In addition to the last, cogeneration and micro-cogeneration have been practically abandoned
when creating efficiency plans. They are most of the times focus on wind power, biomass and
solar energy, and the measures hardly ever are specific for cogeneration. Besides that,
investing in wind or solar energy projects has been always more feasable, so it has fomented
deeper this abandonment.
‘Helping’ bothering the rest
Bonus for renewable energies was really successful. Actually, it was too successful. In Figure 23
it can be seen how since 2004, but especially since 2008, the installed solar power in Spain
increased exponentially.
Figure 23: Installed solar power in Spain (Source: Wikipedia)
In fact, the Government is still paying more and more money for the energy sources under the
special regime, even when the money for kWh has decreased (or is inexistent, for new
installations).
It seemed that self-consumption was being developed very fast: In February 2012 a first draft
Royal Decree was presented. That one showed the following points:
- Regulated ‘Net Balance’. Productor could sell excess energy and deduct it from the
usual consumption.
49
- Productor paid the Access toll for the energy consumed, representing 38% of the
energy cost. Therefore, it could be saved 62% of energy generated but not consumed.
- Productor had 12 months to compensate the energy, or he/she would lose it.
- The purchase price per kWh produced was set by the electric company, and was not
regulated.
However, less than one an a half years later (July 2013) the Government announced in a
second draft Royal Decree that self-consumption will have a tax for the users, called Backup
toll (Peaje de respaldo). The official reason for this measure was that if distributed energy
increase and increase the electrical system could technically collapse, as lots of different points
(the users) are supplying the grid and it affects the voltaje and frequency of the system and
new tax would be, according to the Government, a compensation for the costs it produces for
the electricity network. But the associations affected for the measure and in general the media
think that clarly the aim of the measure is to cut the development of the distributed energy as
it represents a high cost for the Government. Others say that the electric sector lobby has a
great influence on the Government decissions, but it is not going to be taken into account in
this analysis for lack of proof. The CNE was also against the proposal as it considers that the
new measures “make new projects unviable, which goes in the opposite direction of EU
directives on energy efficiency”.
The new draft Royal Decree had also additional information for which the productor situation
becomes worse:
- Regulates self-consumption (instantaneous, and pouring the excesses to the electricity
network), but does not talk about the ‘Net Balance’ concept.
- Forces to applicate for a request, to perform contract and install two counters, even
when no energy is poured to the network.
- A register of installations for self-consumption is created.
- The energy consumed from the network will pay, as always, tolls and the cost of
energy.
- The self-consumed energy not poured to the network will pay which is called "Backup
toll". This toll is 27% more expensive than the home Access toll, and the government's
ability to rise and low it is saved.
- The self-generated energy but not consumed will be just given to the grid. Moreover, it
will be mandatory to pay also the "Backup toll" for it.
- The self-generated and sold energy will pay the Generation toll established by the
electric company.
- Penalties of up to 30 million euros for those who violate these regulations are
established.
According to the last, users with installations which created electricity for self-consumption
would have to pay:
1. Access toll (Peaje de acceso): For the energy CONSUMED FROM the grid. All consumers
pay it, as normal.
2. Generation toll (Peaje de generación): For the energy SOLD TO the grid. The ammount of
money would be stablished by the electric company.
50
3. Backup toll (Peaje de respaldo): For the SELF-CONSUMED energy. The draft Royal Decree
also contains a table with the different toll amounts ranging from 0.04 euros per kWh for
the tariff group 3.0 (three different rates depending on the time of the day) to 0,089 euros
for installed power below 10 kW.
Spanish Photovoltaic Union (Unión Española Fotovoltaica, UNEF) says that in this way while
for an user with a standard electricity tariff and a standard solar photovoltaic installation (30
kW) it has now 12 years payback, after the reform it would be around 35 years, similar number
than the installation useful life.
The Government also announced later that the official new legislation for self-consumption (it
is, a real Royal Decree and not just a draft version) would be “in the first trimester of 2015”.
But still is not available.
No matter that there is not an official measure, it was enough to stop dramatically the self-
consumption installations. Especially the solar photovoltaic panels, which were very successful
in Spain because of the lower and lower prices.
The rumour also involved cogeneration installations for self-consumption, it is, in most of the
cases, microcogeneration: The new Backup toll is expected to not affect cogeneration until
2019 in order to foment it. So nowadays Spanish people are not installing solar panels (at least
voluntarily, as in some cases it is mandatory. See 3.2 Building opportunities: F Class) as there is
a high insecurity in the sector. It is convenient to remember that there is no official document
(Law, Loyal Decree, Statal Strategy Plan…) which includes this information, but is useful to see
the policy which Government pretends to follow.
For sure the rumour affects anyway cogeneration and micro-cogeneration, as it creates
general insecurity and 2019 is not a long-term future. But as it affects more to other sources
which were more successful (and still are), the measure can ironically represent an opportunity
for micro-cogeneration units as XRGI to raise positions and at least to make the people know
about the product as an alternative.
51
4. CONCLUSIONS
Taking into account what has been pre-analyzed and especially the issues which have been
analyzed, this section shows the ideas which can be concluded and the possible solutions for
the problems described.
As a general conclusion, the cogeneration market in Spain has had to face several problems
since there was at least a willingness to regulate the sector (which was actually so late, in the
80s). The development has been totally different from Denmark: Spanish industralization is
lower but it needs more heat than the Danish (mainly because of industries associated with
ceramics), and the development has not always gone in the same direction, while in Denmark
the tendency has been, from 1920, to encourage combined heat and power. The lack of a
consensual and long-term plan has led to the refusal of investors and consumers, which also
affects micro-cogeneration units.
However this refusal has not been official. Actually, the situation is exactly the opposite: The
theorical promotion for the cogeneration (and later, micro-cogeneration) has been always
presented in Royal Decrees, State Plans and similar documents. But words hardly ever became
reality, with numbers and data, as has happened with solar thermal and photovoltaic energy in
rellevant documents as CTE or RITE. They also name cogeneration and micro-cogeneration, but
just as something that “should be taken into account”, “possible alternative” or “good
measure which could be installed when possible”.
The promotion of Micro-cogeneration has been so poor especially because it is linked with
cogeneration, although the characteristics and the application fields are profoundly different.
The technology is not known for most of the Spaniards, sometimes not even for those who
have a more than basic knowledge about energy. This unknowledge deeply affects to the
promotion of XRGI, as ‘everybody’ is aware of what a solar thermal or photovoltaic panels or
biomass boilers are, but not micro-cogeneration units.
Apart from that, there are other ‘base problems’ in Spain regarding micro-cogeneration. The
heat requirements are low, but Spain needs DHW anyway, so it should not be such a critical
issue. But these are:
- The buildings are generally poor quality regarding energy (which could represent a
chance to improve the efficiency by XRGI installation), but those ones constructed in
the ‘Building Bubble’ years did not take into account energy efficiency measures as
they should have done. Once they are constructed and other heating systems are
installed, is more difficult to implement XRGI.
- The heating systems both for Space Heating and for Domestic Hot Water are mainly
individual, which makes difficult the installation of a common heating system. At least
natural gas is one of the most used sources for these activities, but still it should be
considered that practically households do not represent an opportunity for EC POWER.
52
Other buildings (hospitals, clinics, hotels…) due to the minimum mandatory contribution of
thermal and photovoltaic panels, presenting micro-cogeneration as an alternative is a hard
task even for new or/and large buildings (not only households). Moreover, that minimum
contribution is higher in the Mediterranean coast, the most interesting place as it is where
more hotels are available.
A great effort should be spent on presenting XRGI as a system of CO2 emissions and primary
energy savings, so the installation has to be designed to cover a high percentage of electricity
and heating demands. For this reason and due to the fact that ‘Net Balance’ is not developed
in Spain yet (so is not possible to sell the electricity produced but not consumed), is practically
mandatory that the demand is quite constant and especially very predictable: Hotels, pools
(for which cogeneration is encourage by RITE), hospitals…
But any new possible project will always have to face the same: The legislation. The reasons
which make Legislation one of the worst issues are the following:
- The tendency since 2008 is to cut the bonus for renewable energies, which affects to
the new possibe investments.
- Measures which are in the opposite direction from the European Directives, so the
customers do not take care about what they said, as it seems the Government is not
taking them into account.
- The constant changes which produce insecurity, incomprehension, and difficulties to
follow the current regulations.
- The ‘rumour’ of self-consumption, which continues creating insecurity and stopped the
good development of self-consumption installations.
This is not an issue EC POWER or its dealers can solve, but the dealers could do something
more. They are not focused in XRGI product. It is just one product more among the long
catalogue they have with very different products. They did not even want to express their
opinion when they were asked about which kinds of problems they had or had had when
trying to sell XRGI.
Dealers should take the opportunity to promote XRGI especially in this context where
cogeneration does not have to pay the Backup Toll until 2019 while other sources have to
(according to the draft Royal Decree).
The same happens with funding opportunities. Dealers should not (only) be waiting for the
public bonus for micro-cogeneration. XRGI 20 costs 37500€ + installation costs and the
subsidies will cover, if installed in 2015, around 7000€: It is a welcomed help, but is not going
to solve the financing issue. Pay-back is the more important factor for the customers, so if it
becomes lower, the sales will increase ‘easily’. Trading with banks and gas companies would be
a crucial option to increase the sales and to really promote micro-cogeneration.
53
Finally, the economy context can not be forgotten, as it is more than very important (probably
more than most of the aspects evaluated). The money which is available for the companies to
invest in reforms and in general how the magnitude of the economical activity in the country
is, are totally linked to the EC POWER success. As can be seen in the sales graphic, the
development of the sales is quite similar to the development/tendency of the Spanish
economy.
This supports what was said above: In Spain there are a lot of base problems which impedes
the proper development of the sales, so the variation of them is mainly linked to the economy.
Even when the promotion of renewable energies (for Spaniards, including cogeneration) has
been different over the years, without following a clear tendency. Anyway, the unfavorable
economic situation in the country is an issue which could be really better. But does not depend
on EC POWER neither.
The Spanish market is full of different problems, and the only clear advantage is the great
difference between electricity and gas prices. Some of the issues depend directly on the
Spanish Government (Legislation, cogeneration promotion), others are intrinsic circumstances
in the country or characteristics which only can be changed in the long term (weather,
purchase power, confidence in the system) and the only thing is related with EC POWER is
through its dealers: more promotion of the product, deep knowledge of the current legislation
and searching new financial opportunities are mandatory to improve the sales.
Otherwise, it will depend on the economic cycles.
54
Annex 1. Guide for main institutions appeared
- ACOGEN:
It is the Spanish Cogeneration Association, which integrates and represents companies owning
cogeneration plants, equipment suppliers and services for cogeneration, as well as associations
of industries which develop this system. Its mission is to encourage and support the
cogeneration in Spain in the necessary areas, promoting a favorable frame for the operation of
existing installations and construction of new plants.
- COGENSPAIN:
It is the Spanish Association for the Promotion of Cogeneration and national member of Cogen
Europe. Its foundations since 2001 are based on achieving an equitable legal framework and
without barriers to the development of cogeneration.
- CTE:
The Technical Building Code is the regulatory framework which establishes the requirements
to be met by buildings in relation to the basic requirements of safety and habitability
established in Law 38/1999 de 5 de noviembre, about the Regulation of Management of
building (LOE).
- Fenercom:
The Autonomous Community of Madrid Energy Foundation. The main objective of the
foundation is to encourage, promote and carry out initiatives and action programs for
research, study and support actions of knowledge, development and application of energy
technologies. It also pursues savings and improved energy efficiency, promoting the rational
use of energy and in general, the optimal management of energy resources.
- IDAE:
The Institute for Diversification and Energy Saving is ascribed to the Ministry of Industry,
Energy and Tourism, through the Secretariat of Energy, which oversees organically. Contribute
to achieving the objectives which Spain has acquired in terms of improving energy efficiency,
renewable energy and other low carbon technologies is the strategic framework of their
activity.
- RITE:
Regulation of Thermal Installations in Buildings lays down the conditions to be met by
installations designed to meet the demand of thermal welfare and hygiene through heating,
cooling and hot water for a rational use of energy.
55
Annex 2. References
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ACOGEN, 2015. Home page [Online]. Available at: www.acogen .org
Ana Isabel Mendoza Losana, 2013. Inminente nuevo régimen de retribución de las instalaciones
de producción de energía eléctrica a partir de fuentes de energía renovables, generación y
residuos: Situación de las instalaciones acogidas al régimen especial con anterioridad a la
entrada en vigor del Real Decreto ley 9/2013.
Carmen Monforte. La CNMC quita las primas a las renovables que arrancaron en 2013. Cinco
Días, September 2014.
Código Técnico de la Edificación, 2013. Documento Básico HE – Ahorro de Energía.
COGEN España, 2008. Visión histórica de la cogeneración en España.
COGEN España, 2014. Quién es quién en Cogen España 2014.
COGEN Europe, no data available. Cogeneration in the European Union’s Energy Supply
Security.
COGEN SPAIN, 2015. Home page [Online]. Available at: www.cogenspain .org
Comisión Nacional de Energía, 2013. Información Estadística sobre las Ventas de Energía del
Régimen Especial.
Cotrading, 2015. Gas natural en tendencia bajista [Online]. Available at:
http://www.cotradingclub.com/gas-natural-en-tendencia-bajista/
Danish Energy Agency, 2012. District Heating – Danish and Chinese experience.
Datosmacro, 2015. España - PIB [Online]. Available at: www.datosmacro.com/pib/espana
Datosmacro, 2015. España – Salario medio [Online]. Available at:
www.datosmacro.com/mercado-laboral/salario-medio/espana
EC POWER, 2015. General information about XRGI [Online]. Available at: ecpower.eu
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Econoticias, 2013. Industria cargará con un "peaje de respaldo" el autoconsumo de electricidad
para uso propio [Online]. Available at: www.ecoticias.com/energias-
renovables/81275/2013/07/19/Industria-cargara-peaje-respaldo-autoconsumo-electricidad-
propio
El País editorial. Las primas a las renovables suben un 17% pese a la moratoria y recortes a las
ayudas. El País, July 2013.
56
Eurostat, IDAE & Ministerio de Industria, Energía y Turismo. Análisis del consumo energético
del sector residencial en España. July 2011.
Foresis, 2015. Home page [Online]. Available at: www.foresis.info
Gerónimo Andreu. The shocking price of Spanish electricity. El País, January 2014.
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2010. Energy Efficiency Policies and Measures in Spain.
IDAE & Ministerio de Industria, Turismo y Comercio, 2011. Plan de Ahorro y Eficiencia
Energética 2011-2020.
International Energy Agency, 2009. Cogeneration and District Energy. Sustainable energy
technologies for today… and tomorrow.
IPMark editorial. Consumidores españoles, a la cola europea en poder adquisitivo. IPMark,
November 2014.
Jan de Wit, 2011. COGEN Europe’s Annual Conference.
Javier Fernández Alarcón Medina, 2010. Estudio de los sistemas de microgeneración en España.
Jose María Roqueta, 2006. Visión histórica de la Cogeneración en España.
Juan Blanco Díez & José Ignacio García Bielsa, 2012. Guía básica de Microcogeneración.
Juana Viúdez. Industria gravará con un peaje la producción casera de electricidad. El país, July
2013.
Luis Llamas, 2013. La estafa tras el Real Decreto de Autoconsumo y Balance Neto [Online].
Available at: www.luisllamas.es/2013/08/real-decreto-autoconsumo-balance-neto/
Ministerio de Industria, Energía y Turismo, 2013. Reglamento de Instalaciones Térmicas en los
Edificios – Versión Consolidada.
Ministerio de Industria, Energía y Turismo, 2014. Boletín Oficial del Estado. Orden
IET/1045/2014, de 16 de junio, por la que se aprueban los parámetros retributivos de las
instalaciones tipo aplicables a determinadas instalaciones de producción de energía eléctrica a
partir de fuentes de energía renovables, cogeneración y residuos.
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