selling xrgi in the spanish market · 2015-05-28 · 4 summary this report carries out the analysis...

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.


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 &


Q60-HEAT DISTRIBUTOR

Functions:

- Controls engine water temperature.

- Discharges the storage tank.

- Manages the storage tank.


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 &


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

31

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.

40

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

EC POWER, 2015. XRGI20 Manual: System components & Installation instructions.

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.

http://www.ecoticias.com/energias-renovables/81275/2013/07/19/Industria-cargara-peaje-respaldo-autoconsumo-electricidad-propio



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.

IDAE, Inteligent Energy Europe, Ministerio de Industria, Turismo y Comercio & Mure Odyssee,

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.

Ministerio de Industria, Energía y Turismo, 2014. Boletín Oficial del Estado. Real Decreto

413/2014, de 6 de junio, por el que se regula la actividad de producción de energía eléctrica a

partir de fuentes de energía renovables, cogeneración y residuos.

Ministerio de Industria, Turismo y Comercio, 2007. Boletín Oficial del Estado. Real Decreto

616/2007, de 11 de mayo, sobre fomento de la cogeneración.


661/2007, de 25 de mayo, por el que se regula la actividad de producción de energía eléctrica

en régimen especial.

http://www.foresis.info/

57


1699/2011, de 18 de noviembre, por el que se regula la conexión a red de instalaciones de

producción de energía eléctrica de pequeña potencia.

Pilar Quijada. ¿Por qué nos cuesta tanto aprender inglés? ABC, April 2015.

Pisos.com editorial. El 25% de las viviendas construidas en los últimos 10 años presenta

defectos [Online]. Pisos.com, March 2015. Available at:

www.pisos.com/noticias/noticias/vivienda/el-25-de-las-viviendas-construidas-en-los-ultimos-

10-anos-presenta-defectos/

Ramón Roca. El Gobierno da la puntilla a la cogeneración con mayores recortes para 2015. El

Periódico de la Energía, March 2015.

Saltoki, 2015. Home page [Online]. Available at: www.saltoki.es

Statesnet, 2015. Combined Heat and Power in Denmark. History and present status of CHP in

Denmark [Online]. Available at:

www.statensnet.dk/pligtarkiv/fremvis.pl?vaerkid=329&reprid=0&filid=12

The European Parlament and the Council of the European Union, 2012. Diario Oficial de la

Unión Europea. Directiva 2012/27/UE del Parlamento Europeo y del Consejode 25 de octubre

de 2012 relativa a la eficiencia energética, por la que se modifican las Directivas 2009/125/CE y

2010/30/UE, y por la que se derogan las Directivas 2004/8/CE y 2006/32/CE.

The International CHP/DHC Collaborative, no data available. Advancing Near-Term Low Carbon

Technologies.

Union Calor, 2015. Home page [Online]. Available at: www.unioncalor.com

Unión Española Fotovoltaica, 2013. Verdades y falsedades sobre autoconsumo.

Wikipedia, 2015. Burbuja inmobiliaria en España [Online]. Available at:

es.wikipedia.org/wiki/Burbuja_inmobiliaria_en_España

Wikipedia, 2015. District Heating [Online]. Available at: en.wikipedia.org/wiki/District_heating

Wikipedia, 2015. Micro combined heat and power [Online]. Available at:

en.wikipedia.org/wiki/Micro_combined_heat_and_power

http://www.pisos.com/noticias/noticias/vivienda/el-25-de-las-viviendas-construidas-en-los-ultimos-10-anos-presenta-defectos/

http://www.pisos.com/noticias/noticias/vivienda/el-25-de-las-viviendas-construidas-en-los-ultimos-10-anos-presenta-defectos/

http://www.statensnet.dk/pligtarkiv/fremvis.pl?vaerkid=329&reprid=0&filid=12

selling xrgi in the spanish market · 2015-05-28 · 4 summary this report carries out the analysis...

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