the economic and technical integration of wind power into the spanish electrical system

1

THE ECONOMIC AND TECHNICAL INTEGRATION OF WIND POWER INTO THE

SPANISH ELECTRICAL SYSTEM

Alberto Ceña

Technical Director

SPANISH WIND ENERGY ASSOCIATION

ASOCIACIÓN EMPRESARIAL EÓLICA

UNIVERSITY OF BATH 9 May 2008

2

SUMMARY

WIND ENERGY IN SPAIN

KEY ELEMENTS FOR THE SUCCESS OF WIND ENERGY IN SPAIN:

SUPPORT MECHANISM

OPERATION OF THE ELECTRICAL SYSTEM:

• WIND ENERGY IN ELECTRICAL MARKET

• PREDICTION

• IMPACT ON THE POOL MARKET

ADVANCED CODES AND IMPORTANT EXPERIENCE ON GRID INTEGRATION

CONCLUSIONS

3

SUMMARY



SUPPORT MECHANISM



• PREDICTION



CONCLUSIONS

4

CONTINOUS AND STEADY GROWTH OF WIND POWER IN SPAIN

15,145 MW AT 01/01/2008

8391585

21983389

4879

6206

8504

10028

11623

15145

0

2000

4000

6000

8000

10000

12000

14000

16000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

YEARS

MW

ANNUAL ACUMULATED

So

urc

e:

AE

E

INSTALLED WIND POWER AT 01/01/08 15.145 MW

5

YEARLY EVOLUTION OF WIND CAPACITY IN OPERATION IN SPAIN

419

746613

1191

14901327

2.297,51

1.523,99 1595,105

3522,09

0

500

1000

1500

2000

2500

3000

3500

4000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

MW

0%

20%

40%

60%

80%

100%

120%

Annual rise

Growth rate

So

urc

e:

AE

E

6

AMONG ALL RENEWABLE ENERGIES WIND ENERGY IS THE MAIN SOURCE OF POWER

PRODUCTION

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

MW

WIND POWER

BIOMASS

SOLAR

MINI HYDRO

So

urc

e: C

NE

an

d A

EE

7

Wind16,4%

Combined Cycle24,0% Fuel/gas

9,5%

Coal12,9%

Nuclear8,4%

Hydro18,1%

Rest of special regime10,9%

Source: REE

INSTALLED WIND POWER WAS 16.4% OF THE TOTAL POWER INSTALLED IN SPAIN IN 2007

Breakdown of installed capacity technologies 2007

8

0

5000

10000

15000

20000

25000

30000

Hydro

Nuclear

CCGT

Other thermal

Wind

Other Special Regime

1997

2007

2011Source: JM Rodriguez REE.

COMBINED CYCLES AND WIND FARMS COVERS THE GROWTH OF POWER DEMAND IN SPAIN

Units: MW

9

Wind9,5%

Rest of special regime10,4%

Hydro9,4%

Nuclear19,7%

Coal25,7%

Fuel/gas0,9%

Combined Cycle24,4%

Source: REE

WIND ENERGY REPRESENTS ALMOST 10% OF POWER GENERATION IN 2007 AND IT COVERS

THE 20% OF DEMAND GROWTH

The average capacity factor was of 25%, 10% more than in Germany and 10% less than the UK

Generation breakdown by technology 2007

10

OWNERSHIP OF WIND POWER PLANTS IN SPAIN

AROUND OF 100 PROMOTERS HAVE PROJETS IN DIFFERENT STAGES BUT THERE IS A CLEAR TREND TO CONCENTRATION AROUND OF THE ELECTRICAL

COMPANIES.

REPARTO POR PROMOTORES DE LA POTENCIA EÓLICA ACUMULADA A 01/01/2008

IBERDROLA28,03%

ACCIONA17,68%

ECYR8,36%NEO ENERGÍA

8,08%ENEL UNIÓN FENOSA

RENOVABLES3,93%

OLIVENTO2,78%

RENOMAR2,60%

GAS NATURAL2,53%

ENERFÍN2,20%

EYRA1,73%

MOLINOS DEL EBRO1,55%

E. ON Renovables1,35%

OTROS20,48%

Fuente: AEE

DEVELOPER BREAKDOWN OF CUMULATIVE INSTALLED CAPACITY TO 01/01/2008

11

WIND ENERGY HAS CREATED AN IMPORTANT INDUSTRIAL NETWORK

An important number of components suppliers completes the industrial grid created by the wind energy sector

REPARTO POR FABRICANTES DE LA POTENCIA EÓLICA INSTALADA A 01/01/2008

GAMESA48,63%

MADE (GAMESA)8,43%

VESTAS14,66%

ACCIONA WINDPOWER8,21%

Ecotècnia7,32%

GE5,93%

NAVANTIA-SIEMENS4,03%

ENERCON0,69%

DESA0,67%

NORDEX0,56% LAGERWEY

0,25%KENETECH

0,20%

M TORRES0,16%

OTROS0,26%

Fuente: AEE

MANUFACTURER BREAKDOWN OF CUMULATIVE INSTALLED CAPACITY TO 01/01/2008

12

PRIVATE

PUBLIC

COMMUNITY

SITE SELECTION

MET. TOWER INSTALLATION > 1 YEAR OF DATA

(2) REGIONAL AUTHORITY

ADMINISTRATIVE AUTHORIZATION

(1) DIST./TRANSMISION COMPANIES

CONNECTION/ACCESS POINT

REG. AUTHORITY

AD. AUTHORIZATION

COMMUNITY

PERMITS

CONSTRUCTION

OPERATION

PAYMENT FOR CONSTRUCTION LICENCES AND URBANISTIC LEVY

RENTING

TYPICAL SCHEME FOR THE EXECUTION OF PROJECT

13

10% of the 8,100 municipalities have some kind of wind plant activities within their limits

C0MMUNITIES WITH WIND FARMS WITHIN THEIR MUNICIPAL LIMITS

14

POSITIVE IMPACT ON THE INDUSTRIAL EXPANSION

15

SUMMARY



SUPPORT MECHANISM



• PREDICTION



CONCLUSIONS

16

PREDOMINANT SUPPORT SCHEMES FOR RES-E

Feed-in tariff and Quota / TGC

Feed-in tariff

Quota / TGC

Tax incentives / Investment grants

Other system

SE

FI

LALT

PL

CZ

HUAT

DE

DK

UKIE

ESPTIT

MTCY

GR

FR

NLBELU

EE

BE

SI

SK

A clear majority of EU countries uses feed-in tariffs as main instrument

Source: Fraunhofer Institute Systems and Innovation Research

17

19941994

ELECTRICITY LAW

19971997

• 29% of power production will be renewable in 2010

20022002 20042004

• Regulatory stability to reach targets

• 13,000 MW of wind farms in 2011

“SPECIAL SCHEME” R. D.

• Basic framework for renewables

19981998

ROYALDECREES

• Priority of access

• Premium-based incentives

20052005

NEW RENEWABLE

ENERGIES PLAN

IN 2020, BINDING TARGET OF 20%

RENEWABLE ENERGIES

ROYAL DECREE 436/2004

NATIONAL ENERGY PLAN

19991999

RENEWABLE ENERGY

PROMOTION PLAN


20072007

ROYAL DECREE 661/2007


• Binding target for Europe

NEW PROGRESS IN RENEWABLE ENERGY REGULATION

18

RD 661/2007 FINANCIAL SCHEME (HOURLY VALUES)

• 2 options:

– Regulated tariff: regulated tariff + supplements – deviations

– Market: market price + premium + supplements – deviations

Supplements: reactive power, voltage dips (only for existing farms)

Updated based on RPI-X,

– where X is 0.25 until 2012 and 0.5 thereafter

(2007 values)

Must choose by 01/01/2009 between:• Staying with the current RD

436/2004 scheme:– Regulated tariff:

• no time limit• no update

– Market until 31/12/2012 (without premium update and incentive) and subsequently change to the new RD 661/2007 scheme

• Change to the new RD 661/2007 scheme

EXISTING INSTALLATIONS NEW INSTALLATIONS31/12/2007

2010 changes applicable from 2013. The premium can be retroactive.

units: cents/kWh First 20

yearsThereafter

Tariff 7.3228 6.12Reference premium 2.9291 0

Cap 8.4944Floor 7.1275

19

0

2

4

6

8

10

12

14

16

0 2 4 6 8 10 12

Pool market -€cents/kWh-

Po

ol

mar

ket

+ p

rem

ium

-€c

ents

/kW

h-

RD 661/2007 Income (pool + premium)

RD 436/2004 Income (pool + premium)

RD 661/2007 Tariff

RD 436/2004 Tariff

RD 661/07 Cap:8,4944 €cents/kWh RD 661/07 Tariff:

7,3228 €cents/kWh

RD 661/07 Floor: 7,1275 €cents/kWh

RD436/04 Tariff: 6,8931

€cents/kWh

Source: AEE

RD 436/2004AND RD 661/2007 COMPARISON

Royal Decree 661/2007 Ranges:• 0<pool< 4.1984 → premium=7.1275-pool• 4.1984<pool< 5.5653 → premium=reference premium• 5,5653<pool<8.4944 → premium=8.4944-pool• pool>8.4944 → premium=0

20

0

1

2

3

4

5

6

7

8

€cen

t/kW

h

Average price

Source: OMEL, REE and AEE

THE POOL PRICE IS KEY IN THE REVENUES FOR WIND FARMS

Pool prices follow power demand, fuel costs, CO2 emissions duties and hydropower production.

21

HIGH POOL PRICES IN 2006 DUE TO HIGH NATURAL GAS, GHG CREDITS AND

DROUGHT

Payments to wind, 2006

48.01

30.64

7.664.81

3.80

68.933.8

72.73

91.01- 0.80- 0.50- 2.60

0

20

40

60

80

100

120

Average windprice

Premium40% TMR

Incentive10% TMR

Powerguarantee

Reactive power

Deviations Prediction MarketAgent

Totalpayments

Regulated tariff(90% TMR)

Reactivepower

Total payments

€/MWh

Market RegulatedTariff

Source: AEE

22

RETRIBUTION IN 2007 ACCORDING TO THE RD 436/2004

Retribución según el RD 436/2004

68,93

77,647,66

30,64

39,35

0

10

20

30

40

50

60

70

80

90

Wind power average pool price premium Pool trade incentive FINAL TARIF MARKETOPTION

Regulated tariff

€/M

Wh

Source: AEE

23

RETRIBUTION IN 2007 ACCORDING TO THE NEW RD 661/2007

Retribución según el RD 661/2007

73,2374,140,00

34,80

39,35

0

10

20

30

40

50

60

70

80

90

Wind power average pool price premium Pool trade incentive FINAL TARIF MARKETOPTION

Regulated tariff

€/M

Wh

Source: AEE

24

SUMMARY



SUPPORT MECHANISM



• PREDICTION



CONCLUSIONS

25

ALMOST ALL PRODUCERS ARE MAKING OFFERS ON THE POOL MARKET

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

ene-0

4

abr-

04

jul-

04

oct-

04

ene-0

5

abr-

05

jul-

05

oct-

05

kW

h/día

REG. ESPECI AL A DI STRI BUCI ÓN REG. ESPECI AL A MERCADO

• The bulk of wind energy makes offers on the pool market.

• All wind farms in Spain are programming their production to participate in the market year (universal use of prediction tools).

0

2000

4000

6000

8000

10000

12000

2000 2001 2002 2003 2004 2005

MW

Eó

lico

s

0

500

1000

1500

2000

2500

En

erg

ía D

esv

íos

(GW

h)

MW instalados

% Mercado

Eª Desvíos

La entrada de la generación eólica en el mercado ha contribuido a la reducción de la energía utilizada para la gestión de los

desvíos en el sistema

Distribution

Market

Mw installed

0% market

Derivation electricity

The presence of wind energy in the market has helped to the reduction of electricity for services management

M

w

DE

SV

IAT

ION

MA

NA

GE

ME

NT

(G

Wh

)

26

Resultado de la Casación

Parque Eólico 1

Parque Eólico 2

Parque Eólico N

Programación (10:00h/D-1)

Ajustes intradiarios

• Restricciones técnicas

• Otros procesos de gestión técnica

OMEL

MERCADO DIARIO

REE

MERCADOS

INTRADIARIOS

PROGRAMA HORARIO FINAL

(PHF)

Programación ajustada 6 veces/día

WIND ENERGY IN THE ELECTRICAL MARKET

The main incidence of wind power is in tertiary regulation (between 15’ and 3 hours) and management of deviations between generation and load (before closing day and intraday markets).

Unforeseen variation of power demand is more important (with 40% 0f deviations) than prediction errors of wind power plants (slightly over 30%).

Costs in balancing power caused by wind energy is paid by wind producers. The unitary cost in 2007 was of 1,4 €/MWh much lower than initially foreseen.

INCIDENCE OF WIND ENERGY IN THE BALANCING POWER:

27

ECONOMIC FLOWS IN THE OPERATION OF WIND FARMS

CNE

ADJUSTMENTS

WIND FARMS OWNERS

ELECTRICAL MARKET

DISTRIBUTORS COMMUNITIES

PRIVATE LANDOWNER

- Renting

- Taxes

- Agreed fees

CONSUMERS

OPERATION & MAINTENANCE

INVESTMENT PAY-BACK

€

€

€

SOCIAL BENEFITS(ANNEX)

€

€

ELECTRICAL CONSUMERS PAYS FOR EVERYTHING IN ACCORDANCDE WITH THE EXPECTED BENEFITS

€

kWh

28

SUMMARY



SUPPORT MECHANISM



• PREDICTION



CONCLUSIONS

29

Source: Areva y AEE

LOOP P/f

OPTIMISATION

OF SECONDARY

AND TERTIARY

REGULATION

SERVICES

Minutes/3 hours

FREQUENCY

CONTROL

OPTIMISATION

OF SECONDARY

REGULATION

SERVICES

Seconds

MACHINES AND

INSTALLATIONS

ADAPTED FOR

TRANSITORY

STABILITY

DIP

VOLTAGES

MilisecondsPLANT AVAILABILITY

PRODUCTION FORECAST

TECHNICAL RESTRICTIONS BEFORE DAILY

MARHET

NON-APPLICABLE*

Variable

generation

OPTIMUM PRODUCTION PROGRAMME

DAILY

INTRA-DAY RODUCTION

ADJUSTMENS

INTRA-DAY

OPTIMISATION OF SPINNING RESERVES

Days

INTRA-DAY

PRODUCTION

ADJUSTMENTS

ON LINE TECHNICAL RESTRICTIONS

DEVIATION MANAGEMENT

BEFRORE CLOSING MARKETS

PREDICTION IMPROVES THE OPERATION OF THE ELECTRICAL SYSTEM AS A WHOLE

30

EMAP vs. Fc

0

20

40

60

80

100

120

140

0 5 10 15 20 25 30 35 40 45

Fc [%]

EMAP

[%]

Potencial (Predictor 1) Potencial (Predictor 2)Potencial (Predictor 3) Potencial (Predictor 4)Potencial (Predictor 5) Potencial (Predictor 6)Potencial (Predictor 7) Potencial (Predictor 8)

ERRORS OF PREDICTION

EMAP shows clear dependency

with Fc (Capacity Factor).

Much higher than the EMAE

(Mean Absolute State Error),

which is the prediction error

measured against nominal

capacity, with values in the

order of 10%.

It is easier to make good

predictions for high power

values

EMAP (Mean Absolute Production Error):

100real pred

real

P PEMAP

P

31

BENEFITS OF WIND FARM CLUSTERING

Once added, the total EMAP obtained is lowered almost to

half its initial value, reducing greatly its impact on the stability of the system.

oct04- sep05: y = 0.5186x

R 2 = 0.9138

0%

10%

20%

30%

40%

50%

60%

0% 20% 40% 60% 80% 100% 120% 140%

Initial EMAP

Individual EMAP after aggregating

oct

nov

dic

ene

feb

mar

abr

may

jun

jul

ago

sep

oct04-sep05

Lineal (oct04-sep05)

32

SUMMARY



SUPPORT MECHANISM



• PREDICTION



CONCLUSIONS

33

y = -0,0003x + 5,0921R2 = 0,4031

01

2345

67

0 1000 2000 3000 4000 5000 6000 7000

Wind power (MW)

Po

ol m

ark

et

(ce

nt€

/kW

h)

WIND ENERGY SUBSTITUTES MORE EXPENSIVE POWER PLANTS AND THEN POOL PRICE IS

REDUCED

Reduction of prices is estimated in around 2-3 €/MWh every 1000 MW of wind power in the system and it almost covers the cost of premium

linked to wind energy

RELATIONSHIP BETWEEN WIND ENERGY AND POOL PRICE IN THE DAILY MARKET (data January 2007-july 2007)

y = -0,0002x + 5,0193R2 = 0,6085

0

1

2

3

4

5

6

0 1000 2000 3000 4000 5000 6000 7000

Wind power (MW)

Po

ol m

arke

t (c

ent€

/kW

h)

MWh

Pri

ce(€

/ MW

h)

Gas

Day

Wind & Nuclear

Night Peak

DemandOffer

Fuel oilCCGT

Source: RISOE y AEE

MWh

Pri

ce(€

/ MW

h)

Gas

Day

Wind & Nuclear

Night Peak

DemandOffer

Fuel oilCCGT

MWh

Pri

ce(€

/ MW

h)

Gas

Day

Wind & Nuclear

Night Peak

DemandOffer

Fuel oilCCGT

Source: RISOE y AEE

34

IMPACT OF THE WIND ENERGY IN THE POOL MARKET

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

5,5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Hours

cen

t€/k

Wh

<1000 MW1000 MW-2000 MW2000 MW-3000 MW3000 MW-4000 MW4000 MW-5000 MW>5000 MW

Fuente: AEE

• This graph shows by levels of wind generation the average pool price per hour (January 2007-July 2007).

• The range <1000MW shows the average pool price by hour if the contribution of the wind energy was null.

• The following curves show increases of wind production, this shows how the pool price decrease when increase the contribution from wind power.

Pool market (January 2007-July 2007)

35

SUMMARY



SUPPORT MECHANISM



• PREDICTION



CONCLUSIONS

36

• Turbines are usually far away from centers of consumption– Wind power has helped and financed the reinforcement of the

grid.

• Time variation of wind power:– Request of balancing is lower than expected and less

important than load management.

– Results of forecast models are improving and aggregating production from different sites reduces deviations.

• Technical Integration into the grid:– WTGs and wind farms are incorporating for grid stability

solutions.

– Voltage control and FACTs integration in Substations are being implemented.

– Other ancillary services are under investigation.

INTEGRATION OF WIND ENERGY INTO THE ELECTRICAL GRID.

SPAIN HAS THE MORE STRICT GRID CODES AND IT IS A PIONEER IN THE COORDINATION WITH

THE TSO

37

Shortcircuit in Loeches SE

500 MW are disconnected 300 km of distance .

• A joint study between the wind sector and the System Operators of PO (REN) and ES (REE), led by REE.

• Different scenarios of wind penetration according to the demand level of the Iberian Electrical System and adaptation of WTGs to comply with the grid codes.

• In parallel to future levels of wind power fed into the grid, consumption requests of active and reactive power in dip voltage conditions were evaluated

1400-1000 MW

400 MW

850-1000 MW

COLLABORATION BETWEEN WIND SECTOR AND SYSTEM OPERATORS IS

FOUNDAMENTAL: ALLOWS A MUTUAL UNDERSTADING OF TECHNICAL SOLUTIONS

38

...WIND FARM

TelemandoVSAT

...WIND FARM

...WIND FARM

HUB

CECRE Punto a Punto

Control Center

ADSL

Dedicated line

CURTAILMENT CONDITIONSNetwork over-loadings at specific nodesRisks of losses of load due to dynamic stability problemsShort circuit limits which could affect the operation of protections at neighboring substationsExcess generation which can not be incorporated into the system at low load periods

CECRE

COORDINATED OPERATION OF ALL WIND FARMS BY THE SYSTEM OPERATOR

IMPROVES GRID SECURITY

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39

PRODUCTION CURTAILMENTS IN MARCH 2008

Reducción de generación eólica por hueco de tensión (4/3/2008)

Reducción de generación eólica por sobrecarga (7/3/2008)

Fuente: CAM

40

SUMMARY



SUPPORT MECHANISM



• PREDICTION



CONCLUSIONS

41

It is the third country at world wide level and the goals for 2010 makes it the most interesting for the future within the EU.

The specificities of the Spanish development with wind farms for 25 MW in average size, facilitates the integration of wind energy into the grid as well as solutions such as clustering of several wind farms.

Wind producers are making offers to the market and therefore prediction is universally used.

LVRT Grid Code is the most strict in the world due to the isolation of the Iberian grid and used for manufacturers to develop products for third markets.

CONCLUSIONS ON WIND ENERGY IN SPAIN

42

THANK YOU VERY MUCH FOR YOUR ATTENTION

Alberto Ceña

[email protected]

mailto:[email protected]

the economic and technical integration of wind power into the spanish electrical system

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