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transcript
2007 APEX ConferenceParis, October 16, 2007
SESSION 3: How to integrate renewable energy in the markets
Wind power
Maria-Luisa HuidobroPresident
TABLE OF CONTENTS
1. Wind power and energy evolution in the world and in Spain
2. Spanish regulation on power production in the special regime
3. Wind power participating in the day ahead and intra-day market
4. Relevant market data
5. Conclusions
1. Wind power and energy evolution in the world and in Spain.
WORLD INSTALLED WIND POWER (GW)
74.3
59.1
47.6
39.3
31.1
23.9
17.413.6
10.27.66.14.8
0
10
20
30
40
50
60
70
80
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: GWEC, EWEA and AEE
ALLOCATION BY COUNTRIES. INSTALLED WIND POWER IN 2006 (GW)
Source: GWEC, EWEA and AEE
0
5.000
10.000
15.000
20.000
25.000
Solar 21 43 77 371 400
Biomass 450 493 527 2.039
Small hydro 1.601 1.717 1.740 2.199
Wind pow er 8.504 10.028 11.615 12.904 20.155
2004 2005 2006 2007 2008 2009 2010
INSTALLED POWER IN THE SPECIAL REGIME IN SPAIN AND FORECAST UNTIL 2010 (MW)
Source: Renewable Energy Plan
RECENT FORECASTS FROM THE MINISTRY OF INDUSTRY, TOURISM AND COMMERCE
The forecasts of the Secretary General of Energy, aim at:
35,000 MW in 2020 and
44,000 MW in 2030.
In addition, “during the following 10-years period, the renewable energy will be able to compete without premium”.
2. Spanish regulation on power production in the special regime.
Cogeneration and waste energy.
Renewable energy:• Group b.2 Wind power.• Group b.2.1 Windmills onshore.• Group b.2.2 Windmills offshore.
Waste energy with energy value.
Installed power per unit must be < 50 MW.
KINDS OF FACILITIES
Installation licence corresponds to regional authorities.
Nevertheless, this competence is of the State Government when:• The installed power is > 50 MW.• Its location affects more than one Region.• It is located offshore.
Regulated price corresponds to the State Government:• Fix price applied to wind energy.• Premium over the market price:
Wind power onshore: Fixed by the Government.Wind power offshore: Established by auction.
ADMINISTRATIVE COMPETENCES
ACCESSING THE NETWORKS
Priority for accessing the transmission and distribution network.
Mandatory guarantee to be applied when accessing the transmission and distribution network:
• 20 €/kW for wind power facilities.
Once the wind power facility starts up, the guarantee is cancelled.
Adscription to a generation control centre, as a dispatch centre connected to the system operator:
• Producer.
• Special dispatch in the system operator.
All the facilities with capacity > 10 MW should be connected to a control centre or establish by itself a control centre.
• Information will be transmitted to the system operator and instructions to control centre will be executed in real time.
• This obligation will be a necessary condition for the perception of the tariff or the premium.
REQUIREMENTS APPLIED TO WIND POWER FACILITIES (I)
The wind facilities will have to fulfil certain response requirements when a voltage dip.
• This requirement will be a necessary condition for the perception of the tariff or the premium:
A transitory period is established until the 1st of January of 2010 without penalty, for the existing facilities before the Royal Decree is in force.
A transitory period is established for the facilities previous to 1 of January of 2008, during a maximum term of 5 years, for maintaining the continuity of supply, receiving a complementary income of 0.38 c€/kWh.
REQUIREMENTS APPLIED TO WIND POWER FACILITIES (II)
SELLING THE WIND ENERGY
The wind energy producer has two options:
• To sell the wind energy at a fix regulated tariff equal for all the hours (option a).
• To bid in the organized market, through the system of auctions managed by the market operator, to establish a bilateral contract, or a forward contract (option b).
OPTION A: TO SELL AT A REGULATED TARIFF
The wind power producer communicates the day ahead schedule to the market operator:
The auction system managed by the market operator considers this schedule as a bid at null price.
The schedule can be communicated directly or through a representative.
Producers can send bids also to the intra-day market
The wind power producer is paid by:
The market operator for the amount that corresponds to daily and intra-day market.
The system operator by the amount that corresponds to the ancillary services and deviations.
The Energy Regulatory Commission for the rest of the fix price of the tariff. This part of the retribution is paid until 2009 by the distributors.
OPTION B: TO SELL IN THE MARKET (I)
The wind power producer send the bids for the day ahead market to the market operator: The bid can be sent directly or through a representative.
Producers can also send bids to the intra-day market.
The price is paid to the wind power producer by: The market operator for the amount that corresponds to daily and intra-
day market.
The system operator by the amount that corresponds to the ancillary services and the deviations.
The Energy Regulatory Commission for the premium. This part of the retribution is paid until 2009 by the distributors.
Alternatively the power producer can sign a bilateral contract or operate through the forwards market.
OPTION B: TO SELL IN THE MARKET (II)
Negotiated price+
Premium+
Reactive energy complement-
Deviations+
Complement to help voltage dip problems(applicable to wind facilities previous to 1/1/2008 and
maximum 31/12/2013, that support voltage dip)
REQUIREMENTS THAT THE WIND PRODUCERS SHOULD COMPLY
In case the entity accessing the market on behalf of the wind producer is not a market agent, then the wind producer should be a market agent.
The entity accessing the market on behalf of the wind producer can send several bids for the set of facilities of the wind producer.
The dominant operators will only be able to act as representatives of their own facilities when their participation is greater than 50%.
The non dominant operators, will be able to act as representatives, until they reach a maximum of 5% of all the suppliers.
REGULATED TARIFF AND PREMIUM
Group TermRegulated
tariff c€/kWh
Reference premium c€/kWh
Upper limit
c€/kWh
Lower limit
c€/kWh
Onshore wind
facilities
First 20 years 7.3228 2.9291 8.4944 7.1275
After 20 years 6.1200 0.0000
Offshore wind
facilities
The maximum and minimum reference premium
16.4000 8.4300
LOWER AND UPPER PRICE LIMITS TO BE PERCEIVED BY WIND FACILITIES
Market price
Price to receiveUpper limit = 8.4944
Lower limit = 7.1275Premium = 2.9291
If the price of the market plus the premium is below the lower limit, this limit will be received
THE REGULATED TARIFF AND THE PREMIUMS (I)
Parameters for establishing:
• Regulated tariff option: IRR of 7%
• Market option:
Lower and upper limits IRR of 7%, with a minimum of 5% and a maximum of 9% are the limits of the band.
Updates:
• Renewable: annual based on the RPI – 0.25 up to 31/12/2012 and from then RPI – 0.50.
Revisions. Every 4-years period:
• Costs associated to each of the technologies.
• Degree of participation of the special regime in the demand coverage.
• Incidence in the technical and economic management of the system.
THE REGULATED TARIFF AND THE PREMIUMS (II)
ROYAL DECREE 1028/2007WIND FACILITIES OFFSHORE
The construction or extension of the electrical systems for wind generation offshore requires:
The production licence given by the Ministry of Industry regulated in the Royal Decree 1955/2000.
The licence to set the installation on the sea as public dominion by the Ministry of Environment (Law 22/1988, of 28 of July, relative to coasts).
The auction result licence that grants the applicant the zone reserve, regulated in the Royal Decree 1028/2007.
3. Wind power participating in the day ahead and intra-day market.
Current(MW)
In the market(%)
CCGT 16,657 100.0
Cogeneration 5,773 52.0
Windmills 12,323 95.5
Installed capacity in CCGT,cogeneration and windmills
INSTALLED CAPACITY IN CCGT,COGENERATION AND WINDMILLS
(*) 6,000 MW more are in testing period and will be in commercial operation in last quarter of 2007 and first quarter of 2008.
(*)
INSTALLED POWER IN SPECIAL REGIME AND ORDINARY REGIME WITH PREMIUM BIDDING IN
THE MARKET ON SEPTEMBER 16th, 2007
TECHNOLOGYSpecial regime
(MW)
Ordinary regime with incentives
(MW)
Gas 0.0 183.2
Oil or gas 28.3 0.0
Cogeneration 2,258.2 592.5
Wind 11,798.0 0.0
Oil 1.2 0.0
Natural gas 281.3 0.0
Hydro 1,113.9 0.0
Total 15,480.9 775.7
DAILY ENERGY BY PRODUCTION TECHNOLOGIESJANUARY 2004 – 10th OCTOBER 2007
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
1300
1400
1500
01/0
1/04
01/0
3/04
01/0
5/04
01/0
7/04
01/0
9/04
01/1
1/04
01/0
1/05
01/0
3/05
01/0
5/05
01/0
7/05
01/0
9/05
01/1
1/05
01/0
1/06
01/0
3/06
01/0
5/06
01/0
7/06
01/0
9/06
01/1
1/06
01/0
1/07
01/0
3/07
01/0
5/07
01/0
7/07
01/0
9/07
Date
EN
ER
GY
(G
Wh
)
Special Regime to Distribution Special Regime to Market Nuclear
Imports Hydro Coal
Combined Cycle Fuel-Gas
Bid at 0 €/MWh to be matched.
Bid at a price different from 0 €/MWh with risk of none being matched
TYPICAL BID OF A WIND POWER PRODUCER
Power producers in the Spanish power production market: On October 11, 507 power producers are participating in the dayly
and intraday markets.
Number of wind power producer facility owners than ere selling in the daily market: 3
Number of wind power producer facility owners that are selling in the daily market through units managed by other kind of agents (representative or seller agent): 212
Number of power producer agents without wind power facilities: 292
NUMBER OF MARKET PARTICIPANTS
PRICES AND ENERGY IN THE DAILY MARKET1st January 2004 – 10th October 2007
0
2
4
6
8
10
12
14
16
18
20
22
24
26
28
30
01/0
1/04
01/0
3/04
01/0
5/04
01/0
7/04
01/0
9/04
01/1
1/04
01/0
1/05
01/0
3/05
01/0
5/05
01/0
7/05
01/0
9/05
01/1
1/05
01/0
1/06
01/0
3/06
01/0
5/06
01/0
7/06
01/0
9/06
01/1
1/06
01/0
1/07
01/0
3/07
01/0
5/07
01/0
7/07
01/0
9/07
Date
0
100.000
200.000
300.000
400.000
500.000
600.000
700.000
800.000
900.000
1.000.000
1.100.000
1.200.000
1.300.000
1.400.000
1.500.000
Maximum hourly price
Average price
Minimum hourly price
Energy executed + Assimilated to bilateral contracts + Energy in matching result schedule
Energy assimilated to bilateral contracts + Energy in matching result schedule
Energy in matching result schedule
Average price in the daily market Period Price 01/01/2004 10/10/2007 4,248 cEur/kWh
c€/kWh MWh
PRICES IN THE SPANISH SYSTEM IN THE DAILY MARKET1st January 2004 – 10th October 2007
c€/kWh
0
2
4
6
8
10
12
14
16
18
20
01
/01
/04
01
/03
/04
01
/05
/04
01
/07
/04
01
/09
/04
01
/11
/04
01
/01
/05
01
/03
/05
01
/05
/05
01
/07
/05
01
/09
/05
01
/11
/05
01
/01
/06
01
/03
/06
01
/05
/06
01
/07
/06
01
/09
/06
01
/11
/06
01
/01
/07
01
/03
/07
01
/05
/07
01
/07
/07
01
/09
/07
DateMaximum hourly price Average price Minimum hourly price
Average price in the daily market Period Price 01/01/2004 10/10/2007 4,248 cEur/kWh
THE WIND ENERGY PRICE IN 2006
This participation of the wind energy in the electric market diminishes the price of the electricity due to:
The incorporation of the wind energy moves the market supply curve causing a lower price.
In addition, the wind production is greater in periods of low/medium prices, because the local winds take place in the periods of diurnal transition that in many cases does not correspond with the highest demand.
Wind price in the daily market: 48.01 €/MWh, is lower 4.96% to the arithmetic average price of the daily market (50.52 €/MWh)
Wind Price in regulated tariff: 72.73 €/MWh
AVERAGE PRICE COMPONENETSOF WIND ENERGY IN 2006 (€/MWh)
Source: REE and AEE
Market price components 91.01 €/MWh
WIND ENERGY MATCHED AND MARGINAL PRICE 2004ENERGÍA CASADA EÓLICA Y PRECIO MARGINAL
AÑO 2004
0
100
200
300
400
500
600
0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0 5,5 6,0 6,5 7,0
Precio marginal (c€/kWh)
En
erg
ía c
asad
a (M
Wh
)
WIND ENERGY MATCHED AND MARGINAL PRICE 2005ENERGÍA CASADA EÓLICA Y PRECIO MARGINAL
AÑO 2005
0
1.000
2.000
3.000
4.000
5.000
6.000
0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0 5,5 6,0 6,5 7,0 7,5 8,0 8,5 9,0 9,5 10,0 10,5 11,0 11,5 12,0 12,5 13,0 13,5
Precio marginal (c€/kWh)
En
erg
ía c
asad
a (M
Wh
)
WIND ENERGY MATCHED IN THE DAILY MARKET AND MARGINAL PRICE IN 2006ENERGÍA EÓLICA EN EL MERCADO DIARIO Y PRECIO MARGINAL
AÑO 2006
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0 5,5 6,0 6,5 7,0 7,5 8,0 8,5 9,0 9,5 10,0 10,5 11,0 11,5 12,0 12,5
Precio marginal (c€/kWh)
En
erg
ía c
asad
a (M
Wh
)
SPECIAL REGIME ENERGY MATCHED IN THE DAILY MARKET AND MARGINAL PRICE IN 2007
ENERGÍA DE RÉGIMEN ESPECIAL EN EL MERCADO DIARIO Y PRECIO MARGINAL AÑO 2007
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0 5,5 6,0 6,5 7,0 7,5 8,0 8,5 9,0
Precio marginal (c€/kWh)
En
erg
ía c
asad
a (M
Wh
)
-1.000
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
10.000
11.000
12.000
13.000
14.000
15.000
16.000
17.000
18.000
01
/01
/05
29
/01
/05
27
/02
/05
28
/03
/05
26
/04
/05
24
/05
/05
22
/06
/05
21
/07
/05
19
/08
/05
16
/09
/05
15
/10
/05
13
/11
/05
12
/12
/05
09
/01
/06
07
/02
/06
08
/03
/06
06
/04
/06
04
/05
/06
02
/06
/06
01
/07
/06
30
/07
/06
27
/08
/06
25
/09
/06
24
/10
/06
22
/11
/06
20
/12
/06
18
/01
/07
16
/02
/07
17
/03
/07
14
/04
/07
13
/05
/07
11
/06
/07
10
/07
/07
07
/08
/07
05
/09
/07
EN
ER
GÍA
(M
Wh
)
-1.000
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
10.000
11.000
12.000
13.000
14.000
15.000
16.000
17.000
18.000
PO
TE
NC
IA (
MW
)
Mercado diario (con restricciones) Mercado intradiario Potencia instalada
PARTICIPACIÓN EN EL MERCADO DE INSTALACIONES DE RÉGIMEN ESPECIAL
MARKET ENERGY OF POWER STATION UNDER THE SPECIAL REGIME
WIND PRODUCERS ACTING IN THE INTRA-DAY MARKET
The wind producers are very active in the intra-day market:
As weather forecast is close to real time, the producers modify schedules to more accurate figures.
To solve the power production unavailability.
THE FORWARD CONTRACTS AND THE DAILY MARKET
The participation of the wind power producers in the daily market serves to them as a base to be able to take part in the CESUR (last resort supply), VPP auctions and the forward organized market, buying or selling the necessary amounts of energy to fulfil their compromises.
INCORPORATING OFFERS INTO DAILY MARKET
OMEL
4. Relevant market data.
INSTALLED POWER BY TECHNOLOGIESIN 2006 (%)
ENERGY PRODUCED BY TECHNOLOGIES IN 2006 (%)
Wind power production reached 8.5% in 2006 of the demand coverage. In 2007 a 12% is expected to be reached.
ENERGY PRODUCED IN SEPTEMBER 2006 & 2007 (%)
INSTALLED POWER IN THE SPECIAL REGIME IN 2006 (%)
ENERGY PRODUCED IN THE SPECIAL REGIME IN 2006 (%)
DAILY WIND GENERATION IN 2006 (MWh)
Source: REE and AEE
On December 8th, 2006, a maximum in wind power production was achieved with an average daily energy of 159,291 MWh and an hourly energy of 8,010 MWh at 15:00 hours. This wind power production covered 23.3 % of the domestic demand
DAILY ENERGY PRODUCEDBY WIND POWER IN 2006 (%)
Source: REE and AEE
WIND ENERGY SOLD AT REGULATED TARIFFAND IN THE MARKET (GWh)
0
5.000
10.000
15.000
20.000
25.000
2004 2005 2006
GW
h
Participating in the market Sold to distributors
5. Conclusions.
CONCLUSIONS
From 1994 to now, wind energy production have been growing in an uninterrupted way.
The price of the market plus the premium has been attractive enough to build 12,900 MW of installed wind power.
The management of the electric system has changed to integrate many small producers whose production will increase or diminish based on the wind regime.
Most of the wind energy producers have chosen the option of bidding into the market instead of the option of the fix price.
THANKS YOU FOR YOUR ATTENTION