PV Policy Group KOMCatania, 6-7 October 2005 1

About PV in Portugal

Luís Silvaluis.silva@adene.pt

Pedro PaesPedro.paes@edp.pt

Hybrid PV-Wind power plant of Cismalhas, Ourique (2000)

PV Policy Group KOMCatania, 6-7 October 2005 2

E4 Programme (Energy Efficiency and Endogenous Energies), RCM 154/2001 established specific goals concerning the use of RES for

power (and thermal) generation, consistent with the adoption of the RES-E Directive, under which Portugal has to realise the target of 39% (incl. large hydro) renewable electricity production in 2010. PV: from 1,0 MW (2001) to 50 MW (2010).

Renewable Energy Policy

Cabinet Resolution (RCM) 63/2003 reinforces the specific goals on installed capacity by

technology. PV: from 2,0 MW (2003) to 150 MW (2010).

PV Policy Group KOMCatania, 6-7 October 2005 3

Electricity supply from RES (1995-2004)

Electricity from Renewables

source: DGGE, 2005

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

GW

h/y

ear

Solar PV

Geothermal

Wind

Biomass

Small hydro (<10 MW)

Hydro (>10 MW)

PV Policy Group KOMCatania, 6-7 October 2005 4

By 2010

3.0005001005013050

505.0008.800

E4Programme

RES-E

WindSmall hydroBiomassBiogasMSWSolar PV

WaveLarge hydroTOTAL (MW)

In 2001

101215101661

04.2094.603

By 2010

3.75040015050130150

505.0009.680

RCM63/2003

RES Policy Targets

Electricity market

PV Policy Group KOMCatania, 6-7 October 2005 5

The main legal and incentive framework related with PV is:

MAPE/PRIME programme which provides financial incentives, namely for energy efficiency and endogenous energies projects.

Decree-Law establishing a range of favourable feed-in tariffs for RES electricity.

Decree-Law defining the conditions regulating the awarding and management of grid interconnection points for Independent Power Producers (IPP).

Decree-Law regulating the delivery of electrical energy into the low-voltage grid (micro-generation, including PV).

Indirect incentives: VAT, custom duties, income tax

Legal Framework

PV Policy Group KOMCatania, 6-7 October 2005 6

Feed-in Tariffs

First introduced by Decree-Law 189/881988 Tariff associated to utility prices (indexed to the grid voltage level tariff),

ranging from 40 to 55 EUR/MWh

New comprehensive formula, tariffs in the range of 40 to 75 EUR/MWh

Fully changed by DL168/99

1999 Adapted by DL 339-C/2001

2001 General increase in tariffs, differentiated by RES technology For PV, ranging from 290 €/MWh (>5kW) to 500 €/MWh (<5kW)

Further adjustment in tariffs, depending on technology For PV, ranging from 380 €/MWh (>5kW) to 540 €/MWh (<5kW) Amended in April 2005 – D.R. 29/2005 (-17% for PV)

Now2005

Adapted by DL 33-A/2005

PV Policy Group KOMCatania, 6-7 October 2005 7

)1(

1)()()( 1

LEVIPC

IPCZVRDPAVRDPVVRDPFKMHOVRD

ref

mmmmmm

Current tariff formula (DL 33-A/2005)

Variable parcel – O&M avoided costs (0,036 €/kWh)

Environmental contribution (0,0074 €/kWh)

Fixed parcel – capacity credit (5,44 €/kW installed capacity)

Production period

Monthly payment (€/kWh) Inflation rate adjustment

Grid avoided losses

Feed-in Tariffs

RES Coefficient

PV Policy Group KOMCatania, 6-7 October 2005 8

)1(

1)()()( 1

LEVIPC

IPCZVRDPAVRDPVVRDPFKMHOVRD

ref

mmmmmm

Current tariff formula (DL 33-A/2005)

Z Coefficient, variable according to RES: Wind - 4,6 Small hydro - 4,5 (up to 10 MW), decreasing 0,075/MW (from 10 to 30 MW) Solar PV - 35 (above 5 kW) and 52 (up to 5 kW) Biomass - 8,2 (forest residues) and 7,5 (animal wastes) Wastes - 7,5 (landfill) and 3,8 (incineration) Others - 1

Feed-in Tariffs

PV Policy Group KOMCatania, 6-7 October 2005 9

0

10

20

30

40

50

60D

L 1

68/9

9

DL

339-

C/2

001

DL

339-

C/2

001

DL

33-

A/2

005

DR

29/2

005

Feed

-in

Tari

ff (

c€/k

Wh

)

P< 5 kW

P> 5 kW

Feed-in Tariff evolution

PV Policy Group KOMCatania, 6-7 October 2005 10

Current tariff rates for PV

Z Feed-in tariff

above 5 kWp 35 0,31 EUR/kWh

up to 5 kWp 52 0,45 EUR/kWh

For each MW of installed capacity, the tariff is valid for the first 21 GWh of production or for the first 15 years of production, whatever happens first !

Feed-in Tariffs

PV Policy Group KOMCatania, 6-7 October 2005 11

PV in Portugal

PV installed capacity of only 2,6 MW (end 2004)market growth based on off-grid applications

Source: IEA-PVPS

Cumulative Installed PV Power (Portugal)

0

500

1000

1500

2000

2500

3000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Year

kW

p On-Grid

Off-grid

PV Policy Group KOMCatania, 6-7 October 2005 12

PV in Portugal

Few grid-connected installations have been realised since January 2003:

RE Demonstration Platform (Labelec-EDP): 1,4 kWp 2-axis tracking system + 1,4 kWp fixed system + hybrid PV (0,5 kWp)-wind system.

Solar Energy in Schools: PV systems (15, 25 and 35 kWp) in 3 schools in Moura, Alentejo region.

Solar Building XXI: the 1st building integrated (facade) PV system in Portugal. 12 kWp PV system installed in the new building of RE Dept. of INETI.

S. Brás 5 kWp PV system. 1st installation licensed under the IPP law launched within E4.

but

PV Policy Group KOMCatania, 6-7 October 2005 13

PV in Portugal

Large PV projects, currently under development: World largest centralised PV power plant (64 MWp) in Moura. PV Solar Park of S. Domingos (40 PV systems, total: 116 MWp).

No. of requests for grid interconnection points received: 471 PV systems > total power requested in 2004: 5,28 MWp More than 3 000 requests in 2005

The PV market in Portugal is expected to grow significantly in the next few years, based on grid-connected applications, either small scale systems up to 5 kWp or medium to large scale systems, including multi-megawatt power plants.

PV Policy Group KOMCatania, 6-7 October 2005 14

PV in Portugal

Requests for PV power

Year No. of requests (PIP) Total Power (MWp)

2001 ? ?

2002 9 76,97

2003 27 40,55

2004 471 5,28

2005 > 3 000 ~ 340

PV Policy Group KOMCatania, 6-7 October 2005 15

PV Investment Support

Tax and fiscal incentives

Financial incentives MAPE / PRIME (POE) Programme - investment subsidies

to projects in the energy sector (RES and EE) under the 3rd Community Support Framework (QCA III, 2000-2006). 40% of eligible costs (refundable in 12 years, with 3 years grace period) Maximum eligible specific investment for PV projects: 3,500 EUR/kW

IRS (income tax) deduction 30% of the investment, up to 728 EUR

Reduced VAT rate 12% tax applied for RES equipment

PV Policy Group KOMCatania, 6-7 October 2005 16

Main expectations regarding the PV Policy Group project:

Expectations

follow-up of “FORUM on RES in Portugal” (2002)

contribute to review PV activities, share information & exchange views and discuss future strategies in Portugal

contribute to the sustained deployment of the PV market in Portugal.

help to make the national ambitious target (150 MW in 2010) become reality !

PV Policy Group KOMCatania, 6-7 October 2005 17

simplifying the licensing procedures as well as the grid-connection regulations, especially in the case of small systems connected to the low voltage grid;

development of building codes for PV building integration; implementing a national certification scheme on equipment

and installers, aiming at a better quality assurance.

PV in Portugal

The major barriers to the widespread of PV in Portugal, namely in the built environment, have been identified and the following measures still need to be adopted: