Transcript Wind Power in the Spanish market

2007 APEX Conference
Paris, October 16, 2007
SESSION 3: How to integrate
renewable energy in the markets
Wind power
Maria-Luisa Huidobro
President
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)
80
74.3
70
59.1
60
47.6
50
39.3
40
31.1
30
23.9
17.4
20
10
13.6
4.8
6.1
7.6
1995
1996
1997
10.2
0
1998
Source: GWEC, EWEA and AEE
1999
2000
2001
2002
2003
2004
2005
2006
ALLOCATION BY COUNTRIES.
INSTALLED WIND POWER IN 2006 (GW)
25 20,6
20
15
11,6 11,6
10
6,3
3,1 2,6 2,1 2,0 1,7
1,6 1,6 1,5 1,4 1,0 0,8 0,7 0,7 0,6
5
Source: GWEC, EWEA and AEE
Sweeden
Ireland
Greece
Australia
Austria
Japan
Canada
France
Holland
Portugal
UK
Italy
China
Denmark
India
USA
Spain
Germany
0
INSTALLED POWER IN THE SPECIAL REGIME IN
SPAIN AND FORECAST UNTIL 2010 (MW)
25.000
20.000
15.000
10.000
5.000
0
2004
2005
2006
2007
Solar
21
43
77
371
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
Source: Renewable Energy Plan
2008
2009
2010
400
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.
KINDS OF FACILITIES
 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.
ADMINISTRATIVE COMPETENCES
 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.
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.
REQUIREMENTS APPLIED TO WIND POWER FACILITIES (I)
 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 (II)
 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.
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
ancillary services and deviations.
corresponds to the
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
Upper Lower
premium
limit
limit
c€/kWh c€/kWh c€/kWh
Regulated Reference
Group
Term
tariff
c€/kWh
Onshore
wind
facilities
First 20 years
7.3228
2.9291
After 20 years
6.1200
0.0000
Offshore
wind
facilities
The maximum and minimum
reference premium
8.4944
7.1275
16.4000
8.4300
Price in c€/kWh
LOWER AND UPPER PRICE LIMITS TO BE
PERCEIVED BY WIND FACILITIES
12
11
10
9
Upper limit = 8.4944
Price to receive
8
7
Lower limit = 7.1275
Premium
= 2.9291
6
5
Market price
4
3
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.
THE REGULATED TARIFF AND THE PREMIUMS (II)
 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.
ROYAL DECREE 1028/2007
WIND 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.
INSTALLED CAPACITY IN CCGT,
COGENERATION AND WINDMILLS
Installed capacity in CCGT,
cogeneration and windmills
Current
(MW)
CCGT
Cogeneration
Windmills
In the market
(%)
(*) 16,657
100.0
5,773
52.0
12,323
95.5
(*) 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
TECHNOLOGY
Gas
Oil or gas
Cogeneration
Wind
Oil
Natural gas
Hydro
Total
Special regime
(MW)
Ordinary regime
with incentives
(MW)
0.0
183.2
28.3
0.0
2,258.2
592.5
11,798.0
0.0
1.2
0.0
281.3
0.0
1,113.9
0.0
15,480.9
775.7
DAILY ENERGY BY PRODUCTION TECHNOLOGIES
DAILY ENERGY GROUPED BY PRODUCTION TECHNOLOGY
th OCTOBER 2007
JANUARY
2004
–- 10
10OCTOBER
JANUARY
2004
2007
1500
1400
1300
1200
1000
900
800
700
600
500
400
300
200
100
Date
Special Regime to Distribution
Special Regime to Market
Nuclear
Imports
Hydro
Coal
Combined Cycle
Fuel-Gas
01/09/07
01/07/07
01/05/07
01/03/07
01/01/07
01/11/06
01/09/06
01/07/06
01/05/06
01/03/06
01/01/06
01/11/05
01/09/05
01/07/05
01/05/05
01/03/05
01/01/05
01/11/04
01/09/04
01/07/04
01/05/04
01/03/04
0
01/01/04
ENERGY (GWh)
1100
TYPICAL BID OF A WIND POWER PRODUCER
 Bid at 0 €/MWh to be matched.
 Bid at a price different from 0 €/MWh with risk of none being matched
NUMBER OF MARKET PARTICIPANTS
 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
cEur/kWh
PRICES AND ENERGY IN THE DAILY MARKET
AND ENERGY
THEthDAILY
MARKET2007
1st PRICES
January
2004 –IN 10
October
MWh
1st JANUARY 2004 - 10th OCTOBER 2007
c€/kWh
MWh
30
1.500.000
28
1.400.000
Average price in the daily market
Period
01/01/2004 10/10/2007
26
Price
4,248 cEur/kWh
1.300.000
100.000
0
0
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
01/09/07
2
01/07/07
200.000
01/05/07
4
01/03/07
300.000
01/01/07
6
01/11/06
400.000
01/09/06
8
01/07/06
500.000
01/05/06
10
01/03/06
600.000
01/01/06
12
01/11/05
700.000
01/09/05
14
01/07/05
800.000
01/05/05
16
01/03/05
900.000
01/01/05
18
01/11/04
1.000.000
01/09/04
20
01/07/04
1.100.000
01/05/04
22
01/03/04
1.200.000
01/01/04
24
Date
PRICES
IN THE SPANISH SYSTEM IN THE DAILY MARKET
PRICES IN THE SPANISH SYSTEM IN THE DAILY MARKET
1st1st
January
2004
10thOCTOBER
October 2007
2007
JANUARY
2004–- 10th
cEur/kWh
c€/kWh
Average price in the daily market
Period
01/01/2004 10/10/2007
Price
4,248 cEur/kWh
01/05/05
18
01/03/04
20
16
14
12
10
8
6
4
2
01/09/07
01/07/07
01/05/07
01/03/07
01/01/07
01/11/06
01/09/06
01/07/06
01/05/06
01/03/06
01/01/06
01/11/05
01/09/05
01/07/05
01/03/05
01/01/05
01/11/04
01/09/04
01/07/04
01/05/04
01/01/04
0
Date
Maximum hourly price
Average price
Minimum hourly price
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 COMPONENETS
OF WIND ENERGY IN 2006 (€/MWh)
100
Market price components 91.01 €/MWh
0,9
90
3,8
7,66
80
70
30,64
60
50
40
30
48,01
20
10
0
Daily market
Source: REE and AEE
Premium
Incentive
Reactive energy
Others
WIND ENERGY MATCHED AND MARGINAL PRICE
ENERGÍA CASADA EÓLICA Y PRECIO
MARGINAL
2004
AÑO 2004
600
500
Energía casada (MWh)
400
300
200
100
0
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
Precio marginal (c€/kWh)
4,5
5,0
5,5
6,0
6,5
7,0
WIND ENERGY MATCHED AND MARGINAL PRICE
2005
ENERGÍA CASADA EÓLICA Y PRECIO
MARGINAL
AÑO 2005
6.000
5.000
Energía casada (MWh)
4.000
3.000
2.000
1.000
0
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)
WIND ENERGY MATCHED IN THE DAILY MARKET
ENERGÍA
EÓLICA EN
EL MERCADO DIARIO Y PRECIO
MARGINALIN 2006
AND
MARGINAL
PRICE
AÑO 2006
7.000
6.000
Energía casada (MWh)
5.000
4.000
3.000
2.000
1.000
0
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
Precio marginal (c€/kWh)
8,0
8,5
9,0
9,5 10,0 10,5 11,0 11,5 12,0 12,5
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
14.000
12.000
Energía casada (MWh)
10.000
8.000
6.000
4.000
2.000
0
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
5,0
Precio marginal (c€/kWh)
5,5
6,0
6,5
7,0
7,5
8,0
8,5
9,0
MARKET ENERGY OF POWER STATION UNDER THE
SPECIAL REGIME
18.000
17.000
17.000
16.000
16.000
15.000
15.000
14.000
14.000
13.000
13.000
12.000
12.000
11.000
11.000
10.000
10.000
9.000
9.000
8.000
8.000
7.000
7.000
6.000
6.000
5.000
5.000
4.000
4.000
3.000
3.000
2.000
2.000
1.000
1.000
0
0
Mercado diario (con restricciones)
Mercado intradiario
Potencia instalada
05/09/07
07/08/07
10/07/07
11/06/07
13/05/07
14/04/07
17/03/07
16/02/07
18/01/07
20/12/06
22/11/06
24/10/06
25/09/06
27/08/06
30/07/06
01/07/06
02/06/06
04/05/06
06/04/06
08/03/06
07/02/06
09/01/06
12/12/05
13/11/05
15/10/05
16/09/05
19/08/05
21/07/05
22/06/05
24/05/05
26/04/05
28/03/05
27/02/05
-1.000
29/01/05
-1.000
POTENCIA (MW)
18.000
01/01/05
ENERGÍA (MWh)
PARTICIPACIÓN EN EL MERCADO DE INSTALACIONES DE RÉGIMEN ESPECIAL
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 TECHNOLOGIES
IN 2006 (%)
Other special
regime 11.32
Hydro 20.14
Wind power
14.03
Combined
cycle 19.84
Nuclear 9.32
Fuel-gas 10.92
Coal 14.43
ENERGY PRODUCED BY TECHNOLOGIES
IN 2006 (%)
Other special
regime 9.61
Hydro 9.51
Wind power 8.51
Nuclear 22.02
Combined cycle
23.92
Fuel-gas 2.6
Coal 23.82
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 (%)
September 2006
Other special
regim e 7%
Hydro 6%
Wind pow er 3%
Nuclear 20%
Com bined cycle
32%
Fuel-gas 5%
September 2007
Coal 27%
Other special
regim e 9%
Wind pow er 10%
Com bined cycle
26%
Fuel-gas 2%
Hydro 6%
Nuclear 21%
Coal 26%
INSTALLED POWER IN THE SPECIAL
REGIME IN 2006 (%)
Small hydro
12.64
Biomass 3.76
Solar 0.68
Wind power
82.92
ENERGY PRODUCED IN THE SPECIAL
REGIME IN 2006 (%)
Small hydro
13.68
Biomass 6.99
Solar 0.34
Wind power
78.99
DAILY WIND GENERATION IN 2006
(MWh)
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
Source: REE and AEE
DAILY ENERGY PRODUCED
BY WIND POWER IN 2006 (%)
Source: REE and AEE
WIND ENERGY SOLD AT REGULATED TARIFF
AND IN THE MARKET (GWh)
25.000
20.000
GWh
15.000
10.000
5.000
0
2004
2005
Participating in the market
2006
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