Electric Systems Challenges

Some weeks ago, I read in a Spanish newspaper information coming from the president of one of the Top 5 Spanish Utilities, Mr. Ignacio Sánchez Galán. He talked about the possibility to transfer the incentives (Feed-in-Tariff), which the Spanish Government gives to the Renewable Energies producers (mostly Wind and PV Energy), to the investigation for getting a more profitable production in this Renewable Energy technologies and, at the same time, insert this Wind and Solar PV yield in the Pool at the same conditions than the rest of generation (being out of Feed-in-Tariff incentives).

This information was communicated to the European Union last 11th October in Brussels by the 10 CEO of the Top 10 Utilities in Europe which represents the 50% of the Electricity production and the 30% of the Renewable energy production in the EU, having more than 213 million customers. With this information, the Utilities wants to transmit that the Integration of Renewable Energies in the Electric System has economical and technical consequence.

From the technical point of view, Wind and Solar PV Energy is not fully controlled such as could be Hydraulic, thermal or other technologies (Utilization Factor), just by the nature of the wind and sun (not stable and shadowing respectively). 

Like in the most European countries,in Spain, the Renewable Energies have a priority to enter in the Electric Pool such as first option in the mix generation . It means, all the other generation must to enter in the mix after the clean energies. 
This process has consequences in the Operation of the Electric System, because the first to enter in the Pool, is the most intermittent yield (Wind and Solar PV Energy).

In line with what is mentioned in the previous paragraph, which has serious technical consequences, it is necessary to have the respective forecasting systems to predict the energy production for every Renewable Energy Tecnology (e.g.: Wind Power Forecasting systems; Sipreolico; Spain / Prediktor: Denmark / Eurowind: Germany) to align supply and demand. As a example, in Spain, the System Operator is controlling in some cases, even more than 20 % of the mix generation by Renewable Energies (mostly Wind Power).

Other point for having in consideration, is the quality of wave which generates this big amount of Electricity generated by Wind and Solar PV Energy, which at the end, is integrated in the Electric Systems. 
This amount of electricity can create consequence in the frequency stability of the Electric System, for not being 100% controlled, but also, it has to be considered that the instability in the system can be produced by the own characteristics of the AC Electric System (mostly used worldwide), which the demand must be adjusted to the production, simply because the AC is not possible to storage. 
The main point is, this frequency it will be the base of time (clock) of the microcontrollers of the electronics systems, which, some of them, are responsible for security control systems. As a example related directly with this issue; the Nuclear Plants could switch off for security reasons when the frequency is going down from the value of 49 Hz (in the case of being placed in Europe with the frequency reference in 50Hz). In this case, the Nuclear Plant falls down, therefore, if the Electric System needs this Nuclear Plant for any peak demand, it needs a long time for getting in an stable situation for producing again. This time can arrive even to 45 or 50 hours in some cases, and of course, creating a serious problem in moments of high peak demand.

If this is not enough, the future applications like EV charger will integrate a high number of harmonics in the Grid, which are overloading the capacity of the complete systems: Power lines, trafos and protections systems. 

Having in mind this issues exposed, the point is, the Utilities are responsible for the assurance of the electricity supply, and then supporting the issues which generates Renewable Energies in the complete Electric Systems, and the cost in the distribution assets, which of course are responsible Utilities.

Economically, and taking in advance the situation, which Onshore Wind Power is producing at 80€ MW/h, Offshore Wind at 180€ MW/h, and Solar PV at 400€ MW/h, there is a big difference between Wind and Solar technology. 
The possibility for inserting this technologies in the "ordinary" pool, staying out of the "special regime", named adopted in Spain for designation of non subsidiaries -out of Feed-in-Tariff, and take this economic resources to the investigation for optimizing economically and technically both technologies, and specially Solar PV, for the high Levelized Cost of Energy, is getting a conclusion for some professionals: the actual system is not working, because is increasing the cost of Electricity and reducing the competitiveness of the companies.

From another point of view, from Renewable Energy producers and some customers, one point which is not in consideration from the Utilities, is the great investment in Electric Distribution and Transmission AC Power Systems made in the past, before crisis, when the Electricity demand was increasing year by year. 
Nowadays, this demand is even lower. In consequence the end consumer is paying a bill which includes this bad forecasting on demand made before crisis, as it happened in Spain, but also it is necessary to consider other cases, as a example the Australian Electric System is in the same roll, the demand is falling down but the bill for the end consumers is increasing every month by month.

Germany, one of the most important examples to follow regarding policy in Renewable Energies, which is still the worldwide number one in Photovoltaic MW installed and one reference in Wind Energy ,has approved the first coal-fired plant in eight years, this situation shows the change in the Energy Policy (also one example in New England, USA), which in the new Energy Policy, after the new government coalition, the new policy is eliminating the subsidiary for Wind Energy and keeping only the Feed-in-Tariff for Photovoltaic industry. This situation, it gives an idea about the situation of the Electricity price for the German consumers and companies which must pay the cost of Clean Energy. Even there is a possibility, in the next future, of the non increasing demand of electricity. But this, it seems not probable for German economy next year - very diversified economy with high value products and services and with records on exports, may be for getting the best worldwide Network of Commerce Chambers.

In the particular case of Spain, from the point of view of Renewable Energies producers, which erected projects with specific Feed-in-Tariff conditions defined by the previous Spanish Government, which right now, this conditions, are not implemented. 
The final consequence has been the modification of the law, breaking the security for the investors, receiving complaints from the most important investors of this Renewable Energy projects (e.g.: RREEF from Deutsche Bank and the last in the list; Eiser Infrastructure ltd with the Luxemburg subsidiary: Energia Solar Luxemburg). 

Moreover, Renewable Energy producers and End Customers, are claiming about the cost of Electricity, they demand one audit of the fixed cost of the Electric bill. 
In the Spanish Electric System, the bill of the Electricity is make by two sections; one variable (cost of Electricity production depending of supply and demand) and the fixed cost. Regarding the fixed cost, as it happens in some countries, the transmission of electricity is not a private business, in the most of cases, it is a company regulated by the State, which is also composed by private investors, having no competence, just for being one "strategic sector".

At the same time, the distribution, which is related directly to private companies, are responsible of the distribution of the Electricity. And this distribution, is included in the fixed part of the Electric bill, for using this infrastructure in terms of capacity.  

The question of this Renewable Energy producer and part of End Customers is, which is the value of the infrastructure of transmission and distribution of the Electricity which is included in the fixed section of the Electric bill?, who audit the real cost of this infrastructure? The customer must pay in the Electricity bill for using this infrastructure because is "the way" which use the Electricity for arriving from the production to the End Customer connection. The problem presents nowadays is, the demand is decreasing but the price of Electricity is increasing. The first consequence for that is, the reduction of competitiveness in the Spanish economy for the high price of Electricity, and on the other hand, one collateral issue, the increasing production of Coal Power Plant.

In conclusion, it is well known the Utilities gives the responsibility to the policy for the excessive cost of Feed-in-Tariff subsidiaries to Renewable Energies. But is well known, when there is a great production of Wind Power (in the case of Spain can arrive to an average of 20% of the total mix generation, and in some cases being almost 50% of the total production) the cost of the Electricity gets down, then, the Renewable Energies are not the responsible for increasing the Electricity price.

The claim of Renewable Energy producers (and also some part of the End Consumers) is why the price of the Electricity is increasing and the demand decreasing. Some reports talk about the Utilities will invest in AMI and Analysis of the grid for DR control systems in the next years, but I think the Electric System must review some points which are on the table in a short term. May be what exposed the President of one of the Top 5 Utilities in Spain is right, when he is saying to "relocate" the money of Feed-in-Tariff for the  Renewable Energies (PV and Thermo-solar) into the Research for getting this technology "mature" in terms of profitability. But on the other hand, the Utilities and Government must review the cost of transmission and distribution assets because it is not possible to pay more money for the Electricity when the demand is lower.

Bottom line: All parts must be opened to find one solution because is in risk the competitiveness of the economy.