Jul SEPA Italy FFM slides for webinar final
Helping Utilities Make Smart Solar Decisions
SEPA Fact Finding Mission to Italy May 7 – 14, 2011
SEPA’s Fact Finding Missions • First mission in 2008 – Germany – Focus on rooftop PV, with some utility-scale PV
• Second mission in 2009 – Spain – Focus on utility-scale PV and CSP
• Third mission in 2010 – Japan – Focus on rooftop PV and grid integration
• Fourth mission in 2011 – Italy – Focus on utility-scale solar and Italy’s rapidly growing solar market
• Future missions Southern California, USA: Nov 13-18, 2011 Helping Utilities Make Smart Solar Decisions
2
Mission Objectives • Learn about the Italian electricity market, the impacts of solar on the market • Learn and investigate the structure and design of solar policy in Italy • Visit and Learn about innovative solar sites • Learn about the experience of Italian utilities in integrating large amounts of solar electricity into their grid • Network with utility peers and bring back lessons learned to share with utility colleagues Helping Utilities Make Smart Solar Decisions
3
Participating Organizations • • • • • • • • • • • • • • •
Ameren Missouri Arizona Public Service Atlantic City Electric City of Lake Worth Utilities Delmarva Power EPRI Gainesville Regional Utilities Italian Trade Commission New Braunfels Utilities Progress Energy Salt River Project San Diego Gas & Electric Santee Cooper Southern California Edison U.S. Department of Energy
NJ DE CA
CA
MO
NC SC
AZ AZ
TX
FL FL
Helping Utilities Make Smart Solar Decisions
4
SEPA Fact Finding Mission Italy 2011
Helping Utilities Make Smart Solar Decisions
5
Why Italy? • 300% solar market growth spurred by attractive tariffs and government support. • The government is working to adjust incentives to provide a sustainable market. • Italy’s combined wind and solar capacity is about equal to their peak load and both MV and HV grid upgrades are required. Italy is a singular laboratory and the experiment is reaching an interesting phase….
Helping Utilities Make Smart Solar Decisions
6
Solar Resource Comparison
Helping Utilities Make Smart Solar Decisions
7
Italy is now the second largest solar market in the world Italy as compared to US Italy is about ¾ the land mass of California, similar size economy
Italy • PV Market 2009 - 1144 MW 2010 - 3470 MW • Avg. residential costs 20 €¢/kWh (28 ¢/kWh) • Avg. residential annual consumption 2400 kWh
California • PV Market 2009 - 214 MW 2010 - 252 MW • Avg. residential costs 14.83 ¢/kWh • Avg. residential annual consumption 7000 kWh
Sources: Gestore Servizi Elettrici (GSE), EU, and IEA data
Sources: IREC, EIA, and IEA data
Helping Utilities Make Smart Solar Decisions
8
Evolution of the Italian Solar PV Market
Source: Gestore Servizi Elettrici (GSE)
Helping Utilities Make Smart Solar Decisions
9
Italian Electricity Mix, 2010
Source: GRTN / Terna
Helping Utilities Make Smart Solar Decisions
10
Motivations for RE in Italy • Continued and growing dependence on electricity imports • Improve energy diversification and security • Encourage new generating capacity • Meet EU 20-20-20 targets • Energy prices are higher than the rest of Europe – and Italy adds VAT to energies. • Total GHG emissions (CO2) increased by 12.13% from 1990 to 2006. Helping Utilities Make Smart Solar Decisions
11
Market Liberalization • Electricity market before liberalization (1962-1999) – a single vertically integrated and state-owned company: ENEL. • Liberalization process required by European Union law, and enforced in Italy, created new market mechanisms • Monopoly Liberalization 1992 – ENEL became limited company 1995 – Establishment of an independent energy regulator AEEG (to promote competition, set standards for service, set tariffs for T&D, grid access regulation) 1999 – Implementation of unbundling requirements: separation of generation and distribution ENEL privatization creation of TERNA (transmission system operator)
1999 -2007 – Supply and demand liberalization
Source: Autoritá per l’energia elettrica e il gas (AEEG)
Helping Utilities Make Smart Solar Decisions
12
Electricity Market Players • Parliament and Government including the Ministry of Economic Development (MSE) whose role includes defining strategy and guidelines for the national power system security and cost-effectiveness. • AEEG – Regulates electricity and natural gas sectors and T&D. • ENEA – the National Agency for New Technologies, Energy and the Environment) – Promotes and carries out research and technological innovation.
• GSE – Electricity services operator (state-controlled under the Ministry of Finance) – Responsible for promoting and developing RE resources.
• TERNA – Transmission system operator – owns, develops and maintains electricity grid.
Sources: GME and AEEG
Helping Utilities Make Smart Solar Decisions
13
Electricity Market Diagram
Source: Gestore Mercati Energetici (GME)
Helping Utilities Make Smart Solar Decisions
14
PV Incentive scheme: Conto Energia
Outcomes from the 1st, 2nd, and 3rd Iterations of the Conto Energia
1st Conto Energia is established in 2005 and revisited a couple of months after its introduction, in 2006. 2nd Conto Energia is installed in 2007 to run through January 1st, 2010. 3rd Conto Energia is valid for installations between January 1st, 2010 and May 31st, 2011. Extended in April 2011, for ongoing discussions on tariffs, will be valid until August 31st, 2011. Source: GSE and Assoelettrica
Helping Utilities Make Smart Solar Decisions
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PV Incentive scheme: Conto Energia 4th Conto Energia – starting Sept 1st, 2011 • Overall national target of 23 GW by 2016 • Annual incentive fee ceiling of €6 billion to €7 billion • Progressive, automatic reduction in tariffs (e.g., accelerated degression) once predetermined target levels are reached • Large (1 MW+) PV project cap in 2011 and 2012, and a cumulative cap for all projects from 2013-2016 • 10% premium to projects comprised of over 60% EUmade components Helping Utilities Make Smart Solar Decisions
16
Italian Transmission System Overview
(720MW)
Map above: Transmission zones – both geographical (within Italy) and virtual
Source: GME
Helping Utilities Make Smart Solar Decisions
17
Transmission Facts
Terna’s Grid Investment Evolution (in € millions) (left), and New Renewable Plant Applications on the Transmission Grid (right) Source: Terna
Helping Utilities Make Smart Solar Decisions
18
Transmission Outlook • Terna currently owns & operates ~62,000 km of HVDC line • Italy’s Transmission Network Development Plan calls for €3.8 billion in grid development from 2011 to 2015
– ~ 50% of planned transmission expansion will be targeted to support intermittent renewables – Siting to, in part, help transfer RE generation produced in the south of Italy to load centers in the north via HVDC lines
• Overall, Italy’s National Development Plan calls for an €7.5 billion of grid investment from 2011 to 2020
Planned Transmission Network Investments, 2011-2020 Source: Terna
Helping Utilities Make Smart Solar Decisions
19
Renewable Requests vs. Maximum Load
Ongoing Renewables Requests Vs. Maximum Load (MV+LV Grid) by Italian Region and Overall Source: Enel Distribuzione
Helping Utilities Make Smart Solar Decisions
20
SEPA Fact Finding Mission Italy 2011 Agenda May 9
Briefing at the American Consulate in Milan
May 9
Meeting with Assolombarda, Assoeletrica, Assosolare, and GIFI in Milan Site visit and Briefing: SunEdison PV Plant in Rovigo Technical Visit to Vatican City
May 10 May 11
May 12
Utility Workshop with E.ON, GSE, and Terna in Rome
May 13
Workshop with ENEL and ENEL Green Power in Rome
May 13
Tour of SunPower’s Montalto Di Castro PV Park in Lazio
Helping Utilities Make Smart Solar Decisions
21
Site Tour: SunEdison’s 70 MWdc PV Plant in Rovigo • Largest PV plant in Europe with a single point of interconnection. • Construction March – Nov 2010 (to take advantage of FIT rates of the 3rd Conto Energia). • SunEdison sold the project for $382 million, but remains responsible for plant O&M. • Some Rovigo PV plant facts: – Capital cost ~€300 million. Yields ~88.5 GWh/year. Performance ratio: 82%. – ~300,000 PV modules (both polycrystalline and monocrystalline) over a land area totaling 850,000 m2
Helping Utilities Make Smart Solar Decisions
22
Site Visit: BIPV Vatican City • Vatican City: the world’s smallest sovereign city state • Vatican City is installing solar energy to help meet its goal of becoming the world’s first carbon neutral state. • 221 kW BIPV system, composed of 2,400 custom manufactured crystalline PV panels integrated onto the roof of the papal audience hall. The solar array, matches the original cement roof design; cost €1.2 million; and was installed in 2008. • Annually produces ~300 MWh supplying light, heat and cooling to the auditorium. Surplus is fed into the Vatican’s main power grid. Helping Utilities Make Smart Solar Decisions
23
Utility Workshop: E.ON, GSE, and Terna Some highlights:
– E.ON Climate & Renewables expects to complete 50 MW by end-2011 and to have a project pipeline of 540 MW. Though challenges abound, permitting appears to be among the most daunting, in some cases requiring anywhere from 20 to 60 permits from multiple national and regional agencies. – The public cost / rate impact of the Italian renewables market is to be approximately 8%. – To date, GSE has 155,000 PV incentive applications in its queue. – Terna has received ~23,160 MW of solar connection applications. – It green lights the interconnection of ~1.52.2 GW of renewable generation each year. Helping Utilities Make Smart Solar Decisions
24
Site Tour: SunPower’s 84 MWdc Montalto Di Castro PV Plant in Lazio • SunPower designed and installed the plant before selling the facility to private investors. • Some Montalto Di Castro PV facility facts: – 84 MWdc plant has 276,156 SunPower modules and covers 166 hectares. The plant, which was built in 4 separate tranches (45 MW, 25 MW, 6 MW, and 8MW) produces ~140 GWh/year. – SunPower has found that single-axis tracking has added 13.5% to output compared to fixedtilt (claims are ‘up to 25%’). – The panels are cleaned once a year, but inverter filters are cleaned every 6 weeks. – 3,000 sheep owned by a local shepherd keep the grass short, reducing O&M costs Helping Utilities Make Smart Solar Decisions
25
ENEL • Enel Distribuzione serves 85% of Italy’s energy customers • It expects PV volume to increase by 160% from 2010 levels in 2011. • Since May 2006, 45,450 HV-MV interconnection requests (41% have completed process) • In 2010, 9% of medium voltage bus bar had reverse flow more than 1% of the time (and 7% had reverse flow more than 5% of the time) • Smart grid communication and controls an asset in managing impact of PV Helping Utilities Make Smart Solar Decisions
26
Enel Green Power (EGP) • Responding to opportunity opened by 4th Conto Energia that favors development of smaller, distributed rooftop plants – and those that can provide grid support – through higher FIT prices • EGP cites forecasts of €2.8/W ($4.02/W) for all-in PV install costs in 2011, dropping by 56% by 2020 to €1.3/W ($1.86/W) for plants sized at 1 MW+ • PV grid parity in Italy was achieved in 2010 in certain locations with high retail rates [e.g., Sicily] • EGP’s subsidiary Enel.si offers a franchise business model with local entrepreneurs to stimulate solar PV installations. To date there are 550 franchisees with installations that total 100 MW. Helping Utilities Make Smart Solar Decisions
27
Key Takeaways from the Mission • Solar remains a policy-driven market. • The policy and energy context for renewable energy development in Italy is demonstrably different from the U.S. • The feed-in tariff is a blessing and a curse. • There is an apparent current lack of integrated planning within Italy. • The Smart Grid is perceived as a PV grid integration and management savior. Helping Utilities Make Smart Solar Decisions
28
Key Takeaways from the Mission (cont’d) • Streamlining the PV permitting, authorization, and grid interconnection administrative processes is a work in progress. • Intermittency issues are on the horizon, so now what? • PV plant O&M is becoming an increasingly important issue. • What seems daunting to U.S. utilities appears to strike Italian utilities as doable. Helping Utilities Make Smart Solar Decisions
29
SEPA Fact Finding Mission Italy 2011
Helping Utilities Make Smart Solar Decisions
30
Report: Italy FFM
Full report available on SEPA’s website: http://www.solarelectricpower.org/resources/reports.aspx Helping Utilities Make Smart Solar Decisions
31
SEPA Fact Finding Mission to Italy May 7 – 14, 2011
SEPA’s Fact Finding Missions • First mission in 2008 – Germany – Focus on rooftop PV, with some utility-scale PV
• Second mission in 2009 – Spain – Focus on utility-scale PV and CSP
• Third mission in 2010 – Japan – Focus on rooftop PV and grid integration
• Fourth mission in 2011 – Italy – Focus on utility-scale solar and Italy’s rapidly growing solar market
• Future missions Southern California, USA: Nov 13-18, 2011 Helping Utilities Make Smart Solar Decisions
2
Mission Objectives • Learn about the Italian electricity market, the impacts of solar on the market • Learn and investigate the structure and design of solar policy in Italy • Visit and Learn about innovative solar sites • Learn about the experience of Italian utilities in integrating large amounts of solar electricity into their grid • Network with utility peers and bring back lessons learned to share with utility colleagues Helping Utilities Make Smart Solar Decisions
3
Participating Organizations • • • • • • • • • • • • • • •
Ameren Missouri Arizona Public Service Atlantic City Electric City of Lake Worth Utilities Delmarva Power EPRI Gainesville Regional Utilities Italian Trade Commission New Braunfels Utilities Progress Energy Salt River Project San Diego Gas & Electric Santee Cooper Southern California Edison U.S. Department of Energy
NJ DE CA
CA
MO
NC SC
AZ AZ
TX
FL FL
Helping Utilities Make Smart Solar Decisions
4
SEPA Fact Finding Mission Italy 2011
Helping Utilities Make Smart Solar Decisions
5
Why Italy? • 300% solar market growth spurred by attractive tariffs and government support. • The government is working to adjust incentives to provide a sustainable market. • Italy’s combined wind and solar capacity is about equal to their peak load and both MV and HV grid upgrades are required. Italy is a singular laboratory and the experiment is reaching an interesting phase….
Helping Utilities Make Smart Solar Decisions
6
Solar Resource Comparison
Helping Utilities Make Smart Solar Decisions
7
Italy is now the second largest solar market in the world Italy as compared to US Italy is about ¾ the land mass of California, similar size economy
Italy • PV Market 2009 - 1144 MW 2010 - 3470 MW • Avg. residential costs 20 €¢/kWh (28 ¢/kWh) • Avg. residential annual consumption 2400 kWh
California • PV Market 2009 - 214 MW 2010 - 252 MW • Avg. residential costs 14.83 ¢/kWh • Avg. residential annual consumption 7000 kWh
Sources: Gestore Servizi Elettrici (GSE), EU, and IEA data
Sources: IREC, EIA, and IEA data
Helping Utilities Make Smart Solar Decisions
8
Evolution of the Italian Solar PV Market
Source: Gestore Servizi Elettrici (GSE)
Helping Utilities Make Smart Solar Decisions
9
Italian Electricity Mix, 2010
Source: GRTN / Terna
Helping Utilities Make Smart Solar Decisions
10
Motivations for RE in Italy • Continued and growing dependence on electricity imports • Improve energy diversification and security • Encourage new generating capacity • Meet EU 20-20-20 targets • Energy prices are higher than the rest of Europe – and Italy adds VAT to energies. • Total GHG emissions (CO2) increased by 12.13% from 1990 to 2006. Helping Utilities Make Smart Solar Decisions
11
Market Liberalization • Electricity market before liberalization (1962-1999) – a single vertically integrated and state-owned company: ENEL. • Liberalization process required by European Union law, and enforced in Italy, created new market mechanisms • Monopoly Liberalization 1992 – ENEL became limited company 1995 – Establishment of an independent energy regulator AEEG (to promote competition, set standards for service, set tariffs for T&D, grid access regulation) 1999 – Implementation of unbundling requirements: separation of generation and distribution ENEL privatization creation of TERNA (transmission system operator)
1999 -2007 – Supply and demand liberalization
Source: Autoritá per l’energia elettrica e il gas (AEEG)
Helping Utilities Make Smart Solar Decisions
12
Electricity Market Players • Parliament and Government including the Ministry of Economic Development (MSE) whose role includes defining strategy and guidelines for the national power system security and cost-effectiveness. • AEEG – Regulates electricity and natural gas sectors and T&D. • ENEA – the National Agency for New Technologies, Energy and the Environment) – Promotes and carries out research and technological innovation.
• GSE – Electricity services operator (state-controlled under the Ministry of Finance) – Responsible for promoting and developing RE resources.
• TERNA – Transmission system operator – owns, develops and maintains electricity grid.
Sources: GME and AEEG
Helping Utilities Make Smart Solar Decisions
13
Electricity Market Diagram
Source: Gestore Mercati Energetici (GME)
Helping Utilities Make Smart Solar Decisions
14
PV Incentive scheme: Conto Energia
Outcomes from the 1st, 2nd, and 3rd Iterations of the Conto Energia
1st Conto Energia is established in 2005 and revisited a couple of months after its introduction, in 2006. 2nd Conto Energia is installed in 2007 to run through January 1st, 2010. 3rd Conto Energia is valid for installations between January 1st, 2010 and May 31st, 2011. Extended in April 2011, for ongoing discussions on tariffs, will be valid until August 31st, 2011. Source: GSE and Assoelettrica
Helping Utilities Make Smart Solar Decisions
15
PV Incentive scheme: Conto Energia 4th Conto Energia – starting Sept 1st, 2011 • Overall national target of 23 GW by 2016 • Annual incentive fee ceiling of €6 billion to €7 billion • Progressive, automatic reduction in tariffs (e.g., accelerated degression) once predetermined target levels are reached • Large (1 MW+) PV project cap in 2011 and 2012, and a cumulative cap for all projects from 2013-2016 • 10% premium to projects comprised of over 60% EUmade components Helping Utilities Make Smart Solar Decisions
16
Italian Transmission System Overview
(720MW)
Map above: Transmission zones – both geographical (within Italy) and virtual
Source: GME
Helping Utilities Make Smart Solar Decisions
17
Transmission Facts
Terna’s Grid Investment Evolution (in € millions) (left), and New Renewable Plant Applications on the Transmission Grid (right) Source: Terna
Helping Utilities Make Smart Solar Decisions
18
Transmission Outlook • Terna currently owns & operates ~62,000 km of HVDC line • Italy’s Transmission Network Development Plan calls for €3.8 billion in grid development from 2011 to 2015
– ~ 50% of planned transmission expansion will be targeted to support intermittent renewables – Siting to, in part, help transfer RE generation produced in the south of Italy to load centers in the north via HVDC lines
• Overall, Italy’s National Development Plan calls for an €7.5 billion of grid investment from 2011 to 2020
Planned Transmission Network Investments, 2011-2020 Source: Terna
Helping Utilities Make Smart Solar Decisions
19
Renewable Requests vs. Maximum Load
Ongoing Renewables Requests Vs. Maximum Load (MV+LV Grid) by Italian Region and Overall Source: Enel Distribuzione
Helping Utilities Make Smart Solar Decisions
20
SEPA Fact Finding Mission Italy 2011 Agenda May 9
Briefing at the American Consulate in Milan
May 9
Meeting with Assolombarda, Assoeletrica, Assosolare, and GIFI in Milan Site visit and Briefing: SunEdison PV Plant in Rovigo Technical Visit to Vatican City
May 10 May 11
May 12
Utility Workshop with E.ON, GSE, and Terna in Rome
May 13
Workshop with ENEL and ENEL Green Power in Rome
May 13
Tour of SunPower’s Montalto Di Castro PV Park in Lazio
Helping Utilities Make Smart Solar Decisions
21
Site Tour: SunEdison’s 70 MWdc PV Plant in Rovigo • Largest PV plant in Europe with a single point of interconnection. • Construction March – Nov 2010 (to take advantage of FIT rates of the 3rd Conto Energia). • SunEdison sold the project for $382 million, but remains responsible for plant O&M. • Some Rovigo PV plant facts: – Capital cost ~€300 million. Yields ~88.5 GWh/year. Performance ratio: 82%. – ~300,000 PV modules (both polycrystalline and monocrystalline) over a land area totaling 850,000 m2
Helping Utilities Make Smart Solar Decisions
22
Site Visit: BIPV Vatican City • Vatican City: the world’s smallest sovereign city state • Vatican City is installing solar energy to help meet its goal of becoming the world’s first carbon neutral state. • 221 kW BIPV system, composed of 2,400 custom manufactured crystalline PV panels integrated onto the roof of the papal audience hall. The solar array, matches the original cement roof design; cost €1.2 million; and was installed in 2008. • Annually produces ~300 MWh supplying light, heat and cooling to the auditorium. Surplus is fed into the Vatican’s main power grid. Helping Utilities Make Smart Solar Decisions
23
Utility Workshop: E.ON, GSE, and Terna Some highlights:
– E.ON Climate & Renewables expects to complete 50 MW by end-2011 and to have a project pipeline of 540 MW. Though challenges abound, permitting appears to be among the most daunting, in some cases requiring anywhere from 20 to 60 permits from multiple national and regional agencies. – The public cost / rate impact of the Italian renewables market is to be approximately 8%. – To date, GSE has 155,000 PV incentive applications in its queue. – Terna has received ~23,160 MW of solar connection applications. – It green lights the interconnection of ~1.52.2 GW of renewable generation each year. Helping Utilities Make Smart Solar Decisions
24
Site Tour: SunPower’s 84 MWdc Montalto Di Castro PV Plant in Lazio • SunPower designed and installed the plant before selling the facility to private investors. • Some Montalto Di Castro PV facility facts: – 84 MWdc plant has 276,156 SunPower modules and covers 166 hectares. The plant, which was built in 4 separate tranches (45 MW, 25 MW, 6 MW, and 8MW) produces ~140 GWh/year. – SunPower has found that single-axis tracking has added 13.5% to output compared to fixedtilt (claims are ‘up to 25%’). – The panels are cleaned once a year, but inverter filters are cleaned every 6 weeks. – 3,000 sheep owned by a local shepherd keep the grass short, reducing O&M costs Helping Utilities Make Smart Solar Decisions
25
ENEL • Enel Distribuzione serves 85% of Italy’s energy customers • It expects PV volume to increase by 160% from 2010 levels in 2011. • Since May 2006, 45,450 HV-MV interconnection requests (41% have completed process) • In 2010, 9% of medium voltage bus bar had reverse flow more than 1% of the time (and 7% had reverse flow more than 5% of the time) • Smart grid communication and controls an asset in managing impact of PV Helping Utilities Make Smart Solar Decisions
26
Enel Green Power (EGP) • Responding to opportunity opened by 4th Conto Energia that favors development of smaller, distributed rooftop plants – and those that can provide grid support – through higher FIT prices • EGP cites forecasts of €2.8/W ($4.02/W) for all-in PV install costs in 2011, dropping by 56% by 2020 to €1.3/W ($1.86/W) for plants sized at 1 MW+ • PV grid parity in Italy was achieved in 2010 in certain locations with high retail rates [e.g., Sicily] • EGP’s subsidiary Enel.si offers a franchise business model with local entrepreneurs to stimulate solar PV installations. To date there are 550 franchisees with installations that total 100 MW. Helping Utilities Make Smart Solar Decisions
27
Key Takeaways from the Mission • Solar remains a policy-driven market. • The policy and energy context for renewable energy development in Italy is demonstrably different from the U.S. • The feed-in tariff is a blessing and a curse. • There is an apparent current lack of integrated planning within Italy. • The Smart Grid is perceived as a PV grid integration and management savior. Helping Utilities Make Smart Solar Decisions
28
Key Takeaways from the Mission (cont’d) • Streamlining the PV permitting, authorization, and grid interconnection administrative processes is a work in progress. • Intermittency issues are on the horizon, so now what? • PV plant O&M is becoming an increasingly important issue. • What seems daunting to U.S. utilities appears to strike Italian utilities as doable. Helping Utilities Make Smart Solar Decisions
29
SEPA Fact Finding Mission Italy 2011
Helping Utilities Make Smart Solar Decisions
30
Report: Italy FFM
Full report available on SEPA’s website: http://www.solarelectricpower.org/resources/reports.aspx Helping Utilities Make Smart Solar Decisions
31
