Campo base 40.805

Vamos a verlo por el lado positivo y lógico. Esta claro que no podíamos seguir ascendiendo, la falta de fans (demanda) y los altos costes de la expedición y las deudas contraídas nos estaban ahogando (déficit tarifario). Ahora, encima, otros métodos de escalada tradicionales y más baratos se estaban imponiendo (gas natural).

Pero valoremos donde hemos llegado: a 40805 MW de generación renovable. Un buen campo base para esperar unos años (tres según la CNE) y seguir progresando. Está claro que hemos llegado más lejos que otros paises, pero subir tan rápido nos ha dado mal de altura. La cima de las renovables nos espera, y a no mucha distancia.

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Evolución de la potencia instalada renovable
Evolución de la potencia instalada renovable

Minimizing externalities

The electricity generation has important externalities issues. An externality happens when the price of a good doesn’t reflect all the costs that are generated in its manufacturing. That is because some of affections of the product manufacturing has no cost for the company because the price is zero, for instance, there are no price for the clean air or for a not-nuclear-risky generation. In the electrical generation, the product is very homogenous: electrical energy, measured in kWh. But, obviously, it is not the same for the planet how you obtain this energy. But the market, the wholesale market by own, doesn’t reflects all of these affections. So, in electricity markets, both negative externalities and positive externalities happen at the same time. In these two pages, I will analyze the two most popular methods of internalizing the benefits of the positive externalities of the renewable generation: Feed-in Tariffs (FiT) and Renewable Portfolio Standards (RPS), and I will focus on two country examples: Spain (FiT) and the US (RPS). There are also methods for internalize the negative externalities as the carbon cap and trade for CO2 emissions, but I will not consider them in this article.

So, the promotion of the renewable energy, as solar, wind or biomass, is an issue of how to internalize their positive externalities into the market. These benefits are well known. The clean or renewable energies, do not pollute, do not contribute to climate change, do not imply resources depletion, do generate local employment, do promote the national industry, do improve the energetic independence, and more. All of these benefits are not include in the Levelized Cost of Energy (LCOE) or the price of the electricity. Because of that, these technologies are not competing in the same conditions as the conventional generation. That makes that the price of them is above the average price of the electricity in wholesale market, and as a consequence, the utilities do not want to build this expansive plants or to purchase expensive energy to others. This is because the benefits of the renewable energy do not go to them, but to society. That is a market failure and that is because they need the regulation or the support from the Government.

In a market, even the Government can not control the quantity and the price of a product at the same time. If you fix the price for the renewable generation (as FiT does) you do not know what will be the amount of renewable generation that you will obtain. The same, if you fix the quantity you want (as RPS does); you do not know what will be the price for this generation. The price plus the quantity is the key point, because that will be the cost for the electricity customers who are also your voters. So you have to be careful with that because otherwise you can make your citizens to pay so much for the electricity if the price plus the quantity is too high or you can make them not to gain the benefits of renewals if the renewals were not developed due to low prices which do not make the investments profitable. The two methods are good if they are well designed, but that is not the common case.

The Feed-in Tariffs
In the Feed-in Tariffs option, the government decides what will be the price of the renewable generation. That has enormous advantages for developing the market because it is very easy for developers, investors and financial institutions to know what will be their retribution and the Internal Rate of Return (IRR) for their investments. It is easy to calculate the IRR and if the FiT is well calculated -the price will be a bit more than the cost of capital- then the development of renewable is smoothly and a reasonable cost for ratepayers, being the society awarded with the benefits of clean generation.
Spain has become a power in renewals thanks to FiT. The government support has been very strong and determined. Spain has been successful implementing some FiTs, for instance in the case of wind, but has made huge mistakes in solar PV. Spain started to use FiTs in 2000, and ten year later, the 35% of the total generation is using renewals (2010).

In the following graph you can see the average cost of electricity in the wholesale market (black line), the LCOE of wind power (blue line) and the FiT (yellow and red line). As long as the FiT is above the cost, the investment is interesting. This FiT was well calculated to make the investor obtain a 5-7% IRR.

Spanish Fit in wind

In the following graph you can see the objective in wind (red bars) and the actual development (blue bars). As you can see, the development has been constant and progressive.

Spanish wind development vs objective

That is the successful example. But what did it happen in solar? In the following graph you can see the average cost of electricity in the wholesale market (black line), the LCOE of solar power (red line) and the FiT (yellow line). As you can see, the FiT was much more than the cost, so the investors obtained more than 11% IRR.

Spanish Fit in solar PV

What was the result? An over investment in solar PV power. Government wanted 400MW and they obtain more than 3,000MW. That implied a huge cost for citizens, and, as a result, the FiT has been reduced dramatically.

Spanish solar PV development vs objective

Renewable Portfolio Standards
With this method, the Government fixes the quantity of renewable generation that it wants, but not the price. That makes that the developer, the investor, and the most important, the financial institution that is going to put the money on the table, they do not know what will be their IRR before they start to promote a plant. So they have to deal with a lot of risk if they want to build a renewable plant. That is crucial, because at the end, the development of the renewals results too slowly.

You can see the example of the US. The US was the first country in building renewable plants in the 80’s, but now, only the 10% of the total generation is renewable (being 7% big hydro). So they have thirty years of expertise in renewable and only 10% as a result.

The US uses the RPS. That is an objective that some states try to achieve. For example, California has a RPS of 33% renewable in 2020. This objective becomes an obligation for the utilities, which have to provide a 33% of their portfolio using renewals.

Not bad, but then why have they achieved so few renewable generation up to now? Because two things: first of all, they make auctions to know the price of generation (trough Request for Proposals) and due to the competition, many of the bidders offers a price below the real cost, thinking that when they will build the plants, the technological development will made the cost reduced. But that not happened, and now there are a lot of projects that will not be ever built because the developers offered a very low price. Second, because, in fact, the utilities are not penalized if they do not comply with the RPS. So they do not have real incentives to buy more expensive energy that will make their ratepayers to pay more. As a result, the real price of renewals is not revealed.

Conclusions
We have seen to examples of trying to internalize a positive externality. But it is not easy because it is extremely difficult for a legislator to put a price for all of these things that are not in the market. Nevertheless, from the errors, we learn, so, these experiences will improve Government thinking. Benchmarking is also good thing to do for legislators to learn from the errors of the neighbours.

RFP, las cartas sobre la mesa

Las politicas de promoción de las energías renovables son un caso muy interesante de estudiar desde el punto de vista económico. ¿Como internalizar las ventajas sociales que implican de forma adecuada? En España y en Europa, las feed-in tariffs han sido la estrella estos últimos años, pero los gobiernos han aprendido que pueden ser peligrosas. Un ejemplo claro es el español con la fotovoltaica, en el que un error (no de cálculo, sino político) en el precio de generación fotovoltaico o prima, provocó una sobreinversión sin precedentes. El gobierno, que confió en las previsiones de las asociaciones fotovoltaicas (que iluso), más algunas triquiñuelas de pasillos y despachos (el actual ministro tiene mucho que ver cuando estaba en la oficina económica), puso un precio muy por encima del coste real de generación, y de 400MW que buscaba, consiguió más de 3.000MW en un año. En otras palabras, murió de éxito. Tampoco vamos a hacer sangre del árbol caído, porque después llegaron Italia, Francia y Rep Checa y cometieron el mismo error, y encima con el precedente español.
Claro esto es fácil de decir ahora a posteriori, pero no me hubiera gustado estar en la piel del funcionario o político que tuvo que decidir la tarifa para los siguientes años. ¿Cómo asignar el precio, sin datos de los costes reales? Porque los costes, de saberlos, los sabrían las empresas promotoras y los epecistas, y si acaso, porque ¿cómo saber lo que va a costar algo que nunca se ha hecho?. En fin, no es fácil poner una feed-in tariff.
Por ello los americanos, que de competir saben mucho más que nosotros, emplean otro método, el de los Renewable Portfolio Standard, forzando, sin mucha fuerza por cierto, a las utilities a servir a sus clientes un porcentaje de generación renovable. Y como Poncio Pilatos se lavan las manos, la pelota para el tejado de la utility que tiene que fijar los precios que va a pagar.
Las utilities, que por cierto, actuan como monopolistas con los clientes y como monopsonistas cuando compran energía (muchos vendedores y un solo comprador), hacen una subasta para comprar energía renovable. Como cuervos a un pastel acuden todos los developers y ponen sus precios, tanto ajustan que incluso ofertan por debajo del coste actual, pensando que quizás en un par de años, cuando construyan el proyecto, los precios habrán bajado. Ello ha dado lugar a un montón de ofertas temerarias y PPAs firmados que no se van a realizar nunca, una situación que ‘nadie’ quiere (si obviamos la hipocresia política). Estas subastas son las llamadas Request for Proposal o RFP.
Sin embargo, la estrategia ultimamente esta siendo un poco distinta. Las utilities hacen RFP pero sólo por una pequeña parte de la capacidad que quieren comprar, digamos 50MW y después por otro lado, firman PPA bilaterales con las empresas por valor de muchos más MWs. ¿Que curiosa estrategia no? gastarse un dineral en consultores y hacer un proceso tedioso y largo de RFP para sólo firmar pocos MW en PPA y luego firmar muchos más bilateralmente.
Está claro lo que hacen, más sabe la utility por vieja que por utility. Con el RFP consiguen una referencia de precio más o menos ajustada a la realidad, ya que casi el resultado de la subasta es el propio coste con algo o nada de margen. Con esa referencia, saben cuánto le tienen que pagar al developer serio con el firman un bilateral por cientos de megas, sin pagar de más por ello y con la garantía de que al ser rentable para el developer, el proyecto se va a acabar realizando.
Asi que nota para el próximo Secretario de Energia, (el que tenemos poco va a durar, aunque espero conocerle personalmente en Octubre), feed-in tariffs sí, pero el precio que lo ponga una subasta competitiva por una pequeña parte de la capacidad. Eviten lobbyes y colusión y tendrán un desarrollo renovable sostenible.

Spain: A Renewable Kingdom :: POWER Magazine

I have been mentioned in this article from POWER Magazine, by Sonal Patel. I think it sum up very well the current situation in the spanish electricity market, however, they are not mentioned some details which could be important for understand all the problem. The Government is not the unique guilty for the struggling tariff deficits.

Spain: A Renewable Kingdom :: POWER Magazine :: Page 2 of 6.

Only Sustainable Conferences

Only Sustainable 2010 took place in one of the worst places for consuming energy efficiency I have ever met: Miami. I have been in the US since one month ago and I have realized what energy-wasteful the Americans are. But Miami is it probably the best burn-petrol-barrils-for-nothing of this country.

Miami, is the Caribbean. The average temperature of the year is  77 ºF (25 ºC), so in Miami they are hot. (And not only because of the wonderful women you can see in the latinos’ pubs on Española way street). So the American-way-of-life is understanded like Airconditioning-me. I have never seen before a place with so huge contrast temperature between indoors or outdoors. The indoors places are freezing, yes completly freezing. When you walk on the street, you can feel about 30ºC, and inside the places, less than 20ºC. Apart of the uncomfort you feel dressing up when enter into place, this policy is a completly crazy in terms of energy efficiency. Even in my hotel, when I arrived at 9:00 after a full day of conferences and networking, the air-conditioning was turned on, at plenty power, so the room seems as a gulag siberian prision. That’s make me crazy.

Refrigeration has usually a low performance.  The best airconditioner machines will be a EER about 4 (I don’t think these cutting-edge type of machines were in US) when the ideal Carnot efficiency is about 12. So refrigeration is, in fact, a very bad way of consuming energy. That’s is ever worse if you actually freeze the rooms. Even in the big conference room, you can feel your cold breath, speaking about ‘Sustainability’. That’s another awkward things you can live in US.

Despite of this, the conferences were interesting. We have the opportunity to hear the nonsense explanations of Spanish the director of National Commission of Energy (the so-called electro-barbie), getting myself embarras and regreting to be spanish. Oh my God, how mess and confusion in the thermodinamics and engineering terms, while the rest of spaniards face down their tables embarrasing. I will never understand the political human resource managment.

The good thing is that I had the opportunity to meet Juan Verde, the spanish who has reached the most top position in the US government in the history. Juan Verde has worked with a lot of presidents and candidates as Al Gore or Obama. He made a superb presentation making everybody sit up and cheer. I achieved shacking hands  and chat a little with him.

Concentración Fotovoltaica, con el banco hemos topado

Con motivo de la feria Solar Power International 2010, celebrada el pasado mes de octubre, tuve la oportunidad, gracias a Pedro Banda, amigo de ISFOC y gran experto en fotovoltaica, de visitar una planta de Concentración Fotovoltaica. La planta está diseñada y construida de SolFocus, de las pocas empresas en el mundo que ya es capaz de construir este tipo de centrales. La planta es aproximadamente de 1MW de potencia y representa actualmente la planta más grande del mundo en esta tecnología. Se encuentra en Victorville, pueblo a mitad de camino entre Los Angeles y Las Vegas, donde ya comienza el desierto, pero en territorio todavía de California.

Panel concentracion fotovoltaica

La planta vende la energía a un instituto cercano, y está ubicada en los terrenos de esta. Al ser una instutución pública el permiting les resultó más fácil, pero están de acuerdo en que en California es una autentica pesadilla. La energía sobrante la venden a la red, no dijeron precios, pero me imagino que el PPA no será alto. La instalación es comercial pero casi de demostración, ya que no existen más de cinco en todo el mundo. Otra de ellas está en Puertollano, construida también por SolFocus para ISFOC.

Las ventajas de la CPV (Concentracion Fotovoltaica) es la reducción de costes que implica el uso de menos silicio para la misma potencia de salida, ya que a través de unos pequeños espejos se concentra la luz solar en las pequeñas placas fotovoltaicas. Por tanto para el mismo área de captación que un panel normal, se emplea menos silicio, que es el elemento más costoso de un panel. No obstante, para ello, el seguimiento o tracking ha de ser más exacto que un panel estandar de doble eje, ya que ha de ir perfectamente alineado con la radiación normal directa. Ello implica estructuras y cimentaciones más robustas.

Concentracion fotovoltaica

A pesar de ello, el impedimento más grande de esta tecnología por ahora, es la “maldita” bancabilidad (mala traducción de bankability), es decir que alguien tenga narices a financiar un proyecto con una tecnología tan nueva. Los bancos, en un contexto de restricción de crédito y pánico al moroso, cada vez actúan más como ingenieros, y analizan todos los componentes de un proyecto fotovoltaico, mirando la calidad de los módulos, del inversor, las garantías, y sobre todo los años de experiencia probada. Y ahí es donde la CPV falla. Frente a la gran experiencia en fotovoltaica tradicional, la CPV sólo tiene unos cuantos proyectos en su historia. Por tanto es complicado que un banco financie estos proyectos por ahora. Tiempo ha de pasar y trabajo, como el de ISFOC y el de SolFocus, se ha de realizar para que esta tecnología llegue a ser un opción.