Premises for LargeScale Implementation of Distributed Generation in Romania

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• Premises for Large-Scale Implementation of
  Distributed Generation in Romania

Camelia Vasile, MSc Eng
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Contents

• General framework
• Structure and prospects
• Targets
• Legislation
• Promotion Mechanism
• Regulatory obstacles and necessary measures
• Research priorities

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General framework (1)

• DG has, in the long term, the potential to make a
  large contribution to the EU energy supply,
  achieving security of energy supply and
  environmental sustainability. Main targets
• Decreasing the cost of electricity and fuel
  supplies to competitive levels developing highly
  efficient concepts and achieving major cost
  reductions in the entire production chain
• Improving reliability, safety, availability,
  system efficiency and durability with long
  maintenance intervals of electricity supply
• Transforming the conventional power transmission
  and distribution grid into a sustainable, unified
  and active energy service network with a large
  share of DG requires new concepts and systems for
  planning, control and supervision.

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General framework (2)

• In Romania - DG utilization is making its first
  steps
• - interest of investors in installing WPPs
  increased considerably
• - is expected that investments in DG technologies
  will grow
• Potential for RES - very high
• Successful projects are in place, but the
  investment rate in the renewable sector is quite
  low

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Structure and Prospects (1)
Structure of electricity production in 2008
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Structure and Prospects (2)

• Hydro energy - the biggest share in the total
  participation of RES to the power balance
• Hidroelectrica (state-owned company)
• 275 HPPs and power pumping stations summing up an
  installed capacity of 6,374 MW
• main output comes from large hydropower plants
• Power generation in HPPs in 2008 17 TWh
• Strategy for the period 2003-2025
• in 2025 70 of the hydro potential will be used
  (compared to 50 today)
• electricity production - 24 TWh for an installed
  capacity of 9,000 MW

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Structure and Prospects (3)

• Installed capacity in wind turbines - 11 MW
• Great number of private investors interested in
  installing new wind generation capacities - wind
  power the only RES for which there are important
  planned projects
• Requests for grid connection received by the TSO
  - about 7000 MW
• Estimated that only 1000 1500 MW will be
  integrated into the NPS in a first phase
• Connection agreements for an installed capacity
  of 900 MW

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Structure and Prospects (4)

• A certain increase in solar electric utilization
  In the last years
• High investment costs
• Not expected to have a significant contribution
  in the power balance

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Targets for RES (Energy Strategy of Romania)

• RES targets (electricity produced from RES in
  the gross domestic electricity consumption)

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Existing Legislation

• Law 220/2008 establishing the promotion system
  for RES electricity generation
• GD 750/2008 approving state subsidies for RES
  utilization
• GD 90/2008 - Regulation regarding the
  interconnection of generators to the power grids
  of national interest
• Energy Law no 13/2007 - transposes articles from
  the EU Directive 2003/54/CE concerning common
  rules for the internal market in electricity
• GD 1535/2004 approving the National Strategy for
  Renewable Energy Sources Utilization
• GD 443/2003 regarding the promotion of
  electricity production from renewable energy
  sources transposes the EU RES-e Directive
  2001/77/EC provisions

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RES Promotion Mechanism (1)

• Green certificates and mandatory quota system

• Mandatory quotas for the suppliers settled until
  2020
• 8.3 for the period 2010 2012
• 16.8 for 2020
• GCs price
• Min 27 Euro/certificate
• Max 55 Euro/certificate

• Penalty system
• Penalties for non fulfilment of the quota
• 70 Euro/certificate for the non-purchased
  certificates
• Collected penalties are used annually for
  investments in the national grid

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RES Promotion Mechanism (2)

• The electricity producers receive from the TSO

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Regulatory obstacles to the deployment of DG and
necessary measures (1)

• Responsible for RES energy promotion - a number
  of institutions and state administrative
  authorities (Ministry of Economy, local
  authorities, ANRE, ARCE) not appointed by law to
  execute economic activities (e.g. execution of
  pilot projects in the RES field, implementation
  of new execution projects for new capacities,
  etc.) and not having a specific apparatus for
  developing such activities
• Established responsibilities and competencies in
  the field of RES are not clear
• Management of such activities can only be
  achieved by dedicated structures

• Measures
• Creation of a management body within the Ministry
  of Economy and Finances dedicated to the activity
  of RES energy promotion and achievement of RES
  strategy goals

• Obstacles
• Non-existence of a competent authority
  responsible for the implementation of the
  strategy for RES utilization

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Regulatory obstacles to the deployment of DG and
necessary measures (2)

• GD 219/2007 transposes the provisions of EU
  directive 2004/8/EC concerning the promotion of
  cogeneration based on a useful heat demand
• No steps made towards the elaboration of
  secondary legislation necessary for
• adoption of the harmonized reference values and
  of applicable correction factors
• approval of bonus-type support scheme applied to
  the cogeneration electricity production
• analysis for the national cogeneration potential
  of Romania
• Exception procedure for issuing the guarantees
  of origin for the electricity produced in
  cogeneration of high-efficiency

• Obstacles
• Lack of secondary legislation for the promotion
  of CHP

• Measures
• Elaboration of secondary legislation for the
  promotion of cogeneration of high-efficiency

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Regulatory obstacles to the deployment of DG and
necessary measures (3)

• Grid operators - priority connection of all RES
  or cogeneration units investments for
  integration of such generators
• Costs that affect the grid operators are related
  to
• grid strengthening and development
• back-up capacities from other power plants that
  have to be kept in reserve for cases of total
  generation outages of DG, such as WPP, as well as
  for balancing variations in wind energy
  injections
• development of new activities.
• These costs submitted to the regulator for
  approval and then reflected into the price of the
  consumers

• Obstacles
• Regulatory uncertainties of cost recovery of
  distribution and transmission companies for RES
  integration into the grids

• Measures
• Development of a mechanism for determining a fair
  cost allocation for DG integration

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Regulatory obstacles to the deployment of DG and
necessary measures (4)

• Project developers need to obtain an entire
  package of permits and approvals from a series of
  state and municipal authorities, depending on the
  project specifics
• The process of obtaining all approvals is very
  heavy (could take up to two years) - delays for
  the investment project.

• Obstacles
• Time consuming administrative procedures for
  development projects
• Lack of informational support for potential DG
  investors

• Measures
• Establishing procedures for DG project proposals
  and diminishing the response times
• Improvement of the Guide for RES electricity
  producer with information related to the
  authorization procedure for a RES generation
  capacity construction

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Research priorities (1)

• A. Assessment of the potential
• Old potential for RES and its values calculated
  at country level
• No updating of the RES potential maps
• No CHP potential studies
• Lack of knowledge about the protected areas on
  which constructions are not allowed - problems in
  obtaining the environmental permit
• No centralized database regarding the areas with
  RES potential or a portfolio of RES projects to
  help the investors in selecting their investment
  location

• Measures
• Inventory of renewable energy sources by sources
  and regions and exclusion of protected areas from
  the RES potential maps
• CHP potential study

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Research priorities (2)

• B. Technical priorities
• The solution studies emphasized a series of
  problems related to two important issues
• the connection possibilities
• how the NPS grid should react when it has to deal
  with a power source with random and intermittent
  operation mode

• Problems signaled in relation to the grid
  connection
• limited possibilities of the existent networks
  (distribution as well as transport) to evacuate
  the power produced by the wind farms
• the effects of wind farms connection to the
  grids, especially regarding the voltage level and
  the power quality

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Research priorities (3)

• Research on Impact of DG on the Design and
  Operation of the Grid
• The solution studies highlighted the following
• At MV level (20 kV)
• connecting WPP of maximum 10 MW - due to reduced
  capacity of the evacuation line or due to risk of
  exceeding the short circuit capacity of the
  interconnection substations
• difficulties in maintaining the flicker effect in
  the limits set by the technical norms
• problems in keeping the voltage in its admissible
  limits
• At HV level (110 kV)
• need of tele-transmission means (e.g. optical
  fiber) - additional expenses for the connection
  options of a WPP directly to an existing line
• the HV grid needs to be developed - research for
  its transformation from a passive network into an
  active one
• At transport network level (220 kV, 400 kV)
• The Romanian NPS does not have enough quick start
  tertiary reserves required for wind operating
  systems
• Technical connection permits issued for 2650 MW
• Quick start tertiary reserves are available for
  only 800 MW (analyses of the National Dispatch
  Center - DEN)

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Research priorities (4)

• Research on grid elements
• Contemporary power electronic interface
• Use of last generation of power electronics and
  invertors available in countries with better
  experience in DG for improving the reliability
  and flexibility of the distribution system
• Romanian research community needs to focus on the
  improvement in manufacturing, design and
  technology
• researches in converter topologies and control
• the use of new materials for semiconductors and
  magnetic components
• ICT for network management
• Limited possibilities for financing innovations
  in the network - ICT implementation should be
  carried out gradually, after a preliminary plan
  taking into account the priority of urgent needs,
  expenses and time needed for their introduction

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Research priorities (5)

• System research
• Assessment and improving the grid possibilities
  to integrate DG
• Studies regarding the impact of WPPs on the NPS
  emphasized that the use of dimensioning criteria
  applicable in the case of classical power plants
  is not conclusive. For instance, the connection
  solution analysis cannot be done only at peak
  load - DGs like WPPs cannot be planned so that
  they cannot be correctly considered in covering
  the load curve
• Distribution and transport grids require
  strengthening investments for wide penetration of
  DG
• Another problem - the calculation of the
  transitory stability
• Wind forecast - no proper solution for this issue
  e.g. a cooperation between the TSO, the
  National Agency for Meteorology and wind dispatch
  operators

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Research priorities (6)

• System research
• Active Design Concept for the Grid Structure
• Requests for the installation of over 12,000 MW
  in WPPs up to 2012 - unknown if all this power
  could be installed
• Difficulties for the grid operators in planning
  the development of the distribution and transport
  grids
• Is important that grid operators develop
  active network management for integrating DG
  into the grid

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Research priorities (7)

• System research
• Demand Side Management
• DSM programs - planning, implementing, and
  monitoring activities of electric utilities,
  designed to encourage consumers to modify their
  level and pattern of electricity usage
• The various opportunities for including the
  consumers into the grid operation are not used in
  the Romanian electric system and need to be
  properly researched

• Micro-grids
• The micro-grid concept allows for local control
  of distributed generation thereby reducing or
  eliminating the need for central dispatch.
• A high level of interest and research on the
  utilization of micro-grids concept at EU level
• Research is also needed to be done in Romania
  towards its implementation

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Research priorities (8)

• Research on Electricity Storages
• DG technologies are intermittent, requiring
  demand flexibility, backup power sources, and
  very likely enough electricity storage for days
  to perhaps a week
• Strategically-placed storage systems can increase
  the utilization of existing TD equipment and
  defer/eliminate the need for costly TD additions
  
• In Romania the most common storage technology is
  pumped hydro storage

• Research on DG Technologies
• Equipment manufacturing is done on a very
  small-scale and for the new DG investments
  imported equipment and systems are preferred

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Research priorities (9)

• C. DG Economics
• The economics of DG depend on complex mix of
  economic factors
• On one hand - economic advantages over power from
  the grid
• On-site production avoids TD costs
• Production can be limited to parts of the day
  when grid electricity is expensive, with grid
  power purchased at less costly periods
• DG can be available in the case of a power system
  outage to assure a more reliable supply
• DG may also be better positioned to use
  inexpensive fuels (ex. local biomass)
• On the other hand - higher unit capital costs/kW
  due to high combined capital, operation, and
  maintenance costs of DG systems
• Understanding of the fundamental economics of DG
  is essential for policymakers to arrive at sound
  decisions regarding the future of DG

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Research priorities (10)

• D. Pricing Cost allocation
• An analysis should be done towards finding
  whether the feed-in-tariff would be a better
  support scheme for RES investments encouraging
• Research on the development of a mechanism for
  proper allocation of costs to distribution and
  transmission companies for DG integration to the
  grids is needed

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Priorities timing
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• Conclusions
• In Romania DG utilization is in its very
  beginning but it is expected that the investments
  in DG technology applications will grow
• In order to integrate DG to the Romanian power
  system there is need for sustained research and
  measures to overcome the obstacles of regulatory,
  economic and technical nature
• With the recent rush for wind power in Romania
  additional measures are needed in order to ensure
  the security and stability of the NPS in
  accordance with the UCTE methodology on system
  adequacy

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THANK YOU FOR YOUR ATTENTION
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Contact

• CAMELIA VASILE, MSc Eng.
• Institute for Studies and Power Engineering
  (ISPE)
• Energy and Environment Division
• 1-3 Lacul Tei Blvd.
• 020371 Bucuresti
• Romania
• ph. 40 21 2061331
• fax. [phone]
• email camelia.vasile_at_ispe.ro
• www.ispe.ro