Renewable Energy Internship 2011 - Renewable Portfolio Standards PART III: Compliances

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Renewable Energy Internship 2011 - Renewable Portfolio Standards PART III: Compliances
Renewable Energy
        Internship - 2011

Renewable Portfolio Standards
   PART III: Compliances

              Presented by:

             Riquel Mitma
             OSINERGMIN
        Regulatory Agency of Perú
Renewable Energy Internship 2011 - Renewable Portfolio Standards PART III: Compliances
Maine
– We (Marcelo and Me) were in Maine (Augusta) in the
  Public Utilities Commission of Maine.

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Renewable Energy Internship 2011 - Renewable Portfolio Standards PART III: Compliances
Maine
– Maine (Augusta) is a fantastic place. The lobster is
  delicious and the people are hospitable and very friendly..

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Renewable Energy Internship 2011 - Renewable Portfolio Standards PART III: Compliances
Renewable Portfolio Standards (RPS)
• INTRODUCTION:
  – There are several mechanisms to promote renewable
    energy: Feed-in tariff, RPS, Auctions.
  – So, RPS is a regulation that requires the increased
    production of energy from renewable energy sources
  – Other common names for RPS is:
     • Renewable Electricity Standard (RES) at the United States federal
       level, and
     • Renewables Obligation in the UK
  – RPS-type mechanisms have been adopted in several
    countries, including Britain, Italy, Poland, Sweden, Belgium,
    and Chile
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RPS of Maine
– The Maine’s RPS define two class of renewable resources:
   • Class I: for new renewable energy development
   • Class II: for traditional (existing) renewable energy

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RPS of Maine
• Maine´s Class I: New renewable resource
  requirement
   – The eligible renewable resources are:
      •   Fuel cells (This is related to energy efficiency)
      •   Tidal power
      •   Wind power
      •   Geothermal
      •   Hydro –meets fish passage requirements
      •   Biomass/landfill gas
   – The maximum size is 100 MW, except wind power

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RPS of Maine

• Maine Class II: Renewable source requirement
   – The eligible renewable resources are:
      • Efficient Resource (cogeneration)
      • Renewable resource:
          –   Fuel cells (This is related to energy efficiency)
          –   Tidal power
          –   Wind power
          –   Geothermal
          –   Hydro –meets fish passage requirements
          –   Biomass/landfill gas
          –   Municipal solid waste

   – The maximum size is 100 MW

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RPS of Maine
• Schedule: The schedule for both Class is as follow:

         Class I: increases 1% each year, reaching 10% by 2017
         Class II: remains constante at 30% all time
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RPS of Maine
• Compliance:
  – Compliance is achieved through the acquisition of
    renewable energy certificates that are issued and tracked
    through the New England Generation Information System
    (NE-GIS)
  – In addition, the rule allows competitive electric providers
    to fulfill their annual requirements by making alternative
    compliance payments to a Renewable Resource Fund,
    which will be used to support new renewable energy
    development.

           More information: www.dsireusa.org
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RPS of Maine
• Penalties:
   – A competitive electricity provider that does not satisfy the
     RPS requirements is subject to one or more of the
     following sanctions by the PUC:
      • license revocation
      • monetary penalties, or
      • any other sanction authorized by law that the PUC determines
        appropriate, taking into account the facts and circumstances that
        resulted in the non-compliance.

             More information: www.dsireusa.org
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Promotion of Renewable Energy in Perú

• We don´t use RPS as a mechanism to promote Renewable
  Energy
• Auctions is the type of mechanism adopted in Perú, for
  promotion of non conventional renewable energy (wind,
  Solar, Geothermal, Biomass)
• Large Hydro is considered as conventional energy
               Peru is Hydrothermal
               •2010:   Hyd: 60% ; Ther: 40%
               •2009:   Hyd: 63% ; Ther : 37%
               •2008:   Hyd: 61% ; Ther : 39%
               •2007:   Hyd: 68% ; Ther : 32%
               •2006:   Hyd: 75% ; Ther : 25%
               • :       :          :
               •2000:   Hyd: 90% ; Ther : 10%

             in 2000, Hydro electricity was about 90%
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Promotion of Renewable Energy in Perú

• Unlike RPS, which generally places an obligation on
  electricity supply companies to supply a specified
  fraction of their electricity from renewable energy
  sources, the Auctions of a quantity of RE, if it is
  properly designed and there is competition, it can
  provide renewable energy to the grid, at the lowest
  possible cost.

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1st Auction Results
• Prices resulting from de auction:

                                                         Reserve
                           Average    Minimum maximum                 Nº of        Nº of
                                                       price set by
                            Price       price   price                Projects     projects
                                                       OSINERGMI
                           Offered     offered offered              Proposed      Awarded
                                                            N
Biomass (Ctv US$/kWh)        6.35       5.20    11.00     12.00         2            2
Wind(Ctv US$/kWh)            8.04       6.55    87.00     11.00         6            3
Solar (Ctv US$/kWh)         22.11       21.50   22.50     26.90         6            4
Hydroelectric (Ctv
US$/kWh)                     6,03        5.50          7.00         7.40     17     17
             Number of projects adjudicated : (27 projects)
             • 3 wind farms (142 MW)
             • 2 Biomass Power (27 MW)
             • 4 solar farms(80 MW)
             • 18 small hydro (180 MW)
             MW Total allocated: 429
             Deadline for the operation of the RE projects: December, 2012
                                                                                             13
Promotion of Renewable Energy in Perú

• Main objectives of the RE Auction
   – Promote the entry of large-scale RE generation in the energy matrix
   – Achieve efficiency of the auction process
   – Maximize benefits for electric users (they pay prices)

• Specific objectives:
   – Avoid the possibility of collusion
   – Avoid possible barriers to entry
   – Maintain the credibility of the rules

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Promotion of Renewable Energy in
                 Perú
• Main Incentives offered:

   1. Stable prices to 20 years (set by auction)=Long term
      contract

   2. Dispatch priority into the grid

   3. Priority access to T & D networks

   4. Simple rules for participating in the auction

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Promotion of Renewable Energy in Perú

• Penalties (defined in the Bid documentation of the
  auctions):
   – During the auction process:
      • Penalty: Execution of the Bid Guarantee (20 000 U.S. $ / MW installed)

   – During the construction process of the RER power plant:
      • Penalty: Execution of the Guarantee of compliance with the construction
        schedule (100 000 U.S. $ / MW installed)

   – During the operation of the RER power plant (20 years):
      • Penalty: Applying the correction factor for the price if it fails to deliver to
        the grid, the annual energy offered.

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2nd Auction: In progress
• Required energy: 1981 GWh/year (7% total energy consumption)

• Deadline for the operation of the RER projects: December, 2014
• Starting the process: April 28, 2011
• Submission of bids: July 15, 2011
    – All information and documentation are confidential
• Day of the bid adjudication: August 23, 2011
    – Opening of the offer and the maximum tariffs envelopes

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Thank you for your attention

    rmitma@osinerg.gob.pe

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1st Auction Requirements
• Required energy = 4314 GWh/year (15% total energy consumption)

• Deadline for the operation of the RE projects: December, 2012
• Starting the process: August 21, 2009
• Submission of bids: January 18, 2010
    – All information and documentation are confidential
• Day of the bid adjudication: February 12, 2010
    – Opening of the offer and the maximum tariffs envelopes
• Starting the process: April 28, 2011

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