Introduction Part 2: the hidden costs of conventional electricity generation in Spain

We had seen the cost of electricity is in the market. Now it needs to be analyzed two hidden costs, but paid by the taxpayers: The contamination and the risk insurance.

Economic costs of waste from conventional power
Due to gaseous contamination Spain will pay according to some estimates up to € 10,000 million between 2008 and 2012 (http://www.ecoticias.com/20080910-el-incumplimiento-de-kyoto-le-va-a- pose-a-spain-cost-of-a-mas-de-10000-million-euros-for-second experto.html). In fact Spain is now buying allowances from Eastern Europe now (http://www.elpais.com/articulo/sociedad/Espana/compra/paises/derechos/emision/CO2/elpepisoc/20090102elpepisoc_3/Tes). These costs are initially not paid by companies (although they will in a few years) and this is covered by the government directly. This cost is due to the excess CO2 emissions of Spain in general, not just the electricity sector.
As for nuclear waste management right now the cost of it is literally incalculable. Unlike in the polluting emissions that are only paid for their release (and only once) in nuclear waste, because we don’t have a definitive solution, it is not paid for his release, but is paid for its storage, which causes each year a payment for every kilogram of nuclear waste. If a radioactive waste lasts a million years (and these figures and higher happen in the nuclear waste) each year will have to pay for each Kg of nuclear waste, so something apparently cheap it becomes really very expensive over the years, and keep in mind that each year there is more waste. After all, if Spain meet tomorrow Kyoto immediately finish to pay their fines. But nuclear waste inevitably will continue to pay year after year, although it stops all sources of generation of nuclear waste, century after century, millennium after millennium. Millions of years after millions of years.

The sources of nuclear propaganda are saying that the nuclear waste issue is almost solved, but the reality is that Spain has plans to build a temporary store able to hold up nuclear waste for about 100 years (http://www.lukor.com / not-soc/cuestiones/0506/17115450.htm). "The president of Enresa (the state owned company that manages nuclear waste) Jose Alejandro Pina, announced that ATC (Temporary Centralized Storage) is the solution to high activity radioactive waste, which could remain in the store between 80 and 100 years, during which they’ll investigate how to reduce its volume and its radioactivity. The ATC would have too a research center "

So, 53 years after the start of the first commercial nuclear power plant, nobody has an idea about what to do with the nuclear waste and the only can have for the future is expectations of being able to reduce waste within 80 or 100 years. So even in a 100 years more there isn’t expectation to solve this terrible issue and a clear mortgage for the coming generations. Management nuclear waste in Spain (10 nuclear plants, 8 operating right now) until the year 2070 is expected to cost 13,018 million € (http://www.mityc.es/energia/nuclear/Residuos/Paginas/financiacion.aspx) If it is decided in the future to build more nuclear plants, the cost of decommissioning would not be included in this fund and will increase its value quite significantly. At this time is being dismantled Vandellós I and just the decommissioning of the plant represents 73% of the radioactive waste generated in Spain. At the end of this plan, from 2070, another plan would need to be funded, because will remain the same amount of the high level radioactive waste. The cost of managing all nuclear waste has been fully funded until 2005 through surcharges on electricity bills (34 years). It is from 2005 where nuclear power plants began to pay directly the waste cost of maintenace and storage management. The National Nuclear Waste Plan can be found here: http://www.mityc.es/energia/nuclear/Residuos/Documents/SextoPGRR.pdf

Underwriting risk (*)
All power plants are required to have liability insurance to cover any damages that may happen accidentally during their operation. In fact not all the power plants, nuclear plants are an exception because their insurance is partial.
In 2007 the Ministry of Industry presented a draft bill requiring nuclear plants to have liability insurance amounting to 1,200 million €. The ministry, during the draft phase of this act discovered that no insurer wanted to have any responsibility 10 years after the accident, and no insurance company with an office in Spain had enough guarantee, so finally ministry suggested to create a fund financed through the electricity tariff. Finally the act project was cancelled and the insured amount is currently 700 million €.
Así que tenemos que ante el problema de que los seguros no querían, o podían hacerse cargo de cubrir el riesgo que supone una central nuclear, las opciones eran o bien que se encargara el consumidor el que se hiciera cargo del riesgo, o bien, simplemente, no cubrir en su totalidad el riesgo (es decir, pasar de él). So we have to face the problem that the insurance did not want, or couldn’t cover the liability insurance of a nuclear power plant, and the options were either the consumers pays an extra charge for the risk or or simply not cover the full liability. At the end the government choose to not to cover completely the liability.

and includes waste management until that date and also the construction costs of the Temporary Centralized Storage (ATC) and the dismantling of existing nuclear power plants.

(*) Although the information is public, is the journal 'Renewable Energy' in a brilliant article written by Antonio Barrero this month, which has served as a source for this section.

About the efficiency in renewable energy power plants

This issue comes because some comments in the spanish blog. The issue of renewables efficiency I think is key and open to many misinterpretations so I wanto to add my comments on that in this post.

I will begin by the end, efficiency in a renewable energy system has no value, an efficient, renewable, is, in principle, not better or cheaper.

We are used to think about the efficiency in renewables in the same way we used to think about the standard generation systems and it is really a mistake to judge renewables in the same way. A liter of oil generate about 10 kWh of heat. Let's say you have a hypothetical cost of € 1 and that when burned produces 10 kg of CO2. If I have an electrical generation system based on oil with an efficiency of 20%, the burning of a 1 liter of oil (10 kWh) will generate 2 kWh of electricity. Therefore I need to generate 1 kWh, 0.5 l of oil, I'll have a cost of 0.5 €/kWh and will generate an emissions of 5 kg of CO2/kWh. These are the economic and environmental costs of this generation.
If I have an electrical generation system based on oil but has a 40% efficiency, burning 1 liter of oil (10 kWh) I'll genetate 4 kWh of electricity. Therefore I need to generate 1 kWh 0.25 liter of oil, at a cost of 0.25 €/kWh and will generate 2.5 kg of CO2/kWh emissions.

So, in the standard thermal generation systems the energy efficiency is really important. The more efficiency you have, the less fuel is used to make 1 kWh of electricity and electricity is a cheaper and has less emissions. Efficiency is a core issue in conventional generation plants. By the way, I make a point, the efficiency of conventional plants is not really phantastic. In fact if you look CSN web site (it is the governamental intitute to assure the nuclear safety in Spain) you will see that the Trillo nuclear power plant has a thermal power of 3010 MWt and an electrical power 1064 MWe. This means that the reactor at full power generate 3010 MWt of heat, of which the plant can only turn into electricity 1060 MWe, which gives an efficiency of 35%. Nothing impressive. We have experimental PV cells with an efficiency little bit higher than 40 %.

Let's see what happens now if we replace 1 liter of oil, per 10 kWh of wind at a cost of € 0 ¿idoes t matters the efficiency? Whether it is 20% or is 40%, the fuel to generate 1 kWh of electricity will continue to cost 0 € meanwhile, the CO2 emissions will remain at 0 kg CO2/kWh.

So we have to as the 'fuel' used by nearly all renewable plants is free, then we really don't care about the efficiency. What matters is that the cost of construction, divided by the kWh generated along the life cycle is as low as possible. And this sometimes can be achieved by increasing the efficiency, but it isn't always the case. Es decir si un Wp de panel fotovoltaico con una eficiencia del 15% cuesta 2,5 € y otro con una eficiencia del 25% cuesta 3 €, siempre me interesará más instalar el panel con un 15% de eficiencia ya que el coste de mi electricidad será más económico. I.e. if a Wp of PV module with an efficiency of 15% costs € 2.5 and another with an efficiency of 25% costs is 3 €, I am always more interested in installing the panel with a 15% efficiency as the cost of my electricity will be cheaper.

And there is a general exception to everything I said. In the case of biomass, from the standpoint of efficiency, we must consider it as a conventional power plant. This is the only exception that applies.

And one final point is that is always a maximum efficiency that can never be exceeded in all technologies. For example in the wind energy Betz theorem says that the theoretical maximum efficiency of a wind turbine is 16/27. A perfect wind tutbine can only generate a 5,9kWh from 10kWh of wind.

(This article is adaptated from the original in spanish: ("Sobre la eficiencia de las plantas de energía renovable").

Introduction. Part I. How the electricity market works in Spain

A short introduction

Everything that I know about the electricity market, it's because some debates I participated with those against the renewable energy. This has compelled me to search for very large amounts of data to refute them (or not). In fact I will make you a confession. My position had also changed due to the data that I have found. Four years ago, after nearly six working in renewables, I thought it was necessary to complement the renewable with the nuclear and has been the strength of the data that changed my position in the recent years. Now I think it's quite obvious one being against nuclear energy and I wonder how I could be confused for so long?.

This is an introductory subject. It is necessary to understand the falsehoods and misunderstandings which we can read frequently. The electricity market that is using Spain is quite similar to a lot of European countries. Originally it was going to be a part of the "1st falsehood on renewable energy: renewable energy is expensive.", But given the length it has taken, I believe it is necessary to separate it. In fact, it has taken so much extention that the introduction is also splited in two parts: How the electricity market works and hidden costs of the conventional generation system.

The electricity market
The electrical market in Spain and many other countries works as follows. Some companies, many more than we think, generate the electricity that feed the grid. The electricity generation is always exactly what it is consumed, because in principle (we will see further whay means this' in principle ' another day) you can not store electricity. This electricity is distributed throughout Spain via the transmission grid. The transport network is the exclusive property of Red Eléctrica de España. Finally the electricity is distributed by the distribution companies to the end user. Is the distributor who actually buy the electricity at any given moment in a kind of stock exchange market, named 'electricity pool' with the prices per MWh generated fluctuating each hour. For the distribution company it doesn't matter the primary energy used to generate the electricity,. Price is the same if it's, for example, wind generation or nuclear generation. In the pool, wherever it comes the electricity, for evry hour of the day is negotiated a fixed price per MWh generated. The MWh, for those without a lot of technical background, is the measure of electrical energy generated. In a car we use liters of gasoline and in electricity we use the MWh of electricity. 1 MWh is roughly the amount of energy consumed by a family of two adults and two children for 3 months and currently 1 MWh of electricity in the pool costs an average of 60 € to 80 €. This is not the only cost that pays for the electricity distributor. A number of factors must be added to the cost of electricity. For example, to mention only a few, deviations in the generation when a generation plant is planned to produce and unexpected technical problem happen, requiring to start another plant fees of the transport grid and its maintenance.
So, we have that, from the point of view of the electricity market it doesn't matter if we use to generate 1 MWh wind, photovoltaic, nuclear or gas. Later on, the energies that are within the Special Regime, which are all renewable sources, excluding large hydropower generation and other special methods that are not renewable (eg the treatment of slurry) are compensated for each kWh (1000 kWh = 1 MWh) generated depending on the technology and the market price. This is known as the incentive paid each MWh generated by a given technology. Incentives from the special regime come from the energy bill and we will discuss them in the coming days.
The price at a given time of electricity is the following. Let's imagine that Red Electrica determines in the next hour we require a production 1000 MWh. Each plant makes its offer as follows:
0010 Hidraulica cantábrica: 10 MWh at 0 €/MWh
0110 Hidráulica del Ebro: 100 MWh at 0 €/MWh
0210 Wind plant Mestral: 100 MWh at 0 €/MWh
0220 Photovoltaic of Miramontes: 10 MWh at 0 €/MWh
0420 Nuclear Ascó: 200 MWh at 0 €/MWh
0520 Gas plant Juanito: 100 MWh at 40 €/MWh
0620 Gas plant Pepito: 100 MWh at 45 €/MWh
0720 Coal plant Pedrito: 100 MWh at 50 €/MWh
0920 Gas plant Jorgito: 200 MWh at 55 €/MWh
1020 Coal plant Penibética: 100 MWh at 60 €/GWh
1120 Fuel plant Arábiga: 20 MWh at 65 €/GWh

All numbers are hypothetical, just to explain how the system works. As 1000 MWh are needed (1 GWh). Plants are ranked by the offered price and it is bought the electricity in function of energy demand expected. In the example companies buy the entire production of the list up to Gas plant Jorgito. From the coal plant Penibética it is just purchased 80 MWh instead the 100 MWh offered. And do not buy energy on the fuel plant Arábiga. And here comes the most interesting, the price the distribution company will pay it is not the offered price, but the price of the latest plant that has entered in the generation list. In this case all the plants from Hidráulica Cantabrica to the coal plant Penibética at the price of 60 € / MWh offered by this plant. Obviously the Fuel plant Arábiga will not charge anything, it has been discarded. The plants can also do not offer on the pool.
You can see that there are several plants that offer at 0 € / MWh and this is because this plants whant to generate no mather the price is paid for their electricity. When there is wind the wind plants want to feed into the grid, when the sun shine the photovoltaic plants want to feed into the grid. The only costs that these plants have are only capital (payment of the credits needed for its construction) and a very small cost of maintenance (even smaller in the case of photovoltaics as they don't have mechanical parts). The wind and the sun always cost the same, 0 € / MWh and that is always more expensive to maintain not feeding a wind plant when there is wind, whatever it is the price paid by the pool for each MWh generated. With hydro it is even better. Basically all capital costs of the hydropower where paid years ago so they nearly just pay maintenance costs. Regarding the nuclear plants, they can not easily stop and start. An standard stop without later problems normally requires more than a day and the starting the same. Nuclear power, by this problem of the nuclear technology, can not enter and exit the system, so they always offer whatever price is for MWh. On the other hand the capital cost of these plants is much greater than for other conventional methods. Nuclear are plants where the fuel costs are relatively few, but their construction costs it is very high. Although sometimes lost money with each MWh generated, it loses more stopping the nuclear power plant, because most of them are still paying the amortization of loans that allowed its construction. So nuclear only have the option to be allways on or allways off, no matter if they earn or loss money. They can not turn on or off the reactor every hour.
From this point, the conventional power stations, with the exception of the nuclear we had seen, offered in accordance with the fuel cost and capital amortization.
Regarding the cost a power plant, renewable or not, has three elements that determine the cost of their energy. Amortization of capital (return to the bank the loan give it for the construction), low in the conventional, high renewables and high in the case of nuclear. Cost of fuel: high and variable in the conventional, middle and variable in the nuclear and zero in the case of renewables (sun, wind, etc ... are free). And the operating costs very low renewables (especially hydro and PV) and tmedium in the rest of the technologies.

Notes you can follow the real time generation in Spain:
- Prediction and real time measurement
- Real time production by sources
- Real time Wind generation

(This article is adaptated from the original in spanish: ("Introducción, 1ªparte: Como funciona el sistema elécttrico")

Schedule

In the following four posts I'll explain how the incentive system of renewables and the electrical market works in Spain.

"We are in the energy revolution, we can only change the speed of change"

They are not my words but words that were said in the presentation of the book: "La electricidad solar térmica: tan lejos, tan cerca" ("The solar thermal power: So far, so close" )by Valeriano Ruiz Hernandez, published by the Gas Natural Foundation.
... ...
I began in renewables, then unknown to me, in 1999. First in service, and I quickly introduced to the engineering of electronic converters for wind turbines with doubly-fed generator, and training maintenance engineers of wind turbine manufacturers. At that time an innovative technology that allowed a generator with a variable speed, needed due to the variability of the wind, to generate electricity with a fixed frequency of 50Hz which is what we get at home. In this work, I traveled around the world. A long time since then, I'm ten years old and head of a small subsidiary of a German company in Spain in the field of PV. I'm older, but the renewable energy technology is more mature and younger than ever.

In 1999 were installed 300 MW of wind energy in a year in Spain, it seemed a whole record. In 2007 were installed more than 2400 MW.
In 1999, wind power produced 1.38% of the electrical energy of Spain. Last year 2008 wind energy produced 11.38% of the electricity and in the last 12 months more than 12%.
In 1999 there was in Spain just 4 MW of PV power installed and produced 0.0001% of the electricity consumed. Only in 2008 were installed in Spain more than 2,500 MW in solar photovoltaic energy, reaching a total installed capacity of 3390 MW. In April 2009 3.2% of the electrical needs of Spain were generated by photovoltaic solar plants.
In 1999 solar thermoelectric power was nonexistent. In 2009 there are more than 80 MW connected to the network with more than 1,000 MW to be connected to the grid over the next 12 months and more than 10,000 MW in the pipeline.

The benefits for Spain due to the promotion of the renewables are:i
1) Energy independence.
2) Energy inexhaustible forever and ever.
3) Non-polluting energy.
4) Improvement in the trade balance for two reasons: Reduction of the energy imports and increased exports of Spanish renewable energy technology.
5) Industrial and technological leadership worldwide in an area with a clear future.
6) Large numbers of highly skilled jobs.

As you can see a lot of things had changed since ten years ago. When I started the technology was a young upstart teenager, excited that it could contribute to the development of the society. A diamond in the rough. Today the technology, though it lacks a lot to cover, is already in industrial stage, proving every day, with its progress, that a future based on an economy with a 100% renewable energy is not an issue of many decades, centuries or even a utopia, but with political will, is a matter of few years.

In the coming days I will explain you about the figures for renewables in Spain and the world, as well as the different technologies. We keep in mind the words that has started this post.
Welcome to your blog, the blog of the energy revolution.

(This article is adapted from the original in spanish:“Ya estamos en la transición energética, sólo podemos variar la velocidad del cambio”)

Welcome

A long time ago my friends began to told me to organize a blog to write all my knowledge and my ideas about renewables. Finally I did it ten days ago with the blog 'Revolución Energética', in spanish and very focused in the spanish market. Right in the very first day, a lot of people told me to do the same in english. OK, so that's what you can see now.

The idea of the blog is to translate some articles there are in the spanish blog and adapt it to the worldwide reader. I will try to not to be so spanish focused that in the spanish blog, so I will do also posts only for this blog. However, according European Union, Spain has the best renewables incentive system europewide and is one of the worldwide leaders and drivers of this type of thechnology. So I'll try to be worldwide focused, but with an 'spanish touch' as probably you also are interested on how we are running renewables in Spain.

By the way, I apologize if something sounds bad in english. I'll do my best, but please, understand that I'm not english speaker native.

So, no need to knock the door. Is open. Feel free to enter, read, ask and share your experience in renewables in the comments with all of us.