Description of the spanish energy system

See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/277309299 Description of the Spanish energy system and policies TECHNICAL REPORT · DECEMBER 2012 CITATION READS 29 6 AUTHORS, INCLUDING: Helena Cabal Yolanda Lechon Centro Investigaciones Energéticas, Medio… Centro Investigaciones Energéticas, Medio… 50 PUBLICATIONS 209 CITATIONS 97 PUBLICATIONS 402 CITATIONS SEE PROFILE SEE PROFILE N Caldés Maryse Labriet Centro Investigaciones Energéticas, Medio… Eneris Environment Energy Consultants 13 PUBLICATIONS 116 CITATIONS 56 PUBLICATIONS 537 CITATIONS SEE PROFILE SEE PROFILE Available from: Helena Cabal Retrieved on: 05 February 2016 Project COMET Integrated infrastructure for CO2 transport and storage in the west Mediterranean Description of the Spanish energy system and policies WP5 – Technical Note 5.2.3 This document describes the main characteristics of the Spanish energy system; along with the consumption, production and emissions trends This report also includes an assessment of the sector use of energy This is followed by the identification of the installed capacity perspectives; future energy potentials and relevant energy related policies AUTHORS H.Cabal, Y Lechón, D García and N Caldés Energy Systems Analysis Unit, Energy Department, CIEMAT Maryse labriet, GianCarlo Tosato (ASATREM) April 2011 - Updated on December 2012 TN 5.2.3 – Description of the Spanish energy system and policies Grant agreement no.: 241400 Project acronym: COMET Project full title: Integrated infrastructure for CO2 transport and storage in the west MEdiTerranean Collaborative project FP7 - ENERGY.2009.1 Start date of project: 2010-01-01 Duration: years TN5.2.3 Description of the Spanish energy systems and policies Due delivery month: December 2010 Actual delivery month: December 2010 Updated version: December 2012 Project co-funded by the European Commission within the Seventh Framework Programme Dissemination Level PU Public PP Restricted to other programme participants (including the Commission Services) RE Restricted to a group specified by the consortium (including the Commission Services) CO Confidential, only for members of the consortium (including the Commission Services) X TN 5.2.3 – Description of the Spanish energy system and policies Version Submitted by Review Level* Date Submitted GianCarloTosato WPL April 2011 GianCarloTosato WPL December 2012 Reviewed March 2012 December 2012 * WPL, MB, AB Editors Name (organization) Leading participant Contributing participants WP leader (WPL) e-mail Helena Cabal (CIEMAT) helena.cabal@ciemat.es Yolanda Lechón (CIEMAT) yolanda.lechon@ciemat.es Natalia Caldés (CIEMAT) Natalia.caldes@ciemat.es Maryse Labriet (ENERIS) Maryse.labriet@enerisconsultants.com Diego García (CIEMAT) Diego.garcia@ciemat.es Giancarlo Tosato (ASATREM) gct@etsap.org Giancarlo Tosato (ASATREM) gct@etsap.org Management Board (MB) Advisory Board (AB) Executive Summary This technical note analyses the energy consumption of Spain in recent years with a ‘system’ perspective The initial chapter frames the system in its socio-economic context Then it describes the energy supply chains from primary resources in place through all the main transport, transformation and distribution technologies till the distribution to end users Great effort is devoted to match the statistical information on energy flows – the national energy balance – with the information on the stock of existing technologies The demand for energy is disaggregated in different end uses, such as cooling, road transport and cement production For each end use sector, using information on the stock of end use devices by type and fuel, such as cars, buildings, appliances, the demand for energy services is estimated The description of the energy system is completed by a chapter on the emissions of greenhouse gas and other pollutants The report is concluded by a chapter about the main energy relevant policies This technical note identifies and quantifies the energy system of Spain and is the preliminary step in order to represent it in the TIMES-Spain model, which is described in TN 5.3.1 Keywords Spain, energy systems, policies TN 5.2.3 – Description of the Spanish energy system and policies Contents List of figures List of tables Acronyms and Definitions 10 Units 12 INTRODUCTION 13 GENERAL DESCRIPTION OF THE COUNTRY 14 MACRO AND SOCIO-ECONOMIC DRIVERS 16 3.1 Population 16 3.2 Economy 17 3.3 Other socioeconomic drivers 20 OVERVIEW OF THE ENERGY SYSTEM 22 4.1 Overview 22 4.2 Primary energy 24 4.3 Final energy 24 4.4 Energy Intensity 25 SUPPLY SECTORS 29 5.1 Upstream sector 29 5.1.1 Coal 29 5.1.2 Oil 30 5.1.3 Refineries 31 5.1.4 Gas 33 5.1.5 Uranium 34 5.1.6 Biofuels 35 5.1.7 5.2 Security of supply 36 Power sector 36 5.2.1 Capacity 38 5.2.2 Generation 39 5.2.3 Regimes 41 5.2.4 Trade 41 5.2.5 The Iberian Power Market (MIBEL) 42 5.2.6 Cogeneration 42 5.2.7 Renewable energies 44 TN 5.2.3 – Description of the Spanish energy system and policies 5.3 5.3.1 Wind power 46 5.3.2 Hydropower 47 5.3.3 Biomass 47 5.3.4 Solar energy 48 5.3.5 Wave and tide energy 48 END-USE SECTORS 49 6.1 Transport 49 6.2 Residential 53 6.3 Commercial 57 6.4 Industry 59 6.5 Agriculture 64 EMISSIONS 66 7.1 All emissions 66 7.1.2 Focus on the EU ETS sectors 68 Other emissions 69 POLICIES 71 8.1 Greenhouse gas emissions 66 7.1.1 7.2 Energy resources 45 Energy policies 71 8.1.1 Energy efficiency 71 8.1.2 Buildings 73 8.1.3 Renewable Energy 74 8.2 Climate change 78 8.3 Air pollution 82 8.4 Carbon Capture and Storage 82 8.5 Deficit of the electricity rate 83 REFERENCES 85 TN 5.2.3 – Description of the Spanish energy system and policies List of figures Figure Map of peninsular Spain 14 Figure Historical temperatures in Spain 15 Figure Heating degree days evolution 15 Figure Population density in Europe 16 Figure Long term population projections 17 Figure GDP evolution in Spain from 2005 17 Figure Evolution of GDP per capita 18 Figure New and demolished dwellings in the period 2002-2008 and evolution of the number of dwellings in the period 2001-2008 21 Figure Evolution of the number of inhabitants per dwelling in the period 2001-2008 21 Figure 10 E-sankey diagram representing the national energy balance in 2010, Source: (SEE, 2011) 23 Figure 11 Evolution of the primary energy intensity in Spain from 1980 to 2010 26 Figure 12 Evolution of the primary and final energy intensity in Spain and EU-15 from 1995 to 2009 26 Figure 13 Evolution of the energy intensity in Spain by sub sector from 1995 to 2008 28 Figure 14 Evolution of electricity generation with coal in Spain 30 Figure 15 Refineries in Spain Capacity and FCC 31 Figure 16 Refining in Spain and EU from 2003 to 2008 32 Figure 17 CHL logistics 33 Figure 18 Map of the Iberian Peninsula Natural Gas System 34 Figure 19 Production and exports of Uranium in Spain 35 Figure 20 Energy dependency in Spain 36 Figure 21 Electricity demand for four winter days 37 Figure 22 Electricity demand for four spring days 37 Figure 23 Electricity demand for four summer days 38 Figure 24 Electricity demand for four autumn days 38 TN 5.2.3 – Description of the Spanish energy system and policies Figure 25 and Figure 26 Hydro power production in the period 2000-2010 40 Figure 27 Evolution of power imports in GWh 41 Figure 28 Evolution of power exports in GWh 42 Figure 29 Evolution of the capacity installed in cogeneration in Spain 43 Figure 30 Power generation in cogeneration plants in Spain in 2010 by fuel 43 Figure 31 Evolution of the capacity of special regime facilities in Spain 45 Figure 32 Technical potential share of the different renewable technologies in Spain 46 Figure 33 Use of fuels (petrol in light grey and diesel oil in dark grey) by type of road vehicle in 2005 in Spain 49 Figure 34 Use of fuels (petrol in green and diesel oil in orange) by type of road vehicle in 2010 in Spain 49 Figure 35 Traffic of passengers in the commercial airports in 103 passengers in 2010 51 Figure 36 Traffic of goods in the commercial ports in 103 tonnes of goods in 2010 52 Figure 37 Fulfillment of the biofuels commitments in 2010 (1st quarter) 53 Figure 38 Evolution of final energy consumption in the residential sector 53 Figure 39 Energy consumption by end-use in the residential sector in 2010 54 Figure 40 Space heating, water heating and cooking energy consumption disaggregated by energy type in 2010 54 Figure 41 Electric equipment consumption by type in 2010 55 Figure 42 Percentage of dwellings with space cooling in the different Spanish regions 55 Figure 43 Energy intensity of residential sector corrected by climate 55 Figure 44 Thermal and electric energy intensity in the residential sector 1990= 100 56 Figure 45 Electricity prices in residential sector 56 Figure 46 Gas prices in residential sector 57 Figure 47 Evolution of final energy consumption in the commercial 57 Figure 48 Energy consumption by different activities and fuels in the commercial sector year 2008 58 Figure 49 Evolution of the energy intensity in the commercial sector 58 Figure 50 Comparison of the energy intensity in the commercial sector in the European countries 59 Figure 51 Comparison of the electricity intensity in the commercial sector in the European countries 59 Figure 52 Evolution of final energy consumption in the industry sector in the period 2005-2010 60 TN 5.2.3 – Description of the Spanish energy system and policies Figure 53 Final energy consumption by different activities and fuels in the industry sector in year 2010 60 Figure 54 Electricity and fossil energy consumption evolution in the industry sector 61 Figure 55 Evolution of the final energy consumption, energy intensity and economic growth of the industry sector 61 Figure 56 Evolution of the energy intensity of the industry sector in several European countries 62 Figure 57 Evolution of thermal and electric energy intensity of the industry sector 62 Figure 58 Evolution of unitary consumption of some sub-sectors of the industry sector 63 Figure 59 Electricity prices in the industrial sector 63 Figure 60 Gas prices in the industrial sector 64 Figure 61 Evolution of final energy consumption of the agriculture sector 64 Figure 62 Final energy consumption of the agriculture sector by fuel in years 2005 to 2008 65 Figure 63 Distribution of final energy consumption of the agriculture sector by subsectors in years 2001 and 2012 65 Figure 64 Evolution of GHG emissions 66 Figure 65 RE electricity production share in 2009 77 Figure 66 Feed in Tariff cost share in 2009 78 Figure 67 Deficit of electricity rate and predictions of the Government in million Euro 84 TN 5.2.3 – Description of the Spanish energy system and policies List of tables Table Main demographic and economic indicators 18 Table GDP composition in million Euros 19 Table Projections of the GDP growth (%) 20 Table GDP deflator 20 Table Energy balance for 2005 in PJ Assumption for non fossil energy use 1:1 primary: final 23 Table Total primary energy supply by energy carrier (PJ) 24 Table Primary energy consumption per GDP in toe/Mill Euro2000 25 Table Evolution of the energy intensity in Spain by sub sector from 1995 to 2008 27 Table Coal and lignite proven reserves in Spain, year 2008, expressed in PJ 29 Table 10 Crude oil imports (PJ) in 2005 and 2008 31 Table 11 Characteristics of the Spanish refineries 32 Table 12 Natural gas imports (PJ) in 2005 and 2008 33 Table 13 Biofuel production and capacity installed in Spain 35 Table 14 Self-supply in Spain from 2005 to 2009 36 Table 15 Breakdown of installed electricity generation capacities between 1990 and 2009 (GW) 39 Table 16 Electricity production between 1990 and 2010 (GWh) 40 Table 17 International power interchanges in GWh 41 Table 18 Technical potential of the different renewable technologies in Spain in TWh 45 Table 19 Main characteristics of road transport in Spain in 2005 and 2010 50 Table 20 Total road network in Spain 50 Table 21 Main characteristics of rail transport in Spain in 2005 and 2010 50 Table 22 Main characteristics of air and navigation transport in Spain in 2005 and 2009/2010 50 Table 23 Final energy consumption of the Spanish transport sector in 2005 in PJ 52 Table 24 CO2 emissions by sector in years 1990, 2005 and 2010 (Mt CO2 equivalent) 67 Table 25 N2O emissions by sector in years 1990, 2005 and 2010 (kt CO2 equivalent) 67 Table 26 CH4 emissions by sector in years 1990, 2005 and 2010 (kt CO2 equivalent) 67 TN 5.2.3 – Description of the Spanish energy system and policies - Limitation to the energy demand (heating and cooling) Performance of the thermal systems Energy efficiency of the lighting systems Minimum contribution of solar energy to sanitary hot water Minimum contribution of solar photovoltaic to power energy The CTE partially transposes the Directive 2002/91/CE for the energy efficiency in buildings More info can be found in the CTE web page http://www.codigotecnico.org/web 8.1.3 Renewable Energy Renewable Energies National Action Plan 2011-2020 (Plan de Acción Nacional de Energías Renovables (PANER) 2011-2020) PANER is the National Action Plan developed to fulfil the Directive 2009/28/CE objectives Some of the most relevant goals of the plan include reaching 22.7% of the final energy consumption from renewables and achieving 13.6% of biofuels contribution to the total transport fuel consumption by 2020 2005 2010 2015 2020 Renewable Energy Resources - Heating & cooling (%) 8.8 11.3 14.0 Renewable Energy Resources - Electricity (%) 18.4 28.8 33.8 Renewable Energy Resources - Transport (%) 1.1 6.0 9.3 Global Share of Renewable Energy Resources (%) 8.3 13.6 17.4 Table 35 PANER main goals for heating, cooling, electricity and transport sectors Source: (IDAE, 2010) 18.9 40.0 13.6 22.7 The Directive sets 20% of the final energy consumption from renewables, so there is 2.7% excess which would be allocated through the cooperation mechanisms listed in the EC Directive To fully exploit this surplus, it will be essential to further develop Spain's electricity interconnections with the European electricity system The greatest potential for the development of renewable energy sources in Spain lies in the areas of electricity generation The goals included in the PANER report will be achieve through a range of new and modified policy instruments Some of the general measures considered in PANER are: - Development of a framework to simplify, homogenise, and unify administrative procedures for new RES facilities permissions Support to I+D+I in energy storage systems Maintain public participation in I+D+i in the RES sector by means of supporting programmes to industrial initiatives to reduce generation costs, mainly in the wind and solar power sectors Development of research and scientific innovation lines to promote the technological development of marine prototypes Development of specific marine technologies focused on deep waters projects (wind offshore, wave power) Some measures in the power generation field: - Change to a smart grid system in transport and distribution 74 TN 5.2.3 – Description of the Spanish energy system and policies - Help renewable power generation for self-consumption setting systems based on net balance and energy balance compensation Set a stable, predictable, flexible, controllable, and secure pay framework for promoters and power system Building and use of new international connections, mainly with France Increment of the energy storage capacity by means of new pump facilities There are also measures specifically focus on RES thermal use; hydropower; geothermal; solar; marine; wind power; biomass, biogas and wastes; and biofuels Finally, feed-in tariffs mechanism remains Feed-in tariffs Electricity generation in Spain has two different regimes, the ordinary regime (R.O.), to which all the conventional generation belongs to, and the special regime (R.E,) to which the renewable energy generation and the CHP plants belong to The Spanish Government has traditionally acknowledged the various socioeconomic and environmental benefits associated to the promotion of electricity from renewable energy sources Consequently, public support measures have been developed as early as 1997 Since then, one of the most successful measures has been feed-in tariff (FIT) If the Spanish special regime generator sells electricity in the market, it will receive the market price plus a premium, subject to a cap and floor on final prices for each type of facility, depending on the technology used This measure has mostly been responsible of a successful deployment of renewable energy technologies which currently represent 24-7% electricity production share This feed-in tariff co-exists with a fixed premium regime Besides fiscal support of investments and tax exemptions, premium prices for electricity production as regulated by the Royal Decrees RD 2818/1998, 436/2004, 661/2007 and 1578/2008 have facilitated the penetration of RREE in the electricity market and their technological development The Royal Decree 436/2004, which regulates the electricity generation by renewable energies in Spain, stated that producers could chose between: 1) sell their energy at a regulated tariff which is the same for all the periods, 2) or sell their energy in the electricity market In this case, the final price is the price of the market plus a feed-in tariff The final feed-in tariff is calculated as follows: - when the sum of the reference market price and the reference feed-in tariff is between the lower and upper limits, the final feed-in tariff will be the reference one - when the sum of the reference market price and the reference feed-in tariff is less or equal to the lower limit, the final feed-in tariff will be the difference between the lower limit and the reference market price at this moment - when the reference market price is between the upper limit minus the reference feed-in tariff and the upper limit , the final feed-in tariff will be the subtraction between the upper limit and the reference market price at this moment - finally, when the reference market price is higher or equal to the upper limit, the final feed-in tariff will be zero Next tables show the 2010 and 2005 tariffs applied to the different plants For 2010, tariffs depend on the plant capacity and life: 75 TN 5.2.3 – Description of the Spanish energy system and policies Capacity (MW) Reference feed-in (c€/kWh) Upper limit (c€/kWh) Lower limit (c€/kWh) 12.6723 17.5936 16.3029 11.1562 15.9643 15.0968 9.1620 14.0812 12.7905 7.0249 11.8384 10.9804 9.1620 14.0812 12.7905 8.1633 12.9704 12.1028 4.4721 9.4792 7.8711 10.8104 16.2182 13.0656 6.5870 11.6691 10.1033 3.7380 8.8126 5.3955 9.1620 14.0812 12.7905 7.0249 11.8384 10.9804 5.6814 10.6006 9.2993 2.5329 7.3421 6.4746 5.9439 10.6006 9.2993 3.8813 9.5215 7.9346 26.8717 21.4973 36.3906 26.8757 3.0988 8.9866 7.5405 8.9184 17.3502 0-20 7.2892 4.0672 > 20 6.8872 3.2373 0-25 8.2519 2.6495 < 10 9.0137 > 25 7.4268 1.4223 0-25 * 2.2263 10 - 50 8.4635 > 25 * 1.4223 Table 36 2010 Tariffs [Source: Orden ITC/3519/2009 (BOE 315, 2009)] 6.8978 * Depends on the capacity ≤2 Energy crops >2 ≤2 Agricultural residues >2 Forest residues ≤2 >2 Landfill biogas ≤ 0.5 Biogas from digesters > 0.5 Manure Agricultural industry residues ≤2 >2 Forest industry residues Black liquor ≤2 >2 ≤2 >2 MSW Waste < 50% Mineral PCI < 2200 kcal/kg < 0.1 Solar PV 0.1-10 > 10 Solar thermal Wind Geothermal, tide, ocean Hydro Onshore Offshore Life (y) 0-15 >15 0-15 >15 0-15 >15 0-15 >15 0-15 >15 0-15 >15 0-15 >15 0-15 >15 0-15 >15 0-15 >15 0-15 >15 0-15 >15 0-15 >15 0-15 >15 0-15 >15 0-15 >15 0-25 > 25 0-25 > 25 0-25 > 25 0-25 > 25 0-20 > 20 Regulated tariff (c€/kWh) Biomass 16.8096 12.4764 15.5084 13.0624 13.2994 8.9663 11.3771 8.5334 13.2994 89663 12.5148 8.5334 8.4551 6.8872 13.8262 6.8872 10.2409 6.8872 5.6706 5.6706 13.2994 8.9663 11.3771 8.5334 9.8177 6.8872 6.8851 6.8851 9.8177 6.8872 8.4635 6.8851 5.6843 4.0617 6.6268 Solar 46.5897 37.2718 44.1690 35.3352 24.3077 19.4462 28.4983 22.7984 Wind 7.7471 6.4746 2.9151 2.9151 2.7894 6.4746 76 TN 5.2.3 – Description of the Spanish energy system and policies RE feed-in tariffs in 2005 cEuro/kWh Public support period (years) CHP Solar PV Solar thermal Wind Geothermal Mini-Hydro Biomass Waste CHP for waste treatment 1.44-2.88 18.74 18.74 3.6 3.6 3.6 2.88-3.6 2.16 1.44-2.16 10 25 25 or 15 20 15 20 15 15 Table 37 RE feed-in tariffs in 2005 Since 2007, an intense public debate has emerged around the current FIT scheme and, in general, regarding renewable energy support measures Such discontent has been originated by the unexpected deployment of some technologies which has outpassed the most positive expectations leading to undesirable costs for the public funds Table 38 shows, for the different RE technologies, their production and FIT´s associated costs in 2009 GWh M€ €/MWh Cogeneration 26409 1062 40.21 Solar PV 6589 2633 399.61 Solar Thermal 511 116 227.01 Wind 38401 1712 44.58 Minihidro 5086 193 37.95 Biomass 1657 88 53.11 Residues 2696 86 31.90 TOTAL 81349 5890 72.40 Table 38 RE production and FIT´s associated costs in 2009 Source: (Unesa, 2009) Figure 65 and Figure 66 illustrate the RE electricity production share and feed-in tariff cost share in 2009 2009 RE electricity production share Cogeneration 6% 2% 3% 32% Solar PV Solar Thermal Wind Minihidro 48% 1% 8% Biomass Residues Figure 65 RE electricity production share in 2009 77 TN 5.2.3 – Description of the Spanish energy system and policies 2009 RE Feed in tariffs costs share 1% 1% 3% 18% Cogeneration Solar PV 29% Solar Thermal Wind Minihidro 2% 46% Biomass Residues Figure 66 Feed in Tariff cost share in 2009 As can be concluded from the above figures, solar PV was at the eye of the storm In 2009, solar energy accounted for 45% of the FIT while only contributed to 9% of the RE electricity production Also, for solar PV, the 2010 installed capacity goal was already exceeded in 2008 (3.342 MW compared to 371 MW set by the PER 2005-2010) In order to address this asymmetry, two RD (1578/2008 and 1565/2010) have arisen: (i) RD 1578/2008 set some quotas on the maximum amount of solar PV plants eligible to participate in the FIT scheme, and (ii) RD 1565/2010 that a Limits to 25 the time horizon during which the PV plants are eligible to receive FIT b Reduce the PV FIT set by the RD 1578/2008 by the following amounts: i Small PV roof installations decrease by 5% ii Large PV roof installations decrease by 20% iii Floor PV installations decrease by 45% In January 2012, the Government published the Royal Decree-Law 1/2012 cancelling the feed-in tariffs for the new facilities with the objective of eliminating the deficit of the electricity rate The Royal Decree did not affect the existing facilities The effect of this policy has not yet been noticed (see Figure 31) but the renewable sector is afraid that this may lead to a stop in the development of these energies in Spain in the following years 8.2 Climate change Spain ratified the Kyoto Protocol, which limited the country to increase its GHG emissions by 15 % over the 1990 level by 2012, according the EU burden-sharing agreement In order to achieve the Kyoto target, the Inter-ministerial Climate Change Group –which was created in May 2004-, has drawn up the Second National Allocation Plan (NAP) for the period 2008-2012 The objective is that the total GHG emissions over five-year period not exceed five times the base year’s emissions in more than 37% This second NAP was approved by the Royal Decree 370/2006 dated November 24th The present weight of CO2 emissions in the sectors included in the Directive regarding the total emissions in the country remains the same, 45% 78 TN 5.2.3 – Description of the Spanish energy system and policies Sector Average annual allocation 2005-2007 108.54 23.14 15.25 11.23 Power sector Other combustion installations Refineries Coke ovens Metal ore roasting, sintering, pig iron and steel producing installations Cement producing installations 27.54 Lime producing installations 2.46 Glass and glass fibre producing installations 2.93 Ceramics producing installations 5.65 Pulp, paper and board producing installations 5.30 Sub-total 178.88 New entrants 3.29 TOTAL 182.18 Table 39 Updated allocation by sub-sector in Mt/CO2 rd Source: (BOE , 23 October 2009) Average annual allocation 2008-2012 72.27 17.70 16.13 12.21 29.02 2.41 2.83 5.83 5.49 146.19 6.06 152.25 146.19 Mt CO2/y is distributed plus an additional reserve of 4.15% for new incomings The total allocation results in 152.25 Mt CO2/y with a reduction of 16.43% regarding the emissions in 2005 72.27 Mt CO2/y are allocated to the power sector and 73.92 Mt CO2/y to the industry sector in 2008-2012 289.39 Mt could be allocated through flexibility mechanisms based on projects during the period That means 20% of the base year emissions multiplied by the years Finally, the Plan estimates 28.94 Mt to be captured by CO2 sinks That is 2% of the base year emissions multiplied by the years Regarding the flexibility mechanism, the Spanish Carbon Fund (SCF) was created in 2004 in an agreement between the Ministries of Environment and Economy of Spain and the World Bank This fund was established to purchase greenhouse gas emission reductions from projects developed under the Kyoto Protocol to mitigate climate change while promoting the use of cleaner technologies and sustainable development in developing countries and countries with economies in transition The Fund has a total capital of $278.6 million As of December 2009, the Spanish Carbon Fund signed 14 emission reductions purchase agreements and participated in a HFC-23 investment with other funds for a total of 20.7 million tons of CO2equiv Another 17 projects remain in the pipeline as part of the development of new projects and programmes of activities aimed at completing the portfolio Among them were two projects at carbon finance document stage, totalling 0.8 million tons of CO2equiv In addition, 13 projects corresponding to 8.3 million tons of CO2equiv had signed letters of intent Finally, two project idea notes expected to generate 1.1 million tons of CO2equiv completed the Spanish Carbon Fund pipeline (Carbon Finance, 2009) In terms of carbon dioxide equivalence, most of the Spanish Carbon Fund projects that have signed emission reductions purchase agreements are concentrated in East Asia and the Pacific (65%), followed by Latin American and Caribbean (18%), Europe and Central Asia (11%), the Middle East and North Africa (4%), South Asia (1%), and Africa (1%)(Carbon Finance, 2009) In terms of technological distribution, the Spanish Carbon Fund has sought diversification in its portfolio Projects included in the fund encompass a wide range of technologies such as HFC-23 destruction (33%), energy efficiency in industry (22%), landfill gas (16%), and wind (10%)(Carbon Finance, 2009) Next table shows the projects been developed within the Spanish Carbon Fund framework 79 TN 5.2.3 – Description of the Spanish energy system and policies Table 40 Projects developed within the Spanish Carbon Fund framework Source: (Carbon Finance, 2009) 80 TN 5.2.3 – Description of the Spanish energy system and policies Spain also participates in other two funds administered by the World Bank: - The BioCarbon Fund to demonstrate projects that sequester or conserve carbon in forest and agroecosystems This Fund aims to deliver cost-effective emission reductions, while promoting biodiversity conservation and poverty alleviation The Fund is composed of two Tranches: Tranche One started operations in May 2004, and Tranche Two started in March 2007 Spain participates in both Tranches - The Community Development Carbon Fund to extend the benefits of carbon finance to the poorest countries and poor communities in all developing countries, which would otherwise find it difficult to attract carbon finance because of country and financial risk Contributors to the CDCF support projects that measurably benefit poor communities and their local environment and will receive in return, verified Kyoto-compliant emission reductions from these projects Out of the World Bank projects, Spain participates also in: - The Iniciativa Iberoamericana de Carbono (IIC), a fund created by the Corporación Andina de Fomento (CAF) and the Spanish Government to reduce carbon emissions through projects on renewable energies, efficiency improvement, waste management and gases capture in Latin America Some projects are Santo Domingo subway, Integrated sustainable transport system in the South of Quito, Integrated massive transport system for Barranquilla, La Calera biogas, Reforestation in the North of Colombia, and Hydropower Hidrovictoria 10 MW More info on these projects can be found at http://www.caf.com/view/index.asp?pageMS=57291&ms=12 - The Fondo Multilateral de Créditos de Carbono del Banco Europeo de Inversiones- Banco Europeo de Reconstrucción y Desarrollo (MCCF), to acquire emission reductions from projects that capture or reduce GHG The fund is divided into two sub-funds, the Project fund for projects on energy efficiency, renewable energies, petrochemical plants and less carbon intensive energy, and the Green fund to buy allocates quantity units Spain intends to get 4.7 MtCO2 - The Asian Pacific Carbon Fund (APCF), to provide co-financing to CDM projects in Developing Member Countries (DMC) of the Asian Development Bank for future delivery of certified emission reductions The APCF aims to increase the number of clean energy and energy efficiency projects in DMCs, assist APCF participants in satisfying their legally binding emission reduction commitments under the Kyoto Protocol, and capitalize increased investments from developed countries to improve energy access in the Asia and Pacific region - The Carbon Fund for the Spanish Companies (FC2E) promoted by the Official Credit Institute and the Santander group to assist the Spanish companies to fulfil the normative on GHG emissions in the period 2008-2012 The Fund supports clean projects in emerging countries under the CDM and JI mechanisms buying carbon credits generated in those projects Despite all the measures taken, as has been shown in section 7.1, Spain is still far from meeting Kyoto’s objective (115%) being the average reference index for the period (2008-2011) 128% (see Figure 64) 81 TN 5.2.3 – Description of the Spanish energy system and policies 8.3 Air pollution Directive 2001/81/EC of the European Parliament and the Council on National Emission Ceilings for certain pollutants (NEC Directive) sets upper limits for each Member State for the total emissions in 2010 of the four pollutants responsible for acidification, eutrophication and ground-level ozone pollution (sulphur dioxide, nitrogen oxides, volatile organic compounds and ammonia), but leaves it largely to the Member States to decide which measures – on top of Community legislation for specific source categories - to take in order to comply For Spain, the NECs are the following: − − − − NOx: 847 kt COV: 662 kt SOX: 746 kt NH3: 353 kt Spain prepared the I National Emissions Reduction Programme in 2003 (11th September resolution, Secretaría General de Medio Ambiente BOE nº 228, 23.09.2003) This programme has been updated and reviewed and a II National Emissions Reduction Programme was published in 2008 (Resolution de 14th January resolution, Secretaría General para la Prevención de la Contaminación y el Cambio Climático BOE nº 25, 29.01.08) The main objective of the II Programme is to promote the policies and measures needed to meet the national emissions ceilings It sets the following actions: − − − − To valuate the reduction potential of all the approved measures To quantify the reduction potential of all the measures To update the national emission projections To analyse the level of fulfilment of the national emissions ceilings 8.4 Carbon Capture and Storage The most important Spanish initiative on CCS technologies has been the Singular and Strategic Project for Advanced Generation, Capture and Storage of CO2 (PSE-CO2) funded by the Science & Innovation Ministry and coordinated by CIEMAT The project consists of two pilot plants with CO2 capture, one subproject for CO2 storage and one subproject for public awareness: - CIUDEN – CO2 capture (oxy-combustion) CIUDEN’s main objectives are the research, development and demonstration of efficient, cost effective and reliable CCS as well as third generation flue gas cleaning through the design and operation of a large scale integrated test facility for advanced technologies on CO2 capture in coal power generation which incorporates the following technologies: a) pulverized coal boiler, PC, 20 MWth operating from air-mode to full oxy-mode; b) circulating fluidized bed boiler, CFB, 15 MWth air -mode, 30 MWth full oxy-mode; c) flue gas cleaning train for NOx, dust and Sox; and d) CO2 capture: compression train (oxy)/ absorption unit (air) - ELCOGAS – CO2 capture (pre-combustion) The aim is to prove the feasibility of CO2 capture and H2 production in an IGCC plant using solid fossil fuels and wastes as main feedstock The plant started in 2010 and some preliminary results have been published (Cámara A et al., 2010) The CO2 capture and H2 production system installation cost was 14 M€ for the treatment of 2% of synthesis gas flue, equivalent to 14 MWth Taking this investment cost, the final cost of CO2 capture is between 18 and 23 €/tCO2 depending on the operative scenario considered 82 TN 5.2.3 – Description of the Spanish energy system and policies - IGME – CO2 storage The objective is to study the site selection and characterization for CO2 geological storage in Spain - CIEMAT – Public awareness The aim is to research into the social acceptance of CCS technologies Besides this national project, there is another ambitious one funded by the EU's European Economy Recovery Plan (EEPR), the OXYCFB300 Compostilla project This is a Carbon Capture and Storage (CCS) integral commercial demonstration project, including CO2 capture, transport and storage This Project is one of the CCS demonstration projects funded by the European Energy Programme for Recovery (EEPR), and is currently under development by a partnership formed by ENDESA, CIUDEN and FOSTER WHEELER ENERGIA Oy within the framework of a consortium agreement The Project is based on a 323 MWe gross Circulating Fluidised Bed (CFB) supercritical oxycombustion power plant, with CO2 storage in a saline aquifer This technology will be tested first on a new 30 MWth Technological Development Plant (TDP), which is currently being constructed in Cubillos de Sil, in the northwest of Spain It is envisaged to scale the technology to demonstration size (323 MWe) at this same location, close to ENDESA’s Compostilla Power Station Preliminary studies predict that about five million tons of CO2 will be stored during the first five years of operation (EC, 2010) Finally there are other two commercial demo projects funded by the Spanish Government: - CENIT CO2- La Robla (post-combustion), to develop a new 500 MWe cofiring power plant with CO2 capture and storage and use of biomass, and - Endesa/Hunosa/CSIC- La Pereda, to develop a low cost CO2 capture technology based in Carbonate Looping Post Combustion It includes a MWt pilot plant integrated into the La Pereda thermal plant, designed to treat up to 2,600 m3/h of combustion gases and with a capture capacity of tonnes of CO2 per day, with efficiency of around 90% The project is sponsored by the Seventh European Framework Project in the area of energy and has a budget of more than Euro 6.8 million Spain considers CCS a valid option for mitigation In this sense, some objectives have been established (Ministerio de Medio Ambiente, 2007): - To determine the potential of this technology in Spain - To develop the necessary R&D&I both for the capture as well as for CO2 storage, in collaboration with national Research Centres as well as with the companies of the sector - To assess the application of this technology as a mitigation option within the national set of measures - To quantify the amount of CO2 available for capture and storage in Spanish facilities - To develop a legal framework of reference 8.5 Deficit of the electricity rate To finalize this chapter on policies, a burning issue worrying consumers and the Government should be included The deficit of the electricity rate is defined as the difference between the price paid by the consumer and the cost declared by the power company At the end of 2006, the Royal Decree 1634/2006 which established the electricity rates applicable from January 1, 2007 onward, acknowledged, ex ante, the existence of a revenue deficit in the payments of 83 TN 5.2.3 – Description of the Spanish energy system and policies regulated activities This deficit relates to the period spanning January 1, 2007 to March 31, 2007 and amounted to 750 million Euros (source: CNE, Spanish Energy Comission) Later on, the Royal Decree 871/2007, dated June 29, 2007, was enacted to adjust electricity rates from July 1, 2007 onward, and acknowledged, ex ante, the existence of an additional revenue deficit in the payments of regulated activities This deficit related to the period spanning July 1, 2007 to September 30, 2007 and likewise amounted to another 750 million Euros So at the end of 2007 there was an accumulated amount of 1500 million Euros From then, the deficit of the electric rate has continued increasing and exceeding the legal maximum every year In 2011, it reached 3784 million Euros (23% over the legal maximum set for this year), and in 2012 provisional data estimated the deficit in 5000 million Euro This evolution is far from the one projected by the Government in the Royal Decree Law 6/2009 and also from the one updated later in the following Royal Decree Law 14/2010 Figure 67 shows the deficit of rate and the predictions made by the Government in the RDL 6/2009 and RDL 14/2010 Figure 67 Deficit of electricity rate and predictions of the Government in million Euro Source: own elaboration At the moment the measures taken, such as the suspension of the feed-in tariffs, not seem to have worked to finish with the deficit More pessimistic energy stakeholders are afraid that the deficit will continue for many years on 84 TN 5.2.3 – Description of the Spanish energy system and policies REFERENCES AEMET, 2009 http://www.aemet.es/documentos/es/elclima/datos_climat/resumenes_climat/anuales/ res_anual_clim_2009.pdf APPA, 2010 El 75% de las plantas españolas de biodiésel están paradas, mientras una avalancha de importaciones argentinas inunda el mercado Press release Julio, 2010 APPA, 2008 Capacidad, producción y consumo de biocarburantes en Espa Situación y perspectivas 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