Archive for the ‘FITs – Feed-In Tariff’ Category

Smart Grid – A Vision of the future

Wednesday, April 28th, 2010

Smart grid is the term applied to tomorrow’s electricity system. It encompasses a variety of changes that will transform the way electricity is used, delivered and produced, and result in a cleaner more efficient and more interactive electricity system. It represents a paradigm shift for electricity much in the way that mobile phones transformed communications. The concept is broad; it stretches beyond modernization of the transmission and distribution grid to include devices that allow consumers to better manage their electricity use, new ways of creating and storing electricity, and the widespread adoption of electric vehicles.

The power grid shift to move to a culture of conservation and its substantial commitment to renewable energy will also be supported by the smart grid. Smart meters, a major smart grid component, can give consumers timely information on price and consumption. Emerging devices will empower consumers to act on this information automatically while at the same time improving their energy efficiency, comfort and convenience. New sensing, monitoring, protection and control technologies will enhance the ability of the grid to incorporate renewable generation.The institutional structure of the electricity industry makes it easy to look at how the smart grid will impact each piece of the system in isolation, but the most profound impact of a smart grid may be its ability to link these pieces more closely together.

With the regulator OFGEM, we could have a system of applying structured market operator requirements with corporation responsibilities, encouraging longer-term system network planning, and procuring electricity supply and demand resources connected to the network. Both by the electrical shippers, National Grid and and the the regional Distribution Network Operators (DNO’s). but also the Feed in tariff (FIT’s) small generation customers and CHP and renewable end customer/suppliers. While the smart grid will affect each of these segments in different ways, it will affect all of them by increasing their ability to work together to better serve consumers.

Smart Grid Definition
A smart grid is a modern electric system. It uses communications, sensors, automation and computers to improve the flexibility, security, reliability, efficiency, and safety of the electricity system. It offers consumers increased choice by facilitating opportunities to control their electricity use and respond to electricity price changes by adjusting their consumption. A smart grid includes diverse and dispersed energy resources and accommodates electric vehicle charging. It facilitates connection and integrated operation. In short, it brings all elements of the electricity system – production, delivery and consumption closer together to improve overall system operation for the benefit of consumers and the environment. A smart grid is not only information rich, but also has the analytic infrastructure, processes and trained individuals necessary to integrate and act on information in the very short time frames required by the electricity system. It is characterized by clear standards, security protection and open architecture that allow for continued innovation through the development and deployment of new technologies and applications by multiple suppliers. So OFGEM must get it right, undertaking discussions with both the customer and the electrical supply and distribution network industry community.


Driver’s for a smart Grid

The Goverment’s commitment to establishing a culture of conservation and the desire to reduce the environmental footprint of the electricity sector are major drivers for creating a modern grid. The culture of conservation requires the continual search for new ways to encourage all customers to use energy more efficiently and lower consumption during peak periods. The comprehensive provision of smart meters creates the opportunity for all customers to better understand and manage their electricity usage and, for those who wish, to become active providers of demand response, and be rewarded in doing so.

The prominence of renewable energy in the Governments white papers an increased ability to accommodate variable renewable generation from off shore tidal, wind farms, solar, biomass and micro generation. Where today the grid serves primarily as a vehicle to move electricity generated in large central facilities to consumers, in the very near future, the grid will need to do much more. As the number and distribution of smaller generators grow, Micro generation (FITs) come on line, the operational challenge of incorporating these independent generated energy resources, while maintaining safety and reliability, will also grow. Meeting this challenge will require a smart grid. Other features of this arrangement will also also drive the development of a smart grid. DNO’s will need to upgrade, renew or replace a significant amount of the existing electricity infrastructure network load monitoring and reporting real time demand and quality of supply (similar in some ways to end customer smart meters to be rolled out) In addition dynamic load forecasting to request power stations load demand requirements. This need creates an opportunity to use smart grid technology both to maximize the use of existing equipment and to improve the efficiency of the grid as it is replaced. Growth and redevelopment also present opportunities to introduce smart grid technologies in newly developed and reconstructed areas. Demands by industry and consumers for increased reliability and power quality technology are also pushing toward a smarter grid.

Promise, Cost and Timing Of a Smart Grid
There are many potential benefits from a smart grid in the areas of economics, environment and operating performance. The ability of consumers to increasingly participate in the electricity market by adjusting their demand in response to price or other signals will help to defer the need for peaking resources and incorporate additional generation from variable sources. Improved system economics will come from reduced losses during electricity delivery (line losses) and better use of power station and distribution network plant & equipment. Potential reductions in network congestion will also allow greater use of the most cost effective generation and improve the capacity to move generation throughout the electrical supply network. Greater ability to integrate generation and load can also reduce the cost of operating reserve and some ancillary services. Finally, improved analytics and the ability for the grid to automatically restore itself from faults can reduce the scope and duration of outages, lower operations and maintenance costs, and improve service to customers. Many of the identified economic benefits also have associated environmental benefits. Reduced losses not only reduce cost, they allow more of the electricity generated to reach consumers thereby lowering the environmental impacts from generation. Increased ability to incorporate distributed energy resources, including both renewable generation and demand response, will allow us to move more quickly to a cleaner resource mix that everyone generally wishes to be collectively archive. Even if if it is viewed by some, that this is achieved by someone else. Using existing assets more efficiently can defer the need to expand the grid to accommodate growth. The smart grid offers enhanced operational performance. Greater awareness of system conditions can help anticipate and address problems before they lead to outages, minimize the scope of outages that do occur, and enable more rapid restoration of power. With a smart grid, these fixes may increasingly occur automatically so that the grid becomes self healing.

The ability to remotely monitor equipment condition and performance can also enhance security, help better target maintenance and improve the accuracy of replacement decisions. The information provided by a smart grid also can be used to improve power quality, which is increasingly important in operating today’s sophisticated equipment controlled by digital electronics.

By automating functions that are controlled manually today, the smart grid will increase productivity, which will be essential in managing the more complex grid of tomorrow and helpful in addressing the demographic issues facing the electric system as the baby boomer’s retire and new workers need to be hired and trained. Finally, the smart grid can provide significant operational advantages through its ability to improve both public and worker safety by increasing the amount of system information available for protection and control and by enabling remote operation and automation of equipment. The costs of the smart grid are difficult to quantify. They will depend on investment decisions and the pace of implementation by numerous companies and individuals undertaking smart grid expenditures. It is through the analysis underlying these decisions that the benefits and costs of specific smart grid investments will be evaluated. Certain cost elements that support the smart grid have already been incurred. Ontario’s investment in smart meters and advanced metering infrastructure provide an important connection with customers and the beginning of the communications infrastructure necessary for a smart grid. Additional communications, with greater bandwidth, speed and reliability will be needed, for full smart grid implementation. Moreover, much of the distribution infrastructure replaced over the last few years is already smart grid compatible.

Customer support also would be a key factor in evaluating smart grid investment and customer education will be necessary to inform consumers on this issue. Investment at this level would require increased availability of demonstrated smart grid technology and the human resources to install and integrate it. Finally, the costs and benefits of proposed incremental smart grid investments would be evaluated through appropriate regulatory processes. The timing of smart grid development also will depend on individual investment decisions, which in turn will be influenced by external policy drivers. The investment plans by Electrical shippers, distribution network operators, IDNO’s, meter operators and consumers that will largely determine the pace of adoption for smart grid technologies will be based on their individual needs and circumstances, and their available capital. Government policy, implemented through incentives, mandates or regulatory initiatives will be a major factor in influencing the timing of investments. In short, because the smart grid is not a single project, but rather a series of actions by a variety of entities to modernize the electricity system, it is difficult to produce a definitive time line for smart grid development.

When it does come together, and matures, the system as a ‘whole’, will be more resilient, but it will dependable on all parties being dependable on each other. Including the micro generation and independent supply generation supply contribution and working efficiently, otherwise extra power stations will still be required to be built or available, just in case all independent customers disconnect supplies from the network, say as a future government protest action, interrupting the collective electrical supply contribution factored in the ultimate smart generation mesh smart grid arrangement.

In some respectsit is similar to the how the internet developed and matured and came to be more resilient and depended by everyone including the internet backbone and local ISP’s provide the network grid to connect people and systems together.

Another interesting development will be how supply authorities & DNO’s will undertake works on the network.

For the purposes of this blog, assume in simplistic traditionally engineering supply arrangements, that electricity is generated from a remote power station, distribution via the national grid 132KV network to the local DNO network (66 / 33 /11 / 6.6KV substation network to a 230 V rated supply and so onwards the the end customer via the service cutout consumption monitored by the electrical meter / CT arrangement . Generally, electrical only going one way – Power station via DNO’s to the end customer.

So isolation of cabling & equipment only required from local substation supply to be dead supply to enable major upgrade work to be undertaken.

In comes the Smart grid roll out which end customers are encouraged to provide their own renewable energy, with spare capacity connected and used by local network So introducing multiple back-feed supply’s. Always connected, but independently controlled and managed by the customer, supply on and off all the time – generally individually, each micro generation arrangement not resulting a constant dependable supply contribution, only achieved collectively when provided in clusters of connection points.

So back to the final distribution feeder cable supply requiring major works to be undertaken. DNO isolates at substation and is checked and tested that the LV cable was a ‘dead’ cable, but it could become live at any time, thanks to customers micro-generation connected supply.

So how do you isolate the DNO feeder cable, to cut or repair the cable?

OK – Live working methods can be used and will have to be adopted through the LV network from now on.

But the customers generation equipment will also have to be able to provide circuit protective devices from a grid network earth fault or the remote chance that the distribution point may not be connected to the network. But thats a separate subject, as well!

In a joint up world – simple things get complicated – but systems change and adapt to “keep it simple” – to make it more easier to manage and control.

What are Feed-In Tariffs?

Saturday, April 3rd, 2010

The Government is introducing a system of feed-in tariffs (FITs) for small-scale low-carbon electricity generation from 1 April 2010. FITs are a per-unit support payment made directly to generators by electricity suppliers.

The new renewable electricity Feed-in Tariff scheme (FITs) will be available from 1 April 2010. FITs aims to promote domestic and small-scale renewable generation technologies up to a maximum capacity of 5 megawatts (MW). Ofgem will be running the behind the scenes administration of the scheme on behalf of the Department of Energy and Climate Change (DECC).

There are two routes to apply for FITs depending on the type and scale of technology installed:
• Generators with Microgeneration Certification Scheme (MCS) accredited solar, wind and hydro generating equipment up to 50kW in capacity that are installed by an MCS accredited installer can apply direct to a ‘FIT supplier’ – usually their energy supply company – with their installation details and to enquire about FITs payments. We expect the majority of installations will fall into this category.
• Generators with larger installations between 50kW and 5MW (or anaerobic digestion at 5MW or less) will first need to apply for accreditation through Ofgem’s Renewable and CHP Register before they can apply to a supplier for the tariffs.

Its intend that FITs will replace the Renewables Obligation (RO) as far as possible as the financial support mechanism for microgeneration (with a declared net capacity 50 kW or less) in Great Britain.
FITs will complement the RO by providing the simplicity and certainty needed to support householders, communities and businesses involved in small-scale generation. Installations with a capacity of 5MW or less will be eligible for FITs. Whereas the level of reward under the RO is exposed to fluctuations in the value of Renewables Obligation Certificates (ROCs), FITs will guarantee a fixed level of reward for each unit of electricity you generate, for as long as you are eligible to receive support.The Feed-In Tariffs are based on the electricity generated by a renewable energy system and there will be an additional bonus for any energy which is ‘exported’ to the grid. This means you get paid more for the energy you don’t use than for that which you do which encourages energy efficiency.

At times when you are producing less electricity than you are using, the shortfall will be ‘imported’ from the grid and you will pay your electricity company for this in the usual way.

The Feed-in Tariff therefore gives you these three financial benefits:

  1. A ‘generation’ tariff based on the Total generation and the energy type, plus
  2. An ‘export’ tariff for any energy Exports when generating more than you need, and because you are now producing some of the energy you use
  3. Lower bills from your supplier for the energy you Import from them

What you need to do
You will require an additional electricity meter to measure the electricity that your system is generating, and also to measure how much is being fed back into the electricity grid.

Once you have installed your generating technology you must inform your chosen energy supplier that you are eligible to receive the FIT. The supplier will then register your installation onto the Central FIT Register, which is administered by Ofgem. Payments will be made by your energy supplier at intervals to be decided between you and your supplier. You may be required to provide meter readings to the suppliers if requested.

If you want to opt out of the guaranteed export tariff you must inform the supplier. You may want to do this if you chose to use a power purchase agreement.
Tariff levels, for technologies installed between 15th July 2009 and 31st March 2012

Technology___________Scale____________Tariff level (p/kWh)________Tariff lifetime (years)
Solar electricity (PV)____≤4 kW (retro fit)___ ____41.3____________________25
Solar electricity (PV)____≤4 kW (new build)______36.1____________________25
Wind_______________≤1.5 kW____________34.5_____________________20
Wind _______________>1.5 – 15 kW________ 26.7 _____________________20
Micro CHP ___________≤2kW _____________10.0 _____________________10
Hydroelectricity _______≤15 kW ____________19.9 _____________________20

Tariff levels vary depending on the scale of the installation.

The tariff levels shown in the table above apply to installations completed from 15th July 2009 to 31st March 2012 for the lifetime of the tariff. After this date, the rates decrease each year for new entrants into the scheme.

All generation and export tariffs will be linked to the Retail Price Index (RPI) which ensures that each year they follow the rate of inflation.
What payments will you be eligible for, and how can you claim them?

The tariffs available and the process for receiving them vary, depending on when the technology was installed, and whether the system and the installer were certificated under the MCS scheme:

The following advice applies to domestic installations. If you have installed a qualifying electricity-generating system non-domestic property with a grant from the Low Carbon Buildings Programme, see the Low Carbon Buildings Programme website for further guidance.

Background:
In October 2008 the UK Secretary of State for Energy and Climate Change, Ed Miliband, announced that Britain would implement a feed-in tariff by 2010, in addition to its current renewable energy quota scheme Renewable Obligation Certificates”. In July 2009, he presented UK’s new Feed-in Tariff Programme, expected to begin in early April, 2010. Miliband has given a new name, “clean energy cash back”, to this policy which falls fully within the framework of Feed-in Tariffs and is based on a few, extensively discussed, key elements:

a) Less than 10% of Britain’s electricity consumption, by 2020, will be provided by renewable energy sources. The 2% target requires the “green generation” of only 8 billion kWh (that is 8 TWh) per year. France, thanks to its system of Feed-in Tariffs, in 2008 generated already nearly 6 TWh, and only from wind energy; in the same year Germany generated more than 4 TWh from solar PV (photovoltaic), and reached 40 TWh from wind energy.

b) The project involves only renewables sources which can produce less than 5 MW energy; so, UK’s new FiT’s project cap is 5 MW. Depending on law, only renewable energy sources and generators within this cap can benefit from tariffs: the government still prefers resorting to the Renewable Obligation Certificates mechanism for developing larger projects.
To prevent companies from moving large scale (for example big wind) projects from the ROCs to the Feed-in Tariff programme, a number of anti-gaming provisions has been inserted in the policy design; this should avoid the breaking up of bigger projects into several small ones, to fit within the 5 MW energy size cap.

c) The contract term is 20 years, 25 years for solar photovoltaic projects: this means that, starting from 2010, British providers of Wind Energy, Hydropower, Energy from Biomass and Anaerobic Digestion falling within the Renewable Sources eligible in accordance with the provisions of the proposed FiT scheme will be rewarded with a tariff rate guaranteed for the next 20 years – 25 years for Solar PV generators. In this way UK’s renewable energy industry has a somehow long-term certainty, and can advantage of the FiT over other policy options.

d) Costs for the programme will be borne by all British ratepayers proportionally: all electricity consumers will bear a slight increase in their annual rate, thus allowing electricity utilities to buy renewable energy generated from green sources at above-market rates set by the government.

e) Generators can be green fields (they do not have to be metered customers).

f) The new UK’s Feed-in Tariff Programme review is scheduled for 2013.