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Renewable Energy Developments

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Renewable Energy Developments STUDY Renewable Energy Developments PROF. NIKOS CHATZIARGYRIOU DR. IOANNIS MARGARIS DR. ARIS DIMEAS December 2016 n Renewable energy on islands provides an excellent opportunity for economic development in Greece taking into account that the islands of the Aegean sea are characterized by a significant potential mainly of wind and solar energy. n Greece already has a history of being a first mover in Europe for the use of renewables on islands with Kythnos – for solar, wind and microgrids, and Ikaria – for hybrid with storage. n The use of renewables on these islands would economically benefit the citizens and the local communities, as the current cost of energy production is high compared to the mainland. n Several new jobs can be created by implementing renewable energy sources on islands both temporarily during the construction phase, as well as permanently for operation and maintenance. n The Aegean islands provide huge opportunities for innovative technological solutions, such as hybrid systems including pumped storage as well as desalination systems, and sophisticated control systems. n Greek islands can serve as ideal testbeds for the operation of systems with very high penetration of renewables and provide valuable experience for the transfer of innovative technologies in larger interconnected systems. CHATZIARGYRIOU, MARGARIS, DIMEAS, | RENEWABLE ENERGY DEVELOPMENTS IN GREEK ISLANDS Table of Contents A. Executive Summary..............................................................................................5 B. Current State of Affairs on the Greek Islands......................................................6 B1. Operational and Market Characteristics of the Greek Islands.........................6 B2. RES potential in NIIPS and current RES Capacity..............................................8 B3. Operational Frameworks and Costs................................................................13 B4. Interconnection of NIIPS..................................................................................15 B5. CO2 Emissions....................................................................................................16 B6. The Economic Activities in the Greek Islands..................................................16 C. Technical Enablers to Increase RES Penetration..................................................17 C1. Introduction......................................................................................................17 C2. Installation of Advanced EMS..........................................................................17 C3. Energy Storage.................................................................................................18 C4. Desalination......................................................................................................18 D. Competitiveness, Job Creation and Economic Development..............................18 D1. RES and Employment.......................................................................................18 D2. Industry Policy Recommendations for Greece focusing on NIIPS.................20 D3. RES and Tourism..............................................................................................22 D4. RES and Desalination......................................................................................22 D5. RES and Research & Development (R&D)......................................................23 E. Policy Recommendations and Technology Requirements...................................23 E1. Technical Recommendations............................................................................24 E2. Policy and Business Recommendations...........................................................25 E3. Social Policy Recommendations......................................................................25 Appendix.................................................................................................................27 References..............................................................................................................29 Authors‘ note: This policy paper was drafted by the authors in December 2014 and most of the content was defined based on available data and public debate until then (January 2015). Since April 2015 Prof. Nikos Hatziargyriou is Chairman of the BoD & CEO of HEDNO S.A. (Hellenic Electricity Distribution Network Operator S.A.) and Ioannis Margaris is executive Vice-Chairman of the BoD of HEDNO S.A. In some places the text is updated according to recent developments. 3 CHATZIARGYRIOU, MARGARIS, DIMEAS, | RENEWABLE ENERGY DEVELOPMENTS IN GREEK ISLANDS 4 CHATZIARGYRIOU, MARGARIS, DIMEAS, | RENEWABLE ENERGY DEVELOPMENTS IN GREEK ISLANDS A. Executive Summary EU Directives into national legislation starting in 1999 with the Law 2773/1999, regarding unbundling of the The global economy seems to be in the midst of a electricity sector (production-supply, transmission- complex transformation, not only financial, which distribution). Many issues which affect this process, should aim at new sustainable forms of living and including market power of different actors, investment production models. Scarce natural recourses with schemes as well as specific geographic concerns, fragmented intellectual, immaterial production, have which affect the planning and operation of the power produced several bottlenecks in the field of innovation system, are still major concerns in the public debate models in terms of technology, institutional bodies, around the energy sector and the respective policies. policy mechanisms, cost and management techniques. A series of reforms of the legislation have followed Islands can provide us with the necessary social and since 1999, including the introduction of a mandatory natural field of experimentation towards such a complex pool (Law 3175/2003), a balancing market and bilateral innovation process. On a global level, distributed agreements (Law 4001/2011). production lines and other novel technology paradigms resemble the concept of insularity taking advantage Planning, operation and market regulation of small- of ICT technologies. Within this context products sized isolated electricity power systems - the ones and services need to be more adaptive, personalized, referred to as Non-Interconnected Island Power Systems replicable and transferable responding to the real, local (NIIPS) in this report - has also been under continuous conditions of social and economic life. transformation during the last two decades, mainly due to the introduction of RES production plants in the Energy, as a key means of production and reproduction energy mix. The power system, market and grid operator in modern economy, lies in the center of this of NIIPSs is the Hellenic Electricity Distribution Network transformative process and needs to be addressed Operator S.A. (HEDNO S.A.), which was founded in 2012 with reference to facilitative structures, shifts in according to Law 4001/2011. HEDNO S.A. was formed by the technology paradigm and institutional-policy- the separation of the Distribution Department from the governmental initiatives in order to accelerate the Public Power Corporation S.A. (PPC S.A.), in compliance adoption of sustainable ways of living. This challenge with 2009/72/EC EU Directive relative to the electricity appears even more so vital in the case of Greece market organization with the goal to undertake the and other European countries, which have been tasks of the Hellenic Electricity Distribution Network experiencing severe financial and social crisis during the Operator. It is a 100% subsidiary of PPC S.A., however, last 5 years. Based on available resources - both natural it is independent in operation and management fulfilling and technical -, the Greek energy sector could play a all the independence requirements of the above- fundamental role in the transformation and transition mentioned legislative framework. process of the national production pattern towards a new, sustainable and socially equitable system. This HEDNO S.A. tasks include operation, maintenance short policy paper aims at identifying the potential and development of the power distribution network for innovative methods and technologies in the in Greece, as well as the assurance of a transparent electricity sector, focusing on ways to facilitate large and impartial access of retailers, consumers, local penetration of renewable energy sources (RES) in the producers and all network users connected at the non-interconnected island power systems of Greece. distribution network, in general. Specifically for NIIPS, HEDNO is responsible for the system operation and for A radical restructuring of electricity markets in their security of supply. These tasks make HEDNO S.A. Continental European countries began in the late the main stakeholder of the electricity systems of NIIPS, 1990s, a process still ongoing. The underlying premise and following the European trends, the basic smart grid was the EC‘s policy guideline regarding competition driver in the electricity system of Greece, in general. through market liberalization, which is believed to eventually lead to price reduction and security of supply 1. This contribution is calculated as net receipts to Greece from sea through activation of the market forces in the energy transports. According to sector representatives, shipping as a percentage of GDP will rise to 4.9% and 5.7% of GDP in 2014 and 2015, respectively, sector. In Greece the national government
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