Intelligent Energy Europe

MAXIMIZATIONOF THE PENETRATION

OF RES IN ISLANDSROADMAP

table of contents...3. INTRODUCTION. PROJECT SCOPE

11. ECONOMIC MEASURES

17. STORIES PROJECT CASE-STUDIES18. CASE-STUDIES RESULTS

14. EXAMPLE MEASURES TO PROMOTE. HYBRID RES-STORAGE SYSTEMS / Grid and ManagementEconomic / Regulatory / Social

7. EXTERNAL FACTORS 8. ENVIRONMENT. Environmental Effects

4. OVERVIEW

9. RECOMMENDATIONS

12. LEGAL/REGULATORY MEASURES

19. SUMMARY

15. IMPLEMENTATION PLAN / BEST CASE EXAMPLE / EL HIERRO, CANARY ISLANDS, SPAIN / Actions in Focus

5. SWOT ANALYSIS. TECHNOLOGY AND MARKET APPLICATIONS OF ENERGY STORAGE

10. GRID AND MANAGEMENT MEASURES

13. SOCIAL MEASURES

16. Socio-Economic Aspects

The necessity to implement energy efficiency measures is now firmly on the political agenda. The G8, IEA member countries and the European Union have clearly stated the importance of acting on energy efficiency to address energy security, climate change and economic challenges.Improved energy efficiency is a shared policy goal of many governments around the world. The benefits of a more efficient use of energy are well known and include reduced investments in energy infrastructure, lower fossil fuel dependency, increased competitiveness and improved consumer welfare. Efficiency gains can also deliver environmental benefits by reducing greenhouse gas emissions and local air pollution.The integration of renewable energies in local energy systems is also of great importance in the EU endeavour to achieve proposed goals of 20-20-20 for 2020. The increased deployment of Renewable Energy Sources (RES) in local/small energy systems entails the use of energy storage, which is essential to maximizing the penetration of renewables, covering demand fluctuations and enhancing security of supply.Existing energy storage systems have been tested and have proved their efficiencies. In the case of islands these systems need to be designed according to the island energy needs, available renewable energy sources and RES storage local policy.The objective of this Roadmap is to promote the introduction of RES-energy storage power systems in islands and to become a reference document to be used by island local authorities in charge of energy production and storage, suggesting ways to achieve higher penetration of RES in their islands.This document is mainly composed of a short summary of a SWOT (Strengths-Weaknesses-Opportunities-Threats) analysis performed within the STORIES project, recommendations to island local authorities, an implementation plan and some examples of successful cases.

INTRODUCTIONPROJECT SCOPEThis Roadmap entitled “Maximization of the Penetration of RES in Islands” is a deliverable of the STORIES Project, which is a project of 30 months that started in November 2007. Its full title is “Addressing barriers to STORage technologies for increasing the penetration of Intermittent Energy Sources”, and is co-financed by the Intelligent Energy - Europe (IEE) programme.The main objective of the STORIES project is to facilitate RES penetration in islands, through modifications in the legislative and regulatory framework that will help adopt energy storage technologies. Partners coming from countries that include islands, both from Southern and Northern Europe, and two European networks/councils worked together in order to exchange experiences from their countries and examine the effect of different environmental conditions and regulatory frameworks on RES market development.

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For this Roadmap a 20 year time horizon has been used, starting in the year 2005. The three major objectives that are considered in all the approaches followed in this document are to:

1. Increase energy efficiency by 20%,2. Reduce CO2 emissions by 20%,3. Maximize RES penetration in islands through the adoption of energy storage solutions.

In order to achieve these objectives, the proposed measures for overcoming the identified barriers that impede a higher penetration of RES in islands, need to have a wide range of applications. For this reason the authors tried to address all major issues of RES penetration and made relevant recommendations for the majority of islands analysed in the framework of the project.

This document summarizes mainly the results of deliverable 2.2 “Set of Existing Regulation and Legislative Framework Related to RES Implementation”, deliverable 3.2 “Barriers and recommendations” and deliverable 4.1 “SWOT Analysis”.Deliverable 2.2 provides an overview of existing regulations and the respective legislative framework related to RES implementation at a European level. Deliverable 3.2 presents an assessment of major existing barriers to maximum penetration of renewable energy in island electrical systems, and recommendations to overcome these technical, economical, political, social and environmental barriers.SWOT analysis was carried out as a first approach covering four different aspects, market, technology, environment and renewable energy utilization. A short summary of the results of this deliverable is presented in the next chapter.The recommendations given in this Roadmap are related to main renewable energy technologies, economic measures, general policies and social actions that are available to decision makers and aim at increasing the level of energy sustainability in islands.

OVERVIEW

Deliverable 4.1 of the STORIES project is a SWOT analysis for a smooth and successful introduction of hybrid RES-energy storage power systems, namely batteries, pumped hydro, hydrogen (H2) and desalination to the market.The analysis was initially carried out among the partners as a first step exercise drawing from

their own experiences, knowledge and contacts. This provided preliminary critical success factors and focus

for the data collection phase. Valuable information for the SWOT analysis was also obtained by means of the workshops for key stakeholders (e.g. RES technology providers, system operators, users, etc). The information obtained from these activities was used in the SWOT analysis.

The objectives of the analysis are to:• Obtain a reality check on the critical success factors• Gain additional feedback• Update and add to the critical success factors

SWOT ANALYSIS

Electrical energy storage systems find applications in a diverse range of markets, such as, traction and propulsion, automotive starting, lighting and ignition sector, standby power, remote area power supplies and island electrical power systems. The latter constitutes the focus of this project. More details on technologies, applications and potential uses of storage devices are provided in the “Storage Technologies” document available on the web-site of the project. There the reader can also find links for further investigation of energy storage technologies.

A) Batteries: Batteries are at present the most widespread form of storing electrical energy especially for domestic applications compared to all the other ways of storing energy considered in the STORIES project. They range in size from the button cells used in watches to megawatt load-

levelling applications. The most frequent use of Batteries in

the field of RES is the formulation of small hybrid and autonomous

systems for providing power to isolated houses

or villages. In larger autonomous power

systems like islands, battery systems can increase RES penetration and simultaneously, if properly managed, as shown for the case of Kythnos, Greece, presented in the 2nd Workshop of the project, they can increase the adequacy of an island power system at competitive cost. The most usual battery system considered for Hybrid RES systems is the Lead-Acid battery. This may be easy to find and requires low maintenance but presents low energy density per weight and the need to be placed in well ventilated places to avoid dangerous accumulation of the hydrogen produced. Moreover, it needs rather frequent change due to its depletion, especially if the hybrid RES system is poorly designed. Significant efforts have been recently made to understand the ageing mechanism and finding ways to prolong the life-time and number of complete charge/discharge cycles that a battery can withstand.

Other battery technologies are:• Nickel-Cadmium (NiCd)• Nickel metal hydride (NiMH)• Lithium ion (Li-ion)• Li-polymer• Redox Batteries

TECHNOLOGY AND MARKET APPLICATIONS OF ENERGY STORAGE

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B) Pumped Hydro Energy Storage (PHES): This method of energy storage combines the operation of a pump with the operation of a hydroelectric power plant. Thus, the electricity is stored in potential energy form. This type of storage is a well established technology. The oldest pumped hydro storage plants have been in operation for over 80 years. According to the Energy Storage Association (ESA), around 1000 GW of this technology has been installed all over the world. The round trip energy storage efficiency in modern pumped hydro storage plant is over 80% and can be as high as 84% compared to 75% 20-30 years ago.The main advantages from the market point of view of PHES are:• Increased profitability for plant owners in volatile electricity spot markets• Optimisation of power plant fleets and electrical network infrastructures• Night-time cost to pumped water is less than sales price of daytime electricityFurther to these advantages, especially for island power systems with significant RES penetration, PHES can be used for storing energy when excess electricity from RES is expected and for producing energy when the demand is high or RES production is low. A general concept for the operation of such plants is shown below.

Some plants of this kind have either been installed in island power systems in combination with RES, like in the case of El Hierro in Spain and Okinawa in Japan, or are under construction such as the Ikaria project of the Public Power Corporation in Greece.This type of combination of PHES, RES and Islands has been evaluated in the STORIES project. A summary of the results is provided in the last section of this Roadmap and details are provided in Deliverables D2.1 and D2.3.However, the application of this technology is restricted due to the morphology of the site. The following table summarizes the characteristics that should be taken into account when the possibility of a PHES technology installation in an island is examined.

C) Hydrogen Energy Storage: In general, there are two commercially available hydrogen storage options; compressed gas and liquefied gas. These storage techniques are well established and mature. In addition, hydrogen can be stored in metal hydrides. Several metal hydrides are available commercially representing a promising solution for hydrogen where the weight factor is not a problem.One of the ways of producing hydrogen is via electrolysis of water to hydrogen and oxygen. The idea of combining RES and Hydrogen Energy Storage in island power systems is based on the fact that electricity from RES, especially excess electricity, can be used for water electrolysis and then the hydrogen produced can be stored for future use for producing energy via a Fuel Cell either for electricity or for transportation. Hydrogen storage can be an interesting solution for small-medium islands when RES penetration is to be increased, such as in the Utsira island in Norway. The number of islands where hydrogen can be exploited will get higher as the hydrogen technology will get more affordable.Market demand for Hydrogen Energy Storage will depend on the external conditions of the market, the characteristics of the demand side of the target market and the degree of diffusion and acceptance of the technology. The managerial and technical aspects, i.e. physical integration with minimum visual impact must also be taken into consideration. Thus, any social barrier can be mitigated.High load factor is a significant parameter for the co-operation of RES and hydrogen since fuel sells are usually operated at constant power. The use of hydrogen as a transport fuel may provide an alternative solution that enhances the introduction of hydrogen in island power systems.

D) Desalination: this is not a conventional way of storing energy but incorporates storage in the form of potable water. Water can be produced during periods when it is more convenient for the power system, like any other Demand Side Management (DSM) measure. Desalination can be a candidate DSM technology if there is water scarcity on the island under study and water is already being transported to it for meeting local needs. The impact of an increase in demand is mitigated by RES use.The benefits of this co-operation are much higher when there is RES curtailment in the island power system. In this case RES power, that otherwise would have been curtailed, is exploited for the production of potable water. The exploitation of curtailed power is more efficient when the desalination power installed is comparable to the increase of RES capacity on the island.Desalination plants can also provide significant benefits when co-operating with other storage technologies since they can exploit part of the energy that otherwise would have been curtailed.

EXTERNAL FACTORS External factors, other than technology related factors, which are seen to affect the size of the hybrid RES • Hydrogen storage market are:

• General political climate – for RES• Energy mix – for RES (security of supply, diversification, environment)• Subsidies and fiscal measures – for RES (tax incentives, certificate trading, etc.)• Implementation of the RES electricity directive• Security and quality of supply (blackouts, natural disasters, terrorist attacks)• Population and public perception• Formal procedures in local planning (environmental regulations, local planning)• Grid system and cost issues

Terrain morphology

Interconnection

Current electricity production cost

RES potential

Not flat (maybe the existence of one reservoir in a suitable site)

Autonomous island with local power station (not interconnected with the mainland)

High current cost of the energy production

High wind potential (always wind with pumped hydro) or the existence of other renewable source economically feasible to explore

Criteria Ideal case

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ENVIRONMENTBattery manufacturing industry consumes resources and often involves hazardous chemicals. Used batteries may be harmful and also contribute to the increase of electronic waste. Like other energy storage systems. Apart from, the obvious fact that pumped hydro can only be applied in hilly areas, the technology has another very serious hurdle: its implementation involves regulatory and environmental review procedures that are quite time-consuming.

Environmental EffectsA) The widespread use of batteries has created many environmental concerns, such as toxic metal pollution produced by some kinds of batteries, like Nickel-Cadmium, and the fear of increasing electronic waste volume. The environmental impact of battery systems can be alleviated by matching operating conditions and battery characteristics in a life cycle perspective. In order to decrease the environmental impact of battery systems, the development of battery technologies should aim at the recycling of materials, increased service lives and higher energy densities. In order to reduce the environmental impact arising from the use of metals in battery systems, metals with relatively high natural occurrence should be used, and regulations should be implemented in order to decrease the need for virgin metals.

B) Pumped Hydro Storage can reduce the uncertainty in power production (either RES or conventional) and help utilities avoid using expensive backup power plants. Rather than firing up last-resort plants when demand peaks, they can dispatch stored energy. An additional constraint compared to a simple Hydro power plant is the need of constructing two reservoirs

instead of one. This can be alleviated if the one reservoir already exists (reducing simultaneously the construction cost) or the other reservoir is e.g. sea or an underground cavity. Therefore, as in the case of any reservoir, measures should be taken for the careful planning which reduces these effects. In addition, one should not ignore the fact that a reservoir can become an attractive place for walking and tourism.

C) One of the expectations of hydrogen and fuel cells is the significant reductions in CO2 that could arise from their use. The environmental impact of high RES penetration is of course greater in remote areas.

D) In the vast majority of desalination scenarios simulated, the water demand was met at lower emissions level when both desalination and RES are installed, compared to the current practice of transporting water and simply adding RES on the island. In the former case, the results are more favourable as the desalination plant schedule is based on RES estimations. The following table for Milos shows this point.

CO2 (g/m3 water)

Transportation of Water 6445

Transportation of Water + One Wind Turbine 4488

One Wind Turbine + Water Desalination Completely Independent 2053

One Wind Turbine + Water Desalination with Close Co-operation 1223

Only Desalination Plant Added 4898

RECOMMENDATIONSAs stated in Deliverable 2.2 “Set of Existing Regulation and Legislative Framework Related to RES Implementation” it can be concluded that each member state has adopted different measures in promoting RES, depending on the RES type and the year of implementation. Also the investigation showed that although a number of support schemes are in force for promoting RES, there is no special legislation or policy framework for hybrid power plants with the notable exception of Greece.

Despite the absence of a favourable legislative and regulatory framework, ongoing projects were identified in a number of EU member states, such as Finland, Germany and Ireland that investigate technically feasible and economically viable methods to store RES energy produced from intermittent energy sources. Construction of hybrid power plants is also ongoing in a few member states including Germany, Greece and the UK.

Deliverable 3.2 presents an assessment of major existing barriers to maximum penetration of renewable energy in island electrical systems, and recommendations for overcoming these technical, economical, political, social and environmental barriers.

The results of deliverables 2.2, 3.2 and 4.1 were taken into account for the elaboration of this Roadmap, and thus regulatory aspects, barriers and the strengths, weaknesses, opportunities and threats were taken into consideration.

Several measures are presented below divided into four different areas: Grid and Management, Economic, Regulatory and Social.

The measures recommended aim to increase the penetration of RES in islands, promote the creation of RES storage systems, decrease greenhouse gas emissions, increase social awareness of RES integration issues and also contribute to the improvement of RES planning in continental countries through the experience gained in the islands analysed.

WHO

WHERE

WHAT

GRID & MANAGEMENT MEASURES ECONOMIC MEASURESTechnical measures are the most difficult to be implemented. The elimination of some of the existing barriers will only be possible through more intensive R&D efforts to look for solutions related to energy storage and reinforcement of stability of grids with high penetration of intermittent RES sources.• Planning of power systems: energy storage systems can help so that the interconnection line capacity is sufficient to meet the RES production to be transferred. Improved planning of power systems with integration of different energy storage systems based on reversible pumped-hydro storage, where possible, batteries and hydrogen technologies could be used to increase the penetration of renewables. If properly managed, these systems can help mitigate the need for additional transmission and/or distribution capacity in weakly interconnected islands.

• Reinforcement and extension of the electricity grid: making investments in transport lines and other generation and distribution infrastructure, could contribute to improving RES penetration. Dynamic stability studies of the electrical grid to realistically assess the RES penetration limits, and cost effective solutions to reinforce the grids may allow making optimum investment decisions in the electrical infrastructures for maximum RES penetration.• Use Geographical Information Systems: in order to maximize the use of available RES potential and grid potential the use of Geographical Information Systems (GIS) can help in identifying the most suitable locations for installing RES taking into account not only the RES potential but also the

proximity to “stronger” networks. • Use weather forecasting numerical models: reliable wind, wave and solar prediction is possible through the development of climate models for 48 hrs forecast. This is an important tool for generation programming that would maximise of available RES in islands.

• Programmable loads to use excess energy from RES: RES storage installations can provide a form of auxiliary service. Water desalination or hydrogen production as a transport fuel could be two possible applications of variable loads capable of consuming excess electrical power from RES at valley hours of the demand curve. The former has been also studied in the STORIES project.

• Research activities: more R&D activities aiming at overcoming restrictions in unit size of RES generation equipment; research activities that could contribute to new solutions for overcoming the high weight of gearless multiple generators; the price/availability of materials for permanent magnet generators limiting the use of this technology; R&D activities aiming at increasing the potential of storage technologies using RES. Such activities assist in promoting renewable energy technology options by comparing the relative costs of renewable energy with conventional fuels and power delivery.

Economic measures should aim at supporting the developers of RES by reducing the risk of their projects, and implementing policies that focus more on subsidies to RES generation, and the elimination of existing support schemes for fossil fuels and nuclear power.

• RES business development: develop business and microcredit schemes to support private entrepreneurs to provide renewable energy products and services to end-users and offer consumer credit for purchases for the installation of home RES systems (solar thermal, photovoltaic, low power wind turbines and storage systems). Introduce capital cost reduction policies reducing investment costs through subsidies, rebates, tax relief, loans, and grants.

• Create associations: encourage project developers to form associations in order to strengthen their market presence.

• Tariff schemes: price-setting and quantity-quotas mandating minimum prices to

be paid for renewable energy, or requiring a fixed amount or

fixed share of generation to be renewable and creation

of support schemes that compensate renewable

electricity for its positive environmental impact

and its contribution to the security of supply.

• Create electricity feed-in tariff laws: set a fixed price for utility purchases of renewable energy. With feed-in tariffs the government fixes a price for every unit of electricity produced from any technology that is classified as renewable.

• Internalize externalities: Energy production, either from fossil fuels, nuclear or RES, should include external costs associated with the different impact of the energy systems to the environment and society. (Emission fees or caps on total pollution, with tradable emission permits, are examples of ways to internalize the costs of pollution, creating a more levelled arena for renewables) (example: European Trading Scheme).

• Promote hybrid power plants: remunerate hybrid power plants in non-interconnected islands for capacity availability as well as for the amount of energy supplied to the grid and pay for the electricity absorbed from the grid in order to fill their storage systems.

• Green Certificates: issue Green Certificates or guarantees of RES origin of electricity sold. Standardized certificates provide evidence of renewable energy production, and are coupled with institutions and rules for trading that separate renewable attributes from the associated physical energy.

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Planning of power systems

Use weather forecasting numerical models

Programmable loads to use excess energy from RES

Reinforcement and extension of the electricity grid

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Research activities

Use geographical information systems

RES businessdevelopment

Createassociation

Tariff schemes

Internalize the externalities

Create electricityfeed-in teriff laws

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Green Certificates

Training of personnel

Promote hybrid power plants

Regulatory measures have to consider the monopoly environment in many islands on electricity production and distribution. Therefore, the legal framework that guarantees protection of independent power production should be revised in order to give priority to RES generation. On islands, where such measures were taken, such as Crete, RES penetration increased from 2% to 10% in a few years and now is 15%. It is also very important to simplify all bureaucratic procedures that reduce both the time required and the transaction costs that relatively small RES projects have to face.RES will be unable to compete on a level playing field with conventional generation until new policies are adopted to internalize the public costs of fossil fuel sources.

• Unbundling: unbundle generation, transmission and distribution to eliminate monopolies so that separate entities can have the same power grid access to allow renewable energy equal or favourable treatment in transmission and distribution systems. Simplify technical standards and administrative procedures for grid connection of home installed RES systems.• Promote self-generation: allow end-users to

generate their own electricity and either sell surplus power to the utility or partly offset purchased power.• Pre-planning: mechanisms in which municipalities are requested to assign locations for different RES types.• Valorisation of RE: renewable energy production valorisation to the actual cost of avoided fossil fuel generation at any given time of the day. • Net metering: valorise renewable energy production at the point of end-use, and allow utility networks to provide “energy storage” for small users.• Simplification of procedures: harmonization of administrative procedures at the EU level taking into account national specific conditions and objectives to accelerate the authorization/ertification procedures.• Clear guidelines: clear guidelines for authorization procedures with clear attribution of responsibilities and obligatory response periods, eliminating all unnecessary requirements and guaranteeing transparency of the process. More information should be publicly available on how to initiate the procedure, and different stages of the administrative process. In areas where local authorities had provided clear guidelines, the increase in RES capacity was very quick (e.g. Sitia Region on the island of Crete).

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Unbundling

Promote self-generation

Pre-planning

Valorization of RE

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Simplificationof procedures

Clear guidelines

Net metering

Most of the social measures have to address the lack of effective public awareness activities explaining the economic, social and environmental opportunities of RES and energy storage systems. Public awareness and acceptance is crucial in promoting innovative technological solutions promoting enhanced RES penetration. This is true not only for the general public, but also for policy makers and regulators who in most cases do not always have a good understanding of these technologies needed to make sound policies. Political Will can promote public awareness and further stakeholder participation.

• Inform the public: public awareness campaigns, debates, workshops and educational activities to promote better understanding of the significance of RES in island energy systems, assure safety and reliability of the storage applications, explain emissions cap, trading policies, greenhouse gas mitigation policies, environmental emissions and fuel cost reduction to be met by renewable energy and the financial and societal benefits that may arise from these policies.

• Training and education: engineers, designers and installers have to be properly trained. Installation, operation, safety, and maintenance courses should be promoted in order to improve workers technical skills and increase their productivity.

• Regional Energy/Environmental Agencies: can play a pivotal role in the better understanding and promotion of RES and energy storage systems in the mix of islands’ energy systems. Well financed energy agencies can also play an important role in training activities, as well as in improving and promoting public awareness of the significance of RES and energy storage systems.

• Demonstration projects: public investments in demonstration projects of different RES technologies. These projects allow demonstrating their technical and economic feasibility, and give the opportunity to the public to get acquainted with the benefits for the local society and local economy.

• Ambitious plans: setting ambitious plans regarding increased penetration of RES in island communities demonstrate that islands can be at the forefront of technological developments promoting RES solutions in order to reduce greenhouse gas emissions in the fight against climate change.

Inform the population

Training & education

Agencies

Demo projects

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Ambitious plans

LEGAL/REGULATORY MEASURES

SOCIAL MEASURES

EXAMPLE MEASURESTO PROMOTE HYBRID RES-STORAGE SYSTEMSGrid and Management• Introduce feed-in tariffs for storage of electricity from RES• Adopt special software for intermittent energy prediction. Develop special elements for the grid code• Develop rules on costs and fees for connection to the grid• Establish an online registration system of RES which will use GIS to show potential free locations for RES projects• Create programs to help the development of scientific projects that may assist in achieving RES national goals

Economic• Establish schemes for guarantee of origins and green certificates• Support mechanisms for the production of electricity from RES• Create instruments for the promotion of RES (special Funds, feed-in tariffs, loans for RES)• Support and legislate mechanisms for the production of electricity from RES

Regulatory• Define standards of procedures for private micro power plant establishment• Optimize administrative procedures for RES, taking into account national conditions, for example by creating an online platform for RES producers• Provide clear instructions and guidelines for the development and implementation of RES projects

Social• Inform the public through public awareness campaigns, workshops, debates and educational activities

• Train engineers, designers, installers• Support RES demonstration projects

• Establish RES demonstration and testing plants in schools and public buildings

• Create and support local/regional energy agencies

• Create co-ownership of RES power plants to involve the public with the projects

• Be aware of EU goals on RES, energy efficiency and greenhouse gases emissions

reduction, in order to set ambitious plans for incoming projects in islands

IMPLEMENTATION PLAN

El Hierro, Canary Islands, SpainWith 276 km² and more than 10000 inhabitants, El Hierro is the smallest island of the Canary archipelago (Spain). The island has its own electricity grid; it is totally isolated as the significant sea depths make any interconnection impossible. Till a little time ago, the electricity demand, which accounts for about 65% of the internal energy consumption, was mainly covered by a conventional thermal power station (10MW diesel-fired system). The contribution of renewable energies to the electricity grid was less than 5% and came from two wind turbines installed close to the main town (100 kW and 180 kW). The island has a large Renewable Energy potential, mainly wind, and decided to implement a 100% RES project for its energy supply. This is a key issue of the “Sustainable Development Plan” defined in 1997 by the Island Government of El Hierro and has became even more relevant since El Hierro was declared a “World Wide Reserve of Biosphere” by UNESCO in January 2000.

Actions in FocusIn order to reach the objectives of the project, 3 different programmes are to be implemented: • The Energy Saving Programme• The “100% RES for Electricity Production” Programme• The Transport Programme (gradual conversion from Fossil Fuels to Clean Transport)

With the financial support of the DG TREN of the European Commission, a consortium of 7 partners, coordinated by ITC (Instituto Tecnológico de Canarias), is carrying out a project that focuses on the “100% RES for Electricity Production” programme. During the first phase, the programme aims to meet 70-80% of the electricity demand of the island by means of several activities. The most innovative one will consist of the implementation of a Wind-Hydro power station (WHPS), with the target of covering 75% of the island’s electricity demand and achieving 30% direct wind penetration into the grid.

BEST CASE EXAMPLE

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Country Battery system Pumped hydro H2 Desalination

Spain La Graciosa

Greece Ios Milos Milos

Croatia Mljet

Portugal Corvo Corvo

Italy San Pietro

Cyprus Cyprus Cyprus

Responsible Partner ITC NTUA CRES NTUA

As the set objective can only be reached by the integration of several RES, the following activities are also examined: • Implementation of a Solar Thermal Energy Programme• Implementation of a PV Roof Programme• Implementation of a Biofuels Programme

During the first phase, an important part of the project is devoted to the construction and monitoring of the Wind-Hydro power station on El Hierro, but also to feasibility and economic studies for the development of similar Wind-Hydro power stations, initially in Crete and Madeira and later, in other islands worldwide that are appropriate for the replication of the system. On a less technical level, tasks such as the integration and involvement of the island population (acceptance of the system), socio-economic research and knowledge sharing will be implemented.

Socio-Economic Aspects

A major innovation of the present project is that, contrary to what has been done until now regarding electricity management (the utility owns and exploits the power station as well as the wind farm and sells/distributes the electricity), it has been decided that a consortium would be formed to own and administer the Wind-Hydro Power Station. The company was baptized Gorona del Viento El Hierro, S.A. and the shareholders and their respective financial contributions were defined in an agreement in December 2004. This consortium includes the Island Government of El Hierro (representing political commitment, which is essential for local society integration in the project), the Canary Islands through ITC and the power utility (UNELCO-ENDESA).

STORIES PROJECT CASE-STUDIESStories Project Deliverables 2.1 and 2.3 present the results from the simulation and cost-benefit analysis of 7 different islands from 6 different countries with different sizes and electricity demand patterns, from as small as Corvo in the Azores Archipelago to as large as Cyprus in the Mediterranean for various levels of RES penetration combined with energy storage. More precisely, 3 different storage methods, namely Batteries, Pumped Hydro Storage and Hydrogen storage were considered. Additionally, a Demand Side Management (DSM) methodology for Reverse Osmosis Desalination Plants was also examined since water scarcity is a common characteristic not only for some of the islands studied, but also of other islands targeted by the STORIES action. The results have focused on the impact that the combination of RES and storage means can have on the operation of an island power system mainly in terms of system economics and emissions. Taking into account these results and externalities in Cost–Benefit Analysis, more concrete proposals on the value of storage on island power systems can be made.

Acceptance of the project by the island’s inhabitants is essential. In parallel with several workshops, and awareness campaigns, the inhabitants will also have the opportunity to be directly involved in the project as co-owners of the Wind-Hydro Power Station. A number of the Island Government-owned shares will be divided into smaller ones giving El Hierro Small-Medium Enterprises (SMEs) and every islander the possibility of part-ownership, which is expected to create interest and to effectively involve the population in the project.

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1. Population: more than 10.000 inhabitants for a surface area of 278 km²2. Peak Load: 7,56 MW3. Total electricity consumption (2009): 41.530 MWh4. Conventional power station: 13,3 MW diesel fired system5. Wind farm: 11,5 MW installed power (5 ENERCON E-70 wind turbines)6. Maximum penetration rate of wind energy for direct consumption into the grid: 70%7. Pumping station: 6 MW8. Hydropower station: 11,32 MW9. Upper reservoir capacity: 500.000 m3

10. Height: 700 m above sea level11. Lower reservoir capacity: 150.000 m3

12. Desalination plant: 3 desalination plants already in operation with a capacity of 2.000 m3/day to supply water to the pumped-hydro system13. Yearly energy production from wind-Pumped Hydro system: 31.190 MWh14. RES penetration (on a yearly basis: 75 to 80%15. Coverage of demand by hydro without diesel or wind: 20 hrs

For the case of batteries, two islands have been studied assuming autonomous operation. The optimum configuration of the proposed power system with as high as possible RES penetration was identified. For both islands, La Graciosa and San Pietro, scenarios that lead to 80% RES penetration were simulated. The cost for La Graciosa is significantly lower due to its smaller size, and the higher correlation between load and RES especially during the periods of high demand compared to San Pietro. For levels of penetration above this percentage, both the excess electricity and the installation cost increase geometrically. For this penetration level, a private investment for La Graciosa can be timely paid-back. Unless excess electricity is exploited in other uses, such as hydrogen used for transportation or desalination for potable water, social benefits will be very limited. A scenario with lower RES penetration target, e.g. 50% for La Graciosa will provide lower benefits for the grid regarding emissions levels and fuel consumption, but with significantly lower excess energy. Such a configuration can be used as a first step in introducing RES in this Spanish island and during the construction phase to consider ways of exploiting additional excess electricity and apply demand side measures for smoothing the peak of the island. Pumped hydro is an interesting option for larger scale applications of energy storage, wherever the morphology of the island allows its application. The case studies of Ios, Cyprus and Corvo have covered the entire range of demand and various levels of wind power potential. In all of these cases pumped hydro storage can help in increasing significantly the wind power penetration on these islands. Especially for Corvo, with very favourable RES conditions and good correlation with the load, a penetration level of 100% can be easily achieved reducing the operating cost to one half of the current operating cost.Pumped hydro storage can help in even moderate wind power conditions such as in Cyprus to increase

wind–power penetration and provide a viable solution for wind power development even in such cases. Finally, even if any of these islands are interconnected to larger networks, like in the case of Ios, the pumped hydro will provide significant aid to the weakly interconnected area without decreasing the value of the hybrid plant created. In the meantime, a WHPS can help in further exploitation of the wind potential with significant fuel avoidance. The results from the cost-benefit analysis prove that these benefits are large enough to fully cover any subsidies that the decision makers could provide for such investments in order to encourage private investors to undertake the technical and financial risks associated with these projects. Additionally, Pumped hydro creates the highest local employment among the cases studied.A general conclusion that may be drawn from both case studies simulated with hydrogen energy storage is that hydrogen may complement RES as it has the potential to tackle their intermittent nature and thus to assist in achieving high level RES penetration. The combination and introduction of wind energy and hydrogen storage into the power system of Milos and Corvo showed that the reduction of fossil fuel dependency, the enhancement of security of supply and the decrease of the production of harmful emissions associated with fossil fuel consumption are feasible and can be achieved at a lower than the current power generation cost. For Milos, the thermal units’ capacity can be also reduced, while in Corvo, the financial indices are already very favourable even for a private investment. The impact of using hydrogen as a fuel for transport or heating process has not been considered in any of the cases. In such a case, the wind-hydrogen storage system may become more economically attractive and would increase the already satisfactory social benefits. Desalination cannot produce electricity as the other methods studied but it incorporates storage in the

Results of Case-Studiesform of potable water. However, the output of such a plant can be scheduled to match as close as possible its demand to RES production as a DSM approach. The selected islands have scarcity of water and either have or are about to install desalination plants. Part of their needs is met by transporting water from the mainland.The results of the applications show that a) If RES are simultaneously installed with desalination plants, the demand increases, the associated fuel consumption and emissions can be mitigated but more importantly this demand change can be shifted to periods when it is more convenient for the power system b) For Island power systems with medium-high penetration and RES curtailment, like Milos and Cyprus (when wind turbines are installed), matching of desalination power plant operation with RES production estimations will reduce the amount of RES curtailment. Thus, any addition of RES can retain its positive economic indices.At the same time, for island power systems where the Municipality pays for transporting water to the island, a RES-Desalination combination will reduce the water costs. Additionally, the emissions per m3 of water delivered to the population will be significantly reduced. Thus, the social value of such an investment can be

significantly increased.

The key findings of Work Package 2 of the STORIES project show that:• There were cases, like Corvo, where the cost of energy can be significantly reduced by utilizing a combination of storage and RES and simultaneously achieving high RES penetration levels.• In order to achieve significant penetration of RES in an island system, energy storage or demand management methods or even a combination of both is required. • Utilizing energy storage will: - maximize the value of RES for the islands. - decrease fuel dependency. - reduce emissions. - help in achieving higher capacity factor for RES installations for the same potential. • Energy storage is a vital component for managing grid issues in autonomous power systems when high RES penetration is considered and efforts to eliminate barriers that impede the installation of storage in such networks should be intensified.

More info on these results can be found at http://www.storiesproject.eu

Batteries • Small-medium Islands • Preferably not high current exchange-Demand and RES production as correlated as possible. (This storage type is the most sensitive of all on this subject) Pumped Storage • Small up to (and mainly) large islands • Special morphology of the island • High electricity production costs

Hydrogen • Small -medium islands • High electricity production costs • Alternative uses, e.g. hydrogen as a transport fuel can be an interesting option when comparing similar case studies. Case studies that hydrogen has a manifold role (storage, transport fuel etc) are preferred.

Desalination Systems • Island systems with water scarcity and expected RES curtailment • Improved results when the desalination plant and RES capacity are close and the scheduling of desalination plant follows the RES production or even better curtailment estimations

ACKNOWLEDGEMENTS This guide was published within the framework of the STORIES project which is co-financed by the Intelligent Energy - Europe (IEE) programme. We are grateful to all those who have contributed with their work in preparing, writing and reviewing this publication. Furthermore, we would like to express our thanks to the Executive Agency for Competitiveness and Innovation (EACI) for their guidance and support.

You may visit the STORIES project at: www.storiesproject.eu for detailed information on all the aspects of the project.We welcome feedback on this publication. If you have comments or questions please contact islenet@skynet.be Reproduction is authorised provided the source is acknowledged.

Summary

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GRAPHIC DESIGN: DRIMON

STORIES is an official partner of the Sustainable Energy Europe Campaign

WITH THE SUPPORT ΟF

Intelligent Energy Europe

SUSTAINABLE ENERGY EUROPE

Coordinator: The Center for Renewable Energy Sources and Saving (CRES)http://www.cres.gr/kape/index_eng.htm

The National Technical University of Athens (NTUA) http://www.ntua.gr/en_index.htm

The Canary Islands Institute of Technology (ITC)http://www.itccanarias.org

The Institute of Mechanical Engineering of Instituto Superior Técnico – Portugal (IDMEC - IST) http://www.dem.ist.utl.pt/IDMEC/

The Regulatory Authority for Energy (RAE) of the Hellenic Republic http://www.rae.gr/en/

ISLENET, a network of European Island Authorities on Energy and Environmentwww.islenet.net

EREC, the European Renewable Energy Councilhttp://www.erec.org

SOFTECH Energia Tecnologia Ambiente s.r.lhttp://www.softech-team.it/

The University of Zagreb, Faculty of Mechanical Engineering and Naval Architecture (FSB-UZ)http://www.powerlab.fsb.hr/depee/

The Cyprus Energy Regulatory Authority (CERA) http://www.cera.org.cy/main/default.aspx

CONTACTCoNtACt DEtAILS

Dr. Manos Zoulias, Centre for Renewable Energy Sources and Saving (CRES)Tel: +30 210 6603327mzoulias@cres.gr

PRoDUCED BY ISLENEt

The Outer Hebrides of Scotland - Comhairle nan Eilean SiarSandwick Road, StornowayIsle of Lewis, HS1 2BW - UKhttp://www.islenet.netislenet@skynet.be

LEGAL NotICEThe sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein.

PROJECT PARTNERS

www.storiesproject.eu