edp distribuição energia, s.a

1BRITO Portugal Session 4 – Block 1

Barcelona 12-15 May 2003

EDP Distribuição Energia, S.A.

Internalisation of Environmental Benefits Concerning Dispersed Generation in the Portuguese

Legislation

António Brito

Luis Neves



Introduction

• The 1973 oil crisis lead to a global change of the European energy politics in an attempt to reduce external dependence.

Some priorities were defined:

• Diversify the oil supply;• Promote the saving and the rational use of

energy;• Develop the internal sources of energy.



Renewable Energy Sources

• Renewable energy sources achieved greater importance, as a main contribution to the global security in terms of energy supply

Some priorities were defined:

• Research;• Development of new technologies;• Legal context.



Legal Context

• Technical definition of the plants connection to the grid;

• Remuneration process assured;

• Obligation of purchasing the energy emitted to the grid;

• Support to the investment.



Legal Context

• Decree-Law nº 168 / 99 - Renewable Energies

• Use of “green tariff” concept;• Remuneration process that internalises:

– environmental benefits;

– reduction of costs in the Public Electric System;

• Inflation correction by means of the monthly index of consumers price.



Legal Context• Decree-Law nº 538/99 - Cogeneration

• Internalisation of environmental benefits;• Remuneration of the reduction of costs and losses in the grid;• Remuneration related to the dollar and the oil price;• Introduction of the equivalent electric efficiency concept.

– environmental benefits;

– reduction of costs in the Public Electric System;

• Inflaction correction by means of the monthly index of consumers price.



Percentile distribution of production under a special regime in 2002 (Portugal)

Wind

12,09%

Small Hydro

25,11%

Cogeneration

41,29%

Biomass

1,35%

Others

4,22%

Biogas

0,00%

Urban waste

15,94%



Weight of production under a special regime (PSR) in terms of the total energy flow in the

grid - 2002 (Portugal)

RNT

87,08%

PNV

3,39%PSR

7,04%SENV

2,49%



7,5

9,1

35,5

15,7

14,4

14,01

4,8

1,34

0,48

7,02

12,23

10,04

0,608

0,072

0,65

5,95

1,852

0,627

2,7

0,731

2,4

0,25

4,4

9,24

10,6

2,46

3,66

15,5

66,9

55,8

14,2

0,3

21,3

5,9

2,1

0,7

0,69,3

10,4

62,2

74,4

0,07

11.8

10,3

13

1,6

26,09



279,8

1,2

0,018

57,486,8

10,7

15,6

33,5

10,2

12,4

0,8

39,7

26

2,577,242

11,2

5,4

6,09

38,3

0,34

62

16,24

0,006

22,66

10,6

18,2

3,2

16,4

0,278

29,8

74,4

44,8

5,4

18,678

24,44

20,3

24,6

5,7

16,5

19

35,91,6

4,44

51,4

4,44

26.9

22,6



29,6

11

13,365

53

0,9

3

45

72

2,6

1,61

52,8

5,96

9,1

17,96

18,8



53

5,925



0,011

0,006

0,0227



Remuneration process for renewable energies

• The remuneration is based on the avoided costs:

• Fixed Remuneration (PF) - represents the avoided investment costs;

• Variable Remuneration (PV) - represents the avoided operation costs;

• Environment Remuneration (PA) - valorises the avoided CO2 emissions.



Remuneration process for renewable energies

• In the remuneration process the following parameters are still considered:

• LEV - represents the losses prevented in the nets;

• KMHO - depends on the diagram of energy production;

• Correction according to the inflation.



Wind PlantsRemuneration Distribution (%)

43,20%

38,90%

11,20%

1,40%5,20%

KMHO LEV PF PV PA

Environment Remuneration



KMHO - Modulation of Production DiagramHidro

0,00

0,20

0,40

0,60

0,80

1,00

1,20

1,40

0 10 20 30 40 50 60 70 80 90 100

Percentage of energy during low load hours

KM

HO



Increase of Remuneration due to the Z parameter

without Z with Z

Wind Hydro

+ 27 %

+ 8%



Remuneration process for cogeneration

• Fixed Remuneration (PF) - which is proportional to the power emitted to the net;

• Variable Remuneration (PV) - which is proportional to the energy emitted; represents the avoided operation costs;

• Environment Remuneration (PA) - which is also proportional to the energy emitted; valorises the avoided CO2 emissions.



Remuneration process for cogeneration

• In the remuneration process the following parameters are still considered:

• LEV - represents the losses prevented in the nets;

• KMHO - depends on the diagram of energy production;

• Correction according to the inflation, the relation between Euro/Dollar and the price of oil.



Cogeneration

Environment Remuneration

Remuneration Distribution (%)

17,00%

2,40%1,10%

13,00%

66,50%

KMHO LEV PF PV PA

EnvironmentRemuneration



Future Perspectives

• Reduction of the obstacles that can prevent the increase of electricity by means of renewable sources of energy;

• Simplification of administrative procedures;• Establishment of objective rules;• Easy access to the grid, maintaining the

reliability and safety of the electric system.• Introduction of the “green certificates”

mechanism.

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