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SOLAR BOOM IN CZECH REPUBLIC IN RELATION TO ELECTRICITY PRICES

SOLAR BOOM IN CZECH REPUBLIC IN RELATION TO ELECTRICITY PRICES. Radoslav Sokol , J úlius Bemš Czech Technical University in Prague. INTRODUCTION TO THE SITUATION OF PHOTOVOLTAICS IN THE CZECH REPUBLIC.

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SOLAR BOOM IN CZECH REPUBLIC IN RELATION TO ELECTRICITY PRICES

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  1. SOLAR BOOM IN CZECH REPUBLIC IN RELATION TO ELECTRICITY PRICES Radoslav Sokol, Július BemšCzech Technical University in Prague

  2. INTRODUCTION TO THE SITUATION OF PHOTOVOLTAICS IN THE CZECH REPUBLIC • The boom has peaked at the end of the year 2010 after the Czech Senate approved a new law of 26% tax on electricity generation from PV over the next three years, as well as 32% tax on carbon credits awarded to solar companies in the next two years to all PV plants that were guaranteed to receive a fixed feed-in tariff for a period of 20 years. This tax will be retroactively applied to all ground-mounted PV built in 2009-2010. Also the feed-in tariff for new installations after 2011 was reduced from roughly 500 EUR/MWh to 300 EUR/MWh for installed capacities below 30 kWp and to 250 EUR/MWh for installations above 30 kWp. No. of installations Installedcapacity

  3. RELATIVE UTILIZATION OF CZECH SOLAR POWER PLANTS COMPARE TO INSTALLATIONS IN ITALY FOR NORMAL SKY CONDITIONS 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% • Solar panels in Czech Republic and Germanyalike generate only 62% of electricity compared to the same installations in Italy. Despite this fact Germany and Czech Republic have four times more installed capacity per capita, 0% July June May April August October March January February November December September • Daily generation comparison between clear and normal sky for installed capacity of 1000 Wp in the Czech Republic.

  4. VIRTUAL AUCTION OFFICE • Market data – matching curve data from coupled Czech-Slovak short-term electricity market in 2010, • Available cross-border transfer capacites – not nominated therefore available export capacities in 2010 towards Germany and Austria as additional demand, • PV generation – irradiation model for the Czech Republic in hourly • resolution. Price modelling was performed for two basic scenarios which are clear sky (scenario presuming no clouds over the whole year) and normal sky (scenario takes into account statistical data of cloudiness for a specific period of time).

  5. TRANSMISSION CAPACITIES AS TOOL FOR ARBITRAGES BETWEEN MARKETS WITH DIFFERENT PRICES • Cross-border transfer capacities will play an important part as a tool for arbitrages between the markets in the context of a new trading opportunities, • The transfer capacities between adjacent markets will be utilized to a higher extent than nowadays in both export and import directions, • Since power generated from solar power plants represents additional supply and Czech Republic is electricity power exporter the pressure will certainly be on export capacities, • Not utilized export capacities together with already nominated import capacities represent additional demand on the market thus can decrease the impact of photovoltaics, • If flow-based allocation auction comes alive during the year 2011 we can expect decrease of export capacities but this scenario looks to be rather very little probable.

  6. INTRADAY TRADING • Expected higher liquidity on intraday markets, where traders and other market participants such as CEPS (transmission system operator) will balance themselves, • The price of ancillary services bought by TSO for balancing of deviations on intraday basis will increase due to the unpredictability of PV generation, because we can expect that majority of conventional generation is hedged on long-term basis and these sources will not be exposed to intraday trading risks, • Due to lack of liquidity on the Czech intraday market, participants have the only chance to balance themselves by bidding for export/import intraday capacities to/from Germany where they can close their positions on liquid intraday market, • Problem connected with this is that intraday capacity allocation is divided into six sessions of four-hour time intervals, • New approach needed.

  7. PL/BSLD RATIO COMPARISON OF YEARLY PRODUCTS

  8. RELATIVE PRICE CHANGES BETWEEN 2010/2011 FOR A RANGE OF 1650 – 2000 MWp OF AVAILABLE PV CAPACITIES Impact of clear sky scenario with no export/import transmission capacities on most liquid traded electricity products • Clear sky conditions – maximum theoretical generation from PV installations for the whole year, • Cross-border transfer capacities - no impact of not-nominated export nor nominated import capacities to alleviate the price impact of PV generation, • Combination of these two factors happens in case we have at the same time clear sky in the Czech Republic and huge power generation from wind farms or photovoltaics in Germany. In this situation export capacities from the Czech Republic are considerably reduced because of parallel and loop flows originating in north of Germany and flowing through the Czech Republic back to the south of Germany or Austria.

  9. RELATIVE PRICE CHANGES BETWEEN 2010/2011 FOR A RANGE OF 1650 – 2000 MWp OF AVAILABLE PV CAPACITIES Impact of clear sky scenario with additional export/import transmission capacities on most liquid traded electricity products • Clear sky conditions – maximum theoretical generation from PV installations for the whole year, • Cross-border transfer capacities – use of not-nominated export and nominated import capacities to alleviate the price impact of PV generation, • Scenario with the maximum PV generation and maximum price offsetting utilization of not-nominated export and nominated import capacities, • The overall impact of maximum generation from PV on prices can not be fully offset by available transmission capacities.

  10. RELATIVE PRICE CHANGES BETWEEN 2010/2011 FOR A RANGE OF 1650 – 2000 MWp OF AVAILABLE PV CAPACITIES Impact of normal sky scenario with no export/import transmission capacities on most liquid traded electricity products • Normal sky conditions – solar radiation reflecting real number of sunny hours in the tested period, • Cross-border transfer capacities - no impact of not-nominated export nor nominated import capacities to alleviate the price impact of PV generation, • Export transfer capacities towards Germany and Austria are cut to the minimum level due to building-up of all sorts of renewables in Germany. The situation seem less dramatic compared to both of the above scenarios and most realistic in case of flow-based capacity allocation comes alive in the central Europe.

  11. RELATIVE PRICE CHANGES BETWEEN 2010/2011 FOR A RANGE OF 1650 – 2000 MWp OF AVAILABLE PV CAPACITIES Impact of normal sky scenario with additional export/import transmission capacities on most liquid traded electricity products • Normal sky conditions – solar radiation reflecting real number of sunny hours in the tested period, • Cross-border transfer capacities – use of not-nominated export and nominated import capacities to alleviate the price impact of PV generation, • Scenario reflects most realistically weather seasonality meaning probability of cloudiness and the impact of not-nominated export capacity nor nominated import capacity alleviating price impact of PV generation. Use of available transmission capacities is under the condition that present NTC method for transmission capacity allocation will still be used.

  12. IMPACT OF NEW PV INSTALLATIONS ON PRICE CURVE Price difference of more than 25 EUR in business hours around midday between two consecutive days with exactly the same diagram of consumption.

  13. IMPACT OF PHOTOVOLAITCS ON COMPANIES • We assume the normal sky scenario for analysis • Electricity from renewables must be sold, it has higher priority than electricity from classic sources. Basically, this causes lowering of electricity prices on markets • We take into account the financial support for renewables (17,6 EUR/MWh, 2011) • Analysis were made for two companies • ŠKODA AUTO a.s. • Coal Mining Company • Δ EAT = f(electricity consumption, price change, tax) • The impact on net earnings of company is maximum at 3%, but it is important to notice, that unpredictable changes caused by german shut-down of nuclear power plants will have much higher impact than renewables at all.

  14. IMPACT OF PHOTOVOLAITCS – ŠKODA AUTO a.s. Electricity consumption (MWh/year) EAT change Change in electricity price (EUR/MWh)

  15. IMPACT OF PHOTOVOLAITCS – Coal Mining Company Electricity consumption (MWh/year) EAT change Change in electricity price (EUR/MWh)

  16. Thankyouforyourattention

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