The Spanish new legislation for renewable energy in insular
systems represents an important opportunity to reduce the cost of
electricity in Tenerife, where grid parity has been achieved for PV
and wind energy. The new feed-in tariffs approved by the Spanish
government are very attractive for investors. However, they will
contribute to an unnecessary extra cost of the Tenerife power
system because of the fixed feed-in tariff applied to new wind
energy capacity. In contrast, the new PV plants can contribute to
reduce the cost of the power system as the final remuneration will
be defined on a competitive basis.
Moreover, the new PV and wind capacity will lead to sharp
power ramps and curtailment of renewable energy generation.
This will pose a big challenge to the current power generation
system, which is mainly made up of thermal power plants and
defined for manageable power generation. The possible consequences
could be: an additional extra cost and operation of the
thermal power system in suboptimal conditions.
In particular, the scenarios defined by the Spanish and regional
government for wind energy are above the current capacity of the
system to integrate all the energy produced. Also, as the new feed-in
tariffs are mainly defined to pay for the investment instead of the
energy produced, it will add an extra cost to the power system when
the curtailment of the wind energy occurs. On the other hand, the
Tenerife power system is technically capable of managing the ramps
expected to occur in the defined near term scenarios. However, the
sharpest ramps require many of the reserves available to back-up the
power system. Therefore, the cost per MWh produced will increase
due to the operation of the most costly conventional power units
below the optimal conditions.