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The best solution

Michael Deppner

Human evolution occurs through the comprehension of the phenomena that surround us. Back in the mists of time, the forces of nature were explained as divine acts that punished or rewarded us for our actions. But through the repeated observation of the same phenomena, humans understood that nature functions cyclically and could be used for their benefit. Initially, this was done in an empirical manner, but with the development of tools and technologies, humans came to control and derive the maximum yield from natural resources and renewable energies. One example of this exploitation and development is the increasingly effective use of wind and solar energy. Twenty years ago they were the future, but today it is common to see windmills and solar panels all over the place. In order to gain a better understanding of the phenomenon of renewable energy in Portugal and of how its new liberalised market operates, ECO 123 went to Aljezur to the office of the pioneering company FF Solar, because they have been working since 1989 in awareness-raising and the optimization of systems for exploiting renewable energy, and spoke to the electro-technical engineer Michael Deppner (64), who has been living and working in Portugal for 34 years.
ECO123: How do the Portuguese regard renewable energy?
Michael Deppner: In my opinion, most are interested in doing business. In making money. Only a small number are investing in this energy for environmental reasons. This became very clear when the remuneration tariff decreased, there was a proportionate reduction in the number of people interested.

So, which source is preferred, solar or wind power?
Solar always. Because it involves much less maintenance, almost zero. While wind power at a height of 10 or 15 metres is weak and Portugal is not a windy country. There are only a few sites on the coast or in the hills that are reasonably well exposed. For this reason, small-scale wind production is not a good solution. Because of the cost, because of the lower remuneration compared to solar power, the need for public liability insurance and the annual maintenance that is necessary (removing the blades and placing them on the ground to be inspected).

Is it possible to create a solution that is wholly based on renewable energy?
No, because there’s only sunshine during the day and we also need power at night. Photovoltaic power alone cannot replace conventional power stations yet. And large-scale storage isn’t viable yet. Researchers are doing studies in the field of batteries. There are already some prototypes on a large scale but the technique is not yet well developed which means it’s very expensive.

What is the difference between a UPP (1) and a UPAC? (2)?
UPP is a small grid feeding unit and is the continuation of the old mini- and micro-production. The scheme is the same, everything that is produced is sold to the energy supplier. Normally it’s EDP.

But the former distinction between micro- and mini-production no longer exists, there is just one scheme for selling everything that is produced.

solar battteriesIn the case of the UPAC, it’s the opposite. The aim is not to sell the energy to the grid, but to consume the power produced in one’s own home. For this, the inverter converts the DC current from the panels into the AC current that we use in our homes.
This conversion is done by an inverter and instead of connecting it to a meter and the grid, it is connected to the fuse box in your home. And when power is used, this is the first source of power to be consumed instead of being fed into the grid. But here we have a problem: if there isn’t enough consumption to absorb all the energy produced, the excess goes out into the grid and cannot be recovered.
There is an option of the excess energy being remunerated but the tariff is completely different to that of the UPPs, where the tariff is fixed for 15 years.

With the UPAC, when we feed the power into the grid, the remuneration is minimal. And it’s not fixed, it varies depending on the price on the Madrid stock exchange. Where all the suppliers go to buy the energy to sell to the public. The new liberalised market pays just 90% of this stock exchange price. Last year, 2014, the price on the Madrid stock market fluctuated between €0.02 and 0.05 per Kwh. Which is very low compared to the purchase price for the end consumer on the standard tariff, around €0.15, and on the dual tariff the price is about €0.09 and goes up to €0.25 at peak times.
Given these amounts, the remuneration of a UPAC is ridiculous. But I think the law was created with the aim of avoiding installing more panels than those that are necessary for home consumption, or self-consumption. But it cannot be guaranteed that consumption will equal production, and so all the excess goes into the grid, or for an additional €1,000 we can install a meter that communicates with the inverter, and when the meter detects power being fed into the grid, it immediately lowers the power in the inverter to the point where it doesn’t feed anything in. If we turn on more appliances, the meter allows more to be produced. Up to a maximum of 1.5 Kwh, this device is not compulsory. We are talking about six panels, which for most houses is already too much. Because there’s normally no one at home during the day, consumption is minimal, the consumption peaks are in the morning and at night.
But it’s a great solution for businesses such as restaurants, small-scale producers, workshops or offices where power is consumed during the day.

What would be best for a private individual, and what would be best for a company?
A UPAC always makes sense if there is consumption during the day. And the installation should take into account the real consumption needs. And not install much more that this because of the poor remuneration.

What legislation applies to such installations?
It is all available in the Diário da República in Decree-Law DL 153/2014 of 20th October 2014 and on-line at www.dgeg.pt or on the FF Solar website (www.ffsolar.com).

Registration used to be done for mini- and micro-generation on the portal “renováveis na hora” (3) and it will now be possible to do this on the SERUP (4) portal. But for the moment we have to use the DGEG website which is where SERUP is housed, it’s possible to do the registration there. There we can register a UPP or a UPAC, and there is another possibility which is prior notification. This is for small-scale production of less than 1500 w. Up to six panels, we do not need to register, it is sufficient to declare the power and refer to the installation of consumption.

How does the payment system work?
With UPPs selling total production, there are three categories: the first is simple and has no specific features, the second is for people who have a charging point for electric cars or who have an electric car. And the third is a tariff for people have who solar water heating. These are paid at €0.095 in the first category, at €0.105 in the second and €0.10 in the third. But, when the reading is taken, an amount has to be deducted from this reference tariff for each category, you never receive the full reference tariff. It’s always less.

What would be the ideal format for producing and consuming energy?
solar and wind powerI think the UPAC system is good. It’s just that the remuneration for the excess energy produced is not fair; instead of being 90% of the price on the Madrid stock exchange, it should be 90% of the purchase price. It is reasonable to deduct a small margin because we are using the grid as a battery. A utopian idea for a future private system would be a meter that counts the units that are produced and fed into the grid. When producers feed power into the grid, they will receive a credit when they need power, and when they take it from the grid they receive a debit. If the account is balanced, the producer will not receive anything, nor pay anything for their energy.

Is it better to install a UPP or a UPAC?
It is a matter of patience: installing a UPP in good conditions, i.e. facing south, with no shade, will pay for itself in 10 to 12 years. After this period, a few more years will be needed to make a profit. The contract is for 15 years, and the panels have a guarantee of 25 years, with no maintenance.

Which system will be most useful and fair, and which will last in the future?
The future of photovoltaic power is good because there is already mass production, and hence low prices. Twenty years ago, a small panel cost a huge amount. For a power of 3.6Kwh at the beginning, the cost of installation was about €40,000, and now it is about €10,000.

Now the new idea is distributed production, that is private individuals can produce on site for consumption, and the best source for this concept is the photovoltaic system. Because it is easier and more affordable than any of the other sources of renewable energy.

(1) Unidade de Pequena Produção or Small Grid Feeding Unit
(2) Unidade de Produção para Autoconsumo or Production Unit for Self-Consumption
(3) www.renovaveisnahora.pt
(4) Sistema Electrónico de Registo de Unidades de Produção
To understand the differences between UPAC and UPP consult the link:
www.ffsolar.com/pdf/UPAC _vs_UPP_pt.pdf

SOURCES consulted:
www.dgeg.pt (site of the Directorate General of Energy and Geology)
www.dre.pt/home (site of the electronic Diário da República)
www.ffsolar.com (site of the company FF Solar)

About the author

João Gonçalves (31) Was born in Serpa, and holds a degree in Marketing, Business Communication, and Audio-visual Production from the University of Algarve, in Faro. He is currently working as a director, cameraman and editor. He lives in Faro.

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