The Development of Wind Farm Businesses and the Central Control of the Smart Grid in Spain: Making a Virtue of Necessity

Round 1

Reviewer 1 Report

1. Table 1: How is MPIP defined?
2. Line 62: Could the author provide evidence that wind power penetration in Spain will face no further development during 2020s if the investors receive now FiT or FiP?
3. Line 138: What about the LNG terminals? Spain is a traditional powerhouse when it comes to LNG.
4. Lines 144-147: One understands that what FECYT realized was a large-scale poll. Why do the authors call this an experiment?
5. Lines 152 and 354: The literature does not support the argument that there is 1:1 ratio regarding intermittent RES and dispatchable capacity needed. That is, a large part of the CCGT development in Spain cannot be attributed to the need of balancing the wind and solar energy.
6. Line 190: The authors are invited to provide data regarding the pumping hydro plants’ capacity in Spain.
7. Figure 5: The y-axis is in %.
8. Line 370: 3.500 MW per year?
9. Line 435: Please clarify which type of energy does this deficit concern. Only renewables?

Author Response

We would like to thank the referee for general and specific comments. The referee's comments have allowed us to significantly improve the article.

1. Table 1 has been improved by including line 5 so that the calculation of the MPIP can be appreciated. In turn, a note has been added to the table explaining what MPIP is. In the bibliography the link to the reference article has been included to be able to see the original table

2. Line 62. Now line 97. We have added the following text to explain the current trend and the influence of premiums as well as a new bibliographic reference to support what has been explained in the new text:

"Until 2013, feed-in tariffs for wind power held steady, and at the same time wind farm installations continued to grow. With the arrival of the Energy Reform in 2013 (Real Decreto Ley (Royal Legislative Decree/Act) RLD-Act 24/2013), this evolution was cut short, since power began to be encouraged instead of production. In addition, the new premiums considered the age of the wind farms and the maximum profit that they could obtain (the so-called reasonable profit that is set annually). The effect of the Reform was appreciated for the first time in 2014: incentives fell from one year to the next by no less than 41%. The coverage of electricity demand by wind energy, which had reached 21.2% in 2013, fell two points by 2017. Several companies had to sell their wind farms.

Until 2017, the state administration did not carry out auctions again. From 2017 and with the new feed-in tariffs, new wind farms were created. In 2019, wind energy recovered a coverage rate of 21%, and Spain achieved second place in Europe, after the United Kingdom, in the installation of wind farms (onshore and offshore) and was the first in onshore wind farms. In 2019, auctions for offshore wind were already being held in Germany and the Netherlands without the need for feed-in tariffs. With the current premium regime, the trends for 2021 are promising. For more information, see graph 1.10 of the AEE yearbook, 'Eólica 20' [30] (p. 22)

Consequently, everything seems to indicate that feed-in tariffs were the only cause of the increase in renewable energy in Spain. However, the real story is somewhat more complex."  

3. The importance of LNG terminals. We have added a paragraph explaining how the entry of natural gas through the LNG terminals and pipelines is the energy reservoir for the entire electricity production system. This function and the very consumption of gas as primary energy has led Spain to be the country in Europe with the highest capacity and number of LNG terminals. All the argumentation is supported by 9 new bibliographic references. The added text is (now in the lines 213-235, before lines 138):

"In the absence of these options, natural gas was the first alternative. The commitment in favour of gas pipelines and LNG terminals began in the 1980s [31, 32]. This has been very powerful, but feelings of vulnerability are heightened by the fact that the peninsula’s main energy reservoir is outside of it, and depends on the diplomatic management.
Algeria's dependence on gas is remarkable. Half of the gas that enters Spain comes from that country. Of this half only 1/6 part enters via LNG terminals. Therefore, most of the gas enters through two maritime pipelines that connect Spain with Africa. One started operating in 2011 and is direct to Algeria (MEZGAS) but the other is older (1996) and crosses Morocco. At this point it must be remembered that Morocco and Algeria are enemy regional powers. The connection to the European network is low. The three pipelines with France have small capacity. A fourth line with France, the MidCat pipeline, is under construction. The rest of the gas enters through seven LNG terminals [33]. In total, there are 22 LNG terminals in Europe. In 2017, the entry through LNG terminals in Spain accounted for half of the entering natural gas. The demand for natural gas comes from thermoelectric plants (25% on average for the period 2002-2017) and from primary consumption for heating and industrial uses (75%). Re-exports do not exceed 5% (2020) [34]. Direct consumption and thermoelectric plants have given Spain the largest LNG import capacity in the EU—50.6 mtpa (68.6 bcma)[1], followed by the UK—35.3 mtpa (52.1 bcma) [35 - 37]. However, it was not until the end of 2015 when Spain created a wholesale reference market (MIBGAS) [38]. In conclusion, it can be said that being an energetic island without its own production in relation to natural gas leaves Spain with a great economic dependence on imported natural gas for any energy development [39]."

4. We have replaced the text "Social experiment" with the text proposed by the reviewer. We thank the reviewer for improving the concept as it was a large-scale poll. See lines 240 and 242 (before 144-147).

5. We have removed the two texts where it could be understood that there was a 1: 1 relationship. Now it is clarified that this relationship is not exactly 1: 1. The text of lines 151 to 153 (now lines 247-255) has been replaced. The following text now appears:                                                                                                         

"Figure 3 shows the growth of combined cycles. According to the ASE group, which includes the largest electrical engineering companies in Spain, for every MW installed in wind or solar energy, another combined cycle would be needed to be built to cover situations of high electrical demand in conditions of lack of sun and wind [40]. However, the growth of combined cycles is not only due to their role in supporting renewable energies. The increase in the use of natural gas for electricity production has its own dynamics. It depends on the rapid replacement of gas-thermal power plants, stagnation of other sources (coal, nuclear and hydroelectricity) and, of course, on the very competitive development of the natural gas market in Spain, as noted above." 

The text of lines 353-355 (now 518-523) has been replaced. The new text added is:

"Meanwhile, Naturgy, which specialized in combined gas cycles, saw its business grow until 2013, especially by supporting the growing wind farm installations. In any case, the investment in combined cycles was also due to the good expectations of the gas market, the replacement of obsolete gas thermal plants and the need to increase the production of electricity due to the stagnation of electric energy production by nuclear power plants, carbon power plants and hydroelectric power plants."

6.  Regarding the pumping hydro plants' capacity (line 190), the following text and two new bibliographic references have been added (now line 316-321):

"The main form of storage is pumped-storage hydroelectric power stations. In 2015, Spain had a 3.3GW pumped hydro storage capacity, which represented 3.1% of the total installed electricity production capacity [41] (p. 240). Since then, no new pumping stations have been built, so that in 2020 the generation of electricity by this type of facilities was only 1.1% [42] (p. 24). By 2030 it is planned to reach 9.5GW [41] (p. 12). "

7. Figure 5. We have added the percentage symbol (%) and the text "Annal growth rate - Data in logarithmic scale"

8. Line 370, now lines 537-548. We have deleted the previous text ("The government had foreseen at the beginning of this plan that the demand would lead to installing a power of around 400MW per year. However, the Government found itself with 3,500 new MW coming from photovoltaic energy sources.") and have provided more exact references. The new text is:

"The regulated feed-in tariff established by that Decree was 440 EUR per MWh, a price that was ten times the market price [43] (p. 23).

The Renewable Energy Plan 2005-2010 provided for the installation of 363 new MW of photovoltaic energy throughout the period [44] (p. 327). In 2006, there was an installed capacity of 118.2 MW [43] (p.24). However, between 2007 and 2008, a leap was made to 3,270MW [45] (see the exponential growth of photovoltaic power installed capacity in Figure 5). This amount was close to the installed capacity in Germany in 2007 (3,811MW) [46] (p. 56). In 2008, Spain was one of the countries with the most installed photovoltaic power in the world. This trend was partly reached between 2009 and 2010 (Figure 5). The photovoltaic capacity was 4,047 MW and 1,049 MW for thermo-solar energy by the end of 2011 [49] (p. 51)."

9. The new text clarifies that most of the deficit came from the difference between the rates to be paid by consumers for energy from renewable energies and the costs associated with the premiums. Now the new text is:

"Between 2007 and 2012, the lack of convergence among revenues and costs of regulated activities (cogeneration plants, renewable energies and waste processing) generated a debt of the system (the “tariff deficit”) that amounts to 21,812M EUR€, around 2% of the GDP [47] (p. 7). "

Following the general indications of the referee we have tried to improve the conclusions and connect the different sections of the article. For this we have introduced new texts that the referee can see in the new version. We appreciate the courtesy of the referee in pointing out the issues in the initial release.

Reviewer 2 Report

This manuscript researches on the reasons for the relative fall of Spain in the world ranking of wind energy producers, of which the authors provide unique insights. However, it presents the following problems:

1. In section 1, the second paragraph seems ambiguous. Whether the three points mentioned above or the third point is the main cause of Spain's great achievements in wind energy? According to the introduction below, the third point should be the main reason. But, further explanations are required for the reasons the authors would like to state.
2. In section 2, ‘Little societal interest in renewable energies’, How does this explain “Spain's becoming a leader in renewable energy production”? This explanation seems a bit counterintuitive.
3. In section 2.1.1 and 2.1.2, for the explanation of software such as Gemashe, it will be more convincing if it is assisted by some practical cases.
4. In the interpretation of Figure 5, it relates to the specific data recommendations being highlighted on the graph. Whether the ordinate denotes the growth rate or the fitted capacity recommendation? It is suggested that the authors add units in figures, although it can be found from the interpretation in the context.
5. The explanation of graphics and tables is not very detailed, or almost no, such as Table 1. Please check the whole manuscript.

Author Response

We would like to thank the referee for general and specific comments. The referee's comments have allowed us to significantly improve the article.

1) In section 1, the second paragraph seems ambiguous. Whether the three points mentioned above or the third point is the main cause of Spain's great achievements in wind energy? According to the introduction below, the third point should be the main reason. But, further explanations are required for the reasons the authors would like to state.

• The referee is right. The second paragraph had a notable flaw. It starts by putting the key in the third point when it should be put first. We appreciate the careful reading of the referee. We have modified it and added an explanation at the end of the paragraph (lines 58-61): "This evolution in the RECAI ranking allows us for the moment to argue that premiums played an important role in the development of renewables in Spain. This is a matter that will be addressed again in the Discussion section. "

2) In section 2, ‘Little societal interest in renewable energies’, How does this explain “Spain's becoming a leader in renewable energy production”? This explanation seems a bit counterintuitive.

• Again the referee is right and the point he makes is counterintuitive. We have decided to delete the entire paragraph, the three points and the beginning of the next paragraph. Instead we have written a new paragraph (lines 265-291): 

  "It is certainly very difficult to explain how Spain became one of the leading countries in the production of renewable energy without the support of its population. At the beginning of the century there were very few individual initiatives to install small wind turbines or solar water heating or photovoltaic systems. People did not have an extraordinary fondness for renewable energy [2]. However, there was a wide social perception about the lack of own sources of energy. Paradoxically, this lack of social drive and the social awareness that the problem could only be solved at the macro level left the hands of power companies and the state free, through the public–private partnership REE (Red Eléctrica Española; Spanish Electrical Grid), to install and manage all wind turbines [13]."

3) In section 2.1.1 and 2.1.2, for the explanation of software such as Gemas, it will be more convincing if it is assisted by some practical cases.

• Following the referee's advice, two examples have been added, one for GEMAS (lines 383-390) and the other for SIPREOLICO (402-409). Both texts are added below:

"t is certainly very difficult to explain how Spain became one of the leading countries in the production of renewable energy without the support of its population. At the beginning of the century there were very few individual initiatives to install small wind turbines or solar water heating or photovoltaic systems. People did not have an extraordinary fondness for renewable energy [2]. However, there was a wide social perception about the lack of own sources of energy. Paradoxically, this lack of social drive and the social awareness that the problem could only be solved at the macro level left the hands of power companies and the state free, through the public–private partnership REE (Red Eléctrica Española; Spanish Electrical Grid), to install and manage all wind turbines [13]."

"An example of the function of SIPREOLICO is its use in the cases of transmission grid works and line disconnection scheduling:

When a line disconnection takes place in a zone with many wind farms, problems may arise for the evacuation of the total power generated in the area (this could be the case when both the generation groups and the wind farms are working at full power). This situation took place in the northwest of Spain during the disconnection of a 220 kV line. Since wind generation forecasts were available 48 hours in advance, the system operator imposed a limitation on the technical minimum to several conventional groups in the area, when necessary. [17] (p. 8)"

4) In the interpretation of Figure 5, it relates to the specific data recommendations being highlighted on the graph. Whether the ordinate denotes the growth rate or the fitted capacity recommendation? It is suggested that the authors add units in figures, although it can be found from the interpretation in the context.

• Following the referee's advice on the ordinate axis (Y), the information of the units has also been added to the scale information. As the "unit" is the growth rate, the symbol "%" has been included:

% (Annual Growth rate - Data in logarithmic scale)

5) The explanation of graphics and tables is not very detailed, or almost no, such as Table 1. Please check the whole manuscript. 

• We have significantly increased the text of the Introduction. Now it occupies 5 pages. The figures have been commented and Table 1 has been improved. In Table 1 we have clearly specified the meaning of all the lines. To understand the importance of the article in the Introduction, we have indicated on three new occasions how Figures 1 and 2 and Table 1 should be interpreted. In addition, we have revised all the text following the general indications of the referee to improve the descriptions, improve the presentation of the results and offer conclusions more connected with the results.

Following the general indications of the referee we have tried to improve the conclusions and connect the different sections of the article. For this we have introduced new texts that the referee can see in the new version. We appreciate the courtesy of the referee in pointing out the issues in the initial release.

Author Response File: Author Response.docx

Reviewer 3 Report

It is an interesting review article that presents the use of wind farms in Spain over a certain period of time, which could be of interest to readers. Here are my recommendations:

1- The language used sometimes makes it difficult to comprehend the content. There are many vague sentences in the paper that are hard to understand. Therefore the language needs to be improved. In this regard, I would encourage the authors to professionally proof read the paper and also refine the topic to make it more readable.

2- Clearly explain the significance of the study in the introduction section. 

Author Response

We would like to thank the referee for general and specific comments. The referee's comments have allowed us to significantly improve the article.

1- I would encourage the authors to professionally proof read the paper and also refine the topic to make it more readable.

Following the referee's indication, the text has been revised by the MDPI English team revise service.

We have revised all the text following the general indications of the referee. Now the  conclusions are more connected with the results.

2- Clearly explain the significance of the study in the introduction section.

We have totally transformed the first section (Introduction). We have divided it into two parts. In the first part of the Introduction (pages 1 to 5), we have focused on pointing out the significance of the article, following the referee's advice.

Following the general indications of the referee we have tried to improve the conclusions. For this we have introduced new text that the referee can see in the new version. We appreciate the courtesy of the referee in pointing out the issues in the initial release.