**5. Conclusion**

The creation on the wholesale electricity market is one of the key concepts in the Spanish electricity industry liberalization process (Law 54/1997 and Law 17/2007). Theoretically, competitive markets should lead to efficiency gains in the economy. However, the real benefits from increasing the competition are object of debate because the market´s opening– up does not necessary imply market efficiency and competitive prices. It depends on the characteristics of the electricity supply and the electricity demand.

Regarding the supply side, the generation from renewable sources became an important share of the total electricity generation. Over the last years Spanish electricity generation from renewable sources (RES-E) has rapidly risen accounted for approximately 25% of total electricity generation in 2009. The largest part of the electricity generation by RES is devoted to wind power and hydro which are in the forefront accounting for over 86% of total renewable electricity (52% and 36% respectively). It follows by solar photovoltaic (8%), biomass (3.2%), municipal solid waste (1,2%) and solar thermoelectric (0,1%).

According to the Spanish Renewable Energy Plan 2011-2020 processed by the Industry and Energy Council of the Spanish government and the Spanish Institute for Energy Diversification and Saving-IDEA these renewable resources will meet 36% of electricity demand in 2020.

Therefore, the electricity generated from renewable energies become more integrated into the wholesale electricity market and can influence electricity market efficiency and competitiveness.

An electricity generation technology based on renewable energies produce a least-cost merit order in the wholesale electricity market and its associated efficiency gains should also lead to lower electricity prices. However, there is not clear evidence about the effect of renewable energies on the final electricity prices.

A large share of RES-E power generally gives lower electricity prices reducing the profitability of investing in new electricity capacity. If RES-E generators are exposed to market prices, it directly affects their market revenues.

In this context, the participation of the governments is necessary in the initial phase of the introduction of the renewable electricity generation technologies for securing their development and protecting them of the direct competition that suppose the conventional technologies.

In Spain, the public support in electricity generation using renewable energies is the feed-in tariff which guarantees a price higher than that existing in the wholesale market for the renewable technology employed. This cost increment is financed by electricity tariffs.

Therefore, although large share of RES-E power generally gives lower wholesale electricity prices, a controversial debate has arisen about the RES-E effects on final electricity prices.

In order to contribute to this debate, in this chapter we propose a maximum entropy econometric model with the aim of explaining the electricity prices as a function of variables related to renewable energy sources and other electricity generation sources.

The sample data regarding the introduction of renewables in the wholesale is limited and when trying to estimate models through regression procedures a dimensionality problem arises. As an alternative to estimate the model, when a dimensionality problem arises, we propose a Maximum Entropy Econometric approach.

The obtained results show that electricity generated by reneawable energies contributes to increase final electricity prices. But also, the most important variables affecting prices is energy dependency. Spain has a high dependence (around 80% levels) on imported resources such as crude oil and natural gas (100%), therefore electricity prices are linked to such international energy commodities prices and introduces some risk to energy generation related to volatility of international market prices.

## **6. References**

254 Modeling and Optimization of Renewable Energy Systems

*Electricity generated from RES* -0,516 0,383 *Electricity generated from nuclear* 0,522 0,366 *Electricity generated from natural gas* 0,503 0,425 *Electricity generated from petroleum* 0,596 0,035 *Electricity generated from hard coal* -0,323 0,790 *GHG energy indutries* 0,477 0,496 *GDP per capita* -0,323 0,790 *Energy dependency* 0,598 0,014 Support vector for the errors (-v, -v/2, 0, v/2, v) v= 18 Support space for coefficients (-z, 0, z) z= 0,6 Estimated information index R= 0,67 Table 5. Estimated Household electricity price model by Maximum entropy econometric

Energy dependency has also an important effect. Spain has a high rate of energy dependency due to the scant presence of primary fossil fuel deposits. That great dependence introduces some risk to energy generation related to volatility of

The creation on the wholesale electricity market is one of the key concepts in the Spanish electricity industry liberalization process (Law 54/1997 and Law 17/2007). Theoretically, competitive markets should lead to efficiency gains in the economy. However, the real benefits from increasing the competition are object of debate because the market´s opening– up does not necessary imply market efficiency and competitive prices. It depends on the

Regarding the supply side, the generation from renewable sources became an important share of the total electricity generation. Over the last years Spanish electricity generation from renewable sources (RES-E) has rapidly risen accounted for approximately 25% of total electricity generation in 2009. The largest part of the electricity generation by RES is devoted to wind power and hydro which are in the forefront accounting for over 86% of total renewable electricity (52% and 36% respectively). It follows by solar photovoltaic (8%),

According to the Spanish Renewable Energy Plan 2011-2020 processed by the Industry and Energy Council of the Spanish government and the Spanish Institute for Energy Diversification and Saving-IDEA these renewable resources will meet 36% of electricity

Therefore, the electricity generated from renewable energies become more integrated into the wholesale electricity market and can influence electricity market efficiency and

characteristics of the electricity supply and the electricity demand.

biomass (3.2%), municipal solid waste (1,2%) and solar thermoelectric (0,1%).

approach

international market prices.

**5. Conclusion** 

demand in 2020.

competitiveness.

**Variables** 

*<sup>i</sup>* <sup>ˆ</sup> *<sup>S</sup> <sup>i</sup> <sup>p</sup>*


An Analysis of the Effect of Renewable Energies on Spanish Electricity Market Efficiency 257

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**11** 

*Poland* 

**Nitric Acid Plants** 

*Instytut Nawozów Sztucznych, Puławy* 

Marcin Wilk et al.\*

**Modernization and Intensification of** 

Nitric acid plants both in AZOTY Tarnów and ANWIL SA in Włocławek are dual pressure plants which means that ammonia oxidation and heat recovery take place under a low pressure whereas absorption under a high pressure. Nevertheless, there are important differences between them in regard to pressure and construction solutions applied and the level of their exploitation. A number of design solutions were implemented which aimed at removal of equipment damage, as well as exchange of machines and equipment and provision of plant continuous operation before 2000. Most of these works were performed by companies themselves, however Fertilizers Research Institute (Instytut Nawozów Sztucznych) participated in realization of some of them. After 2000 the increase of nitric acid plant capacity in the above mentioned Works became necessary. The scope of tasks to be undertaken, the realization of which was necessary to increase plant capacity in the above mentioned Works was to be defined in the first stage. This project was realized in cooperation with Fertilizers Research Institute. Some of the accomplished tasks which

Process design of nitric acid plant of a nominal production capacity – 700 t HNO3/d for Zakłady Azotowe SA in Tarnów-Mościce was prepared by Fertilizers Research Institute and Prosynchem in Gliwice in 19851). The pressure applied that is 0.5 MPa in ammonia oxidation unit and 1.5 MPa in absorption unit provided energy self-sufficiency of this plant and, NOx content in outlet gases below 200 ppm and allowed for the nitric acid production with the

The plant called Dual Pressure Nitric Acid Plant, presented on Fig. 1 was started in 1992. During Start-up a number of changes were introduced3,4) which improved its operation

allowed for the achievement of stated objectives are presented below.

**2. Nitric acid plant 0.5/1.5 MPa, 700 T HNO3/d in AZOTY Tarnów** 

Andrzej Kruszewski2, Marcin Potempa2, Romuald Jancewicz3, Jacek Mendelewski3,

**1. Introduction** 

**2.1 Plant description** 

 \*

concentration of 65% by weight.

*3ANWIL SA, Włocławek, Poland* 

Paweł Sławiński3, Marek Inger1 and Jan Nieścioruk1 *1Instytut Nawozów Sztucznych, Puławy, Poland 2AZOTY Tarnów, Poland* 

Weigt, H. (2009). Germany's wind energy: The potential for fossil capacity replacement and cost saving. *Applied Energy*, Vol. 86, (October, 2009), pp (1857-1863), ISSN 0306- 2619.
