The low price leaves the renewable auction for 3,300 MW almost deserted
The fourth renewable auction under the new remuneration regime it has been left almost deserted, despite the fact that it put 3,300 megawatts (MW) at stake ‘green’, given the low price that was finally offered for the award of the capacity to be developed, according to what sources in the sector told Europa Press. The low reserve price finally set by the Ministry for the Ecological Transition and the Demographic Challenge It has cut off the majority of applicants who attended the bid, since, despite the fact that the interest was not the same as on previous occasions, there was competition, although at prices above the established one.
According to sources in the sector, only about 50 MW have been awarded in the bid, one of the winners being the company Elawan, with about 30 MW. However, the result of the auction must be validated by the National Commission for Markets and Competition (CNMC).
The October auction of last year ended with a weighted average price of €31.65/MWh for photovoltaic technology and 30.18 euros/MWh for wind power. However, these prices in the current situation have risen substantially to make the development of projects attractive. This new renewable auction put at stake a total of 3,300 renewable MW, structured in two capacity quotas, one of 1,800 MW for photovoltaic and another of 1,500 MW for wind.
The Government had already launched three allocation auctions of the Renewable Energy Economic Regime (REER). Two, which were held in January and October 2021, had also focused on photovoltaic and wind technologies, assigning a total of 2,902 MW of photovoltaic and 3,256 MW of wind, at prices much lower than those registered by the wholesale electricity market, being a success.
However, the third auction, which took place a few weeks ago, was already a warning for today’s auction with a ‘puncture’ by awarding only 177 MW of the 520 MW that were put up for grabs, leaving everything that was up for grabs void. available for solar thermal.
The Cabinet led by Teresa Ribera As estimated by this auction, if the objective of fully covering the 3,300 MW had been achieved, it represented a gas saving of 11,000 gigawatt hours (GWh) per year, 2.9% of total gas consumption in Spain in 2021, and a reduction of greenhouse gas emissions of about 2.7 million tons of carbon dioxide (CO2) equivalent. In addition, the forecast contemplated that the investment necessary to execute the awarded capacity would be around 2,900 million.
In the auctions to obtain the REER, developers bid for the price they are willing to charge for the energy generated by their plants -12 years in the case of wind and photovoltaic-, with some exposure to the market price. As in the other auctions, the winning companies also had to submit a strategic plan with estimates of the impact on local employment and the industrial value chain. In addition, access to future REER auctions will be prevented for the winning facilities, to discourage waiving the regime granted in this auction in order to attend a subsequent auction.
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