Iberdrola halts investments in some renewable energy projects in Spain

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Iberdrola is currently building around 1.8GW of PV and wind projects in Spain. Image: Iberdrola.

Iberdrola has paused tenders for goods and services associated with the construction of renewables projects in Spain following the introduction of new measures in the country that limit the profitability of non-emitting power plants.

The utility, which is currently constructing around 1.8GW of solar PV and wind farms in Spain, sent letters to its suppliers this week informing them of the move, which it said will be in place until a detailed evaluation of the economic viability of projects has been carried out.

The announcement comes after Spain’s government introduced a pack of measures earlier this month to mitigate the impact of record-breaking wholesale power prices, including a mechanism limiting the windfall profits of certain renewables projects. Applying to plants with a capacity greater than 10MW that sell power on the merchant market, the new rules are in place until the end of March 2022.

Iberdrola is part of Spain’s Association of Electric Power Companies (AELEC), which has warned that the rules may cause some projects to become unprofitable. Pedro González, director of regulation at the association, told PV Tech Premium last week that there are concerns the measures could be extended, creating uncertainty surrounding future renewables investment in Spain.

Iberdrola stressed that its decision does not apply to projects backed by remuneration frameworks such as auctions, which are not affected by the government’s measures. The company’s Iberenova subsidiary was one of the big winners in Spain’s renewables auction earlier this year, picking up 243MW of solar PV capacity.

It remains to be seen how the new policy will impact the country’s 3.3GW renewables auction next month, which will allocate 700MW of capacity for projects that can be operational next summer as the government seeks to support the quick deployment of new solar and wind plants to help lower high electricity prices.

Iberdrola CEO Ignacio Galán said earlier this year that the company will invest €150 billion (US$183 billion) by 2030 as it aims to reach 95GW of installed renewables globally by the end of the decade.

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