Neoen touts 50MW victory in Portugal’s momentous PV auction

(Image credit: Neoen)

Neoen has shed light on its winning project in Portugal’s head-turning solar auction this summer, a tender consultants now say illustrates a new, bolder attitude towards merchant risks.

This week, the IPP explained the solar scheme it bagged a 15-year power purchase agreement (PPA) for at the July tender is now at a “very advanced stage” of development.

The project – designed with a capacity of 50MVA, or 65 in MWp terms – will be deployed near the town of Rio Maior, a one hour drive north of capital Lisbon.

Construction, Neoen explained, should get underway in 2021 and lead to the installation's operational launch around early 2022.

According to the IPP, the project is meant to produce 130GWh every year, covering the electricity needs of a 28,000-inhabitant town.

WoodMac: The potential and risks of merchant solar

At €23.47/MWh (US$26.28/MWh), the tariffs scored by Neoen’s 50MW auction PPA were not the lowest in Portugal’s tender, with Akuo’s €14.76/MWh (US$16/MWh) widely seen as a global record.

The IPP said its €23.47/MWh figure is “one of the highest” – the priciest PPA came in at €31.16/MWh, the tender results show – and will bring a “good level of profitability” for its scheme.

The claim emerged as Wood Mackenzie consultants anticipated it will be revenues beyond auction PPAs, and not within, that will be increasingly key for solar projects going forward.

“What is clear… is that in liberalised power markets, solar PV investors are ascribing ever more value to revenue streams outside of those secured through competitive auctions,” senior research analyst Tom Heggarty said in a statement on Monday.

“Taking on merchant risk pre-, during or post-PPA is becoming the norm. This presents a range of new risks and opportunities,” Heggarty added.

Learning the rules of the zero-subsidy game

The talk around merchant risks as PPA duration and prices are squeezed is not new in the solar ranks, with many an industry debate convened in the past year to examine the issue.

Firms attending Solar Media's Large Scale Solar Europe event, held in Lisbon in March, were bullish about PV's free-market potential but also wary of power pricing trends and grid bottlenecks.   

At an Intersolar 2019 session attended by PV Tech, Neoen’s deputy head of financing Bastien Grandet warned of potential cannibalisation risks as technology costs continue to plummet.

Grid access will be the “defining bottleneck” of zero-subsidy solar, Grandet said, adding: “We’ve yet to find a common view on how to deal with long-term merchant risks.”

With a 3GW renewable portfolio in operation or under construction worldwide, Neoen entered Portugal in 2010 and has since developed 13MWp Cabrela, 9MWp Seixal and 2MWp Coruche.

See here for PV Tech’s interview with Portugal's Energy state secretary and here for an in-depth look at the tender's winners

The prospects and challenges of European solar's new subsidy-free era will take centre stage at Solar Media's Large Scale Solar Europe 2020, to be held in Lisbon on 31 March and 1 April 2020

4 October 2022
Solar & Storage Finance USA, the only event that connects developers to capital and capital to solar and storage projects, will be back in November 2022.
11 October 2022
PV CellTech Extra will be held as a series of live webinars and on-demand sessions on 11-13 October 2022. We'll be taking a slightly further forward-looking view at the technologies and roadmaps for new cell architectures set to dominate mass production during 2023-2025 with special emphasis on the potential timelines for technologies beyond the single-junction cell design, including perovskite and hybrid concepts.
29 November 2022
PV ModuleTech EMEA in Madrid on 29-30 November 2022 will address the factors underpinning the changing PV module landscape, gathering together all the key stakeholders across the value-chain from module production to field testing. Join us for presentations from the leading players in the sector, clearly identifying the opportunities and challenges set to impact module supply to Europe and the Middle-East over the next few years.

Read Next

September 30, 2022
US renewable energy major Brookfield Renewable has agreed to spend up to US$2 billion in order to acquire both Scout Clean Energy and Standard Solar.
September 30, 2022
Canadian natural gas pipeline giant Enbridge has bought US renewables developer Tri Global Energy (TGE) for US$270 million in cash and assumed debt.
September 28, 2022
Rajasthan’s electricity regulator has proposed new rules that would make solar installations in the state which supply power to other states provide 10% of their generation to Rajasthan’s state distribution company (Discom) free of charge.
September 28, 2022
The ENACT Installer App automates the complete journey of the customer, right from first contact to complete installation.
PV Tech Premium
September 27, 2022
Europe must build out its own large-scale, vertically integrated solar PV manufacturing base as a means to ensure its clean energy transition.
PV Tech Premium
September 26, 2022
The way that solar companies use and consume intelligence needs to change, with more accurate and reliable data on project deployment needed, especially in light of the recently passed Inflation Reduction Act (IRA).

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 4, 2022
New York, USA
On-Demand Webinars, Solar Media Events
October 11, 2022
Virtual event
Upcoming Webinars
October 18, 2022
10am (EDT) / 4pm (CEST)