Spain’s solar resurgence is being driven by a huge merchant and power purchase agreement opportunity, which far outstrips the size of recent government tenders.
The country now has a pipeline of 29GW, according to the national solar trade group, UNEF, of which 3.9GW has been tendered by the government.
The tenders resulted in 3.9GW of PV being awarded but more important was the awareness in government and society of the level of competitiveness that solar has achieved.
“The market has realised that they can expect very little from the government and they aren't going to wait around for a new support scheme,” said Jose Donoso, the head of UNEF. “With the degree of competitiveness that solar has, we can go straight to the market on a merchant basis or we can look for PPAs, without any need for input from the government.
“At this moment in Spain, there are 29GW of solar projects in the planning process. One year ago we had no PPAs and now we have a PPA signed every week with big companies. All the major offtakers are in talks with different developers,” added Donoso.
The developer Eco Energy World recently announced plans to develop 600MW of solar in Spain.
Founder Svante Kumlin told PV Tech said it was not the recent tenders, or the prospect of fresh ones, that drew it to the country.
“Grid parity is what makes Spain attractive now,” said Kumlin. “The Spanish market has solid fundamentals for solar power such as high solar radiation, a competitive EPC environment, and a diversified generation mix, which can complement the daytime-only nature of solar power.
EEW plans to raise the finance, debt and equity, for its own projects in pursuit of the lowest possible LCOE to then compete in the energy marketplace.
“We base our business model on merchant sale of energy so we will not be dependent on the tenders framework,” added Kumlin.
Jose Donoso will participate in our Managing European Solar Assets conference in Barcelona on the 25-26 April.
The business of solar is changing, as the industry scales up, technology, IT and new players to the market will add complexity. This sparks a host of opportunities such as co-location of solar and storage and the rise of unsubsidised solar projects as well as challenges which will question the very business model of European solar asset owners. Solar Finance & Investment Europe is the meeting place for institutional investors, sovereign wealth funds, solar, wind and storage funds and large energy buyers to do business.