Requires Subscription: PV Tech Premium

Next Spanish PV auction expected to be richly competitive as national power prices break records

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
The auction next month will allocate at least 700MW of capacity for large-scale solar projects. Image: Image: Endesa.

Spain’s renewables auction next month is set to receive high levels of interest from solar bidders, according to industry observers, as the country’s government seeks to support the swift deployment of new capacity following a summer beset by record-breaking electricity prices.

The 3.3GW auction was announced by Spain’s energy and environment ministry two weeks ago, and prospective bidders have until 5 October to submit applications before the auction takes place on 14 October.

This short turnaround reflects government efforts to harness new renewables as a solution to rising electricity prices. The average price of electricity in Spain’s wholesale market has reached a new high on three consecutive days this week, rising to €132.47/MWh (US$156.5/MWh) today (Wednesday), according to data from market operator OMIE. That figure is three times higher than the average price seen on the first Wednesday of September 2020.

The energy and environment ministry said that results from Spain’s 3GW auction in January, which saw solar bidders awarded more than 2GW of capacity, show that the launch of new renewables projects can reduce the price of electricity.

Consequently, the ministry has reserved 600MW of capacity for projects that can be operational before the peak of summer 2022. That is in addition to 700MW reserved for large-scale solar and 1,500MW for onshore wind.

Technology/categoryMinimum capacity
Wind1,500MW
Large-scale PV700MW
Projects (PV and wind) that can be operational by the peak of summer 2022600MW
Distributed PV300MW
Neutral 200MW
Reserved capacities for Spain’s upcoming renewables auction.

The auction is expected to be “very competitive and probably well oversubscribed”, said Michele Lauritano, senior consultant and partner at renewables consultancy Everoze, adding that slight differences in the rules compared to previous auctions mean there should be more opportunities for smaller players to take part.

Some 300MW of capacity will also be reserved for distributed PV projects up to 5MW. As well as reducing the need for new electrical infrastructure compared to larger installs, these projects are intended to encourage the participation of the public and small businesses in renewables deployment. At least 25% of the share capital of the company that owns these facilities will need to be held by a minimum of four owners that have a tax address less than 20km away from the installations.

Given the short timeframe between when the auction was announced and when it will take place, the 300MW of capacity reserved for these installations seems sufficient, said Rafael Barrera, director at Spain’s National Association of Photovoltaic Energy Producers (ANPIER), adding that tweaks could be made in future auctions to further support small-scale PV deployment.

“While the reserve of the auction for photovoltaic installations of local distributed generation is undoubtedly a good step in the right direction, we believe that it should be expanded in the next calls to a minimum of 25% of the capacity to auction,” Barrera said. ANPIER also proposes extending the distance of the tax address from the partners behind such projects from 20km to 100km so that the whole district or region where facilities are located is included.

The upcoming auction forms part of efforts by Spain’s government to add a further 60GW of renewables capacity by 2030. A new auction mechanism announced last year aims to support approximately 19.4GW of renewables, including 10GW of PV, by 2025.

Last year, Spain deployed around 2.6GW of additional PV, most of which was from projects backed by power purchase agreements, taking its total installed capacity to 13.2GW. According to new data from think tank Ember, the country generated 16% of its electricity in June and July 2021 from solar.

Spain is also aiming to reach 20GW of installed energy storage capacity by 2030 and 30GW by 2050 as part of a new strategy unveiled in February that includes policies to remove administrative barriers to facilitate new projects.

Despite being permitted in the auction earlier this year, energy storage bids didn’t feature, potentially due to the lack of a dedicated remuneration scheme as well as a short timeframe for participants to submit bids.

After the publication of the storage strategy in February 2021, the sector was expecting a mechanism to incentivise the installation of battery storage associated with renewables, said Lauritano, adding: “This could have been easily achieved with an additional reserved capacity threshold for renewable + storage. However, we will probably have to wait for a different mechanism for storage colocation or, possibly, for the next edition of the renewable auction.”

Read Next

September 17, 2021
US utility company Dominion Energy Virginia has proposed 15 new energy projects totalling 1GW of power for the state, which Dominion Energy claimed was the largest group of projects to be submitted to the Virginia State Corporation Commission (SCC)
PV Tech Premium
September 16, 2021
Spencer Jansen, head of new technology solutions at developers Hive Energy and Ethical Power, assesses how the introduction of large-format solar modules has had repercussions throughout the solar design and procurement process.
PV Tech Premium
September 15, 2021
Record-breaking power prices across Europe have turned the spotlight on the role fossil fuel plants play in generating electricity and how the transition to renewables-plus-storage could lower consumer bills.
September 14, 2021
The Senate of Illinois has passed legislation that will commit the US state to reaching 50% renewables by 2040 and 100% carbon-free electricity by 2045.
September 13, 2021
The Indian state of Tamil Nadu is planning to develop 4GW of additional solar projects as well as new battery energy storage systems, according to local media.
September 13, 2021
The Australian Renewable Energy Agency (ARENA) will support projects that further lower the cost of renewable generation as part of a new investment strategy aimed at underpinning the transition to net zero emissions.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
BRISTOL, UK
Solar Media Events
December 1, 2021