Portugal picks calendar month, storage modality for 2020 solar auction

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
The auction's tentative date of late March 2020 places it right alongside Solar Media's Large Scale Solar Europe 2020 (Lisbon, 31 March-1 April 2020). Image credit: Michaela Loheit / Flickr

Portugal is already speeding up work to follow its record-breaking solar auction of 2019 with a fresh tender this year, with a tentative launch date now set towards the end of Q1 2020.

Recently contacted by PV Tech, the country’s Environment and Climate Action Ministry said it expects this year’s PV tender to get underway “by the end of March 2020”.

Asked about a potential separate storage tender – a move the government had discussed last year – a Ministry spokesperson said these technologies will be incorporated to the PV auction.

“A new bidding option shall be provided [under the solar tender] to promoters who wish to deploy a storage technology,” the spokesperson explained.

“These bidders will compete, in equal terms, with those choosing one of the previous bidding options (fixed tariff or payment to the system),” the spokesperson added.

This year's new solar tender became a talking point at a Portuguese parliament hearing this week, with Environment minister João Pedro Matos Fernandes facing MP questions on this front.

According to Jornal de Negócios, the top government official also floated March as a likely tender date as he addressed MPs and anticipated a total 700-800MW size for the auction.

Portugal’s solar tendering efforts come after last year’s 1.15GW industry-only auction sparked global headlines thanks to its ultra-low bids of €14.76/MWh (US$16.44/MWh).

Breaking the auction results to PV Tech in July, before they were formally published, Energy state secretary João Galamba described the low PV tariff as a “new world record”.

The list of winners, disclosed one week later, revealed Akuo – the winner of 370MW all in all under the first, fixed-tariff modality – had been behind the €14.76/MWh solar bid.

Iberdrola was, for its part, granted 149MW in PV auction contracts under a second modality, where developers were made to pay in return for grid access.

Small print of auction design sees developers pay price for joining Portugal’s PV push

Analysis by José Rojo, senior reporter, PV Tech

Having stolen the global solar spotlight in 2019 with its record-smashing tender, Portugal’s behind-the-scenes preparations for a fresh go this year means industry attention to the European republic is not likely to fade in the new decade.

The tender series is meant to fuel a surge in installed PV capacity from 572MW (2018) up to 1.6GW (2021) and 8.1GW-9.9GW (2030), helping Portugal catch up with the more mature solar markets across the European continent.

Official stats recorded a timid PV awakening last year. According to grid operator REN, PV’s contribution to Portugal’s domestic energy use remained modest in 2019 – 2.1% where wind scored 27% – but the industry was the fastest-growing power source, hitting the 1TWh-a-year mark.

For now, the country’s deft use of auction design to drive down prices for consumers has drawn policymaker praise, with some in Spain urging to emulate the approach. An altogether different question is whether the tender modalities will be equally beneficial to PV developers, however.

There is, for starters, debate around how first-modality winners such as Akuo can make money from 15-year PPAs that will pay at around €15-20 per MWh. Like PV peers accepting shorter, lower-priced private PPAs in Spain, Portuguese players will face questions over long-term project economics.

An even more intriguing twist lies in the second category, which saw Iberdrola and others agree to payments in return for the right to produce at market prices, also for 15 years. On social media, some incredulous observers have dubbed the move “reverse subsidies”.

Whether the concerns are warranted, the industry cannot seem to get enough of these auction modalities. The 10GW avalanche of bids Portugal had to process for the 2019 solar tender illustrates how eager PV players are to pay the price of helping deliver the country’s PV ambitions.

Storage’s addition to the 2020 PV tender will no doubt please those who, at Solar Media events, have warned of grid “imbalances” from the future roll-out of renewables. Whether an additional, storage-only tender is still in the cards remains unclear; the Ministry had not commented on that point by the time this article went to press.

The auction's tentative date of late March 2020 places it right alongside Solar Media's Large Scale Solar Europe 2020 (Lisbon, 31 March-1 April 2020), which will delve into Portugal's plans to drive a solar boom. 

Meanwhile, the prospects and challenges of solar's new era in Europe and beyond will also take centre stage at Solar Media's Solar Finance & Investment Europe (London, 5-6 February) 

Read Next

May 6, 2021
Independent power producer has Opdenergy has postponed an initial public offering (IPO) just days before its shares were due to start trading on the Spanish stock exchanges.
May 5, 2021
Europe’s solar industry has lauded the inclusion of a commitment to "re-ignite" Europe's solar manufacturing sector within the European Commission’s refreshed industrial strategy.
PV Tech Premium
May 3, 2021
Companies are purchasing solar, wind, and other forms of renewable energy more than ever before. The power purchase agreement (PPA) market in Europe has grown to a cumulative capacity of over 12GW, with a record 4GW signed in 2020. Corporate climate commitments are opening doors for investment in renewable energy, and continued price declines are convincing companies to sign new contracts. Is the European market ready to fulfil its potential? By Dr. Mercè Labordena, senior policy advisor at SolarPower Europe, and Milena Koot, communications advisor at SolarPower Europe
April 28, 2021
Renewable energy group BayWa r.e. has opened what it claims is its largest PV warehouse in Europe yet in a bid to expand its distribution network in the continent.
April 28, 2021
Spanish energy giant Iberdrola has partnered with oil and gas majors bp and Enagas on a feasibility study to develop a large-scale green hydrogen project in Valencia.
April 23, 2021
Spanish energy group Iberdrola is hoping to launch a solar-plus-hydrogen power project to decarbonise ceramic tile maker Porcelanosa’s production process.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
May 11, 2021
Upcoming Webinars
May 26, 2021
Session 1 - 7:00 AM (BST) | Session 2 - 5:00 PM (BST)
Solar Media Events
June 15, 2021
Solar Media Events
July 6, 2021