Portugal floating solar auction closes with record negative price, awards 183MW

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A 220kWp floating solar pilot project from EDP at the Alto Rabagão dam in the north of Portugal. Image: EDP.

Portugal’s first floating solar auction closed with a world record-low price, with utilities EDP and Endesa among the winning bidders, the country’s environment ministry has announced.

According to provisional results of the auction held on Monday, 183MW of floating PV capacity was awarded, of which 103MW is backed by contracts for difference (CfDs) and 80MW by compensation paid to Portugal’s National Electric System (SEN).

EDP subsidiary EDP Renováveis posted the lowest bid of -€4.13/MWh (-US$4.51/MWh), securing a 15-year CfD for 70MW of floating solar it will install at the Alqueva dam in the south of the country.

The company said that alongside the contract-backed floating solar, the grid connection it secured through the auction will allow it to deploy an additional 14MW of solar and 70MW of wind, to be operational in 2025.

“This project is a clear example of value creation through hybridisation of renewable technologies and optimisation of grid connection,” EDP Renováveis said.

Spanish utility Endesa, through its Endesa Generación Portugal subsidiary, was awarded 42MW of floating solar, to be deployed at the Alto Rabagão dam. Endesa said it will invest around €115 million to construct the project, which is due to begin operations in 2026.

Portuguese renewables operator Finerge was awarded three lots at different dams, corresponding to a total of 38MW of floating solar capacity. Local media also reported that French developer Voltalia was awarded one lot. PV Tech has contacted the company for confirmation.

“The floating solar auction proved to be a success, with Portugal breaking a new record by setting the lowest energy price in the world,” the environment ministry said in a statement.

After carrying out two previous solar auctions, in 2019 and 2020, which both closed with record-low prices, Portugal’s floating PV tender was due to allocate 262MW of capacity at seven dams across the country.

However, one of the lots – for 50MW to be installed at Castelo de Bode – only had one bidder. This bidder has five days to make an improved offer, after which there will be a calculation to determine if it is successful.

While winning bidders will secure 15-year contracts, they receive a concession to the water surfaces for 30 years, meaning they can continue producing electricity from the projects after the contracts end.

The results were welcomed by Portugal’s secretary of state for energy, João Galamba, who said in a tweet on Monday that the auction represents “an extraordinary result” for the country.

Having been sworn into office last week, Portugal’s new government is aiming to increase the share of renewables in electricity production in the country to 80% by 2026, four years earlier than previously planned.

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