Spain considering solar in 3GW renewables auction but awaits formed government

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A new option is being considered which is most likely to focus on wind and solar PV, with intentions to procure around 3GW capacity. Credit: ABB

Spain is considering a 3GW renewable energy auction including solar PV, however, the policy is uncertain while the country awaits the formation of a government.

The Institute for the Diversification and Saving of Energy (IDAE) has announced the tender plans, which were then confirmed by the general secretary of energy.

The Energy Ministry had organised a renewables bidding option in January, which only applied to wind energy and biomass, Spanish solar association (UNEF) general director José Donoso told PV Tech. However, a new option is being considered which is most likely to focus on wind and solar PV, with intentions to procure around 3GW capacity. Importantly, the intention is to have no technological discrimination.

Donoso said: “We must take this information as very provisional because we really don’t have a government at this moment.”

After a general election in 2015, Spain failed to form a government after no party gained a majority. Meanwhile, another election was held on 26 June this year, which also brought about no majority and further failures to form a coalition government.

Donoso said the most probable scenario going forward will be the continuation of the conservative government, but it is not clear who will become minister of energy. If the former minister is reappointed then the auction will go ahead, he added.

Donoso said the news was a surprise to UNEF and was welcomed. However, the association does not agree with the organising of the auction, which is run on similar grounds to the January wind and biomass bidding, where no subsidies were offered, and players did not bid on a kWh tariff basis. Instead it will based on an “investment cost”, which Donoso said “is not in relation to the real costs”. He added that without a subsidy the auction process may even be an “inconvenience”.

A second concern is that a regulation upcoming in 2019 means the government can change the variables of the retribution model for the solar developers. This means developers will not be able to forecast cash flows and may struggle to get financing due to the uncertainty around 2019.

Referring to both concerns, Donoso also said: “We consider this does not give us guarantee that at the end of the day all the projects that are included in the auction will be constructed, [which] is important for Spain if we want to achieve the target of the 20% renewables by 2020.”

While the auction news may be seen as positive for Spain, legal cases have continued to rage over policies around its subsidies for solar over the last few years. For example, in June, Spain’s Supreme Court ruled against appeals claiming that the Popular Party’s cutbacks on the feed-in-tariff (FiTs) for solar in 2013 and 2014 were retroactive.

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