Spain will carry out an auction this October for 3.3GW of solar PV and wind capacity as the country’s government aims to speed up renewables deployment in the face of soaring electricity bills.
The energy and environment ministry revealed the auction structure will see 1.5GW of the capacity reserved for onshore wind and 700MW for solar PV.
In addition, 600MW will be reserved for PV and wind plants in advanced stages that will have to be completed within eight months of being awarded so that they are online before the peak of summer 2022.
The addition of renewables resulting from this auction “will directly reduce the price of electricity” by displacing energy produced from more expensive and polluting plants, said the energy and environment ministry, which is forecasting high levels of interest.
Recent days have seen Spain hit by record-high electricity prices, peaking at an average of €117.29/MWh (US$138/MWh) last Friday, which was almost three times higher than the same day last year.
The October auction is the second under a new mechanism announced last year that aims to support Spain’s efforts to add an additional 60GW of renewables by 2030. The mechanism foresees a total of around 19.4GW of renewables to be assigned by 2025, with at least 10GW of that being solar PV.
The first auction, for 3GW of capacity, took place in January and saw solar PV bidders secure a total of 2,036MW with average winning solar bids of €0.0244/kWh (US$0.0295). Local developer X-Elio Energy was a major winner, picking up 315MW of PV capacity, while Iberdrola subsidiary Iberenova Promociones and utility Naturgy also won notable amounts.
In a move to support the construction of distributed PV systems, October’s auction will also reserve 300MW of capacity for solar installations less than or equal to 5MW as the government looks to increase the role of citizens, businesses and local entities in renewables deployment. This has been welcomed by Spanish PV association UNEF, which has been calling for such an inclusion for years.
The trade body recently suggested that new government grants to support self-consumption solar projects in Spain could result in 3.5GW of additional capacity.
Rafael Benjumea, president at UNEF, said the latest auction brings certainty to the solar sector and advances its role in supporting the country to meet its climate objectives and generate employment. However, UNEF said the success of the next auction is conditional on whether barriers related to project processing are removed.
Spain added 2.8GWp of ground-mount solar last year, its second-highest level, as merchant solar and projects backed by power purchase agreements drove deployment, according to figures published by UNEF last month. It is expected that this year will follow a similar trend as projects awarded from January’s auction are still being developed.