Thursday, December 2

The Government returns to auction renewable capacity amid the tension with the large electricity companies

The Government is once again auctioning renewable capacity amid the tension with the large electricity companies.

In the middle of the tug of war between the large electricity companies and the Government, this Tuesday a new auction of renewable energies in Spain that will serve to measure the tension that exists between the two. Endesa and Naturgy yes they will be present in the contest which is putting out to tender 3,300 megawatts of wind and solar power; While Iberdrola, Acciona or Repsol They prefer not to reveal their cards and maintain the suspense, less than 24 hours before the auction. Yes, the ‘winner’ of the previous edition, the young woman, will participate in the bid Capital Energy.

The Government approved in September a controversial decree that cuts by 2,600 million the “supervening benefits” of the power plants nuclear, hydroelectric and renewable due to the rise in natural gas. The change represented a revolution in the sector that threatened that it could cause the “cessation of activity” of nuclear facilities and put the renewable investment proposed by the PNIEC at risk. After a few weeks of strong pressure On the part of the companies, which threatened to change the contracts with their clients and even complained about the changes in Brussels, the Executive has promised to alleviate the ‘hack’; but the sector still does not have them all with it.

However, sources from Endesa, a company that openly acknowledges its presence, specify that the auction has nothing to do with the decree since guarantees a fixed price for 10 years and, therefore, the participation of the companies in the bid is independent of this rule. “Another thing is that they add up the numbers or not,” add these sources. That is another issue because the last auction, held on January 26, awarded 3,034 MW of wind and photovoltaic power to some 25 euros on average per megawatt-hour, a much lower price those that the wholesale electricity market usually registered (around 40 or 50 euros per megawatt-hour) and that has nothing to do with current prices that exceed 200 euros on average.

The winner of the last auction was Capital Energy, while companies that promised ways like Repsol were left out. The oil company considered that the bid prices were far from the “profitability requirements” required by the company, according to market sources at the time. It also did not take any megawatts Forestalia, the great winner in the previous auctions, still with the system designed by Minister Álvaro Nadal in which all the winners were paid the marginal price (now the ‘pay as bid’ system governs, that is, the price that asks each investor). Naturgy, Iberdrola, Endesa and EDP they were made with 235, 243, 50 and 148 megawatts, respectively.

Fast execution

The Vice President and Minister for the Ecological Transition, Teresa Ribera, announced in August this new renewable contest includes accelerated lead times to lower electricity prices as soon as possible after the upward gas rally. Thus, the bid is structured in various quotas or power reserves, among which stands out 600 megawatts for wind or photovoltaic plants already in advanced processing status, which will have to be built within a period of eight months from the award of the regulated remuneration, so that they have an impact before the summer of 2022. The rest of the power will also have terms shorter than those of the first auction; specifically, with 20 months for photovoltaic technology and 32 months for wind power

Citizen participation

In addition, this tender provides for a reserve of 1,500 megawatts for onshore wind, another of 700 megawatts for photovoltaic and a neutral reserve of 200 megawatts. But the great novelty is the first time entry of the citizen participation with the reserve of 300 megawatts for distributed solar systems aimed at small photovoltaic installations (less than or equal to 5 megawatts), with a strong local character, and elements such as the population near the site or citizen participation in the facilities will be taken into account in the award.

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