Doubts continue to be over need of Spain's new renewables auction system

Nov 26, 2020 04:17 PM ET
  • Concerns have actually been raised about the requirement for Spain to turn out a new renewables auction mechanism to increase PV installment prices and fulfill its 2030 green power targets.
Doubts continue to be over need of Spain's new renewables auction system
Image: X-Elio

While acknowledging the significant opportunity that the Spanish PV market offers, some panellists speaking at the Large Scale Solar Europe Virtual Summit event this week prompted care regarding the effectiveness of the brand-new auction system.

Spain's Council of Ministers authorized a royal mandate earlier this month for the pay-as-bid auctions that will certainly permit hybridisation in between innovations and be compatible with power storage, with at least 1GW of solar PV capability set to be set up for auction prior to completion of this year. It is hoped the brand-new auctions will certainly motivate investment and also aid the country reach 60GW of renewables ability by 2030.

" We see the auction as a fabricated disturbance on market prices," said José Antonio Urquizu, founding companion of Spanish investment company Everwood Capital. "We see today that the market is attractive sufficient to attract resources and also we see that the projects are being built as well as are being developed on a vendor basis and are being funded likewise on a seller basis with no auctions in position."

Urquizu claimed the government is doing a "lot of favorable points", such as organising governing task, however believes much more sources should be committed to allowing if the country is to accomplish its green energy targets. "We think that the primary difficulty now is the rate at which the allowing process is advancing as well as the clog in the administration."

When revealing the brand-new auction version, Spain's government said it replies to the need to supply a secure framework that draws in investment and also encourages economic activity. A a sign schedule anticipates a total of around 19.4 GW of renewables to be assigned through auctions between now and also 2025, with at the very least 10GW of that ability to be solar PV.

Fernando de Juan Astray, head of origination and long term products at Axpo Iberia, stated there are worries that the auction system sends the incorrect signals to the marketplace. With Spain currently attaining its installment targets through merchant-based projects, he claimed: "These auctions are not actually required."

With Spain's last renewables auction taking place in 2017, a much more hopeful tone was taken throughout the panel discussion by Jaime Vázquez, supervisor of regulation at PV project designer X-Elio, that stated it is required to differentiate between both various systems.

"There are a lot of similarities, particularly on the turning points, yet the crucial distinction is obviously on the price. The last auction was a very challenging system ahead to a rate that everyone shared, so it was not truly competitive; these auctions on the other side are competitive on rate." Vázquez included that with the auctions based upon rate, it resembles having a power acquisition contract discussed with the federal government.

Having unveiled the first timetable this month, Spain is set to update its auctioning calendar each year to make certain the nation is on the path to attaining its 2030 environment targets, that includes the installment of 37GW of solar PV.

Ana Barillas, principal at Aurora Energy Research, claimed that while the auction system will certainly help in providing some stability to Spain's solar growth pipeline, the risk is that "all of the focus turns into the auctions which there's not enough left for merchant growth to mitigate some of the risk".

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