Spain's auction 'a step in the right instructions' as sector asks for more power storage support

Jan 29, 2021 05:39 PM ET
  • The outcomes of Spain's public auction today for 3GW of renewables capability have actually been widely welcomed by the nation's solar field, yet calls have actually been made to fine-tune future public auctions to sustain smaller-scale projects in addition to motivate the engagement of proposals with power storage.
Spain's auction 'a step in the right instructions' as sector asks for more power storage support
Image: Solaria

The greatly oversubscribed public auction saw PV bidders grab 2,036 MW of ability, while 998MW was granted for wind projects.

The capability acquired by PV prospective buyers was separated right into 66 whole lots and also protected by 27 companies, with an average lot capability of 30MW, revealing the competitiveness in the nation's solar sector, according to trade organization UNEF.

Rafael Benjumea, president of UNEF, stated the outcomes reveal the "enormous interest" in developing PV projects in Spain, including: "The success of the picked public auction version has actually confirmed to be an effective formula both for the quantity of projects and for the price that has actually been recorded for customers." Regardless of these positives, UNEF is requiring a future auction to have 20% of alloted ability particularly for setups smaller than 10MW along with another auction for projects with storage space.

The typical winning PV quote was EUR0.0244/ kWh (US$ 0.0295), representing a discount of 28% on in 2014's electrical power market price in Spain as well as a 49% decrease on prices in 2019, while the lowest bid was EUR0.0148/ kWh as well as made by Ignis, which protected 125MW of capacity.

Other champions included X-Elio, Iberdrola, Naturgy as well as Solaria, which all now have six months to recognize the locations of projects they will establish as well as 12 months to offer evidence of preparing permission. They are required to finish the growths by March 2023.

The renewables public auction was Spain's initial since 2017 and also is part of a brand-new government technique to aid the nation reach 39GW of set up solar PV by 2030. Ana Barillas, head of Iberia at Aurora Energy Research, stated the current public auction system is a "great deal simpler to understand" for individuals compared to the previous one: "From a quality and an ease-of-participation viewpoint ... I assume it's absolutely an action in the ideal direction."

According to Aurora, renewables coming online with the brand-new auction plan will likely reduce the surplus in Spain's power acquisition contract (PPA) market. By 2030, the consultancy expects the public auctions to get rid of more than 19GW of renewables capacity from the supply side of the PPA market.

" One of the effects of the auction has is that it takes away from the market a huge portion of ability that would certainly have needed PPAs in the past and no more does, and so the need and also supply for PPAs after that becomes a lot closer to one another," Barillas claimed. "In a well balanced market where customers don't have as much power, then you would certainly anticipate PPAs to be closer to what we would consider a reasonable worth of a PPA agreement."

The Spanish federal government's calendar anticipates a minimum of 10GW of PV auctioned by 2025, with one more auction arranged to take place later this year. "There's talks about whether the landmarks are also hostile and whether you can actually get these projects constructed in time," said Barillas, who additionally asked for changes in the regulatory structure to ensure power storage space is included.

While quotes were allowed to consist of storage, the modern technology didn't function. The policies defined that dispatchable solar as well as wind tolls would certainly have a 25% market exposure, but winning storage space plants would certainly be limited to charging from the sustainable project they are paired with, leaving out the possibility of charging energy from the grid.

This limitation, along with the requirement that 2MWh of storage would certainly have to be installed for each megawatt of solar and wind, has "elevated a lot of objection among the ranks of European power storage project developers", according to Tanguy Poirot, power storage expert at working as a consultant Clean Horizon.

" These two restrictions incorporated with the really brief timeline to send proposals and also the lack of a specialized reimbursement scheme makes it unsurprising that no storage space was granted," stated Poirot. "If the real objective of the Spanish government was to make a significative step towards its 2.5 GW battery storage space target, I would certainly claim the auction is fairly a fiasco."

The analyst stated it is likely that the auction rules will certainly be modified by the end of the year to enable a much more competitive involvement of energy storage space, adding: "In any kind of instance, Clean Horizon is encouraged this is just a positive indicator of a government will certainly to promote storage: other opportunities for storage space will emerge in Spain!"

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