Portugal: ‘Unsubsidized’ approved large-scale PV projects top 756 MW, first private solar PPA signed

The Portuguese government has approved another six “unbsubsidized” large-scale solar projects with a combined capacity of 229 MW, to be located in the southern regions of Alentejo and the Algarve.

Four of the projects with a total capacity of 132 MW have been proposed by Malta-based independent asset management firm, Hyperion Energy Investment Fund SICAV P.L.C.

Two of the facilities will be located in the municipalities of Ferreira do Alentejo and Lagos, respectively, while another two plants are planned to be installed in Moura. The largest plant will have a capacity of 49 MW and will be built by Goldiport Solar in Lagos. A sixth, 48 MW solar power plant, proposed by Goldnalco, will be deployed in Viçosa, Alcoutim.

The projects’ aggregate investment, the government specified, will amount to around €206 million. More details on the projects were not provided.

Overall, the Portuguese Directorate General for Energy and Geology (DGEG) has approved unsubsidized solar projects with a combined capacity of 756 MW to date. At the end of November, capacity stood at 521 MW. At the time, the DGEG said it was reviewing another 91 PV projects totaling 2.2 GW for approval.

As it is not possible to host all of the approved and planned PV capacity, the government stressed in November, a drawing mechanism for the project selection has been designed, and included in the budget law for 2018 (Orçamento de Estado para 2018). Further information on this mechanism, however, was not disclosed.

The reason for the creation of the drawing principle is to find, according to the government, space in Portugal’s limited grid for more, new generation capacity.

The government has indicated the available capacity in its 10-year plan to improve the power network (Plano Decenal Indicativo de Desenvolvimento e Investimento da Rede Nacional de Transporte), which is currently under public consultation.

The government intends that these kind of projects, including other renewable energy technologies, will be developed under a remuneration scheme, dubbed Plano Nacional Solar,  which would be “based on market prices, and without subsidies paid by consumers, through the national electric system.”

This means that future solar plants will have to sell power to the spot market, an option that is considered as unviable by the local energy sector, which has urged the government to introduce an auction mechanism, or in the private PPA market.

Meanwhile, one solar project proposed by Hyperion, a 28.8 MW solar plant located in Evora, has already secured a 10-year PPA with local power distributor Axpo Ibéria, a unit of Switzerland-based Axpo Group. The project, local financial newspaper Express reports, is being financed by the Portuguese Investment Bank (BIP).

Axpo Ibéria confirmed on its twitter account the signing of the PPA. “The group’s extensive experience in the private PPA market in Europe puts us in a privileged position when implementing other similar initiatives in the Iberian Peninsula in the coming years,” said Axpo Iberia’s CEO Ignacio Soneira.

Just as in Spain, where the first solar private PPA was signed in mid-December, the private PPA market is becoming one of the best options for developers of large-scale solar projects on the Iberian peninsula, as the existing design of the spot market rarely guarantees the profitablity of big solar power infrastructures.