Spanish power provider Holaluz has committed to sell power produced by a 46 MW solar plant in Orique, southern Portugal to its Spanish clients through a representation agreement.
The company said the solar park, whose construction was started in July 2017, was commissioned last week by developers the Welink, based in the U.K., and Chinese engineering services provider China Triumph International Engineering (CTIEC). The two companies, which aim to instal around 1 GW of solar plants in Spain and Portugal by 2020, had announced their first agreement for this and other projects in March 2017.
The total investment in the Orique project was around €40 million ($46 million), a sum provided by CTIEC.
Holaluz said the advantage of selling power produced in Portugal to clients in Spain is down to the fact power generators in Portugal are exempt from Spain’s electricity tax – the Impuesto sobre el Valor de la Energía Eléctrica, or IVPEE – of 7% on revenue from electricity production.
Another Iberian power provider, Axpo Ibéria – a unit of the Swiss Axpo Group – revealed in May construction had started on the 28.8 MW (DC) PV plant Portuguese developer Hyperion has planned near the town of Evora, in Portugal’s southern region of Alentejo. Axpo will buy power from the facility, whose largest shareholder is now Mirova – a unit of French financial group Natixis – through a 10-year PPA signed in January.
Although construction has started on several other “unsubsidized” solar parks in Portugal in recent months, and more than 700 MW of these grid-parity projects have been approved, the viability of many remains uncertain. Most of them face high land costs as Portugal has limited availability compared to Spain, and have to negotiate an allocation system which includes a draw element for the selection of projects, which does not provide absolute guarantees for developers.