Spain’s renewables auction: Do troubled waters benefit the fishermen?

Capital Energy has once again prevailed in the second renewable energy auction held under Spain’s new methodology. The company was awarded 1.548 GW (1.540 GW of wind and 8 MW of solar) – all of the capacity it was competing for – according to preliminary results that the company shared with pv magazine.

“Being the winner again in this second auction of renewables organized by the government in 2021 is a very relevant milestone that reveals the strengths of capital energy,” they explain, adding that “the credibility of our business, with more than 20 years of experience in renewable energies, and the high efficiency which has allowed it to present highly competitive offers without sacrificing the profitability required by investors, or the flexibility granted by having a large portfolio and deciding on risk coverage.”

Capital Energy’s portfolio now exceeds 35 GW, of which more than 8.7 GW has been granted a grid access permit. In Spain’s previous auction, the company was the biggest winner with 620 MW, followed by Iberdrola with 243 MW, Naturgy with 215 MW, Acciona with 106 MW and Endesa with 50 MW.

Capital’s averages award price in this auction was €28.6/MWh, more than four euros above the average price reached in the previous auction held in January of this year.

The second auction awarded a total of 3.12 GW, 95% of the 3.3 GW on offer. 2.258 GW went to wind projects, and 866 MW to solar, at an average price of €30.56/MWh. The auction marks the first time in history where solar did not cover all of the offered capacity.

Other winners are Forestalia, which acquired 562 MW of wind and 215 MW of PV, or more than 25% of the auctioned capacity. Repsol won 138 MW of wind power. Naturgy, one of several large companies not to participate in the auction, would have been awarded 221 MW.

Sitting one out

Teresa Ribera, Spain’s Minister for the Ecological Transition, gave assurances on Monday that Iberdrola would stop revising upwards its medium- and long-term industrial electricity supply contracts, a potential peace offering in the fight between government and some electricity suppliers over measures introduced to quell a sudden rise in electricity prices.

As was rumored, however, Iberdrola, together with Enel Green Power subsidiary Endesa, Acciona, and Greenalia, did not participate in today’s auction. Of the 3,300 MW auctioned, 600 MW will have an accelerated deadline requiring them to be in operation by September 30^th, 2022 – to help lower electricity prices as soon as possible. Iberdrola blamed regulatory uncertainty for its non-participation in the auction, despite the fact that the auction guarantees a fixed price for ten years.

This was also the first auction that allowed for citizen participation, with a reserve of 300 MW for distributed systems, aimed primarily at PV installations smaller than 5 MW. Zaragoza City Council, which submitted a bid to generate and sell power through Forestalia subsidiary Levitec, did not win, and so the 5 MW project it bid for will not be completed.