Earlier this week the Spanish authorities revealed the outcomes of the nation’s newest renewable public sale, held on 22 November, which awarded 45.5MW of wind energy out of a complete of three.3GW of photo voltaic and wind accessible.
The dearth of a single megawatt of photo voltaic awarded within the fourth spherical – held by the Ministry of Ecological Transition (MITECO) – might be contrasted with earlier auctions that allotted greater than 2GW in January 2021 and 866MW in October 2021. Nonetheless, the end result shouldn’t be seen as a trigger for alarm, in keeping with José Donoso, head of the nation’s PV affiliation UNEF.
“I see this as a constructive, because it exhibits the trade is in a powerful and aggressive place and prefers to be out there.”
Options equivalent to energy buy agreements or going to the spot market have been extra engaging with present excessive costs and builders searching for different methods to construct new photo voltaic PV vegetation, because the urge for food to put money into renewable power remains to be going robust in Spain, in keeping with Donoso.
“Greater than being concerned [about the auction results], this exhibits a maturity and stability of the market.”
The elevated urge for food for PV initiatives to go service provider given the excessive wholesale costs throughout Europe is considered one of a number of components that may clarify the dearth of photo voltaic awarded within the fourth spherical, in keeping with Alejandro Zerain and Alexandre Danthine, senior associates at consultancy Aurora Vitality Analysis.
“To some extent the low allocation within the newest renewable public sale has additionally been the results of greater price of capital in a rising rate of interest setting, resulting in presents above the utmost reserve value (€45/MWh) set by MITECO,” added Zerain and Danthine.
One more reason for the dearth of photo voltaic capability awarded is because of provide chain disruptions which can be affecting builders in Spain, with bottlenecks and longer order cycle occasions for buying elements, say Zerain and Danthine. “There may be reluctancy in getting into contracts for distinction (CfD) agreements with a selected industrial operation date (photo voltaic initiatives need to be accessible by November 2024), on the danger of going through penalties in case of delays or if challenge milestones usually are not met.”
The Spanish authorities revealed a decree final yr that outlined its Built-in Nationwide Vitality and Local weather Plan 2021-2030 (PNIEC), which estimated the addition of round 60GW of renewable capability this decade, with one of many measures to speed up installations being annual auctions.
“Of the greater than 4.5GW of photo voltaic capability put in in 2018 we’re about to achieve 16GW by the tip of the yr. Contemplating the goal from PNIEC to achieve nearly 40GW [of solar] by 2030, a goal that may most probably be handed,” says Rafael Barrera Morcillo, director at Spain’s Nationwide Affiliation of Photovoltaic Vitality Producers (ANPIER).
One other three auctions stay to be held till 2025, with the amount that remained vacant in earlier auctions – the totality of the 1.8GW for photo voltaic PV within the fourth spherical – considered and which could possibly be added to the next auctions.
To this point MITECO has not introduced when the subsequent public sale will probably be held and if there will probably be any modifications with a purpose to entice extra curiosity from builders to bid, however the mechanisms stay an essential software within the brief and medium-term to fulfill the PNIEC targets, say Zerain and Danthine.
“Due to this fact, if nonetheless relevant, the milestones and guidelines for the subsequent CfD auctions ought to accommodate for the prevailing provide chain disruptions builders are going through, and the reserve value ought to mirror the present enhance in financing prices,” add Zerain and Danthine.