At the beginning of the last legislative assembly, the Government drafted a bill. new type of auctions to encourage deployment renewable. The administration has promised to launch ‘macro tenders’ to guarantee fees for new green plants, setting minimum volumes each year and with a planned timetable of up to 2025. First the energy crisis with price records and the political pause due to the election The subsequent advance meant that this timetable was not met and no auctions were held last year.
Business associations in the renewable sector are pressing the Government to reactivate the call for tenders as soon as possible and request that the next tender be awarded now. In the first quarter of 2024 He said a second auction will be held next year. The Ministry of Ecological Transition, which is responsible for organizing these processes, refrains from confirming the date of the next tenders and They are conditioned to have “more visibility” about the development of prices in electricity markets and the progress in the administrative processing of hundreds of renewable power plants.
Renewables are now seeking auction, but they are also asking the Government to make changes to their designs to make them more attractive and prevent the next round of bids from being canceled as was the case when the last call was made in November 2022. energy crisis. A tender was later called for 3,300 megawatts (MW) of new wind and photovoltaic power plants, but there was widespread concern from green energy companies and only 45.5 MW was tendered.
All companies except two successful bidders (Elawan and Forestalia) submitted bids above the maximum allowed price. The amount of this cap is confidential, but tender results indicate that it is around 46 euros per megawatt hour (MWh). The rest of the participants were excluded from the tender by offering prices above 50 euros. Wind and photovoltaic employers’ associations are demanding that this maximum price be raised in the next tender in order to be more in line with the real prices of the electricity market.
Industry claims
Wind Cooperation (AEE) It demands that the ceiling price be made public before the auction takes place and that it be raised to bring it more in line with the reality of the wholesale market, as well as adjusted in line with forecasts foreseen by virtual long-term power sales agreements (PPAs) for the next ten years, currently at 58 euros per MWh Prices around are expected. “Now there is a problem with the design of the auction. Under these conditions, it is difficult to find financing for projects, as in the energy market,” states AEE. “Participation needs to be encouraged with better conditions.”
Spanish Photovoltaic Association (UNEF)The main employers’ association of the solar energy industry has officially sent a change proposal to the Ministry of Ecological Transition for the holding of the next tenders. In addition to increasing the maximum price at which companies can bid, the association is also demanding an extension of the 12-year fixed-price energy supply contracts for wind and photovoltaics. increase to 15 or 20 yearsAs confirmed by sources from the organization, from the Prensa Ibérica group to El Periódico de España.
UNEF also claimed include antitrust clauses tender principles, so that a company can be awarded a maximum of 30% of the tendered power in each part of the tender, thus avoiding some of the consequences of previous tenders where a single company monopolized the award and subsequently some of the winners. projects were not executed or resold; Require that candidate green projects already have an approved environmental impact statement (DIA), preventing fictitious and speculative proposals that are not ultimately developed; To reserve 20% of the power involved for small projects Power less than 10 MW; That part of the tendered power will be allocated to storage projects. Likewise, UNEF requests an update on the tender schedule and sizes to know the plans for the next five years.
The government is resisting
In 2020, the Government designed a new type of auction to encourage the deployment of renewable energy sources: companies offer a fixed price at which they will sell their green energy production into the electricity system for twelve years, as a way to guarantee a stable cost for consumers and adequate profitability for companies. The average tender price in the three renewable energy tenders was around 30 euros per MWh.
Following the disappointment in the last tender, the Government blamed the poor results on “the current situation of high electricity market prices, high inflation, rising interest rates and tensions in raw materials and equipment”. According to the manager, market volatility in the midst of the energy crisis and uncertainty about the future course of prices is what ruined the last auction.a, not the judicial system. This is why, as El Periódico de España explains, the Government has rejected in principle any changes to the design of the next renewable energy tenders and will not change it in future appointments.
In fact, the Ministry of Ecological Transition continues to defend the proper functioning of the current system and in the extreme volatility scenario, it is emphasized that what prevents the delivery of new reasonable power at a rapidly increasing level is that keeping the maximum price formula at a reasonable level means that Spanish consumers will have to pay this price. High prices for twelve years due to the current situation in the energy sector.
The government has already issued four tenders in recent years (one in 2020, two in 2021 and one in 2022). Not counting the tender that was almost canceled a little over a year ago, previous bids had awarded 6,380 MW for new green power plants (3,302 MW of wind, 2,933 MW of photovoltaics and 146 MW of biomass) that would transfer their production to the electricity system. At a stable price and cheaper than wholesale market levels.