After a government-led renewable energy tender stalled, the major industry is planning its own competition aimed at electro-intensive users. The Major Energy Consumption Companies Association (AEGE), which designed the process with the Iberian electricity market operator (OMIE), intends to run the tender in the first quarter of this year, according to a recent statement by its chief executive, Pedro González, during a Congress of Deputies forum.
The effort brings together large users such as ArcelorMittal and Zinc Asturiana. Electricity costs for these groups can represent a substantial portion of total expenses; in some cases, the cost burden covers nearly half of operating expenditures. The competition has been in progress for months, originally scheduled for September, but weather disruptions and geopolitical uncertainties delayed it. Roughly 80% of these electro-intensive companies purchase energy directly from the market, the so-called pool, and the currently elevated prices have multiplied pre-pandemic figures. The aim is to establish power purchase agreements that lock in a fixed price, offering a lower rate than current market levels and providing a degree of price certainty for more than a decade. A notable attraction is the potential involvement of the Spanish Reserve Fund for Guarantees of Electro-intensive Institutions (FERGEY), which would provide additional assurance for participating buyers.
Industry insiders note that a large round of bids could meaningfully shift the landscape compared with government-organized auctions, and there would be no fixed reserve price as part of the process. This design is intended to give buyers and sellers a clearer sense of future price levels. A senior OMIE technology and innovation executive commented that many bids in a government auction failed to align with reserve price expectations, and that the absence of a reserve price in this plan invites more competitive offers and clearer strategic positioning from buyers about how far they can push prices. The expectation is that there will be ample offers, with buyers calibrating their bids to what is economically viable for their operations.
The core mechanism mirrors government proposals in spirit: energy prices are adjusted to incentivize developers to commit specific quantities of energy at prices consumers are prepared to pay. Bids flow in until the market balancing aligns, and the process is designed to preserve a steady flow of energy while enabling price transparency for participants. A key difference from public renewable auctions is that producers would receive the proposed payment amount, while consumers would pay the average price determined by the auction, provided their bid falls short of the higher end of the spectrum.
Another important distinction involves how the renewable portfolio is managed. Instead of requiring all approved capacity to enter an auction, producers could opt to leave a portion of their output available for sale on the market. For instance, a 50-megawatt wind farm might auction 45 megawatts and sell the remaining 5 megawatts on the open market. Industry sources suggest this could represent 20–30% of a project, though specifics remain to be clarified as the plan evolves.
Experts emphasize that these auctions offer predictability and stability by creating binding energy supply commitments from producers and clear payment obligations from consumers. They also note that bilateral contracts already signed could be exempt if certain take-back mechanisms are maintained. This approach aims to balance continuity with market flexibility, potentially reducing regulatory shocks and providing a clearer path for long-term planning in Spain’s electro-intensive sector.