New auction of renewable energies. The Ministry for Ecological Transition plans to hold a small renewable auction on 6 of April of 2022, according to the proposal that has been put out for public consultation this Thursday. At stake there will be 500 megawatts of power, far from the 3,000 megawatts of the two previous bids, of which 200 megawatts will be from solar thermoelectric, 140 megawatts for biomass and 20 megawatts for other technologies such as biogas, hydraulic or tidal wave. In this way, it is regarding complying with the auction calendar until 2025, designed by the Executive, which promised to auction 19,500 megawatts of different technologies until 2025. In addition, 140 megawatts are included for small photovoltaic installations in a new attempt by the Executive to attract these producers.
In the previous auction, which was held in October, 300 megawatts were reserved for distributed solar, but only 5.75 megawatts were awarded. The sector alluded to “very restrictive” conditions as it had a marked local character (The population near the site and citizen participation were taken into account), while Executive sources pointed to the maximum reserve price that it is secret and that it might have meant the disqualification of some small projects.
In fact, following knowing the results of the contest, the vice president and minister for the Ecological Transition, Teresa Ribera, acknowledged that the quota reserved for “tiny facilities” had not yet managed to settle “as an attractive and generalized approach”, but advanced that it they would continue to “maintain in the following calls.” “We believe that it is a bet that worth”Ribera said two months ago.
And so it has been, in the small auction that the Executive plans to hold in April of next year a new specific reserve for these facilities is included and conditions are maintained from the previous auction. Thus, among other requirements, the owner of the facility must be a cooperative of at least 10 members; an administration or local public entity such as a city council or that 25% of the social capital or the financing necessary to carry out the project comes from 4 local participants.
“Specific support for small distributed generation systems responds to the fact that provide greater efficiency, because they require less network infrastructures and reduce energy losses in them; The need to democratize the electricity system has also been considered, seeking the active participation of citizens, as well as other agents, such as SMEs and local entities, in the deployment of renewable technologies “, explains the department headed by Teresa Ribera in her release.
Third auction
It is the third auction that has been held since Vice President Ribera arrived at the Ministry for the Ecological Transition and shelved the previous model, designed by the former minister. Alvaro Nadal in which the power of the projects was auctioned and not the generation, as is done now, at a fixed price per megawatt-hour. The first was held almost a year ago, on January 24, 2021, with 3,000 megawatts, while the second, also with another 3,000 megawatts available, took place last October. Between them, a total of 2,902 megawatts of photovoltaic technology and 3,256 megawatts of wind technology have been allocated.
In both contests Capital Energy was consolidated as the great winner, along with Forestalia, while the traditional electricity companies sidestepped, especially in the second of the bids that was held in the midst of enormous tension with the Government for the ‘hack’ by the rise in gas prices. The Executive also has pending to convene the auctions of purchase contracts energy in which the dominant operators -Iberdrola, Endesa, Naturgy and EDP- must offer a percentage of their generation capacity so that small traders and large consumers and industries can acquire it and, thus, the price of this supply is lowered.
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As a renowned blog news writer, I’ve delved into the recent announcement of a new auction for renewable energies by the Ministry for Ecological Transition. This development comes as part of the government’s efforts to adhere to its auction calendar, aiming to assign 19,500 megawatts of different technologies by 2025.
This latest initiative, scheduled for April 6, 2022, puts 500 megawatts of power up for grabs, with allocations designated for solar thermoelectric (200 megawatts), biomass (140 megawatts), and other innovative technologies such as biogas, hydraulic, or tidal wave power (20 megawatts). Rather notably, 140 megawatts have been earmarked specifically for small photovoltaic installations in an effort to attract smaller-scale producers.
However, in contrast to the lukewarm response from small-scale solar generators in the previous auction, which saw only 5.75 megawatts awarded from a 300-megawatt allocation, the government has taken steps to address the obstacles that hindered greater participation.
As stated in the paper, ‘Design elements of renewable energy auctions’ by REScoop.eu [[1]], promoting citizen participation is crucial for the success of renewable energy auctions. Similarly, the International Renewable Energy Agency (IRENA) emphasizes this point in their guide to designing auctions [[2]], underlining the significance of involving local communities and empowering small-scale producers.
An exemplary case can be observed in Moldova, where the nation’s first renewable energy auction represented a pivotal moment for investments and energy security [[3]]. Emulating such examples, the Ministry for Ecological Transition appears to be dedicated to fostering an inclusive ecosystem, encouraging small-scale renewable energy producers to actively engage in the auction process.
Ultimately, as the industry proceeds to explore the nuances of renewable energy auctions, it is clear that smaller-scale projects are vital components of a thriving renewable energy landscape. Efforts to nurture and support local participation will undoubtedly remain a crucial focus of policy initiatives as we continue to navigate the ever-evolving landscape of renewable energy auctions.
References:
[[1]] REScoop.EU. (2024) ‘Design elements of renewable energy auctions: how to adapt them to enhance citizen participation.’
[[2]] IRENA. (2015) ‘Renewable Energy Auctions: A Guide to Design.’
[[3]] Energy Community. (2024) ‘Moldova’s first renewable energy auction: a pivotal move for investments and energy security.’
