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Spain awards clean power capacity below market price in oversubscribed auction

Spain awards clean power capacity below market price in oversubscribed auction

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In the country’s first clean energy auction since 2017, home-grown power group Naturgy was picked to supply 235 megawatts (MW), a company spokeswoman said

MADRID: Spain has chosen 32 bidders out of 84 hopefuls to supply more than 3 gigawatts (GW) of renewable power in projects that will generate over 2 billion euros in investments, its Energy and Environment Ministry said on Tuesday.

In the country’s first clean energy auction since 2017, home-grown power group Naturgy was picked to supply 235 megawatts (MW), a company spokeswoman said.

Madrid-based market newcomer Capital Energy was awarded 620 MW of wind capacity, a company source said, grabbing the lion’s share of the one gigawatt reserved for wind.

Italian renewable firm Falck clinched 40MW of solar capacity, a source with knowledge of the matter said.

Winning capacity in auctions assures a developer a fixed price for the electricity generated, shielding it from market volatility. Spain chose a pay-as-bid system, whereby each company is paid the price it offers.

Investor interest in the country’s under-exploited solar and more established wind sector has risen as the government of Socialist Prime Minister Pedro Sanchez set out ambitious targets amid an international bid to decarbonise economies and halt climate change.

The weighted average price of the winning projects was 24.47 euros per MWh for solar and 25.31 euros for wind, 43 per cent below this week’s estimates for 2023, the ministry said, adding that this would filter through directly to lower power bills for households and industrial consumers.

A total of 84 bidders submitted projects totalling more than three times the capacity on offer. One gigawatt was reserved for solar photovoltaic and one gigawatt was open to any technology.

Naturgy’s allocation consists of 38 MW of wind power and 197 MW of solar photovoltaic capacity, the spokeswoman said.

Under its version of the national energy and climate plan required from all European Union countries, Spain aims to install 60GW of capacity by 2030, reaching 74 per cent of electricity generation from renewable sources and thereby cutting greenhouse gas emissions by a third from current levels.

Source: reuters
Anand Gupta Editor - EQ Int'l Media Network