Spanish tender results October 2021

The second renewable energy auction of 2021 was held on the 19th of October. The aim was to offer more than 3GW of renewable power with quotas for wind and photovoltaic, with the novelty of accelerated availability quotas and distributed generation.

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Beyond the average prices and the large power figures, we are going to analyze some aspects that seem relevant to us:

• The two technologies filled their corresponding quotas, but wind won out over PV by taking the additional 700 MW. PV filled its quota and added 100 MW. This could have several interpretations, but our reading is that the uncertainty in the potential electricity regulation and PV value chain in prices has had a strong impact on future projects. Likewise, the possibility of hybridization from wind could have had a pull effect towards this technology.
• The auction in general has been less successful in terms of the number of bidders, in January it was x9 in terms of power awarded, while in this one it was x1.5, which could be linked to the very short timeframe for commissioning the facilities.
• In terms of prices, they continue in the ranges of the previous offer, although the range has narrowed to around 31 €/MWh. There is no great dispersion on the part of any of the bidders.
• The low success of the accelerated availability (3.6% of the tender) and distributed generation (1.9%) batches, possibly due to the strict energy delivery deadlines in the former case and the higher relationship with consumer tariffs in the case of the latter.
• The auction demonstrated that providing certainty in revenues from renewable assets continues to be undoubtedly attractive for new market players, who see it as a way to give certainty to their projects through lower risk business models. This could have been the reason why other market players did not participate in the auction.

Auction process:

• 61 participants with more than 5,100 MW offered (+54.5% more than awarded)
• 3,300 MW Pay-as-Bid auction for 12 years
  • 600 MW for accelerated availability
  • 700 MW for solar PV technology
  • 1,500 MW for onshore wind technology
  • 300 MW for distributed solar PV
  • 200 MW technology neutral

Auction results

• From the 300 MW reserved for distributed PV just 5.75 MW has been awarded at 35.92 €/MWh
• For the 600 MW reserved for accelerated COD, just 22 MW have been awarded at 32.49 €/MWh.

Auction winners

• Capital, Forestalia, Naturgy and Repsol achieved 86% of the total awarded power