Portugal Officially Confirms World’s Lowest Solar Bid

Portugal Confirms €0.01114/kWh As Lowest Winning Bid In 700 MW 2nd Solar Auction, As Lowest Winning Solar Tariff Globally; El Periodico De La Energia Claims Enerland Group As Having Offered It
05:30 PM (Beijing Time) - 28. August 2020

The Minister of Environment and Climate Action João Pedro Matos Fernandes (right), and Assistant Secretary of State for Energy, João Galamba held a press conference to announce the results of Portugal’s second solar auction, which resulted in a new world record low tariff. (Photo Credit: Government of the Portuguese Republic)

Key Takeaways

  • Portugal has officially announced the results of its 700 MW solar auction conducted over 2 days
  • €0.01114 per kWh was determined as the lowest winning bid which El Periodico De La Energia says was offered by Enerland Group of Spain
  • Hanwha Q Cells of South Korea won the largest chunk of the 670 MW awarded, securing 315 MW
  • Other winners of the auction included Iberdrola, Endesa, Audax, Tag Energy

The Portuguese Ministry for the Environment and Climate Action has confirmed media reports of securing the world’s lowest winning solar bid at €0.01114 ($0.013) per kWh in the country’s second solar auction with 700 MW capacity. It means the previous record for the world’s lowest winning solar tariff of $0.0135 per kWh achieved for 2 GW Abu Dhabi tender has officially been breached, as reported by local Portuguese newspaper Expresso. It stated €0.0112 per kWh as the lowest winning bid on day 1 of the auction proceedings (see €0.011/kWh Record Low Bid In Portugal Solar Auction).

It is also 25% lower than the lowest tariff achieved in Portugal’s first solar auction held in 2019 when Akuo Energy won 3 projects out of which a 150 MW project stood out for the lowest winning bid at €14.76 ($16.46) per MWh (see Portugal Awarded 1.15 GW Capacity In Solar Auction).

While the government statement doesn’t give away much about the auction winners, digital newspaper El Periodico de la Energia reports Spanish renewable energy company Enerland Group to have offered the prized tariff of €0.01114 per kWh for lot number 7, a 10 MW project under a contract for difference (CfD).

Despite the world record tariffs, the 700 MW auction had a total of 670 MW awarded finally in 3 categories, namely solar with storage taking 483 MW or 75% of the total awarded, 177 MW in the system compensation category and 10 MW in CfD.

A total of 35 entities competed in the auction process. The government pointed out South Korea’s Hanwha Q Cells as the big winner in the auction winning the largest capacity of 315 MW in 6 lots. France’s Tag Energy took 2 lots, and so did Switzerland’s Audax while Spanish companies Iberdrola, Endesa, Enerland, reported ECO new portal after the press conference of Minister for Environment and Energy Transition, João Pedro Matos Fernandes.

Hanwha Q Cells

Confirming its 315 MW win in the Portugal auction, Hanwha Q Cells said the capacity will be spread out via 2 projects of 109 MW and 99 MW capacities in Ourique region, a 50 MW project in Ferreira do Alentejo, and 3 x 19 MW projects in Beja, Vale do Gaio and Porteirinhos. All the projects in Alentejo region will be developed, built and connected to the national grid by June 2024 and will come with storage capacity.

The company explained that it secured the grid capacity in lieu of paying a set annual price-per-capacity to the Portuguese national grid operator for 15 years. “Thanks to the flexibility offered by coupling the solar with storage, Q CELLS will be able to sell the electricity produced by the solar plant to merchants, undertake energy arbitrage by time shifting and participate in ancillary services markets in order to make the most out of these projects, while contributing to local grid stability. This strategy enabled Q CELLS to be highly competitive at this auction,” the management added.

This 315 MW capacity takes the company’s total development pipeline in Portugal to almost 2 GW. It is already constructing an 11.6 MW solar project.

Endesa (Enel)

Italy’s Enel Group won a 99 MW solar and storage project in the auction through Endesa Generacion Portugal, a subsidiary of the group’s Spanish subsidiary Endesa. Enel’s renewable energy arm Enel Green Power will develop build and operate the project as the group’s first renewable + storage project in the Iberian Peninsula.

It will be located in Algarve and will come online in 2024 for an investment of €90 million ($107 million). The project will be connected to the grid under a 15-year contract with the National Electricity System of Portugal.

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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Anu Bhambhani