Spain’s 2nd Renewable Energy Auction Results

• Spain has awarded 94% of the 3.3 GW offered in its 2^nd renewable energy auction held on October 19, 2021
• Solar secured only 866 MW while wind energy won the lion's share of over 2.2 GW
• The weighted average tariff for solar PV went up 63% over previous round to €0.01489 per kWh
• Larger corporations as Iberdrola, Endesa, X-Elio, Acciona Energia and Greenalia did not participate in the auction, possibly to show their displeasure with 'regulatory uncertainty'

The 2^nd renewable energy auction of Spain has awarded 2.258 GW capacity for wind energy projects, and 866 MW solar PV to the winners. The total 3.124 GW is less than 3.3 GW originally on offer even though the tender process saw oversubscription with more than 5.1 GW offers coming in (see Spain To Hold 2^nd RE Auction).

Of the 61 companies that sent in their proposals, 26 have made the cut and secured 12-year power supply contracts. For 866 MW solar PV capacity awarded, 21.95 MW must come online before September 2022, and 5.75 MW must meet certain requirements to favor distributed and local generation, specified the Ministry for the Ecological Transition and Demographic Challenge (MITECO).

For solar PV, tariffs for the winning projects ranged between €0.0244 per kWh and €0.0349 per kWh with weighted average price of €0.03165 per kWh. The weighted average price has gone up over 63% from €0.01489 per kWh awarded in the 1^st auction round in January 2021 (see €0.01489/kWh Lowest Winning Tariff In Spanish RE Auction).

In comparison, for wind energy facilities selected, winning bids ranged between €0.0279 per kWh and €0.03668 per kWh and weighted average price of €0.03018 per kWh.

MITECO said, combined with the results of 1^st renewable energy auction held on January 26, 2021 under Economic Regime of Renewable Energies (REER), the government has now awarded a total of 3.256 GW of wind and 2.902 GW of solar PV capacity.

The complete list of winners is available here.

Not all is well?

While MITECO boss Teresa Ribera said the results brings down electricity prices, and will also create jobs for some 32,000 people, it will mobilize investments worth €3,000 million associated with the manufacture and construction of these facilities.

Ribera added that the results confirm the interest and confidence of investors. However one of the biggest Spanish utilities Iberdrola kept away from the auction citing 'regulatory uncertainty' reported Reuters. The same reason was cited by Enel's Endesa for not bidding in the auction.

Local news portal El Periodico De La Energia named some of the other big corporations that did not participate in the 2^nd auction as X-Elio, Acciona Energia and Greenalia. The report pointed that X-Elio is backed by international investment funds Brookfield and KKR and their absence gives a 'bad sign' for future and necessary investments in Spanish renewables, coupled with the current global shortage of solar panels and high shipping costs.

According to local media reports, the tussle between large Spanish utilities and the government has been going on for some time now as energy prices have been on an upward spiral. To bring down these high electricity prices, the government has decided to intervene by way of cutting down the income of hydroelectric and nuclear generation to balance the rise in gas prices, which may end up impacting the financial gains of the utilities.

On September 14, 2021, the Spanish Association of Electric Power Companies (aelēc) expressed its 'forceful rejection' of government measures 'directed against' electricity companies. When implemented, the association said it would 'unfairly penalize' the electricity sector that's 'neither responsible for this situation nor is it benefiting from it'.