Spain Concludes 3rd Renewable Energy Auction

• Spain's MITECO has concluded the 3^rd renewable energy auction under REER for 520 MW capacity
• It awarded 146 MW biomass and 31 MW distributed solar PV capacity for tariffs higher than the cap
• For distributed solar PV, the average winning tariff was determined as €53.88 per MWh, while minimum and maximum tariffs ranged between €44.98 per MWh and €62.5 per MWh, respectively
• It attributed high tariffs to high inflation, rising interest rates and price tensions in raw materials and equipment

The Ministry for the Ecological Transition and the Demographic Challenge (MITECO) in Spain has awarded 146 MW of biomass and 31 MW distributed solar PV capacity under the 3^rd renewable energy auction for 520 MW under the Renewable Energy Economic Regime (REER).

For distributed solar PV projects of up to 5 MW, winning facilities were picked for an average winning tariff of €53.88 per MWh, while minimum and maximum tariffs ranged between €44.98 per MWh and €62.5 per MWh, respectively.

"This is a volume of power five times higher than that awarded in the previous auction, which confirms the good evolution of a type of installation halfway between self-consumption and centralized generation in which citizen participation is decisive," stated MITECO.

For biomass, the average weighted price of €93.09 per MWh with minimum and maximum tariffs of €72.38 per MWh and €108.19 per MWh, respectively. The ministry argued that even though these tariffs are higher than other renewables, biomass is a manageable technology and has an added value of job creation mainly in rural areas and helps to recover forest and agricultural waste.

MITECO attributed high tariffs for this auction, higher than the tariff cap, to 'high inflation, rising interest rates and price tensions in raw materials and equipment'.

The 520 MW tender was launched in July 2022 in which 140 MW was reserved for distributed PV capacity (see Spain Announces 520 MW Renewables Auction). However, in the final tally only 31 MW has been won by distributed PV that was competing with thermal solar power, and other renewable energy technologies including biomass.

These wins will mobilize around €416 million while creating 4,400 direct and indirect jobs. Successful bidders will now be required to submit a strategic plan for the same. These facilities will also displace fossil fuel power generation and save 1.7 TWh of gas annually. The list of winners is available on MITECO's website.

Under all 3 REER auctions held by the ministry since January 2021, it has assigned 3.25 GW wind, 2.93 solar PV and 146 MW biomass capacity. The 4^th REER auction for 3.3 GW capacity will be held on November 22, 2022 (see Spain Launches 4^th Renewable Energy Auction).

Spain aims to install 60 GW renewable energy capacity under its National Integrated Energy and Climate Plan 2021-2030 (PNIEC) to produce 74% of the national electricity generation. Under REER, MITECO will be launching tenders until 2026.