The Spanish Government has announced the results of its 3.3 GW technology-neutral renewable energy auction. The auction, however, was slightly undersubscribed as many companies decided not to compete due to government’s plans to impose a new levy tied to rising gas costs. This would have hampered revenues and these concerns limited participation.
Even then, at an average price of €30.18 per MW, Onshore Wind won a total of 2.258 MW. This is one of Europe’s lowest strike prices ever. It is slightly higher than the price in Spain’s January 2021 auction. These new projects will bring in more than €2.5 million in investment.
A bulk of this measure has been withdrawn by the government. Presently, any project with an old or new PPA or financial hedging that is not pegged to the spot price is excluded from the clawback. Compared to earlier regulations, this will provide more assurance to investors, even on merchant projects.
REGlobal’s Views: Spain is one the leading renewable energy markets in Europe and has many large projects that are already operational as well as several in the pipeline. However, like many other renewable energy markets across the globe, the country suffers from policy and regulatory drawbacks, which need to be addressed urgently to fully realise the country’s renewable energy potential.