The Government launches a new auction model for renewables

The Government is once again bringing measures to the Council of Ministers to boost renewable energies and reactivate the economy. The fourth vice president and minister for the ecological transition, Teresa Ribera, has announced, at the press conference after the Council of Ministers, that the auctions for renewables are back, but totally different from those that had been promoted by the PP until now.

The new auctions will be based on the price of energy and will be specific for the different subsectors, read photovoltaic, wind … That is, investors will bid for specific sectors, with the idea that banks will provide them with financing. For the celebration of the bids, factors such as technical characteristics, size, levels of manageability, location criteria and technological maturity will be taken into account.

“Activating green investment levers is a commitment of Spain and other countries of the European Union,” said Ribera. “It’s a new industrial revolution and it’s going through green energy.”

In his opinion, “green energy, energy efficiency and electrification” are three pillars of the new clean economy.

Avoid speculation

There are 430,000 megawatts requested, but 60% off-grid

Ministry sources say that the new model “will be activated throughout this year.” The framework in force since 2013 stated that the cost of generating a renewable kilowatt hour was more expensive than the price sold in the market. “Now the situation is just the opposite and it is necessary to update that model,” Said Ribera. Premiums are removed and a price will be offered to the long-term investor,” he said. In this way, “consumers will also benefit.”

According to Ribera, “renewable energy is already cheaper than other sources.” And the value chain in Spain is consolidated. “You can manufacture practically all the elements of a wind turbine and a good part of those of solar plants,” he said. That is, “we also talk about jobs,” he said. The idea: to be renewable before the year 2050.

The royal decree law includes, in addition, measures of energy efficiency and electrification of the economy. The new rule also sets milestones and time frames to avoid speculative movements. At the moment, there are requests for 430,000 megawatts (MW), but around 60% have not requested permission to connect to the grid. Which suggests that behind these requests there may be “indications of an eventual speculative component”.

Measurement

Objective: to reduce the electricity deficit

In addition, new business models that the sector is already demanding are incorporated into the Spanish regulation, such as storage, hybridization and the independent aggregator.

In this context, it seeks to stop producing an electricity deficit in Spain. Last year a total of about 1,000 million were generated, but the idea is that it can be injected into the surplus system of previous years. Ribera has defended that it is difficult to give the global figure “due to the Covid-19 crisis”. The idea is that each time the final consumer pays less than that concept in his bill.

Finally, SMEs will be allowed to pay their contribution to the energy efficiency fund in 2021, which establishes a moratorium for those that have experienced liquidity problems as a result of the pandemic.

Source: The Vanguard