Spain auctioned a total of 3GW of renewable energy capacity in its January 2021 tender. In its National Energy and Climate Plan (NECP) the Spanish Government pledged to increase Spain’s installed onshore wind energy capacity by 22 GW from today’s 28 GW to 50 GW by 2030.
To facilitate this large-scale expansion of onshore wind and to guarantee the necessary revenue stabilisation for investors, the Government decided to change the auction design for renewable energies. This months first tender under the new auction design resulted in the lowest ever prices for onshore wind energy in Europe. The wind bids ranged from €20/MWh to €28.89/MWh.
The Spanish Government used for the first time Contracts-for-Difference (CfDs) as their new auction model. With CfDs, wind farms pay back when the market price exceeds the auction price. Governments only pay out when the market price is lower than the auction price.
Yesterday’s 3,000MW tender included three separate pots. The first pot consists of 1,000MW of wind energy capacity. The second pot is made up of 1,000MW of solar PV. And the third pot of another 1,000MW dedicated to all renewable energy sources combined. Bids don’t require a building permit and have to be constructed by April 2024 the latest. The first tender results show that wind energy was awarded a total of 1,000 MW, as the technology-neutral pot went completely to solar PV. No other renewable energy technology could secure volumes from this third pot.
The Spanish Government published an auction schedule for all upcoming auction rounds until 2025. Spain will auction 1,500 GW annually between 2021 and 2025 under the wind-only pot. It is important to note that yesterday’s 3,000 MW tender is a delayed 2020 tender. This means that Spain will hold another auction for at least 1,500 GW of wind energy in 2021.
The Governments auction schedule will further increase the attractiveness of the Spanish wind energy market for investors and developers”, says WindEurope CEO Giles Dickson.