Portugal confirms low prices at solar PV auctions

Portugal has confirmed significantly low prices just above €20/MWh were achieved at solar photovoltaic (PV) capacity auctions concluded last week, which awarded projects totalling 1.15GW with a 15-year remuneration period.

A total of 862MW of capacity was allocated under the fixed-tariff modality at a weighted average price of €20.33/MWh, around 55pc lower than the starting price of about €45/MWh, according to official results released late yesterday by Portugal's general directorate of energy (DGEG).

The remaining 288MW will be operated by companies paying a €21.35/MWh weighted average contribution value to the Portuguese electricity system in exchange for merchant prices. The average contribution is significantly higher than starting values of only €0.01-0.05/MWh.

French renewable energy producer Akuo Energy was confirmed as winning the biggest combined capacity, at 370MW, while Spanish utility Iberdrola snapped up the largest number of individual lots — seven, with a total of 149MW. Akuo Energy was also revealed as the company behind the lowest €14.76/MWh winning bid under the fixed-tariff type — which has been claimed by Portuguese environment and energy minister Joao Pedro Matos Fernandes as a world record low for power capacity auctions.

UK-based renewables developer Aura Power and Spanish solar PV developer Solaria Energia y Medio Ambiente were also among the winners, respectively with 168MW and 49MW (see table).

DGEG released individual reports for each of the 22 lots put out for auction, including the names of all participants and the type of bidding they chose. There was no auction for two of the original 24 lots, as no bids were registered for one of them while the other received interest from just one market participant.

The documents show EDP Renovaveis (EDPR), Portugal's largest renewables producer, took part in auctions for 10 of the 22 lots, without winning any capacity. The company said the final auction prices "do not allow an adequate return on the capital required for the investment", taking into account the criteria it uses in the markets where it is present worldwide. But the firm said it "appreciates" the solar auction system carried out by the Portuguese government and is "still available to invest" in the country.

New Finerge, Portugal's second-largest wind power producer after EDPR, participated in auctions for five of the lots but did not win capacity either.

Other companies that were not awarded capacity despite competing in a number of auctions include French renewable energy producer Voltalia, Portuguese firm Hyperion Renewables, Chinese renewables developer Jinko Power and French state-controlled utility EDF's renewable subsidiary EdF Energies Nouvelles (EN).