Spain seeks to hold redesigned renewables auction by end 2020

The Spanish government on Tuesday approved a royal decree that defines a new pricing regime for renewable energy auctions with plans to hold the first round under updated rules by the end of the year, the ministry for the ecological transition said.

The big novelty in the decree is the introduction of the so-called “pay as bid” model, which will replace the remuneration framework from 2013 that awarded a return on investment on top of market revenue.

The old framework comes from a time when costs of generating one kilowatt of renewable power were higher than the selling price on the market, minister for the ecological transition Teresa Ribera said.

The new auction rules will allow participants to offer a price, in a sealed envelope, they are willing to charge for generating power from their project. Awards will be going to the lowest bids until a previously set quota is reached. The auctioned product will be electricity and/or maximum capacity.

The ministry said that the new framework will allow hybridisation of technologies, expansion or modification of existing plants and energy storage installation. It will also establish criteria for small-scale schemes, demonstration projects and energy communities and enable them to compete on equal terms.

The government will publish a five-year auction calendar, to be updated annually, containing indicative timetable, frequency of auctions, expected capacity and planned technologies.

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