Spain's energy-intensive industry postpones private renewables auction - report

Spain’s energy-intensive industry has postponed its private renewables auction until February or March 2023 to avoid losing promoter interest to power tenders that the Spanish government scheduled for this autumn, according to Wednesday’s news report by local outlet La Provincia.

The energy-intensive industry, through its association Aege, was preparing to procure around 2,000 MW of wind and solar earlier this year via an auction process that was to be managed by the Iberian wholesale electricity operator OMIE. However, the auction kept being pushed due to a flood of responsibilities that OMIE had to take on after the Spanish government adopted measures to reduce electricity prices, the report states.

This summer, the Spanish government scheduled renewable energy auctions for October and November, which then led Aege to postpone its own procurement for early 2023.

There was a risk of cannibalisation between the auctions, and concern that the industry would be left without energy, Aege’s general director Fernando Soto was quoted as saying.

Energy demanding companies have been seeking to hold a separate renewables auction to be able to procure some of the electricity they require for around EUR 35 per MWh, La Provincia reports. The goal was to close power purchase agreements (PPAs) with wind and solar promoters for periods of ten to 12 years.

Spain’s energy-intensive companies have been warning for years that high electricity prices they are paying jeopardise their competitiveness. One of the more extreme examples is that of US aluminium produce Alcoa Corp (NYSE:AA), which had to temporarily curtail its profit-losing smelter in north-west Spain for two years until it secured competitive renewable energy PPAs and modernised the plant.

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