Investors

Spain issues 3GW renewables call one week after auction

After years of drought, the country’s renewable energy sector seems to be on the up once again, although the solar industry is braced for disappointment.

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The Spanish government has launched a surprise call for a 3GW renewable energy auction to take place before the summer, just one week after it concluded an auction of the same size.

Prime Minister Mariano Rajoy announced the auction yesterday after he said the country received applications for over 9GW of cross-technology renewable power in the 3GW call wrapped up last week. With no subsidies awarded to projects, Rajoy emphasised the auctions now come at no extra cost to the government or consumer.

In a shift from this month’s previous tender, which was available to all renewable energy technologies, the auction will only be open to wind and solar PV projects. However, the rules will remain the same: wind projects will be favoured to solar bids even if offered at the same price, with the government stating the higher production levels of wind farms as an overriding factor.

This mechanism drew fury from Spanish solar trade group UNEF last week after just 1MW of solar was awarded, with wind receiving 2.9GW of the capacity up for tender. UNEF said it would be taking its case to the Spanish Supreme Court, as well as filing a complaint with the European Commission, despite the government stating the process had been approved by the National Market and Competition Commission.

While UNEF welcomed plans for a new auction, it urged the government to review the rules.

“We believe that it is imperative to reform the auction design so that wind and photovoltaic technologies can exert their competitiveness in an equitable system without artificial barriers,” it said. APPA, the trade body representing all renewable technologies, also gave a cautious welcome to the government’s announcement, arguing that making the system more predictable would help attract investors.

The Spanish authorities found themselves on the wrong side of the law recently when the Washington-based International Centre for Settlement of Investment Disputes forced it to pay €128 million to EISER Infrastructure following a case against its retroactive cuts to solar tariffs in 2013 and 2014. A number of similar cases are also in the offing awaiting judgement.