Portugal Bags Lowest-Cost Solar Bid In The World

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The Portuguese energy secretariat has secured 1.15 GW of solar development at an average cost of €20.33 ($22.53 per megawatt-hour), representing an investment of about €800 million or $887 million.

One of the bids was made at €14.76/MWh ($16.44/MWh), which was declared a new world record for low solar bidding, according to Portugal’s Journal Económico. The secretariat had placed a €45/kWh ceiling on bidding.

“We made a unique model in the world because it was the first auction in the world to directly compete with fixed rates and market rates with contribution to the system. There has never been such an auction in the world, this was the first,” Secretary of State for Energy João Galamba told the news agency.

The 46 MW Amareleja solar plant in Portugal was built by Acciona. Image courtesy Acciona.

The auction included 24 projects, of which 23 attracted bids and were awarded to 13 bidders. Spain’s Iberdrola won 7 of the 24 licenses available, as the largest number of projects gained by one bidder. France’s Akuo won 370 MW, the largest project in the auction, according to Jornal de Negocios.

The auction was the largest of its kind in Portugal to date, and represents more than double the current installed capacity of solar energy in the country, according to EURACTIV. “This auction shows that the energy transition, to which the government is committed, not only can strongly accelerate investment and the penetration of renewables in Portugal, but it can be done at very low prices,” Galamba told the news agency.

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Portugal produced a record level of power from clean energy sources in March 2018, the first time that renewables filled 100% of its production, the agency said. Much of the country’s renewable energy comes from hydro and wind sources, although solar generation is increasing rapidly now. The country expects to be a 100% renewable energy producer by 2040. In 2018, renewables provided about 52% of the country’s electricity demand, according to the Portuguese power utility Redes Energeticas Nacionais (REN).

“By 2021 we will be able to triple the solar capacity in Portugal, from the current 572 MW to close to 1600 MW,” said Jorge Seguro Sanches, Portugal’s Energy Secretary of State, in a 2018 CleanTechnica report.

Portugal and Spain have had an interconnected grid since 2007, with the creation of the Iberian Electricity Market, MIBEL. The two countries hold electricity auctions, through the Comisión Nacional de los Mercados y la Competencia (CNMC), the regulatory authority of Spain, and the Entidade Reguladora dos Serviços Energéticos Portugal (ERSE), the Portuguese authority.

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Charles W. Thurston

Charles specializes in renewable energy, from finance to technological processes. Among key areas of focus are bifacial panels and solar tracking. He has been active in the industry for over 25 years, living and working in locations ranging from Brazil to Papua New Guinea.

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