700 MW Solar Power Auction Kicked Off Today In Portugal

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After the last delay in March due to the coronavirus pandemic, today, June 8, marked the time for solar power developers to submit applications for Portugal’s 700 MW solar auction. July 31, 2020, is the final day of the application process. After the applications process, the government expects there will be hard bidding around the last week of August.

PV Tech notes that the solar auction winners will probably be announced in early September.

Government documents in May brought to light the government’s intention to put forward 12 contract lots for the bidders. In the first of three categories, bidding will start at an initial maximum price of €41.54–41.73/MWh ($46.37–46.58/MWh).

“The figure marks a drop on the €45/MWh ceiling prices Portugal had set for its 1.15GW solar tender in 2019, which ended up producing individual tariffs of €14.76/MWh. The number has since been described as a global solar cost milestone but also a figure PV players ‘cannot survive on’.”

There are three “modalities” in the auction: 1) Solar developers trying to land a 15-year power purchase agreement (PPA) with a fixed price, 2) “Solar developers accepting to pay in return for the right to produce at market prices, also for 15 years,” and, getting quite complicated, a storage element: 3) “Storage developers: According to state secretary Galamba (see here for full explanation), the new modality will work as a “quid pro quo” insurance-type scheme. Storage developers will receive from the system an annual fixed price per MW installed; by competing in the auction, they will bid down the prices they are prepared to receive. In return, they will insure the system against price rises beyond a certain level, compensating it when market prices climb over strike prices.”

Another auction for 500 MW of solar is expected later in the year.

Featured image: Portugal Nature Reserve, by Jose Pontes/CleanTechnica 

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Cynthia Shahan

Cynthia Shahan, started writing after previously doing research and publishing work on natural birth practices. Words can be used improperly depending on the culture you are in. (Several unrelated publications) She has a degree in Education, Anthropology, Creative Writing, and was tutored in Art as a young child thanks to her father the Doctor.

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