State sells floating solar energy in seven dams

Portugal broke a new record by registering the lowest energy price in the world, resulting from the floating solar energy auction, which provides for the installation of solar panels on the reservoirs of seven dams.

“In the electronic auction carried out, 183 megawatts (MW) were allocated, of which about 56% were awarded in the form of Contract for Differences (103 MW) and the remainder by Compensation to the National Electric System (80 MW)”, disclosed the Ministry of Environment and Climate Action, to which he added: “in this last modality, there were two lots with a fixed price. €13/MWh (equivalent to a 110% discount on the reference tariff initially set by the Government). This tariff is about 137% lower than the lowest tariff obtained in the 2020 solar auction, considered to be the lowest in the world (€11.14/MWh)”.

The remaining four lots were allocated in the form of Compensation to the National Electricity System.

The total capacity made available in this first floating solar auction was 263 MVA (megavolt-ampere) in the Alqueva, Castelo de Bode, Cabril, Alto Rabagão, Paradela, Salamonde and Vilar-Tabuaço reservoirs.

The company EDP Renewables, SGPS, SA led in terms of awarded capacity (total of 70 MW), while Finerge, SA added three lots.

“After this phase of the auction is concluded, there are gains for electricity consumers in the order of 114 million euros over 15 years, which is equivalent to around 7.6 million euros/year. This value corresponds to a unit gain of around 620 thousand euros for each MW awarded (15 years)”, said a government source.

In the Compensation to the National Electric System (SEN) modality, a weighted average contribution of approximately 47.4 thousand euros per MW/year was obtained, which translates into a fixed and guaranteed revenue for the SEN in the order of 4 million euros/ year.

In the lot that had only one bidder and according to the Auction Procedure Program, the bidder has a period of five working days to make an improved bidding offer. If this offer corresponds to an amount equal to or greater than the weighted average Net Present Value of the bids awarded for the various lots submitted for auction, the Directorate-General for Energy and Geology must assign to the bidder the volume of injection capacity indicated in its bid to the batch in question.

These preliminary results are in a period of prior hearing of interested parties, after which they will be final, and lot 2 (Castelo de Bode with 50 MW available) of the single competitor may still be added.

According to a note from the Ministry of the Environment for Climate Action, “this is another step in the intensification of the use of national solar resources and in the consolidation of the bet on renewable sources, which allow reducing the energy bill, as well as reducing energy dependence on non-renewable sources” .

It is the Government’s goal, “Portugal to continue to fulfill the objectives set for the Energy Transition and the decarbonization of the Portuguese economy and society”.

In the Electronic Auction, Finerge, a producer of renewable energy, won three lots corresponding to the reservoirs of Paradela, Salamonde and Vilar-Tabuaço.

“Finerge has just won three lots in the floating solar auction in Portugal, which took place on April 4, 2022,” the company said in a statement this Tuesday.

According to the company, lots five, six and seven correspond, respectively, to the reservoirs of Paradela (13 megawatts -MW), Salamonde (8 MW) and Vilar-Tabuaço (17 MW).

The company also stated that the Tabuaço batch was the most disputed, with 24 rounds, and the last to be completed.

“This is the first time that Finerge guarantees a lot in a solar auction, in its third participation. This achievement reflects our commitment to the area of ​​development and innovation, for which we created an autonomous department in 2020, focused on innovation and technology, namely in the area of ​​storage and floating solar”, said, in a statement, the executive president of Finerge, Pedro Norton.

Endesa also announced, this Tuesday, that it had won the right to connect the 42 MW auctioned at the Alto Rabagão dam (Montalegre) for the installation of a floating photovoltaic solar energy project with an investment of 115 million euros.

EDP, through its subsidiary EDP Renováveis, obtained the right to connect to the electricity grid for a capacity of 70 MVA (MegavoltAmpere) in Alqueva.

The Government decided to auction off the exploitation of 263 MW of solar energy. According to an order, 50 MW in Castelo de Bode and 33 MW in Cabril will be auctioned in the Tagus hydrographic region.

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