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Solar dominates as Spain surprises with 5GW tender

Spain exceeded expections by awarding 5.04GW of capacity in the government’s latest renewable energy auction, with solar power producers being by far the biggest winners with 3.91GW awarded and wind getting 1.13GW.

In a statement the Energy Ministry said the tender had distributed contracts to 40 different companies which would “allow Spain to move definitively in compliance with its target of meeting 20% of energy used from renewables by 2020”.

Spanish construction group ACS was the biggest auction winner being awarded 1.55GW of solar generating capacity through its engineering subsidiary Cobra – a service company focused on solar and wind power, industrial engineering and networks, and grid infrastructure.

The Ministry also awarded Endesa, the renewables arm of Enel Green Power, 339MW of capacity for two solar projects to be located in the Murcia and Bajadoz regions. Enel said it would be investing around €270m in the construction of the new solar capacity which is expected to enter into operation by 2019.

Other solar winners are X-Elio – a solar company owned by KKR and Gestamp – which was awarded 440MW, Forestalia 316MW, Gas Natural Fenosa 250MW, Solaria 250MW, OPDE 200MW, Prodiel 180MW, Alter 50MW, Alten 13MW, and others 322MW.

Forestalia, a relatively unknown renewables developer, surprised the industry earlier this year after it received the go-ahead to build 1.2GW of wind in the first 3GW auction, held in mid-May and dominated by wind.

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The wind sector winners are Capital Energy which was awarded 720MW of capacity, Ibervento 172MW, Greenalia 133MW, Gestamp 24MW and others 79MW.

The Spanish Wind Energy Association (AEE) tells Recharge that it estimates the installation of these 1.13GW of new projects will translate into investments in excess of €4.5bn and create between 25,000 to 30,000 jobs during construction.

The AEE says it is confident that all players involved will work hand-in-hand so that all projects awarded in the last three tenders are fully functioning by the end of December 2019.

However, the association says the industry is more convinced than ever that energy planning is needed for the coming years, and must take into account Spain’s energy and decarbonisation needs in the long term and guarantee a balanced mix among technologies.

“This implies including a calendar of tenders to give visibility to the renewables sector beyond 2020, taking into account international commitments on environmental matters – the Paris climate change agreement and 2030 EU targets – as the necessary milestones for an orderly energy transition,” says the AEE.

"The Spanish government is trying to deploy in the next three years what should have been done in seven"
Pierre Tardieu, WindEurope

That view was backed by European industry group WindEurope, which welcomed the 2017 tenders but said visibility is key. 

“It is a positive signal for the wind industry, notably the Spanish supply chain,” said WindEurope chief policy officer, Pierre Tardieu.

 “However, due to the four-year market standstill, we’re playing catch-up,” Tardieu added. “The Spanish government is trying to deploy in the next three years what should have been done in seven. These types of stop- and go policies are extremely disruptive for the wind supply chain which needs a stable calendar of tenders to thrive.”

The government modified the conditions of the second auction after the Spanish solar association UNEF complained to the European Commission over what it described as the “discriminatory” structure of the last auction held in mid-May that it claimed favoured wind.

Sources indicated that Spain’s energy minister Alvaro Nadal had come under pressure from politicians in Brussels after UNEF filed a complaint with the Directorate-General for Competition within the Commission.

The Ministry says that when taken together with the mid-May auction, Spain has now awarded a total of 8.01GW of new renewable power this year, out of which 3.91GW is solar, 4.11GW comes from wind and 20MW from other technologies.

Note: Update adds further details and comments, revises figures from earlier story

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