Renewables

Spain gets Europe’s lowest wind energy price with CfD auction model

wind-energy-auctions-CfD-Spain-price

Photo: Pixabay/enriquelopezgarre

Published

January 28, 2021

Country

Comments

comments icon

0

Share

Published:

January 28, 2021

Country:

Comments:

comments icon

0

Share

Spain has auctioned a total of 3 GW of renewable energy capacity under the country’s new auction design, the Contracts-for-Difference (CfD) model, resulting in the lowest ever price for new onshore wind energy in Europe, of EUR 20 per MWh, according to WindEurope.

The CfD model brings the lowest prices for renewables because it minimizes the financing costs of new projects. CfDs are cheap for governments, as governments get paid back as well as paying out. In this way, citizens win twice, both as consumers and taxpayers, according to WindEurope CEO Giles Dickson.

CfDs are cheaper for both governments and consumers than other incentive schemes

With CfDs, a model advocated by WindEurope, wind farms pay back when the market price exceeds the auction price, while governments only pay out when the market price is lower than the auction price, making CfDs cheaper for governments and consumers than other support schemes.

Awarded projects in Spain may opt to sign PPAs after selling defined amounts

In the January 21 auction, successful bids are awarded 12-year CfDs. Awarded projects must sell a defined amount of electricity to the market under the CfD contract, but once the threshold is reached, they can either opt to continue selling their electricity under the CfD or, for example, sign corporate renewable power purchase agreements (PPAs) with industrial customers.

Wind projects awarded 1 GW, with at least 1.5 GW more to be auctioned in 2021

The January 21 auction comprised three separate pots – 1 GW of wind energy capacity, 1 GW of solar PV, and another 1 GW for all renewable energy sources combined. The wind energy was awarded a total of 1 GW, whereas the technology-neutral pot went completely to solar. The wind bids ranged from EUR 20 per MWh to EUR 28.89 per MWh.

The Spanish government will auction 1.5 GW annually between 2021 and 2025 under the wind-only pot. Wind Europe also recalled that the January 21 tender for 3 GW was a delayed 2020 tender, meaning that Spain will hold another auction for at least 1.5 GW MW of wind energy in 2021.

Comments (0)

Be the first one to comment on this article.

Enter Your Comment
Please wait... Please fill in the required fields. There seems to be an error, please refresh the page and try again. Your comment has been sent.

Related Articles

macedonia mepso ebrd loan grid renewables koka basso bozinovska

MEPSO secures funds for grid investments; upgrade to enable connecting 1.2 GW of renewables

23 July 2024 - MEPSO and the European Bank for Reconstruction and Development (EBRD) have signed an agreement on a EUR 26.4 million loan

fiat grande panda stellantis serbia electric cars automobiles

Stellantis starts producing electric cars in Serbia

22 July 2024 - With the announced state subsidies, Fiat Grande Panda from the Kragujevac plant could cost around EUR 18,000

Greece lowers 2030 renewable penetration goal in its final NECP

Greece lowers 2030 renewable penetration goal in its final NECP

19 July 2024 - Greece's final National Energy and Climate Plan (NECP) is expected to be submitted to the European Commission in the following days or weeks

Renewable energy spatial plan delayed again in Greece

Renewable energy spatial plan delayed again in Greece

19 July 2024 - It has now been ten years since the European Commission first asked Greece to modernize its renewable energy spatial plan