Montel Magazine 2 2021 - Border control - Page 25

“ The EC appears so confident the agreed target will be 55 % that it is calling its planned draft legislation to achieve it the ‘ Fit for 55 %’ package , which has not gone down well with some MEPs ”
Spain ’ s national energy and climate plan aims for 74 % of power generation from renewable sources by 2030 . Last year , the share of renewables in the power mix stood at almost 46 %. One of the challenges the country will face in achieving that target is so-called price cannibalisation , when a growing amount of intermittent capacity generates power at the same time and drives down prices – which could be bad business for power producers .
The winning bids for renewable power auctions in Spain are also in decline . An auction in January saw winning bids average EUR 24.47 / MWh for solar and EUR 25.31 / MWh for wind . Yet many developers want a minimum of EUR 30 / MWh in PPAs to ensure their projects are financially viable . A total of 3 GW of projects were successful in the January auction , around 2 GW solar and 1 GW wind . Consultancy Afry ’ s Revuelta reckons 80-90 % of these will be completed within the criteria set out in the tender .
Looking back , around 25 % of projects from 2017 auctions , mostly wind , were not built on time , notes Heikki Willstedt , director of energy policy and climate change at the Spanish Wind Energy Association . He expects a
Montel Magazine 2 – 2021 higher completion rate for the January tender . “ Given the long completion timeframe ( end of February 2024 ) there should not be any problems for the 998 MW of wind to be completed on time ,” he adds .
However , Revuelta warns that a sustained reduction in tender prices could harm growth in the PPA market . “ The government might not be troubled by a situation where PPAs are not happening , developers and [ end- ] consumers would be happy . In terms of climate and energy goals , not having PPAs isn ’ t a problem for the government .”
Meanwhile , Barillas says a step-up in auctions to meet the government ’ s climate goal might risk “ overshooting the amount of renewables the system can absorb ” and could be “ detrimental to merchant investment , as they would increase the risk of low capture prices ”.
Meeting the renewable target of 74 % in power generation is possible with less capacity than anticipated by the government , according to Aurora ’ s analysis . “ That is largely because we believe that renewables can achieve higher load factors than the government assumed ,” Barillas adds . n