ACS has once again been the main protagonist in the renewable energy auction in Spain. Through its subsidiary Cobra, the company has been awarded 1.550 MW of solar photovoltaic power, which represents more than half of the megawatts that the Government was putting up for auction. This success positions ACS as one of the most important players in the renewable energy sector in the country, a sector that continues to expand as Spain approaches meeting its 2020 targets.
Details of the renewable energy auction
On Wednesday, the OMIE held the long-awaited renewable energy auction, where more than 5.000 MW were awarded between different technologies. Although the Government had announced that it would initially assign 2.000 MW, the bidding finally closed with about 3.000 MW that could be expanded, and the demand was so high that approximately 5.000 MW were finally awarded. Thanks to a confidential clause, the awarded capacity was allowed to be expanded if the participants presented the maximum possible discount, which was the case for most of the participants.
On this occasion, the auction included both wind and photovoltaic projects, highlighting that a large percentage of the successful bidders opted for the Photovoltaic Solar Energy.
ACS and Cobra: The big winners
ACS, through its subsidiary Cobra, has been awarded 1.550 MW of photovoltaics, which is more than 50% of what the Government had initially planned to auction. This makes ACS the undisputed leader of the auction, in line with its years of experience as one of the most dominant companies in the country's energy sector. Cobra, specialised in the construction and engineering of energy infrastructures, thus strengthens its position in the market, with large solar energy projects.
This success also represents a milestone in the history of ACS, as it is the largest number of megawatts awarded to a single company in a renewable auction in Spain.
Other notable participants
The renewable energy auction not only crowned ACS as the top bidder, there were also other companies that achieved important awards. For example, the group Forestry was awarded 316 MW of photovoltaic energy, diversifying its portfolio of projects in the country. Forestalia had been the big winner in the 2016 and 2017 auctions, accumulating more than 1.500 MW of wind energy and 108,5 MW of biomass.
Moreover, Enel Green Power Spain (EGPE), a subsidiary of Endesa, was awarded 339 MW of photovoltaic energy, which allows it to significantly increase its renewable energy portfolio. EGPE, which had obtained more than 500 MW of wind energy in the May auction, has managed to diversify its commitment to renewables with this new award, adding almost 50% more renewable capacity.
One of the surprises of the auction was X-Helium, the company created by Gestamp and the KKR fund, which was awarded more than 450 MW of solar power. X-Elio is focused on the development of renewable technologies, especially in solar energy, and this success allows them to consolidate their presence in the Spanish market.
Other companies like Gas Natural Fenosa y Solariums also stood out. Gas Natural was awarded 250 MW of photovoltaic power, a similar amount to that obtained by Solaria in this auction. In addition, Prodiel achieved 182 MW of new capacity, while Greenalia was built with 133 MW.
The case of Iberdrola and EDP
Surprisingly, two of the giants of the renewable sector in Spain, Iberdrola y EDP ​​Renewables, were left out of the bidding process. Despite having participated in the auction, neither of these two companies managed to win megawatts on this occasion.
Iberdrola, which had planned to bid for 1.800 MW, decided not to opt for the maximum discount allowed, which left them out of the competition. As for EDP, which had won 100 MW in the January 2016 auction, it also failed to win any megawatts this time. This result underlines the high competitiveness of the sector and the importance of appropriate bidding strategies.
Final results and next steps
With the publication of the official results, the successful bidders have until January 2020 to complete the construction and connection to the grid of the new renewable energy facilities. This auction is key for Spain to meet its commitments to produce 20% of its energy through renewable sources by 2020, in line with the European Union's objectives.
The regulatory framework of this auction has also brought new challenges for companies, which have had to adapt to the need to offer more aggressive discounts (65% this time, compared to 59% in the May auction). One of the key aspects is that all facilities will charge at market price, which adds complexity to project financing, since the discount directly affects profit margins.
Overall, the auction marks a new turning point in the development of renewable energy in Spain, with the PV as a big winner compared to the auctions of previous years, where the wind had mastered.
Each renewable energy auction adds another chapter to Spain's energy history, and with the results of this latest auction, the country is getting closer to meeting its goals towards a more sustainable energy transition.