PORTUGAL: FLOATING SOLAR AUCTION SETS RECORD LOW PRICE OF -4.13 €/MWh

Portugal’s Ministry of Environment and Climate Action has announced that the country has accomplished an impressive accomplishment in its first-ever auction for floating solar energy. They secured a bid of -4.13 euros per megawatt-hour (MWh), the lowest price ever recorded globally.

A total of 183 megawatts (MW) were up for grabs, with 80 MW allocated for compensation to the national electricity system. According to the ministry’s statement, the different lots were awarded in two categories: contracts for differences, accounting for 103 MW, and compensation to the national grid, comprising 80 MW.

According to reports from EDP Renováveis, a Portuguese company, they have become the leading bidder in an auction. They have successfully secured a 70-Megavolt-Ampere (MVA) connection to the power grid at the Alqueva reservoir. This reservoir is located on the Guadiana River, near the border of Spain.

As learned by El Periódico de la Energía, EDP Renováveis managed to drive the prices down to negative values. This was made possible through the compensation model, wherein EDP Renováveis will pay for the electricity generated during the first 15 years. Still, subsequently, for the remaining 15 years, it will receive market prices, ensuring profitability in the long term.

Moreover, EDP Renováveis can disengage from the floating solar project and develop 70 MW of onshore wind energy in the same area, thus avoiding potential price cannibalization during peak solar generation hours.

Recently, various companies won auctions for hydropower connections in Portugal. Endesa Generación Portugal, a subsidiary of Spanish utility Endesa, secured a link at Alto do Rabagão reservoir. Meanwhile, Finerge, a Portuguese company, acquired three lots in the Paradela, Salamonde, and Vilar-Tabuaço dams. French firm Voltalia also secured a lot in Cabril. Portugal has previously held two auctions for conventional solar energy, with Spanish companies like Iberdrola, Endesa, Audax, and Enerland participating and setting a record for the lowest worldwide price on both occasions.