Spain’s 500 MW wind power auction last week was too small to satisfy demand and the country risks missing its 2020 target for renewables.
The auction is Spain’s first under the new support scheme for renewable energy projects since the government implemented a series of harsh retroactive cutbacks to the country’s feed-in tariff in 2013. A backlog of projects that have struggled to get off the ground due to the support cuts meant the auction was hugely over-subscribed.
The tender also excluded a pre-qualification stage, a step that is considered essential in establishing the financial and technical viability of a project. In the absence of stringent pre-qualification criteria, there is no guarantee that developers will be able to deliver on projects.
Giles Dickson, Chief Executive Officer of the European Wind Energy Association, said: “This is the government’s first attempt at auctioning wind power capacity. Unfortunately, it sends out the wrong signals to the market. There were too many projects competing for too little capacity.
He added: “Moreover, well-designed tenders should include a pre-qualification requirement to ensure that those developers bidding in the process are able to follow through and build their projects. Without this vital element, the government is turning an auction into a lottery. It is an example of bad practice and the result is that the government is failing to provide developers with the right level of support. With no clarity on when the next round of auctions will take place, the industry does not have the necessary visibility to take investment decisions going forward.”
In 2015, the European Commission highlighted Spain as one of the countries that needs to do more to meet its commitment of 20% renewables by 2020 in line with the nationally binding EU targets. The Spanish Wind Energy Association – AEE – called on the government to provide the market with an additional 5.9GW of auctions before the summer if Spain is to meet its 2020 goals.
Dickson said: “Spain joins the small but growing list of countries that are falling behind on the binding renewable energy pledges made at EU-level. This is a concern.”