Portuguese solar tender may slip below EUR 20/MWh – Akuo

Nov 11, 2019 | Montel

(Montel) Portugal’s next solar auction in January could see an average price below EUR 20/MWh, putting pressure on developers of the technology aimed at helping the nation achieve its climate goals, said an executive with French firm Akuo Energy.

The auction of 700 MW will be “certainly very competitive”, and the average price will likely decrease from the EUR 20/MWh fetched in July, Joao Macedo, the head of the company’s unit in Portugal, told Montel in an interview.

Akuo had won 370 MW in Portugal’s previous solar auction, including 150 MW that was awarded at a record low of EUR 14.76/MWh.

Macedo said the new tender could see a lower price, even if market participants have said developers would struggle to be profitable at such low levels.

“They said Akuo was crazy, but there were other companies that stayed just above that price in their offer,” said Macedo, adding that the offer was made when the company had already “insured” more than 200 MW.

“We see all the capacity as a single portfolio and focus on the long term,” he said, noting solar plants generally have an operational lifespan of 30 years, compared with 15 years for fixed auction rates.

Construction of the capacity it was awarded in the previous auction will begin in early 2021 and should be connected by the end of 2022.

“It is a great challenge, but we trust that we will achieve it,” said the head.

The recently re-elected Portuguese government plans to hold two 700 MW annual auctions to meet its renewable energy and climate goals, including an increase in solar capacity to 8-9 GW in 2030, from around 1 GW currently.

Boosting capacity
The French renewable company has around 1.2 GW of renewable capacity throughout the world, mostly in France, comprising wind power, hydropower, biomass and solar.

It aims to expand that capacity to in the next two years to 3.5 GW.

“We have made a lot of noise, we have entered the market strongly and now we have many offers that we are analysing.”

“The plan is not to stop here,” he said, adding it is also considering other solar and wind projects in Spain and Portugal.