EWEA: After ‘Hugely Over-Subscribed’ Wind Auction, Spain Could Miss 2020 Goal

Posted by Betsy Lillian on January 22, 2016 No Comments
Categories : New & Noteworthy

In light of Spain’s recent 500 MW wind power auction that did not adequately satisfy the market’s demand, the country is at risk of missing its 2020 renewables target, according to the European Wind Energy Association (EWEA).

EWEA says the auction was Spain’s first under its new support scheme for renewable energy projects; 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, explains EWEA.

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, says the association, there is no guarantee that developers will be able to deliver on projects.

“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,” says Giles Dickson, CEO of EWEA.

“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,” Dickson continues.

In 2015, says EWEA, the European Commission highlighted Spain as a country that needs to do more to meet its commitment of 20% renewables by 2020 – which in line with the nationally binding European Union (EU) targets. Thus, the Spanish Wind Energy Association has called on the government to provide the market with an additional 5.9 GW of auctions before the summer if Spain is to meet its 2020 goals.

Dickson adds, “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.”

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