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Spain Awards 95% of New Renewable Capacity Put Up for Auction

· Country held auction for 3.3 gigawatts of solar, wind projects

· Utilities Iberdrola, Endesa didn’t bid in Tuesday’s auction

The Spanish government awarded 95% of the 3.3 gigawatts of new wind and solar power capacity that it offered in an auction, part of a plan to boost renewable energy generation.
Of the 3.1 gigawatts of new capacity allocated in the auction, about 2.3 gigawatts are for wind farms and the rest is for photovoltaic projects, the government said in a statement. The average price was 30.56 euros per megawatt-hour in an auction that two of the country’s biggest utilities skipped.
The increase in price compared to a previous auction in January is “reasonable” given the inflation in equipment and raw materials, Ecological Transition Minister Teresa Ribera said in the statement.
Spain is trying to boost renewable output and reduce electricity costs as Europe struggles with the energy crunch. The rally in natural gas, power and emission permits is hurting consumers from German chemicals producers to Spanish households just as economies recover from the pandemic, boosting demand.
“This is an especially delicate, complex and turbulent moment in the European energy scene,” Ribera said.
Read more: Iberdrola Shuns Renewables Auction Blaming Uncertainty in Spain
Spain staged Tuesday’s auction in the wake of a month-long tussle over steps taken by the government, including a windfall tax on utilities, aimed at easing the impact on consumers from surging European energy prices. Last week, Spanish Prime Minister Pedro Sanchez sought to draw some of the sting from the dispute with utilities, promising to ease the impact of the windfall tax if they sold power at “reasonable” prices.
Iberdrola SA, one of the world’s biggest clean energy developers, said earlier on Tuesday that it skipped the auction due to regulatory uncertainty that’s made it reconsider investments in Spanish renewable energy projects. Endesa SA, the Spanish utility controlled by Enel SpA of Italy, also said it didn’t take part in the auction.
Meanwhile, Naturgy Energy Group SA said it was awarded 221 megawatts of capacity for photovoltaic projects. Forestalia Renovables SL was awarded 780 megawatts in the auction, El Confidencial reported earlier, citing unidentified people in the industry.
The new projects will involve investment estimated at about 3 billion euros ($3.5 billion), according to the government.