Portugal has set a new worldwide low for a solar photovoltaic, or PV, auction after one lot of new capacity was awarded at a price of €11.14/MWh, Environment Minister João Pedro Matos Fernandes announced Aug. 26.
The result was achieved in the only one of 12 lots auctioned at a fixed price on Aug. 24 and Aug. 25, the minister said, without naming the winner.
The price is a 25% drop from the lowest outcome price for fixed-price PV in Portugal's 2019 auction — which attracted bids as low as €14.76/MWh — and lower than the €11.60/MWh from an auction in Abu Dhabi in July.
Portugal's auction successfully awarded 670 MW of the 700 MW on offer, Matos Fernandes said. Of that total, 483 MW was awarded for solar projects combined with storage systems, 177 MW went to projects that will pay system contributions and just 10 MW was awarded for fixed-price contracts for difference.
The introduction of storage systems for the 2020 auction means that Portugal will have 100 MW of storage capacity in place once the projects are completed, which will increase the system's flexibility, the minister said.
The capacity winners will have to start producing from 2024, according to the auction rules.
The largest single winner from the sale was South Korean group Hanwha Q Cells Co. Ltd., which won 315 MW of capacity across six lots — the maximum permitted.
The price fell as low as €1.20/MWh for two of its lots, according to market and local media sources, while other awarded prices for PV and storage were reported around €9.50/MWh.
As a new development for the 2020 auction, bidders were allowed to submit PV projects with storage where the bid effectively represents the price they are prepared to receive.
In return, the companies act as insurance for the system against price rises, and pay out if the market moves over a certain strike price.
The other two options were for either a fixed price for 15 years or a contribution-based bid where developers pay for the right to produce at market prices for 15 years.
Other winners included large Spanish groups Endesa SA and Iberdrola SA, which won capacity totaling 99 MW and 90 MW, respectively, one market source told Platts, though the companies declined to confirm. Meanwhile, TagEnergy SA was also the winner of two lots, according to Portuguese daily Expresso, with the company unavailable for comment.
Gianluca Baratti is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.