In less than a week a historic event will take place in the Spanish electricity scene. On October 19 the Second Auction will take place for the granting of the economic regime of renewable energies and, for the first time, 300 MW are reserved in the auction to award to proposed photovoltaic technology with a “locally distributed generation” installation.
It is true that only 10% of the 3,000 MW are up for auction, and it is also true that its impact on the social transformation of the business base of renewable energies will be very marginal. However, this should not undermine the fact that it is a great victory for the social movements, which have spent decades not only defending the need to decentralize the electricity system but also demanding its democratization.
In this procedure, premises will be understood as registered participants (natural person) or have their fiscal residence (legal person) in municipalities either totally or partially at a distance under 30 kilometers from the geometric center of the site where the generation equipment is located.
The deadline for submitting candidatures was open between 13 September and 7 October. The auction will take place on the 19th of this month. The result will be known on the same day.
The following legal forms may take part in this procedure:
The call considers that participation in the social capital or the financing of the project can be achieved through “crowdfunding” or “crowdlending”.
The maximum power of the facilities will be 5 MW. They must be connected to the distribution network at a voltage equal to or less than 45 kV.
The legislator took special care to ensure that these facilities were not a result of an artificial fragmentation of larger projects. To this end, legislation points out that the same owner may have no other installation within a radius of 500 meters and that the facilities must independently count on all the necessary operating equipment.
When trying to promote distributed generation and proximity to places of consumption, the legislator established a maximum power limit for each installation (always with a maximum of 5 MW). To reach this value, there will have to be a minimum of 5,000 inhabitants within 30 kilometers of the facility. If there is only half of this population, the maximum power of the photovoltaic park for the local production of electricity cannot exceed 2.5 MW.
The first and most important benefit relates to the change in the production and consumption model: producing locally to consume locally, in local networks, through facilities managed by local actors.
Second, the auctions are expected to produce results with electricity prices well below current prices. As we well know, these are times of hardship for families and many companies, with skyrocketing energy costs that cause greater domestic energy poverty and an exorbitant increase in production costs, which put at risk many jobs linked to small and medium-sized companies strictly dependent on profit margins.Lower electricity prices were the outcome of the first auction held in January 2021. Those 3,000 MW were awarded at an average price of €25/MWh for a period of 12 years. The average of the photovoltaic installations awarded in that auction was even lower: €24.82 MW.
GWO hopes this represents a turning point in the development of the energy transition. It is necessary to move onward/advance in the decarbonization of the electricity system, but it is just as important to democratize the sector and advance in proposals for greater equity.