The two resolutions approved by the Ministry of Energy on the new renewables auction were published in the BOE on Wednesday. Finally, it will be held on 17 May and will cover a maximum power of 3,000 MW. The CNMC proposes several amendments to make it more competitive in separate reports that it has also released on Wednesday.
The two resolutions approved by the Ministry of Energy, Tourism and Digital Agenda on the auction for granting the specific remuneration regime to renewable technology-based installations for electric energy production published in the BOE refer to the rules and procedure on the one hand, and the call, on the other.
The Government sets the date of May 17 for the auction that will cover a maximum power of 3,000 MW and allow the introduction of renewable technologies that are more cost-efficient. Any natural or legal person who complies with the regulations requirements may participate.
In a statement, the Ministry of Energy explains that the entity managing this auction is the Spanish Electricity Market Operator (OMIE) and emphasizes that the call will allow Spain to advance in the fulfillment of the renewables introduction targets set by the EU for 2020.
The new renewables auction
Also on Wednesday, the CNMC announced that it had approved the reports on the proposals by the Ministry of Energy regarding the auction. In a statement, they warned that both reports – corresponding to each of the Government’s resolutions – were made without knowing the final text of Order ETU / 315/2017, dated April 6, nor the proposal of confidential annex referred to in the proposal of Resolution of the call for the new renewables auction. The Order has been approved last week by the Ministry of Energy, Tourism and Digital Agenda (MINETAD).
Regarding the rules of the auction, the CNMC considers that they are developed in a manner consistent with those of other sealed auctions with marginal system and are in line with those of the previous auction, held on January 14, 2016.
However, the CNMC proposes to modify several aspects of the auction rules in order to make it more competitive and transparent. Among others, the CNMC requests that the volume by which the renewable energy companies that come to the auction will submit their bids be binding on the standard reference value set by the Ministry for each type of renewable technology.
“This measure would make it possible to have certainty about the competitive pressure that exists on the part of the companies before the auction,” they explain.
On the other hand, the CNMC states that before it is held, the Managing Entity (OMIE) must propose to the Secretary of State for Energy the criteria by which the auction could be postponed.
Likewise, the CNMC recommends that the amount of power finally awarded in the auction should not be less than the power to be auctioned. This assumption could arise if the renewables companies participating in the auction offer a higher volume of power for example, when bidding for certain blocks of energy that are indivisible and exceed the amount offered, the Commission explains.
Dropping the criterion on the number of equivalent hours
In addition, the CNMC states that when sorting bids to award the different auctioned blocks, in case of indeterminacy or tie, the criterion of equivalent number of hours of operation be eliminated.
It also states that assignee companies to the auction should be released from presenting guarantees (cash, guarantees and surety bonds) in duplicate.
In their opinion, this assumption will impact companies that are awarded one of the blocks auctioned because they must submit a series of guarantees before participating in the auction (guarantees of participation), and some later, when companies register for a specific remuneration regime.
Regarding the rules of the auction, the CNMC proposes as a main recommendation that no limits be set on the discounts (maximum values of the reduction percentage) that renewable companies will offer in their bid compared to the standard value offered by the Ministry.
All this, so as not to reduce the competitive pressure in the auction, and not to restrict the number of discounts within which the offers can be sorted without resorting to more controversial tie-breaking criteria.