Iberdrola decided not to bid in the latest auction of renewable energy capacity in Spain due to regulatory uncertainty amid a spat over measures to contain record-high power prices.
Spain sold almost all of the 3.3 gigawatts (GW) of new capacity it put on the block on Tuesday, smoothing the introduction of cheaper renewable energy sources as rebounding demand and lower fuel stocks contributed to a steep jump in global gas and power prices.
Through the auction, companies secured guaranteed returns for wind and solar power generation at a set price which is only a fraction – 15% – of the current wholesale price, the Energy and Environment Ministry said in a statement.
Energy prices have led to a clash between the biggest Spanish utilities and the government, which believes the companies have benefited excessively from selling their power into markets where prices are extraordinarily high.
“This (the auction) only confirms the need to continue to persevere in the transformation of the energy system,” said Teresa Ribera, Spain’s minister for ecological transition.
As part of a set of measures to control electricity prices, Madrid has announced it will claw back profits from companies including Iberdrola. read more
“Iberdrola did not go into the auction because of the regulatory uncertainty, which has made us reconsider our investments in renewables in the country,” a spokesperson said.
Power companies in Spain have said through AELEC, a trade group, that they are not benefiting from the high prices because they have sold all their base production for this year, and most of what they expect to sell next year, at much lower prices than the spot market. read more
Enel (ENEI.MI) unit Endesa (ELE.MC), which blamed the impact of soaring gas prices for falling earnings earlier this year, also decided not to bid in the auction due to the regulatory uncertainty, a spokesperson said.
Spanish utility Naturgy (NTGY.MC), which is working to boost its renewable capacity and reduce its reliance on gas, was awarded 221 MW of solar capacity.
Capacity auctions typically assure developers a fixed price for the electricity generated, shielding them from market volatility. That is particularly attractive for smaller players.
The weighted average price of the winning projects in Tuesday’s auction was 20% higher than the previous one in January, a “reasonable” increase, according to Ribera.
Madrid-based Capital Energy was awarded 1.55 GW of capacity, a spokesperson said, having already won big in the last round of capacity sales in January.