The wind energy awarded has been 2,258 MW, distributed among 5 companies. The average price awarded to wind power was € 30.18 / MWh, compared to the current price of the electricity market of over € 200 / MWh.
The auction is an important step in moving towards compliance with the PNIEC. In total, with the new wind power auctioned in 2021, indigenous and emission-free electricity will be generated for 2.5 million homes, and current renewable generation will be increased by 8.2%.
The wind energy sector demonstrates its commitment to progress towards the objectives of the PNIEC. The quota for technology auctioned for wind power (1,500 MW) has been exceeded by 50%. For future auctions, the wind sector indicates the need for a design based on the value that each technology brings to the consumer and not only based on price.
• The sector points out the possible tension in the supply chain due to the award at such a competitive price in a situation of increasing cost of raw materials. The higher prices of raw materials and the logistics of the value chain, as well as the current regulatory situation and the situation of administrative procedures, have conditioned the participation of the actors in the auction and the prices offered.
The wind energy sector warns of the need to speed up the processing of projects in all autonomous communities so that there is no bottleneck in administrative processing and connection points.
The total wind power awarded in this auction was 2,258 MW at an average price of € 30.18 / MWh. This amount of megawatts is added to the 998 MW allocated in the January 2021 auction. All of them must be put into operation before October 2024 and represent a weighted average price of electricity of € 28.67 / MWh.
According to the calculations of the Wind Business Association (AEE), the projects awarded to wind power will involve an investment of more than 2,500 million euros, helping to maintain the more than 30,000 value-added jobs with professional development, trajectory, versatility and power competitive purchasing.
AEE considers that the result of the auction is an important step for progress towards compliance with the PNIEC. The auction result has undoubtedly been influenced by certain aspects and is not without its challenges.
On the one hand, the current regulatory situation in the sector, together with the worrying situation in the administrative processing of projects and the requirement of shorter deadlines for start-up have conditioned decision-making by companies, requiring analysis complex risk / opportunity. On the other hand, the situation of higher prices in raw materials and logistics have also had an influence, assuming a direct impact on the offers and, therefore, on the final price. All this has had to be considered in the different business strategies.
This auction is the second step in a set of six auctions already planned and approved by the Government until 2025 with minimum annual quotas for technology. In addition to the auction, in order to comply with the annual rate of incorporation of 2.2 GW of wind power established in the PNIEC, other investment schemes such as PPA or directly merchant with coverage must be promoted, guaranteeing environments of trust and stability for the investors.
Design of the next auctions
The design of the auctions must be evolved, learning from past experiences, which must guarantee a robust and reliable mechanism that is demanding in meeting deadlines and the solvency of the successful bidders, and that is capable of supporting the different strategies of companies without losing efficiency. Without a doubt, that continuous learning is one of the challenges.
For the wind sector, auctions must be focused on maximizing value and not minimizing price, so as to maximize the contributions that each technology makes to the economy, job creation, savings for the citizen, the chain supply in our country, the benefit to local communities, the efficiency of the use of infrastructures and the reduction of emissions. It is also important to advance in auction schemes that allow a degree of energy manageability, with hybridization and storage, to maximize the integration of renewables in the system.
Streamlining of administrative procedures to make projects viable
A key aspect that clearly conditions auctions is progress in the administrative processing of projects. Seeing the current rate of progress in the development of projects, the goal of reaching 40 GW of wind power by 2025 is at risk if the administrative processing capacity is not simplified, streamlined and strengthened by the administrations.
The value chain of the wind sector: national industry with presence in the territory
The wind industry in Spain has 100% of the value chain, developed in more than 250 industrial centers distributed in all the autonomous communities. Said supply chain is currently subject to economic tensions in a global market in which it operates, so having a local market, of a dimension comparable to the wind industrial capacity of our country, that has mechanisms that help To gain stability and industrial comfort is also a priority. The 2,258 MW awarded are equivalent to approximately 450 wind turbines, which implies a workload lower than the capacity of the wind industry in Spain, which is close to 4,500 MW / year. Hence the importance of continuing to bet on complementary schemes such as PPAs and merchant, which guarantee a rhythm of orders to factories during 2022 and 2023 as critical periods.
Wind power and the objectives of the PNIEC
Spain has assumed ambitious and necessary development objectives for renewables in the PNIEC. Currently, wind power has 27,400 MW installed and the target for onshore and offshore wind for 2030 is 50,333 MW. The sector will continue working to fulfill its commitment to Spanish society to do everything possible to achieve the goal of 74% renewable energy in the electricity sector by 2030 and make the energy transition possible by 2050. To do this, it needs a framework stable regulatory framework that generates confidence in investors, an industrial policy that supports the progress of the value chain of the wind industry in Spain, and lay the regulatory foundations for the deployment of offshore wind (which can be a major driving force for the Spanish economy, both energy and industrial), among others.
Wind power and the price of electricity
Wind energy reduces the import of imported fossil fuels, a cause of the current price increase, providing the highest amount of clean energy per MW installed and generating the greatest savings for consumers.
Taking into account the current OMIP futures contracts, AEE calculates that thanks to all the new wind power auctioned in 2021 (3,256 MW), by the end of 2024 Spanish electricity consumers will have 8.2% more renewable electricity at a price Weighted average of € 28.67 / MWh, which will mean a saving of 44% compared to the market price forecast for 2025. In monetary terms, a total saving for consumers of more than 435 million euros.
In addition, in the last 10 years, wind power has avoided the generation with fossil fuels equivalent to 2 years of electricity consumption in Spain, avoiding the import of these fuels worth 18,717 million euros. Wind power is also an essential tool in the fight against climate change. If a hectare of forest absorbs between 10 and 20 tons of CO2, Spanish wind power is the equivalent of between 1.4 and 2.8 million hectares of forest in an emission-reducing effect (between 2 and 4 times the size of the surface of the Community of Madrid).