Iberdrola avoids Spanish renewable energy auction due to regulatory concerns
(Updates with result of the auction, quote from Spanish
By Isla Binnie and Andres Gonzalez
MADRID, Oct 19 (Reuters) - 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
"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.
Enel unit Endesa, 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, 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.
(Reporting by Isla Binnie;
Editing by Bernadette Baum and Paul Simao)
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