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“I find it hard to believe that all the plants will be built in the 2020 solar auction.”

“I find it hard to believe that all the plants will be built in the 2020 solar auction.”

The head of the Portuguese Renewable Energy Association says he “has some difficulty believing” that solar plants auctioned in 2020 – under a flexibility bonus scheme – will see sunlight, totaling 400 megawatts. He applauds the government's decision to expedite the approval of the investment plans for REN and E-Redes.

The president of the Portuguese Renewable Energy Association (APREN) doubts that 400 MW will be built from the solar auction held in 2020.

Pedro Amaral Jorge refers to the positions in the flexibility bonus system and warns that any change in favor of these positions “would distort the rules of competition,” expecting to lead to “legal challenges.”

In January, Jornal Economico revealed that of the 13 projects in the 2020 solar auction (totaling 670 MW), none had yet been completed, as estimated by the then Ministry of Environment and Climate Action.

APREN is holding its second annual conference dedicated to wind energy this week Navy The Renewable Ocean Summit, which will be held on April 17 in Lisbon.

The main project in the coming years is Reboot Of wind power plants Wild. How does this process work? What is needed for things to run smoothly?

We have the right to increase the connection power by 20% in accordance with the current Decree Law 15/22. This means that I can effectively have a system replace old turbines with new ones, maximizing installed power for contact power usage. If we have 20% contact capacity, and we assume we have six gigawatts, we can have an additional 1.2 gigawatts of dedicated contact power, which will result in another 1.4 to 1.5 gigawatts of installed power. But this only gives us seven gigawatts, and the PNEC target is 10 gigawatts. Therefore, we will have to find new sites to install onshore wind energy, because Reboot It will not be sufficient in itself to achieve the objectives of the Palestinian National Emergency Program. We must have a regulatory framework for registered prices, energy purchase sales, and market sales that allows these investments to be made. I think we need investments in the network, because the sites we have can be used for new turbines, and we have even been able to get 20% of Reboot. But to build the remaining three gigawatts needed to reach the ten gigawatt target, we will certainly need: either a new grid or the use of other sites that we have not yet thought of.

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Can the auction be launched?

Auction is an option, however Race to the bottom… We have already had the experience that when we put too much pressure on prices, this leads to delays and difficulties in value chains. I think it should be a competitive process. I don't know if it necessarily has to be an auction or if it has to be an auction with priced components to be included. It could have an auction component and a PPA component, with state support for consumers. But there are a number of methods that can be used here.

Were you referring to the 2019 and 2020 solar auctions?

I remember that when the pandemic happened, the forecasts were not right, and the fact that it was a competitive process and we were restricted by a procedure, created a set of legal difficulties. We have to try to write things in a way that we have either degrees of flexibility or indexes, so that we can accommodate the differences in reality compared to what the models are.

In the current regulatory framework, do you think that all centers for these auctions will be built?

I find it hard to believe that all the factories will be built in the 2020 Resilience Bonus Auction. But the rest that are in CfD or in contributions to the system, I believe will be built.

Do you think something has to change for these 2020 stations to be built or not?

I don't think we can, because the competition procedures were so straightforward that we would have to change the competition rules, and that would probably lead to legal challenges, because it wouldn't make any sense. Because we will change the rules of the contest.

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What is the share of this auction?

There were 400 megawatts, and that is the missing item in the 2020 auction.

Is it unlikely to come to fruition?

Today, I don't see that as possible, unless there is a brutal change, but with the volatility we are experiencing, I understand that it may be difficult, unless we make some change, while respecting the spirit of competition and within the legal framework. From Decree Law 15/22, but from the beginning…

But was the energy sector in an uproar?

Yes, because if we make this change we will distort the rules of the competition.

The compensation base for local authorities of 13,500 euros per installed megawatt of renewable energy has been extended until the end of this year. Should it be longer?

I think so, because if we have incentives for wind energy at 2.5% of revenue, it also makes sense to provide incentives for residents to take advantage of it. Now, incentives cannot be awarded after the fact. In other words, it's not a matter of assigning a certain hotspot with a certain tariff, and now I will demand that the promoters make this payment. It can't be like this. That can't be at the moment I'll be putting the project together. This rule should apply equally to everyone in the solar field.

The government program foresees a national storage strategy, in this case through batteries for wind and solar projects…

They are essentially batteries already installed in existing electrical production centers. It's a good idea, because I'll get a truth and reconciliation commission [licença de injeção de eletricidade na rede] It's already set. I can effectively store energy and mitigate the impact of zero prices by storing this electricity: which is what I produce, rather than delivering it. When the market is at zero, I can deliver a portion to the market. When there is consumption in the market, I can prepare recipes for my project in a way that makes it viable. It makes perfect sense.

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But these batteries are still not widely available?

It exists on a large scale. What we expect is that, just like the PV curve, if we look at 2019, it cost us €400/MW, today it costs us less than €40/MW. The same thing will happen with batteries and the same thing will happen with electrolyzers. In other words, there is no economic reason why the curves should not have the same exponential downward behavior as the costs of producing electricity from production batteries – meaning that the system's storage and reconnection are within what are existing market prices. spot, at times when consumption is more and when there is no solar energy. In the three winter months around 7pm/8pm/9pm, the electricity price reached 80-100€/MWh. In this context, batteries can already be integrated, and the costs of storing this electricity and then delivering it to the market are expected to fall to less than 80-90 euros per megawatt-hour.

Another point is to speed up the approval of the investment plans for REN and E-Redes.

This is essential because we do not have any ability to connect electrical production centers. This is one of the crucial variables, in addition to creating regulatory conditions to attract investment in electricity generation. Since E-Redes and REN are monopolized by the regulated market, they need clear incentives and rules on how to invest. The plans must be approved in line with reality, both in terms of consumption and the commitments Portugal has made with the European Commission and in terms of achieving the goals.