AleaSoft, January 29, 2021. The results of the renewable energy auctions held in Spain at the end of January had an international impact and are good news for the investors, who are showing interest in the renewable energies in Spain. The impact of the prices of the auction on the market prices and the PPA prices are among the concerns showed by those attending the event for investors organised by J.P. Morgan where the AleaSoft’s long‑term forecasting services were presented.
Last Thursday, January 28, AleaSoft participated in a private event with institutional investors organised by the North American investment bank J.P. Morgan. It was an event restricted to institutional clients and among them there were some of the large banks of Spain, international investment funds, Hedge Funds and sovereign funds. AleaSoft was presented to the attendees as a provider of quality and reliable forecasting of the main energy markets in Europe. The meeting focused on the long‑term vision of the wholesale electricity market in Spain based on the AleaSoft‘s forecasting.
The impact of the auctions result
Among the questions and comments of the attendees, the results of the renewable energy auctions held in Spain at the end of January took prominence. The main concern focused on which impact the prices resulting from the auctions might have on both the electricity market prices and the PPA prices.
The conclusions were that the final auction prices are expected to have very little or no impact on the prices of the market or the PPAs signed this year. The bids of the large companies in the auctions respond to a long‑term strategy based on the expected costs and the performance that can be obtained throughout the life of the plant, also beyond the period in which they will be subject to the REER (Economic Regime of Renewable Energies).
The renewable energy facilities subject to the REER will coexist with the full merchant plants that sell all their energy in the market and with the plants that signed a PPA. Each one with its costs, its financial models and the risk associated with each of the remuneration modalities. If well designed, all of them will be profitable in the long term and they will coexist in the Spanish electricity system.
What was observed during the event is that the fact that the prices were in the expected range, around €25/MWh, increased the interest of the international investors and developers. The auction results showed a mature renewable energy sector in Spain with solid long‑term goals rather than a race where any price works, no matter how low it is.
The price captured by the renewable energies
Other topic that aroused the interest of the participants was the forecasting of prices captured by the renewable energies, especially by the photovoltaic energy. The spectre of the cannibalisation of the prices continues in the subconscious of the sector. But as more forecasts show less apocalyptic scenarios, the confidence in a robust and balanced electricity market prepared for the energy transition grows.
Also all the new demand that is going to be incorporated into the electricity system was the protagonist of some consultations. From the impact of the electric vehicles to the production of green hydrogen and its role as the fuel of the future.
Information and analysis of the energy markets in Europe
In addition to private events, at AleaSoft public webinars are organised. Currently, the cycle of webinars “Prospects for the energy markets in Europe from 2021” is being held with the participation of speakers from the most important companies in the energy sector in the continent. The third part of this series is scheduled for February 18, and this time it will have the collaboration of ENGIE, to analyse the prospects for the energy markets and the financing of the renewable energy projects from this 2021. Later, the fourth part of the webinars series is scheduled for March 18 and it will feature the collaboration of speakers from EY (Ernst & Young).
Workshops about tools for the monitoring and analysis of the energy markets in Europe are also being organised. The next workshop will take place on February 4 and it will show the AleaApp platform for the compilation, visualisation and analysis of data related to the energy markets. The next workshop is scheduled for February 11, and it will show to the agents operating in the electricity spot and futures markets how to make the most of the mid‑term market prices forecasting and stochasticity.
In addition, at AleaSoft a wide variety of reports for the energy sector that cover the main markets in Europe is available. New complementary services associated with the long‑term prices curves reports are also offered to advise on their use.
Source: AleaSoft Energy Forecasting.
