AleaSoft, October 21, 2020. On the first day of the seventh edition of the UNEF Solar Forum, the renewable energy auctions in Spain and other issues of relevance to the photovoltaic sector were discussed. At the last table of the day, the message was one of optimism for the investors and a vision of the market in long‑term equilibrium that allows safe investments in renewable energy projects, regardless of whether or not auctions are held and in which modalities.
The Solar Forum “online”
On Wednesday, October 21, the first day of the VII Solar Forum organised by the Spanish Photovoltaic Union (UNEF), the main meeting point for the professionals in the photovoltaic sector in Spain, took place, in which not only professionals from Spain participate, but also international professionals interested in investing in Spain. This edition, which will end on Friday, the 23rd, is being a unique edition as it is the first, and we will see if the last, completely online. Special congratulations to the professionals of the UNEF for managing to organise the Forum in these circumstances, and without technical problems, through a platform that, in addition to following the discussion tables, allows the interaction between the participants.
This first day was very interesting, due to both the guests and the speakers at the tables and the topics discussed. If the topic that appeared the most throughout the day had to be chosen, this would be the renewable energy auctions. Everyone is waiting for knowing when they will be convened and in which modalities it will be.
The renewable energy auctions
The future renewable energy auctions in Spain was a topic that appeared in one way or another on all the tables of the first day of the Forum, although it was specifically discussed at the last table. This table was attended by the CEO of AleaSoft, Antonio Delgado Rigal, and representatives of Powertis, AFRY, Vector Renovables and Nexus Energía, and was moderated by the journalist Juan Cruz from El Confidencial.
The main point of the debate at the table was whether the renewable energy auctions are going to be necessary so that the renewable capacity objectives set out in the National Energy and Climate Plan (NECP) can be met. On this, there were very opposite views on the part of the participants, which stimulated an interesting debate. On the one hand, AFRY presented its vision by raising the need for auctions to exist for compliance with the NECP, at least to filter and allow only a part of the renewable energy projects, the best, to finally connect to the grid.
On the other hand, Antonio Delgado Rigal presented the AleaSoft‘s vision that the auctions are not necessary to achieve the objectives of the NECP. According to AleaSoft, the photovoltaic technology is mature enough to compete directly in the market, and the market, at a prudent pace, can assimilate all the new renewable capacity while maintaining its balance and its price level. “The auctions, with caution” was the specific expression to comment that the auctions can have their role in specific cases, for example, to reactivate regions that lost competitiveness due to the closure of coal‑fired power plants, or for regions with less solar resources, or even to allow the development of new, more experimental or less mature technologies.
The message was one of reassurance for investors. The AleaSoft‘s vision is of a future of the market in balance without excessive price cannibalisation by the renewable energies, and presenting Spain as “the gold mine of the photovoltaic energy” because it has the largest solar resource on the continent. The sentiment continues to be optimistic in the sector and the investor appetite continues.
The future of the PPAs
The second most present topic in the debate at this last table was about the PPAs and their future in Spain. According to the speakers, with somewhat opposite views on some specific points, the PPAs will continue to be present in the Spanish market, whether or not there are auctions. They will continue to be an effective tool to mitigate all or part of the market prices risk for both the producers and the offtakers, and a requirement to obtain financing from some financial institutions. The opinion that PPAs are not the only option to hedge risks was also quite general. The best strategy is the diversification and, in addition to the PPAs, there are also the futures markets.
Next AleaSoft’s webinar with the participation of Deloitte
This seventh edition of the Solar Forum will continue until Friday, October 23. In addition, at AleaSoft the second part of the webinar “Energy markets in the recovery from the economic crisis” is being prepared, which will take place on October 29 and it will have the participation of two invited speakers from the consulting firm Deloitte, Pablo Castillo Lekuona, Senior Manager of Global IFRS & Offerings Services and Carlos Milans del Bosch, Partner of Financial Advisory. On this occasion, the topics analysed in the first part will continue to be deepened and the attention will be focused especially on the needs of investment and financing of the renewable energy projects, the risks and the difficulty of preparing financial information.
Source: AleaSoft Energy Forecasting.