Spain to Sell Green Capacity to Curb Future Energy Prices
Avid natural gas demand and the rising cost of European Union permits to emit planet-warming carbon dioxide have pushed up electricity prices in many countries and prompted political squabbles in Spain.
Spain will launch an auction process for renewable generation capacity this week as the country reels from record-high power prices and seeks ways to prevent further price rises, Energy and Environment Minister Teresa Ribera said on Monday.
Avid natural gas demand and the rising cost of European Union permits to emit planet-warming carbon dioxide have pushed up electricity prices in many countries and prompted political squabbles in Spain.
Madrid wants to increase the level of cheaper renewable energy in the system, and will launch an invitation for bids on Tuesday worth 3.3 gigawatts of generation capacity, Ribera said.
“We are working to ensure that the price of energy does not depend on external factors and carries low costs, as soon as possible,” Ribera said.
But she said it was difficult to manage wholesale power price dynamics while the system is affected by the price of increasingly expensive fossil fuels and external factors.
Technologies such as wind and solar have no underlying fuel costs and are cheaper to maintain than fossil-based plants, but they are intermittent so even countries with lots of renewables have kept thermal and nuclear plants for backup.
Power prices in Spain – and closely-connected Portugal – have scaled record highs this summer, market operator OMIE says.
A heat wave in recent days boosted air conditioning use and helped to raise the day-ahead average price over 117 euros ($137.66) per megawatt-hour on Aug 13.
Easing temperatures, a recovery in wind, and lower projected demand because of a public holiday brought prices down to around 89 euros per megawatt-hour on Monday.
Spain has criticised the rules underpinning the European energy market, which set prices according to the most expensive generator needed at a given time. This means more expensive fossil fuel rather than cheaper green power dictates the price at times of high demand.
Source: Reuters
