Portugal: Tender for allocation of reserve injection capacity for electricity from conversion of solar energy

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published on 16 February 2022 | reading time approx. 3 minutes

 

Portugal is committed to moving to a carbon neutral economy by 2050 in what the national contribution is, within the European framework, to the effort to combat climate change undertaken in the Paris Agreement.

 

 

The challenges facing the pursuit of a carbon neutral economy require concerted action between energy and climate policies, which is, at the same time, promoting economic growth and improving the quality of life. In this regard, Portugal has strong arguments to continue building a strategy towards carbon neutrality based, among others, on renewable energy sources.

The energy sector will be the one that will make the greatest contribution to reducing emissions in the next decade, assuming an especially relevant role in the transition to a decarbonized society in the energy transition. Portugal's strategy for the 2030 horizon is thus based on a combination of several policy options and measures as well as technological options, seeking to find synergies between the various options.

In this sense, the National Energy and Climate Plan 2030 (PNEC 2030), which will be the main instrument of energy and climate policy for the period 2021-2030, is essential to ensure the achievement of the goals for energy and climate in the horizon 2030 and it is oriented towards the future and Portugal's long-term goals.
On 29 January this year the tendering process was opened for the allocation of reserve injection capacity at certain connection points to the Public Service Electricity Network (hereinafter "RESP"), for electricity from solar energy conversion, produced in a floating Electro-Producer Centre, as well as the rights of private use of public water resources allocated to these.

Applications must be submitted through the Application Portal by 23h59 of the 2nd of March 2022. Until the end of this deadline the applicant can make changes to the submitted application, prevailing the last version submitted until 23h59 of the 2nd March 2022. All natural or legal persons fulfilling the requirements defined in the Program can apply to the Procedure. The procedure comprises the following phases: a) Qualification; b) Tender; c) Award. The Qualification phase entails the sending of the application forms and respective annexes, including the provision of the provisional guarantee, its analysis, admission, and exclusion, with a view to selecting the competitors qualified to participate in the Bidding Phase.

In the tender Phase the bidding is done, through a remote access electronic platform, and multiple sequential rounds will be presented, being its term and number determined by the offers relative to price/quantity pairs introduced by the competitors.

In the Allocation phase the preliminary and results of the electronic auctions will be published, the rights of use of the injection capacity reserve allocated in the previous phase will be attributed, and the titles certifying these rights will be issued. The Allocation phase also includes the provisional awarding, by the APA, of the rights of private use of the public water resources allocated to the Floating Electricity Producing Centers to the successful bidders.

Within the scope of the Procedure two remuneration models are admitted:
  • "Variable Difference Premium", where the contractor receives a variable premium, positive or negative, on the closing price of the daily market, allocated to the Portuguese area of MIBEL, managed by OMIE, which allows the auction closing price to be equalized, expressed in €/MWh; 
  • "Fixed Compensation to the National Electricity System (SEN)", where the adjudicator pays the auction closing price to SEN, expressed in €/MW/year, in exchange for the price resulting from placing production on the market.

The presentation of the application to the present procedure implies the provision of a provisional bond in favor of the General Directorate for Energy and Geology to guarantee compliance with the obligations assumed by the bidder in its application, with a term of 6 (six) months.  The amount of the guarantee to be provided is 10,000 €/MVA (ten thousand euros per megavolt-Ampere) of grid injection capacity that the bidder intends to acquire, in all the lots it applies for, within the scope of the Procedure.
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