Portugal’s floating solar energy auction sets world record negative price

Philippines Grants 1.97 GW Solar Capacity in Second Green Energy Auction Round

Portugal’s first auction of rights to build and operate floating solar plants on the surfaces of its reservoirs set a world record low price of minus 4.13 euros per megawatt hour for future output, the environment ministry said on Tuesday.

The government assigned rights to install floating panels with capacity to convert sunlight into 183 megawatts worth of electricity, a large chunk of which went to native power company EDP Renovaveis (EDPR).

EDPR will now build floating panels with capacity to generate 70 MW at the southern Alqueva dam, the largest artificial lake in Western Europe, with a contract for difference equivalent to a price of minus 4.13 euros ($4.51) per MWh for 15 years.

This price compares with levels of around 250 euros per MWh on Tuesday in the Iberian wholesale market MIBEL. Throughout 2021, the average MIBEL price was 112 euros.

Russia’s invasion of Ukraine in February sent prices for gas used in power plants to historic peaks, prompting governments and companies to accelerate their bet on renewable sources such as wind and solar.

“The floating solar auction proved to be a success, with Portugal breaking a new record by setting the lowest energy price in the world. There will be gains for electricity consumers worth 114 million euros over 15 years,” the environment ministry said in a statement.

EDPR won also an additional 14 MW of solar over-capacity and 70 MW of hybrid wind capacity, whose energy will be sold at 41.03 euros per MWh, the reference price for the auction.

Spanish utility Endesa won the right to install a 42 MW solar project on the northern Alto do Rabagao dam, where it plans to invest 115 million euros.

Iberian renewable firm Finerge was awarded three lots, each in different dams, to install a total of 38 MW of solar capacity, it said.

Portugal held two auctions in 2019 and 2020 for on-land solar parks and both set world records for the lowest price of future output.