Skip to main content

Analysis of the first REER auction in Spain

On January 26, the first auction was held under the new renewables scheme (REER) in Spain. This research note summarises the key outcomes of this auction and provides a brief analysis on the impact of the results for the PPA market.

Highlights from the note include:

  • The first REER auction has secured over 3 GW of capacity, with solar PV entirely dominating the technology-neutral volume
  • A heavily oversubscribed process has led to clearing prices in the range of 14.9 to 28.9 €/MWh for solar PV, and 20 to 28.9 €/MWh for onshore wind, and a capacity-weighted average price of 24.5 and 25.3 €/MWh respectively, indicating a similar level of competitiveness between both technologies
  • The effect of these clearing prices on the PPA market will depend on the expected demand/supply balance in the market. With the auction removing over 19 GW of renewable capacity from the PPA market, our projections suggest a fairly balanced market for the next decade as the increase in the supply-side is compensated by an increase in the demand for PPAs from corporates and utilities.
  • With market prices expected to rise in the next few years mainly driven by higher commodity prices, we expect the “fair value” of a PPA to remain above the awarded price in the auction

Find out more about the work we do in the Iberian Power market, and get in touch, we’d love to hear from you.

Sign up to receive our latest public insights straight to your inbox

Sign Up