Tough RES auction terms supporting competition expected

RAE, the Regulatory Authority for Energy, is seeking to satisfy tough European Commission demands aiming to generate fierce competition between investors at new RES capacity auctions being planned.

According to sources, RAE, the Regulatory Authority for Energy, at a related seminar today, is expected to inform propective investors that one of the auction terms will require investors to submit bids for amounts exceeding total capacities on offer by at least 80 percent if planned capacity amounts are to be offered.

The energy ministry plans to stage two RES capacity auctions within the first six months of 2018. They are expected to offer 300 MW for wind energy installations and 300 MW for photovoltaic capacity, well over an initial plan already endorsed by the European Commission, offering 100 MW for each of these two RES technologies, it has been revealed.

Given the aforementioned condition, investors will need to place bids for capacities totaling 540 MW in each of the PV and wind sectors if the 300 MW capacities in each sub-sector are to be offered.

One of the conditions in a pilot auction staged in December, 2016, had required investors to submit bids for capacities whose sum exceeded the overall amount offered by at least 40 percent.

The strict demands of the new condition being planned are expected to raise issues concerning the maturity levels of project licenses.

It is anticipated that wind energy project investors will be required to have received finalized connection offers in order to participate in the auctions. PV project investors may be required to have at least covered the licensing procedure’s preliminary stage.