Portugal solar auction could lead to first CSP plant

Image credit: REUTERS/Nacho Doce
18 Aug 2020

Value-based bidding, favorable site conditions and Spanish engineering has carved a fresh opening for CSP build.

Portugal launched its delayed second solar auction last month, tendering for 700 MW of new capacity across 12 sites in Southern Portugal.

For the first time, the auction includes a new solar plus storage stream which could see Portugal build its first CSP plant. Solar plus storage developers will compete against stand-alone PV projects on a net present value (NPV) basis to win 15-year guaranteed payment contracts.

Portugal is seeking storage capacity to supply evening peak demand and the NPV values are based on forecast market bid prices.

“We are creating the conditions for competitive storage projects to win but we are not ensuring that they will," the energy ministry said in a statement. "Whether that happens will depend on the dynamics of the auction,” it said.

Strong solar resources will lead to eye-waterlingly low PV prices. In the last solar auction held in 2019, France’s Akuo Energy set a record-low PV price of 14.76 euros/MWh ($16.7/MWh).

CSP foothold

Portugal's daily load profile mirrors that of neighboring Spain, peaking in the early evening and remaining high for several hours in winter. Peak demand is largely supplied by hydroelectric power, but there is growing concern over drier conditions due to climate change.


Source: OMIE market operator


Portugal's solar plus storage auction stream is technology agnostic and could attract bids from PV plus battery storage, CSP plus thermal storage, hybrid CSP-PV plus storage projects or even PV plus green hydrogen. Plant capacities must be based on multiples of 10, 19, 99, 108 and 109 MW.

CSP plus storage costs have fallen dramatically in recent years, particularly for larger projects. In the Middle East, developers have used hybrid CSP-PV concepts and economies of scale to achieve prices close to $70/MWh. Lower prices are expected in Chile later this year.

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