Following the implementation of new rules in Spain that restrict the profitability of the non-emitting power plants, Iberdrola has stopped tenders for products and services related to the development of renewables projects.
The company, which is currently building over 1.8GW of the solar PV and wind fields in Spain, sent messages to its vendors this week advising them of the measure, which it claimed will remain in place until a thorough analysis of the projects’ economic sustainability is completed.
The news comes after Spain’s government announced a package of measures earlier in the month to counteract the impact of record-high wholesale electricity costs, including a system to limit windfall gains from certain renewable energy projects. The new regulations are in effect until the close of March 2022 and apply to facilities with a capacity higher than 10MW which sells power on the merchant market.
Iberdrola is a member of the Association of Electric Power Companies (AELEC) in Spain, which has cautioned that the rules could make certain projects unprofitable. Last week, Pedro González, the association’s director of regulation, told PV Tech Premium that there are concerns that the measures would be prolonged, generating uncertainty about potential renewables investment in Spain.
Iberdrola emphasized that its decision doesn’t really apply to projects supported via payment mechanisms such as auctions, that are unaffected by the government’s actions. Iberenova, a subsidiary of the firm, was one of the top winners in Spain’s renewables auction early this year, with 243MW of solar PV capacity.
The impact of the new policy on the country’s 3.3GW renewables auction upcoming month, which will assign 700MW of capacity for initiatives that can be functional next summer as the government attempts to support the rapid adoption of new wind and solar plants to assist lower high electricity prices, remains to be seen.
Iberdrola Chief Executive Officer Ignacio Galán stated earlier this year that the business plans to invest €150 billion by 2030 in order to attain 95 gigawatts of installed renewables by the end of the decade.
Iberdrola is a multinational Spanish electric utility business headquartered in Bilbao. Iberdrola employs over 34,000 people who serve approximately 31.67 million consumers. Scottish Power (UK) and a large portion of Avangrid (United States) are among the subsidiaries. Qatar Investment Holding was the company’s largest stakeholder in 2013. Norges Bank, Kutxabank, and Bankia were among the other major owners. By revenue and market capitalization, Iberdrola, a worldwide energy corporation, is the second-largest producer of the wind power after Orsted (company). By market capitalization, they are the globe’s third-largest electricity utility. They have subsidiaries in the United Kingdom (Scottish Power), Mexico, Germany, Portugal, Italy, Spain, the United States (AVANGRID), Brazil (Neoenergia), and France.