Extraordinary complex situation, challenges us to be more supportive with our clients and look toward the future
COVID-19 has rapidly spread, affecting almost all countries worldwide. Latest economic consensus have shown a general and significant GDP drop, especially relevant in those markets highly dependent on external demand and/or labor-intensive sectors, like the Spanish market. As a result of the health crisis, Government has declared the alarm status, which has a wide variety of implications, many of them impacting the power sector:
• Economy lockdown has led to a relevant decrease in power demand. Combined with the commodities low-trend price observed during the weeks previous to COVID-19 crash, have resulted in historical wholesale electricity low prices.
• Pool and future markets low-price scenario are putting a lot of pressure on off-takers, who are showing a downward trend in PPA prices.
• Delay in the administrative procedures. This has an immediate impact on the development process and construction schedules for renewable energy projects affecting economic projections.
• Financing of renewable energy projects is going through an uncertainty situation which may postpone financial close but also might force financial institutions to revisit their terms and conditions.
• Renewable energy operating projects may face working capital stress situations driven by current retribution parameters as they were calculated considering a complete different pool price scenario compared to existing one.
All the above shows an extraordinary complex situation which challenges renewable energy stakeholders to move fast in order to enhance their business strategy. From Vector Cuatro, we have performed a deep dive on key drivers to provide our clients with a continuous support. Our closeness to the market through a strong network together with our wide in-house expertise, allows us to have 360 picture and enable us to become a reliable partner in the renewable energy industry.
Our M&A and Financial Advisory team is continuously monitoring market updates, factoring any input to adapt opportunity assessment. We are especially active in M&A transactions, on the sell-side helping our clients in maximizing asset value and on the buy-side advising on valuation and structuring to optimize return to shareholders.
Do not hesitate to get in touch with our team requiring any kind of support. Our M&A and Financial Advisory team would be more than happy to support you whatever your concern may be.Read More
Mexico is among the top 10 most attractive countries in the world with the highest investment in renewable energy.
Currently, Mexico is in a situation of uncertainty and risk because the new Government of López Obrador has positioned itself against renewable energy auctions. In turn, the president of CFE (Federal Commission of Electricity) has requested the three previous auctions project contracts to be renegotiated.
So far, in Mexico, three auctions have been carried out in the years 2015, 2016 and 2017, and a fourth was planned for 2018, however, last January, the last clean energy auction was cancelled.
Despite this, the situation also represents an opportunity to obtain high returns for those willing to assume this risk. The abundance of solar resources, the high prices of energy, the decrease in technology costs and the growing need for diversification of resources combine to place Mexico among the world leaders for photovoltaic development.
The Mexican economy is growing at a good pace. The Secretaría de Energía (SENER) expects energy demand to grow at 3% during the period 2018-2032, as well as retirement of nearly 12 GW of existing capacity in the same period.
SENER is implementing a Clean Energy Certificates market, based on the obligation of large consumers to have a minimum level of consumption from clean energy, from 5% in 2018 to 13.9% in 2022.
Also, price of electric power in Mexico is very high: in nominal terms, it is 73% higher than in the United States. Citizens do not realize this because 95% of households obtain an electric subsidy that covers up to 90% of their receipt. Even after the subsidy and adjusting for purchasing power, electric power in Mexico is still 25% more expensive than in the United States. Mexico spends 0.75% of its GDP subsidizing electricity tariffs.
Despite the negative impact of the cancellation of the 4th auction, the current uncertainty, and the multiple challenges that await it, solar energy in Mexico is still in very good shape. Bilateral PPAs viability is already a fact in Mexico and the expansion of this segment could lead to a more sustainable market. It is worth mentioning as recent success stories of long-term PPAs the one of the French Engie with the steel producer Gerdau Corsa for a photovoltaic installation of 130 MW and a Balam Fund’s 35 MW photovoltaic plant that supplies Farmacias del Ahorro.
According to a report published by Bloomberg New Energy Finance, worldwide, the volume of energy consumed by companies that have decided to be supplied by clean energy and specifically through the bilateral market reached a record of 13.4 GW in 2018. Mexico is part of this global trend and between 2008 and 2017 PPAs were signed for a total of 3.4 GW, mostly from wind projects. Main sectors that have led this trend are: cement, malls, financial, mining, steel, consumer and automotive godos.
Vector Cuatro M&A and Financial Advisory business line provides its clients with tailor-made market reports covering, inter alia, country and sector analysis, development and connection process description, market price hedging (PPA and auction) description, tax memo, asset valuation analysis including expected returns and comparable transactions in the market, financing structures definition.
In addition, Vector Cuatro M&A and Financial Advisory business line is well experienced on the valuation of PV and wind projects through the preparation of financial models covering development, construction and operations.
Finally, Vector Cuatro provides potential investors with local investment opportunities according to the specific investor requirements and intermediates between large consumers and project owners in order to negotiate bilateral PPA agreements.Read More
The company continues reinforcing its international strategy by opening an office in Sydney as a new regional hub for its activities in the Pacific. This office joins the delegations that the group has at present outside of Spain, namely in Italy, France, Bulgaria, the United Kingdom, Japan, Mexico, Chile, United Arab Emirates and USA.
From the new office located in the financial district of Sydney, the local team will render asset management services, engineering and commissioning services, technical advisory and owner´s engineering, among others. Before entering the Australian market, Vector Cuatro was already present in the Asia Pacific, providing services from its office in Tokyo. The region has been one of the key markets for the company where it has carried out more than 8 GW in technical services and currently manages renewable assetss with 192 MW of installed capacity.
The company arrives in the continent at the best moment for the development of renewable energy projects. Reaching 8.4 GW of solar and 5.1 GW of wind installed capacity by mid-2018, Australia’s renewable energy market is attracting massive interest from developers, contractors, manufacturers and both local and international investors.
As 2017 was marked as a record-breaking year for renewables in the country, with 700 MW of renewable projects being completed, a recent report of Australia National University shows that during 2018 and 2019, Australia will install around 10,400 MW of renewable energy, of which 7,200 MW will be generated from large-scale solar and wind power projects and 3,200 MW from rooftop PV systems.
In the absence of national energy and climate policy, states and territories have clear renewable energy targets and have introduced a variety of policies to drive the energy transition. If industry continues deploying new renewable capacity at current rates, Australia will comfortably exceed the 2020 Renewable Energy Target and supply 100% renewable electricity by 2030.
Currently Vector Cuatro has carried out more than 1000 projects in 43 countries worldwide and is internationally ranked as one of the most important companies in the renewable energy industry. It has over 2.4 GW of power under management, 53 GW in technical services, 4.6 GW in financial advice and counts with a track record of more than 60 GW throughout the entire value chain of the projects.
201 Elizabeth Street
Sydney NSW 2000
VC provides technical advice to more than 50% of the renewable power awarded in the third long-term auction in Mexico
The company worked as “Perito Independiente” in 50% of the MW allocated in the third long-term auction for the sale of large-scale clean energy in Mexico.
On November 22th, CENACE (National Center for Energy Control) and SENER (Secretariat of Energy) published the names of the winners in the third electricity tender for the contracting of energy from renewable sources in Mexico.
The objective is to allocate ‘Power Coverage Contracts’ for a 15 years period for Power and Electric Power, and 20 years period for Clean Energy Certificates.
A total of 2.73 GW of PPAs, 2.18 GW from solar and wind energy, have been awarded to an average price of 20.57 dollars per MWh, one of the lowest internationally reached. Thus, 16 projects from 9 different companies have been selected in a very crowded auction where 46 bidders initially submitted economic offers.
The clean energy acquired in this auction is equivalent to approximately 1.78% of the annual generation of electricity in Mexico; a significant contribution to achieve the goal of generating 35% of electric power in Mexico from clean sources by 2024.
Vector Cuatro has actively participated in the three renewable energy auctions held to date in Mexico, accumulating 2.8 GW of power awarded to its clients, providing both technical and financial services. In addition to technical advice, Vector Cuatro has 36 MW of solar photovoltaic technology under management in Mexico (Asset Management).
Vector Cuatro opened its Mexico office in 2013. From there, provides Engineering / Consulting, Financial and Asset Management services and controls its projects in Guatemala, Dominican Republic, Ecuador, Peru, Honduras, El Salvador and the rest of the region.Read More
VC Transaction Services team has worked as the sell-side transaction advisor on the selling process, since the initial structuring (June 2017) until the final closing (October 2017), of a 5 MW operational PV project located in Albacete (Spain).
Vector Cuatro has provided advisory services during the selling process of the project (5MW, Albacete) leading the transaction from the investors scouting, preparation of all transaction documents, coordination of the DD process with potential buyers, communication with the bank and negotiation and closing of the terms and conditions under the Sale and Purchase Agreement.
At the end of June, the Transaction Services department received the mandate to launch and lead the selling process that finally took place last October 11th for a final amount over 30 million Euros (Enterprise Value).
Since its foundation in 2007, Vector Cuatro has been a leading advisor in the renewable energy transactions (selling and acquisitions) as well as in the financing and refinancing of renewable energy projects worldwide, taking as a competitive advantage its knowledge of the main players in the sector and its experience in the management of renewable energy facilities.
Through its three service lines (Asset Management, Engineering and Transactions), Vector Cuatro has carried out more than 600 projects in Europe, America, Asia and Middle East. It has over 1.7 GW of power under management, 4 GW in financial advice and counts with a track record of 22 GW throughout the entire value chain of the projects. In September 2014, the company was incorporated into the Italian Falck Renewables Group (FKR.MI), a leading player in the European renewable energy industry and listed at the Milan Stock Exchange.Read More
The Spanish President Mariano Rajoy has just announced that a new 3,000 MW renewable energy auction will take place before the summer. The draft of the Royal Decree has been already submitted to the CNMC for its review. On May 17th, the government already awarded another 3,000 MW of green power, of which 2,979 MW went to wind, 1 MW to photovoltaic and 20MW to other technologies.
The government has justified the launch of this new auction given the great interest attracted by the latest auction. The applications submitted exceeded by more than three times the power awarded and the winners offered the maximum discount allowed. This means that the awarded projects will be carried out without the need for additional premiums to the income they obtain from the market.
According to the announcement, the auction will be technologically neutral, as the one held this month, and it is expected that the selection criteria and pricing rules will also remain mostly unchanged.
Given the complexity of the auction mechanisms and the particularities of the Spanish remuneration regulation, great knowledge of the Spanish market is required when preparing the financial model and calculating the percentage of discount to be offered. The legislation defines the retributive parameters for reference installations of each renewable energy technology (Wind, PV and others). Based on these values, the bidders have to offer a discount over the retribution to the initial investment of their applicable reference installation that will translate to a certain return on a concrete project.
Vector Cuatro advised some of the awarded bidders in the auction held in May by providing different financial advisory services that included the review or preparation of the financial model, the assessment on the auction rules and revenues scheme and the support in the preparation and submission of the bid offers. Vector Cuatro also provided technical and legal advisory services including feasibility study and review of the administrative and land property documentation.
Besides the power awarded in the auction, the Spanish market is increasingly attracting the interest for unsubsidized development. After the slowdown in recent years, the Spanish renewable energy seems to be finally awakening from its lethargy.Read More
The Spanish renewable market has been capturing headlines during the last few weeks. Following the publication, on March 31st, of the “Real Decreto 359/2017 that announced the auction of 2,000 MW extendable to up to 3,000 MW of new renewable energy installations, the government has published the Ministerial order (ETU/315/2017) and the resolutions that approve the auction procedure and rules and the call for the auction. The auction will take place on 17th May 2017 and the deadline for submitting the prequalification and qualification documentation and the financial guarantees is 11th May 2017.
Last February, the announcement of Spain’s Energy Minister Nadal about the delay of the renewable energy auction from the first to the second quarter of 2017 rekindled the debate around these rules. In fact, the Minister justified the deferral by the intense “discussion” among the different actors on how the auction process should be designed. Industry associations welcomed with caution the postponement hoping that the delay meant that the Ministry will consider some of their suggested improvements for the auction structure. Nevertheless, the finally approved mechanism does not differ from the initial suggestions in terms of auction type, selection criteria or pricing rule.
The auction model in Spain distinguishes from the approach followed by other countries due to its unique and complex design. The auction is not project specific and the mechanism for assigning the capacity is based on the investment.
Under the ruling legislation, renewable energy plants in Spain receive the market price plus a “specific complementary remuneration”, mainly composed of two elements: a remuneration for the investment (Rinv) – a payment per kW – and a remuneration for the operation (Ro) – a payment per kWh. The setting of both components of the remuneration is based on several parameters for each plant category. The auction will be used to assign the Rinv to the awarded new installations as the Ro is no longer applicable for new installations. The auction rules set the remuneration parameters (COD, regulatory lifespan, equivalent hours of average annual production, standard value of initial investment, Rinv, etc) for new wind, solar and remaining technologies reference installations. The bidders have to offer a percentage of discount to the standard value of the initial investment of the applicable reference installation. Based on this discount, the offers are sorted by the resulting marginal extra cost to the system, calculated as the ratio between the Rinv obtained with the discounted standard value of the initial investment and the equivalent hours of average annual production. In case of tie, the technology with more equivalent hours will be assigned. All awarded capacity should be connected by 31st December 2019.
Though the auction design for the upcoming bidding is similar to the one held in 2016, some amendments have been considered, such as:
• While the 2016 auction was technology-specific, the upcoming auction do not define any technologic-specific quotas.
• Each bidder can offer between 100 kW and 200 MW in indivisible tranches.
• Maximum discounts for each technology have been established: 63.43% for wind and 51.22% for PV
• Average production, expressed in annual production hours by reference farm, relevant for the calculation of the remuneration which the plant owners will receive, have been increased to an average production of 3,000 annual hours for wind and an average production of 2,367 annual hours for solar PV power projects;
• Guarantees have been increased to EUR 60 / kW and will be put into effect if the established schedule of milestones is not met.
Given the complexity of the auction mechanisms and the particularities of the Spanish remuneration regulation, great knowledge of the Spanish market is required when preparing the financial model and calculating the percentage of discount to be offered.
The main motivation of the auction is to end up the moratorium of support for new renewable energy plants in order to comply with the Spanish target under the European Directive for 2020 and do so at the lowest possible costs for consumers. However, the National Authority for Markets and Competition (CNMC) has been claiming – among others – that even with the initially announced 3,000 MW of new renewable energy capacity the government’s 2015-2020 plan wouldn’t be fulfilled.
Spain is undoubtedly one of the key European markets to watch in the following years. Beyond the auction, the highly attractive spot market prices are also drawing the attention to alternative merchant risk hedging mechanisms such as bilateral power purchase agreements (PPAs) and swap contracts. Although the set-up of these mechanisms is different, both seek to set stable prices and reduce price volatility risk. The main drawback of PPAs and swaps is that the financing is more challenging. These agreements are usually short-term contracts and lenders request at least 15 years hedging to grant a Project Finance. Therefore, even if the contract term reaches the ten years that are expected to be the trend for the following years, different alternatives for financing should be sought. In addition to the new development opportunities arising through the announced auction as well as on a described unsubsidised basis, a great activity expected in the secondary market.
Vector Cuatro entered the renewable energy market about ten years ago, supporting industry players through its different business lines along the entire value chain of green power plants. The team is composed of highly qualified professionals with various engineering and financial backgrounds and a proven experience in the renewable energy industry, who always aim to respond best the specific needs of each of their clients, in accordance to local characteristics. In the Spanish renewables market, Vector Cuatro is one of the most recognized and experienced independent service firms, with a strong network in the industry. Today the company has over 250 MWp of solar PV and wind power plants under management in Spain. In addition, Vector Cuatro counts on a considerable track record as Technical and Financial advisor providing a great variety of services that include market studies, specialized consulting services, owner’s engineering services, on-site audits, technical due diligences, support in financing or refinancing processes or elaboration of financial models, among others.
Concerning the new evolvements within the renewable energy market in Spain, Vector Cuatro’s professional team is available to render any kind of support to interested market players, in terms of legal, technical and financial assessment, for any new solar PV or wind power plants during the bidding process as well as their subsequent design and development, construction, selling, financing and operation phases. That may include support in the understanding of the auction and its alternatives (PPAs, spot market…), the technical and economic analysis of the projects, the project management during the development phase, the elaboration of financial models for the auction, the preparation of the basic and detailed engineering or the support during the financing and subsequent construction and operational phases.Read More
In early 2016, the Spanish government held an energy auction for 500 MW of wind power and 200 MW of biomass which was oversubscribed by more than five times and drew criticism for lacking a prequalification requirement to compete. Back in autumn last year, the Spanish government announced then plans to hold a new renewable energy project auction, eagerly awaited from the national industry and international players, with high expectations that the auction design would be simplified and/or consider some characteristics of the Spanish market reality (e.g. plant size).
On December 29, 2016, the Ministry of Energy, Tourism and Digital Agenda has finally sent the regulatory proposal for the tender, comprising a royal decree and the corresponding ministerial order, to Spain’s energy watchdog, the National Authority for Markets and Competition (CNMC), where it is currently under review and until January 20, 2017 open to public consultation. The regulation’s main goal is to define the policy through which is projected to introduce a new auction system for renewable energy projects.
The intended 3 GW auction is mainly motivated by the requirement to guarantee Spain meeting its binding European Union target for 2020. The 2020 target demands 20 per cent of the gross final energy consumption to come from renewable sources, and up to now, Spain is still on track to hit its target by 2020. Citing figures from Eurostat, the country beat expectations earlier in 2014 when it achieved a green mix of 17.3 per cent, compared to the 12.1 per cent originally forecasted. Thus, the announcement of the new auction may be considered to be a measure of the Spanish government to demonstrate its intention and efforts to meet also its 2020 targets. However, the message has likewise raised hope among industry players as it could reactivate the national market that suffered a severe slow-down after the retroactive measure taken in 2013.
Although the royal decree and ministerial order in their current draft version do not disclose yet further official details neither all details about bidding rules, according to recent industry sources it can be expected that the auction will be held in two rounds, with the aim of allocating 1,500 MW of renewable energy projects in each. Same sources state that it may be expected that the first round is announced during the first quarter 2017 and winners should be named before March 31, 2017. The second round would be subsequently hold in the course of the second quarter 2017. Nevertheless, industry rumours fear that the 3 GW auction could end in a single bidding round in case enough adequate projects were presented already during the first round and the government would correspondingly amplify the allocation capacity to the maximum.
In any case, this tough timeline, which somehow requires projects in an already advanced development stage in order to fulfil milestones, is mainly conditioned to the fact that winning projects would be required to be operational by December 31, 2019, in order to contribute to the fulfilment of the EU 2020 target.
Despite the criticism caused by last year’s auction, the new announcement of the upcoming tender does not differ a lot from the previous one, even though the government has opened this auction up to all technologies. Important to highlight in this context that the new regulation will be introduced and function under the umbrella of royal decree RD 413/2014, the policy which currently regulates the Spanish renewables’ market and establishes that the special remuneration to new renewable projects will be allocated through future public tenders.
That said, a couple of relevant features that may be considered for this auction round, expected to be hold during the next couple of weeks, can be summarized as follows:
- Bidders offer a discount on the standard value of the initial investment of the reference standard plant (defined by the government). The bidding will be performed as sealed-bid, price-only auction, following a uniform pricing rule format, i.e. all the winners receive the discount of the last bid being accepted, which will set such discount.
- Allocated capacity does not have to be associated from the very beginning to any specific project, but oblige bidding parties to register any projects, according to the awarded capacity and technology, within six months, in accordance to the standard regulatory procedure. Subsequently, they have 12 months in order to finalize the official approval process.
- Also it is relevant to know that bidders are required to present a financial guarantee, established at 60 Euro per kW. This guarantee would be enforced in case the 12-months-deadline, for managing all operational and administrative approvals, would not be met.
Summing up, in contrast to recent auctions observed in several geographies worldwide, The Spanish auction system distinguishes through the difficulty of the bid preparation process. Nevertheless, important to highlight, aforementioned details do not have to be translated in ruling policy, but are only based on current draft versions of the suggested regulation and corresponding industry discussions and should be considered solely as an approximate guideline for further analysis of the bidding process.
Last but not least, relevant to note that the technologically neutral 3 GW auction has been designed for projects on the Spanish mainland only. However, as per a recent statement of the Ministry of Energy, Tourism and Digital Agenda, there will be additionally hold a renewable energy auction for the Spanish islands in the first quarter of 2017. Whereas such an announcement for the Canary Island seems already clear, the implementation of a second one for the Balearic Islands remains somewhat controversial.
Vector Cuatro entered the renewable energy market about ten years ago, supporting industry players through its different business lines along the entire value chain of green power plants. The team is composed of highly qualified professionals with various engineering and financial backgrounds and a proven experience in the renewable energy industry, who always aim to respond best the specific needs of each of their clients, in accordance to local characteristics. In the Spanish renewables market, Vector Cuatro is one of the most recognized and experienced independent service firms, with a strong network in the industry. Today the company has over 250 MWp of solar PV and wind power plants under management. In addition, Vector Cuatro counts on a considerable track record equivalent to around 2 GW as Technical and Financial advisor providing a great variety of services that include owner’s engineering services, on-site audits, technical due diligences, support in financing or refinancing processes or elaboration of financial models, among others.
Concerning the new evolvements within the renewable energy market in Spain, Vector Cuatro’s professional team is available to render any kind of support to interested market players, in terms of legal, technical and financial assessment, for any new solar PV or wind power plants during the bidding process as well as their subsequent design and development, construction, selling, financing and operation phases. That may include support in the project sourcing, the elaboration of financial models for the auction, the preparation of the basic and detailed engineering or the support during the financing and subsequent construction and operational phases.Read More
The Spanish group has advised Primrose Solar from the early stages of their project to their recent divestment, providing technical support during the development and construction of most of its plants and the sale of its entire portfolio.
Primrose Solar, one of the leading solar PV developers in the UK, recently announced the sale of its five remaining solar assets that total 80 MW. This is the third successful sale process carried out by Primrose in 2016. The company closes the cycle that began in 2013 with the investment in four projects with fixed mounting structure. Primrose Solar’s portfolio reached 253 MW with 15 solar farms in England and Wales, including some of the largest plants in the country and built under some of the best quality standards that can be found in the UK.
Vector Cuatro has actively participated during all phases of most of these projects. The company has supported the Primrose Solar team from the initial analysis to the sale of the portfolio, providing also the technical support during construction and commissioning.
Giles Clark, CEO Primrose Solar, said that “Primrose is delighted to have enjoyed a very close and constructive working relationship with Vector Cuatro. Vector Cuatro’s support has been invaluable in helping us to complete a demanding set of transactions in 2016 and we have very much appreciated the depth of their technical expertise and the quality of their work”.
Vector Cuatro entered the UK´s renewable energy market for the first time in 2011 as Technical advisor for solar PV power projects. Since then, the company has carried out several technical advisory projects positioning itself as a key reference in this market. In 2015, with the aim of providing an improved service to projects in the UK as well as continuing to strengthen its international presence, Vector Cuatro opened a new office in London.
At the moment, Vector Cuatro has taken part in more than 600 projects in 22 countries worldwide and is internationally ranked as one of the most important companies in the renewable energy industry. It has over 1.5 GW of power under management, 4 GW in financial advice and counts with a track record of 16 GW throughout the entire value chain of the projects.Read More
France suffers high dependency on nuclear power & promotes solar PV to achieve its 2030 renewable energy targets
News about extended outages at some nuclear reactors in France which have sent European power prices to records grabbed the headlines repeatedly over the past weeks. French energy markets regulator CRE proposed tighter rules under which alternative energy providers buy power from nuclear power station managed by state-controlled utility EDF. CRE aims thereby curbing potential speculation in the French power market after spot and forward electricity prices surged to record highs due to tight nuclear supply concerns in France. France could even impose power cuts this winter due to an electricity shortage, an unprecedented step in the wealthy nation which exposes the vulnerabilities of its dependence on nuclear power which is still a reality.
In fact, France still relies for three-quarters of its electricity on nuclear power, more than any other country. In the context of the Energy Transition Act  , implemented in July 2015, France set itself new ambitious energy targets which prospect a promising future for the renewable energy market. In July 2016, just one year later, France continued to materialize those targets and announced solar tenders to have 20 GW of solar power capacity installed by 2023. The tenders are expected to hit incremental goals of 10.2 GW by 2018 and between 18.2 to 20.2 GW by 2023. This means France may triple its solar PV capacity. It’s a pretty good time for France to get into the solar game, considering that solar power is now often cheaper than new power capacity from fossil fuels and nuclear, and offers grid and societal benefits.
France has now reviewed some details of its tender mechanisms (e.g. lifting the maximum capacity of a single project eligible to the program from 12 MW to 17 MW) and introduced a detailed timetable in order to incentivize and promote renewable energy deployment in the country over the next years. While 1 GW of tenders for ground-mounted PV plant will be issued annually for the next three years, other tenders announced aim to support France’s stuttering building integrated photovoltaics (BIPV) sector, with the French government earmarking 450 MW of BIPV tenders over the coming three years, and another tender will be aimed solely at the country’s self-consumption sector, and last but not least an additional 50 MW tender for solar-and-storage has also been introduced for France’s overseas territories.
In September, the French government disclosed further details about its plans to launch a series of solar PV tenders to support an additional 3 GW of PV by 2020. The energy ministry will be in charge of overseeing a series of a total of six tender rounds of 500 MW each, beginning in 2017 with the aim to provide stability and visibility to the French solar industry through this steady and regular roll out of available projects.
The tenders will be available to ground-mounted PV systems between 500 kW and 17 MW in size. During each of the six rounds, 300 MW capacity will be reserved for solar farms larger than 5 MW, while 135 MW of capacity will be for plants with a capacity between 500 kW and 5 MW. The remaining 65 MW will be offered to developers looking to build PV systems on carports, provided they are sized between 500 kW and 10 MW. The first round of bidding ends on February 1, 2017.
The increasing adoption of PPA auctions and tenders is undoubtedly bringing more competition to the French renewables market. Industry experts expect that projects are now going to be more and more LCOE driven, i.e. EUR/MW driven. To be competitive and successful in the biddings, it will be necessary to count on best local and technical know-how in order to be able to optimise projects at each and every single phase and assure their optimal performance and long-term profitability.
Vector Cuatro started its business activities in France already back in 2012. Today the Firm counts on a considerable track record within the French market, with currently 155 MWp of third party solar PV and onshore wind power plants under management. The local team is composed of highly qualified native professionals with various engineering backgrounds and a proven experience in the renewable energy industry, who always aim to best respond specific needs of each of their clients, in accordance to local characteristics. Concerning the new evolvements within the renewable energy market in France, the professional team is available to render any kind of support to interested market players, in terms of legal, technical and financial assessment, for already operating green power plants in terms of production forecasts or maintenance information, but also for any new solar PV or wind power plants during the bidding processes as well as their subsequent construction, selling, financing and operation phases.Read More