El Salvador will conduct its second auction seeking to deploy 170 MW of renewable electricity. This follows an award of 100 MW of PV projects in its previous auction, even though no project are operational yet.
According to pv-magazine, officials anticipate the auction will be completed in December. The auction solicitation is structured for a 100 MW block using solar PV and 70 MW using wind.
“After a delay of more than one month, rules for the second auction for renewable energy projects in El Salvador have been published. Great interest in this contest where 170 MW of renewable energy will be auctioned was the reason for the call to auction, which was originally planned for May 1 and delayed until this week. The auction is open to solar PV and wind.”
The original auction sought 150 MW of renewables but has been amended to 170 MW. The capacity reserved for wind increased by 20 MW to 70 MW and the 100 MW planned for solar PV was maintained.
Solar expected to lead auction bidding
In the previous auction more solar PV was auctioned than initially planned.
According to the auction rules, the initial date of delivery for PV projects will be April 1, 2019. PV projects between 5 and 50 MW will be eligible to participate, and winning projects will be awarded 20-year supply contracts.
The new timeline states that the auction will be resolved at the end of December. Currently the opening for financial bids is set for December 28.
The largest PV project completed to date in El Salvador is a 2.5 MW plant built by AES in Moncagua. Various solar projects around 1 MW in capacity awarded in a distributed generation auction have also been built. Currently none of the PV plants awarded in the last renewable energy auction have been completed.
Of importance, the InterAmerican Development Bank announced additional financing for the 100 MW Providencia Solar project, which is expected to be the first large utility-scale solar project in El Salvador. This project was awarded a contract in the previous auction.
IRENA on understanding renewable energy auctions
IRENA, the International Renewable Energy Agency, has published a six-volume guide which reports on more than 60 countries using renewable energy auctions by 2015, in order to attract competition and drive down costs.
“Auctions for contracts to develop power-generation capacity have emerged as an essential policy instrument for many countries to promote the transition to renewable energy sources and technologies.
“Renewable Energy Auctions: A Guide to Design aims to advise policy makers on the implications of different approaches to such auctions. The set – structured around key auction design elements – offers choices and recommendations to support optimal decision-making in different contexts. Auction designs can emphasize cost effectiveness, supply security or socio-economic development objectives.”
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