Spain’s cabinet approved a decree establishing rules for renewable energy auctions. The long-awaited auction scheme is likely to lead to the first round by year’s end. The system will have submission of sealed bids and the winners will receive different prices based on their offers. This will take place under a “pay as bid” system.

Under the new framework, there will be hybridization of technologies, the expansion and modification of existing facilities, and the use of storage. The tariff set for the successful bidders will be for a period of 20 years. A maximum power or energy quota will be set before the auction takes place. The decree also outlines criteria to include projects with specific characteristics, such as small-sized installations, innovative projects, and energy communities.

The cabinet has also approved a plan mapping out Spain’s route to become carbon neutral by 2050. Under this plan, Spain expects an emission reduction of 90 per cent from their 1990 levels and offset the remaining 10 per cent. The country aims to install 50 GW of renewable capacity by 2030, which will help create more than 100,000 jobs annually and reduce energy costs for consumers and businesses. A five-year auction calendar in tandem with the renewable energy objectives will be published in the upcoming weeks which will be updated at least once a year.