Two sponsors of one of Spain’s iconic subsidy-free plants have sealed a deal to deploy a smaller successor in the same area, planned again without support from government money.
Norwegian firm Statkraft will be the offtaker for Don Rodrigo 2, a new 50MWp zero-subsidy plant BayWa r.e. is already building near its 175MWp forerunner in Spain’s Seville province.
The successor – under development near the town of Alcalá de Guadaira – should have wrapped up construction by the end of 2019, both firms explained in a statement this week.
Once operational at its 162-hectare site, Don Rodrigo 2 will generate 100GWh in solar power and cover the electricity needs of around 30,000 households, the firms added.
For BayWa r.e., the latest ground-breaking comes less than a year after Don Rodrigo was completed.
“Solar power has truly come of age,” said Dr Benedikt Ortmann, managing director and head of solar projects at BayWa r.e., in this week’s statement.
“This is just the beginning,” Ortmann added. “We are proactively looking for other projects and developers to work with in Spain and Portugal.”
The new rules of the subsidy-free game
Contacted today by PV Tech, the project’s promoters had not shed light on the modules Don Rodrigo 2 will feature by the time this article was published.
The terms of the 12-year power purchase agreement (PPA) struck between BayWa r.e. and Statkraft BayWa r.e. for the new plant also remain unknown.
As PV Tech learned while preparing a feature earlier in 2019, the 15-year PPA of predecessor Don Rodrigo was split into a five-year fixed-price period and a subsequent 10-year discount-to-market phase.
The subsidy-free project is the latest of a budding pipeline in Spain, which has gone from European symbol of policy u-turns to the continent’s zero-subsidy hotspot in a matter of years.
Some are venturing one step further and designing fully merchant solar projects, with one such scheme – Renovalia’s 79.2MW pipeline – recently bagging support from top Spanish banks.
The zero-subsidy milestones are being accompanied by growing industry attention on merchant risks and opportunities, increasingly prominent as PPAs become shorter.
At an Intersolar 2019 session attended by PV Tech, Sean Maguire, commercial VP for European PV and wind at Statkraft, explained his firm is amongst those eyeing greater merchant exposure.
“Will merchant solar become the norm? We don’t believe so,” he commented. “But as portfolios grow and subsidies start to fall away, funds and investors may start to look into owning around 20-30% of their portfolios on a merchant basis.”
See here for PV Tech’s dedicated feature into Don Rodrigo, the new project’s predecessor
The prospects and challenges of European solar’s new subsidy-free era will take centre stage at Solar Media’s Large Scale Solar Europe 2020, to be held in Lisbon on 31 March and 1 April 2020