Press office

Press office

07.09.2015
2,890 MW auctioned for a total amount of 503 million euros

Interruptibility service auctions in 2015 have been more competitive than those of 2014

Between 31 August and 3 September, auctions for the electricity interruptibility service for the 2016 period were organised by Red Eléctrica de España, under the supervision of the National Securities Market Commission (CNMC) and were held in pavilion 6 of the Trade Fair Institution of Madrid (IFEMA). Also on 3 September, following the ordinary auctions, additional auctions were held. A total of 132 power stations participated, with all of them being awardees; the overall amount awarded reached 503 million euros. 434 blocks of 5 megawatts (MW) at an average price of 134,808 euros/MW and 8 blocks of 90 MW at an average price of 292,013 euros/MW were allocated. Of the total of 434 blocks of 5 MW, 419 were allocated through competitive bidding; during said bidding a total of 129 tie bids occurred, a sign of the greater degree of competition shown by practically all participants.

In the ordinary auctions held in November 2014, 238 blocks of 5 MW were allocated at an average price of 95,654 euros / MW. In the ordinary auctions held in 2014, 376 blocks of 5 MW were allocated at an average price of 134,054 euros/MW. In 2015, the allocation of blocks has increased by 58% and the price has increased by 40%.

In the extraordinary auctions held in December 2014, 204 blocks of 5 MW were allocated at an average price of 152,142 euros/MW. Of these, 6 were purchased by direct allocation due to the lack of competition. In additional auctions this year, 58 blocks of 5 MW were allocated at an average price of 139,969 euros/MW. Of these, 15 were purchased by direct allocation. In 2015, the allocation of blocks has been 72% lower, with the price being reduced by 8%.

In this year’s auctions, several interruptiblity service providers have waived the right to sell 20 blocks of 5 MW. These 100 MW are equivalent to just over 13 million euros for the system. As in 2014, Red Eléctrica has purchased all the interruptible service that the large-scale industry has made available to the system: 2,890 MW compared to 3,020 MW last year. Considering the 100 MW that were waived voluntarily, the difference between the two years is reduced to 30 MW.

Independently of the administrative exclusions, the interruptibility service applicable in the Spanish peninsular system has remained constant, at around 3,000 MW. There was just 5 million euros difference between the value of the interruptiblity service 2014, which was 508 million euros, and 2015, which is 503 million euros. This difference of 5 million euros would equate to 7 blocks of 5 MW.

The providers excluded from the service for 2016 due to non-compliance during 2015 have not produced savings for the system. Simply, they have reduced competitive pressure in two stages of the auction: in the 90 MW blocks, half of which were purchased by the System Operator by direct allocation, and in the additional auctions.

The innovative competitive interruptibility allocation system, launched by the System Operator in 2014 and used for the second time last week, proved to be the best tool in the electricity system in order to achieve greater efficiency. It has allowed the entire available offer to be purchased without exhausting the allocated budget; it has helped 9 out of 10 participants improve their results; it has maintained competition, and has again generated savings for consumers by nearly 10% of the cost of the service.

 

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