The competitive allocation of the interruptibility demand-side management service corresponding to the period between 1 January and 30 June 2019 has started today, through the holding of the auction convened by the Ministry for Ecological Transition and managed by Red Eléctrica at the IFEMA Trade Fair Venue in Madrid.
The interruptibility service is a tool available to Red Eléctrica, as system operator, to ensure, at all times, a quality electricity supply nationwide. By way of such service, large consumers of electricity (industries) undertake and agree to reduce their electricity consumption as and when the electricity system requires them to do so; such consumers are financially compensated for the reduction. The service is activated by Red Eléctrica and responds to technical or economic criteria.
The allocation of the interruptibility service is carried out through the holding of auctions managed by Red Eléctrica and supervised by the National Markets and Competition Commission. For its part, the Ministry for Ecological Transition is the body in charge of defining the entire procedure and the rules which govern it.
The process is articulated through a system of competitive reverse auctions in which the starting price is reduced until there is only one bidder left; the process is repeated for each block of capacity product. As established in the Resolution of the Secretary of State for Energy of December 5, 2018, approving the requirement for a set volume of interruptible power to be auctioned (available in Spanish), on this occasion a total of 2,600 megawatts (MW) will be auctioned, divided into 352 blocks of the 5 MW capacity product (1,760 MW) and 21 of 40 MW (840 MW).
The allocation mechanism will be similar to that of previous editions and will be carried out through reverse auctions that will start at 150,000 euros per MW and per year for the 5 MW capacity products and 200,000 euros per MW and per year for those of 40 MW.
During the next few days, close to 130 large industry companies with intensive electricity consumption will compete for the awarding of the interruptibility service. The final results of the auction will be published on Red Eléctrica’s System Operator Information System (e-Sios) website), once they have been validated by the National Markets and Competition Commission.
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