The competitive allocation of the interruptibility demand-side management service corresponding to the period between 1 July and 31 December 2019, has started today, through the holding of the auction convened by the Ministry for Ecological Transition and managed by Red Eléctrica in the IFEMA exhibition site in Madrid. On this occasion, 2,400 MW will be auctioned off, divided into 352 blocks of 5 MW capacity product (1,760 MW) and 16 blocks of 40 MW (640 MW) capacity product, as established in the Resolution of the Secretary of State for Energy 13 June 2019, approving the requirement for a set volume of interruptible power to be auctioned
The mechanism that will govern the allocation of the interruptibility service will be similar to that of previous editions and will be carried out through auctions that will start off at 125,000 euros/MW per year for the capacity products of 5 MW and 150,000 euros/MW per year for those of 40 MW; said prices were set by the Secretary of State for Energy in the Resolution of 24 May this year.
During the next few days, about 125 participants, 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 Spanish National Markets and Competition Commission.
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. This service is activated by Red Eléctrica and responds to technical or economic criteria.
The process is articulated through a system of competitive downward auctions in which the starting price for each block of capacity product is progressively reduced until there is only one bidder left, pursuant to Resolution of 5 August 2016/8, approved by the Secretary of State for Energy and by which the rules of the competitive auction procedure are established.
The allocation of the interruptibility service is carried out through the holding of auctions managed by Red Eléctrica and supervised by the Spanish 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.