Red Eléctrica de España has completed the process of allocating the interruptibility demand-side management service through competitive bidding auctions with the allocation 2,340 megawatts (MW) of interruptible power at a weighted average price of 81,220 euros/MW and year.
In this way, according to the final results published on Red Eléctrica’s System Operator Information System (e-Sios) website, which are already validated by the Spanish National Markets and Competition Commission, 95 million euros will be allocated to the interruptibility service for large consumers for the period between 1 July and 31 December 2019,.
In this call for bids, a total of 16 blocks of 40 MW and 340 blocks of 5 MW have been auctioned off, which translates into an interruptible power for the aforementioned period of 2,340 MW. A total of 123 large consumers participated in the auction process for this period. The auctions, which took place in Madrid from 17 to 19 June, were organised by Red Eléctrica as Auction Administrator.
The average allocation price for this auction was 96,925 euros/MW and year for the 40 MW capacity products and 75,307 euros/MW and year for those of 5 MW. The weighted average allocation price was 81.220 euros/MW and year.
The starting prices fixed by the Secretary of State for Energy in the Resolution of May 24, 2019 were 150,000 euros/MW and year for the 40 MW capacity products and 125,000 euros/MW and year for those of 5 MW.
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.