Iberdrola Shuns Renewables Auction, Blaming Uncertainty in Spain
Iberdrola Shuns Renewables Auction, Blaming Uncertainty in Spain
(Bloomberg) -- Iberdrola SA skipped an auction for new wind and solar energy capacity in Spain in the latest show of unease by the country’s largest utilities at government attempts to contain energy costs.
The company, one of the world’s biggest clean energy developers, didn’t take part in Tuesday’s sale process due to regulatory uncertainty that’s made it reconsider investments in Spanish renewable energy projects, an Iberdrola spokesperson said.
Spain staged the auction of 3.3 gigawatts of renewable capacity in the wake of a month-long tussle over steps by the government, including a windfall tax on utilities, aimed at easing the impact on consumers from surging European energy prices.
Iberdrola had warned the measures might discourage investment in the energy industry, while the Wind Energy Association said a fifth of wind farms would be negatively affected by them.
Endesa SA, the Spanish utility controlled by Enel SpA of Italy, also said earlier on Tuesday that it didn’t take part in the auction.
Meanwhile, Naturgy Energy Group SA said in a statement that it was awarded 221 megawatts of capacity for photovoltaic projects. Forestalia Renovables SL was awarded 780 megawatts in Tuesday’s auction, El Confidencial reported, citing unidentified people in the industry.
Energy Crunch
The sale was part of the government’s drive to boost renewable output and reduce electricity costs as Europe struggles with the energy crunch. When the auction was announced in September, the government said it planned to award 3.3 gigawatts of capacity for new wind and solar energy projects.
Last week, Spanish Prime Minister Pedro Sanchez sought to draw some of the sting from the dispute with utilities, promising to ease the impact of the windfall tax if they sold power at “reasonable” prices.
Shares of Iberdrola, the country’s largest utility by value, rose 2.7% as of 5:14 p.m. in Madrid, while Endesa climbed 1.7% and Naturgy fell 3.4%.
The government said in September it would hold the auction to award 1.5 gigawatts to onshore wind projects, 700 megawatts to photovoltaic projects, 300 megawatts to local photovoltaic installations and 200 megawatts to any technology.
©2021 Bloomberg L.P.