In July, Portugal held a solar power auction that yielded 1.15 GW of capacity out of an offered 1.4 GW and, more impressively, the world’s lowest bid ever at €14.70/MWh or US$16.54/MWh. This shattered the previous world record set by Brazil’s July 2019 211-MW auction, which offered $16.95/MWh. Brazil had, in turn, vanquished out California’s 200-MW June auction ($19.97/MWh). California had earlier topped a Nevada’s 120-GW March auction ($0.02175/kWh).
Large growth in renewable generation creates bubbles, and bottlenecks and countries simply don’t have the distribution and storage infrastructure, not to mention the actual demand, to handle the new additions or export them.
The Portuguese situation is similar and the grid operator REN has instituted a lottery system for awarding future permits where capacity currently does not exist. In June 2017, it also made public that it would invest €814 million in new infrastructure by 2027. The country’s energy plan is to make renewables 80% of total power utilization by 2030 and 100% by 2050. This comprises 8.1 GW-9.9 GW of solar by 2030. These targets are ambitious, but not rare among European countries.
What makes Portugal’s solar push so encouraging is that it comes off an incredible 2018, in which renewables accounted for 55% of the country’s total electricity requirement. Wind accounted for 24.3% and hydro for 24.1%; these sources have long been the staples of Portugal’s renewable energy generation. The remaining came from biomass and solar.
In March 2018, the country actually produced more total power with renewables than it could even utilize. The generation reached 103.6% of total consumption. This was not altogether new, as Portugal’s renewable generation reached 99.2% in 2014. Oil and gas imports still fill demand in specific sections, a reality for many large producers of renewables, but the trend is nevertheless encouraging.