RES auctions 2020: only 3% of energy sold in the basket for new biogas and waste installations
In the auction of 5 November 2020 for new installations above 1 MW (biogas other than agricultural, biomass, thermal waste treatment), 0.32 TWh was sold out of almost 11 TWh offered. Two district heating companies won.
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In the renewable energy sources (RES) auction of 5 November 2020 for new installations with a capacity above 1 MW using biogas other than agricultural (including landfill gas and sewage treatment plant gas), biomass and thermal waste treatment, only 0.32 TWh was sold out of almost 11 TWh offered. This is about 3% of the pool. The results, published on 9 November, show that the basket is narrow and investor interest is limited.
Results of the auction for new installations
The auction concerned new installations above 1 MW of electrical capacity in a basket covering biogas other than agricultural, dedicated biomass combustion, hybrid systems (including high-efficiency cogeneration), thermal waste treatment and dedicated multi-fuel combustion.
| Parameter | Value |
|---|---|
| Volume offered | nearly 11 TWh (approx. PLN 5.2 billion) |
| Volume sold | 0.32 TWh (approx. 3%) |
| Value of energy sold | approx. PLN 123 million (2.3% of the budget) |
| Settlement prices | PLN 379.95–407.76 per MWh |
| Number of bids | 3 (the minimum required) |
| Winners | MPEC Łomża, PEC Ciechanów |
| Support period | 15 years, 2023–2038 |
The Gramwzielone.pl portal noted that this is progress compared with 2019, when the auction in the same basket failed because of too few bids. In both cases the outcome depended above all on whether at least three participants came forward.
Auction for existing agricultural biogas plants
Two days earlier, on 3 November, an auction was held for existing agricultural biogas installations. About 20% of the support offered was sold in it, at settlement prices in the range of PLN 628–655 per MWh. Prices were higher than in the equivalent auction in 2019 (PLN 617.5–633.9 per MWh), which meant somewhat more favourable conditions for plant owners.
Significance for the industry
The results confirm several patterns:
- for agricultural biogas, auctions remain an important mechanism, but the high settlement prices show that without support the profitability of installations is limited;
- for landfill gas and sewage treatment plant gas, competition in the basket is small, and winning depends on whether the investor decides to submit a bid;
- for waste incineration, the result indicates that new projects in this segment are carried out mainly by heating companies, which have a guaranteed heat offtake.
At the same time, the key question for the whole sector was the future of the system after 2021, when the European Commission's approval for the current scheme was expiring. The government announced an extension of the support schemes, but the decision required notification.
What next
Further auctions were scheduled for December 2020, including for landfill gas, sewage treatment plant gas and other biogas installations. For investors, decisions on the auction timetable and volumes for the coming years will be important, as the ability to plan projects depends on them.
Sources
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