Contribution to the analysis of the renewable energy auctions in Portugal

Over the last two decades, Portugal started innovating its renewable energy auction process. In 2019, it hosted a solar PV auctions, and claims stating that the design of this auction resulted in the world´s lowest winning bidding price (to date), which raised interest on the functioning of this auction. The auction contained two remunerations scheme: the general and guaranteed. In the general remuneration, producers bid for a positive cashflow in return to the contribution the system (CtS) they will offer. In the guaranteed remuneration, they bid corresponds to a discount from the reference price, in return to receiving a constant Fit-in-Tariff (FiT). In this study, an analysis of the results of the auction was performed; in particular representative cases studies the variables: Net Present Value (NPV), bid awarded, number of rounds, and capacity awarded. Furthermore, a financial model was built to heck the profitability of the government and producers in various scenarios of market performance. The results showed that the NPV of a project was shown to increase with bid value, number of rounds, and awarded capacity. Yet, there no significant correlation the latter two. These correlation indicated economies of scale and competitive advantage of producer with a higher Willingness-to-Pay (WTP). The results confirmed that producers who have placed bids through the general remuneration had more chances of winning a bidding round. On the other hand, producers who have won a bid through the guaranteed remuneration experienced more profits, unaffected by the market conditions. In a similar sense, the government did experience more profits under the general remuneration, also unaffected by the market conditions. In the cases where the profits were affected, the player (government or producer) benefited from increases in the market price of electricity. Although the financial model did envelop the market price project the government was following at the time of the auctions