Portugal contracts go to newcomers -- Results of third government tender

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Portugal's government is close to finalising all 200 MW of the third phase of its program of concessions contracts for wind power production, with the largest concession already awarded to Enel Union Fenosa Energías Renovables (EUFER) to build two wind farms with a combined capacity of 50 MW in Torre de Moncorvo. The purpose of Phase C, launched in May last year, is to encourage smaller scale projects to complement the major wind farms being built under the first two concession phases in 2006 and 2007, which will see 1600 MW come online.

The Phase C concession marks EUFER's debut in Portugal, where it targets a 10% share of the electricity and gas distribution markets within two years. The two wind farms, with a EUR 70 million price tag, are scheduled for commissioning by then, says the company's Luís Lopez. India's Suzlon is providing the turbines, its first sale to Portugal. EUFER is a 50-50 joint venture between Italian utility Enel and Spain's Unión Fenosa

Bidders object

Meanwhile, Portugal's Generg group says it has been awarded a 25 MW concession in Castelo Branco. The tender jury had also recommended that one 25 MW lot each be awarded to Portuguese developer Perform 3, in Macedo de Cavalheiros and German wind project developer Energiekontor, in Valpaços e Mirandela-Tábua. It also recommended a 20 MW lot straddling the districts of Leiria and Porto de Mós e Vila Nova de Ourém for Lena Group's Eneólica. Rival bidders for these last three concessions, however, have lodged appeals. The remaining 55 MW, with contract sizes in the 5-8 MW range, were awarded to eight other renewables companies, most of them locally based.

Concessions for the first two tenders were much larger, with 1200 MW awarded to the Eólicas de Portugal consortium, headed by Energias de Portugal, in 2006, and 400 MW to the Ventinveste consortium, headed by Galp, in 2007 (Windpower Monthly, August 2007). EUFER's bids in the earlier tender stages failed, but offering a 23.15% discount on the government's offered EUR 75/MWh helped. Some other winners offered discounts in the 16.2-23.15% range.

All winners in the tender have to pay a 2.5% local tax, raising concern over profitability. But Generg's Carlos Monjardino is optimistic. "The location of Castelo Branco is in our favour as we already have structures in the region. We are still interested in new opportunities that might emerge," he says. Generg plans to invest EUR 20 million, which will give it total installed wind capacity of over 500 MW.

Two other Spanish power giants are eyeing the Portuguese wind market outside the concession program. Iberdrola plans to invest EUR 1 billion through 2018 in 250 MW of wind power plant. Of that, 50 MW is already installed. Endesa plans to invest as much as EUR 1.4 billion in a bid to secure 20% of the Portuguese power market. Some of that will be used to build more than 880 MW of wind power capacity due for commissioning by 2012.

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