Managing RES auction system obligations for operational renewable assets is usually not so hot and interesting topic for RES owners.
However, the situation often changes when the project approaches or reaches the end of the first 3-year settlement period, as improper management of the process can lead to substantial penalties.
This is where the effective Technical & Commercial Management plays its important role.
According to our observations, the main reasons for not reaching the threshold of 85% of the volume declared in the auction system are:
- improper monthly reporting to the settlement administrator (not submitting reports at all, wrong reporting, missing the deadlines etc.),
- wrong data (e.g. meter data much lower than the real production),
- grid curtailments not reported to DSO to be settled in auction system,
- technical issues (project failures or grid inefficiencies limiting the export of the energy etc.).
Separate point are the optimization strategies to sell part of the energy outside the RES auction system. This doesn’t necessarily need to be the issue provided it is well-thought and takes into account potential penalties while calculating the profit.
What the penalty amount may be?
As an example, let’s assume the PV project of 1MWp capacity. Let’s suppose the owner declared whole production in the auction system but missed the threshold by 1%, meaning delivered 84% of the declared auction volume in the 3-year settlement period.
In such a case, the penalty would be calculated on the basis of 16% of declared volume (missing portion up to 100%). Depending on the auction price and a few other assumptions, estimated amount of the penalty would be at the level of 120kPLN.
Please contact us if this affects you in any way.