Rules for the 1st renewable gas auction
Gases of renewable origin have assumed a central role in the commitment to achieve carbon neutrality, being an efficient option to promote, deepen and facilitate the energy transition, while at the same time being an opportunity for economic, industrial, scientific, and technological development, both nationally and in Europe.
This new ministerial order establishes the centralized purchase system of biomethane, and hydrogen produced by electrolysis from water, using electricity from renewable energy sources.
In fact, Decree-Law no. 62/2020 of 28/august establishes that the member of the Government responsible for the energy sector may establish, by ministerial order, specific schemes for certain gases of renewable origin or low carbon content gases, as well as other mechanisms to support the production of gases of renewable origin or low carbon content gases.
Thus, the opening of the competitive procedure for the acquisition of biomethane and hydrogen was established, through electronic auction, which should be published by 30th June 2023.
This auction will contract two types of renewable gases with differentiated base prices and volumes:
- Biomethane: 150 GWh/year (base price: EUR 62/MWh)
- Hydrogen: 120 GWh/year (base price: EUR 127/MWh, eq. at 5.01 EUR/kg)
The quantities mentioned above are contracted for 10 years (from the date of the first supply), and may be acquired in batches by the Wholesale Last Resort Supply Company (CURg) - Galp. Galp will also assume the costs of the network access tariffs, those for the injection of renewable gases that may be applicable.
However, the contracting has as a precondition: the qualification of the producers for connection to the gas transmission or distribution grids, as well as the conditions that may be attached to it.
This auction will ensure the advancement of projects that allow Portugal to incorporate renewable sources in gas consumption. Decree-Law 30-A/2022, of 18th April, has already provided in its article 9 that gas suppliers with supplies of more than 2000 GWh per year are obliged to incorporate at least 1% biomethane or green hydrogen in the natural gas supplied to clients.
It should also be noted that the review of the Procedures Manual for the Issuer of Guarantees of Origin for the electricity and gas sectors is currently under public consultation.
Decree-Law no. 60/2020, 17th august, establishes the mechanism for issuing guarantees of origin for energy, as low carbon gases and for gases of renewable origin.
"Guarantee of Origin" is the electronic document that proves to the end consumer that a certain share or quantity of energy was produced from renewable energy sources that benefit from a direct price support scheme or an investment incentive, or produced under a power purchase agreement (PPA) or an early termination agreement of a PPA.
Guarantees of Origin (GO) are subject to transaction through a competitive auction mechanism - GO-PT auctions, involving different entities, namely:
- The Directorate-General for Energy and Geology (DGEG), through CUR and OMIP, places in the market the GOs with a price or investment support regime.
- SU ELETRICIDADE (CUR) is the entity responsible for the financial settlement and invoicing of revenues from the Auctions GO-PT.
- OMIP – Pólo Português, S.G.M.R. (OMIP) is the entity responsible for managing the participation and operation of the Auctions GO-PT.
- OMIP, S.A. (OMIP SA) is the entity responsible for managing the financial guarantees required to qualify for the Auctions GO-PT.
- The Guarantees of Origin Issuing Body (EEGO) is the entity responsible for the physical settlement of the guarantees of origin traded in the Auctions GO-PT.