Why Did Things Go Bad at Alcoutim Solar Power Plant?

The ongoing crises in the Alcoutim project, Portugal's largest solar power plant, have finally come to an end. The inability of this giant investment of 175 million euros in the Algarve region to bear the debt burden led the parent company of the project to file for bankruptcy. The facility continues to operate for now, but both the technical problems and the financial aspect of the work have put things in a deadlock.

Low Prices and Fires Led to a Chain Crisis

According to the report prepared by BDO consultancy company, the picture is quite complex. The unabated increase in renewable energy across the Iberian Peninsula has caused electricity prices to sometimes drop to zero or even minus. This situation shook Alcoutim's income balance from the beginning.

As if the financial side of the matter wasn't enough, natural and technical malfunctions also haunted us. Repeated fires at the facility in the last year destroyed the equipment and made maintenance difficult. Inverter failures in particular caused long-term outages. One of the last straws was that 10 percent of the facility was disabled in May due to dry grass that could not be cleaned and the repairs would take months.

Seeking Node and Hybrid Solutions with Chinese Contractor

The problems behind the project are not limited to nature or the market. There is a huge dispute of 143 million euros with the Chinese CTIEC, with which an agreement was reached for the construction of the power plant in 2017. While the Welink side argues that the Chinese company abandoned the project halfway through, CTIEC has initiated an arbitration process in Portugal for its receivables.

The way out of all this stuck is to combine the system with wind energy and battery storage, that is, to make it "hybrid". However, here too, the reservations made by the Portuguese environmental agency APA and ICNF due to the breeding areas of protected species such as Bonelli's eagles can block the process. Although the company is revising plans and seeking new approvals, the future of the facility remains uncertain due to the bankruptcy of the parent company and creditors' preparations for sale.

Source: Expresso (Author: Natasha Donn / Image Source: imenergy.es)