Adif AV launches EUR 1.6 billion green electricity for rail tender

green electricity for railAdif Alta Velocidad has launched a tender for the supply of green electricity for rail transport for both passenger and freight operators across the general interest railway network (RFIG).

EUR 1.6 billion is the estimated value of the contract, although the final cost will depend on actual consumption. The supply contract will run from April 2023 to December 2025 and includes a possible extension for an additional maximum period of two years.

The electricity supply points have been distributed in 16 lots, following proximity criteria to minimise consumption deviations between the points that make up each group and standardise market costs.The tender does not include the costs of access to the transmission and distribution networks, whose management will be fully carried out by Adif AV with the distribution companies.

In 2021, the energy consumption for traction on the Adif and Adif AV railway network was 2,106 GWh and is expected to rise to 2,414 GWh in 2022 due to the increase in traffic, driven by the liberalisation of rail passenger transport.

The new framework agreement includes as a main novelty that each railway operator may develop its own energy price management strategy, in coordination with Adif AV. In this way, railway operators may request price coverage of all or part of the energy that they plan to consume in a specific period of time, whose closing orders will be managed by Adif AV with the successful supplier. Thus, if an operator plans to consume 1,000 MWh on the high-speed network in January 2023, and assuming that the futures market offers an interesting price at that time, it may request Adif AV to proceed to generate that closure order before the energy supplier under the conditions determined by the railway operator. The issuance of this order may be carried out by Adif AV without the need for a consensus with the rest of the operators.

This new management model responds to an intense work carried out by Adif AV with the railway operators in order to provide them with greater decision-making and management capacity in one of their main costs and, thus, reinforce the sustainability of the sector and the liberalisation process. To date, with a regulatory context that prevents railway companies from going to the electricity market and negotiating prices, it was only possible to set prices on 100% of consumption for a temporary period of each of the lots in which electricity is distributed. This procedure forced Adif AV to coordinate the closure order with all the operators that operated the high-speed and conventional network with Iberian and metric gauges.

In recent months, and temporarily, within the framework of the current contract, Adif AV has offered the operators the possibility of closing their negotiated prices and which have been set for approximately 42% of consumptionon high-speed lines for the period between November 2022 and March 2023.

The negotiated procedure that Adif AV will initiate with the supplying companies will materialise in the tender of a single offer modality so that each operator can decidethe period, the amount of energy and the temporary period to carry out price hedges.Subsequently, Adif AV will select the three most competitive offers and will start a negotiated process with the bidders to achieve optimal conditions.

At the end of November, the Spanish government authorised Adif AV to purchase renewable energy for a maximum amount of EUR 1.85 billion.

The purchase of green electricity for rail is aligned with company’s commitments under the Plan to Fight Climate Change 2018-2030 which will allow a successful progress to decarbonise the transport.

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