Insolvency of Welink Energy
The UK firm Welink Energy Portugal 2 UK, owner of Portugal’s largest solar plant Solara4, has entered insolvency proceedings, according to a BDO consultancy report cited by Expresso. The process began this month and its priority is to find new investors for the asset.
Solara4: history and operational challenges
The 219-MW plant located in Alcoutim, Algarve, was inaugurated in 2021 and has been operating for five years. Since then, electricity production has consistently fallen short of initial forecasts, negatively affecting the company’s cash flow. The BDO report states that a combination of operational and market challenges has harmed the plant’s performance.
Market conditions and financial impact
The Iberian energy market has seen a significant increase in solar generation capacity, driving wholesale prices down to zero or even negative levels at times. This price drop, coupled with below-expected production, has led to revenues lower than those projected by Welink.
Disputes and technical problems
In addition to market issues, Solara4 has faced disputes with contractor China Triumph International Engineering, a subsidiary of a Chinese state-owned conglomerate, and has suffered fires and other technical problems that have hampered full operation of the plant.
Hybridisation plan and APA decision
In 2024, Welink announced a €400 million hybridisation plan to add 50 MW of solar capacity, install 40 wind turbines with 264 MW of power, and a 100 MW battery energy storage system (BESS), bringing total installed capacity to over 600 MW. The project was rejected by the Portuguese Environment Agency (APA), which deemed it incompatible with protecting environmental values in the area. The plan was revised, cutting the number of wind turbines to just over half, and was put out to public consultation, but the APA has not yet made a definitive decision.
Insolvency process and search for investors
The insolvency process now focuses on attracting new investors willing to acquire the asset. Solara4, which had already been close to being sold, remains in search of a financial solution that will allow its operations to continue.
