The British company Welink Energy Portugal 2 UK, which owns Solara4 — the largest solar power plant in the country — has entered insolvency proceedings, according to a report published this month by consultancy BDO and cited by Expresso.
The case concerns a large-scale project in the Algarve region with 219 MW of installed solar capacity, according to the Welink Group website.
Located in Alcoutim, Solara4 has operated since its inauguration in 2021 but faced a series of setbacks.
The BDO report, since quoted by several national media outlets, says the plant "has been through a combination of operational and market challenges that have adversely affected its performance and cash flow generation".
The document adds that "electricity production has consistently fallen short of initial forecasts. At the same time, the Iberian energy market has seen significant growth in solar generation capacity."
"This increase in supply has driven down wholesale prices, which at times drop to zero or into negative territory."
As a result of these combined factors, "revenues have been lower than expected."
Expresso also reports that disputes between the British company and its contractor, China Triumph International Engineering, a subsidiary of a Chinese state-owned industrial conglomerate, together with fires and other technical problems, have hampered Solara4's operations.
Despite this turbulent trajectory, Jornal Económico reported in 2024 that Welink had decided to "hybridise" the solar plant through a €400 million investment, boosting solar capacity while adding wind power and battery storage.
The initial plan envisaged uninterrupted electricity production through a further 50 MW of solar capacity, 264 MW of wind power across 40 turbines and a 100 MW battery energy storage system (BESS), taking installed capacity to "more than 600 MW... upon completion," according to Welink Group's website.
However, the assessment committee led by the Portuguese Environment Agency (APA) gave the expanded project an unfavourable opinion, finding it would not be "compatible with safeguarding the environmental values present in the affected area" (translated from Portuguese).
Welink later revised the plan, cutting the number of planned wind turbines to just over half, and put it out to public consultation. The APA has yet to reach a definitive decision.
All this came after Solara4 had already come close to being sold. Within the current insolvency process, the priority is once again to find new investors willing to buy the asset, Expresso reports.
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