Welink Energy Portugal 2 UK, owner of Solara4, a 219 MW mega solar power plant installed in the Algarve, has been declared insolvent. Fires, disputes with the Chinese contractor, and a collapse in wholesale prices brought the project to an end.
A report by the consulting firm BDO confirms it: the British company Welink Energy Portugal 2 UK, owner of Solara4, is officially insolvent. This solar power plant, with an installed capacity of 219 MW, located in Alcoutim in the Algarve region, has nevertheless been operational since 2021. Five years of operation were not enough to secure its future.
The report highlights a series of difficulties. Electricity production remained "consistently below initial forecasts," while the Iberian market saw an influx of new solar capacity. This surge in supply caused wholesale prices to plummet, sometimes falling to zero or into negative territory. As a result, "revenues fell short of expectations."
The problems didn't end there. Disputes arose between Welink and its contractor, China Triumph International Engineering, a subsidiary of a Chinese state-owned industrial conglomerate. Fires and other technical incidents also disrupted operations at the site.
Faced with these difficulties, Welink announced in 2024 a €400 million plan to hybridize the power plant. The project envisioned adding 50 MW of solar power, 264 MW of wind power via forty turbines, and a 100 MW battery storage system, bringing the total capacity to over 600 MW. However, the Portuguese Environment Agency (APA) issued an unfavorable opinion, deeming the project incompatible with preserving the area's environmental values. A revised version, reducing the number of turbines by just over half, was submitted for public consultation, but no final decision has yet been reached.
The insolvency proceedings now underway bring back to the forefront an option already considered in the past: the sale of the asset to new investors.
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