The Spanish industrial sector has finally received news that has been awaited for over five years. The Council of Ministers has taken the final step to approve the regulatory framework that will allow the implementation of the cogeneration auctionsThis technology is vital for the competitiveness of factories that produce both heat and electricity. This measure comes at a critical time, as the lack of a clear framework had led to... Many plants will close down after reaching the end of its useful life, leaving the industry in a rather worrying situation of energy vulnerability.
The proposal, submitted by the Ministry for Ecological Transition and the Demographic Challenge, envisions the allocation of a total of 1.200 megawatts of power. This will not be done all at once; instead, the plan consists of distributing this capacity through two competitive bidding processes of 600 MW each, scheduled for 2026 and 2027. This move aims not only to halt the dismantling of infrastructure that are already in operation, but also to encourage the construction of new units that are much more efficient and environmentally friendly, in line with European objectives.
A breath of fresh air for industrial competitiveness
The collapse of cogeneration in Spain has been staggering over the last five years. According to data from the main industry associations, installed capacity has halved, falling from contributing 12% of the national electricity supply to barely 6%. This legal vacuum has forced halt operations at approximately 320 plantsThis represents a loss of approximately 2.000 MW of power. Therefore, these new auctions are seen as a lifeline for such powerful sectors as the tile industry in Castellón or the chemical industry, who need this support in order not to fall behind in competitiveness compared to other European countries.
The investments expected to be mobilized through these calls for proposals are around €2.000 billion. Beneficiaries will be able to enjoy a reasonable return, set at 7,09% for the regulatory period extending until 2031. This is no small sum, as this scheme offers the necessary legal certainty so that companies dare to spend the necessary capital to renew their boilers and generation equipment, ensuring that the cost of energy does not put them out of the game in international markets.
Regarding the established operating periods, there are significant differences depending on the fuel used. Installations that opt ​​for natural gas will have a regulated lifespan of 12 years, while those that choose [fuel type missing] biomass in Spain They will be able to extend that period up to 20 years. This distinction aims to to promote the transition to renewable energy sources, rewarding the stability of technologies that emit less carbon into the atmosphere and that help clean up industrial waste management.
Green requirements and technological requirements
It won't all be about receiving subsidies; the government has set quite strict conditions regarding sustainability. For the first time, gas plants participating in the auctions must be prepared to mix at least 10% hydrogen renewable in its usual consumption, relying on the development of a green hydrogen plantFurthermore, very clear emission limits have been set, specifically 270 grams of CO2 per kilowatt hour, to ensure that the modernization of the industrial park does not represent a step backwards in the fight against climate change.
The auction design will be based on a sealed-bid system with a marginal descending bid mechanism. This means that companies will have to compete for megawatts by offering discounts on the standard investment value. To prevent undue concentration or monopolies, it has been established that no company will be able to be awarded more than half of the power auctioned in each round. The Iberian Electricity Market Operator (OMIE) will be in charge of organizing this whole operation, always under the watchful eye of the CNMC.
Another interesting point is the expansion of the investment catalog. Thermal and electrical storage systems, heat pumps, and even digitalization solutions can now be included to make the plants smarter. It is estimated that the commissioning of these 1.200 MW will achieve avoid the emission of 8,4 million tons of carbon dioxide throughout its operational life, driving the advances in CO2 captureThis provides a tremendous boost to the country's environmental accounts while keeping the economic engine of factories afloat.
The implementation of this new regulatory framework marks the end of a period of uncertainty that has severely impacted the national manufacturing sector. By facilitating the renewal of key equipment and promoting the use of renewable gases and biomass, the electricity system will gain flexibility, and industry will be able to look to the future with greater optimism. Although the additional cost to the system is estimated at between €414 and €582 million annually, the benefit in terms of energy efficiency and emissions savings It will more than compensate for the economic effort made by the public administration.
