Tuesday, February 27

Sánchez announces that the electrical cogeneration of the industry will be covered by the Iberian mechanism

The President of the Government, Pedro Sánchez, announced this Tuesday that he is going to approve the inclusion of the electrical cogeneration of the industries within the compensation for the Iberian electrical mechanism, during the debate with the leader of the PP, Alberto Núñez Feijóo, in the Senate. This is one of the main claims of the industrial sectors that use this form of energy generation to stop their plants. The high costs of electricity and gas have caused some of these factories to stop production due to loss of profitability: electricity production from cogeneration is 60% lower than normal.

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“We are going to approve an exception for the cogeneration facilities of industries with large gas consumption, allowing them to be temporarily covered by the Iberian mechanism”, the President of the Government announced. Núñez Feijóo had previously requested – and reiterated the request in his speech in the Senate – that these industries be included in the aid of the gas ceiling.

Executive sources assure that the Government is processing a ministerial order that increases its regulated remuneration by more than 1,000 million. Cogeneration, which received a regulated remuneration of 665 million in 2021, has traditionally produced 10% of the electricity in Spain, using the heat from industrial processes to generate electricity.

Representatives of the Alliance for the Competitiveness of Industry had met this Monday with the Ministers of Ecological Transition and Industry, Teresa Ribera and Reyes Maroto respectively, to seek solutions to cogeneration and to agree in writing that cuts in consumption of gas that the Contingency Plan can collect does not fall on the industry.

According to the Alliance for Industry Competitiveness, the problem faced by cogeneration plants has a direct impact on the ceramic, paper, chemical and food, among others. According to the lobby grouping these industries, the 600 cogeneration plants in Spain generate energy worth 7,000 million euros a year.

Due to the fact that the price of gas has exceeded 300 euros megawatt on some occasions, a high number of these plants had stopped or slowed down their operation because they were not included in the aid framed in the ‘gas cap’. The return to operation of the stopped cogeneration plants could provide savings that could reach 1.2% of the daily demand for gas in the best scenario.

Executive sources point out that “this measure can increase gas savings in the country, at a time when this is a priority to meet European objectives. A cogeneration plant produces heat and electricity more efficiently than if heat is generated on one side and electricity on the other, obtaining savings of around 10%”.

In addition, the leader of the Executive has indicated that Spain has opted for the diversification of its gas suppliers, the promotion of renewable energies and for applying measures to reduce energy consumption.

Sánchez has emphasized that the Government advocates “solidarity” with the rest of the “European brothers”. Along these lines, he highlighted that in the first fortnight of August, Spain exported some 2,400 gigawatt hours (GWh) of gas in the form of electricity to the rest of the EU, equivalent, according to his calculations, to the consumption of an autonomous community such as Cantabria during six months.