“The reform macro-scissors have resulted in cogeneration reducing its revenues by1,100 million per year. This sector highly integrated in the industry, used to generate 12% of the country’s electricity and has suffered the closure of one hundred plants, reducing its production by 20%, resulting in the compensation cost having dropped more than expected by Ministry “.
With these words, Antonio Pérez Palacio president of ACOGEN, the sector association, has pictured the situation of cogeneration in the conference organized in the frame of Genera Fair held these days in Madrid’s IFEMA.
The reform envisaged reducing the remuneration to cogeneration to place it at 1.550 million, but the cut has gone much further and overall retribution has fallen to 1.100 million. The tendency is to keep production at last year’s levels, but if the remuneration formula to the operation is not properly instrumented with sufficient value offered for cogeneration to invest and improve efficiency, more plants will shut down with dire consequences for the industry.
“There is room for improvement in compensation for cogeneration worth 450 million euro,” explained Pérez Palacio, assuring he was confident that the Ministry would take this into account.
The industry is closely watching how and when the reform regulation framework will be completed while a reinvention in the management and operation of plants is emerging in the confidence that cogeneration can continue serving the industry.
Future challenges for the sector
The pending legislation must be set so that plants can continue to support the associated industries and that business adapt successfully to compete in the new framework. The sector faces new challenges from diagnosis and with proposals leading to the goal of optimizing the operation of the plants. The key is to optimize management options on the plant by plant basis, acquiring skills and knowledge in the operation in the markets to achieve greater competitiveness and grab opportunities inherent to the development of markets in progress.
The day began with a panel discussion with the participation of the General Directors of Energy Policy from Valencia, Madrid and Castilla y Leon, who were unanimous in favor of boosting cogeneration as a competitive tool for the industrial sector.
Antonio Cejalvo, General Director Energy and Deputy Director IVACE of Valencia, said “CHP is an additional machine in the production process” and there is a need to provide a legislative framework that favors a plan to renew facilities.
Carlos Lopez, Director of Industry, Energy and Mines of the Community of Madrid, highlighted CHP as “the main power generation system in the community, which has 68 facilities” and expressed the need that it be maintained. He also called for the development of cogeneration projects in the residential, services, hotels, residences, etc. areas in coordination with projects from the Administration in energy efficiency.
The General Director of Energy of the Junta de Castilla y León, Ricardo González, a community where 8% of the electricity production is based on CHP, said Castilla y León produces with renewable energy and cogeneration twice the energy it consumes and advocated to provide solutions to the strong deterioration of production and margins associated with the industry with technological improvements and regulatory stability.