A few days ago Iberdrola claimed it would be better to place their combined cycle gas power plants into hibernate because the electric system is in its moment of “greater capacity” but this will be “temporary”. For the company the balance between supply and demand will happen in a period of between 4 and 8 years so the hibernating option is more advantageous than closing the plants.
But why is now the closure or hibernation of combined cycle power plants brought into question? Because the CNMV (Comisión Nacional del Mercado de Valores)has submitted an information injunction to the utility for details on aspects of their 2013 accounts such as the impairment of their power plants. A fact which is confirmed by Iberdrola because in the document sent to the regulatory organization the company details that wind farms, worth 149 million, and gas storage and alternative plants, worth 431 million euro, are the assets whose value has undergone a more drastic revision, as published by Europa Press.
Hibernate is expensive
In 2002 the first six combined cycle power plants came into operation in the Spanish system, providing a total of 2,794 MW of new power to the power generation stock. In subsequent years, new combined cycle power plants were incorporated up to a total installed capacity nationwide of 27,206 MW by the end of 2013, making this the technology that has most grown in the last decade and the first in installed capacity (25% of the total energy mix), according to the Study of Macroeconomic Impact of Renewable in Spain in 2013 by APPA (Association of Producers of Renewable Energies).
For Javier García Breva, an expert on energy policies and president of N2E, “combined cycle power plants are operating at 10% of their capacity so they are ruinous, but what surprises me most is that they do not question dismantling them but place them into hibernate since between 4 and 8 years they will start to be useful. That’s too long. And meanwhile, what? Should we subsidize their inactivity? “He explains,” what they are looking for is a solution as that given by the government to Florentino Perez in the Castor disaster, ie by placing plants into hibernate, in exchange the state compensates them and so they are able to make ends meet, but do not forget that the state means all consumers as a whole. It is indecent. “
Future with increased demand
For Iberdrola, however, the position of the National Commission on Financial Markets and Competition (CMNC)about the possibility of hibernate these facilities is “reinforced” because “the least costly option for future for the electrical system is to maintain combined cycle power plants “, since this option” is cheaper” than to “come to a close and after having to make new investments in capacity “.
“The private companies have been wrong,” says García Breva, “and now they want that all their errors are assumed among all of us. The model with which they work is based on a bad management. It is very serious that in a liberalized sector when companies do wrong building so many combined cycles, they want the whole error to be socialized “.