Cogenerators -600 industries that produce 20% of the country´s industrial GDP and more than 10% of its electricity, consume 25% of its natural gas and 5% of the total electricity-, are waiting for the political decision on the normative framework that could allow them to undertake the investments required for their plants to continue operating with the highest efficiency levels.
On October 24, during the inauguration of the Annual Congress of Cogen Spain, José Domínguez, Secretary of State for Energy, announced the approval of an extension in the compensation for the facilities operation until a system for the renovation of cogeneration power plants is established.
Cogeneration, which lost its remuneration right for plants with more than 25 years of life, could lose 50 new facilities in the next two years as they reach the end of their useful life. If as expected, the remuneration to operation is extended until the Renove Plan is established, a parenthesis will open-up allowing the industries to make decisions on potential investments for the their facilities renovation.
Two options: Reinvestment or Proximity Self-consumption
According to data from ACOGEN, only 12% of the cogeneration installations self-consume all the electricity production, and the rest feeds it into the grid. This discharge accounts for approximately 50% of all electricity production. We must bear in mind, Javier Rodríguez, CEO of ACOGEN warns us, that each of the existing cogeneration plants has been tailored to the thermal needs of each industry, and that the electricity generation produced as a result of thermodynamic processes accounts, in most cases, for more than 50% of the self-consumption of the plant itself.
The sale of this surplus is not a benefit in itself for the industry as such, but a reduction in the production processes costs that allow it to be more competitive and face the international markets on equal terms. On the other hand, the grid benefits from these facilities as this backup electric resource allows maintaining and increasing the number of renewable megawatts. However, without remuneration for the operation of these plants, the economic result of these is unfeasible since the cost is greater than the income produced.
The sale of that surplus is not a benefit in itself for the industry as such, but a reduction in the production processes costs
At this point, industries must consider the technological reinvestment to improve their equipment and achieve better energy yields and therefore a reduction in their production costs. This will depend on the regulation that is established and the legal certainty.
Or otherwise, not reinvesting and transferring the surplus energy to a third party in what is known as Proximity Self-Consumption. According to Rodríguez, the new regulations on Self-consumption could favor this type of agreements, but knowing what type of tolls would be established is something necessary. Proximity Self-consumption would be viable for a direct connection to a local industry, close to cogeneration and would allow both industries to improve costs.