These are not very auspicious times for the combined cycle sector. It is now the turn of the 860MW El Musel combined cycle plant that Endesa had developed with infrastructures which, following consultation, “do not constitute sufficient guarantee of their complete correctness.” Therefore, the Ministry of Agriculture, Food and Environment rejected the environmental impact authorization.
The Secretary of State for the Environment considers that the infrastructure associated with Endesa´s combined cycle plant in El Musel in the Port of Gijón, would cause ” significant” adverse effects on the environment and the measures provided by the utility ” are not a sufficient guarantee of its complete correctness. ”
This resolution by the Environment authority occurs nine months after the agency adopted the same decision for the project promoted by HC Energía in the same site. Before the falling demand and excess capacity hit the market, both utilities were competing to develop the same project, precisely in the ” years of plenty ” and encouraged by a ministerial resolution that considered it necessary “in order to meet the needs of increased electricity demand, both domestic and regional.”
Renunciation of Endesa in El Musel
Even well into the crisis, the two companies chose to go ahead with “the administrative procedures” in order to carry out the investment once the energy trend would change. However, refusal of environmental authorization, as happened in February with HC Energía, now mocks the plans of Endesa, since it forces the company to present a new project if they finally decide to go ahead with it. This would definitely delay several years its future implementation.
And in the case of deciding not to go ahead, the company may recover the guarantee placed in the past, when it envisaged to build a plant whose construction seemed virtually impossible.
Ruinous situation of the sector
Environmental rejection of this plant confirms the ruinous situation of the combined cycle sector, in which many of the plants are in the technical situation of ” hibernation.” Following the boom in the years before the crisis, most of the combined cycle plants are now shut down and only consume 17% of the system´s gas, compared to the 42% they consumed in 2008. The increasing production of renewable is driving other technologies out of the market, in particular combined cycle gas turbines.
According to the Industry Ministry, there is a surplus of between 4,000 to 6,000 megawatts of power out of the total 25,000 installed with this technology. In his view, this overcapacity requires to set the temporary closure of some facilities. This will occur after the adoption of the new Law on the Electricity Sector. For this reason, one month ago Sedigas, the association that brings together the leading companies in the Spanish gas sector, warned that with the energy reform the sector would bottom and said that if they are not given another solution, they would end up in ruin and thus closing the plants generating with this technology.