According to a report by REE there is an installed capacity surplus of 6,000 MW in Spain and the Energy Plan 2015-2020 drafted by Industry Ministry envisages the possibility of temporarily shutting down or “hibernating” ten combined cycle power plants that would make up this total. In fact, the first on the list is Iberdrola’s Castellón plant, but will it be shut down?
The El newspaper Expansion published last week that “the government is finalizing the authorization to Iberdrola to enable the company to shut down and dismantle one of its gas power plants (combined cycle),” referring to Castellon. However, the Company’s Communication Department has assured EnergyNews that “we are not aware that what has been published by Expansion is true, because in November what we asked to Industry was the partial closure of the plant, where incidentally, all the staff will remain, but we have not yet been told whether our request would be accepted. “
Why do they want to close Castellón?
Iberdrola presented on 21 November 2014 the mentioned request for closure and partial dismantling of the Castellon CCG power plant to the Ministry of Industry. Specifically, the company wanted to be allowed to close one of the two groups of this power complex-number 3, with 793 MW out of the 1,647 MW of total installed capacity available in the Castellon plant.
According to the utility’s statement, “the decision is part of the Thermal Power Plants Efficiency Plan launched in Spain in 2012, which seeks to adapt the generation fleet to the national electricity system’s current situation, characterized by a decrease of the so-called thermal gap and a situation of overcapacity “.
Iberdrola selected group 3 of Castellon gas power plant considering that its closure and subsequent decommissioning, would not impact in any way the security of electricity supply in Spain or in the autonomous community of Valencia.
Previously, Iberdrola had filed in July 2013 the application for closure and partial dismantling of the combined cycle plant Arcos de la Frontera (Cádiz), which however was refused by Industry last April.
“At least, in all this there is something positive and it is the turnaround,” said Jorge Morales, an expert in the electricity sector, “the fact that one single plant is shut down will not be much noticed, but what is positive is Industry’s change of criterion because it is finally realizing that there is excess capacity in Spain “. However, the expert adds “if this is the cause, if I had to choose, I would rather shut down nuclear power plants, by the the tons of radioactive waste they generate and that they are highly dangerous to people and the environment. It is true that in the short term it would be more expensive, but renewable would become operational and finally the cost of electricity would cheapen “.
Hibernation or closing? For his part, Javier García Breva, energy policy expert and president of N2E, explained EnergyNews that “the government has had for almost a year a draft on hibernation but it never started. Red Eléctrica positioned against this line but there are no obstacles today for it. However, utilities will want something in return because the fact is that with a yield of 10% for combined cycle plants, the owners are losing money. “
Regarding the possible closure of the plant in Castellón, García Breva believes that “closing one or the other as an arbitrary decision makes no sense, a rule must be brought forward so that the conditions to do so are established, in addition that consumers also have taken on their bills the costs of capacity payments, and it would not be at all acceptable that the cost of hibernation or closure is also taken by the same, or a similar solution to the Castor project. Combined cycle plants have been created under a liberalized market, they constitute business decisions and should be assumed as own risks of such these companies, there is no room for any compensation. “
Production of Iberdrola’s combined cycle power plants’ in Spain fell 40% in 2013- following a 63% decline registered in 2012, reaching only 1,700 GWh, which represents only 2.9% of all Iberdrola’s generation in the country.