The Supreme Court has partially sided with Naturgy by permitting the temporary shutdown of five gas power plants, while denying compensation for all. Some facilities remained open for extended periods. In 2017, Naturgy asked for a shutdown of four combined-cycle units and approached the Ministry of Ecological Transition, arguing that keeping the plants running incurred costs not covered by the revenues they generated. The plants in question are located in Palos de la Frontera (groups 1 and 3), Cartagena (groups 2 and 3), and Sagunto (group 3).
The department led by the third vice president, Teresa Ribera, did not respond to the energy company’s request, adopting a stance of administrative silence on two occasions. After the initial request, Naturgy appealed to the General Directorate of Energy Policy on May 25, 2017, and later to the Minister for Energy. The high court now allows the closure, stating that repeated administrative silence should be treated as a de facto decision when the deadline for a response passes. This interpretation means the failure to decide within the allotted time can be seen as a decision in favor of the applicant. [Citation: Supreme Court reasoning on administrative silence]
Yet the Supreme Court also agrees with Naturgy on another point: Naturgy sought compensation for damages and losses for the period in which the facilities remained operational, specifically from May 25, 2018, to when the judgment becomes final. The court notes that the company did not provide evidence to substantiate the claimed damages. [Citation: Court findings on evidence and damages]
According to the ruling, the appellant did not attach any documentation to justify the source of the requested compensation, did not reference relevant points of the claim, and did not propose evidence to support the request. Naturgy had argued that compensation should be tied to the execution of the sentence once the shutdown date was known, and the court confirms that this should be resolved promptly once a shutdown date is established. [Citation: Court critique of presented evidence]
The decision also covers additional plants: five centers for which Naturgy sought closure in 2018, plus a sixth center that did not receive a response from the administration for other reasons. The Supreme Court will need to decide on these cases as well. [Citation: Scope of ongoing cases]
The current situation
Naturgy has signaled that it is considering the court’s decision and will determine a course of action for the plants accordingly. The present situation differs markedly from 2017. Coal remained part of the electricity mix, and gas-only cycles were underutilized. In 2017 the utilization rate of gas-fired plants stood at around 16 percent, and a year later it was closer to 12 percent. Last year the energy crisis caused demand for this technology to surge, with gas power gradually becoming a primary source for electricity in the country. Utilization rose to about 34 percent in the most active period. [Citation: National energy utilization statistics]
Although last year showed unusual conditions, gas power plants, which represent the third generation of generation sources today, have become essential to prevent outages during periods of renewable energy intermittency, as new capacity is planned in the region. The Spanish electricity system is expected to rely on these plants in the coming years. There is a clear push from industry players for a framework that rewards capacity availability, ensuring that gas plants can be kept on standby when the system needs them. This aligns with the Ministry of Ecological Transformation’s stance that plants should be retained if they are necessary to the reliability of the grid. [Citation: Energy policy and grid reliability context]