Across a broad industrial sector, a company that generates electricity by reclaiming heat from its factories in areas like ceramics, paper, and food is pushing for rapid legal reforms. This move comes after years of promises that have not materialized, and it aims to safeguard dozens of facilities in Spain from disruption while signaling urgency to policymakers.
In the Spanish market, roughly 600 cogeneration facilities operate under a regime where wages are protected by law. A re-scoring mechanism, similar to what has been used previously for premium-rate renewables, reviews these facilities every six months, adjusting figures as needed.
Cogeneration operators argue that the government has delayed a comprehensive reform of the fee calculation model. They criticize the postponement of measures to increase market flexibility amid volatile energy prices and the lack of timely auctions for regulated payments to facilities with a total capacity of about 1,200 MW.
Public tenders were announced in 2021 with the objective of each facility submitting at least three bids by 2024, one per year. The Ministry of Ecological Transition even published the operating rules for public awareness. Yet since then, the auctions have not materialized, and no concrete date has been set. In response, Acogen and the cogen sector trade groups convened a joint sectoral congress in Madrid to discuss temporary measures that would prevent plant closures while auctions are pending.
Big industry warns bureaucratic gridlock is stalling multimillion-dollar investments across Spain. An estimated 800 million euros of investment is currently on hold as the sector seeks a two-year extension so cogeneration plants nearing the end of their 25-year lifespan can continue to operate while maintaining current rates. The government previously extended these protections in 2018 to prevent abrupt closures following a political shift, and now operators fear a similar disruption could occur again.
Ruben Hernando, president of Acogen, noted at the annual congress that the government needs to complete the new charging methodology set out in Royal Decree No. 6/2022 and the associated rules for cogeneration tenders. He emphasized that a stable framework would enable medium- and long-term investment planning and unlock a new cycle of industrial activity that could mobilize more than 800 million euros across numerous sectors. Operators stress that the absence of clear compensation rules makes continuing operations uncertain and potentially unprofitable.
The proposed framework for the 1,200 MW of cogeneration auctions has been completed for two years, but industry voices warn that delays linked to the energy crisis and broader economic conditions heighten the risk of losing competitiveness to neighboring countries that support cogeneration and its expansion. They argue that cogeneration remains among the most efficient technologies for industrial energy needs and should be supported to spur the construction of new facilities and the modernization of existing ones.[Source: Sectoral trade associations, 2024]
Government discussions recently moved toward updating the fee regime for 2023 to 2025. An ambitious package anticipated additional investments and wage improvements funded by adjustments to renewable and cogeneration income, including a one-off injection of funds designed to sustain operations. The authorities suggested a temporary patch while a wider reform is studied, with the understanding that a comprehensive recalibration would be addressed by the following administration. Teresa Ribera’s Ministry began outlining a new methodology aimed at increasing sector wages, projecting an uplift that could approach a broad, multi-year benefit for cogeneration operators.[Source: Ministry briefs, 2023]
According to industry observers, the short-term fixes are critical in preventing a cascade of plant shutdowns. Cogeneration facilities have faced the loss of price relief mechanisms such as the Iberian cap on gas-derived electricity costs, and the recore fee remains a moving target. The sector argues that maintaining predictable returns is essential to attract the substantial capital required for modernization and to sustain competitiveness in a market where energy costs influence every line of production.
As the debate continues, the sector emphasizes that a transparent, durable pricing model not only supports current operations but also encourages future investment. Companies remain eager to see a clear timetable for completing the pending regulatory reforms and for launching the long-delayed auctions that would allocate support across a wide range of industrial users. The goal is to establish a reliable framework that reduces risk and unlocks a new wave of industrial investment in Spain, catalyzing growth while safeguarding energy-intensive manufacturing jobs across the country.[Source: Industry statements, 2024]