Cogeneration prepares lawsuits for 500 million for damages to the Government

The sector still does not have the remuneration framework for this year and without the new model for 2023

Cogeneration is going through one of the most complicated moments in its history. The sector is preparing lawsuits against the Ministry of Ecological Transition for about 500 million in damages for having been excluded from the gas cap mechanism from June 15 when it came into operation until October 31.

The measure caused the shutdown of almost two-thirds of the plants that now return to recover their production very slowly in November despite the fact that the uncertainty about the remuneration corresponding to 2022 and the framework that will have to be applied for 2023 remains unresolved.

The cogenerators saw how at the end of October the remuneration corresponding to 2020 and 2021 was published in which a cut of 110 million euros was applied to them just after the President of the Government, Pedro Sánchez, committed to solve a situation that significantly affects the ceramics industry, food, glass, paper or refining.

Once the entry into the Iberian mechanism has been approved, the cogenerators can choose each month between the gas capping mechanism or the Recore remuneration.

After a first recovery in the first half of September and fall in the second due to the collapse of this mechanism due to the decline in gas prices, in November 82% of the cogeneration capacity (160 plants) was covered by the cap, but by November 62% has abandoned it.

These plants have preferred to remain under the protection of a regulation that they still do not know because of the uncertainty generated by this situation.

The Ministry had committed to renewables and co-generators to publish this remuneration last week but now it is expected that until the end of the month the details corresponding to the first half of 2022 will not arrive. Likewise, the remuneration corresponding to the second half of 2022 is expected after the publication of the mandatory report of the CNMC – approved a few days ago but which has not yet been published – before the end of the year.

Worry

The sector’s top concern at the moment is that it does not have the remuneration methodology for 2023.

Last March, RDL 6/2022, which entered into force on March 31, established in its article 5.9 the development of a new methodology whose promulgation was regulated before May 31.

After having failed to comply in more than five months with the publication established by the Law, the cogenerators fear that, if it is not before the beginning of the year, they would be forced to produce in a scenario that they describe as of the most absolute legality and uncertainty.

The cogenerators demand the publication of the order of bases of the cogeneration auctions of 1,200 MW with which they planned the investment of more than 800 million in process from December 28, 2021, for which it is essential to have an economic framework. The sector asked for the capacity of this auction to be expanded and this has not been achieved either.

Source: The Economist