Spain has just taken a significant step in modernizing its industrial cogeneration fleet and, for the first time, biomass will play a leading role in this process.
The Council of Ministers approved the regulatory framework that will allow the allocation of 1200 MW of new cogeneration capacity through two auctions of 600 MW each, planned for 2026 and 2027. The objective is to replace aging facilities with more efficient technologies that have a lower environmental impact, in line with the decarbonization goals established in the Integrated National Energy and Climate Plan (PNIEC) 2023-2030.
The most significant development is that future calls for tenders will not be limited to natural gas. For the first time, biomass plants will be able to compete for this specific remuneration scheme, expanding technological options for industry and reinforcing the role of renewable fuels in the Spanish energy system.
Biomass gains ground in the industrial transition
The inclusion of biomass responds to the search for solutions that allow reducing emissions without compromising the competitiveness of energy-intensive industrial sectors.
The new facilities must meet strict sustainability and emissions reduction criteria, while the plants that use biomass will have a regulatory lifespan of up to 20 years, significantly higher than the 12 years contemplated for facilities powered by natural gas.
The Government believes that the renewal of the cogeneration fleet will accelerate the decarbonization of industry, improve energy efficiency and provide greater flexibility to an electricity system with a growing share of renewable energies.
According to official estimates, the 1200 MW that will be added through these auctions will prevent the emission of approximately 8.4 million tons of CO₂ during the regulatory life of the plants.
Two auctions to renew existing capacity
The Ministry for Ecological Transition and the Demographic Challenge (MITECO) will organize two competitive processes, one in 2026 and another in 2027, with a capacity of 600 MW in each call.
The tenders will be open to biomass and natural gas facilities and projects that currently use other fossil fuels and that propose a technological conversion towards these alternatives.
The financial aid associated with the auctions has already received authorization from the European Commission under the State aid scheme, clearing one of the main regulatory requirements for its implementation.
High efficiency and adaptation to the new energy system
All awarded facilities must meet high energy efficiency criteria, achieving primary energy savings of more than 10%.
In addition, natural gas plants must be prepared to incorporate at least 10% renewable hydrogen into their consumption, a condition that seeks to facilitate the future integration of low-carbon fuels.
The regulations also establish power limits of up to 100 MW per installation —15 MW in non-peninsular systems— and include twelve reference technology categories to organize participation in the auctions.
To avoid excessive market concentration, no company may be awarded more than 50% of the capacity offered in each process.
Industrial investment and support for the electrical system
Beyond the environmental impact, the Executive highlights the economic effect that the renewal of industrial equipment linked to cogeneration will have.
The new facilities will allow for the modernization of productive assets, increase the efficiency of industrial processes, and provide backup capacity in a context where renewable generation is gaining increasing importance within the energy mix.
The regulated cost associated with the 1200 MW is estimated to be between 414 and 582 million euros annually , although the final figure will depend on the discounts obtained during the auctions and the future evolution of energy prices.
The organization of the processes will be the responsibility of the Iberian Electricity Market Operator (OMIE), while supervision will fall to the National Commission for Markets and Competition (CNMC).
A change of approach to cogeneration
The decision marks a new stage for cogeneration in Spain. Traditionally associated with natural gas, the technology is beginning to open up to renewable solutions capable of providing reliability, efficiency, and emissions reduction.
In a scenario where electrification is advancing and industries are seeking to reduce their carbon footprint without losing competitiveness, biomass is emerging as one of the alternatives that could gain prominence in the next decade.