Spain is beginning to put concrete figures to the opening of the biomass cogeneration auctions announced in June.
The proposed resolution published by the State Secretariat for Energy reserves 95 MW of the 600 MW included in the first call for facilities that use this renewable fuel.
Of that volume, 65 MW will be directed to new biomass cogeneration plants , while another 30 MW will allow the modernization of existing biomass plants , both exclusively electrical installations and cogeneration plants.
This figure represents approximately 15.8% of the initially offered capacity . The remaining 505 MW will be distributed among eight projects related to new installations and modifications of existing natural gas cogeneration plants.
The call for proposals is not yet final. The Ministry for Ecological Transition and the Demographic Challenge (MITECO) has opened the public consultation and information period, and interested parties may submit comments until September 15, 2026 .
If the planned schedule remains unchanged, the auction will be held on December 10 , with bids accepted between 9:00 and 11:00 a.m. and the provisional results published before 2:00 p.m.
65 MW for new plants and 30 MW for modernizations
The resolution divides the 600 MW into ten independent products, defined according to the fuel, type of operation and size of the facilities.
Two categories are established for biomass:
- 65 MW for new cogeneration facilities , linked to the remuneration reference ITR-0116.
- 30 MW for modifications of existing facilities , linked to ITR-0117.
The first product will enable the construction of power plants that simultaneously produce electricity and useful thermal energy from biomass. The second aims to transform or renovate existing biomass-only power plants or cogeneration facilities to meet the requirements of the new regulations.
Although the regulatory order contemplates biomass categories of up to 100 MW, the proposed call for proposals sets a stricter limit: each installation may receive the specific remuneration scheme for a maximum of 25 MW .
This cap will prevent the reserved capacity from being concentrated in a single large power plant. In practice, the 65 MW allocated for new capacity will require at least three projects to be fully utilized.
The limitation also applies to the bids. The maximum size of each submitted segment will be 25 MW for both new installations and modifications, although participants may submit divisible or indivisible segments.
The biomass quota could reach up to 104.5 MW
The call allows the power finally awarded to exceed by 10% the quota assigned to each product , when the inclusion of the last married section so requires.
Therefore, the 65 MW for new plants could reach a maximum of 71.5 MW , while the 30 MW for modernizations could be increased to 33 MW .
Overall, biomass could yield up to 104.5 MW , provided there is sufficient supply and the clearing process activates that margin.
However, the allocation will depend on the level of competition achieved. To maintain the full quota, the volume offered must exceed the auctioned capacity for each product by at least 20%. If this proportion is not reached, the allocated volume must be reduced until the minimum level of competition is restored.
In the case of new biomass, maintaining the 65 MW will require bids for at least 78 MW . For modifications, a minimum of 36 MW must be submitted.
The bid will be decided on the recognized investment cost.
The auction will not directly set a price for the electricity generated. Participants will compete by offering a percentage discount on the standard initial investment value recognized for each category.
The MITECO has set the following as a reference:
- 4,914 euros/kW for new cogeneration plants with biomass .
- 3,440 euros/kW for modifications to existing installations .
Developers must indicate how much they are willing to reduce these values to qualify for the compensation scheme. Proposals will be ranked from highest to lowest discount and will be selected until the available quota is filled.
A marginal system will be applied: all awarded segments within the same product will receive the percentage reduction corresponding to the last segment married.
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Based on that discount, the recognized investment value will be calculated and, subsequently, the return on investment for the installation.
The reference parameters initially include an investment return of €467,096 per MW for new biomass plants and €326,968 per MW for modernizations . The initial operating return amounts to €55.398/MWh and €52.733/MWh , respectively.
These figures do not constitute the final result that each project will receive: they will be affected by the discount obtained in the auction and by the revisions of the corresponding regulated parameters.
The scheme is based on a reasonable return of 7.09% for the regulatory period 2026-2031 .
A regulatory life of 20 years
Biomass will have a significant temporary advantage over cogeneration with natural gas.
The awarded plants will have a regulatory lifespan of 20 years , compared to the twelve years planned for the gas-powered facilities of subgroup a.1.1.
The regulations use 4,869 gross electricity equivalent hours per year as a reference for both biomass categories. They also establish an annual minimum of 1,950 hours to fully qualify for the corresponding remuneration.
For modifications to existing power plants, a minimum eligible investment of €740 per kW is also required. This investment may include the modernization or acquisition of biomass boilers, steam turbine generators, heat recovery units, after-combustion equipment, purification systems, and other elements directly related to the cogeneration process.
If a modified facility already receives a different specific remuneration scheme, joining the new scheme will result in the cancellation of the previous registration. Therefore, a single facility cannot receive both remuneration schemes.
Five years to get the facilities up and running
Biomass projects will have a maximum period of 60 months to meet the necessary requirements and be registered in the remuneration register in an operational state.
The period will begin counting from the publication in the Official State Gazette of the pre-assignment resolution.
This differentiates biomass from most of the modifications to gas cogeneration, which will have a period of 48 months.
The final operating authorizations may be issued between 2027 and 2032, depending on the effective execution date of each project.
To participate, applicants will need to submit a guarantee to OMIE of €20 per kW of the power for which qualification is requested. Therefore, an offer for 25 MW will require an initial guarantee of €500,000.
Successful bidders must subsequently provide another guarantee of 20 euros/kW to apply for registration in the pre-allocation register.
Gas retains the bulk of the call for bids
Despite the entry of biomass, the first auction will still be largely dominated by natural gas.
Of the 600 MW tendered, 425 MW will be used to upgrade existing cogeneration plants that continue to use gas , 77 MW will allow for the construction of new gas-fired facilities, and another 3 MW will cover conversions of existing facilities. In total, the eight gas-related products will add up to 505 MW .
The largest single allocation will be 210 MW for plant modifications between 1 and 25 MW, followed by 130 MW for installations between 25 and 100 MW and 75 MW for certain medium-sized conversions.
Thus, the technological opening announced in June is materializing, albeit in a limited way: biomass will be able to compete for its own regime, but will initially have access to less than one out of every six megawatts offered .
The second auction, scheduled for 2027, will complete the 1,200 MW framework approved by the Government. Any capacity that remains unsold in this first round can be carried over to the next auction.
The decisive test will come in December. Then it will be known whether the 95 MW reserved are sufficient to mobilize new projects, whether there is competition to fill them, and, above all, what discount the market demands to make biomass a real alternative within the modernization of Spanish industrial cogeneration.
Regulatory sources: , Order TED/672/2026 and Royal Decree 530/2026 .