Presenting Acogen's stance in Parliament, Josep Sanchez Llibre, stressed that cogeneration is a vital technology as it "help to reduce the costs of electricity for industrial use and contributes to primary energy savings and carbon emissions reductions". A non-legislative proposal on a new cogeneration tariff was discussed and unanimously approved on March 28.
Spain's center-right Government had felt compelled to curtail subsidies as a way to reduce Spain's pressing economic deficit. The electricity system deficit in Spain currently stands at over €24 billion, partly due to subsidies and above-market rates paid for electricity produced by cogeneration and renewable energy installations. The legal changes were passed in January 2012, preventing proponents of new cogeneration, renewable energy and waste-to-energy projects from selling their electricity to the grid under subsidized conditions.
Spain's National Energy Commission (CNE) is calling for a hike in electricity prices paid by consumers to cut back Government debts worth €24 billion. This 'tariff-deficit' piled up over the past 10 years as utilities had to sell electricity to end-customers at regulated rates below nominal generation and distribution costs. A 37.7% increase in access tariffs would be necessary in 2012 to balance income and costs, CNE a non-binding report issued in early March.
Keen to avoid underinvestment, the government is now planning a reform in the electricity industry. "A new tariff is expected within 12 month but it is more realistically to expect it materialise in 18 months," Peter Ward, sales manager at Centrax Gas Turbines told Gas-to-Power Journal.