Iberdrola has activated the countdown to get rid of the 5,723 MW that it has installed in the seven combined cycle thermal plants distributed throughout Spain, 73% of the 7,840 MW of this type of generation that the company has around the world, according to La Vanguardia could know.
Combined cycle thermal power plants are infrastructures that use gas to produce electrical energy and are strategic in the electrical system due to their flexibility. But the company chaired by Ignacio Galán has self-imposed a green transition roadmap that collides with the emissions of this technology.
Among the objectives announced in its strategic plan is to achieve emissions neutrality from its generation plants, its electricity distribution activity and its own consumption in 2030 and to achieve net zero emissions throughout its value chain in 2040. “If we do not close the combined cycles, we will not meet our objectives,” company sources acknowledge.
If the closure objective was already on its roadmap, its need has become much more visible once the company has confirmed the sharp decrease in emissions that comes with getting rid of this technology after the sale, last February, of 12 combined cycle plants, about 8,500 MW, in Mexico, which it will highlight in its next presentation of results.
Iberdrola's decision puts more stress on the seams of the Spanish electrical system in the midst of the energy transition, although, at first, it may not seem like it. A PwC report for the Naturgy Foundation states that “in the last 20 years, the equivalent hours of operation of the cycles have experienced a reduction of 45%, mainly as a result of the progressive entry of renewable technologies.”
But, as contradictory as it may seem, in the world of renewables, gas is going to become a strategic piece to guarantee support for the electrical system. During the energy crisis resulting from the war in Ukraine, the rise in gas prices brought the importance of this technology to the fore. Its entry into operation, when necessary, fell like a stone in the stratospheric bills of consumers. But, in that year 2022, the combined cycle plants were the ones that generated the most electricity in Spain, with more than 24%.
This role as energy generators will decrease, but gas combined cycles will be more essential as renewables gain weight in electricity generation and nuclear ones are turned off.
This has been established by the National Integrated Energy and Climate Plan (Pniec) 2023 and 2030. In it, combined cycles play a major role as guarantors of the stability of the electrical system. The draft, which is currently being supervised by Brussels, contemplates increases in the generation of all renewable energies, the closure of nuclear, as well as a boost to storage (batteries, hydrogen). However, this effort will not be enough to dispense with combined cycles, the only polluting energy whose generation volume does not change, and will remain around 26 GW throughout the period. That is, according to these numbers, it has Iberdrola cycles.
These infrastructures face a challenge: their maintenance and updating. They are obsolete and their continuous stops and starts exacerbate operating problems. In the case of Iberdrola, its strategic plan contemplates 41,000 million euros in investments, but none of them allocated to polluting energies (such as combined cycles), but rather to green storage.
The aforementioned PwC report warns that “even if the current installed power of combined cycles is maintained in 2030, as predicted by Pniec, it is possible that at certain times a maximum power of combined cycle plants of up to 23 GW will be required. , which would be higher than what is currently achieved in the same hour (17.7 GW), which could lead to demand coverage risk.”
Even if only Iberdrola closed its cycles, it would already be a risk for the system. The Government knows it. At the end of last year, it requested authorization from the European Commission to create a “capacity payment mechanism”, which is nothing more than paying the owners of combined cycle plants just for being available to come into operation when the system needs it. Now, they only get paid when they inject energy into the system of a business in regression when they are standing still for more and more time. Iberdrola talks about closure, as does Naturgy. In this context, the equation is posed this way: either the remuneration of the cycles is increased so that they are interested in not closing or the commitment to storage must be increased to compensate for their work in system stability.
