New challenges for CHP

These new times need new forms of management for CHP, and in industry in general. The new frame-Law 24/2013, RD 413/2014 and Order 1054/2014- is here and CHPs have possibilities and opportunities to compete in the current contexts, and in future even more, provided they effectively implement the reforms pending in regulated business and energy taxation. The “to be or not to be” of CHP will depend on the challenge of managing markets, regulatory developments and more far-reaching reforms.

The driving principle behind Law 15/2012 is quite right – through payment-based operation – to put CHP on an equal footing to compete with other technologies in the market. Conceptually, the payment scheme and administrative framework of Royal Decree 413/2014 is, in its essence, correct.

However, modelling of Order 1054/2014, especially in terms of energy output and services, completely outside national and European practice, have not. And of course, re-billing of CHP since July 2013 is an absurdity that should have been provisionally measured. The numerical result is challenging to a limit for many CHG plants, who must face a catharsis or not be viable, with a severe impact on the competitiveness of energy industries.

Article published in: FuturENERGY July-August 2014