en.Wedoany.com Reported - On June 23, 2026, the Spanish government approved a new cogeneration capacity auction plan, scheduled to be conducted in two rounds in 2026 and 2027, each with a capacity of 600 MW, totaling 1,200 MW. The first auction is expected to take place this autumn (October or November).
Cogeneration technology can simultaneously provide electricity and thermal energy for industrial facilities. Spain's Third Vice President and Minister for Ecological Transition and Demographic Challenge, Sara Aagesen, submitted the proposal at the Council of Ministers meeting, and it was approved on June 23. This decision responds to long-standing demands from the industrial sector that had been pending without implementation.
According to estimates from cogeneration associations (Acogen and Cogen España), this new capacity could generate investments of approximately €2 billion in the coming years, thereby enhancing the role of cogeneration in Spain's electricity mix.
Previously, Spain's cogeneration sector had been in continuous decline. Between 2020 and 2025, the country's industrial cogeneration capacity decreased by 50%, and its share in the national electricity supply dropped from 12% to 6%. During this period, 320 plants (totaling 2,000 MW) were shut down due to the end of their operational lifespan and the lack of an updated regulatory framework. The sector estimates that this has resulted in annual industrial energy revenue losses of €1.5 billion, additional losses of 13 TWh per year due to reduced system efficiency, and an environmental impact of an extra 3 million tons of CO₂, cumulatively causing negative effects of approximately €2.3 billion annually.
The new auction framework has received state aid approval from Brussels and incorporates several technical improvements, including expanding the eligible investment portfolio to cover biomass, electricity and thermal energy storage, electric boilers, heat pumps, CO₂ capture, and digital solutions; eliminating mandatory self-consumption requirements (which previously excluded many industrial activities); and adopting European high-efficiency standards.
Regarding operational terms, the regulatory lifespan for cogeneration plants using natural gas is 12 years, while for plants using biomass, the term is extended to 20 years. The government expects that this 1,200 MW of new capacity will promote the renewal and installation of industrial equipment, thereby generating significant positive economic impacts.
However, the regulatory remuneration for this capacity is expected to increase the annual cost to the electricity system by between €414 million and €582 million. The final figure will vary based on actual energy prices, the actual operation of the plants, and the discounts offered in the auction. The auction will be organized by the Iberian Electricity Market Operator (OMIE) and supervised by the National Commission on Markets and Competition (CNMC).
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