Castilla y León region designed a favorable frame for attracting promoters` investment for installing a 50 MWe biomass plant, in an closed coal mining area
The “Spanish renewable power capacity auction” allocates specific remuneration regime for renewable electricity production installations into the Spanish electrical system: interested promoter companies agree price with national managing authority of a number of MW for every RES technology.
Once Promoter Company wins its renewable MW, it has to look for the best available conditions for the new RES installation.
Castilla y León, through its regional energy agency EREN, designed a favourable frame for attracting investment of a promoter company, Forestalia, which won the auction of installing a 50 MWe biomass plant.
This interested territory was Cubillos del Sil municipality, where coal mines were the main economic activity and 2 big coal power plants were running until some months before.
EREN asked for a loan from Council of Europe Bank as intermediary to lend 40% of total promoter´s investment. A regional environment company, Somacyl, will assure the biomass supply with long term contract at negotiated prices. Both and promoter worked in the engineering and business plan.
Other 25% of investment come from regional companies as shareholders; municipality facilitates to speed permits and licenses and regional industrial parks entity offered the land.
The social local opposition (pollutants and particles) from ecological association during public administrative procedure and first construction phase, was solved after formal answers and meetings.
Two years for construction (2018-2020). Total investment 106 M€. 450 jobs, 50 working in the plant.
Evidence of success
Agreement from the beginning of all the partners of the consortium.
The facility has started to run on April 2020, after permission and license procedure period and construction.
Even if the installation has followed all the legal public procedure from amendments, there was some local opposition.
Potential for learning or transfer
This kind of consortium has been used to attract new RES investments from the auction system established by the Spanish national government in 2016 to a rural depopulated area characterised by recently closed coal mines. Other similar consortiums with other financing funds available could also apply to these auctions.
This could be considered as a good practice for other Regions.
The implementation of the practice requires the support of an energy agency or a similar entity with technical, economical and policy capacity, and also local support.
The assured biomass supply in a long term period and the correct financing are also key elements.
Please login to see the expert opinion of this good practice.