The European Commission has approved a €3.1 billion Spanish scheme to support the production of electricity from new or substantially refurbished highly efficient combined heat and power (CHP) plants. The measure will contribute to the implementation of Spain’s National Energy and Climate Plan, the Clean Industrial Deal, and the EU’s energy efficiency targets.

Beneficiaries of the scheme, which will run for 10 years, are local operators of new or substantially refurbished CHP installations that meet the definition of high-efficiency cogeneration as set out in the EU’s Energy Efficiency Directive.

Support will be given to technologies and projects that enable the production of electricity from high-efficiency CHP installations powered by natural gas, bioliquids, biogas, and solid biomass. Projects involving natural gas will be required to be able to use at least 10% renewable hydrogen in volume, to avoid the lock-in of natural gas.

Remuneration will consist of two components: compensation for investments in bringing CHP plants on stream, and compensation for operations, to be calculated and updated quarterly based on market variables such as fuel costs and electricity and CO₂ prices.

The EU revised Energy Efficiency Directive of 2023 established an EU-wide binding energy efficiency target of reducing EU final energy consumption by 11.7% by 2030, compared to the projected energy use for 2030. The Directive also set more ambitious binding annual targets to increase the production of energy from renewable sources at EU level. The revisions closely echo the Commission’s overall objectives of net zero greenhouse gas emissions in 2050 and a minimum 55% reduction in net greenhouse gas emissions by 2030.

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