The national biomass sector has received a serious setback with Order TED/526/2024, leading to the closure of hundreds of companies and putting more than 30,000 jobs at risk . After months of operating at a loss due to a delay in approving the methodology for calculating their remuneration, the published figures have little to do with the reality of the sector. The Order recognizes an increase in operation and maintenance costs of 3% in the last three years , a figure even lower than the CPI, when these costs have actually increased by more than 40%. In particular, the acquisition cost of the ton of biomass recognized by the order, €58, is much lower than the actual cost of €70. The difference, greater than 20%, leads hundreds of small and medium-sized companies to closure, unable to finance their operating losses, and puts more than 30,000 jobs and activities in the rural world at serious risk, such as the management of agricultural and livestock waste or the fire prevention by not collecting excess forest biomass.
"Biomass is a generation technology that can operate twenty-four hours a day and plays a crucial role in the valorization of agricultural and livestock waste, as well as in the cleaning of forests, something essential for the summer, so it is not understands the Ministry's decision, which drags companies into restructuring or even closure, causing a domino effect on suppliers,” says José María González Moya , general director of APPA Renovables. “As a sector, we demand that MITERD urgently update the parameters, recognizing the real costs that this technology faces,” González Moya claimed.
An unrecognized increase in costs
In a seriously inflationary economic environment, Order TED/526/2024 only recognizes a 3% increase in operation and maintenance costs, a figure lower than the variation in the CPI in the last 3 years, when the The reality is that these costs associated with electricity generation with biomass have skyrocketed by over 40%.
The cost of acquiring biomass has seen a sharp increase in recent years , given that due to Russia's invasion of Ukraine and subsequent sanctions by the European Union, gas has experienced record prices. Biomass is an alternative fuel to gas, which is why the price per ton has risen sharply to more than €70 per ton. However, the Order only recognizes a cost of €58. The difference, of more than 20%, implies operational losses for the biomass plants.
Serious consequences for companies
Hundreds of small and medium-sized companies see with this Order how the situation of recent months will be maintained, in which the plants have been operating at a loss . Until now, the current regulation still considered the high electricity market prices of previous years, when the current market income of these facilities has plummeted.
“The average price in 2022 was €167.52/MWh and, in that scenario, it was estimated that the plants would receive around €110/MWh from the market in the future, which led to reducing other components of their remuneration, relying all income to a market that has collapsed. Now the parameters have been updated, but the approved values are far from the real prices and costs, prolonging the agony of these companies,” explains González Moya.
Last April, the average market price was €13.67/MWh, when these plants invest between €85 and €95 only in fuel for each MWh generated. "Biomass is a profitable technology if we see all the benefits: job creation, rural population settlement, agricultural and livestock waste management, reduction in the risk of fires... But the approved parameters do not compensate for either the current situation of the electricity market or the real cost of acquiring biomass”, concluded González Moya.
Risk in jobs linked to rural areas
Companies in the sector would not be the only ones affected. In addition to the more than 30,000 jobs in the biomass sector, the operation of the plants is essential to valorize agricultural, livestock and forestry waste that allows the survival of traditional activities in the rural world .
Especially serious for the environment would be both the non-valuation of biomass from municipal pruning and gardens and the management of forest waste. In the case of pruning, due to the methanization phenomenon, emissions are 21 times higher. The situation of forestry waste is critical in this scenario, especially because the hottest months are approaching and, therefore, the highest risk of fire.
