Spain’s economic support measures cause concern to nuclear industry

21 September 2021

Photo: Almaraz nuclear plant (Credit: Foronuclear)Spain’s Council of Ministers has approved a Royal Decree-Law to fulfil a commitment made by President Pedro Sanchez to maintain the final electricity bill for consumers in 2021 at the same level as in 2018. The measure will reduce the monthly bill by 22% until the end of the year or 30% if a recent VAT reduction from 21% to 10% is included.

Other measures include extending until the end of the year the suspension of the tax levied on generation at 7%; reducing from 5.1% to 0.5% the rate of the Special Tax on Electricity  – the minimum allowed by community regulation; and increasing the amount collected through the European CO2 auctions. Also, a temporary reduction of the excess remuneration that non-emitting power generation plants are obtaining in the wholesale market has been approved. These are just a few of a raft of measures aimed at mitigating the effect of high gas prices on consumers as well as the ongoing economic burden of the COVID pandemic. 

“Since June, catapulted by the price of natural gas in international markets and by the high price of CO2 in the EU, the price of the wholesale electricity market has grown by 80%, reaching levels never seen before. This has  created social alarm and is of obvious concern,” the Spanish government said. “Considering that the mismatches between supply and demand in the global gas market will remain in the coming months, the government has chosen to approve a battery of extraordinary measures with immediate application to prevent and cushion the impact of energy costs on consumers and on the economy set. The critical situation of the energy markets coincides with the path of recovery after the pandemic and it is a priority to avoid a slowdown in the rate of growth.”

However, Spain’s nuclear trade body, Foronuclear, warned that nuclear plants will not be able to continue operating if the law is enacted. The law, together with other proposed measures, would impose an "excessive tax burden" on the industry, which Foronuclear says would make the continued operation of nuclear power plants 'economically unfeasible'. Under Spain's nuclear phase-out policy, its nuclear fleet is scheduled to close by 2035.

"This bill should not apply to nuclear energy," Foronuclear said. "The terms which it proposes, together with the current excessive tax pressure, would lead to the cessation of the activity of the entire nuclear fleet." It added, "In the event that this bill is approved and enters into force, the real sale price of nuclear electricity generation, once the price of CO2 has been reduced, should not be less than €57-60 per MWh with the level current tax. Otherwise, the continued operation of Spanish NPPs would be impossible."

Applications to extend the operation of Spanish plants would not have been applied for had the bill already been in force, Foronuclear said. "Therefore, at the time of application, and in order to carry out the necessary investment decisions, the EU emission allowance allocation mechanism and the international market price of CO2 were taken into account," it noted. "Should this draft Bill have been in effect, the renewal authorisations, some of which are very recent, would not have been requested." Investments totalling EUR3 billion are planned to be made until the end of the operation of the nuclear fleet in 2035.

Foronuclear said the impact of the draft CO2 law as it currently stands combined with the current "excessive" taxes paid by Spanish nuclear operators will total some EUR30/MWh. It expects electricity prices to fall below EUR50/MWh by 2024 due to "the massive entry of renewable energies into the system with marginal costs tending to zero." This, it warned, would lead to nuclear's "economic-financial unfeasibility and would lead to the early cessation of the activity."

Foronuclear President Ignacio Araluce commented: "The premature cessation of the power generation technology that produces the most electricity in Spain and prevents the most greenhouse effect emissions would lead to a disorganised closure of nuclear generation, with the resulting loss of jobs and industrial fabric, to a growing energy dependency from overseas and to an increase in price volatility in the wholesale market. "It would also make it impossible to comply with the objectives of Spain's National Integrated Energy and Climate Plan for 2021-2030, especially as regards the reduction of CO2 emissions, since the closure would cause an increase of around 22 million tonnes per year."

Spain's seven nuclear power reactors (with a combined capacity of 7.4GWe) generated 22% of the country's electricity in 2020. Under the nuclear phase-out plans, four reactors are scheduled to close by the end of 2030, representing around 4GWe of capacity. The remaining three reactors will shut by 2035.

Earlier this year, Spain’s Ministry for Ecological Transition and the Challenge Demographic (Miteco) approved a ministerial order granting the renewal of the operating licence for the 1064MW Cofrentes power plant — Spain's only operating boiling water reactors — until November 2030, the date set for its final closure.

Cofrentes is the fourth NPP to extend its operating licence since the government announced plans its nuclear closure plans in 2019. The first licence renewals were approved in March 2020 for the two units at the Almaraz NPP. Almaraz 1 (1011MWe) was authorised to operate until 1 November 2027, and Almaraz 2 (1006MWe) until 31 October 2028. In June 2020, Vandellos 2 (1045MWe) was granted a licence renewal to July 2030. The unit is scheduled for permanent closure in 2034. The two units at the Asco nuclear plant were expecting renewal of their licences later this year. Asco 1 (997MWe is due to close in 2029 and the 995MWe Asco 2 in 2033. The last plant due for licence renewal in March 2023, is the Trillo (1003MWe), scheduled to close in 2035. 

Photo: Almaraz nuclear plant is due to close by 2028 (Credit: Foronuclear)


Privacy Policy
We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.