One of Spain's largest industry unions, UGT has urged the Spanish government to ensure the survival to 2050 of power plants that burn domestic coal.
* 2019 state aid deadline looms for coal mines
* EU legislation allows operation until 2050: UGT
* Retrofits only ongoing for plants using imported coal
With the government due to present a decree in the coming days that could give it the last say in possible plant closures, the industrial group wants the legislation to give around eight plants that face closure a new lease of life beyond a 2019 cut-off for uneconomic coal mines.
"The (upcoming) decree proposal should cater primarily to the general interest of Spain, above economic and individual company interests," the union said.
Aware of the political fall-out a wave of closures might produce, the current minority government in Spain said it wants to ensure it has the final word and is hoping to push through legislation this month that will give it the right to either veto closures or force continued operation.
The move is also driven by a desire to trim cost spikes in the power market, which can also raise consumer bills. A full coal closure could easily raise power prices by 14-27%, according to Spanish daily Cinco Dias, while such a move would leave pricing vulnerable to the volatility of gas prices.
But a EU-imposed 2019 deadline by which coal mines must either close or repay the State Aid previously received has split the Spanish coal-fired generating market down the middle.
While on the one hand, the country's generators have started to carry out the required retrofits to their plants that burn imported coal, the plants that use more expensive domestic coal have mostly been lined up for closure.
According to UGT and sector lobby group Carbunion, the future of whole communities in mining areas would be at risk if plans to close them go ahead.
Only eight mining companies remain in Spain, compared to 21 in 2011, according to coal lobby group Carbunion with two more closing during the last year, while domestic production has fallen for all but one of last 27 years.
The wave of mine closures is likely to be followed by the closure of the power plants they feed.
Among the plants that have applied to close are two operated by Iberdrola -- a 348 MW unit at Lada and a 485 MW one at Velilla -- as well as the 347 MW Anllares plant owned by Gas Natural Fenosa and Endesa. Of the other five coal-fired plants using domestic coal, the operators are stalling on making a formal decision, as they await the outcome of a domestic energy strategy to see if there will be provisions for their future.
For its part, UGT says the life-cycle of these plants could be extended up to 2050 -- which is the end limit as proposed by the EU for the closure of this kind of plant.
UGT says the owners have profited from incentive schemes to invest in emissions reduction as established in the 2013 Coal Mining Plan but have not invested them in these plants.
The handful of plants that have started retrofits to comply with the EU 2020 emissions directive run almost exclusively on imported coal. These include Spain's two largest coal-fired plants, Endesa's As Pontes (1.4 GW) and Litoral (1.1 GW), as well as units at Los Barrios (570 MW) and Abono (878 MW).
For the long-term Carbunion estimates that 4-6 million mt of domestic coal could be produced a year under the right conditions -- up from 2.8 million mt in 2017.
UGT said it believes domestic coal still has an important part to play in the generation mix, being effectively the only major hydrocarbon source readily available in the country.
