Major industry has warned for years about the impact of high electricity prices in Spain on their profitability and ability to compete with their European competitors. And after more than a year of energy crisis and market escalation and volatility, large industrialists whose activities are heavily dependent on high electricity consumption, Price remains his main concern for this year.
Large electricity-intensive industrial groups—for some, the electricity bill accounts for 50% or 60% of their total production costs— pressure the government to secure a shield Against price increases throughout 2023both through reductions in electricity bills and through greater direct assistance to companies to offset costs.
Within the scope of extraordinary measures to mitigate the effect of the electricity hike in the third anti-crisis decree, The government has decided to temporarily reduce 80% of the tolls paid by around 600 electro-intensive companies. on your electricity bill The Executive has decided to extend the measure only until June 30, but Large Energy Consumption Companies Association (AEGE) It calls on the Ministry of Ecological Transition to maintain this reduction through at least 2023, as a key safeguard for large industry.
The temporary discount of 80% of the tolls included in the invoice (where the investments in electricity distribution and transmission networks are paid) is added to the permanent bonus of 85% (together with the fee) of the invoice fees. For regulated renewable energy sources, system debt and extra costs in non-mainland regions are financed) are borne by all power-hungry consumers. The association warns that the state of the industry remains critical amid the energy shock, and claims it will continue to drive a combined reduction in electricity bills with both concepts.
double direct help
Large industry also benefits from a system every year. help to offset the costs of indirect CO2 emissions. The General Government Budget (PGE) for 2023 envisages an item of 244 million Euros for these aids, equal to the amount distributed in the previous year.
“This amount is clearly insufficient,” he says. Pedro González, CEO of AEGE“Government must adapt assistance to the new reality as the price of CO2 emission rights is skyrocketing”. Electro-intensive employers’ association that brings together about thirty industrial giants such as ArcelorMittal, Acerinox, Sidenor, Şener, Ferroatlántica or Tubos Reunidosrequested by the Ministry of Industry. Increase that amount to 400 to 500 million euros this year.
According to Community regulations, these compensations can cover up to 75% of the indirect costs for CO2 of electro-intensive companies, and a maximum of 25% of the revenue from each country’s emission rights auctions can be allocated to finance the programme. . AEGE considers that current prices of emissions rights (around €80 per tonne, more than double pre-pandemic) and the forecast that they will continue to rise in the coming years justify an upward revision of Spanish aid.
Last March, the European Commission approved the Spanish Government’s aid plan for this decade. EUR 2,900 million to offset some of the costs of indirect CO2 emissions. Major industry warns that the amount of the Spanish plan is clearly insufficient compared to the compensations Brussels has approved for other member states, for example the German plan which includes $27,500 million in aid for its own industry over ten years. Spanish industry is confident that the Executive will renegotiate the terms of the plan with the Commission by 2030.
Keep the ‘Iberian exception’
Electro-intensive industry complains electricity companies do not offer them supply contracts at stable and reasonable pricesand that PPAs (long-term contracts) continue to be heavily polluted by expectations that energy prices will remain high. And with the closing or closing of the period market, industrial groups continue to turn to the wholesale electricity market to guarantee the energy they need.
Therefore, AEGE supports the proposal of the Spanish Government: Reform of the EU’s regulation of electricity markets and the Executive’s argument that Brussels allowed the extension of the Iberian exception (Mechanism to limit the price of gas used in electricity generation implemented in Spain and Portugal and expired on 31 May) until this reform continues.
“We think it is appropriate to extend the ‘Iberian exception’ as expectations for the second half of this year remain high prices. Let’s hope Brussels approves to extend the deadline until 2023 or even 2024”, explains González. By closing the gas cap as a temporary protection measure —Mechanism serves to limit growth in wholesale electricity market-, electro-intensive employers believe that Spain’s proposal to reform the European market “makes sense” because it will serve to “provide energy at long-term prices and unpolluted by the price of gas”.
The Spanish Government has proposed to Brussels to change the current operating rules of the European electricity markets, which set prices through a marginal system (which marks the price of others with the latest and most expensive technology needed to meet demand). done fast rising prices natural gas polluted the price of electricity during the energy crisis
Spain, in practice, offered to keep the electricity produced by gas and coal plants in the existing daily and intraday market; this will claim compensation (capacity payments) as it is available in the highest demand. Renewables, nuclear and hydraulics will have a fixed price years through contracts with the electrical system. The price of renewable energy sources will be based on a system similar to existing government tenders, while nuclear and hydro power prices will be a price set by the regulator.
Source: Informacion
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