Big electricity companies warn that record electricity sales to France slow savings due to ‘Iberian exception’

Electricity sales to France have skyrocketed in recent days after the government-enabled mechanism to dim the light was released last week. The interconnections between the two countries have been working at full capacity for days, sending electricity to the French market, and French companies benefit from cheaper electricity from their home countries thanks to the gas cap applied in Spain, and they do not have to bear the cost. They do the part that Spanish consumers pay.

from Aelec, the employers’ association that brings together Iberdrola, Endesa and EDP, It has been warned that increased exports to France are causing the Spanish electricity market to lower the price sought by the Government’s plan and lower savings for Spanish customers. Adding to the list of factors that have diluted the long-awaited launch of the gas cap in the early days is another challenge: At a time when renewable power generation was down, the heatwave boosted electricity demand, so it was triggered. The use of gas power plants at a time when gas prices are rising due to Russia’s decision to reduce its sales to major European economies.

Major electricity companies warn that the increase in exports to France also contributes to this increase in electricity demand, and in the year electricity demand started, Iberian exception (this means that Spain and Portugal impose a maximum price on gas used to generate electricity in order to lower the price of the entire wholesale electricity market) interconnections between the two countries will only be used to carry electricity to the French market.

According to Aelec’s estimates, sales electric Can reach France for up to 25 terawatt hours (TWh) over the next twelve monthswhich has triggered the annual sales balance between 5 and 6 TWh that has occurred in recent years, which means that the electricity demand of the Spanish electricity system increases by about 10% (from 256 TWh in 2021, according to Turkey’s records). Spain Electricity Network). The interconnect is running at maximum capacity these days, but that capacity has been temporarily reduced (currently reduced to around 1,200 megawatt hours if the usual thing is to be able to carry 2,900 megawatt hours).

“Spain’s electricity system will have to make an additional generation to meet France’s demand. We will produce more than is necessary to meet French demand and as it is incremental production, new gas production units will enter which will mean higher prices”, Pedro González, director of the Aelec association Regulations, stated in a meeting with the media.

lower price than france

Official price of the wholesale electricity market since the gas cap was introduced. Prior to the implementation of the new mechanism, the wholesale market set a price of 214 euros per megawatt hour (MWh). With the first exit of the gas cap The official price for electricity in Spain has ranged from 146 to 177 euros per MWh last weekif the price The French market fluctuated between 230 and 300 euros per MWh, therefore French companies imported everything possible to take advantage of the low Spanish price.

The problem is that even though the price of the wholesale electricity market has dropped from ceiling to gas, the amount millions of families and Spanish companies will finally pay at a market-dependent rate continues to rise as we add. Compensation to be paid to gas power plants with the new mechanism (higher than expected due to the massive production of the plants and the exorbitant rise in gas prices in the international market).

Compensation that gas-powered electricity companies receive to cover their real costs, which adds to the price set by the wholesale market, which nowadays ranges between 59 and 122 Euros per MWh, preventing it from falling. light. about An arrangement where only Spanish consumers benefiting from the measure pay, but French consumers do not. The effect of this imbalance is the increase in demand from France, the smaller decrease in the Spanish electricity market and the greater compensation of gas power plants (additional generation is primarily carried out with gas to meet the additional demand), and the final savings are less.

Major industry complaint

Major Spanish industry has already warned of this adverse effect, for their interests, as the mechanism was designed, allowing its French competitors to enjoy the best price for electricity produced and exported in Spain, and without incurring the additional cost of tuning. Spanish groups pay.

The Spanish Association of Large Energy Consumption Companies (AEGE) has called on the Government and the European Commission to reform this aspect of the mechanism “so that we do not finance France and its consumers benefit”. “If this problem is not resolved, it will irreparably damage the competitiveness of Spanish industries,” said the electro-intensive employers’ association, which includes giants such as ArcelorMittal, Acerinox, Sidenor, Şener, Ferroatlántica or Tubos Reunidos.

Source: Informacion


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