As Endesa sources told Efe on Monday, The upper limit of the gas price proposed by Spain and Portugal it is designed to try to lower the price of the wholesale market. only to benefit some of the consumers: customers with regulated rate or PVPC, and major industries that remain indexed to the wholesale price.
In this sense, they draw attention to the difference between the 30 euro/megawatt hour (€/MWh) gas price limit that Spain and Portugal propose to limit the gas price, and how much the combined cycle power plants cost to produce gas. “absorbed” by the electricity system through the wholesale marketbecause it is planned to be evenly distributed among the rest of the technologies.
So they warn eventually they will be the “most far-sighted customers” -contracted at fixed prices- where the cost is charged through a price increase.
Changes in regulated market prices
Endesa resources they see it as “an unfair transfer of income” Trying to reduce the increase in PVPC, which reminds us that the National Institute of Statistics (INE) is the price calculated in the Consumer Price Index (CPI), which measures inflation. free market contract prices are taken into account.
remember this power industry demands change of PVPC calculation method to avoid surges suffered by customers Under the regulated tariff linked to the price of the wholesale market, something they remember does not happen in the rest of Europe, and they complain that the Government has not taken any forward steps to reduce the exposure of these consumers. the ups and downs of the market.
If it is necessary to intervene in the market due to exceptional circumstances, Intervention in the gas market for the whole of Europe because it’s the only way to do it while minimizing distortions.
They also state that It is not true that the electricity companies rejected this offer from the Government. because they are accused of losing a “wonderful income”, because their marginal production – which does not use gas like hydro or nuclear – is already sold at prices well below the predetermined level. ‘pool’ (wholesale market).
Other industry sources agree. Government action will lower PVPC but increase the cost of free contracts.
Compensation for combined cycles
These sources estimate The cost to be compensated for combined cycle power plants will be between 10,000 million and 10,400 million Euros per year. At current prices, it could only be higher if the price of gas (currently around 110 Euro/MWh) rises.
In this sense, the source of the problem, namely gas price increasestill not resolved.
In addition, this mechanism Spain leaves the European market more importance is given to the wholesale market than it is to the wholesale market.
They point out that although the price of the daily wholesale market will fall, the prices of fixed contracts will rise significantly.
In this context, remember that 80% of electricity demand in Spain has fixed pricestherefore, they consider that the measure socializes the problem without correcting the market exposure of customers with PVPC (among them the beneficiaries of the social bonus).
They also point out that the measure may have other negative effects, such as the protection of fossil fuels and curbing renewable investments, the halting of marketers’ activities because they cannot transfer the cost, or an increase in country risk. Spain.