The Spanish government has proposed to the European Commission an almost total reform of the electricity market to lower prices and reduce its volatility in the long run. Brussels is preparing the process of implementing changes in the functioning of the electricity market, and Spain has continued, making it the first member state to present a comprehensive plan for how to tackle the reform, betting on smashing the existing market with technology and imposing contracts. long-term fixed prices for nuclear, hydropower and renewables.
This The executive’s proposal sparked bubbles among companies in the energy sector because it assumes a complete reversal of the existing rules of the game, resulting in a large dose of uncertainty about how investments will be made until the outcome of the reform is clear, and the Ministry of Ecological Transformation has prepared its proposal without any sign-in. without prior dialogue with the energy industry and currently having detailed data on the economic impact these changes will have.
The main renewable business associations are warning that a major reform proposed by the Government could “raise doubt” about planned investments in the Spanish market in the coming years. Renewable Energy Companies Association (APPA) and Wind Business Association (AEE), Iberdrola demands a stable legal framework that provides visibility into investments, in which major Spanish energy companies such as Endesa, Naturgy, Acciona, Repsol or Cepsa are integrated.
Renewable associations warn that only in the case of Spain Moreover 100,000 million euros in potential investments In renewable utilities, green hydrogen, energy storage and suspended network infrastructures, “its realization depends on a stable, predictable and agreed legal framework between the public and private sectors”.
“The proposal by the Spanish Government implies changes that may affect currently operating renewable facilities and planned future facilities in the short, medium and long term,” points out to both green employers, “therefore, if possible, with a compromise-based position between the different actors involved. Companies are requesting a technical discussion with the contributions of the relevant private sector before the electricity market reform.
Employers APPA and AEE warn that rapid development in renewable energy in recent years has been made possible by “companies betting on the current market system in the short and long term”, which the Government’s proposal has brought under control. Aelec, the employers’ association of major electricity companies – integrating Iberdrola, Endesa and EDP– Also warned this week that the Manager’s plan could create uncertainty and affect planned investments.
The Spanish Government has proposed to Brussels to amend the current operating rules of the European electricity markets. marginalist system (which marks the price of others as the latest and most expensive technology needed to meet demand), and the skyrocketing natural gas prices during the energy crisis have polluted the price of electricity.
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. This renewable energies, nuclear and hydraulic would have a fixed price for 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.