As part of its initial shock plans to counter the blow of the energy crisis, the government has announced a meeting at the end of summer 2021. control of extraordinary profits of electricity companies prevent them from taking advantage of the price increase to increase their income. In practice, Execution has since become a ceiling price for sales contracts electric and will maintain it for at least the whole of 2023.
the purpose was energy companies not selling the electricity produced nuclearhydropower and some renewable then at exorbitant prices From the wholesale market triggered by the price of natural gas and CO2 emission rights that these technologies do not support.
Government-activated mechanism, nuclear, hydraulic and renewable companies bring extraordinary income achieved through contracts signed above the maximum price of 67 euros per megawatt hour (MWh), which, according to government calculations, is the barrier between taking unfair advantage of the crisis or not. The sum of the sums companies have had to return for excess revenue in a little over a year 450 million €According to the own data of the electricity companies to which El Periódico de España from the Prensa Ibérica group has access.
The National Markets and Competitiveness Commission (CNMC), responsible for reconciling the industry’s costs and expenses, officially announced that the reduction in revenues reached only between September and December 2021. 131.8 million €but has since not made public the impact of the cuts for energy groups.
During 2022, companies continued to bring additional revenue to the electricity system until they reached 320 million, according to sources in the electricity sector familiar with the liquidations that have been formalized by now. The government’s projections for this 2023, electricity companies return an additional 330m euros to the electricity systemAs stated in the ministry order report for this year’s electricity system charges, prepared by the Ministry of Ecological Transition, led by Vice President Teresa Ribera.
Conflict of power and government
Government cuts have been a source of conflict with energy companies. Big electricity companies continue denying the existence of these extra benefits and they emphasize that they sell all their productions with bilateral agreements at much lower prices than in the wholesale market. In fact, it is noted that the amount of discounts from the sector since the implementation of the maximum price mechanism indicates the reduced volume of electricity from nuclear, hydroelectric and renewable energy sold at market prices or above 67 euros. Per MWh as determined by the executive.
It was pointed out that if all of the electricity produced by large electricity companies, nuclear, hydroelectric and renewable power plants were sold at the prices determined by the wholesale market, the cuts would be 13 billion 400 million euros instead of 450 million euros. effectively returned to the electrical system. Parallel, Companies also complain that the ceiling set by Spain is 67 euros.The maximum electricity price set by the European Commission as a reference is 180 euros, almost three times the price in the Spanish market.
On the other hand, the Government opposes that the revenue reduction system serves to control the prices of the electricity companies as it allows the electricity companies to sign all their new contracts and updates for a maximum of these 67 euros. per MWh to avoid this extra revenue return. Additionally, Execution praises that the mechanism is excellent. Serves to make electricity companies more transparent and clarify the pricing system, as they must disclose data from millions of contracts each month to show that they are not selling electricity above the set maximum price.
Control of extra benefits
The government activated the system in September 2021, forcing it to return some of its nuclear, hydroelectric and renewable energy sources (marginal technologies) in what it saw as extraordinary income. Subsequently, the Executive took advantage of another macro-decree on anti-crisis measures due to the war in Ukraine. Review and expand system to reduce additional revenue to all contracts signed at high prices (above 67 Euros per MWh).
He also created a special surveillance system for large power companies. so-called ‘heavenly blessings’ are not hidden (‘unexpected profits) result in the transfer of inflated prices to the end customer along the chain of contracts between companies in the same group.