big industry Spain has been working for more than two years to purchase large amounts of electricity from renewable sources at a fixed price to protect itself against electricity increases and to reduce its energy bill, a significant cost of its operation. The aim is to celebrate big auction renewableIt is the first to be introduced by private companies on the Spanish market, but the bid has been experiencing delays and the bidders have now decided to freeze the process until the Government confirms that there are no obstacles to celebrating it on some financial and regulatory issues.
Association of Large Energy Consumers of Spain (AEGE), The company, which brings together nearly thirty major industrial groups present in Spain, expects the Ministry of Ecological Transition and the Tax Office to approve the holding of tenders with favorable conditions for energy producers, renewable energy producers and industrial buyers. But if there is no certainty that the regulatory framework is what is needed, Employers of electro-intensive companies will resign to celebrate the big electricity purchase.
“If regulatory and tax doubts remain and are not resolved, we will not proceed with the auction. We cannot celebrate and include buyers and sellers without binding everything,” he explains AEGE managing director Pedro González, from the Prensa Ibérica group to EL PERIÓDICO DE ESPAÑA. “The entire process is stopped until the Tax Office and the Ministry of Ecological Transition clear the doubts. “And if tax treatment and sector-specific regulation do not fit our needs, we will have to abandon the project,” he says.
Taxation and regulation
The business association hopes to continue contacts with the Government in the coming weeks to obtain clarification on how the auction to purchase renewable energy will be carried out. On the one hand, AEGE needs to obtain approval from the Tax Office that the taxation it can use in the operation can be applied to physical energy and not to a financial product, which is less advantageous.
On the other hand, the regulations do not envisage a single user having more than one energy supplier. To conduct the auction, electro-intensive employers must obtain confirmation from Ecological Transition that the proposal is legal as designed or that the Department is committed to promoting a regulatory change to facilitate it. “As long as there are doubts of this magnitude, we cannot move forward,” says González, who admits that the association does not currently have a plan B in case the auction is canceled.
Originally planned for the first quarter of 2022 and hoping for it to be held at different times in 2023, the organizers are now paralyzing the auction and at best it will be held in 2024. The dimensions of the Remaining Proposal have already been defined and if it gets the ‘go’ from the Government on financial and regulatory requirements, it could be launched in just three months, AEGE said.
maintain price
The union of electro-intensive groups uniting giants such as ArcelorMittal, Acerinox, Sidenor, Sener, Ferroatlántica or Tubos Reunidos– It is working to launch its own renewable energy auction system outside of those regulated by the government. The aim is (or was) to secure a significant portion of the electricity supply they need for their operations, and to do so at a stable price over a long period of 10 to 12 years.
Currently, around 80% of the electricity consumed by large Spanish industry is purchased directly on the wholesale electricity market, thus being exposed to fluctuations in their prices and at risk of large increases in production costs. electric.
Major industries’ plans include coming together wind and photovoltaic manufacturers Thus, they present their offers for electricity sales at a fixed price. The industrial and electricity companies would then sign bilateral power purchase agreements or PPAs (“power purchase agreements”), which would receive State approval, through the Spanish Reserve Fund of Guarantees of Electro-Intensive Enterprises (FERGEI).