2023-10-25 18:57:12
“Nothing indicates, in the medium and long termthat the reform of the electricity market is going to be minimally effectiveputting at risk the future of the strategic European industry and its indispensable generation of wealth and quality employment,” the president of the Business Federation of the Spanish Chemical Industry (Feique), Teresa Rasero. The chemical sector is a large energy consumer, so high prices hamper their activity. Despite their hopes for the reform of the electricity market with the original Spanish proposal, they regret that the text in which Europe advances It’s not going to change at all the actual situation. “It does not solve the problem of High pricesnor is he going to fix it,” added the general director, John Anthony Labat.
He bulk of the reform focuses on promoting what is called contracts for differenceswhich are nothing other than public term contracts between the State and a generator that complement the market price when the market price is low, and ask the generator to return an amount when the market price is above a certain limit. In this way, if prices are very high, as in recent years, governments receive income that they can later redistribute. According to Feique These types of measures are “aid” that serves countries with “budgetary availability”, such as France and Germany, but not to Spain. “They can maintain their competitiveness with state aid, but we do not have that possibility,” laments Juan Antonio Labat.
Once you have not gotten “a real reformwhich achieves gas and CO2 stop setting the price” of electricity, the chemical sector asks the next Government for a “tarifa industrial” in order to compete with Franco-German axis, where they have specific rates for the industry. In the French case, the tarifa Arenh quantifies the megawatt-hour at 42 euros, while in Germany a flat rate of 60 euros. “The Government can do it at the national level. We have a lot of renewable energy with a specific remuneration regime (RECORE) and a lot of inframarginal to make it an industrial price. In fact, it has been working on it,” adds Labat.
In the midst of the energy crisis, at the end of 2021, the Government approved this measure known as ‘inframarginal auctions’, which meant that would force large electricity companies to give up a part of his cheaper production (that of the inframarginal power plants, which are those like the nuclear and hydraulic) to independent marketers and large industry, so that they could contain their costs. The large electricity companies argued that they had all their energy already sold and never started up.
The problem of high electricity prices is that it can lead to factory relocations, something that has begun to occur, although occasionally with some plants in this case due to high gas prices. But in this case, the intervention capacity is very limited because its price is linked to geostrategic factors. “There are factories with shutdowns, another thing is when they make the decision that these shutdowns are definitive. We are not seeing too many processes, but when you are a gas consumer you compete with the price of the Henry hub in the United States, which is cheaper than the prices in Europe,” explains Labat.
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The sector estimates a year-end with a 6.8% drop in income up to 83,799 million euros despite the fact that the production grows 0.8%mainly due to the basic chemistry (the one used in processes, such as chlorine), which is the more intensive in electricity and gas consumption. Since the second quarter of 2022, basic chemistry has seen a sharp productive decline which, although it has reversed its trend since April, will close 2023 with a drop of almost 12 points, due to two factors: high energy costs and weak demand.
However, Feique adds that the evolution of the Spanish chemical sector is aligned with the “clear weakness“which is showing the European industry as a wholewhich began a “deceleration in the second half of last year and has continued in the current year, already suffering productive declines.”
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