2023-12-14 08:45:29
The Government of Pedro Sánchez is experiencing international warnings on energy matters from all sides. Both the national and European renewable employers’ associations, as well as the European Commission or the energy companies themselves, publicly or in more informal groups, consider that the process that Spain faces is full of threats, most of them coming from the strategy of the Executive, very active in the collection front and little in terms of guaranteeing the necessary investments for the green deployment that must face 2030 and the subsequent decades, until mid-century.
The Agency that coordinates the work of the national regulators of the energy sector (ACER) has warned on numerous occasions of the risk of blackouts as a consequence of the interventionist policies of the Executive such as “the protection of all consumers from price spikes” that “disincentivizes responsible energy consumption, facilitating a fixed demand and endangering security of supply.” In addition, regulators point out the “high costs” of not having correctly oriented the measures and that it will be necessary in the future to recover these extra costs.
The threat of energy companies to stop or even transfer their investments in the face of the Government’s fiscal pressure – in particular the “tax” on the companies’ profits – and the slap on the wrist from Brussels, which does not consider it justified to apply it today, has led to the Minister of Ecological Transition, Teresa Ribera, and Pedro Sánchez to back down and announce a reformulation of the same.
It is not clear what it will look like, predictably downward given that energy prices have moderated and no major tensions are expected on the horizon, although in no case has there been talk of eliminating the tax, as the third vice president recently clarified. .
The electrification of the economy is of such magnitude that it can burst the system. From the electrification of industrial processes based on fossil fuels, the replacement of gas boilers with electric heat pumps, the development of the transport recharging network, battery and solar panel factories, electrolyzers for the production of green hydrogen, electrification of ports, data center integration…
unstoppable phenomenon is even more significant in the case of industrial consumers, who want to become electrified due to the competitive advantage derived from the high availability of renewable resources (sun, wind and land) in Spain compared to the rest of the EU countries.
In this sense, future markets reflect noticeably lower long-term electricity prices in Spain than in the rest of the European countries, “a key factor when making economic and profitability forecasts for new investments.” PwC points out in a recent report on the strategic importance of networks, which need to expand to accommodate the meteoric deployment of renewable energy, but do not have the necessary incentives to attract the necessary investment. However, the Spanish remuneration framework discourages investment in networks.
The average investment between 2015 and 2018 was 1,482 million euros. According to the limits set by the legislation, average investments between 2023 and 2030 would be 2,750 million euros. The figure rises to 5,631 million in the PNIEC 2023-2030, double what the regulation establishes. But, in addition, the investments projected by this plan represent 0.45 euros for networks for every euro invested in renewable generation capacity, when the IEA believes that double the amount must be invested in networks (0.70 euros), 35% more. . For this reason, it is proposed to be able to advance investments and eliminate the current limit of 0.13% of GDP for the distribution network and 0.075% of GDP for the transportation network.
Added to this are the episodes of zero-cost electricity production, about which the renewable generators have warned the Government so that discharges do not occur due to not being able to use all the energy produced, and the nuclear blackout maintained by the Sánchez-Ribera tandem. .
All of this is raising alarm bells among investors. In fact, some of them already point directly to Sánchez as the main political risk for energy. In fact, the investment bank Citi indicates in its report on the sector for 2024 that in the case of Spain, a “minimum tax rate of 15%” adds that “Sánchez leads the Government” and, therefore, there is a risk of to apply “new fiscal measures that extend the financial impact of the sector” although he points out that the Executive “has recently softened the approach.”
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