Profits fallen from the sky, about to go down in history

The price of energy, with uncontrolled increases, worries consumers, businessmen and also politicians, who have finally decided to take measures to make changes that help to rationalize a market, the electric one, whose operation is obtuse, complicated and, as we have seen, largely unfair. The origin of the problem is the marginalist system that establishes that, throughout Europe, those technologies that cannot be stopped, such as nuclear, are the first to enter the market, then the most economical – such as hydraulics, wind and photovoltaics – and , finally, the most expensive, which are the ones that need gas or, also, coal. The problem is that the final price is set by the latest technology to enter the market, which is gas, and this means that all the cheap energy that has been generated with the rest ends up costing the same as the more expensive one. It is what is known as profits that have fallen from the sky, which have enriched for many months, and years, some large companies and which are now in the crosshairs of governments throughout Europe, including the European executive. In fact, next Friday there will be a European summit in which they want to launch a kind of revolution in the electricity market.

It is an important milestone because until now Europe had completely refused to change the rules of this market. So much so that when the electricity bill skyrocketed in Spain and Portugal, it took a lot to accept what is now known as the Iberian exception, which at least allowed the price of the gas used to generate electricity to be regulated so that it would not become more expensive both the joint price.

What Europe now wants to regulate, however, does not go that way, since it considers that this option, as has already been demonstrated, what it does is to further encourage the consumption of gas and is not a good solution in the face of climate transition, which, as has been seen with the heat this summer, is also urgent. And, in addition, the reduction is also at the expense of consumers, since the state must compensate the electricity companies for the difference between the cap and the real price they have paid.

The European Union proposes to put a cap on the price of the cheapest energies so that they do not have to be paid at the price of gas

So what does Europe want to do? According to what has transpired so far, what is intended is to put a stop to the cost of the cheapest technologies. In other words, separate the price of gas from that of other technologies. It would be a ceiling that should be high enough for the renewable energy companies to pay off and encourage investment in the sector. The benefits that fell from the sky, therefore, which have already been regulated via taxes in several countries, such as Spain, would cease to exist.

To put this measure on the table, it took a strong crisis, motivated by the Russian invasion of Ukraine and the subsequent blackmail that the Kremlin is doing with a gas supply cut that tries to divide and subjugate EU partners. Despite the existing gas reserves and the diversification of suppliers, a hard winter is expected in Europe in terms of energy. For this reason, also at European level there will be proposals for energy reduction and direct aid to consumers and companies – Germany already plans to allocate around 95,000 million euros – to avoid energy collapse and a social crisis. In this context, wanting to keep the benefits that fell from the sky was insulting.

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