The Government’s anti-crisis cuts force electricity companies to return more than 800 million

2023-10-23 07:22:56

The Government launched almost two years ago, in the worst of the energy crisis, a system to control possible extraordinary profits from electricity companies and prevent some companies from taking advantage of the historical escalation of energy prices to abusively boost their income. Spain was ahead of the rest of the European Union to take these types of measures by setting a ceiling price for electricity sales contracts and it did so in a more restrictive manner, with much lower price limits than those finally endorsed by Brussels for all member states.

The objective of the measure, which came into force in Spain in October 2021, was to prevent energy companies from selling the electricity produced by nuclear, hydroelectric and part of the renewables at the exorbitant prices then set by the wholesale market, which were skyrocketing due to the price of natural gas and CO₂ emission rights, which are costs that these technologies do not actually support.

To avoid this, the Government has since obliged nuclear, hydro and renewable energy companies to return the extra income obtained from sales contracts signed above a ceiling price set at 67 euros per megawatt hour (MWh) to avoid the so-called profits fallen from the sky. (‘windfall profits’, according to sector jargon). Electricity companies have been forced to return excessive income to the system for a total of 812.7 million of euros, according to the data to which it has had access THE NEWSPAPER OF SPAIN.

The National Commission of Markets and Competition (CNMC), in charge of carrying out the settlements of costs and expenses of the sector, revealed that The forced reductions in income reached 131.8 million euros between October and December 2021 and which were 370.4 million in the whole of 2022. The organization has not revealed the amount of the returns throughout this year, because it only makes it public when the settlements for the entire year are closed. anus.

The measures to lower electricity, gas, fuel and food in the air after injecting 21,000 M due to the crisis

This year the companies have continued to return extra income to the electricity system until reaching 310.5 million between January and July alone, as confirmed by several sources in the electricity sector with direct knowledge of the settlements formalized so far. The figures from this year and last They are above the estimates managed by the Ministry for the Ecological Transitionwhich anticipated that in each of the years the reductions would be around 330 million.

Extension of the price cap?

The Executive activated the price cap in October 2021, has reviewed and expanded it on several occasions and extended its validity, which is now fixed until the end of 2023like other exceptional measures to contain the prices of electricity, gas, fuel or food. The Spanish Government, now in office, does not reveal its plans for a possible extension of these anti-inflation measures, although it is inclined to maintain some of them depending on how the markets evolve until the end of the year.

Last week, the Twenty-Seven agreed on a common position for the reform of the electricity market, which must now be negotiated with the European Parliament and also with the European Commission for its final approval. The text agreed upon by the member states – with the only abstention of Hungary – explicitly includes the possibility that countries can maintain at least until the end of June 2024. Spain applies a cap of 67 euros per MWh for electricity contracts, but as a general framework in the EU a maximum price of 180 euros is contemplated.

“The inframarginal revenue limit (…) has in some cases provided an important source of revenue that Member States have used to soften the impact of high electricity prices on consumers’ bills. This Regulation [el texto aprobado la semana pasada por los Veintisiete] provides tools that will also provide relief to consumers in times of high electricity prices. As member states implement those tools, they should also be allowed apply an inframarginal income limit until June 30, 2024,” the text states, opening the way for electricity price control to be maintained for at least another six months.