The Government finalizes a reform of the reductions in the electricity bill from which hundreds of Spanish industrial companies benefit, a mechanism that does not fulfill the claims of the large Asturian factories. With the reform, the economic sectors eligible for aid will be further expanded and the number of beneficiary companies will skyrocket to more than 1,000. The large electro-intensive industry, with a strong weight in Asturias, rejects the project because in principle the aid will not be graduated based on the intensity of electricity use. The Association of Large Energy Consumption Companies (AEGE), to which ArcelorMittal or Asturiana de Zinc (AZSA) belong, presented allegations. The Government of Asturias did not do the same, which until now supported the demands of that group, while the Government of Cantabria did present allegations.
The Executive intends to bring a royal decree to the Council of Ministers in the coming weeks to reformulate the Statute of Electro-intensive Consumers to adapt it to the new EU aid regulation. The Ministry of Industry is only waiting to receive the final approval from the European Commission with confirmation that the text conforms to the new community guidelines for state aid in the environment and energy, and also to have the placet of the Council of State, once that of the National Commission for Markets and Competition (CNMC) has been obtained. When the reform is approved, the Ministry still commanded by Reyes Maroto will organize the first call for aid with the new regulations.
The new distribution system will expand the number of economic sectors that the EU allows to be considered as electro-intensive to receive specific aid and unload the enormous weight that the cost of electricity has on their activity. The number of beneficiary sectors will go from the current 62 to 118 -perhaps finally to 119 at the request of the CNMC-, after including all the extractive industries -which can benefit Asturian mining companies- in line with the Brussels strategy of promoting the Community autonomy in the management of its own raw materials.
The aid consists of a reduction in the charges that are included in the receipt of industrial companies – with which the remuneration for regulated renewables and extra costs in non-mainland territories are financed – and in a coverage mechanism for the acquisition of energy long-term.
The maximum aid for sectors “at significant risk” of relocation – a total of 92 of the 118 sectors benefited – remains at 85% of eligible costs, while for sectors “at risk” of relocation – the remaining 26 – is 75%. However, the latter may also reach 85% if they meet certain obligations.
The possibility of granting aid above 85% to especially electro-intensive installations is also added. For the first time, the exceptionality of these companies will be recognized in the statute, as demanded by big industry, the Government of the Principality and the business and trade union organizations of Asturias. However, the text of the royal decree project indicates that these especially electro-intensive installations will be able to obtain more than 85% “if there is a budget available once all the installations have received the maximum aid”, thus minimizing the possibilities taking into account Keep in mind that now there will be many more beneficiary companies and the item foreseen in the general State budget for 2023 (91 million to offset charges and 1.5 million for guarantees for long-term energy contracts) is similar to that of previous years.
The AEGE association, to which ArcelorMittal and AZSA belong, claimed in its allegations to unlink the aid from the statute of budgetary availability and graduate them according to the intensity of electricity use. Also establish the maximum compensation allowed by the European Commission in renewable financing charges.
The Ministry of Industry will relax some requirements of the statute for electro-intensive plants to facilitate access to aid from more companies: the required intensity of electricity use will be reduced from 10% to 5% of the gross added value of the company; the obligation that 50% of the electricity consumption be in off-peak hours will not be applied exceptionally for this year’s aid; it is easier for companies that cover all or a large part of their electricity demand with self-consumption to receive aid; and the range of actions that are included among the investments required in energy efficiency to receive the aid is expanded.
The result, according to the calculations handled by Industry, is that the number of companies benefiting from the receipt reduction will go from the current around 610 to a total of around 1,050.
In parallel, and as part of the extraordinary measures to alleviate the impact of the increase in electricity included in the third anti-crisis decree, the Government decided to maintain a temporary reduction of 80% of the tolls paid by electro-intensive companies on their electricity bill – with which investments in electrical networks are paid. The Executive has decided to extend the measure only until June 30, but AEGE is already calling on the Government as an essential protection measure for large industry to maintain that discount at least throughout 2023. For the moment, the Executive is taking long to big industry on the extension. “It is too early to assess whether or not to extend this exemption beyond said date,” state government sources, who add: “it must be evaluated based on the evolution of energy prices and their impact on the industry.” .
