This article discusses the concerns of the Spanish electricity sector, specifically represented by AELEC (Asociación Española de la industria Eléctrica), regarding proposed changes to electricity remuneration rates and investment limits.
Here’s a breakdown of the key points:
AELEC’s Criticisms of the CNMC’s Proposal:
low Remuneration Rate: AELEC criticizes the proposed remuneration rate of 6.46% set by the CNMC (Comisión Nacional de los Mercados y la Competencia). They argue this rate is too low and places Spain at the “tail end” of European Union countries in terms of electricity network remuneration.
“Disruptive” Remuneration Model: They also object to the model proposed by the CNMC, stating it doesn’t align with government goals of encouraging electrification and discouraging fossil fuels. AELEC believes this model “limits the level of investment” by not considering current or future needs.
Discrimination: AELEC feels the electricity sector is being discriminated against compared to other regulated sectors like airports (8.03%) and communications (6.98%).
Lack of Predictability and Stability: Marta Castro, from AELEC, emphasizes that a low remuneration rate is only acceptable if there’s a stable and predictable regulatory framework that guarantees 100% investment recovery.She argues that the current proposal offers neither.
Evidence of Investment Issues:
Iberdrola’s UK Investment: The article highlights that Iberdrola has recently increased investment in new networks in the United Kingdom, suggesting a diversion of resources away from Spain.
Comparison with European Countries: AELEC points out that Spain’s proposed rate is significantly lower than those in countries like finland, Austria, Germany, the UK, Italy, and Ireland.Government Actions and Demands:
expansion of Investment Limits: AELEC’s concerns come as the Spanish government appears to be considering increasing or eliminating the current investment limits for electrical networks. Thes limits, set at 0.065% of GDP for transport and 0.13% for distribution, are described as unique in Europe.
EU’s Electrification Push: The article notes that the EU, following reports like the Draghi and Letta reports, is promoting massive electrification to ensure energy independence and support decarbonization, estimating a need for 584 billion euros in network investment by 2030.
Unlocking Network Investments in Euskadi: The Lehendakari (Basque President) confirmed the unlocking of network investments in Euskadi following a meeting with the Spanish President. This is seen as a positive step,with Euskadi needing significant new network capacity to meet its electricity demands and industrial decarbonization efforts.
High Connection Demand: In Euskadi, the demand for network connections from companies exceeds the installed power by over 20%.
ministry’s Network Access Contests: The Ministry of Ecological Transition has launched contests for network access with a demand of 3,681 megawatts.
AELEC’s Strategy:
AELEC plans to use the public consultation period, which ends in September, to push for “relevant modifications” from the regulator to ensure a remuneration rate that “fosters investment.”
In essence,the article portrays a conflict between the electricity industry’s need for investment and the regulator’s proposed remuneration framework,with the Spanish government perhaps moving towards policies that support greater network investment in line with European decarbonization goals.
