Spain’s biggest power companies, such as Iberdrola and Endesa, have warned against any intervention in the electricity market by the Spanish state, after the socialist government’s decision to implement urgent measures to bring down soaring energy bills, EURACTIV’s partner EFE reports.
In an exclusive interview with Spain’s state television RTVE on Monday, Spain’s socialist Prime Minister, Pedro Sánchez, announced a series of urgent measures aimed at bringing down the soaring cost of natural gas and electricity for consumers, and to – indirectly – moderate the benefits of energy companies in Spain.
Sánchez announced that the special electricity tax will drop to 0.5% – the minimum allowed by EU law – from 5.1% until the end of the year.
The plan calls for the implementation of a new tax on energy firms’ windfall gains which will last until the end of March, which could generate €2.6 billion according to Spanish official sources.
The extra resources obtained will then be poured back to consumers over the next six months to reduce the price of energy, the government announced on Tuesday (14 September).
Energy prices in Spain: an elevator going only up
The energy prices in Spain have been extremely volatile since last June, with prices going only up. The price reached Thursday over € 188 per megawatt/hour, EFE reported on Thursday.
Spain’s wholesale power market, which sets the amount paid by the companies that supply electricity to all households, has reached on several occasions a record-high since last June.
The Spanish government – a coalition of the socialist party (PSOE) and left-wind Unidas Podemos/United We Can – considered a “moral duty” to intervene and reduce the energy bill, to favor in particular the most vulnerable.
‘Emphaty quotes on the stock exchange’, says Ribera
The center-right Popular Party (PP) and other opposition parties such as the far-right VOX or center-liberal Ciudadanos (Citizens), oppose, by principle, any intervention in the market.
“Empathy quotes on the stock exchange” (La empatía cotiza en bolsa), stressed last week, Spain’s minister for the Ecological Transition, Teresa Ribera, in a direct attack against the record benefits obtained by many Spanish power companies and the need for them to make a solidarity gesture with the poor.
But the majority of Spanish power companies, including those with nuclear plants, fiercely opposed the move, stressing that “the measures aimed at intervening in the markets go against their efficiency, European orthodoxy and create a climate of legal uncertainty”.
Viability of nuclear plants at risk?
The Association of Electric Energy Companies (Aelec), which brings together Iberdrola, Endesa, Viesgo and EDP, issued a statement expressing a “forceful rejection of the measures (to reduce the price of the electricity bill) announced in the Council of Ministers (on Tuesday 14) directed against the electric companies”.
The Nuclear Forum (Foro Nuclear), a group that also includes the large electric utilities, has announced that if the bill on the remuneration of CO2 from the electricity market that withdraws the so-called “benefits fallen from the sky” (beneficios caídos del cielo) that companies receive for not emitting carbon dioxide is finally approved by the government, “the continuity of the Spanish nuclear power plants would be impossible”.
Spain has currently 7 nuclear plants in service, which generate 33% of the total energy produced in the country, “emissions free”, according to the Nuclear Forum.
According to Spain’s National Statistics Institute (INE), consumers’ electricity bills grew 7.8% in August compared with a month earlier, and 34.9% compared with August 2020.
Spanish inflation rose to 3.3% in August, the highest level since 2012, mainly due to the record increase in electricity prices, the INE reported.
The Spanish government promised earlier this month to bring annual electricity costs for households down to levels seen in 2018, the year he came to power.