Wednesday, October 27

Ribera summons the electricity companies and opens to withdraw the cut if Brussels takes measures in the face of the energy crisis

The Third Vice President and Minister of Ecological Transition, Teresa Ribera, is going to initiate a round of contacts with the heads of the electricity companies to address the situation of the energy market in the face of the upward spiral of prices, after being willing to withdraw the cut that was approved in September for the sector if Brussels takes measures in the face of the energy crisis that hits Europe due to the exponential rise in gas.

The wholesale price of electricity soars 60 euros in one day to a new record of 288 per megawatt hour

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“The Government continues working to overcome an extraordinary situation. And it has initiated a round of contacts with the industry, consumers and also with electricity companies, with which we have always maintained the channels of dialogue,” indicate sources from the Ministry of Ecological Transition.

These sources add that “at the same time we continue to work in Europe, because we have always said that we prefer a European-wide solution and we await the package that the Commission has announced that it will present next week.”

This week, in an interview with Reuters, Ribera has been willing to withdraw the cut approved in September, which has put companies on a war footing, as long as Brussels moves, which this week has been open for the first time to make changes to the marginalist model that prevails in the EU whereby the price of gas determines what other technologies charge.

“If the EU takes some measures, we will be happy to move on and forget about any other national solution,” said the vice president, who assured that the complaints in Spain come mainly from “a company”, which she did not cite.

On Monday, Ribera pointed directly to Iberdrola (although he did not mention it expressly either) by announcing in the Senate that he has asked the National Commission for Markets and Competition (CNMC) to investigate the shutdown of renewable energy facilities so as not to enter the Cassation and avoid the price reduction mechanism approved by the Government in September to contain the impact of the escalation in the receipt. A measure described as “terrifying interventionism” by the president of Iberdrola, Ignacio Sánchez Galán, who on Monday assured that he is open to “dialogue.”

Suspend or modify

As reported this Thursday by Cinco Días, the ministry is considering suspending or modifying the mechanism for reducing the income received by hydroelectric, nuclear and some renewables that go to the market due to the benefits they receive when gas marks the marginal price in the ‘ pool ‘.

The strong price increase since that measure came into force on September 14, which is pending validation in Congress, has led the Government to rethink, since it would mean, for gas prices above 100 euros per MWh, doubling practically the cut in income to the three large electricity companies, Endesa, Iberdrola and Naturgy, initially set at 2,600 million euros, according to the newspaper.

After 10.20 am this Thursday, the price of Iberdrola and Endesa has soared this Thursday by 6% and 4%, respectively, given the possibility that the cut will be without effect. Ribera has called as of today a round of meetings with the heads of these companies (the CEO of Endesa, José Bogas; the president of Iberdrola, Ignacio Galán, and the president of Naturgy, Francisco Reynés), to discuss the matter and look for solutions. The companies outlined their proposals yesterday, according to ‘Cinco Días’.

Meanwhile, the critical situation of the gas market gave a break this Thursday. The futures of the Dutch market have collapsed this Thursday almost 50%, to 81.8 euros, compared to the record of 161 euros at which it traded on Wednesday, after Russia and the United States expressed their willingness to stabilize the markets.

The tension in the European gas market has led to a new record of 288 euros per megawatt hour (MWh) on the wholesale electricity market in Spain this Thursday. A historical maximum that, however, is lower than the prices set by the wholesale markets of France, Germany, the Netherlands or Belgium, close to or above the barrier of 300 euros / MWh.

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