“A step forward”, “possibly better than current legislation”, “a positive assessment…”. These are some of the most repeated phrases this Wednesday among companies in the Spanish energy sector, employers and specialists consulted by La Vanguardia. Even consumer associations, usually belligerent with regulations on this sector, were cautious when interpreting the agreement to reform the electricity market reached on Tuesday by the Council of Ministers of the European Union.
“The devil is in the details,” pointed out some of the experts consulted for whom “the announced reform is more of an adjustment.” In general, the bases of what was agreed are liked. The large energy companies celebrate the dilution of those first maximum positions in which the most seasoned, such as the Minister of Energy Transition, Teresa Ribera, defended the end of the marginalist market. Identified at the beginning of the crisis as the main culprit of the escalation of prices on consumers' bills, it finally remains intact.
The sector also likes that the extraordinary measures that intervened in the market, such as the cap on gas prices agreed by Spain and Portugal, already have an expiration date in 2024. Of course, the employers' association of the large Spanish electricity companies, Aelec would prefer to have eliminated them since "we believe that the limit on income from inframarginal technologies should not be extended due to the distortions it generates in both the long-term and short-term markets," they noted this Wednesday.
With long-term consolidated market rules as a starting point, there is unanimity that end consumers will be protected from the volatility of that daily market. “The agreement obliges marketers (with exceptions) to offer fixed prices, as well as variable prices, to consumers, so that they can choose between having coverage (the fixed price) and being protected against volatility scenarios or being exposed to the market signal” explain the sources consulted.
“But let no one confuse stability with low prices. That will depend on the details and we do not know those yet,” warns Rubén Sánchez, general secretary of Facua-Consumidores en Acción. For these prices to be truly affordable, the other agreed points must work. “Everything will depend on how the states apply it, just as now we see many solar panels in some and not in others. The important thing is that the consumer stops being passive and will have more decision-making power,” says Epistimi Oikonomopoulou, expert lawyer in the energy sector at Clifford Chance Paris.
The key point of the agreement was on more technical issues that are also convincing. “Encouraging long-term contracts (PPA) between companies with public coverage is a great advance and how state aid is finally built (CFDs, which will not be mandatory) is another of the proposals that Aelec qualifies as “correct”, since "it will be the European Commission that will ensure compliance that there are no distortions in competition," they assure from the large electricity companies.
Competition is also the issue that worries gas companies. Combined cycles, companies that generate electricity from gas to cover the demand that renewables and nuclear do not meet, remain with their current weight. "But it is key that the remuneration for this continuous availability is set based on fair market prices without distorting competition with French nuclear or Polish coal," the Sedigas employers' association points out.
Renewable energies, in general, are also satisfied. “For Spain, the proposal (without knowing the details) does not vary substantially from what we already have. Everything will depend on how the States apply it,” warns Jose Mª González Moya, from the Renewable Energy Association-APPA.
