The government is appeasing the big electricity companies and openly giving them more investment in their networks.

The government is appeasing the big electricity companies and openly giving them more investment in their networks.ENERGY CLUSTER – Archive

The government is trying to redress complaints big electric and promote the necessary investment to enable a boom in new renewable energy sources. The leader opens up to study increasing the legal limit for energy companies to invest in electrical networks, for which they are compensated in the form of electricity bills that all consumers pay. But he wants to do this under certain conditions.

“Is it is appropriate to propose an increase in the investment limit provided that this will allow for increased investment, and this does not mean that it is intended to increase profitability“, indicate sources in the Ministry of Ecological Transition, commanded by Vice-President Teresa Ribera. The electricity transmission and distribution business is a regulated business in which companies make investments in their infrastructure up to a limit set by law and for which they are reimbursed through access charges charged on their electricity bills.

Currently, Red Eléctrica is subject to a maximum investment limit of 0.065% of GDP (excluding the cost of international interconnections), and the limit for distributors is 0.13% of GDP. In total, there are about 1 billion annual limits for transport networks and about 2 billion for distribution networks. Large electricity companies, which largely control distribution networks, are demanding higher investment limits. accelerate the deployment and modernization of their networks while increasing the rewards they receive.

“We know that this is a critical moment when it is necessary to accelerate investment” in the electricity grid to be able to connect all new renewable energy sources, as well as all large industrial projects that consume light, the ministry points out. But the government is keen to ensure that the bill’s increased network investment does not unduly increase the cost of electricity for consumers. “The Secretary of State for Energy is working through different scenarios to take the most appropriate measures,” the same sources indicate.

In recent years, the government has mobilized European funds to finance improvements to the electricity network without them counting as part of statutory investment limits or preventing them from being passed on to consumers through legislation. The Executive has reserved €931 million from the Recovery, Transformation and Resilience Plan (TRRP) to pay for part of the work needed to expand networks and update high-voltage infrastructure planning, and has also allocated €525 million to finance the digitalization of networks.

Major electricity companies have been asking the government for years to change legislation to enable the billions of dollars in investment needed in the electricity grid, which needs to be upgraded and expanded to integrate the boom in new renewable energy sources. The government has resisted increasing the remuneration that companies receive for these investments, which is included in electricity bills, to avoid further increases, but it is now willing to consider reviewing these limits whenever it serves to speed up the expansion and improvement of networks, and its impact on consumers through electricity bills is limited.

Electrical complaints

The government is currently considering increasing this limit on investments in transport networks (managed by Red Eléctrica) and distribution networks (mainly in the hands of large groups such as Iberdrola, Endesa or Naturgy) as a way to promote their deployment and full digitalization. . new renewable power plants.

Ecological Transition expressed surprise at the “interpretation” that major electricity companies have given of some of State Secretary Sarah Aagesen’s statements, which has drawn criticism from companies over concerns that the possibility of raising limits is tied to GDP on network investment.

Ribera is in ‘last resort’ talks with Brussels over a million-dollar plan to pay electricity companies for their gas plants and big batteries

“Investing in networks to increase demand does not make electricity tolls more expensive, quite the opposite. It’s like with highways: the more cars drive, the lower the toll should be. In addition, Spain has European funds that allow it to stimulate investment in networks without increasing energy bills for consumers,” Marina Serrano, president of the employers’ association Aelec (which brings together Iberdrola, Endesa and EDP), said this week. “The underdevelopment of electricity distribution networks in Spain does not allow industrial consumers to benefit from lower electricity prices. (…) If we don’t promote network development, we risk all this demand moving to other European countries attracted by their strong network investment plans.”