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HomeLatest NewsIberdrola sells less in Spain despite winning almost a million electricity contracts

Iberdrola sells less in Spain despite winning almost a million electricity contracts

Date: March 27, 2023 Time: 12:43:05

Iberdrola closed last year with a 6.8% drop in electricity sales in Spain, to 93,101 gigawatt hours (GWh), despite winning almost one million contracts. Specifically, according to the annual results report submitted to the National Securities Market Commission (CNMV), the year ended with 10.8 million electricity contracts, 9% more, and 1.35 million gas contracts, 17.4% more.

In this way, it ended 2022 with a portfolio of 12.23 million electricity and gas contracts in the country, which represents an increase of 10% compared to the previous year. The company does not specify how many corresponded to the free and regulated market, but it does disaggregate electricity sales. It delivered 66,653 GWh in the free market, a year-on-year increase of 9.6%, and 6,866 GWh for customers with a voluntary price for small consumers (PVPC), 19.6% less. For its part, it sold 19,582 GWh in other markets, which also translates into a decrease of 35.8%.

Regarding gas, it managed a balance of 2.67 million cubic meters (bcm) last year, 4.6% less than in 2021, of which 0.04 bcm (-55%) was sold in operations wholesalers and 1.28 bcm (-3%), to end customers. The remaining 1.35 bcm is used for electricity production, compared to 1.38 bcm a year earlier. Adding those of Smart Solutions (integral solution for electric vehicles, photovoltaic self-consumption, services aimed at improving efficiency…), Iberdrola increased contracts in Spain by 17% in 2022, with 22.1 million.

On his side, the number of clients in the national territory increased by 1.1% compared to the previous year, reaching 10.88 million, while gas clients fell by 6%, to 1.35 million. Iberdrola has been one of the most active companies in attracting customers for the free market. “Savings, stability and security are the proposals for which the company is committed, in the face of contracts subject to uncertainties and the situation of a regulated and unstable market,” said the energy company in the campaign launched in May of last year. .

Commercial ‘War’

“Twenty million households in Spain have seen how their electricity bill is equal to or less than a year ago. They are those of those citizens who have a free rate. However, the rate contracts regulated by the Government have as reference the daily fluctuations in the energy markets and were unbearable for the citizens attached to this rate,” the company insisted.

However, Endesa has been the last electricity company to intensify the commercial ‘war’ to attract customers. The company run by José Bogas has recently launched a commercial offer aimed at domestic customers with which it offers one month of free electricity consumption every year and forever if you contract any of its rates on the free market. The promotion will be available until the end of March for new residential customers and for those customers who already have contracted a rate with Endesa and decide to switch to Única, with which a personalized fixed fee is paid, “with renewable energy, without permanence and with bonuses to consumers for meeting efficient consumption targets”.

It must be pointed out that before the energy crisis broke out in the summer of 2021, in the heat of the increase in the price of gas and CO2 emission rights, a customer under the regulated tariff has been paying less for the electricity bill, according to data published by the National Commission for Markets and Competition (CNMC). In fact, many utilities have been accused of inflating the price for free market customers on the grounds that these rates offer greater stability.

However, with electricity completely skyrocketing after Russia’s invasion of Ukraine in February 2022, the reality is that the customer in the free market has come out ahead because they have agreed to a lower price than the wholesale market with their retailer. In addition, it has also benefited from the Government’s tax reduction.

Take the government to court

Iberdrola presented results corresponding to 2022 this Wednesday and its president focused on Spanish regulation. Sánchez Galán told analysts that the company’s results in Spain fell by 19% “hampered by regulatory and tax measures and the increase in costs that the company has not passed on to customers.” He also charged against the energy tax and announced that Iberdrola will fight in court.

The director of the company’s legal services, Gerardo Codes, went into more detail. The manager called it “arbitrary” and “discriminatory” by only affecting certain sectors (energy and banking) and said that “it breaches the European Constitution and European Law.” The new tax that is levied at 1.2% on energy income will cost the company 200 million euros this year. Iberdrola does not expect the court ruling until next year.

The company also stressed that the energy tax could undermine the benefit target for the period 2023-2025. It expects an increase of between 8% and 10% per year, until it reaches 5,400 million at the end of the cycle. However, the growth could be 5% if finally justice does not agree with him. Last Friday it was known that the National Court rejected Repsol’s request (which foresees an impact of 450 million) to apply precautionary measures against the order of the Ministry of Finance to impose a temporary tax on energy income and large banking entities . On February 8, one day after the order was approved, the anticipation filed an appeal urging the temporary suspension of the rule.

For its part, Naturgy expects a blow of 300 million and has not yet clarified whether it will appeal it or not. The tax is applied to 1.2% of the income of the liberalized business of companies in the sector that billed more than 1,000 million. It remains to know the position of Endesa, which presents results this Friday and has already advanced an impact of 400 million euros. According to the Minister of Finance, María Jesús Montero, the banks and large energy companies have paid a total of 1,454 million euros in the first installment of the payment.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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