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HomeLatest NewsLarge electricity companies urge to adjust the networks' remuneration to inflation

Large electricity companies urge to adjust the networks’ remuneration to inflation

Date: December 8, 2023 Time: 11:17:10

The large electricity companies combine positions to face the transformation of the electrical network. Iberdrola, Endesa and EDP demand a roadmap like the one that has been prepared for self-consumption and green hydrogen in which remuneration is set for electrical networks that adjusts to inflation and a regulatory framework is established that encourages investments. .

The current remuneration of electrical networks, which covers the period 2020-2025, establishes a financial rate of 5.58%, established by Circular 2/2019 of the National Markets and Competition Commission (CNMC). This represents a reduction of 4.1% for distribution and 5% for transportation compared to the previous period. Furthermore, to this reduction we must add the one caused by the new methodology, which ends up representing a total cut of 4.5% and 7.3%, respectively.

Now, under an inflationary macroeconomic context and with continuous increases in interest rates, the sector demands that Competition adapt the remuneration to the current situation and that the new planning, which is already being worked on and will come into force in 2026, there is no falling sea. This is what Iberdrola, Endesa and EDP have demanded at the V Congress of Aelec, the employer’s association that brings together the three companies.

The employers ask for more investment in networks under the ‘new’ PNIEC

The president of the association, Marina Serrano, has also sent a message to the Government. She considers that the investment in networks provided for in the draft of the National Integrated Energy and Climate Plan (PNIEC) “is not adequate.” In her opinion, there must be greater ambition if the objectives set in the decarbonization roadmap are to be achieved. The document, which has received more than 400 allegations and which may still change, estimates investments in this section of around 53 billion euros, around 18% of the total investments that will be mobilized until 2030.

“We believe that the investment that is planned is not adequate, that it must be increased and that it must be aware of the importance of so much integration of renewables, but then the competition in remuneration also corresponds to the CNMC,” he said in statements to the media. Along the same lines, the CEO of EDP Spain, Ana Paula Marques, has assured that “accelerating” investments in networks will be “fundamental” and that it is necessary to have a regulatory framework that is “adequate and stable.” Marques has thus asked to modify the remuneration framework so that it adapts to an economic context that has been altered by Russia’s invasion of Ukraine.

“It is not possible to maintain a model for calculating the remuneration rate like the current one, since the reference values ​​have changed a lot,” he pointed out. On the other hand, the CEO of Iberdrola Spain, Mario Ruiz-Tagle, has stressed the need to streamline the processing processes for renewable projects if the energy transition is to be “accelerated.”

In his opinion, the speed must be “doubled” to achieve the objectives set. The manager explained that last year a figure of 6,000 ‘green’ megawatts (MW) was installed, while this year, until August, about 2,600 MW have been deployed and just over 5,000 could be reached at the end of the year. MW, numbers far from the 10,000 MW per year that are needed.

The director of Institutional Relations and Regulation of Endesa, José Casas, has focused on the need not to distort the market price signal or discourage long-term market participation. It has indicated that contracts for difference (CFD), long-term power purchase contracts (PPA) and forward markets must have “a voluntary nature” and that it is each agent who decides “what “That’s what I want to sign.”

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

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

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