The president of the National Commission for Markets and Competition (CNMC), Cani Fernández, has launched this Wednesday an appeal to the competent authorities of the European Union to initiate an inspection procedure on the actions of the French Government regarding the connections electricity with Spain.
Fernández made his suggestion to Christian Zinglersen, director of the European Union Agency for the Cooperation of Energy Regulators (ACER) with whom he shared the stage at a conference in the ‘Energy Prospectives’ cycle organized by the Naturgy Foundation that was held this Wednesday at the IESE headquarters in Madrid.
The current electrical connections between the two countries do not reach 3% when European legislation set a minimum interconnection objective between European countries of 10% in 2020. The Spanish competition regulator considers that the French position could be hindering progress and therefore there could be a breach of European legislation that “as a minimum should be subject to an inspection procedure”.
Although Cani Fernández herself has little hope that this can be feasible. Her colleague, Zinglersen, considers that analyzing this petition “is a very complicated issue.” She assures that it would mean undertaking an analysis in which “data from both countries, which have very different energy profiles, should be analyzed. France does have connections with other Central European countries, so it is not easy to analyze a position against the country’s interconnections”, she commented.
The issue of interconnections is just one of the many issues that the European energy authorities have on the table. During the session this Wednesday, Fernández and Zinglersen, moderated by IESE professor Jordi Gual, analyzed the regulatory challenges of the energy transition. Both experts have positioned themselves in favor of “the market setting the price signals” since it is the best formula for operation under normal conditions.
What has been learned in recent years is that exceptions exist and have a great impact and “for those moments, exceptional measures have been needed that have been effective”, pointed out the president of the Spanish CNMC.
For Cani Fernández, measures such as the Iberian exception to cap gas prices have worked and can be used “at specific times”, but they cannot be a general rule. That is why the European regulation should not consider them as a general rule.
A reform that has a crucial date tomorrow, the day for which Parliament is expected to finalize its amendments and the Council working group will discuss theirs so that the presidency, now in Spanish hands, can plan the next steps.
According to the speakers, among the most difficult challenges to address is integrating the different technologies that make up the energy mix in a coherent manner with the current market situation.
With the massive entry of renewables, current market signals mark zero euros as remuneration at various times of the day. “This is not compatible with a long-term investment policy like the one that companies in the sector have to carry out,” Zinglersen recalled.
In his opinion, as well as in Fernández’s, the market that emerges from this new design must guarantee competition and the security of investments in a situation without the current stress. The position of these experts that the balance between legal certainty and flexibility must prevail, but if it is necessary to opt for something, that something must be certainty since it is what will allow us to ensure the necessary investments
“We are experiencing profound changes and these decisive moments have made us advance with giant steps but we have to consolidate them so as not to have a giant with feet of clay”, assured the president of the CNMC.
Another of the issues that the new regulations should not forget is that of investment in networks. “It is a complicated balance. Invest in networks before having the demand or do it after the fact. We must work to adjust the appropriate connections and to avoid an excess of investment that leaves connections unused or with inefficient use in the future”, acknowledged the director of ACER.
In the case of Spain, Fernández pointed out that it is difficult to point out if the current massive deployment of renewables is an excess or not. “We are making a strong commitment to green hydrogen that will need many renewables. It is difficult now to make a calculation with the needs, ”he pointed out.
