“Member States may…”. This phrase is repeated almost a dozen times among the 180 amendments with which the deputy of the European Socialist Party, Nicolás González Casares, has the energy sector in Spain in mind.
On Tuesday, the Spanish speaker defended in the European Parliament social reforms such as protecting vulnerable groups from supply cuts, or the controversial limit to profits that have fallen from the sky for inframarginal technologies (those that offer cheaper prices than market prices for be able to sell all its production, since it is free of CO2 emissions). With more support for the first measure and strong disagreement with the second, what really worries the sector are not the reforms that the European Union can define for all countries. The main risk that can be seen, at least from the Spanish energy sector, “is the discretion that the main speaker’s proposal introduces to give power to the member states in the most strategic points of the reform, such as the limit to the benefits of sub-marginal energies, the regulation of contracts for differences for the sale of energy or the regulations of PPAs (sales contracts at fixed prices)”, assure several consulted sources in the sector.
The González Casares proposal gives power to the states so that this new regulation can be applied to existing contracts if they so consider, define who can access a PPA, also establish regulated prices for storage, define crisis situations based on their criteria and establish energy mix, among other measures. “In a normal situation this shouldn’t be too much of a concern. The problem is the times. Now there is a great rush to close the negotiation before the end of the legislature and there is a risk that the European Commission may agree to go the fastest way and move forward with the Spanish rapporteur’s text, which puts the market unit at risk”, they say from the sector.
This path would be to accept that each country had a wide margin of decision regarding the regulation that broke the market price signals. “It would be the total breakdown of the single European energy market and a way of alienating investors in the long term”, say the staunchest detractors of the measure. “Letting the states decide can have its logic, since the energy structure is very different. The problem is that there is a risk that a state will go overboard by incentivizing, for example, aid to renewables, and we find ourselves with an excess of capacity the cost of which would end up being paid by taxpayers”, point out other sources in the sector more partisan that the decision to set national limits and criteria was in the hands of a group of experts.
The 186 amendments of González Casares are added to those that are already being contributed by other political groups, so that the Eurochamber must work at a fast pace to have a joint text in time with which it can demonstrate its ability to function as well in exceptional times. Throughout the crisis they have been excluded from strategic decisions so as not to delay the implementation of measures. “In other words, they are now under pressure to comply and have a final document before the end of June”, European sources explain.
Rushes that worry the big electricity companies a lot.
