The case of Spain (ppt - 296.50 Kb)

Energy transformation under
the pressure of austerity:
The case of Spain.
Bruno Estrada.
Director de Estudios y Proyectos de la Fundación 1º mayo.
Brussels, 25th November 2013.
Fundacion 1º mayo. CC.OO.
1.-The regulatory framework of
the electrical system in Spain
1) A Great external dependence;
2) An uncertain access to the resources;
3) A great volatility in the prices of the
4) High environmental impacts of the
energetic cycle.
5) High costs of the system;
A Great external dependence
According to Eurostat methodology the
Spanish external energy dependence index
was 75,6% in 2011.
In 2012 energetic imports increased reaching
the 18’4% of total imports. 4.6% of GDP.
115% of total trade deficit. That means that
Spanish trade balance (without energetic
goods) shows a surplus.
An uncertain access to the resources;
A great volatility in the prices of the energy
Prices resulting from changes in international oil prices.
Except on gas supplies: Long-term contracts, aimed to ensure security have
resulted in a rise in prices
Spanish imports of Algerian gas, 1995-2012 (% of total imports).
High environmental impacts
of the energetic cycle
The carbon footprint of the energy sector in
Spain is very high.
78.1% of total emissions of greenhouse
gases (GHG) in Spain in 2007.
High costs of the system
- The Spanish prices of electricity are in the
medium-high band of the European Union for
the small consumers (almost 25 millions).
- The prices of the big consumers are lower, and
very similar to the rest of European countries,
due to the interest of the government in order
that the electricity will not be a factor that affects
negatively to the competitiveness of the Spanish
Two elements determine the price of
electricity for this majority of consumers:
- The CESUR (Energy Contract for Supplier
of Last Choice) quarterly auctions in the
liberalised part (production and marketing).
- The additional costs of the regulated part
by the government.
The price fixed by the liberalised part is the
production costs of the last generating technology
built into the system in order to meet the needs of
In other words, if the last technology meets 1% of
the expected demand and the cost of production is
50€/MWh, all the MW used for the rest of demand
are paid to 50€/MWh, whatever the generation
cost have been.
CESUR auctions produces an unrealistic cost of
electricity for some installations (hydraulic and
nuclear, with investments done many years ago)
that receive a “shocking” premium.
Most of the nuclear power plants the most
hydroelectric power plants in Spain belong to two
electric companies: Endesa and Iberdrola.
- The difference between the electric supply
cost and the electricity tariff, that is lower
in many cases is the “tariff deficit”:
A “false” consumer debt with electric
companies of 26.000 millions €.
The electric companies can issued debt
warranted by Government until 25.000
millions €.
2.- Measures to balance prices
between different social groups
With the aim of promoting the most vulnerable groups among small
consumers, in 2009 entry into order the Discount Rate (Bono
Social) and the Social Tariff (Tarifa Social). Four groups may qualify
for the Discount Rates:
A) The residential domestic customers with contracted power less than 3 KW. The
Discount Rate is automatically granted for this group.
B) Pensioners with minimum benefit.
C) Large families.
D) Households in which all members are unemployed.
The Government estimated that about 5 million
consumers would be included at Discont Rate.
Consumer organizations calculate the savings on
the electricity bill by up to 20%.
Domestic Energy expenditure in Spain is lower
than the countries of central and northern Europe,
due to the different climatic conditions. In the
period 2006-2010 it represented only 5% of annual
net income of an average family, but it is growing
very quickly.
3.- Effects of the crisis and austerity:
changes in the regulatory framework
Recent regulatory changes in the sector are reflected in the following laws and royal decrees:
Royal Decree-Law 6/2009, of April 30, by adopting certain measures in the energy sector and
approving the Social Bond.
Royal Decree 1565/2010, of 19 November, regulating and modifying certain aspects of the activity
of electricity production scheme.
Royal Decree 1614/2010, of December 7, which regulates and modifies certain aspects of the
activity of electricity production from wind and solar technologies.
Royal Decree-Law 14/2010, of 23 December, establishing urgent measures to correct the tariff
deficit in the electricity sector.
Royal Decree 1699/2011, of 18 November, regulating the network connection facilities electricity
production of small power.
Royal Decree -Law 1/2012, of January 27, by which we proceed to the suspension of preallocation procedures and the suspension of economic incentives for new installations of
electricity production from cogeneration sources renewable energy and waste.
Royal Decree-Law 13/2012, of March 30, measures adopted for the correction of the deviation
because of imbalances between the costs and income of electrical and gas sector and to
transpose Directives on home markets of electricity and gas and electronic communications.
Law 15/2012, of 27 December, on tax for energy sustainability.
Royal Decree -Law 2/2013, of February 1, on urgent measures in the electrical system and the
financial sector.
Royal Decree -Law 9/2013, of 12 July, by which urgent action to ensure financial stability of the
electrical system.
Since the 4th of October of 2013 there is a new Law project of the Electrical Sector in the
4.- Renewable
Energies in Spain.
Incentive system.
The RDL 9/2013 aims to reduce profit margins in the industry, setting its
reasonable return, before taxes, 3 points above the interest rate of the
Bonds of the State to ten years in secondary markets.
But the judgment of the CNE is that it will take large uncertainties to the
approximately 60,000 existing installations. The CNE warns that the return
on the investment can reach negative values​​, which "could be considered
incompatible with the design of a specific remuneration aims to promote the
production of electricity from renewable sources".
The Associations of Renewable energy producers consider that the
retroactivity of these changes affects the profitability of many projects
already installed.
The government has recently abolished the CNE,
integrating some of its functions in a new Competition
Commission which includes other regulated sectors,
but others have assumed the Ministry of Industry,
subtracting powers to independent regulator.
Regulatory changes, and declining public support
on renewable energy in Spain has caused the
biggest European drop in investment in 2012 in
this sector. According to New Energy Finance
Bloomberg, sector investment declined by 68%
(ie € 2.200 million).
5.- Evolution of employment in
the RE sector
There are no official statistics on employment in renewable energy,
since in the Labour Force Survey there is no renewable energy
Until 2011, the Institute for Energy Diversification and Saving (IDAE) of
the Ministry of Industry has been funding studies on employment in
different research institutes, such as ISTAS of CCOO, as
well as industry associations. It is not currently possible to know the
evolution of employment in the sector in the last two years, when
remuneration for renewable energy has been changed.
The data provided by industry associations shows a loss of 20,000 jobs
in 2009 and 2010 on a total of 111.455 workers in
2010, both direct and indirect jobs.
6.- Evaluation by the author.
The pressures of major conventional
companies (Endesa, Gas Natural,
Iberdrola) on the government (it is worth
remembering that there are several former
heads of government and former finance
ministers in their boards) have broken the
promotion model of renewable energies.
Members of Adminitration Boards and Experts paids by Companies
Felipe Gonzalez
Narcis Serra (Exvicepresidente)
Rafael Villaseca
Carlos Kimder
Nemesio Fernandez
(Exsecretario de Estado de
Pedro Solbes (Enel),
(Exministro de Economía)
Elena Salgado (Chilectra)
(Exministra de Economía)
Jose Maria Aznar
Miquel Roca Junyent
Braulio Medel
Presidente de Unicaja.
Jose Luis Olivas
(Expresidente de la
Generalitat Valenciana y
Expresidente Bancaja y
Banco de Valencia)
Juan Miguel Aynat
(Expresidente de
Bancaja y B. Valencia)
Ricardo Alvarez Isasi.
Paulina Beato
(Expresidenta Red
Electrica y CAMPSA)
Luis Carlos Croissier.
(Exministro Industria)
Miguel Angel Lasheras
(Exconsejero de la Comisión
Nacional del Sistema Eléctrico)
Ramón Perez Simarro
(Ex S.G de Energía)
Dionisio Martinez Martinez
Casa Real
Mario Fernandez
(Ex vicelendakari)
Jon Imaz
(Exsecretario G. PNV )
Artur Carulla, CiU
Carlos Perez de Bricios
(Exministro de Industria)
Juan Manuel Otero,
(Exministro Presidencia)
Carlos Borbón de las Dos
Infante de España.
The European Commission itself has
published a report, done by Ecofys, which
concludes that Spain would only reach
between 12.6% and 17.1% of power
generation from renewable sources, away
from the lens the 20% proposed by the
Commission and included in the plan of
Renewable Energy 2011-2020.