Sun. Jul 21st, 2019

Bubble syndrome plans again on renewables | Economy


The president of BP Spain, Luis Aires, took advantage on Thursday of the presentation of the 68th report BP Statistical Review of World Energy 2019 to put on the table something that has been spreading for a long time around renewable energies in the energy sector. "There is a certain bubble," he launched. "There is a speculative investment that can lead to an escalation of prices," he added, noting the growing request for permits that has occurred in Spain and that already exceeds 150 gigawatts (GW) of generation capacity. The equivalent, he explained, to the installed power worldwide during the past year. "It is a fact that has to make us think", he emphasized in the presence of the former president José Luis Rodríguez Zapatero.

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Aires was right to say, immediately, that the Government is very aware of the matter. It is true that the Government has been studying for some time measures to prevent the massive request for access permits, which currently exceeds 150 GW, which is nothing more and nothing less than three times what is expected increase the power of renewable energies until 2030.

Jordi Sevilla, unexpected hero of the electricity sector. There is the electric sector with the spirit very tense by the circulars on remuneration for investment prepared by the CNMC; but nobody from whom it was published came out to face it. Therefore, when Jordi Sevilla, president of Red Eléctrica, a company with state participation, decided to take the step forward and charge against the proposal of the regulator, he became an unexpected hero and soon received the congratulations of the heads of the electrical , that do not accept that the measure supposes benefits for the user, as maintained by the CNMC. Red Eléctrica would have a cut of 8.2% for transport and its fall in the stock market exceeds 4% since the proposal came out.

The concern is greater in Enagás. The repercussion since the CNMC's proposals on referrals were published has made a dent in the gas companies, Enagas and Naturgy. This, which has lost more than 8%, has reacted with the stoppage of investments in gas networks. But it is the transporter, presided by Antoni Llardén, who has generated the most concern, both within the company and in the Government. It has lost 18%, which is a part of the capitalization of more than 800 million.

And Ribera will analyze the proposal in detail. It is so much the excitement that the minister of the sector, Teresa Ribera, has had to affirm what is obvious, that her department will analyze "in detail" the proposal to verify SDI is compatible with the energy guidelines of the Integrated National Plan of Energy and Climate ( PNIEC), as well as with the electrification and digitalization forecasts of the distribution networks. It awaits the allegations that arise and that may change the guidelines before the circulars take effect on January 1, 2020.

At present, access to the network is regulated by a royal decree of the year 2000, according to which the acquisition of a permit is simple and can be requested by any citizen or company. The only thing that has to comply is the regulation and request it to Red Eléctrica de España, responsible for managing the transport of electricity, which delivers it for free. In this way and before the plans to increase the participation of renewable energy, there has been a flood of requests.

Already last year the Ministry for Ecological Transition decided to double the mandatory guarantee that must be delivered for the investment that is theoretically going to be made. However, it did not have much impact, probably because it is still cheap compared to expectations. Now, the department that runs Teresa Ribera has prepared and put in the drawer a regulation that is waiting for there is a government (not in office) to enact it. This regulation includes measures such as environmental impact statement, land, permit ...

These measures, precisely, are in line with those included by the National Commission of Markets and Competition (CNMC) in the proposals for circulars of access to the network recently issued. Your president, José María Marín, has repeatedly warned that regulation should be modified because today it does not allow responding to the current challenges of integrating renewable energies; there is an excess of demand for projects and requests for access to the network; and access becomes a scarce and essential resource for agents, with an obvious risk of hoarding and speculation if regulation is not put in order.

Permits granted exceed more than three times the power expected for 2030

"It does not happen to be an administrative bubble", that does not imply holes or loss of investment

Circulars, which, contrary to what has happened with respect to remuneration, do have the backing of the sector, it tries to objectively assess the firmness and degree of commitment of the applications, relegating those that are not backed by solid projects . It also contemplates permits for a second stretch of complementary power in order to facilitate hybridisations and combine technologies (wind-solar integration) and opens the possibility of granting permits through auctions in cases where a significant capacity quota is released (200MW) . In other words, the highest level of competition is pursued, responding to current problems, ordering excess demand and integrating renewable energy at the highest level.

In short, the bubble exists. In that all agree. The difference, despite the warnings of Aires, is that it is nothing more than an "administrative bubble", that is, it does not imply a hole or loss of money as happened with the previous one, in which projects that remained undeveloped after have made strong investments. In any case, the electricity companies are very clear that they will have to make disbursements, to a greater or lesser extent, to acquire permits that allow them to connect their renewable facilities. For them, they can mean small amounts; but for speculators (usually, people outside the sector) can represent very substantial pinches.

Zapatero: "I'll know about bubble"

José Luis Rodríguez Zapatero, between PP deputy Guillermo Mariscal and Secretary of State for Energy, José Domínguez Abascal. Next to this, Luis Aires, president of BP Spain.


José Luis Rodríguez Zapatero, between PP deputy Guillermo Mariscal and Secretary of State for Energy, José Domínguez Abascal. Next to this, Luis Aires, president of BP Spain.

José Luis Rodríguez Zapatero was the guest at the BP España event. The former president of the Government recalled the bubble that lived this sector in its stage, although he celebrated that at least caused an "extraordinary leap" of this technology in Spain. Zapatero shielded himself that Spain "has a tendency to originate bubbles; as soon as there is a sector that is encouraged, that takes priority, that there is an expectation of demand, because the immediate risk is the bubble ". "I'll know," he joked jocularly.

(tagsToTranslate) syndrome (t) bubble (t) plan (t) new (t) renewable (t) ministry (t) have (t) prepare (t) normative (t) avoid (t) speculation (t) request ( t) access (t) requirement (t) cnmc



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