The wholesale electricity market shoots up to a new record of 188 euros / MWh after the Government's shock plan
The average daily price of electricity in the wholesale market is going to pulverize another record this Thursday, already shooting above 188 euros / MWh, after the shock plan approved by the Government on Tuesday was approved, which, among other measures, he to cut 2,600 million to electricity companies due to the increase in gas prices to mitigate its impact on the receipt of consumers.
Gas is, together with CO2, the great vector of this spiral of increases in the so-called pool. And the cost of this raw material continues to break records in Europe. In Spain, the benchmark for the Iberian Mibgas market is already close to 70 euros per megawatt hour (MWh). This will lead to this Thursday the average price of the electricity pool, according to the data just published by the Electric Market Operator OMIE, at 188.18 euros / MWw, 8.9% above the historical maximum registered this very wednesday. It is an increase of another 15.4 euros in one day, with maximum hourly prices of up to 198.85 euros.
This spectacular escalation has led the Government to approve a broad regulatory package that aims to neutralize these increases and lower electricity by 22% between now and the end of the year, in addition to deferring the increases in the regulated natural gas rate (TUR) for two quarters .
A “confiscatory” decree, according to the PP, and whose “interventionist measures” were rejected on Tuesday by the electricity employer Aelec shortly after the Nuclear Forum threatened a "Messy closure" of nuclear power plants. An additional cut will also be applied to these plants (which cannot cease their activity unilaterally) due to the rise in CO2, such as hydroelectric plants. Both will be the technologies affected by this cut in income due to the gas escalation, which will be in force until March, when the current price storm is expected to subside after a winter that is expected to be very complicated due to the low levels of storage of this raw material. in Europe.
Vice President Teresa Ribera has attributed this threat of nuclear power to a "first hot reaction" and, in statements to TVE collected by Europa Press, has indicated that "in a few days" she plans to meet with those responsible for the electricity companies to address the measures taken.
For its part, the gas employer, Sedigas, has indicated this Wednesday that it will wait to know the technical details of the mechanism to cap the increases in the TUR "to make an assessment based on the possibility of incurring in a potential tariff deficit of a structural nature for the gas system "that" could put its economic and financial sustainability at risk and question the liberalization process of the sector undertaken more than two decades ago. " Sedigas also claims a reduced VAT on the gas bill, such as the one temporarily applied to electricity.
The Royal Decree Law published in the BOE seeks to “immediately stop the effect that the increase in the price of electricity is having on the rest of the sectors of the economy, which is already being reflected in the most recent data of the electricity index. consumer prices (with the consequent loss of purchasing power of consumers and a loss of competitiveness for industry and the services sector) ”and“ represents a risk of slowing down the recovery ”, according to the Government.
The Executive has informally notified the measures of the decree to the European Commission and has the support of the EU for this regulatory package, the first of this scale adopted by a Member State in the face of this storm, which, as the High Representative for Foreign Policy of the European Union and Vice-President of the Commission, Josep Borrell, told RNE this Wednesday. The former socialist minister believes that "sooner or later" this situation will force the EU to reform its electricity pricing system because it has "too many dysfunctions".
The Spanish government's cut back on the sector has been described by Barclays as "bad news" for Enel, owner of Endesa, a company that contributes 30% of the Italian group's EBITDA and is fully exposed to the Spanish market. In a report published this Wednesday, the British bank estimates that the decree will have an impact of more than 200 million on Endesa's profit this year before taxes and another 200 million in 2022. The bank has cut 26.4 euros Endesa's target price at 25.5 euros and anticipates a "long legal battle" between the Government and electricity companies over this matter. The power company trades at mid-morning at 18.4 euros after falling another 3.7%.
The package of measures has punished the price of the main Spanish electricity companies. Endesa and Iberdrola, which on Tuesday gave 2,200 million of capitalization, extended this Wednesday the falls in the stock market, although in the case of Iberdrola, there are other factors beyond Spain. This Wednesday the electricity company opened the cover in the Financial Times for its criticism of the protectionist policies of the United States to favor its local industry in offshore wind. One group executive has called them "Soviet central planning."