Spain Plans Regulation to Curb Consumer Energy Bills
The reform seeks to reduce part of the carbon dividend for pre-2005, non-emitting plants that sell energy on the market, a source with knowledge of the draft told Reuters on condition of anonymity.
MADRID: Spain’s government is expected to approve draft legislation on Tuesday to limit the windfall profits hydro and nuclear plants make as rising C02 prices drive up electricity bills, the Economy minister said on Monday.
The preliminary bill is part of a wider pledge by the ruling Socialists and left-wing party Unidas Podemos to curb energy prices to protect end-consumers.
Spanish newspapers El Pais and eldiario.es said the government estimated the measures cost utilities between 800 million euros ($976 million) and 1 billion euros in lost income, but would reduce consumers’ electricity bills by around 5 per cent, depending on CO2 prices.
The Environment Ministry declined to comment on the potential impact.
The reform seeks to reduce part of the carbon dividend for pre-2005, non-emitting plants that sell energy on the market, a source with knowledge of the draft told Reuters on condition of anonymity.
“We are working on a draft bill that I believe will be submitted to tomorrow’s cabinet meeting to try to prevent a rise in the cost of CO2 from having a negative impact on the cost of energy for citizens and businesses,” Spain’s Economy Minister Nadia Calvino told Spanish radio station Cadena Cope.
Calvino gave no details about the bill, which is likely to require months of consultations before final approval but said it would encourage companies to increase efficiency.
The energy pool price has surged since the beginning of the year, reaching an average of 52 euros per megawatt hour, a roughly 90 per cent rise year-on-year, Spanish investment firm Alantra said, as CO2 prices have risen 40 per cent.
Shares in Spain’s utilities or companies with the highest exposure to hydro and nuclear power fell on Monday on reports of the plan, which coincides with the implementation of a new power tariff scheme from next month.
The new system, unusual in Europe, splits retail power prices into time bands, which the government hopes will reduce annual bills, but consumer associations say would be confusing for households.
Endesa was down 4.5 per cent, Acciona fell around 2 per cent, and Iberdrola 1.8 per cent, making them the worst performers on Spain’s blue-chip index Ibex-35.
Source: Reuters
