The big industry Spanish company has been working for more than two years on a massive purchase of electricity of renewable origin at a fixed price to be able to protect yourself from electricity increases and reduce your energy bill, a key cost in your activity. The objective is to celebrate a mega auction renewablethe first promoted by private companies in the Spanish market, but the bid has been accumulating delays and the promoters have now decided to freeze the process until the Government confirms that there are no obstacles on some fiscal and regulatory aspects to celebrate it.
The Spanish Association of Large Energy Consumption Companies (AEGE), which brings together almost thirty large industrial groups with a presence in Spain, is waiting for the Ministry for the Ecological Transition and the Tax Agency to approve the holding of the auction with favorable conditions for energy producers. renewables and for industrial buyers. But if there is no certainty that the regulatory framework is what is needed, the employers of the electro-intensive companies will resign to celebrate the massive purchase of electricity.
“If regulatory and tax doubts continue to exist and are not resolved, we will not continue with the auction. We cannot celebrate and involve buyers and sellers without having everything tied up,” explains the general director of AEGE, Pedro González, to EL PERIÓDICO DE ESPAÑA, from the Prensa Ibérica group. “Until the Tax Agency and the Ministry for the Ecological Transition resolve the doubts, the entire process is stopped. And if the tax treatment and sector-specific regulation do not fit with what we need, we will have to abandon the project,” he says.
Taxation and regulation
The business association hopes to resume contacts with the Government in the coming weeks to obtain clarifications on how to execute the auction for the purchase of renewable energy. On the one hand, AEGE needs confirmation from the Tax Agency that the taxation it can use in the operation is that applicable to physical energy and not to a financial product, which is less favorable.
On the other hand, the regulations do not contemplate that a single user has several energy suppliers. To hold the auction, the electro-intensive employers require confirmation from Ecological Transition that the bid is legal as designed or that the Ministry commits to promoting a regulatory change to facilitate it. “As long as there are doubts of this magnitude, we cannot move forward,” says González, who recognizes that the association does not currently have a plan b in case the auction is cancelled.
Initially planned for the first quarter of 2022, and after hoping to be held at different times in 2023, the organizers are now paralyzing the auction and it will be held, in the best of cases, at some point in 2024. AEGE emphasizes that the rest Aspects of the bid have already been defined and, if it receives the ‘ok’ from the Government on its fiscal and regulatory requirements, it could be launched in just three months.
Shield the price
The association of electro-intensive groups – which integrates giants such as ArcelorMittal, Acerinox, Sidenor, Sener, Ferroatlántica or Tubos Reunidos– has been working on launching its own renewable energy auction system apart from those organized by the Government. The objective is (or was) to secure a substantial part of the electricity supply they require for their activity and to do so at a stable price for a long period between 10 and 12 years.
Currently, around 80% of the electricity consumed by large Spanish industry is purchased directly on the wholesale electricity market, so they are exposed to the volatility of their prices and risk assuming large increases in their production costs. when there are large increases in the price of electricity.
The plans of large industries involve convening wind and photovoltaic producers so that they present their offers for the sale of electricity at a fixed price. Subsequently, industrial and electricity companies would seal bilateral power purchase agreements or PPAs (‘power purchase agreements’) that would have the endorsement of the State, through the Spanish Reserve Fund for Guarantees of Electrointensive Entities (FERGEI).