Spanish government announces major electricity sector reform

SPAIN: The electricity sector is to undergo urgent reforms to enable a larger penetration of renewable energies which will, in turn, ensure a lower price for consumers and greater energy efficiency, Spain's ecological transition minister Teresa Ribera announced.

Spain's energy and environment minister Teresa Ribera (pic Casade America)
Spain's energy and environment minister Teresa Ribera (pic Casade America)

First published on Ends Europe

The minister promised a "more plural and decentralised" electricity sector and said that, while complex, the reform of outdated price-setting mechanisms "cannot be postponed" because of their negative impact on consumers and investors.

Ribera told the Spanish parliament that, with a €100 billion investment in renewable generation and increased storage capacity, Spain could obtain a saving on its electricity bill of approximately €400 billion and meet its 32% EU renewables target by 2030.

But in order to achieve this it will be essential to restore investor confidence damaged by unilateral changes to renewables tariffs made by the previous administration, she warned.

To this end the government intends to promote the use of bilateral contracts "to shift a large percentage of energy contracting out of the wholesale electricity market which, in Spain, unlike in some other EU countries, has a dominating position," she said.

Power purchase agreements "are an essential instrument as has been demonstrated in the US and in Germany", she added.

Time extensions will be granted to developers with permits for new renewable projects delayed by bureaucratic obstacles and a plan for repowering existing wind farms will also be rolled out, the minister promised.

Other measures to be urgently introduced include removing the barriers to self-generation introduced by the previous government and permitting and promoting shared generation enabling apartment blocks to instal renewable capacity.

The government will also move to end the long delay in transposing EU legislation on energy efficiency into Spanish law.

Juan Virgilio Márquez, director-general of the wind power lobby group AEE, told ENDS Europe his organisation celebrates the minister’s "wholehearted support for renewables" and "concurs with the urgency of a durable and wide-ranging reform of the energy sector".

Key to restoring investor confidence is "guaranteeing regulatory stability and eliminating changes to the definition of reasonable returns every six years," he added.

AELÉC, the lobby group which represents Spain’s big generating companies, told ENDS Europe it is still studying the government’s proposals.

First published on Ends Europe

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