The creation of a second market for renewables would pit large industry against marketers

The Government proposes that renewables, cogeneration and waste sell their production to electro-intensive industry and PVPC at competitive prices.

The creation of a second market for renewables pits the big industry against the free marketers

The saying goes that it never rains to everyone’s liking. And this is what happens with the possible decree proposed by the Government to lower the price of electricity in two segments that are very sensitive to the cost of energy: households and large industry. However, there is collateral damage, independent marketers who are already on the tightrope due to the unprecedented escalation of electricity in recent months.

“It would be the icing on the cake in a situation that is unsustainable for most independent marketers,” he explains to EL ESPAÑOL-Invertia Sandra Salinas, Responsible for the Operations Department of the marketer Luvon Energy.

According to recently published information, The Ministry for the Ecological Transition would be assessing the exclusion of renewable, cogeneration and waste generators that receive the specific remuneration established in the wholesale electricity market regime (RECORE). The goal is for them to come and sell their production to a parallel market to the current daily energy market with the aim of providing a rate to domestic customers (PVPC or regulated rate) with an intervened price.

The regulated tariff is a system to set the price of electricity at the lowest possible cost and that only households and some SMEs can access. The problem is that only reference marketers can offer PVPC, that is, Iberdrola, Endesa, Naturgy, EDP or Viesgo (Repsol), which would leave out of the game the more than 200 marketers that currently exist in the market.

But why can only these five offer the PVPC rate when there are so many marketers that could offer it with the same guarantees? “It is an issue that should be on the table, but if not, another option is to create a PVPC that is aimed only at truly vulnerable consumers,” adds Salinas.

Economic problems

These marketers, the independent ones, have been experiencing a limit situation over the last few months due to the high prices of the electricity market. But it is not the only thing.

“The distributors are not making us the correct billing of the consumption of our customers, or they don’t send them directly to us so we can’t charge customers, but we have more problems. We also have to count on a high number of non-payments and with the high prices of the pool, the guarantees that they ask us for from OMIE (market operator) Y REE (system operator). That without taking into account the invoicing of the secondary markets or adjustments, which we also pay for”.

If an independent marketer is disqualified because it cannot afford so many costs, your customers automatically go to a referral marketer.

And the industry, in favor

Faced with this situation is the energy-intensive industry. A few weeks ago they warned that they would have to stop due to the high costs of electricity, and this has happened.

Therefore, to his employer AEGE (Association of Large Energy Consumption Companies) those RECORE auctions seem like a good solution. He says that in the short term he would stop the rise in electricity prices, which threatens to “throw to the ground” the economic recovery.

“This measure, together with others such as the exemption of 80% of the transport toll and the maximum compensation, authorized by the European Commission, of indirect CO2 (estimated at 450 million euros by 2022), could serve”, they have pointed out from AEGE .

In the same way, they have asked to take measures urgently, since in the industries they represent, electricity costs reach 60% of total costs, something that with the rise in the price of energy is representing 75%. “In Spain we pay 135% more than in France and 45% more than in Germany”they have lamented.

Bilateral contracts

While independent marketers are crying out in the desert to avoid a bleak future if the creation of that market for PVPC rates is carried out, industrialists are also desperate to find offers for bilateral contracts (PPAs) with electricity marketers or generators.

It is a pity that ten days after the approval of RDL 23/2021, which reviews the conditions of the reduction due to the impact of the price of gas, none of its partners has received bids for bilateral contracts from the dominant power companies at competitive prices, they say.

“This situation puts even more pressure on the electro-intensive industry, especially when none of the letters sent by the dominant electricity companies to large industrial consumers invalidating the PPAs signed before September 14, 2021 have yet been withdrawn, ”they have denounced.