The battle between the electricity companies and the Government has entered a new dimension. The companies, which had warned the Executive that they were willing to paralyze their facilities due to the effect of the ‘decree’, have carried out their threat.
Wind and photovoltaic energy have increased their offers to enter the wholesale market to the level at which their accounts are balanced and not lose money due to the detraction of the benefit that the Government has decided to apply to them. The measure, which is perfectly legal, achieved yesterday that these technologies were out of the electricity market for three hours, with the consequent increase in the cost of energy.
With this decision, the companies stand up in a practical way to Ribera’s measure since to go to court they will need to develop the Royal decree-law approved by the Executive and this could take almost three years.
The effect of the measures included in the Ribera ‘decree’ is fundamentally based on the detraction of the income that the electricity companies obtain by impacting on non-emitting generation plants (wind, solar or hydraulic) the gas costs that they do not support and that the Executive himself values an impact of 2,600 million euros.
Thus, in the matching this morning there have been three hours in which the market price has been below the cost of solar and wind power, which with the effect of the detraction stands at more than 115 euros per MWh.
In fact, the market price in the hour between 3:00 pm and 4:00 pm is 62 euros per MWh; between 4:00 p.m. and 5:00 p.m. it is 54.13 euros per MWh, and between 5:00 p.m. and 6:00 p.m. it is 89.98 euros per MWh, according to data from Red Eléctrica
With these prices, it has only been able to match wind and solar that have regulated remuneration and, therefore, are not sensitive to the market price. The rest of the facilities will stop during those hours or will have to produce if there is capacity in the restricted market and therefore receive a price higher than the market price.
The measure will also cause an increase in imports of nuclear energy from France where disturbances are already taking place due to the energy crisis that Europe is going through.
It is calculated that the contribution of wind and photovoltaic energy in those three hours in which they have been out of the market would have reduced energy imports from the neighboring country by 60%, according to Ep.
In addition, sources warn that by Sunday this effect will be expected to be repeated with greater intensity.
In this way, experts fear that the Executive’s measures, aimed at tempering the price hike in the last resort tariff (PVPC), to which almost 11 million domestic consumers are welcomed, will cause the unwanted effect of giving the mess with progress in ecological transition.
Some sources are even beginning to propose the commissioning of coal plants as a possible strategic reserve to avoid the risk of blackouts that may exist this coming winter.