The National Markets and Competition Commission (CNMC) predicts that the weak recovery in electricity consumption registered this year will slow down in 2025, at a time of concern in the sector due to the announced extension of the tax on energy companies, and in which There is concern about the slow electrification process of the Spanish economy, which is key to making the deployment of renewable energies viable.
Competition seems to rule out in its analyzes that this electrification will have a boost next year. The organization expects an increase in demand of 1.3% by 2025, “a value lower than that expected for the end of 2024”, in which it foresees an increase of 1.5%. The estimates appear in the supporting report of the proposed resolution that establishes the values of the access tolls to the electricity transmission and distribution networks for the year 2025. The draft is open to public consultation until this Friday.
It remains to be seen if the CNMC’s forecasts end up being fulfilled. A year ago, with consumption heading towards a fall to its lowest level in the last 20 years, Competition forecast a new drop of 0.1% for 2024, which ultimately did not occur. Until October, demand in Spain reached 205,703 gigawatt hours (GWh), 1.5% more once the effects of work and temperatures are taken into account, according to data from Red Eléctrica de España (REE).
Last year, demand fell 2.3% compared to 2022 (1.9%, once the effects of the calendar and temperatures were corrected), to 244,665 GWh, according to the electricity system operator. To find a lower level, we must go back to 237,329 GWh in 2003, a decrease related to the penetration of self-consumption, lower industrial demand, greater efficiency or the weather.
In its forecasts for 2024 and 2025, the CNMC has taken into account the estimates of the system operator and the distributors and the economic expectations for the year 2025 of institutions such as the European Commission, the Bank of Spain, Funcas and the Government itself. In the case of the European Commission, the CNMC has considered a Spanish GDP growth forecast of 1.9% in 2025, a figure that Brussels corrected upward to 2.3% on November 15.
For 2025, Red Eléctrica’s “central scenario”, according to the CNMC report, is that of an increase in demand of 245,858 GWh, 1.3% higher than that expected for the end of the 2024 financial year, with increases in all subsystems except the canary.
For their part, the distributors foresee an increase of 1.01%, as a consequence of the increase in consumption in the peninsular and Balearic subsystems (1%), the Canary Islands (1.4%) and Ceuta (4.2%), and the stability in Melilla.
In the proposed toll order, the CNMC proposes to remunerate REE for the Transport activity through electric tolls (the regulated part of the bill that pays the networks) with 1,216.5 million in 2025, with an increase of 2.11 % compared to the 1,191.3 million in 2024, although well below the 1,495 million that it reached in 2021. For its On the other hand, for distribution, the organization proposes a remuneration of 5,826.3 million next year, with an increase of 3.5% compared to 2024.
34% increase
That the demand for electricity grows in the coming years is crucial to make viable the renewable penetration objectives included in the National Integrated Energy and Climate Plan (PNIEC), which contemplates that clean energies account for 81% of the electricity mix in 2030 .
The latest review of this long-term energy plan, sent by the Government to Brussels last September, relies on an increase in electricity demand of 34% in the period between 2019 and 2030. This increase would be supported in part by the take-off of the electric car, in which Spain is currently at the tail end of Europe.
Excluding production for green hydrogen, the plan contemplates demand going from 252 terawatt hours (TWh) in 2023 to 365 TWh in 2030, with the addition of 84 new gigawatts of renewables (mainly solar and wind) and storage between 2023 and 2030. The plan contemplates that the demand from the electrification of transport quadruples in those years, that the industrial demand increases by 48% and residential increased by 5%.
To make this multimillion-dollar deployment of renewables and storage viable, electricity companies demand, on the one hand, regulatory stability, given the possibility of extending the tax on energy companies, following the agreement reached this Thursday by the PSOE and Podemos to move forward. tax reform in another agonizing negotiation; and, on the other, a significant improvement in the networks’ remuneration.
For demand to take off, electricity companies are also entrusting themselves to the promising business of data centers, for which Spain has excellent conditions thanks to the abundance of sun and the availability of land, in a deployment for which the PNIEC recommends caution. and is committed to doing things in a “sustainable” way.
The companies assure that the income from the new demand will more than offset the increase in costs associated with the development of the network. This same week, one day after the PSOE agreed to recover the rate on energy companies in a Royal Decree Law to save its tax reform, Endesa announced a 45% increase in investment in the electricity network in its 2025-2027 strategic plan with respect to the previous 2024-2026 plan, up to 4,000 million, although “pending improvements and updates to the regulation”, and to meet the “ambitious” objectives of electrification of the PNIEC.
The main executives of the electricity company regretted on Tuesday the “uncertainty” about the tax on the sector and stated that it is “impossible” for it to be extended, due to the uncertain parliamentary support for that decision. “It is not the time for more taxes, but for investing,” said Endesa CEO José Bogas, after announcing the largest investments since the sale of the company’s Latin American business to its Italian owner, Enel, in 2014.
The CNMC plans to prepare in the coming months a key circular for the sector, the new remuneration methodology for transport and distribution for the period 2026-2031, which should be approved in October 2025 by this body or by the National Commission. of Energy (CNE) that the Government has promised to revive.
A few weeks ago, the Ministry for the Ecological Transition published some unusual “guidelines” on how the profitability of these facilities should be calculated, in a matter that is the exclusive responsibility of Competition, with very specific guidelines on how the formula that determines the return should be calculated. of those investments. This is an unprecedented movement since the ministry handed over these functions to the organization in 2019 and is equivalent to a veiled pressure maneuver by the Government on the CNMC.
The Aelec employers’ association, to which Endesa, Iberdrola and EdP belong, defends that the extra investments to meet the expected growth in demand “are not a cost”, because “this new demand pays its corresponding tolls”, and these are between five and ten times higher than the cost that this new network represents for the rate, “including an increase in the financial remuneration rate to a range of 7.5%-8%.”
These figures would be close to the levels of Italy, Norway or Greece, with financial remuneration rates of 8.9%, 8.2% or 6.7%, respectively, well above what, according to the companies, the CNMC, around 6.5%.
According to Aelec, a rate of 7.5% would mean an extra cost for the system of about 700 million euros annually, “approximately 1.7% of the total cost.” Endesa managers stated last Tuesday that they would be “comfortable” with a rate of 7.5% and assured that they could “increase” the investments projected for the coming years if there is “visibility” about the regulation.
In its guidelines to the CNMC, the ministry has not mentioned what profitability should be applied, but has asked the body to “attend not only to the objectives established for Spain, but also to the context of competition at the European and international level for financial resources and investments in energy transition, with a driving effect due to its capacity to allow new investments in renewables, decarbonization or industrialization.
The order signed by the still Minister Teresa Ribera goes into detail and says that in the design of this formula the CNMC “will consider the possibility of modifying the methodology for calculating the risk-free profitability, as well as the methodology for calculating the cost of the debt, especially.” The objective is to “soften the effect of past exceptional events (2018-2023) on the determination of risk-free profitability and the cost of debt during the future regulatory period (2026-2031).”
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