The Government is preparing to accelerate investment in electricity networks over the coming years. The department that Sara Aagesen will lead – expected to start this week – plans to allocate 52.36 billion until 2030.
To achieve this amount, the Executive will have to triple the limit on current investment since a significant delay accumulates, of almost 80%, which has not been invested in the current period due to investment limits.
In the draft of the new Energy Planning, to which elEconomista.es has had access, the Ministry of Ecological Transition already expresses its willingness to raise these limits for investment in distribution and transportation but warns that it will maintain vigilance to contain tolls. In this way, the Executive wants to match investment in networks to the real increase in electricity demand to avoid an increase in consumers’ electricity bills.
As stated in said document, It is expected to generally increase the maximum investment volume as a percentage of the gross domestic product up to a value that is considered sufficient to meet the expected network needs – that is, 52,360 million. In fact, the Government opened a public consultation with the intention of carrying out this modification and listening to the needs of the sector.
The intention of the Executive, as stated in the Planning draft, is that said modification of the assumptions under which the volume of investment could be modified upwards, include the new circumstances associated with the energy transition.
Additional investment
Ecological Transition hopes to establish a new procedure for the specific authorization of investments above the maximum current volume, upon request from transport and distribution companies if they have previously exceeded the investment limit provided for in the regulations.
In this way, the Executive manages to maintain much more dynamic supervision over the limits and facilitates their update based on real existing needs as the demand for both consumption and electricity generation or storage evolves.
Likewise, the Executive leaves a margin to the companies so that if the remuneration that is finally set for the next regulatory period is attractive, they can even reinforce your investment plans additionally. In fact, companies like Endesa already have a cushion of 4,000 million euros to increase these investments if necessary and assure that the increase in demand will even reduce the cost of tolls for consumers.
The Government established a annual limit of 0.13% of GDP for investment in distribution networkswhich is the responsibility of the electricity companies and 0.0065% for transportation, which is the responsibility of Red Eléctrica.
According to the Grids by Speed study, by EY, Spain should undertake annual investments of 4,300 million, compared to the 2,000 million currently invested.
Current planning has raised investments in networks to 52,360 million euros, which represents 17% of the total. Or, in other words, it projects investments of 0.45 euros in networks for every euro invested in renewable generation, very far from the 0.67 euros that Eurelectric considers essential.
Shorter planning
For this reason, the Executive also wants to maintain a much more open energy planning that allows anticipating the investments that the electrical system needs instead of attending to request by request individually and after the need has been generated.
In the last Planning period that covers from 2020 to 2025, there has only been one update that has increased the investment this past year, which prevents an agile response to the new connection needs that arise, especially those related to new demand. which have risen throughout the sector to 50 GW and close to 20 GW have already been authorized
Having to wait for a next update of the network planning implies, in many cases, having to delay the project with the uncertainty of whether it will finally be able to connect or not when its execution ends. For this reason, the International Energy Agency recommends planning that is aligned and integrated with that of the main sectors. The PNIEC 2023-2030 recently published by the Government expects to increase demand by up to 110 TWh compared to 2019, which will grow due to electrification. of the economy, due to the incorporation of greater electrification in industry, green hydrogen and data centers.
Europe, China and the US accelerate investment in networks
Eurelectric, the European electricity employers’ association, assures that 40% of the European network is now more than 40 years old. For this reason, they consider that the sector needs investments of the order of 375,000 to 425,000 million in the distribution network until 2030. The strong increase in investment in networks is also a situation that is being reproduced in other large economic blocks, where China has invested 120,000 million in networks in 2022 and 2023 and the United States has increased its investment by 60% until the year 2030.
Europe has 11 million kilometers of networks and it is estimated that the world needs around 80 million new kilometers of networks to accommodate the 1,500 GW of renewables that are waiting.
S&P Global Rating warns of the strong decoupling between investment in renewable energy and transportation and distribution networks, which could lead to collapse and estimates the need for investment at 700 billion
#Government #triple #investment #networks #fulfill #plan
