The rise in the price of electricity, coinciding with the passing of the storm, has intensified the differences in the Government. The wing of Unidos Podemos claims to stop the escalation as it may and even proposes the intervention of the electricity market. But the socialist leaders reject it, especially Teresa Ribera, minister for the Ecological Transition: “We do not consider some proposals that come from our government partners to nationalize or create a state electricity company. It’s not a good idea ”, he settled this Wednesday at Spain Investors Day.
The disagreements of the Government in some matters are notorious. One of those that has become clear these days is that of the electricity market. In this Wednesday’s auction, the average daily price of a megawatt hour fell 3%, to 87.25 euros. But it’s still shooting near highs. The increase so far in 2021 is 80%. And in the two souls of the Government very different readings are made of what happened and how to tackle it.
United We Can has demanded that the PSOE immediately promote the reform of the electricity market, contemplated in the Government pact. “The electricity market is designed to benefit electricity companies and make the bill more expensive with the so-called benefits fallen from the sky [sobrerretribución que reciben la energía nuclear y la hidráulica]. PSOE and United We can agree to eliminate them and it must be fulfilled ”, demanded this Wednesday Pablo Echenique, parliamentary spokesman for the minority partner. Sources from the Ministry for Ecological Transition explain that this reform has been being addressed in parts since 2018. “The agreements are well advanced, although there are still things to be done,” they say.
Among the reforms already undertaken, the preliminary project for the creation of a National Fund for the Sustainability of the Electric System stands out – it will allow to separate the charges on renewables from the electricity bill -, the elimination of barriers for the massive deployment of renewable sources and the regulation of self-consumption, among other modifications. In addition, ministry sources advance changes on the so-called benefits fallen from the sky in the coming months: “Alternatives are being studied to tackle this effect.”
Despite the reforms carried out or in execution, the disagreement in the Executive has passed to public debate. So much so that the fourth vice president had to fight this Wednesday at the Spain Investors Day forum to eliminate any doubt about a possible intervention in the electricity market. Furthermore, almost at the same time —as if the answer had been agreed—, the Minister of Transport, José Luis Ábalos, spoke along the same lines: “It is not on the government’s agenda [nacionalizar firmas eléctricas]”. But United We can insist. And he wants La Moncloa to address without delay the necessary measures “to end the overpayment that nuclear and hydroelectric plants receive in the wholesale market today.”
The opposition parties insist on the double standards of the parties that form the coalition government when they are in power and when they are not. In addition, they propose that the VAT be lowered on the electricity bill. Government sources, however, explain their misgivings about this measure: “Brussels has warned us on several occasions for the excessive use of reduced and hyper-reduced VAT.” The PP, which believes that it is only an excuse, has asked the European Commission to clarify whether the community regulations prevent this reduction in the electricity bill. Despite this derivative by taxes, ministerial sources assure that the roadmap to reduce the electricity bill does not go through the reduction of VAT.
Among all the political noise inside and outside the Executive, the socialist wing insists that the rise in electricity is punctual. And more and more ministers are joining the debate (Ribera, Ábalos or the head of the Treasury, María Jesús Montero). The president, Pedro Sánchez, still maintains a low profile despite the fact that in the opposition he was very belligerent in asking for a lower rise with then-president Mariano Rajoy.
United We can consider insufficient the explanations of the socialists. “It is clear that the electricity bill is rising and that this is a problem that the Government has to respond to,” the Minister of Equality, Irene Montero, disagreed.