Structural turn in the energy sector.

The Council of Ministers has approved a draft law that aims to remove the cost of premiums for renewable energies from the electricity bill to lower the price of the fixed part of the electricity bill for homes and companies.

This cost amounts to around

7,000 million euros per year,

corresponding to investments made in the first decade of the century in the heat of public incentives.

The objective of the Ministry of Ecological Transition led by

Teresa Ribera

is to lower the bill by up to 13% to make electricity more competitive compared to other more polluting fuels.

The big question is: Who will pay that amount when the changes are approved?

The preliminary project provides for the creation of a

National Fund for the Sustainability of the Electricity System (FNSSE)

that will be nourished by contributions from energy companies based on their sales of electricity, gas and other fuels.

According to a first calculation, the initial cost will fall on about a thousand companies.

These will then have a free hand to pass on the new cost to their customers, although sources from Transición Ecológica explain that this will depend on the market in which they operate and their level of competition.

"It may be that there are companies that decide not to pass it on or that they cannot because it would mean losing market share," they explain.

In any case, the change implies sharing a cost that right now only electrical consumers suffer among all energy consumers.

That is, one consequence will be that the price of automotive fuels will rise, for example, although the Government does not give it much importance because its objective is really to promote the electrification of the economy in the face of the most polluting energies.

The price of electricity will also rise in the liberalized market depending on what each company decides, while the Government will revise upwards the margin of the marketers that supply the Voluntary Price for the Small Consumer (PVPC), the old regulated rate.

Ribera has been working for months on this reform and on its legal 'shielding' against the expected avalanche of resources from energy companies.

The change had been insistently demanded by the electricity companies in recent years, who saw this charge as a kind of tax that condemned the country to suffer one of the most expensive bills in the European Union.

However, they asked that it be transferred to the General State Budgets when they understood that it was a public policy of commitment to renewables.

The change also aims to protect the financial sustainability of the electricity sector, which has once again suffered an income deficit in recent years, weighed down by the drop in electricity demand and the loss of efficiency of the taxes approved in the 2013 electricity reform. These taxes fell on technologies in decline such as coal or nuclear, so their collection capacity has lost strength in recent years.

"Certainty is key to attracting the investments that the country needs to reduce polluting emissions. We do not want there to be any doubt about the financial sustainability of the electricity sector," say sources close to the Executive after closing 2019 with a deficit of 527 million.

The objective is that the preliminary draft seen this Tuesday by the Council of Ministers is approved as a Bill in the coming weeks and is processed by the Courts during the first semester of 2021. This would allow a part of the 7,000 million to be drawn in that same year. , although the objective is to complete the transfer in a period of five years.

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