The Government will limit the benefits fallen from the sky of the electricity companies to lower the electricity bill by 5%

The Council of Ministers plans to approve a draft bill on Tuesday that aims to reduce a part of the so-called “benefits that have fallen from the sky” received by electricity companies due to the design of the market, which allows them to pass on costs to the consumer that they have not really had when generating electricity. The measure, which still has a long processing process ahead of it, will basically prevent companies from profiting by charging the cost of CO2 emission rights when they generate energy through nuclear or hydroelectric plants, which do not emit these gases.

This measure, according to government sources, is designed primarily to try to reduce the price to be paid by the end customer on the electricity bill, and will affect those consumers subject to the regulated market (PVPC). With the Executive’s approach, it will not end all the profits that have fallen from the sky of electricity companies, but the sources consulted maintain that, if the price of CO2 emission rights remains as it has been until now, companies will be reduced by about 1 billion euros These benefits that they achieve at the cost of passing on costs that they do not have, and that will mean a saving of around 5% on the bill.

In the current regulated market, the prices of electricity for each hour are set one day in advance, and the operator covers the total demand by purchasing electricity from the electricity companies, starting with the cheapest offer. The least expensive light is that produced through renewables, nuclear or hydroelectric plants, given that these energies are cheaper than gas and, furthermore, they do not have to pay emission rights for polluting gases simply because they do not emit them.

These cheap energies, however, do not usually cover all the demand in Spain for one day, and the missing part must be completed with electricity generated from gas, which is more expensive. The problem with the market is that the price that marks this expensive light to produce is the one that they have to pay final consumers on the bill, although the electricity generated from gas only represents 1% of the total mix and all the rest of the light consumed comes from renewable, nuclear or hydroelectric plants.

The reason that the electricity generated in these gas plants is higher has to do with the price of the gas itself -a raw material, also highly subject to fluctuations-, but also with what it costs electricity companies to buy emission rights of CO2 to be able to use these polluting facilities. As the market works, as it is the energy generated through gas plants that sets the price of all the others, what ends up happening is that consumers they pay the cost of emission allowances also for clean electricity.

Renewables, exempt

New electricity rates

That money that the electricity companies have not spent but that they do receive is a part of the so-called benefits that have fallen from the sky, and it is the one that the Government wants to intervene. Nevertheless, companies may continue to receive other of these benefits fallen from the sky, given that the market design that charges all electricity at the price of the most expensive to produce is defined at the European level and Spain cannot change it completely.

The Government has decided not limit this overpayment in the case of renewable energies, despite the fact that, like nuclear and hydroelectric plants, they do not generate polluting gases and, therefore, electricity companies do not have to buy emission rights to produce with them. This is intended to offer another incentive to companies to invest in renewables, the method with which, in the long term, the Government intends to completely eliminate the benefits that have fallen from the sky, since it is intended that at some point most of the electricity produced comes from clean sources.


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