The faces of the ‘green transition’ (XVIII)

This economist specializing in energy believes that the new electricity bill is “interventionist and regressive.” “You have to tell the truth to people: the ecological transition is expensive.”

Daniel Lacalle is Chief Economist at Tressis and a fund manager specializing in the field of energy. Writer of different works on economics, he works as a professor at the Instituto de Empresa, the Instituto de Estudios Burstiles and the UNED.

What do you think about the new tariffs for sections in the price of electricity designed by the Government and the CNMC?
The change of the tranches was completely unnecessary and very counterproductive for the most disadvantaged citizens and those who do not have the possibility to change their consumption habits. Those who have the most rigid consumption are penalized, so it is deeply regressive. The result is that the new valley prices will pay the same as before at the peak, which will mean that more than 18 million people in Spain pay more than 29% for their energy in Spain.
The government insists that if consumers change their habits they will be able to save. Serve for consumption more efficient?
It is completely false because the consumption curve is not flattened if people cannot adapt. Citizens sleep when we sleep and we cannot function as if we were machines. This is lifelong dirigisme and interventionism.
Is there a similar system in Europe?
No. In the EU you have tariff systems in which you have tax exemption for a certain level of consumption, while here the tariff is taxes on taxes. When you see that your bill has skyrocketed, what the Government tries is to blame you for not putting the washing machine on at eight in the morning.
How can the cost of energy in Spain be lowered?
The first thing we have to realize is that the ecological transition we are facing is expensive. You cannot tell people that energy will be cheaper when you substitute base and stable energy to introduce renewables that are intermittent and require large investments. Renewables must be considered with all the added costs in networks that are required. On the other hand, we cannot have an invoice that is a covert tax collecting machine. Nuclear taxes, ecotax, electricity tax, one of the most expensive VAT in Europe … To reduce the rate you have to lower taxes and get regulated costs from the receipt.
One of the reasons behind the current rising cost of the bill is the increase in the cost of CO2. How can this impact be reduced?
The price of CO2 is a disguised tax that has been skyrocketed by political leadership. When you limit CO2 emission permits and at the same time its consumption is increasing because the economy is growing, what you are causing is an artificial rise by the governments. In the case of Spain, the Executive will also earn more from the auctions of those rights and should use it to mitigate the impact on the rate.
Do you think it is a good solution to cut nuclear and hydraulic revenues so that they do not benefit indirectly from the higher cost of CO2?
The measure makes Spain the only country that penalizes those who do not pollute. The marginalist system and the price of CO2 were established by the EU to reward the most efficient energies that do not pollute, and it turns out that with this measure you penalize those who do not emit CO2. It is also an assault on legal security that shows that the Government, when you have some profitability, is going to take it away from you. They also forget in a tortuous way that nuclear and hydraulic already bear taxes of 60% and 25%, respectively. What is clear is that the only benefits that have fallen from the sky for the electricity tariff are those that the Government has.
Does the increase in the cost of energy – light and fuel – threaten the recovery?
Sure. Industrial SMEs in Spain have three costs: 30% energy, 30% labor and another 30% taxes. If you increase the cost of energy, it affects job creation and recovery because it weighs on competitiveness.
The price of oil is over $ 70. Give a truce?
My feeling is that between OPEC policy and monetary policy it is leading to inflation in raw materials and oil can be maintained at these levels for a long time.

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