Teresa Ribera (Madrid, 1969) champions the decarbonization process of the Spanish economy as Minister for the Ecological Transition and fourth vice president of the Government. A fervent defender of a world without emissions, she is committed to ensuring that consumers are the winners in this process and that, to the detriment, companies pay more for years of high profits. One of its greatest achievements is the Climate Change and Energy Transition Law, with which it intends to achieve the country’s climate neutrality by 2050 with a 100% renewable electricity system. Now he has another great challenge ahead: tackling a structural reform of the electricity system. Ribera receives Five days after approving the temporary VAT reduction (from 10% to 21%) on the electricity bill.
Will the VAT reduction on electricity until December and the suspension of the generation tax be extended?
Each thing in its own time. They are intended to function as interim measures in a high price scenario [de la electricidad] that can be prolonged a few months. In December we will reassess the situation. Meanwhile, the Ministry of Finance is working on a tax reform [del sistema eléctrico] important. Energy taxation in this country is very complex, not only because of the different types of energy or the fiscal figures that have been accumulating, but also because of who collects and who benefits.
Are company profits excessive considering the burden consumers are shouldering?
The reasonable thing is to think that the companies that are raising their profits understand how important it is that part of them be shared with consumers, their customers. The first reaction is that, as an example, they would rather keep earning 200 than just earning 150, but they generally get it. We are moving towards a model in which there will be more demand for electricity, with which the margin of business volume will be on the rise. If we strangle this redistribution, we may find ourselves with social and industrial tensions that are undesirable for anyone. In the light it cannot be that everything is dividends in favor of the companies, it is necessary to reconcile with the consumers. It is logical that companies want to maximize profit, but the government also has to look out for consumers. One of the mechanisms is to ensure that this dividend [a las energías nucleares, hidráulica y eólica] that has been increasing can alleviate the rising cost of energy in consumers.
In recent months it has announced a fund to pay for renewables (FNSSE) and the cut of 1,000 million to the remuneration of hydroelectric and nuclear. Where will the rest of the reform of the electricity system go?
At this time, attention must be paid to the redistributive impact. The rise in the price of electricity is largely borne by consumers, and yet it does not reflect an increase in the real costs of all forms of generating electricity. Work should also be done on how the distortion in the functioning of the market can be alleviated in accordance with European law, reinforcing social policies. Medium-term scenarios show high gas and CO2 prices during a good season. On the other hand, there is the aforementioned tax reform. And we have to work in the availability market, which means payment for storage and availability, payment for availability without storage with combined cycles, which can be hybridized and reduces the cost pressure on the system. It is also very important, within renewables, the development of offshore wind and marine energy, with a very interesting potential. All are relevant changes.
What are you preparing for the Council of Ministers tomorrow?
We have more than 1,300 million euros in aid [plan de recuperación] to encourage self-consumption, electrical storage behind the meter, subsidies for air conditioning and sanitation in capillary investments, with the end consumer in mind.
“The Government will study this Tuesday aid to self-consumption and electrical storage for 1,300 million”
Is the energy transition planned by the sector expensive?
It is not expensive, it is profitable. The expensive thing is the fossil fuels. The energy transition allows there to be many more producers at differentiated scales and with very low operating costs. What is required is to be able to finance the necessary investment. Now we see very extreme comparisons because we come from two years of very cheap electricity prices, thanks to renewables, greater distributed generation capacity and the drop in demand in the last year […] Oil companies have seen their profits fall significantly for the first time, including their cost and investment structure. The faster the transition and is accompanied by social measures, the better.
Aelec, the employers’ association of the large electricity companies, proposes to dedicate part of the income from the CO2 auctions to mitigate the rising cost of the electricity bill.
In reality, almost 100% of CO2 revenues are dedicated to energy and a small part to other investments in climate policies, but there are 1,100 million that are dedicated to alleviating the fixed costs of the electricity system. There is another important part that is destined to compensate the CO2 of the electrointensive industry. What they propose is very good, but it has already been collected.
The National Court has just indicted the president of Iberdrola, Ignacio Sánchez Galán, for alleged espionage orders for former commissioner Villarejo. Should I resign?
You have to be very respectful of the courts and the presumption of innocence. We care about the value of our companies, including their reputational value. It is good that companies have an environment of reliability and solvency. Iberdrola is a great company, with a very powerful reputation abroad. Most companies have their own code of ethics regarding their executives. At this time, with the best wishes for all those involved, starting with the company, it is not our place to speak. I wish that it be clarified as soon as possible in court and that Iberdrola’s credibility and reputation be recovered without diminishing the credibility and reputation of Iberdrola.
What is the amount pending in arbitrations related to the cut in premiums for renewables?
Since we approved the decree law, an alternative has been offered to lessen the impact and no more arbitration has been lost or started. Some remain alive and others in which we are condemned, but recurring. I do not want to risk the cost figure, but it has been substantially reduced compared to the scenario we were handling. In June 2018, Spain had live arbitrations [solicitados por fondos y otros inversores] for an amount close to 10,000 million euros and now we will be about 2,000 million among those who are alive and those who are convicted. Now we are in the process of appeals, so we must be very careful. We have been winning or reducing some sentences in a very important way and I hope that the balance remains in that environment of 2,000 million euros.
The Government has until August to approve or reject the bid launched by the Australian fund IFM for 22.69% of Naturgy. The vice president points out that, whatever the decision, it is essential to send the message that Spain is an “attractive country” for international investors, especially medium- and long-term institutional investors, “not to haggle short.” In addition, she emphasizes that Any investor who is interested in a national company such as the one headed by Francisco Reynés must have a “continuing interest in its transformation” towards decarbonization.
“Naturgy is a very interesting company, but with a very strong historical weight of gas in transmission and generation and storage assets. It is in the process of changing its profile; for us it is important that whoever may have an interest as IFM, do so. make with all the commitment and conditions that guarantee that its strategic transformation will continue to be the company’s objective. It must guarantee that it contributes to the transformation of the company, investing in this modernization process. “
He adds: “the worst thing that we can find in a company like this is that, suddenly, we are out of reach in a sector so relevant to the Spanish economy and the well-being of households such as energy.” IFM claims to be committed not to promote the change of headquarters outside of Spain, nor to seek the sale of essential assets of Naturgy or to change the management team.
For its part, the main shareholder of the energy company, Criteria (CaixaBank), does not consider selling in the takeover bid. In fact, it plans to increase its presence in Naturgy from 24.4% to 29.9%. “I’m not surprised. Criteria’s investment profile probably resembles IFM’s more than that of some of the shareholders on its board. What a shareholder with long-term stability and profitability prospects does not want is to find partners who have a more daring, daring or financial profile ”, indicates the minister about the strengthening of Criteria’s position.
The vice president asks for patience to adapt to the new electricity bill that came into force on June 1 and is structured with new sections of hourly discrimination, in contracted power and in consumption. In principle, it is expected that the new scheme will remain for six years (with an evaluation at three), but Ribera acknowledges that “if the CNMC detects something before it must change or qualify, it will do so.” “They have been working on the circular for a year , the CNMC asks for a little time to see the results that are being produced, “he says.
In fact, the president of the organization, Cani Fernández, suggested last Friday that the imposed rate bands “will be adjusted as consumption adapts and the hours of greatest congestion are downloaded in the networks.”
Ribera argues that the important thing is that a collective learning process takes place, since the norm facilitates mechanisms to save (there is a low period, with cheaper electricity prices, from midnight to 8 in the morning, and weekends and holidays). “The circular ensures coverage of all costs; 100% responds to a fixed fee for each consumer and the weight of the variable fee increases, that is, depending on the energy consumed. This offers signals of what is the demand of the consumers regarding the use of the network ”, he adds.
The minister warns, however, that the new way of calculating the electricity bill has come at a time when electricity is very expensive and, therefore, some confusion has been created. “People think that if electricity is expensive it is because they have to pay at a different time, and it is not like that,” he emphasizes. The increase in the price of electricity so far in June is mainly based on the increase in gas prices and CO2 emission rights, which exceed 51 euros per ton, doubling their value a year ago, Ribera acknowledges.