Ribera, to Brussels: “We must rethink the design of energy markets”

Third Vice-President and Minister for the Ecological Transition, Teresa Ribera, urges Brussels to rethink the design of energy markets at a time when the price of electricity is skyrocketing and touching all-time highs.

Ribera has addressed by letter to the Vice President of the European Commission (EC), Frans Timmermans, and points out in the letter [con fecha de 29 de junio] that markets must not only ensure an efficient allocation of resources and appropriate price signals, but also “a fair and equitable distribution of the benefits associated with the transformation of the generation mix”.

It indicates that, despite the fact that in three years fossil fuel power plants have gone from accounting for 25% of the energy generated to between 10% and 12%, the rapid rise in the price of CO emission rights₂ is having a big impact on electricity bills [en España se paga la luz más cara de Europa], “with regressive effects on consumers and threatening the energy transition”.

The head of Ecological Transition tells the EC vice-president that consumers do not understand why efforts in the deployment of renewable energies do not translate more directly and immediately into lower electricity bills.

It also points out that today in the Spanish electricity market non-CO-emitting power plants₂ and launched before the adoption of the ETS [el régimen de comercio de derechos de emisión de la UE que entró en vigor en 2005] get dividends and extra profits for the price of a CO₂ that do not emit and that were not taken into account at the time of its construction.

Ribera explains that thanks to the ETS mechanism and the energy policies put in place, emissions from the Spanish electricity generation mix have fallen by two-thirds since 2005 (0.425 tons of _CO2 equivalent per MWh in that year, compared to 0.144 tons per MWh in 2020).

The minister points out that the support of citizens for the ambitious climate policies necessary to address climate change cannot be risked and that “therefore, before making decisions on any new instrument, the evaluation of its impact must be carried out carefully”, including the direct and indirect impacts on all citizens, particularly in the current situation.

In this regard, it warns that energy poverty is a growing problem in the EU and must be addressed.

Source: Five Days