Grupo ASE proposes ten electrical measures to increase business competitiveness in the study “Electricity prices and business competitiveness”, which includes potential improvements of the current energy model and ideas to enhance the rational use of electricity transmission networks.
Grupo ASE, the aggregator of electricity demand for industrial use in Spain has produced the study “Prices of electricity and business competitiveness”, with a Decalogue of proposals for regulatory changes that can be summarized in the electricity transmission system rationalization and a change in the cost allocation model of the tariff, they explain in a statement. In the same the company asserts that this model bets on the efficient use of the system and benefits both companies and domestic consumers.
The document has been sent to all authorities linked to the sector: Ministry of Energy, Tourism and Digital Agenda, Directorates-General of Energy of all autonomous communities, National Commission of Markets and Competition-CNMC and autonomous authorities of the competition, in addition to different socioeconomic actors.
Ten electrical measures
Grupo ASE’s aim is to “accredit the industry’s failure to regulate the electricity sector and propose that the Ministry adopts reasonable technical measures to make the electricity system sustainable in the long term,” according to Ramón López, the group´s manager, who also clarifies that “this is not about subsidies or aid, but to arrange in an appropriate way the relationships between all agents that use electricity transmission networks.”
The case study reviews the evolution of regulations since 2000, as well as the impact of successive regulatory changes on the cost of electricity. This impact is clearly visible through the ASE PTEI Index of final electricity prices, a measurement instrument developed by Grupo ASE which is based on a sample of 600 high voltage connected supply points distributed throughout Spain.
After analyzing the Spanish electricity market, one of the most complex, efficient and expensive in Europe including its strengths and weaknesses, Grupo ASE considers that the current context allows to face ten specific reforms, aimed at linking energy policy to the system rationalization and thus improving the business competitiveness.
One of the most relevant modifications would be, according to Ramón López, the access tariff model, for both high voltage and low voltage, included in the first and eighth points and affecting almost 29 million consumers. Its economic impact would translate into “a reduction in prices for the full supply of electricity to those consumers who consume efficiently according to contracted power, compared with an increase for those who maintain idle capacity at their facilities.”
An example of this would be the second holiday homes: “Why do we all have to pay for maintenance of supplies that remain inactive for most of the year?” Grupo ASE´s manager asks.
The seventh measure poses that the current backup tolls be eliminated, as they would be inherently assumed in the previous proposal, the organization explains in a statement. Other outstanding measures include dividing the peninsular system into electrical zones – second – or applying models that allow the grouping of consumers – points eighth and ninth, something that does not happen at the moment, such as “in the interruptible auction, where the lack of competition in the options of 90 MW translates into a huge surcharge on everyone’s bill, ” Grupo ASE´s manager points out.
Liberalization of the entire sector and the electricity market
As Lopez explains, “the building block in the liberalization system of our electricity sector lies on the tariff model, which is what supports the liberalization of the sector and the electricity market in its totality.” That is why “adequate technical treatment of the access tariff is necessary to ensure that operators using electricity transmission networks, a natural monopoly, make it under non-discriminatory conditions.”
In the opinion of ASE Group, adopting these measures would improve our competitiveness at European level because, as López points out, “settling according to the contracted power utilization ratio affects two consumer decisions: increasing its efficiency or increasing its generation for own consumption“; an option, that of generation for own consumption, currently discriminated against.
In his opinion, “regulatory regulation is very complex and contains contradictions and inconsistencies that cripple business competitiveness and negatively impact the entire economy”