The Spanish Committee of the World Energy Council (CECME, acronym in Spanish) represents the WEC in Spain and coordinates the participation of the Spanish energy industry in WEC’s activities, serving as liaison between WEC and the Spanish members. CECME is a part of the Spanish Energy Club (www.enerclub.es), which is a nonprofit organization with more than 300 Associates whose main goal is to contribute to a better understanding of the different energy issues. The main activities of the Spanish Committee include organizing energy-related events in Spain, representing CECME and the World Energy Council in national events, disseminating documentation and collaborating with World Energy Council and its working groups.
A naval engineer by training, Íñigo began his career in CEPSA in 1982. He has held various positions in the areas of Procurement, Aviation and Navy. In 2011 he was appointed Director of CEPSA Comercial Petróleo and since 2014 he has been responsible for the company’s Communications and Institutional Relations. Currently he is member of the Board of Directors.
Based in Madrid, Olalla del Río Barrio is the manager of the Products’ Technology and Biofuels department at CEPSA. After graduating with honors in Chemical Engineering at Universidad de Valladolid (Spain) and Imperial College (London), Olalla joined CEPSA in 2006 as a process engineer at the San Roque-Gibraltar refinery. Ever since, she has held different positions in the refining area. In 2011, she was appointed to represent the company at a national and European level in different technical and advocacy forums on specifications energy products and related regulations.
Energy in Spain
The main highlights for the period in Spain’s energy context, affecting energy leaders concerns are:
• The negotiations to approve the legislative proposals of the EU Clean Energy Package regarding renewable energy, energy efficiency, governance, market design, customer orientation, etc.
• The development by the Government of the “Integrated National Energy and Climate Plan” and the proposal of a “Climate Change and Energy Transition Bill”.
• The development of a transition strategy to protect the most vulnerable regions, sectors and workers from the potential adverse effects of the transition.
Spain’s energy leaders have been paying close attention to the European and national legislative framework which sets the long-term objectives and signals needed to advance the Energy Transition. This development took place in a complicated political scenario, both at European Level with the Brexit process, and at national level with the unexpected government change through a motion of no confidence.
The new government has created the new Ministry for the Ecological Transition, combining the Ministries of Environment and of Energy Affairs. In addition to the aforementioned plans and bill in process, the Energy Ministry has approved the Royal Decree-Law 15/2018 of urgent measures for the Energy Transition and consumer protection. This legislative document is aimed at decreasing the current high electricity prices through temporary fiscal measures and introduces initiatives related to the protection of the most vulnerable consumers, the impulse of self-consumption, and mobility.
The general context has affected how energy leaders perceived issues such as Electricity prices/ Commodity prices, Market design and EU Cohesion, which are in the critical uncertainty area, and issues such as Innovative transport, Climate Change, Sustainable cities and Digitalisation which appear as action priorities for Spain in 2018.
In 2018 once again, Spain has experienced an increase in wholesale electricity prices. The main causes are the increase of gas and coal prices (due to the rise in oil price throughout the year) and the price of CO2 emissions rights, which has tripled since the last year. These came on top of a heat wave during summer and nuclear capacity outages in France.
Electricity/Commodity Prices: Spanish energy leaders perceive this issue as one of the main critical uncertainties, similarly to previous years. The increase in electricity prices in 2018 and the crude oil price fluctuation experienced this year have had a great impact on the Spanish energy sector and society. The national government has approved in 2018 the Royal Decree-Law 15/2018, establishing an electric and heating social grant to protect vulnerable populations.
Market Design: The proportion of renewables in the electricity mix keeps growing and is expected to continue to do so in the future. This has a direct impact on the wholesale market price. Consequently, having a market designed to ensure a fair return of investment for traditional and new facilities has become a priority. One of the last proposals from the Winter Package, pending approval, concerns the redesign of the electricity market, including the appropriate capacity mechanisms. With the Spanish government having recently proposed an objective of 70% renewable energies for 2030 and 100% for 2050 in power generation, the EU’s recommendations for this issue are of great importance and considered as a critical uncertainty.
EU Cohesion: Once again, EU Cohesion is identified as a critical uncertainly with great impact. 2018 has been a year marked by Brexit negotiations and has been characterized by the rise of social movements around EU Member States with general elections in different countries and regions. At the national level, the political scene has been complicated, mainly due to the Catalonia independence movement and the unexpected change in the Spanish government through a motion of no confidence with subsequent election for a new prime minister in June 2018. All these changes and movements generate uncertainties in the economy in general, including the energy sector.
Climate Framework: Mitigating Climate Change has been a priority in the European energy agenda for a while. Having to send the Integrated National Energy and Climate Plans by the end of 2018 with national objectives and targets for 2030 has accelerated the need to determine what measures will define the future of the energy sector for the EU Member Countries. These measures will define companies’ strategies for the upcoming years. During 2017, all energy stakeholders have been reflecting on the best way to meet the different climate objectives. The Spanish government has started to provide guidance on the main changes to be made in the Energy System, mainly through the Climate Change and Energy Transition Bill. A draft document has been in public consultation and includes objectives for 2030 and 2050, in areas such as emission reduction (carbon neutral in 2050), renewable energies, efficiency, as well as for the transport and buildings sectors. In addition, the European long-term strategy for a 2050 climate-neutral economy, presented in November, will shape all national initiatives in the region.
Innovative transport has moved this year from the critical uncertainty to the action priority space. Transport is at the core of discussions regarding climate change and air quality policies in Spain. The way in which these national policies are drafted will have a big impact, not only in the energy sector, but also on the automotive sector, consumers, overall economy, as well as the country’s employment scenario. On the other hand, the Government is developing a Climate Change and Energy Transition Bill, where measures affecting the transport sector are at focus. At the local level, in Madrid, circulation restrictions and parking measures have been established, based on car labelling with environmental criteria.
Digitalisation is bringing new business models, based on the integration of new technologies, where consumers are becoming the centre of energy systems. Changes are happening faster than it seemed some years ago, and companies are developing solutions to meet customer’s needs. The impact of digitalisation is making a substantial difference not only in the commercial activities, but also within internal processes, energy management and the whole energy system. Issues like Cyber Threats that are related to digitalisation have declined in severity due to the reduction in attacks relevant to the sector.
This year’s Spanish Issues Monitor map positions issues such as EU Cohesion, Electricity and Commodity Prices in the same place as last year, showing a continuous perception that these are the most critical uncertainties affecting the energy sector. Market Design appears with greater uncertainty this year.
There is a special concern regarding climate change, which is reflected in issues that appear in the action priority space. This concern is driving all legislative and regulatory actions taking place in the country during this period.