The Minister for Ecological Transition, Teresa Ribera, modifies the operating rules of the electricity market approved by the previous Government

The new Ministry for the Ecological Transition of Spain has modified the resolution approved by the former Secretary of State for Energy on the new rules of operation of the daily and intraday electricity production markets.

This resolution passed on May 9 by the Ministry of Energy, Tourism and Digital Agenda led by Alvaro Nadal caused the National Commission of Markets and Competition (CNMC – Comisión Nacional de los Mercados y la Competencia) to open a new judicial battle in its bid by the Government for the powers to set among other aspects, the amount and distribution of electricity tolls, by filing a contentious-administrative appeal in the National Court against the resolution.

According to the Official State Gazette (BOE -Boletín Oficial del Estado) of 12th of June, an order, signed by the Minister for Ecological Transition, Teresa Ribera, addresses the competence of the Secretariat of State for Energy and modifies the resolution.

The 12th of June was the day scheduled for the start of the European project of continuous intraday market in which market operators and the Spanish system have confirmed their participation.

In its appeal before the Audiencia Nacional, the CNMC denounced the appropriation by the Government of some rules to fix the intraday electricity market, which serves to adjust the offers to consumption in each of the hours and involves a volume of between 3 and 5% of power, and also requested precautionary measures to immediately suspend the regulations.

In the order published in the Official State Gazette, “two specific aspects” of the rules approved in the May resolution are modified, “which contradict what was approved by the CNMC”.

Thus, rule 11, “with respect to the obligation to submit bids for each selling unit, which shall not apply to the continuous intraday market”, as well as the indent relating to the bid unit in rule 46.1, are rendered ineffective.

The provisions of the CNMC in case of contradiction or incommutability

In addition, the order emphasizes that, in the event of any inconsistency or incompatibility with the resolution approved in June by the Regulatory Supervision Chamber of the CNMC on procedures for developing the methodology for intraday regional auctions between Spain and Portugal, the provisions of the regulator will be applied in cases not provided for in the resolution of the previous Secretary of State for Energy for the continuous intraday market.

The CNMC negotiated with the Portuguese regulator a transitional system whereby an auction model similar to the current one would be maintained for this intraday market, and then, within two years, proceed to its definitive evaluation and decide whether or not to modify it.

The relationship between the CNMC and the former tenant of the Ministry of Energy was judicialised after the cabinet headed by Álvaro Nadal responded with a negative to the CNMC’s request to retract the decision to take away its functions.

Specifically, the CNMC appealed articles 3.1 d), 3.1 m), 3.1 ñ), 3.1 q), 4.1 d), 4.1 i), 4.1 s) and 4.1 w), as well as the second additional provision, the third additional provision, the third transitory provision and the fourth transitory provision of the regulations.

Royal Decree 903/2017, approved last October, develops adaptations in the organic structure of the Ministry of Energy, Tourism and Digital Agenda that contemplate the Ministry assuming functions that until now corresponded to the CNMC.

Among those functions that the Ministry will carry out are inspections and liquidations, as well as the supervision of the liquid hydrocarbons sector, the system of biofuel certificates and the control of operations.

Sanctioning procedure from Brussels to Spain

In September 2016, Brussels already opened a sanctioning procedure against the Kingdom of Spain, which has yet to be closed, for its powers in this area.

As a solution, the Government proposed to Brussels a similar model already in other European countries, such as France, whereby the CNMC would set the tolls, although following the Government’s energy policy guidelines.

In statements to the press on the occasion of his participation in the Council of Energy Ministers of the European Union, Ribera already pointed out with regard to the various cases that the European Commission has open against Spain, both in energy and environmental matters, that it forms part of the “aspirations” of the Government to resolve these matters “as soon as possible and in the best possible way”.

The tolls for access to networks, the regulated costs to cover investments in networks, represent 7,000 million euros of the total of 19,000 million euros that represent the regulated costs of the electricity system.

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