The pain in Spain’s electric power industry
went from bad to worse this week as the Spanish government reneged on
promises to plug the growing gap between the cost of running the
electric system and the revenue generated by selling power to consumers.
On Monday, the Spanish government withdrew $4.9 billion in public
funds previously earmarked to fix the so-called “tariff deficit,” which
refers to the shortfall between revenues and system costs (including the
cost of subsidies for renewable energy and non-mainland power
generation). Once again, the sustainability of the Spanish electricity system is surrounded by question marks.
The tariff deficit has become a major problem for Spain’s “Big Five” energy utilities, which includes Iberdrola, Endesa, Gas Natural Fenosa, Hidrocantabrico and E.ON Spain. The Spanish government’s withdrawal of previously announced funding
means the electricity sector will generate a new tariff deficit (TD) in
2013 of $4 and $7 billion, which will have to be carried on utilities’
balance sheets, according to Fitch Ratings.
The funds have been reallocated to the reduction of the public
deficit. The decision reflects the government’s new focus on reducing
its budget deficit and improving public finances. Depending on the impact of subsidy reforms for renewable energy, the
tariff deficit is projected to grow by an estimated $5 billion in 2013
without the government support measures, which will push the cumulative
deficit to more than $60 billion.
http://www.forbes.com/sites/williampentland/2013/12/06/spains-electricity-sector-spins-back-into-chaos/?ss=business%3Aenergy
No comments:
Post a Comment