energy supply

The European Parliament will ask for the domestic energy supply not to be cut off during winter and resume the supply to those who are currently without it. The decision coincides with the recent suspension by the Spanish Constitutional Court (TC) of the Catalan law against energy poverty, which guaranteed energy supply to those families who couldn’t pay their bills. The TC considered the Catalan decree “unconstitutional” as it “invaded competences” of the Spanish State. In an interview with CNA, Green MEP Tamás Meszerics, who promoted the moratorium, stressed “the role of the local authorities in fighting against energy poverty”. “If a regional government is able to finance, at least partly, this policy, I don’t see why it shouldn’t go forward”, he added.

There has been discussion among the Nuclear Safety Council (CSN) to approve construction of Spain's Temporary Centralised Storage Facility, more commonly referred to as the ATC (Almacén Temporal Centralizado), and a decision is expected in the coming days. The Spanish Government designated Villar de Cañas in Castilla-La Mancha's Cuenca Province as the location for the ATC at the end of 2011 to temporarily store 6,700 tU of radioactive waste accumulated in the country, including high-activity radioactive materials that could not previously be stored in any facility within Spain's borders. At present, nuclear reactors – including three active in Catalonia – must manage high-level waste on-site, either in light water pools or in dry storage casks until it can be shipped to a completed ATC. While Catalonia's nuclear power plants are licensed far into the 2020s, environmental concerns over the safety of radioactive waste hang over nuclear energy's future.

A strategic gas pipeline is to be built through the Catalan Pyrenees, linking the Iberian Peninsula with France and Central Europe. The Midcat project aims to reduce Europe's dependency on Russian gas by 40%, diversifying the sources of supply. The pipeline should be operational by 2020, announced on Thursday the Spanish Minister for Industry, José Manuel Soria. The day before, French President, François Hollande, Spanish PM, Mariano Rajoy, Portuguese PM, Pedro Passos Coelho, and European Commission President, Jean-Claude Juncker, re-launched the project's construction. Midcat started to be planned in 2007 but it was halted for several years, mainly due to a lack of interest from French companies and institutions, which were not guaranteeing to build their part. Now, the crisis with Russia has reignited the urge to find alternative gas suppliers for Central Europe.

On Friday, the Spanish Government approved the €1,350 million compensation to Escal UGS, the company behind the controversial Castor Project, a submarine facility built to store 1.3 billion tonnes worth of gas reserves off the Ebro Delta coast. This project failed after it was found to have caused almost 1,000 small earthquakes. This amount will be financed through increased tariffs to gas consumers over the next 30 years, resulting in public compensation for a private investment. The Spanish Government is obliged to pay the developer Escal UGS, because of a clause in the 2008 Royal Decree whereby the State would agree to compensate the company should the project be unable to be completed. An appeal of this law was rejected by the Spanish Supreme Court last October. The Spanish Government has argued that this solution is cheaper than operating the project. The Catalan Government however, which had opposed the project from the start, has appealed this decision to the Constitutional Court.

The Constitutional Court has accepted the Spanish Government's appeal against the Catalan Executive' decree from December 2013 with which families in need are protected from their household electricity and gas being cut off by energy supply companies during winter months. The Catalan Government's measure aimed to fight the so-called 'energy poverty': people who cannot afford to pay for their energy bills because they do not get minimum income. The decree was not a cancellation of the bills but to allow those families to postpone the payment during the winter months. However, the Spanish Executive considered that the Catalan measure represented a "discrimination" against the citizens from other Autonomous Communities, who have to pay their energy bills on time. The appeal goes against Catalonia's political autonomy and is arbitrary. The Catalan Government stated it was "upset" by the ban and added that it will find an alternative way to help those families.

The Spanish Government plans to compensate €1.35 billion to the companies behind the failed Castor project, the off-shore gas storage facility built off the coast of Vinaròs, a Valencian town near the Catalan border. The company Escal UGS, controlled with a 66.7% stake by ACS, filed a claim in July last year for the €1.6 billion cost. The project which funded with €1.4 billion worth of bonds issued by the European Investment Bank in a controversial new funding scheme, was forced to temporarily stop a few weeks after it began in September last year, after it was found to be responsible for almost 1,000 earthquakes in Catalonia's Ebro Delta.  However, due to a clause from 2008 in the agreement, Escal was legally entitled to compensation. The Spanish Government tried to free itself of this obligation, but last October the Supreme Court allowed it. This decision has been highly controversial and will cause further political, financial and ecological earthquakes.

Barcelona-based Gas Natural Fenosa earned €1.445 billion in 2013, 0.3% more than in 2012. The strong international customer base of the energy company has neutralized the “decline in business” in Spain. This fall at Spanish level was due to the fiscal pressure increase and to the impact of the latest Spanish Government’s reform of the electricity market, which led to a shortfall of €455 million in 2013 for the Catalan multinational. The aggregate EBITDA (Earnings before interest, tax, depreciation and amortization) stood at €5.085 billion, 0.1% more than in 2012. International business accounted for 44.1% of the EBITDA, while it had represented 43.2% in 2012. In addition, the Spanish market contributed to 55.9% of Gas Natural Fenosa’s EBITDA, a 1.6% drop on last year figures.

The Catalan Government has finally approved a decree protecting families in need from having their household electricity and gas cut off by energy supply companies during the winter months. The measure aims to fight the so-called ‘energy povert’: people who cannot afford to pay for their energy bills because they do not get minimum income. This way, the Catalan Government ensures they can continue having heating and using their cooking devices during the coldest period of the year. Energy companies will not be able to cut off supplies to these families between November and March. Besides, the Catalan Government has also approved a temporary budget extension for the coming weeks, since the People’s  Party (PP) – which runs the Spanish Executive – has blocked the approval of the 2014 budget.

The Catalan Government wants energy companies not to cut off the domestic power supply to people in financial difficulties who are temporarily unable to pay their bills. The Catalan Ministry of Business and Employment aims to fight so-called ‘energy poverty’: people who are obliged to do without electricity or gas because they simply cannot afford the bills. In the current economic crisis, thousands of Catalan households (around 20%) are facing this problem, which means they cannot use the heating during winter or they have problems cooking meals. In order to achieve this objective, the Catalan Executive is looking at modifying Catalonia’s Consumption Code to include this initiative fighting ‘energy poverty’.

The Catalan company has signed an agreement with the Shah Deniz consortium for a 25-year period. The Azerbaijani company will supply 1bcm of natural gas per year. The agreement is conditional on the final decision on the project investment, a step planned for later this year. The development of this project will open a new supply route to Europe through the ‘Southern Corridor’, which will allow Europe to access gas reserves in the Caspian Sea area. Barcelona-based Gas Natural Fenosa will receive the gas in facilities based in Italy, one end of the European gas pipeline passing through Georgia, Turkey, Greece, Albania, and crossing the Adriatic Sea. The Catalan company said that this supply will consolidate its presence and strengthen its gas supply business in Italy.