MADRID (Reuters) -A proposal by Spain’s competition watchdog CNMC to raise the guaranteed return on investments in power grids to 6.46% is not enough to stop Spain losing much-needed capital to other countries, power utilities lobby Aelec warned on Friday.
A massive blackout that hit Spain and Portugal on April 28 reignited a debate about investment needs in the country’s power networks and the return on such investments.
Power companies invest in grids in exchange for a stable return, which in Spain is currently set at 5.58%, with consumers ultimately paying that guaranteed rate through their electricity bills.
Aelec said the guaranteed return on investments for electricity distribution should be around 7.5%, a level in line with the rates being applied in other countries.
“We run the risk of capital flight and investment being attracted away from Spain to other European Union countries, thereby jeopardising the implementation of investments for the energy transition,” Marta Castro, Aelec’s head of regulation, told reporters.
The new remuneration will cover the 2026-2031 period. The CNMC proposal is open to feedback until August 4.
Spain’s grid operator REE, owned by Redeia, manages the trunk grid, and carries out investments envisaged in government plans.
Power companies including Iberdrola and Endesa control and invest in local distribution grids, which take electricity to the final customers.
Energy giants like Iberdrola and Enel have increased their focus in recent years on expanding and upgrading power grids while taking a more selective approach to renewable energy projects.
(Reporting by Pietro Lombardi and Emma PinedoEditing by Andrei Khalip and Frances Kerry)
