‘Spain is not an energy island’: Iberdrola criticizes intervention in the electricity market

The logo of Spanish utility company Iberdrola is seen outside its headquarters in Madrid, Spain, May 23, 2018. REUTERS/Sergio Perez/File photo

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MADRID, April 27 (Reuters) – Global wind power group Iberdrola (IBE.MC) on Wednesday criticized moves by its home country of Spain and neighboring Portugal to take national measures aimed at curbing energy prices, saying that the solution to Europe’s energy crisis lay in coordinated action. .

Energy prices in Europe have risen to record highs as the conflict in Ukraine and fears of supply disruptions have tightened markets already struggling with the effects of COVID-19.

Governments are scrambling to find ways to protect voters’ pocketbooks, and Iberdrola Chief Executive Ignacio Galán has opposed state decisions in some of its main markets, including Britain, which has capped prices for energy for years.

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This week Spain and Portugal, which have long argued they are cut off from the rest of Europe’s electricity system, struck a deal in principle with Brussels to allow them to limit the cost of gas for power generated in the country.

Spain and Portugal said this would help protect consumers. Galan objected vigorously.

“Whenever Europe has stood together, things have gone well,” he told analysts on a conference call. “Instead of trying to create regime exceptions like the one proposed by the Iberian market, we must seek common solutions.”

He said that the fact that energy prices in Spain and France could be seen converging was one factor showing that they were integrated. “Spain is not an energy island”.

Galán said that Iberdrola, which recently became Europe’s largest utility by market value, overtaking its Italian peer Enel, did not expect this move to affect its business.

Shares of Spanish power companies were hit last year by government plans to cut their profits. read more

Iberdrola operates wind and solar farms, nuclear reactors and gas plants in Europe and Latin America, as well as thousands of kilometers of transmission and distribution lines.

Its net profit in Spain, which accounts for less than a third of profits, fell 29% in the first quarter due to low wind and hydro generation and an outage at a nuclear plant, Chief Financial Officer José Sainz said. This meant that the company had to buy power on the feverish open market.

However, it confirmed that it still expects full-year net profit to reach 4.2-4.2 billion euros ($4.25-4.46 billion) and sticks to its long-term renewable energy strategy.

“The current crisis demonstrates the need to accelerate the energy transition to achieve energy self-sufficiency in Europe and decarbonize our economy,” Galán said in a statement.

($1 = 0.9412 euros)

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Binnie Island Information Edited by Louise Heavens and Mark Potter

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