The Spanish electricity sector in the face of rising gas prices and the Goverment measures rolled out in response

Fernando García Martínez and Matías Pacce
Additional contact information
Fernando García Martínez: Banco de España

No 2316, Occasional Papers from Banco de España

Abstract: The increase in electricity prices, which peaked in August 2022, has affected the various activities carried out in the Spanish electricity sector differently. This paper analyses the impact of this increase on the sector, distinguishing between electric power companies and electricity retailers, paying special attention to their operating profit and, particularly, to the influence of aspects such as (i) the incidence of forward contracts with a fixed price, (ii) asymmetric exposure to price increases in wholesale electricity markets, or (iii) belonging to vertically integrated groups, in the case of electricity retailers. The effect on the sector of the measures rolled out by the authorities to mitigate the impact of higher electricity costs on households and companies in Spain is also analysed. Of note among these measures are the Iberian Exception (a mechanism to cap the cost of the gas used in electricity generation) and the temporary deduction of the so-called excess remuneration arising from higher gas prices. Lastly, this paper studies the impact of the extraordinary temporary levy that energy companies must pay on net turnover for 2022 and 2023.

Keywords: energy; electricity markets; electricity prices; generation costs (search for similar items in EconPapers)
JEL-codes: E31 L94 Q41 Q43 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2023-11
New Economics Papers: this item is included in nep-ene, nep-inv and nep-reg
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bde.es/f/webbe/SES/Secciones/Publicaci ... 23/Files/do2316e.pdf First version, November 2023 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bde:opaper:2316e

DOI: 10.53479/34832

Access Statistics for this paper

More papers in Occasional Papers from Banco de España Contact information at EDIRC.
Bibliographic data for series maintained by Ángel Rodríguez. Electronic Dissemination of Information Unit. Research Department. Banco de España ().