Unesid, Spain's steel sector association, praises the EU Council of Energy Ministers for taking the first major step in reforming the European electricity market. The association stresses the need for the Spanish government to enforce stable, competitive electricity prices and is concerned that the reforms may favor bigger countries over smaller ones.
Spain's steel industry has voiced its approval for the recent agreement reached by the Council of Energy Ministers of the European Union. According to Unesid, the Spanish steelmakers' association, this agreement marks a significant advance in reshaping the European electricity market.
Unesid emphasizes that the next crucial step is for the Spanish government to show political will. This is necessary to ensure that industrial consumers benefit from competitive, stable, and predictable electricity prices. The organization is urging the government to take swift and effective action in this regard.
One of the main concerns raised by Unesid is the current system's focus on spot market pricing. This means that all electricity bought and sold in this market is priced according to the most expensive source, usually natural gas. Unesid warns that unless mechanisms are put in place for effective bilateral contracts, industries will end up paying significantly high prices tied to natural gas.
Contracts for Difference (CFDs) are another point raised by the association. According to Unesid, CFDs will offer countries a way to secure prices for end consumers and provide essential guarantees to electricity producers. This mechanism allows governments to set a stable price for a fixed period, returning the difference if the final price is either higher or lower than agreed.
However, Unesid also expresses concerns that larger countries like France and Germany might disproportionately benefit from these reforms. This could potentially leave industries in smaller countries at a significant disadvantage, raising issues of inequality within the European Union.
The reforms are seen as the EU's long-term solution to the energy crisis caused by the Russia-Ukraine war in 2022. Despite the EU's reliance on renewable energy, the rise in gas prices had led to more expensive electricity. The reforms aim to focus on long-term solutions to prevent similar situations in the future.
Unesid welcomes the EU's initial steps in energy reform as a positive advancement for the Spanish steel industry. However, the association stresses the need for the Spanish government to actively ensure competitive electricity prices and is cautious about the reforms favoring larger EU countries. These reforms represent the EU's attempt to build a more stable and equitable energy market for the long term.
