Not even a mild winter with a general drop in gas prices has succeeded in tarnishing Naturgy's results. The first Spanish gas company has closed a golden first semester in which it has managed to compensate for the cut in sales with higher margins, an equation that has resulted in an increase in profit to 1,045 million euros between January and June, 87.6% more than in the same period of the previous year, when the company earned 557 million.

The progress of the company's business has not been unrelated to the situation at the start of the year. After the historic rise in gas and electricity prices in 2022, fueled by the Russian invasion of Ukraine, the first half of 2023 brought a reduction in energy prices that in Europe were affected by lower demand due to mild temperatures, which translated into full reserves. Average gas prices in the main markets showed significant corrections, with declines of up to 41.8% compared to the same period last year.

All these factors favored a drop in group sales to 12,054 million euros, 28% less than in the first six months of 2022 (16,737 million). In parallel, the gross operating profit (ebitda) improved significantly, more than 39%, standing at 2,849 million, according to the semi-annual results that Naturgy has transferred to the market on Monday.

Naturgy pursued three objectives in the first six months of the year: debt, dividend and investments. The company has reduced its net liabilities from the 12,070 million that it carried at the end of 2022 to 10,752 million as of June 30, 2023. In addition, the group made investments amounting to 839 million in the period. Within the framework of the recent review of its strategic plan, the gas company has revised its shareholder remuneration upwards and will pay a first interim dividend of 0.50 euros per share on August 7, 2023 results, 66% more than the one distributed in August of last year.

In Spain, Naturgy's Generation activity boosted the result, with higher margins in the thermal segment (which includes combined cycles) and a 34% increase in ebitda in the Renewable Generation area, up to 235 million in the period, a positive evolution that is explained by the increase in installed capacity and production in Spain, especially in the gas company's hydraulic power plants, which multiplied its production by 2.3 times. “This was partially offset by lower regulated revenues (new parameters for the 2023-25 semi-period) and lower sales prices,” the company has stated.

In its half-yearly report, Naturgy has highlighted the group's commitment to biomethane. The company currently operates 2 megawatts (MW) of capacity on this renewable gas, reaching a production of 117 megawatt hours (MWh) during the first half of 2023 and is advancing several additional projects in Spain. In addition, two hydrogen projects are underway, in Meirama (30MW) and La Robla (280MW), and “a portfolio of additional options is being evaluated.”

The Ibex 35, the main index of the Spanish stock market, has closed the session this Monday with a decrease of 0.29% to 9,543.5 points, given the uncertainty that threatens the country after the electoral result this Sunday, in which the polls have presented a country divided into two halves with serious difficulties that no one can be sworn in as president.

The value that has fallen the most is Endesa, which has fallen by 2.75%, followed by Indra, which has fallen by 2.05%; Rovi, 1.43%; AENA, 1.42%, and IAG, 1.36%. Iberdrola has fallen by 0.48%, while the banks have also registered drops in value: BBVA has lost 0.11%; Santander, 0.24%; CaixaBank, 0.55%; Banco Sabadell, 0.76%, and Bankinter, 1.23%. Both energy companies and banks are among the values that have fallen the most in the session, given that since an imminent change of government is not intuited, it is not expected that the extraordinary tax on these companies will cease to be applied in the short term.

Although the elections show an uncertain outlook, it must be taken into account that it is common for the Spanish stock market to fall on the Monday after the elections. In fact, this has happened in nine of the last ten general elections held in our country. Specifically, in the last of 2019, the Ibex 35 dropped 0.06% at the end of the session.

The biggest drop occurred after the 1996 elections, in which the Popular Party won, with a drop of 5.22%, followed by the one that occurred after the March 2004 elections, in which the PSOE emerged victorious, and when the Ibex dropped 4.15%.

“The Ibex will accuse political uncertainty. The General Elections held yesterday 23J have resulted in what seems to be a complicated situation, which could translate either into a weak government or a repetition of elections. A result that will not be well received by the market, which anticipated an easy formation of a government and which now seems to face a blocked Parliament and months of political instability,” Renta 4 analysts warned first thing in the morning.

These experts, however, warn that the most relevant for the economic world this week are not the election results, but the monetary policy meetings of the Fed in the United States (on Wednesday) and the ECB in the Eurozone (on Thursday), from which further increases in interest rates will foreseeably come, and also the publication of business results of many companies in Spain.

Franco Macchiavelli, head of analysis at Admirals Spain, points out that “the Ibex's rise of more than 400 points since May seemed to reflect a victory for the more pro-business right, however, yesterday's result could be classified as the least desired economic result”. He warns that “the left could seek the support of the pro-independence parties, but the price of their support is high, which could lead to unpleasant transfers and collateral results, such as those that occurred in the march of many companies such as Sabadell, Naturgy or Colonial, which took their offices out of Catalonia. Therefore, opening talks with Catalonia could bring more uncertainty to the markets.”

The market expects electoral repetition

Barclays experts believe that the most likely is an electoral repetition: “In our opinion, it is most likely that an indecisive parliament will be formed and new elections will be called, with Pedro Sánchez as interim prime minister until new elections are held at the end of 2023 or beginning of 2024.. This scenario would likely cause prolonged uncertainty and could delay the disbursement of European Next Generation EU funds as a result of the parliamentary deadlock.”

“Most likely, new elections will be held, at the end of 2023 or beginning of 2024, and that the PSOE cabinet will remain in office until then.. This would be reminiscent of the 2015 and 2019 elections, which were also inconclusive”, agree analysts from the British consultancy Capital Economics, who believe that “the impact of the current political uncertainty on the economy will be negligible”.. According to their forecast, the Spanish economy continued to perform better in the second quarter, helped by the rebound in tourism and lower inflation, although they see the recovery as likely to lose steam in the second half of the year, as the tightening of monetary policy weighs on growth.

Dario Messi, fixed income analyst at Julius Baer, explains why the market may react with turbulence to the electoral result, including the risk premium that could stop falling: “The formation of the government will be a long and complicated process, and it is possible that the elections will be repeated. Social policy has been in the spotlight during the electoral campaign; As for the economic agenda, a new center-right government would be expected to focus on medium-term fiscal consolidation and tax cuts, while another term for the current government implies a continuation (…) A still-possible change in leadership and increased attention to fiscal discipline could further support the current momentum to tighten sovereign debt spreads, which is now likely to see a pause amid political uncertainty triggered by the elections,” he warns.

Spain is one of the sunniest countries in Europe. Its approximately 2,500 hours of sunshine per year, comparable to those of Turkey, Italy, Greece, France and Portugal, invite you to make use of its full potential and one of the possibilities it offers is to merge the energy of the sun's rays with another of the country's strong points, the agri-food sector -which has a contribution of more than 111 billion euros to GDP and represents 9.2%-. This symbiosis has a name: agrovoltaic, a concept that seeks to take advantage of the synergies between both fields and take advantage of the same area of land both to obtain solar energy and agricultural products, that is, solar panels coexist with crops on the same surface, or even with livestock.. “Only with 1% of arable land also dedicated to the production of solar energy, it would be possible to compensate the world demand for energy”, concludes a study published by the journal Nature, which means that the more you bet on renewables, the more you contribute to curbing climate change, one of the great threats to the agricultural sector.

This concept, which began to be considered in the 1980s, has gained strength in recent years as the commitment to sustainability has been strengthened, since it seeks to establish synergies between the agricultural and energy sectors through more efficient and shared use of land.. There are several ways to achieve this: the most common is to use fixed support systems to raise the solar panels between two and five meters above the cultivated or grazing land.. Thus, machinery and animals can access the crops or pastures located below them. But there are also other options, since solar panels can be installed on the roof of a greenhouse.

Although it may sound striking a priori, the combination of both uses of the same land offers interesting benefits. Regarding the environment, the reduction in the emission of greenhouse gases in the agricultural sector stands out. But, in addition, the use and double use of land for agriculture and energy alleviates the pressure on ecosystems and biodiversity, which can coexist with these energy facilities in symbiosis.

But that's not all, since the deployment of solar panels can help limit the evaporation of water in crops, which reduces the water needs of the land. For their part, they also help protect crops from atmospheric phenomena such as hail, frost, downpours or heat waves and droughts, since a reduction in wind loads and solar radiation can contribute to lower water consumption, and can be shelter for animals.

Following this philosophy of making land use compatible, experts from Chonnam National University (South Korea) launched a pioneering study and planted broccoli under solar panels. The results show that the flavor is identical and also its nutritional properties. The panels were raised between two and three meters and turned at an angle of 30º to provide water and shade for the crops. There are numerous examples, most of them developed in the Netherlands and Germany, focusing on wheat, potato, celery, blueberries, red currants, raspberries, strawberries and blackberries. In these locations, it has been shown that, during hot days, the conditions under the panels were between two and five degrees Celsius cooler compared to traditional cultivation methods. Closer by, in the French Upper Saxony region, 5,500 panels have been distributed on a farm in the Amance commune and soybeans are already being harvested under its shade. There are also examples of its usefulness with olive trees in Sicily, peach trees and vines in France, and artichokes and peppers in Murcia.

Since he was little, Manuel Maqueda connected with nature and suffered from “eco-anxiety”, but it was in 2009 when he found his turning point, the act of looking in the mirror and seeing the reflection of our society.. It happened in the Midway Islands, the small atoll located in the Pacific Ocean, when seabirds regurgitate plastic to their chicks instead of food. «Plastic is a very new technology, a versatile, cheap, very useful material, but it has a lot of problems that we are beginning to discover.. The main one is that it is a material that the planet cannot digest”, he recalls in Buscando Vocations.

In fact, although plastic does not degrade, it does fragment down to the molecular level, contaminating all of our planet's ecosystems and even human beings themselves: it is estimated that a person ingests, inhales and drinks between three and five grams of plastic a week. Or what is the same: the equivalent of a credit card.

«You have to change the mentality of thinking quickly to think systemically, in systems that, if you touch one thing, damage everything. And have a long-term mentality, without easy and immediate solutions”, suggests Maqueda. And it responds to this problem: the circular and regenerative economy. The economy that maintains things, that repairs them, that ceases to be resource-intensive to be so in job creation.

Magnification of microplastics found on a beach.

Currently, around 93% of everything that is produced in the world in a year is thrown away, only 7% is still in use. Our economy, to get value, extracts finite resources, makes things and turns them into waste.. «The circular economy is to turn that around, it is to keep everything in use, as it has always been done, for as long as possible at the maximum possible value.. Things that last, things that can be repaired,” he insists.. With materials that are healthy. No asbestos, no plastics, no toxicity. And focusing “on effectiveness, not efficiency”: on how we can return to living systems, to nature-based solutions.

“80% of the environmental benefits are determined in the design phase and if something is not designed for a circular end of life, we are wasting time,” warns Maqueda, professor of Circular Economy and Regenerative Economy at Harvard University.. And he adds: «We cannot corner nature, we need to regenerate it. Our economic activity, our existence, our health depends on essential biological cycles.

And it also depends on people who, paraphrasing Cervantes, want to see the world as it should be and not as it is: «The world is changing rapidly, we are transforming the planet. If we don't let the planet transform us, we will become extinct,” he says.

In Buscando Vocaciones, the project with which the European University inspires young students who are walking towards their university stage and all people who are looking for a greater professional specialization, great leaders of our society, such as Manuel Maqueda, have outlined from the present what our future will be like. And they do it through personal stories full of successes, failures and, above all, the ability to overcome and adapt.

Precisely, the circular economy, sustainability and climate change have played a leading role in Buscando Vocations. “Architecture is essential to stop climate change,” warned the architect Belén Moneo. Meanwhile, Laura Sánchez, sustainability consultant and Sustainable Finance Manager at Deloitte, completed: “The entire economy is going to revolve around sustainability.”