The struggle to attract large investments opens another 'war' between autonomies and the Government for access to the electricity that supplies them

Produce green hydrogen in the Escombreras Valley, in Murcia, or green steel in Puertollano, in Ciudad Real. Electrify the ceramics industry in Castellón, develop circular economy projects in Cerceda (A Coruña) or hundreds of industrial and urban planning projects in Madrid. All these plans have two things in common. The first, that they will be a source of economic development and job creation. The second, that to become a reality they need to have guaranteed electricity supply, which at the moment is scarce and which has become the latest trigger for a 'war' between the central government and the regional governments – and, basically, between them. yes- for access to electricity. It depends on whether communities can implement large investments in their territories to build data centers or reconvert industries, which collide with the barrier of access to an electrical grid that is not prepared for it.. The Government had just expanded it punctually and in a way that the majority of autonomies consider insufficient and contrary to their own interests.. Looking at medium-term electricity planning, another conflict already appears on the not-so-distant horizon over the claim that communities with more renewable plants have the right to more access to the grid.

In the heat of European funds, their ability to attract investments, electricity supply has now become more than ever the key element for large companies and promoters of large industrial or energy projects to settle in different communities or for them to they can carry out the necessary energy transition of their traditional sectors. According to sources in the sector, in recent months there have been many contacts between businessmen and regional authorities, in a flourishing of projects with high electricity demand that the Ministry for the Ecological Transition also confirms.. In December it decided to start demanding financial guarantees and a time limit from those who requested access to the distribution network due to the “extraordinarily rapid growth” of requests.

Regional governments are competent in the planning of their territory and, as indicated in the sector, companies and promoters see in them much easier access to 'sell' their projects than in the central Government, to which communities now look to demand that provides them with something essential, the ability to connect to the grid so that the hundreds of projects that from Andalusia to Galicia and from Aragon to Murcia, passing through Madrid, are up in the air because it is not guaranteed that they will have electricity.

Due to all the elements it contains, in the energy sector it is considered that access to electricity will be one of the great wars that the Government and communities will fight in the coming years. Its origin can be traced to the middle of last December and the first battle, on Friday of last week, in the meeting between the third vice president, Teresa Ribera, and the regional Energy officials in which sparks flew.

64 projects from hundreds of plans

The trigger for the 'war' was the “specific” modification that the Ministry for the Ecological Transition is preparing to ensure that large projects that already have European financing – such as the Volkswagen electric battery gigafactory in Sagunto or the Andalusian Valley of the Hydrogen-, which were not planned when the current Planning was approved in 2020, can be connected to the grid before 2026. In mid-December, Ribera announced his intention to allocate 321 million to finance actions that ensure that Sagunto or the area of Huelva and Algeciras has sufficient access to the electrical grid, as well as in the Bay of Biscay, to ensure interconnection with France, in the area of As Pontes (A Coruña) to guarantee conversion after the closure of the thermal plant or in locations where electric pumping projects are planned.

The problem is that this plan was only about opening the network to allow access for 64 projects, when in the plans of the different communities there are hundreds that also need to have guaranteed electricity.. A few days later, Ribera advanced the Planning of the transportation network – from the generator to the substations – and electrical distribution – from the substations to the final consumer – between 2026 and 2030, a year ahead of schedule, but the communities and companies electrical distribution demand that their electricity supply be guaranteed immediately, at the latest in 2026. The Ministry does not see it so clearly and remembers that, according to the law, Planning can only be modified for very justified reasons, among which are not those alleged by the regional governments.

Faithful to her style of open confrontation with the Government of Pedro Sánchez, the president of the Community of Madrid, Isabel Díaz Ayuso, was the first to raise her voice against the “specific” modification and criticize that Ribera had ignored all the allegations that presented his Government for another 80 projects in the region. Madrid denounces that of 64 actions, Ribera only contemplates one in the Community, also without additional financial support. But the feeling of “grievance” was general in the allegations that communities, city councils or electricity distributors presented throughout the country. Murcia denounces that of the 321 million euros, the Ministry will only allocate 1.1 million and Galicia, that the specific modification perpetuates the “penalty” with which it was treated in the 2021-2026 Planning and that in total no more will be allocated than 2.6% of the total investment. Nor are the Valencian communities happy, 'graced' in December with 61 million for the electrical connection to the future gigabattery plant, or Andalusia, which has seen the so-called Andalusian Hydrogen Valley projects included and which, according to Ribera, “absorbs” the 10% of the planned investment, with the “additional efforts” of December. Even communities like Aragón, which is considered among the best served by the specific modification of electrical planning, hopes that in the end some more of its allegations will enter, to set up data or consumption centers.. In short, it was what Ribera described a few days ago as a “flurry of requests” that, he said, his Ministry “has not been able to attend to.”

Ribera opens to study the requests

The communities' claims are many and very high-sounding for everything to remain a matter of incapacity.. After weeks of public and private complaints for not taking their requests into account, Ribera called a Sectoral Energy Conference at the end of last week to explain to regional officials the specific modification of Planning.. However, the meeting turned into an avalanche of reproaches for not taking into account hundreds of projects that need electricity. Regional sources speak of a “quite critical” meeting with the vice president, who had to listen to how “all” the communities made her see that their electricity consumption needs are not included in the plans she has drawn up so far to expand access before 2026.

They agreed that there would be technical meetings between the Ministry and each community to explain the situation and the meeting also points to a change in attitude on the part of Ribera, which is now open to incorporating some of the regional requests.. In December, the 64 projects chosen seemed like the final result and when a few weeks ago the first criticisms began at the hands of Ayuso, the Ministry stood by its stance of not authorizing access to supply except for projects that would otherwise lose European funds. A few days ago, he assured that he will take the allegations into account because that is why he opened a period for them to be presented.. The electricity sector “trusts” that Ribera will open his hand a little and his Ministry assures that the allegations are being studied to see which ones can be taken into account.. At the moment there is no date for the Council of Ministers to definitively approve the specific modifications.

Rajoy's limit

Aside from the justified need to have an electricity supply, the sector also believes that the PP, which governs almost all the communities, has seen in this issue an opportunity to oppose the Government of Pedro Sánchez.. Access to electricity supply has become a campaign issue at the other end and days before the formal start of the electoral campaign in Galicia, Ribera walked through Vigo this week with Abel Caballero, the mayor of the city in whose vicinity will install a new Stellantis electric vehicle factory thanks to the 72 million that were authorized in December to create a new electrical substation. Despite this, the Xunta lists up to seven projects that are still in the air.

The struggle between the Government and communities for the supply of electricity will continue for years because in addition to the modification to connect more points before 2026, the process is already underway to plan the electricity distribution network between 2026 and 2030, a period that both electricity companies and administrations consider it too long and rigid for the dynamism they are detecting in investments and industrial projects.

The requirement that more companies and industries be able to plug into the network will also come up against the limit set by law on investment in transportation and distribution networks, which cannot exceed respectively 0.65% of GDP -8,626 million taking the year 2022- not even 0.13% -1,725 million euros following the previous calculation. Curiously, this limit was set by the Government of Mariano Rajoy in the middle of the real estate boom, seeing that many developers demanded access to networks for projects that were later not carried out but in which the investment remained.. Paradoxically too, now it is the PP – regional – governments that have begun to question this limit and ask that it be raised so that the network can satisfy all the expected demand, in this case, mainly to be able to accommodate large companies and industrial projects. .

The next conflict

It is not the only conflict that is on the horizon. Also for the planning of the electrical network between 2026 and 2030 – the consultation period will end at the end of March – some of the communities that have the most wind and photovoltaic parks have already begun to demand that they be the ones that have more access to electricity. network, because they are also the ones that generate the most energy, with projects that also tend to provoke social rejection wherever they are located.

Aragón raised it at last week's sectoral meeting, “the need to bring consumption closer to the places where energy is produced”, as explained in Zaragoza, about an idea that Castilla-La Mancha and Galicia also support and that It leaves communities like Madrid or Catalonia in an uncertain place, very attractive for investment but which, due to the size of their territory and because it is largely protected, consume much more of the electricity – renewable – than is generated in their areas. floor.

Large renewable energy producers see the possibility of having greater access to the grid as a way to benefit the territory that coexists with photovoltaic and wind farms, also within the debate on compensation that Ribera will soon open with communities, companies and interested actors.. Before that, the Ministry of Sustainable Development of Castilla-La Mancha is already talking with the territory and the energy sector to ensure that the next planning of the electrical network acts as “a lever against depopulation with the generation of employment”, with access to electricity that is consistent with the amount produced on its land.

If the electricity 'producing' communities achieve this objective, not all 'consuming' autonomous communities see it as a threat. The new government of the Valencian Community of the popular Carlos Mazón sees in this a way to justify the large renewable deployment that it projects after Compromís stopped it in the previous government of the socialist Ximo Puig. “They put us at home,” said Valencian sources about the opportunities that installing wind turbines and solar panels will also have the coveted electricity supply as a reward.