MADRID, Sept 26 (Reuters) – Spanish competition watchdog CNMC will lower the financial burden on around 300 smaller Spanish electricity traders and direct electricity consumers when depositing collateral payments in an attempt to help them stay afloat, the regulator said on Monday.
The CNMC said it was adopting these measures, like adjusting the calculation of guarantees to use the most accurate measurement, to reduce the impact of high prices on the financial solvency of these companies.
Those measures come at a time when European financial regulators are examining relief measures to defuse a crisis for energy suppliers, as power prices surge following Moscow’s slashing of supplies. read more
Energy firms sought to buffer themselves from price rises through derivatives tied to the future cost of energy.
In order to keep these contracts open, the companies must post a “margin” in cash but that has ballooned with rising prices following Russia’s invasion of Ukraine.
In Spain, the spike in gas and electricity prices over the last year has increased the financial pressure on the activity of the purchasing agents in the market, especially in the case of independent traders who buy energy on the market and are more exposed to price fluctuations.
The CNMC said it was trying to avoid the impact of daily fluctuations in energy prices and subsequent guarantees when the monthly requirement is already met.
The independent traders have to deposit guarantees to meet their payment obligations to the market operator (OMIE) and the power grid operator Red Electrica REE , putting the viability of many of them at risk.
“As they pay the money up front, it is basically to prevent the companies from going bankrupt,” a CNMC spokesperson said, adding that these generic measures were designed for smaller power distributors that do not generate power on their own.
“Though you still require the guarantees, the procedure allows companies to speed up the paperwork, making it lighter, reducing deadlines,” the spokesperson said.
(c) Thompson Reuters