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Brussels calls on Spain a new draft of the Coal decree

The European Commission also requires that the Ministry of Energy amend its proposal so that the CNMC set the tariffs of transport and distribution of electricity

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Brussels calls on Spain a new draft of the Coal decree

Brussels calls on Spain a new draft of coal decree in coming days, ensuring that most polluting plants will be closed for 2025. The European Commission also requires government to cede methodology of fixing electric tariffs to National Competition Market Commission (CNMC): The Ministry of Energy has proposed a mechanism that gives it last word, but Brussels demands more Clarity and demands a new proposal more adjusted to EU rules. And soon: Before end of year.

The Minister of Energy, Álvaro Nadal, maintains a pulse with energy sector — more specifically with Iberdrola — on behalf of Lada Coal power plants (Asturias) and Velilla (Palencia): Iberdrola has requested its closure. And ministry has responded with a royal decree that hinders closure of se plants and ascribes government to final decision. Nadal also stars in a long litigation with independent regulator, CNMC, by fixation of tolls of transport and distribution of electricity. In both cases, Commission has a lot to say.

Brussels has already made a preliminary analysis of coal decree, and calls for Madrid a second draft to polish several edges. The ministry agree to "make some adjustments", according to sources consulted, and points out that Commission puts more emphasis on defects so that in content of regulations: for example, it is agree to clarify that compensation will come with a previous report Of regulator, and will be compatible with state aid rules.

The pulse with CNMC comes from furr back and is somewhat more muddled. The European Commission opened a dossier to Spain at end of 2016 for government to give electricity tariffs to CNMC, as required by European legislation. Madrid risks multi-million dollar penalties if it does not. Nadal was agreed at first at request of Commissioner Miguel Arias Cañete, but in spring he sent a long document to Brussels announcing that he was not willing to give up one of key issues of energy policy. The Secretary of State for Energy, Daniel Navia, has since held several meetings in Brussels. In last meeting, Government presented a proposal that offers to CNMC fixation of methodology, but that continues giving to executive last word. Brussels, according to sources consulted, believes that solution is near. But it asks for a new draft that definitively clarifies price fixing mechanism, according to European sources. And he hopes that this new proposal will arrive in just a few weeks: before end of 2017, given that it has been a year since opening of procedure.

Spain poses a system similar to French to fix prices of transport and distribution. It emphasizes that CNMC will fix methodology of se tariffs, which amount to about 7 billion euros annually (of a total of 18 billion: renewable energies, cost of debt and costs of leveling between peninsula and islands would be outside scope of Influence of regulator). According to draft, CNMC will take into account energy policy guidelines of Ministry to establish aforementioned methodology. In case of discrepancy, energy may return ball to roof of CNMC within two months to correct. If conflict still persists, Council of State decides in France; The Spanish referee would not be even determined, "it is pending discussion with Brussels and political parties", according to sources of energy.

Brussels accepts that executive can set energy policy's master lines and ensure that solution is not far away. But that draft does not fully satisfy Commission, which calls for clarity: in event of a conflict, it aims to make government more transparent, justify its position on basis of objective criteria and give publicity to its decisions. "The draft is not enough", admits a high European source; "We must set clearer rules and comply with letter European rules", underline same sources. In both disputes, Madrid is blunt: "The government must be able to fix electric mix and master lines of energy policy", y close from Ministry of Energy.

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