The reduction of purchases in the electric interruption service puts production and exports at risk

Electricity costs have once again become a major threat to the cement industry in Catalonia. Red Eléctrica de España (REE) has completed the process of assigning interruptibility service through competitive auctions with the allocation of an interruptible power for the period from January 1 to May 31, 2018 of 2,584, 9 MW. This means a decrease of 13% compared to the previous year, more than 400 MW unassigned, a volume that will directly affect several Catalan factories, which have been left without the allocation of some blocks of this service.

In fact, this implies more expensive production costs, since they will no longer receive remuneration for interruption of the electric service. In the case of Catalonia, which is the second exporting region in Spain and, with the current low domestic consumption, the highest producer, the extra cost of energy implies losing the aid that allowed access to foreign markets. “It should be remembered that, in addition, Spain is one of the most expensive countries in Europe in electricity prices for industrial consumers, above Germany or France, for example, and only below geographically isolated markets, such as those in the United Kingdom or Ireland“, explains the president of Ciment Català, Salvador Fernández Capo.

This is in addition to the fact that the budgets of the companies have been approved a few months ago with the serious inconvenience of doing it without knowing the electric cost, which is of special importance in the case of the cement sector and which depends on the allocation of blocks of interruptibility. “Besides approving the blocks late, only the ones corresponding to the first five months of the year have been allocated, which keeps the uncertainty about the electricity cost throughout the next year and, therefore, the real profitability of the export contracts” recalls Fernández Capo.

The interruptibility service is offered by large consumers of electricity (such as cement factories) and consists of its commitment to reduce or suspend demand in times of emergency for supply in exchange for a fee. This service is a key point to reduce the important energy cost of the sector and maintain the competitiveness of the Catalan cement factories, which also involves the availability of a larger volume of waste to be used as alternative fuels, thereby reducing the cost of the global energy mix.