La ola de frío hace estragos en el mercado energético español

Prefer the English version? Please find it here.

Los mercados energéticos españoles se comportaron de forma inestable la semana pasada. El jueves 19 de enero, el precio de la electricidad para el día siguiente cerró en 88 euros por MWh, este es el nivel más alto alcanzado desde el 6 de febrero de 2006. El nuevo Hub de gas natural, Mibgas, también alcanzó un máximo llegando a los 41,87 euros por MWh los días 12 y 13 de enero.

Hace frío en España y los turistas en busca de un clima agradable en invierno están siendo sorprendidos con tormentas de nieve y heladas. Las circunstancias siberianas son excepcionales y obviamente causan un pico en la demanda de electricidad y gas. El sistema eléctrico ha encontrado dificultades para hacer frente a este pico. En la Comunidad Valenciana 32.000 clientes se quedaron sin electricidad y la eléctrica Iberdrola tuvo que poner en marcha 23 generadores de emergencia.

Álvaro Nadal, nuevo ministro de Energía, advirtió a los ciudadanos españoles en un comunicado de prensa que se fueran acostumbrando a una energía más cara. El ministro cita todo tipo de argumentos para justificar los actuales precios, junto al aumento de la demanda de calefacción, señala también paradas nucleares, mayores exportaciones a Francia, baja producción de energía eólica y solar, mayor precio del crudo y un alto precio del gas natural. La situación actual muestra una tendencia muy alcista, pero los altos precios de la electricidad y el gas natural en España no son sólo un fenómeno de este invierno. Los mercados energéticos españoles son más caros que otros mercados europeos desde hace años.

Respecto a la electricidad, podemos ver que los precios spot españoles se alinearon con los precios spot alemanes hasta 2014, cuando comenzaron a subir estructuralmente. Los analistas señalan a menudo el alto porcentaje de energía renovable en España para explicar los altos precios de electricidad. Según datos de Red Eléctrica, el 49,9% de la capacidad de producción de energía eléctrica en España es renovable. El viento no siempre sopla y, hasta en España, el sol no siempre brilla, haciendo que los precios del mercado de día siguiente se eleven algunos días y los acontecimientos del último día parecen apoyar ese análisis.

Sin embargo, Alemania tiene un porcentaje aún mayor de energía renovables en el mix de capacidad de producción: un 52,43% de acuerdo con los datos de https://www.energy-charts.de/power_inst_de.htm. En Alemania, un volumen creciente de energías renovables en la red ha tenido un claro efecto beneficioso sobre los precios de la electricidad al por mayor. ¿Por qué no hemos visto el mismo efecto en España?

La situación actual de altos precios y apagones en algunas regiones parece señalar que en España hay escasez de capacidad de producción de energía. Sin embargo, como podemos ver en la página web de Red Eléctrica, el viernes 20 de enero la demanda alcanzó un máximo de 40.294 MW, esta cifra es muy inferior a la capacidad de producción total de 100.088 MW estando incluso por debajo de la capacidad instalada de producción tradicional de energía térmica (carbón y gas), que se sitúa en 41.154 MW. Además, en el momento de mayor demanda, las centrales nucleares españolas producían 7.100 MW, las centrales hidroeléctricas 6.168 MW, las turbinas eólicas 5.007 MW y las centrales fotovoltaicas 675 MW. Sumando estas cifras, realmente no se entiende el por qué los precios subieron tanto.

omie vs eex.png

Es cierto que el equilibrio entre la oferta y la demanda en España está cada vez más ajustado. Con una economía en recuperación, España registra un aumento de su demanda de energía de 0,8% en 2016. Al mismo tiempo, la capacidad de producción cayó un 0,9%, debido al cierre de centrales de carbón. A pesar de ello no olvidemos que la situación general sigue siendo muy cómoda en comparación con otros países europeos como Bélgica o Francia cuando tienen centrales nucleares cerradas.

Entonces…¿Por qué los precios españoles son más altos?

Los productores de energía españoles parecen ser incapaces de entregar a la red una electricidad fiable y con un precio razonable. Los 194.530 MW de potencia disponible en Alemania produjeron 648,2 TWh de electricidad en 2016. Esa es una utilización del aparato de producción de 3.322 horas, siendo mucho mejor que las 2.500 horas de los productores españoles, con 100.088 MW de capacidad instalada produciendo sólo 250.266 TWh. Una vez más, el alto porcentaje de energía renovable en España no es una excusa, ya que Alemania tiene un porcentaje aún mayor.

El ministro Álvaro Nadal debería aprovechar la situación actual para hacer un llamamiento a los productores de energía y exigirles que mejoren su rendimiento. Por otra parte, como hemos mencionado antes, los sistemas que organizan la oferta de energía española y la logística de la demanda son bizantinos y disfuncionales. Súbase a un avión señor Nadal y vea cómo otros países europeos lograron organizar mejor sus mercados: una mejor organización que resulte en una mejor utilización del parque de producción de energía y menores precios de los productos básicos para los consumidores finales.

La semana pasada se podía escuchar en las noticias españolas que los altos precios se debían al uso de “costosas” centrales de gas de ciclo combinado. Sin embargo, en el momento de máxima demanda el viernes pasado, sólo había 2.229 MW de ciclo combinado en operación, lo que representa menos del 10% de la capacidad instalada total de 24.948 MW. Es un hecho, sin embargo, que el costo de producir electricidad con una central eléctrica de gas es mucho más caro en España que en otros países. Esto se debe al alto precio del gas en España.

La mayor parte del gas natural en el mercado energético español aún se comercializa a precios indexados a los mercados petroleros. Los recientes aumentos de los precios del petróleo han provocado por tanto un aumento de los precios del gas en España. Si nos fijamos en los precios de los otros mercados europeos, determinados por los hubs como el TTF donde la demanda y la oferta de gas natural fijan el precio, diríamos que el desarrollo del Mibgas en España es una excelente idea. Sin embargo, una idea sólo es buena cuando está bien ejecutada.

El verano pasado, vimos los precios del hub ibérico Mibgas operando a un nivel similar al TTF. En mayo y junio de 2016, incluso vimos un precio de Mibgas más bajo que el TTF algunos días, lo que generó esperanzas de que finalmente veríamos unos precios normales de gas en España. Sin embargo, a partir de agosto, el precio de Mibgas comenzó a subir por encima del TTF. El 13 de enero, el precio de Mibgas fue 21,14 euros por MWh más caro que el TTF u otros precios del norte de Europa.

ttf-mibgas

Los abastecedores españoles de gas (y los analistas que lo apoyan sin argumentos) apuntan dos razones que causan esta situación:

  1. El hecho de que los buques de GNL provenientes de Argelia por ejemplo, en lugar de llegar a la península Ibérica hayan decidido navegar a otros destinos como Asia, donde los precios del gas son actualmente altos.
  2. La falta de capacidad de interconexión con Francia y los precios del Norte de Europa.

Sí, los precios asiáticos están reduciendo las exportaciones de GNL a Europa. Pero los 41,87 euros por MWh que encontramos en España a principios de este mes, fue el precio más alto de gas natural en todo el planeta en ese momento, así que ¿Por qué los buques no llegaron a España?

Por otra parte, la reducción de gas natural licuado debido a la alta demanda asiática afecta de la misma manera al TTF, así que ¿Por qué el precio en España es más del doble que en el norte de Europa?

La falta de conexión por gaseoducto hacia el Norte es también un hecho, pero no hay ningún país en Europa que tenga tanta capacidad (no utilizada) para importación de GNL como España. Sólo hay 1.305 kilómetros por mar entre los puertos de Zeebrugge y Bilbao.

El 13 de enero, un comerciante podría haber ganado 21,14 euros por MWh al cargar GNL en Zeebrugge y descargarlo en Bilbao, ese habría sido uno de los trayectos de GNL más lucrativos de la historia, pero ningún barco lo hizo.

España estará mal conectada con el resto del mundo mediante gaseoductos, pero está muy bien conectada con terminales de GNL, el problema es que estos no se están utilizando. ¿Por qué? Porque traer el gas a la terminal de GNL es posible, pero sacarlo de la planta de regasificación y venderlo en el mercado interno español parece ser casi imposible.

España ha sido el último de todos los países europeos en establecer un Hub. Preparándose para ese lanzamiento, España se centró más en cómo organizar los aspectos financieros que los aspectos físicos, pero la parte física es clave. Un Hub debería facilitar el acceso de terceros al sistema de gas mediante el establecimiento de una zona de entrada-salida a nivel nacional y la introducción de un sistema de equilibrio eficiente y rentable. Debido a los altos precios actuales y la falta de liquidez, está claro que Mibgas no ha logrado esto. Una vez más, España ha introducido sistemas que son diferentes de lo que vemos en el resto de Europa. Así que, Ministro Nadal, vaya a echar un vistazo al resto de Europa y arregle este desastre de mercado energético español.

A cold snap wreaks havoc on the Spanish energy market

Spanish energy markets were in turmoil last week. On Thursday the 19th of January, the day ahead electricity price averaged 88 euro per MWh. That is the highest level since the 6th of February 2006. The new Hub market for natural gas, Mibgas, went through the roof as well, racing to 41,87 euro per MWh on the 12th and 13th of January.

It’s cold in Spain. Tourists in search of mild winter weather were caught in snowstorms and frost. The Siberian circumstances are exceptional and obviously cause a peak in demand for electricity and gas. The power system struggled to cope with this peak. In the Communidad Valenciana, 32.000 clients were without electricity and utility Iberdrola had to rush in 23 emergency generators. Álvaro Nadal, the new Minister of Energy is all over the press, warning the Spanish citizens to get adapted to more costly energy.

The Minister is citing all kinds of reasons for the current peaks in prices: next to the increased demand for heating purposes he points out: nuclear shutdowns, increased exports to France, low output of wind and solar, the higher price of crude oil and the high price of natural gas. The current cocktail is indeed very bullish. But the high prices for electricity and natural gas in Spain are not just a phenomenon of this winter. Spanish energy markets are more expensive than other European markets for years.

If we look at electricity, than we can see that the Spanish spot prices were at more or less the same level as German spot prices until 2014 and then started to rise structurally higher. Analysts are often pointing at the high percentage of renewable energy in Spain to explain high spot prices: according to Red Electrica’s data, 49,9% of Spain’s power production capacity is renewable. The wind doesn’t always blow and even in Spain, the sun doesn’t always shine, causing spot prices to rise high on some days. The events of the last day seem to support that analysis.

omie vs eex.png

However, Germany has an even higher percentage of renewable power production capacity: 52,43% according to data of https://www.energy-charts.de/power_inst_de.htm. In Germany, increasing amounts of renewables on the grid have clearly had a beneficial effect on the wholesale electricity prices. Why haven’t we seen the same effect in Spain?

The current situation of high prices and blackouts in some regions seems to point out that Spain has a shortage of power production capacity. However, as we can see on the website of Red Electrica, on Friday the 20th demand peaked at 40.294 MW. That is well below the total production capacity of 100.088 MW. It is even below the installed capacity of traditional thermal power production (coal and gas), which stands at 41.154 MW. Moreover, at the moment of peak demand, Spanish nuclear power stations were producing 7.100 MW, hydro power stations 6.168 MW, wind turbines 5.007 MW and photovoltaics 675 MW. Adding up the figures, you really don’t understand why prices were soaring that much.

It is true that the supply and demand balance in Spain is getting more tight. With a recovering economy, Spain is seeing an increase in its power demand, +0,8% in 2016. At the same time, production capacity dropped 0,9%, due to the closure of carbon-fired power stations. However, the overall situation still looks very comfortable compared to other European countries like Belgium or France when it has nuclear power stations shut down. Then why are Spanish prices higher?

The Spanish power producers seem to be incapable of delivering a reliable, reasonably priced electricity to the grid. Germany’s 194.530 MW of available power capacity produced 648,2 TWh of electricity in 2016. That’s a utilization of the production apparatus of 3.322 hours. That’s a lot better than the Spanish power producers’ 2.500 hours with 100.088 MW of installed capacity producing just 250,266 TWh. Again, the high percentage of renewable energy in Spain is not an excuse, as Germany’s having an even higher percentage.

Minister Álvaro Nadal would better use the current situation to call upon the Spanish power production companies to improve their performance. Moreover, as we have mentioned before, the systems that organize Spain’s power supply and demand logistics are byzantine and dysfunctional. Get yourself on a plane, Mr. Nadal, and go and have a look at how other European countries managed to get their markets better organized. A better organization that results in a better utilization of the power production park and lower commodity prices for the end consumers.

Last week you could hear in the Spanish news that the high prices were due to the usage of “expensive” combined cycle gas-fired power stations. However, at the moment of peak demand last Friday, there was just 2.229 MW of such combined cycle power stations at work, which is less than 10% of the total installed capacity of 24.948 MW. It is a fact however, that the cost of producing electricity with a gas-fired power station is much more expensive in Spain than in other countries. This is due to the high price of gas.

Most of the natural gas in the Spanish energy market is still traded at prices indexed to oil markets. The recent increases of oil prices have therefore caused Spanish gas prices to increase. If you look at the pricing in the other European markets, determined by Hubs such as TTF where the demand and supply of natural gas itself is setting the price, you would say that the development of the Mibgas Hub in Spain is an excellent idea. However, an idea is only good when it’s well executed.

Last summer, we saw Mibgas prices trading at a level similar level as TTF. In May and June 2016, we even saw a lower Mibgas price than TTF on some days. This sparked hopes that we would finally see normal gas prices in Spain. However, as of August, the Mibgas price started to rise high above TTF. On the 13th of January, the Mibgas price was 21,14 euro per MWh more expensive than TTF or other Northern-European prices.

ttf-mibgas

Spanish gas suppliers (and analysts paying them lip service) point at two reasons for this:

1. The fact that LNG ships from Algeria for example, rather sail to Asia where gas prices are currently high.
2. The lack of interconnection capacity with France and the Northern European prices.

Yes, Asian prices are reducing LNG exports to Europe. But the 41,87 euro per MWh that you could get in Spain earlier this month, was about the highest price for natural gas on the planet at that moment, so why didn’t the ships come to Spain? Moreover, the “less LNG due to high Asian demand” counts for TTF just as well, so why is that price in Spain so much higher than in the North of Europe?

Lack of connection by pipeline to the North is also a fact. However, there is no country in Europe that has so much (unused) LNG import capacity as Spain. There is only 1.305 kilometer by sea between the ports of Zeebrugge and Bilbao. On the 13th of January, a trader could make 21,14 euro per MWh by loading LNG in Zeebrugge and sailing to Bilbao. That must be one of the most lucrative LNG trips in history. But no ships did it.

Spain might be badly connected to the rest of the world with gas pipelines, but it is well connected with LNG terminals. But these are not being used. Why? Because getting the gas into the LNG terminal is possible, getting it out and sell it in the internal Spanish market seems to be all but impossible.

Spain has been the last of all European countries to launch a Hub market. Preparing for that launch, Spain was more focused on how to organize the financial aspects than the physical aspects. Whereas the physical side is key. A Hub should facilitate third party access to the gas system by the establishment of a nation-wide entry-exit zone and the introduction of an efficient, cost-effective balancing system. From the current high prices and lack of liquidity, it is clear that Mibgas has failed to achieve this. Again, Spain has introduced systems that are different from what we see in the rest of Europe. So, Minister Nadal, go and have a look in the rest of Europe and get this mess of a Spanish energy market fixed.

Mibgas and its failure to fix the Spanish gas market

On this blog and in conferences, we have repeatedly complained about Spain’s reluctance to fix its gas market. For years now, Spanish end consumers of gas are paying more than consumers in other countries. And we can’t see any good reason for that. Spain’s gas import and transportation infrastructure was drastically expanded in the booming early 2000’s, anticipating a never-ending period of growth of the economy and gas consumption. Instead of that, Spain slumped into a deep recession and in 2015, Spain’s gas consumption was 29% lower than in 2008. As a result, wherever you look in Spain’s gas system, you will find excess capacities. So why on earth doesn’t this result in lower prices?

Many Spanish gas suppliers will point at the limited capacity on the French-Spanish cross-border pipeline. Yes, this means that only small quantities of gas can float directly, through a pipeline, from the cheaper markets in the North to Spain. However, only looking at this pipeline is a very shallow look, especially if you consider that most of Spain (and Portugal’s) gas comes in through LNG ships. As a matter of fact, no other European country has such a large LNG import capacity. Most of the terminals are used at very low percentages of their capacities. And still, lots of LNG ships are sailing past Spain without unloading the gas, taking it to terminals further North to sell it at a price far below what they could get in Spain. They are sailing hundreds of extra, expensive miles to unload at a lower price. In September, the average spot price of gas in Spain was 4,6 euro per MWh higher than in Zeebrugge in Belgium. Why didn’t anyone cash in on that spread by loading gas in Zeebrugge and unloading it in Bilbao? Why isn’t the market with the highest end-consumer price in Europe and the highest amount of unused import capacity flooded with LNG?

Traders answer us: we can get the gas into the Spanish ports, but we can’t get it out. The Spanish government has failed to implement gas market policies that guarantee third party access to the Spanish gas grid. The system makes it possible for incumbent suppliers to sit on unused capacities on key infrastructure just to keep newcomers out. And it creates a lot of risk for traders that don’t have access to huge physical quantities of gas within the country. For a little while we were hopeful that things might change with the introduction of the Hydrocarbon Law in May 2015. It resulted in the launch of Mibgas, a Hub market for gas in Spain. In the middle of this year, we saw prices on this Mibgas drop towards the levels in the North of Europe (TTF). But in the last month, the gap has widened again. Mibgas prices are now trading well above TTF level. In October, the gap was reduced a bit, but that was because of TTF rising, and not Mibgas falling. And, despite the obligation for suppliers to balance their portfolios using the Mibgas spot market since October, volume has picked up only slightly. 

Spain is currently without a government that can fix this mess. On behalf of all gas consumers in the Iberian peninsula, we hope that the first thing a new energy administration will do, is book a flight to the North and see what simple but effective measures are necessary to make a gas market work. It is really very simple:

  • Make the whole country one entry – exit zone and give the responsibility for managing congestions to the transport grid operator (Enagas),
  • Create an hourly day-ahead market (Mibgas) that is adequately aligned with a balancing system (run by Enagas) that is as simple as possible,
  • Implement the use-it-or-lose-it principles that oblige owners of unused capacities to sell it to others.

And while they are there, they might look at power market regulations as well.

In the meantime, the Spanish gas buyers face difficult choices regarding their gas contracts:

  • In April / May / June, when Mibgas and TTF were close to each other, we saw some offers in the retail market that were very attractive, will such periods return? It’s more important than ever for buyers in Spain to follow up intensively what suppliers can offer.
  • When should you switch to Hub-indexed gas buying instead of oil-indexation? With the low liquidity and lack of forward products, financially swapping an oil-indexed formula to TTF is a better choice than Mibgas. Budget risk customers that need long term price stability can focus on the possibilities for savings and more agile price fixing of the new market realities. Market risk customers for whom energy pricing matters in terms of competitiveness should consider whether their competition is in Spain or in countries that have already switched to Hub-indexation. If you face foreign competition, you better consider a quick switch to Hubs. If you’re competing with Spanish companies, you have to decide whether you want to be a first mover or not.
  • Switches to Hub-indexation can come at different add-on costs, depending on the difference between oil-indexed gas and the Hub (TTF) at the moment that you make your contract. From that perspective, you should consider switching an oil-indexed formula in gradual steps towards TTF, which is a complicated hedging operation.

Natural gas is an important input to the economy. It is intensively used by base industries that are the cornerstone of many supply chains. Moreover, it has a lot of impact on electricity pricing. In Spain’s fuel mix, natural gas-fired power stations have the potential of being the marginal power stations, meaning that lower gas prices should result in lower electricity prices. Getting Mibgas fixed should therefore be an important priority for the next Spanish energy minister.