AEGE – Association of Companies with High Energy Consumption – held the AEGE Energy Forum 2024 today in Madrid. Under the title “Electro-intensive Industry: Driving the Future,” the annual event for the electro-intensive industry gathered more than 200 attendees, including industrialists and energy and sustainability experts, who analyzed the current state of the sector and debated the challenges faced by electro-intensive consumers.

During the forum’s opening, AEGE President José Antonio Jainaga emphasized that there is a shift in the debate about the importance of industrial competitiveness for ensuring sustainable growth, which he described as positive. In light of the high electricity prices in recent years, Jainaga pointed out that AEGE members have seen a more than 30% drop in electricity consumption since 2019, a figure directly proportional to the decline in industrial activity. He highlighted that “to reverse this trend, caused by the structural disadvantage we face in electricity bills compared to European economies with more electro-intensive industries, effective measures are needed,” emphasizing the importance of specific measures such as reducing tariffs or providing compensation for indirect CO2 emissions.

Given this situation, AEGE stressed the importance of industrial electricity demand for continuing significant investments planned for 2030 in the energy sector. However, without affordable electricity prices, the decarbonization and electrification of the economy will be hindered. “Investing in industrial competitiveness pays off for society,” assured the AEGE President.

Decarbonization, Electrification, and Competitiveness: Challenges for Electro-intensive Consumers

The first discussion panel of the AEGE Forum, titled Decarbonization, Electrification, and Competitiveness of Electro-intensive Consumers, addressed the current state of the industry and the main challenges it faces through three key areas: the decarbonization process that industries have begun, the role of electricity in this process, and the competitiveness of energy access as a necessary condition for this effort.

Moderated by Concha Raso, Energy Editor at elEconomista, the panel featured Juan Antonio Labat, General Director of Feique; Aurora Simón, Energy Purchasing Manager at Verallia, representing Anfevi; and Santiago Oliver, Director of Sustainability and Innovation at Unesid.

Juan Antonio Labat opened the discussion by stating that “contracts for differences are vital to accelerate investments in industry decarbonization.” Aurora Simón emphasized issues related to access to electricity grids and high energy costs, arguing that “without a stable and predictable price framework, not only will it be difficult to electrify our processes, but we will also lose competitiveness against other countries and alternative materials, calling for government support to advance the energy transition without compromising our market position.”

Lastly, Santiago Oliver asserted that to prevent the electro-intensive industry from being outpaced by production from third countries with no costs or minimal climate ambitions, the EU must ensure that the OPEX of European low-carbon products are globally competitive, not just locally. “Otherwise, European industry will eventually be displaced by companies from third countries,” Oliver pointed out.

Next, Jordi Esteve, PwC’s Economics Area Partner, presented the study Socioeconomic Impact in Spain of a Competitive Electricity Bill in Industry. Esteve explained that “a competitive electricity price is crucial for the electro-intensive sector to continue driving the overall competitiveness of the economy. With a price similar to that of France, GDP and national employment could increase by 1% structurally.”

Following this, Óscar Barrero, PwC’s Energy Partner, moderated the second panel, Sustainable Solutions for Electro-intensive Consumers, with contributions from Fernando de Juan, Head of Origination Iberia at Axpo; Blanca Losada, President of Fortia Energía; and Silvia Escudero, Head of Upstream Origination Iberia at Statkraft.

“From Axpo, we believe that the consumer is a solution, not a problem. Our tailored products are designed to highlight the flexibility of electro-intensive consumers, adapting at all times to regulatory requirements,” commented Fernando de Juan.

Blanca Losada pointed out the usefulness of PPAs (Power Purchase Agreements), highlighting that a system with increasing renewable energy requires flexibility and firmness. She called for “a regulatory framework that allows the value of existing flexibility resources in demand to be realized.” Losada also reflected on the importance of the Draghi Report, calling for “an industrial strategy that allows Europe to position itself in the two major technological revolutions of our time: the digital and energy transitions.” For Silvia Escudero, the Electro-intensive Statute is currently generating significant interest in PPA contracts, “allowing the industry to manage its risk,” and commented that “from Statkraft, we offer long-term coverage and are even starting to assess tailor-made coverage that leverages the industry’s flexibility to modulate consumption.”

Challenges of the New Regulator

The third and final panel of the Forum, Challenges of the New Regulator, brought together Marina Serrano, President of aelēc; Joan Batalla, President of Sedigas; and Diego Rodríguez, Professor at the Complutense University of Madrid, moderated by Fernando Soto, former Director General of AEGE, to discuss the role of the new regulator.

Marina Serrano expressed confidence that “the new CNE (National Commission on Markets and Competition) will have the necessary resources and personnel, as well as the internal flexibility to adapt to the changing environment of the energy transition process,” and emphasized the importance of “ensuring that competitive prices from renewable energy sources reach consumers.”

Joan Batalla highlighted that “it is essential for the future regulatory body to play a clear and solid role in promoting sustainability and competitiveness in Spain’s energy sector,” stressing the importance of “functional, financial, and management autonomy to make decisions professionally, independently, and autonomously to address current and future challenges.” According to Sedigas’ president, this requires the CNE to “guarantee transparent and balanced rules that promote innovation, efficiency, and free competition, ensuring market progress and consumer protection. Only then can we achieve the social well-being and sustainable development goals demanded by the current energy context.”

Diego Rodríguez concluded the debate by stressing that “the independent regulator often receives new mandates and functions without the necessary human resources to carry them out.” He noted that “the extraordinary difficulty associated with designing, processing, and overseeing the wide range of measures needed to advance decarbonization when the regulator faces significant human resource constraints and, most importantly, challenges in retaining talent.”

The Secretary of State for Industry, Rebeca Torró, closed the AEGE Energy Forum 2024. “Among all the projects already resolved under the first line of the Decarbonization PERTE, I would like to highlight that we have 27 files from electro-intensive companies, which will receive €217 million. Moreover, 10 companies that are part of AEGE have already obtained €75 million in subsidies,” said the Secretary of State during her speech.

“In recent years,” Rebeca Torró emphasized, “we have allocated €900 million for compensation for CO2 emission costs. We went from €6 million in 2018 to €244 million in 2022 and 2023. Moreover, as you know, this past year we made a bigger effort and expanded this new compensation aid call to €300 million. And we know that the effort must continue to grow.”

The Secretary of State for Industry concluded with a message: “We want our industries to be more competitive by reducing indirect emission costs while advancing toward decarbonization.”