The blackout on April 28 did not come free, and consumers will bear the financial burden. Iberdrola has confirmed that costs incurred due to the “reinforced mode” implemented after the massive blackout are now reflected in bills. Other electricity companies are likely to follow suit.
What Happened?
According to The World, the impact of the blackout on consumer bills had previously been mitigated by CNMC intervention, which prevented electricity providers from altering prices for customers on fixed-rate contracts. FACUA also emphasized that rates cannot increase without explicit contract stipulations. As more than six months have passed since the blackout, many contracts in the free market have been renewed, allowing Iberdrola to introduce clauses enabling them to pass the incurred costs onto consumers.
Understanding the Reinforced Mode
Following the blackout, the so-called “reinforced mode” was activated. This adjustment involves significant market intervention by incorporating more conventional energy sources—gas, hydroelectric, and nuclear—while limiting the entry of renewable energy. This strategy aims to minimize voltage failures. However, conventional energy sources are inherently more expensive and require additional services for network stabilization. What began as a temporary measure has become a long-term norm that has persisted for over six months.
The Cost Implications
This adjustment has resulted in costs amounting to 210 million euros, spanning from the date of the blackout to September, with Spain responsible for 180 million euros of this total. Iberdrola has pointed out that the operational changes made by Red Eléctrica have negatively impacted their financial results, leading them to forecast transferring 70% of this incurred expense onto customers by the end of the year.
Beyond Iberdrola
There’s nothing stopping other electricity providers from mirroring Iberdrola’s approach. According to El Mundo, the total expense associated with the reinforced mode over the past six months has reached an astounding 731 million euros, and there are indications this measure will remain in effect longer, escalating the financial burden. The CNMC insists that any changes in contract prices must be communicated with complete transparency.
Money Transfer between Pocket and Pocket
The Iberian Peninsula is home to five nuclear power plants, 1,300 hydroelectric plants, and approximately 200 gas plants. These conventional, non-renewable energy sources have ramped up their output due to the activation of the reinforced mode, resulting in increased revenues. It is noteworthy that these facilities predominantly belong to private firms such as Iberdrola, Naturgy, and Endesa, which are ultimately responsible for driving up electricity prices.
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In Xataka | Five months later, we continue to discover things about the blackout in Spain. And the news is getting worse for Europe.