(Bloomberg) -- EDP-Energias de Portugal SA said any government intervention in Spain and Portugal to cap energy costs should be short-term and target natural gas prices.
“The current model works well and any intervention should be limited in time, it should be minimal,” the Portuguese utility's Chief Executive Officer Miguel Stilwell de Andrade said in an interview in London Wednesday.
Soaring European energy costs, worsened by the war in Ukraine, prompted Spanish Prime Minister Pedro Sanchez to promise a price limit on gas used to generate electricity. Spain and Portugal rely mostly on cheaper renewable energy, but power prices are determined by the most expensive generation technology -- which is currently gas.
Any cap should be “very much focused” on the fossil fuel, as acting on electricity prices would also have to address gas and result in two interventions, according to the CEO. The aim should be on helping customers most affected by rising costs without distorting prices, as this could lead to indirect subsidies for different parts of the market, he said.
Spain and Portugal have started working with the European Commission on their proposal to cap prices for natural gas used to generate electricity, the Spanish government said Thursday. Two weeks ago, the Portuguese government had said it was discussing an electricity price cap with neighboring Spain. The Iberian countries only have small gas and power interconnections with the rest of Europe.
The governments may present a proposal for affected companies to be consulted in the next two weeks, EDP's CEO said.
See also: European Gas Swings as Putin Unveils Terms for Ruble Payments
EDP operates gas-fired power plants in the Iberian peninsula and is also one of Europe's leading wind energy developers. It plans to invest 24 billion euros ($26 billion) in the 2021-2025 period as it continues adding projects, mostly in Europe and North America, and aims to double its solar and wind installed capacity to 25 gigawatts by 2025.
Bottlenecks
“One thing which is very clear from this energy crisis is that we need to accelerate the buildout of renewables,” Stilwell de Andrade said. “Europe has the objectives, it has the vision, but there are still a lot of bottlenecks in terms of licensing, permitting, interconnections.”
Stilwell de Andrade said there's no technological barriers and no lack of capital, with a lot of companies wanting to invest, and called for more resources in public administration to streamline the implementation of renewable projects.
Read more: Money Flows to Green-Energy Funds Amid Vows to Cut Russian Fuels
“In some countries it takes six, seven, eight years to develop a renewable project,” he said. “A best practice, in some places, is maybe two, three, four years.” The CEO mentioned France and Italy as examples of large countries with ambitious targets but where projects take a “very long time.”
“It's not just to double the rate of growth. We need to triple it or quadruple it over this decade.”
©2022 Bloomberg L.P.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
