The National Markets and Competition Commission (CNMC) predicts that the weak recovery in electricity consumption recorded this year will slow down in 2025, at a time of concern in the sector due to the announced extension of the business tax energy, and where there is concern about the slow pace of the electrification process of the Spanish economy, which is essential to make the deployment of renewable energies viable.
The competition seems to exclude in its analyzes that this electrification will be accelerated next year. The organization expects demand to increase by 1.3% by 2025, “a value lower than that expected for the end of 2024”, for which it forecasts an increase of 1.5%. The estimates appear in the supporting report for the proposed resolution which establishes the values of access tolls to the electricity transport and distribution networks for the year 2025. The project is open for public consultation until this Friday .
It remains to be seen whether the CNMC’s predictions will ultimately come true. A year ago, when consumption was heading towards a decline to its lowest level in the last 20 years, Competition predicted a further drop of 0.1% for 2024, which ultimately did not happen. Until October, demand in Spain reached 205,703 gigawatt hours (GWh), or 1.5% more once the effects of work and temperatures are taken into account, according to data from Red Eléctrica de España (REE).
Last year, demand fell by 2.3% compared to 2022 (1.9%, once corrected for calendar and temperature effects), to 244,665 GWh, according to the electricity system manager. To find a lower level, we must go back to 237,329 GWh in 2003, a drop linked to the penetration of self-consumption, lower industrial demand, greater efficiency or the weather.
In its forecasts for 2024 and 2025, the CNMC took into account the estimates of the system manager and distributors as well as the economic expectations for the year 2025 of institutions such as the European Commission, the Bank of Spain, Funcas and the government itself. In the case of the European Commission, the CNMC estimated a Spanish GDP growth forecast of 1.9% in 2025, a figure that Brussels corrected upwards to 2.3% on November 15.
For 2025, Red Eléctrica’s “central scenario”, according to the CNMC report, is that of an increase in demand of 245,858 GWh, 1.3% higher than that expected for the end of the 2024 financial year, with increases in all subsystems except the Canary Islands. .
For their part, distributors anticipate an increase of 1.01%, a consequence of the increase in consumption in the Peninsular and Balearic subsystems (1%), the Canary Islands (1.4%) and Ceuta (4, 2%), and the stability of Mélilla.
In the draft toll decree, the CNMC proposes to remunerate REE for the Transport activity through electric tolls (the regulated part of the bill which pays the networks) with 1,216.5 million in 2025, with an increase of 2 .11% compared to 1,191.3 million in 2024. , although well below the 1.495 million it reached in 2021. For its On the other hand, for distribution, the organization proposes remuneration of 5,826.3 million next year, up 3.5% compared to 2024.
34% increase
That the demand for electricity increases in the years to come is crucial to make viable the renewable energy penetration objectives included in the National Integrated Energy and Climate Plan (PNIEC), which foresees that clean energies represent 81% of the electricity mix in 2030.
The latest revision of this long-term energy plan, sent by the Government to Brussels last September, expects an increase in electricity demand of 34% over the period between 2019 and 2030. This increase would be partly supported by the take-off of the electric car, in which Spain is currently at the forefront of Europe.
Excluding green hydrogen production, the plan envisages demand increasing from 252 terawatt hours (TWh) in 2023 to 365 TWh in 2030, with the addition of 84 new gigawatts of renewable energy (mainly solar and wind) and storage between 2023 and 2030. The plan envisions demand for transportation electrification quadrupling over those years, as Industrial demand increased by 48% and residential increased by 5%.
To make this multimillion-dollar deployment of renewable energy and storage viable, power companies require, on the one hand, regulatory stability, given the possibility of extending the energy company tax, continued to the agreement reached this Thursday by the PSOE and Podemos to move forward. . tax reform in another agonizing negotiation; and, on the other hand, a significant improvement in network remuneration.
For demand to take off, electricity companies are also relying on the promising sector of data centers, for which Spain has excellent conditions thanks to the abundance of sunshine and the availability of land, in a deployment for which the PNIEC recommends caution and imposes it. committed to doing things in a “sustainable” way.
The companies assure that revenues from new demand will more than offset the increased costs associated with network development. This same week, a day after the PSOE agreed to recover the rate on energy companies in a royal decree-law to save its tax reform, Endesa announced a 45% increase in investments in the electricity network in its strategic plan 2025-2027 with regard to the previous 2024-2026 plan, to the tune of 4 billion, although “pending improvements and updates to the regulations”, and to meet the objectives “ambitious” electrification of the PNIEC.
The electricity company’s top executives on Tuesday regretted the “uncertainty” surrounding the tax on the sector and said it was “impossible” to extend it, due to uncertain parliamentary support for the move. “This is not the time to raise taxes, but to invest,” Endesa CEO José Bogas said after announcing the largest investments since the sale of the company’s Latin American operations to its Italian owner, Enel, in 2014.
The CNMC plans to prepare in the coming months a key circular for the sector, the new transport and distribution remuneration methodology for the period 2026-2031, which should be approved in October 2025 by this body or by the National Commission of energy (. CNE) which the Government has promised to relaunch.
A few weeks ago, the Ministry of Ecological Transition published unusual “guidelines” on the calculation of the profitability of these installations, in a matter which falls exclusively under Competition, with very precise guidelines on how the formula that determines the return on these investments must be calculated. This is an unprecedented move since the ministry transferred these functions to the organization in 2019 and amounts to a Veiled pressure maneuver by the Government on the CNMC.
The employers’ association Aelec, to which Endesa, Iberdrola and EdP belong, defends that additional investments to meet the expected growth in demand “are not a cost”, because “this new demand pays its corresponding tolls”, and those -these are between five and ten times higher than the cost that this new network represents for the tariff, “including an increase in the financial remuneration rate in a range of 7.5% to 8%”.
These figures would be close to the levels of Italy, Norway or Greece, with financial remuneration rates of 8.9%, 8.2% or 6.7% respectively, well above what, according to the companies, the CNMC, around 6.5%.
According to Aelec, a rate of 7.5% would result in additional costs for the system of around 700 million euros per year, or “around 1.7% of the total cost”. Endesa executives said last Tuesday that they would be “comfortable” with a rate of 7.5% and assured that they could “increase” projected investments for coming years if there was “visibility” on the regulations.
In its guidelines to the CNMC, the ministry did not mention what profitability should be applied, but asked the body to “take into account not only the objectives set for Spain, but also the context of competition at the level European and international for the financial sector”. resources and investments in the energy transition, with a driving effect due to its capacity to enable new investments in renewable energies, decarbonization or industrialization.
The decree signed by the current Minister Teresa Ribera goes into detail and says that in the design of this formula, the CNMC “will examine the possibility of modifying the methodology for calculating the risk-free profitability, as well as the methodology for calculating the cost of debt, above all. The objective is “to mitigate the effect of past exceptional events (2018-2023) on the determination of risk-free profitability and the cost of debt during the future regulatory period (2026-2031)”.
