Withdrawing the 7,000 million annual aid to historical renewables from the electricity tariff and distributing it among all energy sectors will have positive macroeconomic effects, such as increasing GDP by 0.05% -more than 600 million euros- or reducing the unemployment rate 0.51%, among other externalities, such that avoiding 132 million health costs or reducing carbon emissions by 3.1%.
This is pointed out by a report from the Basque Center for Climate Change (BC3) -the entity that calculated the economic impacts of the country’s Energy and Climate Plan to 2030- entitled Economic, social and environmental impact of alternative financing mechanisms for renewable energies in the electricity sector in Spain. It was presented during last february and had the financing and collaboration of Iberdrola.
The document analyzes three options to withdraw the premiums for renewables from the electricity tariff, an old aspiration of companies in the sector that the Government is materializing with a Draft law announced last week and currently in the public information phase.
The electricity company chaired by Ignacio Sánchez Galán and BC3 designed the alternative scenarios to withdraw the 7,000 million and the think tank Vasco carried out the subsequent technical analysis with its macroeconomic models for evaluating public policies.
The first of the three options analyzed is the transfer of the premiums to the General State Budget (PGE); the second is the distribution between final energy consumption, taking into account the proportion of oil, gas, coal and electricity, which is the one chosen by the Government; and the third is to finance them with a CO2 tax, as does the new German Renewables Law, which will enter into force on January 1.
The macroeconomic impacts are small in all scenarios – GDP rises between 0.05% and 0.17%, unemployment falls from 0.018% to 0.57%, and CO2 emissions from 1.3% to 14 , 8% -, but positive in all cases. They are more appreciated if the cost of the premiums is assumed by the PGE, because it is financed with all taxes and there is a greater redistribution of income.
The scenario chosen by the Executive, the distribution in the final consumption of energy among the different sources, the drop in the price of electricity -the Government calculates it at 13% for the domestic consumer- favors electricity production, while The rising cost of fossil fuels – the oil companies have calculated seven euro cents per liter of fuel – reduces their demand.
The environmental impact varies markedly from one scenario to another. In the case of PGE, CO2 emissions rise by 1.3%, because there is no sign of reducing fossil fuels, while in the distribution sector they fall by 3.1% and in the case of the surcharge on emissions of CO2 these decrease 14.8%; not in vain, BC3 considers this third to be the best option.
Better for the poorest
The report draws attention to the effect on the poorest and most vulnerable population, which allocates a greater proportion of their income to cover their energy needs: in the scenario of distribution by source, the poorest 20% improve their consumption capacity by 0 39%, while the richest 20% do so by 0.01%.
In addition, there are other positive impacts, such as the reduction in healthcare costs, due to the lower emissions of polluting gases (NOx, SO2 and particles), which are evaluated at 132 million in the distribution option and reach 277 million in the option chosen by Germany.
The Government lowers the light by 13% and raises the fuel with a ‘green cent’