Spain contacts energy companies as profit clawback roils sector

by 24britishtvOct. 7, 2021, 11:40 a.m. 17
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High-voltage power lines and an electricity pylon are pictured at dusk outside Madrid, Spain, September 29, 2021. REUTERS/Susana Vera

MADRID, Oct 7 (Reuters) - Spain's government has started a round of talks with power companies as part of efforts to manage record-high market prices, it said on Thursday, after a report that a minister would meet the country's biggest utilities sent shares soaring.

News of the talks comes almost a month after Madrid passed emergency measures to claw back profits from power companies deemed to have profited from historically high global gas prices. read more

Cinco Dias newspaper reported earlier on Thursday that Energy Minister Teresa Ribera had summoned the CEOs of Iberdrola (IBE.MC), Endesa (ELE.MC) and Naturgy (NTGY.MC) for a round of meetings, citing unidentified political sources.

Shares in Iberdrola (IBE.MC) and Endesa (ELE.MC) rose as much as 6.2% and 4.3% respectively, rebounding from slumps of around 14% since the measures were passed, and stayed higher throughout the morning session.

A spokesperson for Endesa confirmed CEO Jose Bogas was called by the minister for meetings. A Naturgy spokesperson said its CEO did not have a meeting scheduled this week and Iberdrola declined to comment.

Asked about the report, the Energy and Environment Ministry said in an emailed statement:

"The government is working to overcome an extraordinary situation, and has started a round of contacts with the industry, with consumers and also the utilities."

Ribera told Reuters this week Spain would forget about national measures if the European Union took action to reform energy markets. Her ministry repeated on Thursday that Spain would prefer Europe-wide to national solutions to the crisis. read more

Spain has been among the most vocal member states in a growing call that has pushed the issue up the agenda in Brussels, where the European Commission is also seeking to address climate change. read more

Brokerage Alantra welcomed the possibility of softening the measures to limit utilities' profits, but warned that the government might look for new measures which "could end up being even more negative for the sector than the gas clawback".

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