Javier Bustos: We believe that electricity costs can be allocated more efficiently

This is an automated translation of the original release published in Spanish

PRESS RELEASE from Acenor
August 9, 2023

“We find ourselves in a rather complicated supply cost situation, as new charges for customers have been added over time and this has led us to higher total supply cost levels than we had before the SIC SING interconnection,” the executive director of the Association of Electricity Clients (ACENOR AG), Javier Bustos, stated off by saying in the Hágase La Luz program, hosted by Daniela González and Danilo Zurita.

The big problem that we see, explained Javier Bustos, is that the conceptual design after which the transmission payment was transferred 100% to the customer was to lower the risk of the generation market, but what we have seen is that, more than risk management, it has been a risk transfer that has meant more costs and the current energy transition bill is very similar to this, because all costs are paid 100% by the customer.

Faced with the storage tender that is included in the aforementioned bill, the representative of the free customers stated that this initiative values batteries as if they were a transmission asset, when in fact they are not. "Their operation is clearly for the spot market, as an asset of the wholesale market and customers cannot access that market. The cost risk here would be passed on to the customer and we don't know how much it's going to cost. We have seen that this type of infrastructure in other countries is over US$2.5 billion.”

We propose, said Bustos, that the direct beneficiaries pay for the cost of using these services, because in this way the generator that agreed to have this storage infrastructure, when offering a contract, will compete with another generator that did not need the battery and in this competition, the most efficient is the one that will keep the contract and thus the efficient cost of the battery would be transmitted to the customer.

Regarding the reassignment of tariff income, also included in the legal initiative, Javier Bustos said that he sees a problem in the design: if the reassignment of tariff income and other types of measures are allowed to eliminate the little that there are of location signals, we run the risk of risk that the next 20-30GW of renewable capacity will continue to be installed in the most congested areas.

“We believe that costs can be allocated more efficiently. The legal proposals are designed to solve specific generation or transmission problems, but the focus of what this is done for, who is impacted by this, is lost. If we don't add efficiency criteria, it's difficult for us to see a price trajectory that is sustainable,” Bustos stressed.

The fair energy transition, as we understand it, is when costs and benefits are balanced among all and not only where costs are borne only by customers, concluded the representative of electricity users.