Bogas (Endesa): “We are not considering any judicial action against Iberdrola by Villarejo”

José Bogas, CEO of Endesa, takes benefit of the newest fringes of the COP25 to take inventory of how the power transition will have an effect on his firm, in addition to present affairs, such because the alleged espionage of the ex-commissioner Villarejo to his firm.

They’ve introduced 2,800 MW of funding in renewables. Are they going to extend that objective?

We now have a portfolio of 16,100 MW tasks, of which 4,600 MW are already related, which ensures that they are often accomplished and represents a determine larger than that introduced for 2022. That’s, extra might be accomplished. Our intention is sooner or later, past 2022, to extend the quantity of funding.

Will that imply reducing the 'once morepay out'from that 12 months?

No, as a result of what we have now stated is that we put it at 70%, which is the typical of what the sector has – between 65% and 75% – and we proceed to present yield 5.2%. We now have no intention of modifying that pay out.

“Nuclear energy crops do not emit CO2, handle to decrease the worth and supply safety of provide”

Do you’re taking nuclear crops useless for good?

That is if we take the grandmother for useless. Properly, when the grandmother dies, we are going to take her for useless. What we have now at all times maintained is that we have now a superb Nationwide Vitality and Local weather Plan (PNIEC), however that’s based mostly on a sequence of hypotheses of innovation and technological improvement. In the event that they are met and the evolution of the demand is as anticipated, they are going to be closed on the agreed dates. In any other case, it should be adjusted. It appears that evidently adjusting to shut earlier than will not be capable of be after which closing them at the most effective. The essential factor for me is that nuclear energy crops do not emit CO2, handle to decrease the worth and supply safety of provide, so for me it’s not a drama that its closure is delayed. Though, if the plan is 100% fulfilled, they are going to be closed inside the dates established within the agreements.

The USA has already prolonged the primary to 80 years. The European Fee is defending nuclear and in Spain it ensures that they are effectively maintained.

There’s a nice debate about nuclear, which has to do with waste remedy and the technological resolution that exists in the present day – which is deep geological storage – it appears to be efficient however we have now not had experiences on the planet to know if it may have or no penalties or the way it can have an effect on. There are those that suppose that within the face of those doubts, if doable, we should dispense with nuclear power. If we do with out them with renewables and storage programs that can provide firmness, CO2 will not be emitted, we could have safety of provide and costs will not be raised, due to this fact, it may be an answer. One other problem is that we do not have storage or renewables do not simply attain aggressive costs.

In Teruel we are going to substitute 1,200 MW with about 1,700 MW of renewable power

With the compensation that the CNMC has marked, will or not it’s invested in networks?

It’s important to make an important funding. There was speak of virtually 40,000 million between transport and distribution in ten years. I don't need to say it's late, as a result of there’s time to do issues, however you must act instantly. That stated, the degrees of funding include introducing flexibility and autonomy to the community that are laid out in plenty of digital funding. For 2019-2022 we are going to make investments 2,000 million in our community, of which 1,100 million are digital. It’s a good quantity and the priority I had with the primary draft of the CNMC is that it’d not acknowledge a few of these investments. At present I believe that’s clear and the bases and foundations are being laid to make investments within the community that facilitate the transition.

What is going to occur to your coal crops?

We now have requested the closure of two crops: these of Compostilla and Teruel. And we have now introduced the discontinuity within the operation of the Puentes and Litoral crops. The distinction is that within the discontinued ones we have now not but requested the closure. That stated, we have now some action plans designed for the crops by which we have now introduced the closure. In Teruel we are going to interchange the 1,200 MW with about 1,700 MW of renewables, which is greater than the ability we shut. In Compostilla, we are going to shut 1,100 MW, however the climate situations are not nearly as good as these in Andorra de Teruel and we solely plan to put in 400 MW. These investments are a part of what we name the transition plan of the plant, which matches first by the efficient seek for employment. In Teruel it’s achieved with renewables, however within the case of Compostilla, then again, it’s not and we are going to ask a second query: coaching for the employability of the individuals, the evaluation and assist to the municipalities that cease receiving quantities essential taxes and a contest of concepts that seeks to seek out different makes use of for the placement of the plant. Compostilla has land with entry to the electrical energy grid, to water and near gasoline, which makes it a land of nice worth from an industrial standpoint.

“We now have moved from costs of 5 euros per ton of CO2 in 2017 to round 25 euros between 2018 and 2019”

What can or not it’s used for?

For a lot of issues. The concepts contest will probably be managed by the College of León. There will probably be a jury with Ciuden to resolve which are the viable concepts. The deadline to obtain the proposals extends till subsequent January 31. We now have despatched info to greater than 200 entities, to 17 Chambers of Commerce overseas, in addition to to the American and Chinese language Embassy in order that they will announce to traders within the corresponding nations the potential for coming right here. We have already got the primary proposals, starting from agricultural or battery recycling tasks, however we can’t give a lot info both, as a result of it’s confidential. Then, for 2 months we are going to attempt to choose the options after which we are going to handle their implementation and situations.

What concerning the discontinued crops? Is it a definitive closure? The accounting provision is already made.

The closure is when the closure happens. Earlier than you must request it and for this you must persuade your self.

What can change?

We imagine {that a} sequence of results have occurred and market dynamics have made these crops speed up their doable closure. We had deliberate, and so it was within the Vitality Plan, the closure within the second a part of the following decade, between 2025 and 2030. In truth, in 2025 there have been about 4,500 MW and about 1,300 MW that might have reached 2030.

“The ministry asks us that if our determination is to shut, that we make a simply transition”

What has occurred?

We now have moved from costs of 5 euros per ton of CO2 in 2017 to round 25 euros between 2018 and 2019. The value of coal has remained secure and gasoline has collapsed because of the bubble that has been generated, on account of the surplus of Provide and falling demand. This has led to a change within the final 12 months of 20 euros of distinction from one coal energy plant to a different gasoline plant and makes these crops are not working, which leads us to see that it now not has an answer as a coal energy plant and that We should make the closing determination, however first we wished to speak with the brokers concerned and see what prospects may exist in these crops, starting from co-combustion to biomass or the event of renewables. We need to contain the central and regional governments to see the issue and the options earlier than making the choice to request the closure.

Is there a particular date?

There isn’t a particular date to make the choice, but it surely can’t be prolonged a lot. In truth, in our strategic plan the cut-off date is June 2022. If we bear in mind that the processing of a closure takes between one 12 months and 18 months, then we have now to do it now.

Has the ministry requested you to think about an possibility?

The ministry asks us that if our determination is to shut, we make a simply transition. That’s, we search for parts that may mitigate the social and financial affect within the space. Within the case of Galicia, though we have now not requested the closure but, what we have now realized is that proper now, with the crops beneath development, there may very well be an issue of lack of biomass, if that have been the choice. Co-combustion may very well be accomplished however, from my standpoint, it’s not assured that it may be viable both technically or environmentally, however we are nonetheless testing. Mud can be burned with coal, however we are going to see the chances of doing this, since on the finish of a 12 months and a half in approving the closure we have now that point to check the chances.

“We now have been negotiating the collective settlement with the unions for greater than two years and we have now not been capable of strategy rather more”

How is the negotiation of the collective settlement with the employees going? Can an settlement be reached after two years of negotiations?

We now have been negotiating for greater than two years and we have now not been capable of get a lot nearer to the positions we had each two years in the past. Confronted with this case, a truth occurred and that’s that when the interval of ultraactivity ended, the situations have been contractualized and in our opinion these individuals who are now not within the firm, as a result of they are retired, misplaced their situations. The one who’s pre-retired, as he nonetheless has a contract with the corporate, does not lose them. As soon as that is accomplished, we approve an extension of six months, then one other of three extra and we are nonetheless in extension, with the thought of ​​negotiating. The unions, and it appears to me appropriate, put an attraction within the Nationwide Courtroom, which gave us the explanation and at this second the logical factor is that the Supreme Courtroom ratify the choice of the Nationwide Courtroom. Earlier than this occurs, though I believe it’s by no means good for labor agreements to be prosecuted, we settle for the unions' proposal to hunt a way of mediation, of arbitration. I believe there’s rather more profit in an fairness arbitration, so to talk, as a result of if it have been by authorized means the corporate would win it, however it could not be good for everybody both and that’s we determined to go forward. There isn’t a unanimity within the unions. There was a union, the bulk, which has taken a step ahead and I suppose that now and again it has its doubts, as I do, however I believe it’s good for the corporate. There have been different unions that did not discover it acceptable, for numerous very respectable causes, to go to this arbitration. As soon as the arbitration arrives, the duty we have now imposed is to respect it. Because of this we might have an award, which might lead us to an settlement.

Does this mandate seem because the final?

I'm nonetheless excited to work on this nice firm and on this nice group that’s Enel. He is almost all shareholder and has the capability to resolve, however I need to proceed.

We now have raised no judicial action for the alleged listening of Villarejo

What do you concentrate on the alleged espionage of Villarejo to Endesa?

All the knowledge I’ve is from the media. I’ve no different info. With out doubting what the media say, there’s a judicial course of to know whether it is true or not and what diploma of truthfulness there’s or is not in these statements. I don't know if it was, if it have been true, if it was a call of an organization individual or a company determination, I don't know both. In any case, I'm sorry. I remorse that these instances happen. I remorse that it impacts on this essential means, as a result of I believe it has an impact on the picture of corporations. I remorse that it impacts the picture of an incredible Spanish firm, within the case of the electrical energy sector, I’m sorry and I hope and need that issues will probably be clarified as quickly as doable and my need is that or not it’s clarified within the sense that there’s nothing.

Are there any judicial measures in your half?

After these needs I’ve expressed, no, we have now not raised any judicial measures.

Do you see a 3rd election?

They are prophecies however I believe there are no third elections and an settlement will probably be reached. I believe that within the temper of all political events is the big punishment they might obtain if we have now to go to vote for the third time. I believe there will probably be authorities.

“To date we have now not purchased issues for a worth that we are not capable of get better acquiring worth”

Do you contemplate purchases such because the Zero-e mission portfolio, the ACS renewable affiliate?

Our strategic plan does not embody purchases. It’s all natural however we are open and we imagine that the stability is powerful if we discover a possibility to undertake this kind of funding.

The investments have to satisfy two traits: that match our enterprise mannequin and that we will get hold of worth of the belongings. An instance is EDP's hydraulic belongings that made excellent sense to us. We valued an inexpensive worth, which allowed us to extract worth, they usually invited us to retire as a result of there have been larger presents. To date we have now not made any mistake within the sense of shopping for issues for a worth that we are not capable of get better acquiring worth and that’s what we are going to proceed to do. Any alternative we analyze it from this attitude.

With respect to what’s renewable, we imagine that we are higher with the portfolio than with the central one in operation for which many funds are leveraged, which ask for a low mission profitability and against that it’s troublesome to compete. We do higher when shopping for supplies. If there’s somebody who sells belongings in operation and portfolio of tasks, I should purchase the portfolio. If I’ve to purchase the lively crops I’ll do it however I’m not aggressive and others will supply a greater worth.

And in networks are they ? If Viesgo goes on sale subsequent 12 months would they have an interest?

It will even be fascinating as a result of it has strategic match, as does the distribution in Portugal however I’m a kind of who imagine that each in renewable and in distribution, as in different issues many alternatives will happen.

Do you see a bubble?

I believe there’s a worth bubble that’s going to fall and you must await alternatives.

Have you considered promoting your pure gasoline contracts like Iberdrola?

Iberdrola, from what I learn within the press, offered its portfolio with capital beneficial properties of 100 or 200 million. This 12 months we are going to get 250 million margin. Properly, with out figuring out the numbers, everybody makes their very own, with the portfolio we are attaining good outcomes. A number of years in the past greater than 300 million and now much less because of market circumstances.

The way in which the way it has advanced?

This 12 months 2020 we could have 6 bcm of which three will probably be listed to Brent and one other three Bcm to the Henry Hub. Our portfolio has a price between each of about 20 euros. It is vitally aggressive. If somebody goes to purchase gasoline listed to Brent in the present day in a 10-year or 5-year contract they are not capable of purchase it for lower than 25 or 26 euros and if you happen to are going to purchase Henry Hub you are not capable of do it for lower than 22 euros. Then it implies that the Henry hub is cheaper than Brent and each are dearer than the pockets we have now. In that sense we are calm. When the autumn of gasoline happens, what occurs is that within the spot market you pay 15 or 17 euros and you must be on high and handle it. If with this extra of gasoline within the system we have now been capable of get hold of an inexpensive consequence, what we imagine is that this case might final some 12 months but it surely can’t worsen however for the higher and due to this fact we do not intend to promote.

“It is vitally complicated to ask for the closure of mixed cycles and really troublesome to outlive with out capability funds”

Are they going to think about hibernating mixed gasoline cycles?

All of it depends upon the protection index and that may be a delicate factor. Proper now it may be 30%, that’s, the accessible energy is above the height energy by 30%. REE applies the rule of a minimal reserve of 10%. With the nationwide coal closures and if the worldwide coal closures happen we might be at 10% and it will occur in 2022, 2023, then we might be particularly reasonable and the mixed cycles may not be closed.

Do you must endure then these years of crossing within the desert?

In fact, and what occurs is that the mixed cycle will play a supporting function simply because yearly they’ll have gotten extra renewable and though by 2025 it’s going to take extra hours, it will likely be capable of attain 2,000 hours – of the 5,000 hours for which they have been designed – from 2025 they’ll go down till the closing of the nuclear ones that may rise one other little till the 1,000 hours. It is vitally complicated to ask for the closing of mixed cycles and really troublesome to outlive with out capability funds so it will likely be a debate that may open for certain.

Is it truthful that some can promote electrical energy contracts at gasoline stations and that others can’t do it door to door?

Because the product is identical for everybody, the essential factor is the service, a good worth that permits profitability of the exercise and the shopper to be happy after which you must be a part of it with house management providers. The fundamental thought is not a lot to develop, as a result of I’m already the chief, as to create worth within the buyer base.

Are they going to launch monetary providers?

Not but, however it’s another with a excessive chance.