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Julián Barquín, Regulatory expert at Endesa (centre of the image), at today's round-table discussion at the COP25
Electrification of all possible activities is key to reducing emissions, essential to comply with the Paris Agreements. Of course, this is based on generating electricity with renewable sources, both in the future and increasingly in the present. In fact, electrification is known to be a key aspect of climate action.
This was discussed today at the COP25 and from different perspectives at a session organised by the Association of Electric Power Companies (AELÉC), of which Endesa is a member together with other companies in the sector.
It is worth mentioning the remarks of Endesa’s regulatory expert Julián Barquín who said that “to start with, electrification means wanting to replace the energy being used with another type. And in this regard, numerous things and principles and the ways that things have traditionally been done must also change, not just the energy, .
Making this change efficiently, “will mean that prices will have to reflect all costs, based on those same principles. Electricity users will pay for the energy they use, the cost of the networks, as well as energy policy costs and VAT, other taxes, etc.”.
In the case of other mobility products like petrol and diesel, “the consumer pays, on the one hand, the price of the fuel, which includes other costs, such as refineries, transportation, etc. and as well as that, the special hydrocarbon tax. That’s the way it’s done. And natural gas is subject to other taxes. The disparity in actions and the tax logic are not sustainable”. This will no longer function, “because we want to replace some things with others. Therefore, the principles and levels must be given the same tax treatment. This means changes not only at the fiscal level, but also in its structure”.
In his initial approach, Barquin said that “the result is that the tax burden of electricity will have to change. Financially, it would be progressive. Studies say that electricity prices and tax income from petrol and diesel will tend to favour riskier profiles”.