Spanish Energy Oligopoly as the new market capitalist structure
As we can see, the year 2008 not only occurred a great decrease in photovoltaic facilities due to the economic crisis and the fall of the real estate sector, which were undoubtedly an important factor, but the passage of the 2007 regulation to that of2008 reduced the profitability of the solar facilities of electric production, promoting a self-consumption industry, which relegated large solar plants to the background.
The subsequent fall of the sector affected the companies that were forced to adapt to the new economic reality they faced, having in many cases that displace their activity to more profitable regions that presented a better business opportunity. This displacement of opportunities has favored large national electricity companies, which thanks to their economic size and weight, were able to transfer their business lines to other markets, which favors the appearance of oligopolies that take a large part of the supply of projects.
The orientation towards self-consumption in the national market has limited the appearance of large solar fields that, although there are not the main route of development of photovoltaic solar energy in Spain. self-consumption, although it may benefit very much limits the appearance of great projects. This aspect of self-consumption has been reinforced with the present legislation.
The big risks associated with investments in solar fields derive from changing legislation, which prevents long -term planning and does not offer guarantees, therefore Spain even a favorable country for this industry presents great limitations for the development of the same.
Oligopolies
As we have seen, the Spanish trajectory in renewable energy has led to a market dominated by large companies. The vacuum in the market left in 2008 for the solar energy crisis has been a unique opportunity for large Spanish energy companies to have been established as the main promoters of large projects of solar fields. The exploitation of this market niche has fallen at the end in a small group of companies, an oligopoly, dedicated to energy production, in which its customers are the entire population, all households, companies and industries in the country,Captive consumers who cannot stop using electricity to meet a primary need. The large business volume and fund arrangement have allowed these business groups to develop renewable energy divisions.
The privileges of oligopolies are based on collusion with political power. These companies obtain a favorable regulation to their interests, generally to the detriment of the interests of consumers, thanks to the influences of some members of their administration councils belonging to large lobbies or companies that are dedicated to influence with their members.Politics for their own benefit.
The practice known as ‘rotating doors’, allows you to put the contacts and privileged information of political positions at the service of oligopoly. Many political parties use it when their senior leaders leave active politics.
The basic structure of its operation has that the prices established for the product are higher than marginal production costs, which distorts the price by moving it from competitive markets. The oligopoly prefers to work, as a market, distributing parts of the global demand. Establishing these subdemandas get competitors not to compete and in reality what it manages to form a mini monopoly in their subdemanda. Oligopolys do not usually establish price wars. They prefer to reach agreements that, in very few cases, make competitive organisms to detect and denounce.
In this way, the consensus on prices and the distribution of market fees ensure that oligopoly becomes the new market capitalist structure. Its different forms of existence allow you to adapt to any legislation and their high business power allows them to access patents, brands and innovation that small business structures cannot even dream.
Now we will focus on making a brief count of the largest companies dedicated to this sector.
- ACCIONA, s.A.: This is a Spanish promotion and management of renewable infrastructure and energies. It is a large multinational with presence in more than 65 countries, in which it has carried out large projects in which it has developed energy generation plants with great weight of renewable energy, in particular solar energy. With a business figure of 3.€ 430 million, € 289 million from Ebitda, more than 11.000 people employed and 6.€ 506 million in project portfolio, is one of the leading companies in the clean energy sector. ACCIONA has a great experience in the construction and development of photovoltaic solar plants with facilities that generate more than 1.000 MW for itself and for customers. These include Puerto Libertad (405 MWP), one of the largest in Latin America, in Mexico;The Solar Romero (246 MWP), in Chile. This energy giant has seen a constant development over the last decades establishing itself as one of the dominant companies in the sector, only the company’s energy sector billed 2206 million euros in the last year obtaining an EBITDA of 743 million euros. In this period the gross result of international generation grew by an 8.5% fruit of the new production capabilities of the company the opening of new markets and an improvement in prices in which this division operates.
The development of the Latin American sector has meant a great source of income for the company where it has strong investments in Chile, where Acciona has built the largest photovoltaic plant in Latin America: solar rosemary, as well as strong projections in the Atacama desert and in Mexicowhere at the end of 2018 ACCIONA finished the construction and assembly of the solar energy generation plant, Puerto Libertad, where together with the Mexican company Tuto Energy they have established a plant with a power of 405 megawatts of power that has entered into service during 2019, this project one of the largest in Latin America, is one of the company’s largest projects to date
- Grupo Enel: This is one of the largest energy companies in Europe and the Americas, with energy generation plants of all active types in eleven countries, from Alberta in Canada to the central Andes, and supply energy to some of theLarger cities in South America: Rio de Janeiro, Bogotá, Buenos Aires, Santiago, Chile and Lima.
In Brazil, the Enel Group is one of the country’s main energy companies and is a leader in the renewable energy market. It generates energy of hydroelectric, thermoelectric, solar (the largest in the country) and is a leader in wind energy production. In fact, it is one of the most important companies in the transmission, distribution and sale of energy. In addition, it deals with solutions for electric mobility, intelligent lighting, energy efficiency and distributed generation.
As we can see from large national companies they have strong investments in Latin America, where they have developed profitable projects in which solar energy is one of the stars. The overturning of the great Spanish energy oligopolies to the Americas has meant a great advance for the generation of solar energy in this continent, leaving juicy benefits for companies that have managed to open a market there.
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