Profiting from the Heatwave

  A Spanish power company drained two reservoirs during a heatwave and drought in order to profit from exceptionally high electricity prices.

Both reservoirs are now a desert, according to Javier Aguado, the mayor of San Cebrián de Castro. In another, San Pedro de la Nave-Almendra, the water level is so low the pumps that extract drinking water have become clogged with mud and the filters have to be cleaned twice a day.

Iberdrola, the country’s second-biggest producer, drained the dams in Zamora and Cáceres provinces in western Spain over a period of a few weeks to produce cheap hydroelectricity while the price to consumers is at a record high.

Electricity prices in Spain are fixed on a daily basis through what is effectively an auction as power generators bid for their slice of the market based on expected demand. A base price is set by the cost of nuclear power and renewables such as wind and solar because they are the cheapest, and then the rest – hydro and fossil fuel generators – make their bid. The net effect is that the higher the demand, the higher the price, with fluctuations making it almost impossible for consumers to budget for their electricity bills.

 Spain remains in the grip of a heatwave and recorded its highest ever temperature on Saturday, 47.2C (117F), in Córdoba in Andalucía. Air conditioners and fans are running flat out. With the heatwave expected to continue for several more days, most of the country faces temperatures ranging from 30 to 44 degrees.

The minister for ecological transition, Teresa Ribera, described Iberdrola’s actions as scandalous and said, “Water is a scarce resource which is just as important for the wellbeing of families and the economy as it is for generating electricity.” Ribera said Iberdrola’s actions as irresponsible, but that they were not illegal because the company was allowed to use a fixed quantity of water a year whenever it wished and regardless of climatic conditions.

Spain launches inquiry after dams drained for profit during drought | Spain | The Guardian