In the middle of autumn and with winter on the horizon, the geopolitical situation once again places the price of energy at the center of the debate. While the Government has implemented some immediate relief measures, the gas sector reminds that the current crisis poses structural challenges, but also opportunities that Spain must not waste to advance in decarbonization and strengthen its energy autonomy.
QUESTION: The current situation dictates and I want to start by asking you about one of the most recent measures of the Government. Given the forecast of a significant increase in the bill due to the war in Iran, the Last Resort Tariff (TUR) has been limited. What do you think about this and what could be the impact on the market and on the citizens' pockets?
ANSWER: The decision to limit the Last Resort Tariff continues the measures adopted by the Government in recent months to mitigate the impacts of the war in the Middle East. It aims to protect the consumer in a situation like the current one, marked by market volatility and a rise in energy raw material prices in international markets. The October revision, which limits the growth of raw material costs to 35% during the current quarter and to 15% during the first quarter of 2027, does not equate to a subsidy or aid. It simply defers the payment by the consumer until a more favorable moment.
From the association, we understand the difficulty of the moment and the impact it may have on consumers. We believe that it is a measure of a merely circumstantial nature, which, however, has a structural impact by distorting free competition in the gas market.
It is a measure analogous to those already implemented in 2022 after the outbreak of the conflict in Ukraine. Of the approximately eight million gas customers, in the first half of that year, 6.5 million were in the free market and 1.5 million were covered by the Last Resort Tariff. Today, there are already more than three million customers on this tariff. Obviously, it makes perfect sense: it is an 'intervened' price because the current calculation methodology does not reflect the real cost of supply for marketers in Spain and, therefore, it has consolidated as a structural problem that will need a response sooner rather than later.
On the other hand, we miss a decisive support for the productive sectors, for the gas-intensive industry. The mentioned measure is focused on domestic consumers, but industrial consumers are severely affected by this price situation. Before the conflict began, gas was around 31 euros/MWh and today it is around 88 euros/MWh. Similar aid measures to those implemented in 2022 would have been timely, as well as the development of a specific framework for that gas-intensive industry.
"We miss a decisive support for the gas-intensive industrial sector"
P: We will talk about those structural issues, but I want us to focus on the gas tariff. Do you think there is some ignorance about the different ingredients that make up the bill? What are they and how should we read it?
R: It is a basic structure that has three components. The first, the smallest of all, are the access tolls, which cover the costs of the infrastructures: the transportation network, the distribution network, and the regasification plants. For example, for an industrial customer, it represents less than 1% of the final bill.
The second element is the cost of the raw material. In Spain, unfortunately, we do not have that indigenous resource since it was politically decided in May 2021 not to grant new titles for exploration, research, and exploitation of this resource in our subsoil.
And, finally, the tax burden, the special hydrocarbon tax and the value-added tax.
Those are the three main elements of the bill, although the most important, of course, are the cost of the raw material and the taxation.
P: We are already facing the first days of October, high prices are looming for this autumn and winter. What is the scenario that Sedigas is considering?
R: Earlier I mentioned the market price figure, in the spot market: at the moment it is around 90 euros/MWh. The futures markets do not discount a reduction in the price of gas until the end of the winter period and, according to their forecasts, we would not recover the price levels prior to the start of the conflict until 2029.
"The futures markets do not discount a reduction in the price of natural gas at least until the end of the winter period"
P: You were talking about structural issues. Are we facing a temporary episode of prices or do you think we should get used to a structurally more expensive and volatile gas?
R: In the last five years, we have gone through two energy crises: one resulting from Russia's invasion of Ukraine and another, the current conflict in the Persian Gulf. We live in an increasingly complex geopolitical environment, where the use of energy as a weapon of war is evident.
We must continue to work with a basic objective: to strengthen supply security, diversification of sources, and energy autonomy through a determined commitment to indigenous resources. In that sense, renewable gases offer Spain a unique opportunity.
P: What measures do you think can be adopted to help alleviate this increase?
R: In addition to the temporary limitation of the Last Resort Tariff that we mentioned earlier, there is room for maneuver in the tax burden that domestic consumers pay. For the gas-intensive industry, it would be necessary to enable direct aid to compensate for energy overcosts, along with financial support instruments that allow addressing possible liquidity tensions. The objective must be to preserve the industrial fabric and avoid that this situation translates into permanent losses of productive capacity or relocations, with structural consequences for economic activity and employment.
P: We have often mentioned in DEMÓCRATA that gas is also fundamental in the energy transition. How do you see the sector currently and where should it transition in a horizon of five, 10, or 15 years?
R: Natural gas in Spain, in Europe, and globally, is a crucial vector to respond to the thermal needs of the domestic customer, the industrial customer, but also for the security of electricity supply.
There is no need to go back to the blackout episode in Spain and the contribution of combined cycles, which were essential to restore service during the night of April 28 to 29. In a power generation market with an increasing penetration of renewable sources, it is important to remember that the flexibility and firmness that the system needs is being provided by natural gas.
Not to mention, this summer has provided a sample. During the months of July, August, and especially September, the demand for natural gas for combined cycles hit record figures. The combined cycles have been responsible for ensuring supply security in a summer of atypically high temperatures, in which there was a lower contribution from wind power and unscheduled outages of nuclear plants.
P: Gas infrastructures have a strategic value and Spain has a very good network. Could you explain to us why it is so important and what point we are at?
R: The Spanish gas system is recognized as one of the most resilient, modern, and diversified, one of the best prepared in the world. This is possible thanks to the nearly 100,000 kilometers that make up the transportation and distribution network.
In addition, Spain has 25% of the total regasification capacity that currently exists in Europe. Even more relevant and probably unknown: the tanks of our plants offer a third of the European capacity for liquefied natural gas storage. They are assets that other countries do not have and that are pillars of our energy security.
Given its strategic role, natural gas will be present in our economy for many years; moreover, the gas network is prepared for the channeling of renewable gases, which are making their way by allowing decarbonization with an efficient use of existing infrastructures. Without a doubt, they are one of the most efficient options that the Spanish economy has for its decarbonization.
"The Spanish gas system is recognized as the most resilient, modern, and diversified in Europe, one of the best prepared in the world."
Gas infrastructures will be a fundamental part of the response to a more decarbonized, competitive, and autonomous future from an energy point of view, because they will allow the use of molecules produced in our own territory.
Without any doubt, electrification represents a very important part of the energy transition. However, electricity is not a solution for all sectors. Certain activities in heavy industry, road and maritime transport, or aviation need molecules. Let us remember that, according to the International Energy Agency, by 2050, even in the net zero emissions scenario, only 55% of final energy would be electricity. The remaining 45% would correspond to energy molecules.
P: We are pending the deployment of digital meters. How is this going?
R: We are already in the final stretch for the deployment of some meters that will make the digitalization of the gas sector possible, just as has already happened in the electricity and water sectors. They will allow remote reading or the cut-off of supply in the event of a security incident. This deployment will create a digital ecosystem that will facilitate the comfort of the end consumer and their access to the best offers available in the market.
P: Let's talk now about the new remuneration framework 2027-2032. You have a clear reading: continuity is given. How does it look and what is your assessment of it?
R: After a year and a half of intense work, which began in the first half of 2025 with the specific public consultation of the National Commission of Markets and Competition (CNMC), followed later by the energy policy guidelines of MITECO, on September 18, the BOE published the final circulars of the CNMC that set the remuneration for regulated gas activities.
These offer stability as they provide continuity to the remuneration model, which comes to recognize the strategic role of gas infrastructures. They are much more than energy assets: they are country assets, which contribute to supply security, a fundamental factor that, perhaps, we took for granted a decade ago. And yet, the last two crises have highlighted their strategic importance.
Our assessment is, therefore, positive as it is technically solid and comparable to good European regulatory practices. It offers, in general terms, a solid response to the challenges of the Spanish gas system; regulatory stability; an adequate economic signal for the remuneration of strategic assets, and incentives for digitalization, cybersecurity, and the injection of renewable gases.
It is undoubtedly a tacit recognition of the strategic importance of these infrastructures. The new framework comes to accompany the transition process in which the companies in the sector are fully immersed and committed.
P: Focusing on biomethane now. Is that 6% biomethane quota in 2035 ambitious enough or is Sedigas going to ask for it to be raised?
R: Biomethane is not a marginal energy option. Thanks to the importance of our primary sector and the agri-food industry, Spain is one of the three European countries with the greatest potential for the production of this renewable gas, as recognized by the European Commission itself. It is a gas that can also be generated from wastewater treatment sludge or the organic fraction of municipal solid waste.
Compared to countries like France, where more than 800 plants are currently injecting biomethane into the grid; Italy has about 300 facilities and Germany has a similar number. The sector in Spain is progressing at a much slower pace: there are about 30 biomethane plants in operation.
The good news is that this year seven nine plants have started injecting biomethane into the grid and last year, nine. The challenge is to materialize all the existing potential, which, according to the analysis conducted by Sedigas in 2023, exceeds 160 TWh. That is to say, nearly half of our total natural gas demand could be decarbonized thanks to this 100% renewable gas.
To achieve this, the current infrastructures are key. Biomethane is a renewable molecule perfectly interchangeable with the fossil molecule, so it does not require the adaptation of existing infrastructure or equipment, whether domestic, such as boilers in our homes, or industrial.
The reading we make of the objectives set by the draft Royal Decree to promote biomethane is positive. We believe that the take-off of the sector needs a demand stimulus. There are multiple tools to do so. Spain has opted to establish a system of mandatory minimum quotas for certain gas consumption. The path will begin in 2028 with 0.5% and will grow to reach 6% in 2035. To meet these objectives, it is necessary to resolve the bottlenecks that hinder new projects. And one of them is undoubtedly the administrative processing.
"Biomethane is not a marginal energy option. To take off, it is necessary to stimulate demand."
A biogas plant requires a complex process of processing environmental, industrial authorizations... As it could not be otherwise, the system is very protective from a technical and safety point of view, which should provide peace of mind to all citizens. But the average time for obtaining the permits is around 3 to 4 years. This is one of the main obstacles that the sector faces to achieve the goal of 6% by 2035.
Q: How to ensure that the development of biomethane is compatible with the concerns of local populations and with the environmental sustainability of the projects?
A: Social acceptance is crucial for the future of biomethane. The technology is mature, safe, and proven. This is demonstrated by European experience and the number of operational plants. There are more than 2,000 facilities injecting biomethane into the European gas grid. It is by no means an emerging technology. Spain, for its part, has a long way to go. The success of new projects will only be ensured from the highest technical demands. The sector is absolutely committed to the highest standards of safety and operational quality, as shown by the pioneering ten commitments and good practices for the development and operation of biomethane production plants in Spain that the members of Sedigas approved in 2024.
It is equally essential that new projects offer channels for transparent communication with all stakeholders from their initial phase, from citizens to farmers and ranchers, from the early stages of new projects.
Social acceptance will undoubtedly be earned when there is a critical number of plants that will provide practical and real evidence of their operation.
Q: Regarding green hydrogen, is it already an industrial reality or what point is it at?
A: Spain has, not only in biomethane but also in renewable hydrogen, an extraordinary opportunity. We have the technical capacity, as well as the renewable and electrical resources for its production. And we have an industry that is advancing in its decarbonization and that is, in fact, already using gray hydrogen.
Without the infrastructures being promoted, the green hydrogen market simply will not be able to exist. Being key for the future, the European Commission itself has granted the hydrogen backbone that will connect Spain, Portugal, France, and Germany the recognition of a project of community interest and funding for basic engineering. The milestones of the planned schedule for the creation of that network are being met. This summer, for example, the detailed engineering phase of the BarMar hydrogen pipeline began, which will be operational in 2032.
The sector has to offer technologies, decarbonization options to that productive fabric that will not be electrifiable. In that sense, renewable hydrogen is going to play a decisive role in the decarbonization of the final uses of energy where electrification is not an efficient solution.
P: At the beginning of this conversation, we discussed how the geopolitical situation affected the gas bill. Spain boasts having a very diversified gas system. To what extent are we still exposed to Algeria, the United States, Qatar, or other major suppliers?
R: In any adverse situation, there is a risk of supply and a risk of prices. In the case of Spain, our dependence on the conflict zone is zero. In 2026, no molecules are expected to arrive that pass through the Strait of Hormuz. From Qatar, in 2025, less than 2% of the supplies arrived. This is possible thanks to the diversification of supply sources provided by liquefied natural gas. I remind you that a very important percentage of it is in the tanks of our gas system, which underpin our capacity to respond to critical situations.
A different issue is prices. In a global market, any tension in supply or demand generates volatility. And the current situation is not the same as before the conflict began.
In this context, the flexibility offered by the diversification of supply origins is fundamental. That is what our infrastructures allow.
P: In light of this new geopolitical scenario, do you think Europe should reconsider its methane emission reduction schedules?
R: Europe must maintain its commitment to reducing methane emissions while ensuring that the deadlines and conditions for meeting the new requirements are realistic. The geopolitical and energy context has changed substantially since the beginning of the year and requires reconciling environmental objectives with supply security and competitiveness.
In this regard, we positively assess the European Commission's proposal to postpone for a year the application of certain requirements of the Methane Regulation related to imports, scheduled for January 1, 2027. It is a necessary step that acknowledges the compliance difficulties that the sector and various member states have been warning about. However, we believe that this additional deadline is insufficient to resolve the technical and operational obstacles that persist.
For this reason, the Spanish and European gas sector, fully committed to reducing methane emissions, has requested that the postponement be extended to three years. We have conveyed this, along with other entities and associations, in a letter addressed to the heads of state and government and to the ministers of Energy, on the occasion of the recent European Council. The goal is to have a sufficient adaptation period to effectively implement the regulation and avoid that requirements difficult to meet within the expected deadlines limit the diversification and flexibility of supply, especially necessary in the current situation.
We trust that the final negotiation between the European Parliament, the Council, and the Commission will allow for an agreement on a viable timetable. Reducing methane emissions and preserving energy security are objectives that must advance together, with a demanding, predictable, and applicable framework.
"The security of supply invites postponing at least three years certain provisions of the European regulation on methane emissions"
Q: To conclude, I cannot help but ask how you assess and what implication the announcement of the electoral call on the next 29-N has for the sector
A: From Sedigas, we face the electoral call on November 29 with a clear priority: to preserve the continuity of the regulatory work necessary to guarantee supply security, advance in decarbonization, and strengthen the competitiveness of our economy.
The change of political cycle introduces uncertainty about the approval timelines of regulatory initiatives of great relevance to the gas sector,
Many are the result of years of technical work and dialogue with the Administration, and their delay can affect investment decisions and the development of strategic projects. Therefore, we consider it essential that this work continues and that unnecessary delays are avoided.
With this objective, we have indicated to MITECO the regulatory projects whose approval we consider a priority, distinguishing between those with sufficiently advanced processing that would allow their completion in the coming weeks, within the possibilities of the current legal framework, and those that will need to be promoted by the future Government that emerges from the polls.
Among the first, merely by way of example, I would highlight the following: the ministerial order for the deployment of digital meters, the royal decree to promote biomethane, the resolutions for the start-up of the capacity market, the first cogeneration auction, the gas system charges for 2027, the technical safety regulation, or the prior consultation for the transposition of the European directive of the 'gas package'.
For the remaining ones, we will request that they be resumed with the utmost urgency at the beginning of the new legislature because the sector needs a stable and predictable regulatory framework to continue contributing to a secure, sustainable, and competitive energy supply. That will be the priority of our dialogue with the next Government.