Today in Madrid, the Fundación Renovables presented the report ‘The Energy Social Contract: Electrifying to democratize’ which is “an important conceptual step and which, at the same time, encompasses all its contribution of ideas, proposals and analyses published over the last nine years and which consider energy as a basic good of first necessity whose access must be guaranteed as a public service, the starting point of its discourse”.
The Fundación Renovables provides this initiative “as a basis for the permanently called State Energy Pact”. Among the most significant ideas are the demand that the signal price responds to the payment for use and not for investments and the realization that the traditional sector can never lead a radical change that goes against their own interests.
For the FR, the electrification of demand, of renewable origin, is the only way to achieve a sustainable future under criteria of efficiency, equity, social justice and full respect for the environment. This requires a complete redesign of our country’s electricity system, evolving and innovating, in a disruptive way, thanks to the technology already available until reaching a new decentralized and multidirectional system, in which citizens have the capacity to make decisions both to buy and to generate electricity.
The report is structured in three parts. The first part, entitled ‘Reasons for change’, reviews the reasons that justify the need to act to change the electricity system. Among them we find: the lack of universal access to energy and the persistence of the scourge of energy poverty; the absolute lack of transparency in the setting of prices and the flagrant asymmetry in the allocation of the costs of a system that is opaque and undemocratic; the serious reputational problem that companies in the sector have; the control of the ownership of infrastructures by a few hands; the perverse conversion of certain administrative formalities into real speculative goods; the lack of degrees of consumer freedom; the lack of an active and finalist fiscal policy and the unavoidable obligation to eradicate fossil fuels and complete the energy transition in time, for reasons of environmental and consequently social emergency.
Once the diagnosis has been made, the report addresses in its second part, ‘The levers of change’, those instruments or mechanisms that allow the current paradigm to be replaced by another one. One of them is undoubtedly the appearance of technological scenarios (internet of things, blockchain, etc.) with the capacity to provoke the change of model from bottom to top, together with the incontestable fact that the very need to change every day enjoys greater social acceptance. Indeed, society’s concern is increasingly determining in the assumption of political commitments in the face of real and effective pressure from business lobbies.
Another important mechanism that drives the change of model, explains the FR, is that “the generation of electricity from renewable energy sources is today cheaper than the use of fossil fuels. And all this without taking into account the negative externalities of fossil energies, on the one hand, and the benefits induced by the use of indigenous renewable sources, on the other.
Self-consumption, on the other hand, is an unequalled instrument for change, opening the door to a new way of relating socially with energy, turning the whole of the citizenry into the manager of its own energy and strengthening new behaviours and responsibilities. Finally, the storage of electricity in batteries will be key both for the electrification of demand and, above all, for the manageability of the system and the reduction of investments in generation with low use.
In the third part, entitled ‘The paths of change’, the report reviews the actions we must take to successfully complete the transformation of the energy system, particularly the electricity system. These include: the design of a transparent electricity tariff with a real price signal; the digitalisation of the electricity system itself; the consolidation of the figure of the demand aggregator; co-responsibility in the fulfilment of commitments to cover demand with renewables; the change of model in the ownership and management of infrastructures; fiscal reform, which generates an active and finalist fiscal policy and the articulation of a new electricity model in which electricity is considered a commodity of primary need and as a public service.
The “Energy Social Contract” is proposed as a vehicle for achieving this. In it, the Fundación Renovables puts the needs of society as a whole before individual interests, as a demand for rights, but also for obligations, and courageously bets on changing the moral order of the current system, with a more committed and active role for the State. Based on “a more social concept of energy”, he defines it as “a public service and as a public good whose universal access must be guaranteed, at least, in its electrical format from renewable sources”. It details the bases and rights on which the proposal of the Social Energy Contract revolves, “whose next step must be to reach a State Energy Pact with the greatest possible consensus”.
Finally, the report presents its proposals for legislative actions to develop the aforementioned Social Contract, such as the Climate Change Law, an umbrella law for a compact regulatory development that includes, among others, the Electricity Sector Reform Law, a fiscal reform that guarantees social and intergenerational justice and the reform of the Law Regulating the Bases of the Local Regime, assuming that the commitment arises from the necessary urban action.
In the words of Fernando Ferrando, president of the Renovables Foundation, “this is a model for all and for all, in which the social agreement is the basis for all of us to assume the rights and obligations it entails”.