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Interview

Arcadio Gutierrez Zapico – Director General, Club Español de la Energía (Enerclub), Spain

“Vendor diversification is one of the most important variables when it comes to achieving energy supply security” – The Director General of Club Español de la Energía (Enerclub), Spain’s leading energy society, makes the case for Spain to become Europe’s energy backbone.

Could you begin by introducing Enerclub and the role it plays within Spain’s energy sector?

“Spain’s strength is the very high sophistication of its energy infrastructure. We already have two subsea pipelines connecting us with North Africa—one directly from Algeria and another one through Morocco.”

Enerclub is a non-profit organization set-up in 1985. The organization was the result of a merger of a variety of different existing clubs across Spain, thus bringing together the different actors within Spain’s energy sector. The club itself acts more as a civil society, that means companies as well as private individuals working in the field of energy or simply being interested in it are forming our club next to associations, technology incubators or even government branches. This implies that we represent the entire spectrum of the energy actors in Spain: oil and gas, utilities, renewables, nuclear, coal and relevant engineering and consulting.

How do you manage the different interests of these groups?

I would argue that finding common ground and building consensus is the main asset of the club. The club is a platform which enables communication, exchange and discussions across the different segments and stakeholders; we find common ground and publish the consensus and relevant topics into various papers. As we have this broad spectrum and interconnection of experts, we are able to find best practices and recommendations benefiting the entirety of the sector.

Within this main purpose, we foster the interests of our different actors with three main activities. The first one is education and training. We have an outstanding relationship with relevant companies and universities alike, thus we can offer master degrees in the discipline of business in energy, regulation and law, and financials in energy. The typical student is already between 30 and 40 years old and an industry professional wanting to develop his career. What is unique about our offering is that we have experts from the industry passing own their accumulated experience, next to accredited university courses. In addition to the master courses, we also offer intense short term training on specific topics. This could be on the European electricity market, for instance, or for the emerging gas markets. Last year, more than 700 individuals used the offering of our expert training.

Secondly, we organize approximately 40 different events each year. One example could be the award for outstanding journalism, where we honor the journalistic efforts of individuals in energy related fields. Other events include the presentation of the latest findings and publications of the International Energy Agency, among other relevant institutions. Other events may be about energy efficiency, newest technology, refining and more—all energy related topics. We closely follow the ongoing trends within the energy sector and organize our events in a manner that these trends can be discussed and developed for our members.

Furthermore, we act as a think tank within the Spanish energy arena; every year we produce and publish several papers and books. Last year, for instance, we published a paper on non-conventional oil and gas and another about the interconnection needs with rest of Europe. For the reports, the different experts that are members of the club contribute to the conceptualization and writing of the report and we formed an independent commission to ensure that common consensus is kept and that all relevant topics are covered. These reports are also always presented to the relevant administrative bodies.

In 2016, Enerclub published La energía hoy en España. 15 temas clave para la próxima legislatura” [Energy Today in Spain. 15 key issues for the next legislature], in which you identified the need for a holistic Spanish energy strategy, greater alignment with the European strategy, regulatory and financial stability and greater citizen participation. How are these goals progressing?

We actually published that report almost two years ago, prior to the Spanish election, representing the common consensus of all members of our club. 2013 and 2014 saw significant reforms to Spain’s electrical sectors where renewable energy was brought forward to the spotlight. At that time, we saw financial challenges set specifically due to what’s called the tariff deficit and prepared this paper to showcase the different challenges and solutions we see for them to the members of parliament. Today, the perspective on this topic has changed to the extent that we focus on the role of renewables in 2030 as we see that we will be able to meet the 2020 target of establishing a 20 percent share of Spain’s energy matrix. Now we need to discuss the right pathway to achieve new goals for 2030!

Spain has previously been quite isolated from the rest of Europe in terms of energy integration; what do you see as its potential to play a greater role as a regional energy centre, especially in light of the creation of a virtual gas hub for Spain?

Spain’s strength is the very high sophistication of its energy infrastructure. We already have two subsea pipelines connecting us with North Africa—one directly from Algeria and another one through Morocco. We have seven regasification units if we take Portugal into account and we are technically able to supply the European mainland with half of what Russia supplies today. Geopolitically speaking, vendor diversification is one of the most important variables when it comes to achieving energy supply security and Spain is able to play a major role to achieve just that for the rest of Europe.

As we already have the domestic infrastructure, all we need to do is achieve a level of European interconnection to create a sustainable supply solution for Europe. We have splendid suppliers; Algeria has proven utmost responsibility for their commitment for decades now and Spain has been receiving LNG shipments since 1969. Thus, right now we do not have a supply challenge at all. The question is more focused on the interconnections within Europe and the particular case of Spain, we are talking about our interconnections with France. For example, Spain and Portugal have nearly the exact same prices for electricity (for about 99 percent of the time), whereas France and Spain have a price congruence of about 35 percent. The European Union needs to push forward a model in which we can achieve energy interconnectivity, as this would bring economic benefits for all actors involved. The question, however, is who pays for the infrastructure. The main problem is to align on a pan-European level and finance such projects together. This project, for example, is of utmost significance to the economic future for Spain, but it is about understanding the benefits not only for Spain, but also for Northern Europe and finding a solution to who finances this project and to what extent the burden is carried in between the European Union, the national administrations and, of course, the people of Europe.

This is not only vital for gas supply, but also for renewable energy. Renewable energy requires energy storage systems in order to create an electricity backup large enough for an entire country. It makes no economic sense to create these systems on an individual level; on the contrary, this should be a European approach, thus lowering costs and increasing the share of renewables on a continental level.

With Repsol making the largest onshore oil discovery in 30 years in Alaska, a Spanish company is right at the forefront of international energy news. What are the specificities that Spanish companies, including your members, bring to energy projects abroad, and how can they internationalize further?

It is the Spanish people that make these Spanish companies successful! One can witness that across the different sectors—tourism, bank, construction, renewables, utilities—Spaniards make Spanish companies great. The technical expertise of Spanish engineers is recognized and sought after across the globe – and for a good reason: Spain hosts three of the top ten global business schools. The Spanish education results in superior technical skills and entrepreneurial spirited professionals whose success can be witnessed worldwide.

There are multiple examples in the oil sector too. I think it is important to mention the success of the liberalization process of the oil industry in Spain When we joined the EU, Spain had to deregulate the sector and open it, and this particular milestone has been tremendously beneficial for our country, our economy and our whole energy sector, that could be used as an example for other countries.

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