This Tuesday the light will touch 700 euros MWh. "Its activity is at serious risk" warns the sector.

Panic is returning to Spanish factories, which are being forced to stop production due to the unaffordable price of electricity. The steel company Megasa is one of the first names that are becoming known among the companies that have had to stop working due to the energy storm unleashed by Russia's invasion of Ukraine.

Since last Friday, March 4, this company located in the municipality of Narón, A Coruña, has suspended its activity. In addition, the management has summoned the works council to a meeting from 12:00 noon this Tuesday at the industrial facilities to study the current situation of escalating prices in electricity supply. Megasa has not wanted to give details of their situation to the media. "Our policy is not to talk to the press" they assure.

Megasa is classified as an electro-intensive company due to the amount of electrical energy it uses to transform scrap into rebar, wild coil and wire rod, in a wide range of qualities.

Megasa has another company in Narón, Megamalla, located in the Río do Pozo industrial park, dedicated to the manufacture of electrowelded steel mesh, whose production comes from hot-rolled corrugated steel, in bar or coil.

Over the last few months, Megasa has only been producing during the nights and weekends, at times when the price of electricity was cheaper. Various media have also reported that ArcelorMittal has also shut down its Olaberría plant, for the time being, for one day.

The energy escalation has already forced many plants in the country to close due to what they called the "ruin" of the electricity hike.

"For days, many of them are being forced to stop their activity for a few hours, to stop a furnace or to engage in maintenance work -which are done on holidays- because it is not profitable for them to continue producing with these electricity prices," explained a few months ago the general director of the Association of Companies with Large Energy Consumption, AEGE, Fernando Soto, to Libre Mercado. "

Once again,AEGE warns of the extreme situation of the companies. "The Spanish electro-intensive industries are suffering the increase in the cost of their electricity supply due to the escalation of natural gas prices and emission rights, which with the impact of the war in Ukraine has meant electricity prices in March of more than 540 €/MWh, with hours at 700 €/MWh, never seen in our market. In industries so sensitive to electricity prices and with these levels, their activity is at serious risk given their high exposure to the daily market price and not having most of the regulatory measures that their European competitors have", they warn.

To alleviate the situation, AEGE requests the Government "emergency measures similar to those of other European countries such as France, Germany, Italy, Portugal... In the absence of offers from the electricity companies of bilateral contracts at prices prior to the energy crisis, the Government would have to convene auctions of inframarginal technology energy (nuclear, hydro and renewables), collected in RDL 17/2021, and additionally offer RECORE energy at a regulated price". For AEGE "it is urgent that these measures are adopted now to safeguard the competitiveness of our electro-intensive industry, the economy and employment they represent. It was not done in the last quarter of 2021 and we cannot wait any longer. In addition, we demand other measures such as the exemption of 80% of the electricity transport toll, the maximum compensation of indirect CO2, estimated at 450 million euros for 2022, and to launch a new substitute service for interruptibility, as they have done in Portugal."

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