Spain’s National Commission for Markets and Competition (CNMC) has launched an in-depth investigation into Naturgy Energy Group SA, a major player in the Spanish energy sector, for alleged anti-competitive practices in the electricity distribution market. According to a CNMC press release, two Naturgy offices were searched as part of the investigation. This is not the first time that major companies in the sector have been the subject of a competition investigation in Spain. In fact, Repsol, Cepsa and BP were targeted by a similar investigation in 2022.
The focus of the investigation is on the activities of Naturgy’s electrical unit, UFD. The CNMC is seeking to determine whether UFD has preferentially and discriminatorily favored incidents and complaints filed by certain wholesalers in 2021 and 2022, to the detriment of other independent market players.
History of Sanctions
This investigation follows a fine imposed on Naturgy in July 2023. The CNMC had imposed a penalty of 6 million euros on the company for manipulating electricity prices in a specific market segment between 2019 and 2020. This sanction had already highlighted concerns about Naturgy’s commercial practices.
A Naturgy spokesman said the company complied with all applicable regulations in its dealings with wholesalers, and had not favored any of them. Naturgy has also indicated its willingness to cooperate fully with the CNMC throughout the investigation.
Implications for the Electricity Market
The current investigation could have a major impact on the Spanish electricity market. The alleged anti-competitive practices could harm free competition and disadvantage independent players. If the allegations are confirmed, this could lead to regulatory reforms aimed at strengthening transparency and fairness in the sector.
Spain’s electricity market has already been in the spotlight, with frequent debates on price regulation and the integration of renewable energies. This investigation is part of a wider context of increased scrutiny of the business practices of major energy companies.
Sector feedback and outlook
Reactions in the energy sector are mixed. Some analysts believe that this investigation is necessary to ensure healthy competition and protect the interests of consumers and small market players. Others, however, fear that this could lead to regulatory uncertainty that could dampen investment in the energy sector.
The CNMC plans to publish the results of its survey within 24 months. In the meantime, the industry will be closely monitoring developments and any implications for electricity market regulation policies.
In short, this investigation of Naturgy by the CNMC could not only affect the company itself, but also have wider repercussions for the Spanish electricity market. Careful analysis of the results will be crucial to understanding the competitive dynamics in this vital sector.
