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Spain's Endesa demands improvements to nuclear and power grid investment frameworks

In the wake of the unprecedented blackout last week, the chief of Spanish utility Endesa called on Wednesday for the country's politicians to examine the tax burden placed on nuclear power plants and improve the remuneration paid for investments in electricity grids.

The power outage on the Iberian Peninsula that occurred on April 28, has reignited debates about the need to invest more in the grids to handle the increasing solar and wind output.

"We need to build a resilient and robust grid. This requires significant investment, as well as fair remuneration," said Chief Executive Jose Bogas.

He said that a diverse and competitive mix of generation is important.

Bogas stated that "it is important to review the taxation on nuclear power in order to ensure its viability and to provide security of supply over many years."

The nuclear lobby asked policymakers on Tuesday to lower taxes because they are making the plants uncompetitive in the market.

Endesa stated that with the electricity demand continuing to grow and grid connections increasing, it is necessary to pay more for grid investments.

The utility stated that the return on investment for the grid needs to be increased to 7.5%, from the current level of 5.6%. Also, the cap on the amount companies can invest into power grids should be reviewed.

These comments come after Endesa released its earnings report, which showed that the company's first-quarter net profits doubled from 292 to 583 millions euros (or $662.00 million), beating expectations.

(source: Reuters)