The CEO of the second largest French electricity and gas company, Catherine MacGregor (Salé, Morocco, 50 years old), arrives early for the only interview she will grant on her visit to Madrid. She has just given a lecture at the luxurious Ritz hotel and answers a dozen questions from Business in impeccable varnished English with an unmistakable Gallic accent. Shortly after, he will leave to visit a new renewable plant, the epitome of his commitment to Spain, one of the countries marked in red on the expansion agenda of the energy giant Engie, which he has led for two years.
After a 2022 marked almost from beginning to end by two words that today are conjugated practically automatically -energy crisis-, in recent weeks it has turned from radical pessimism to an equally exacerbated optimism. Is the energy crisis over? That was one of the most repeated questions, behind the scenes, at the recent Davos Forum, the meeting of the top brass of the economy and finance from around the world. MacGregor calls for prudence: “No, it’s not over yet. If all agents continue to work to guarantee security of supply, Europe will be able to muddle through next winter. But it’s not guaranteed.”
His is not just any voice. Talking about Engie is talking about an energy liner: it is the second largest French utility, only behind the once all-powerful EdF, and also a relevant operator in the European gas market. Its value on the stock market, plus 31,000 million euros, exceeds that of any Spanish electricity company, except Iberdrola. It is, in short, a colossus in the midst of a decarbonization phase, with organic growth outside its home market as a priority and with the vast Spanish renewable potential in its sights.
In the current situation, her request to governments, companies and citizens in general could not be clearer: “we must not slacken efforts, neither on the demand side nor on the supply side”, slips the French executive, trained as an engineer at the Ecole Centrale de Paris. “We cannot forget it: the situation this winter [más favorable de lo anticipado] is the result of a lot of work: in infrastructure [regasificación], in storage, in diversification of imports… Without that, we would not be where we are today; We have to continue on that same line.”
Europe, he says, has no margin for error in 2023. “There is no cushion: if a terminal breaks [de regasificación], there is a problem in a compressor… The system is sensitive to any failure”, recounts the boss of Engie. You just have to remember, she says, what happened in June of last year, when the explosion at Freeport, a key plant in the US -by far the largest gas producer on the planet-, opened the box of thunder even more. in the world market. “Any problem would have a domino effect,” she recalls.
There are three more items of concern in MacGregor’s eyes. First, the rebound in Asian demand, especially after the reopening of the Chinese economy, which will mean the return to the scene of the largest competitor for liquefied natural gas (LNG, the gas that is transported by ship and not by tube): ” The European attractiveness for LNG carriers could decrease, and that would translate into less gas reaching Europe.” Second, what may happen to demand as the energy crisis gradually fades from the headlines and the fear factor that has prevailed in recent months: “If people stop paying attention, there will be problems.” And third, the recent cap on the price of gas in the European wholesale market: “We have to be careful with the unintended consequences of this type of measure. I hope it is being analyzed well now, before it enters into force [el 15 de febrero] to mitigate any risk.
state presence
The French state is by far Engie’s largest single shareholder, with almost a quarter of the capital and more than a third of the voting rights. This does not, however, prevent MacGregor from having his own speech when talking about nuclear, the great energy flag of Emmanuel Macron and all his predecessors in the Fifth Republic: “On its own, it will not allow France to decarbonise,” he says. . “We are going to need renewables in the mixed: It is not a matter of deciding between one and the other technology, we need both and we must add as many carbon-free gigawatts as possible”.
The second European economy accumulates significant delays in the deployment of wind and photovoltaic solar, and MacGregor acknowledges this. “We are late with respect to our renewables target. And we see how other countries are doing much more, particularly in offshore wind”, he slides while declaring himself an “admirer” of the United Kingdom in this area. “I hope France follows her example. We are late in renewables ”, she reiterates without ever abandoning her leisurely tone.
Engie has no role in the operation of the huge French atomic park, entirely in the hands of EdF. But it does manage, through its subsidiary Electrabel, the two reactors whose useful life has just been extended by a decade by the Belgian Government. Can it be an example to be followed by other European countries that, like Spain, plan to close their power plants in recent years or are the recent technical problems in France weighing more heavily? “It is a decision that corresponds to them. For Engie, nuclear is not a strategic priority. We will accompany Belgium, because we are a responsible and historic player there, but nuclear is no longer in our focus. Not anymore. Our priority is to accelerate the energy transition and the development of renewables: electricity, gas…”.
This expiration date for dozens of atomic reactors in Europe in the coming years, however, contributes to a “supply tension” in the continental electricity markets that, he says, will last a long time. “There is a lot of coal power in retirement and several countries have made the decision to leave nuclear behind…There are many gigawatts that are coming out of the system, and that leads me to think that the situation in Europe will remain tense for years to come.”
The solution? “Everything depends on our ability to execute the massive development of renewables, flexible technologies and batteries that can complement them. Also of our collective ability to introduce green molecules: we must not only electrify, we must also develop green gases. If not, we will hit a wall”.
While waiting for the European Commission to unveil its proposal to reform the electricity markets of the Old Continent, MacGregor hastened to ask that it be “an evolution and not a revolution: we must be careful and not overregulate.” Although widespread, this warning resonates especially in those capitals that, like Madrid, have moved the most to stop the rise in prices and to return to society part of the extraordinary benefits obtained by energy companies. His plans for Spain -doubling its current 1.6 gigawatts of renewables by 2026- remain intact, with a special interest in hybridization (wind and solar) and in the repowering of parks. “Not for now [cambia nada], but we remain attentive, above all, to the stability of investment frameworks in the long term. It’s something we’ll look at very carefully.”
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