Former presidents Felipe González and José María Aznar discuss geopolitics and energy

Today, former presidents Felipe González and José María Aznar took part in the twelfth Energy Prospectives conferences organised by the Naturgy Foundation and IESE Business School, where they discussed geopolitics and energy. The event was opened by the president of Naturgy, Francisco Reynés, and the managing director of IESE, Franz Heukamp.

During the session, which was attended by over 1,500 executives, the former presidents analysed the challenges facing Spain in the context of the energy crisis caused by the war in Ukraine, and the EU’s ecological transition agenda.

In his opening speech, Reynés touched on some of the milestones of González and Aznar’s mandates over a continuous period of 22 years, including the 1983 reform of the energy plan; the creation of the Spanish Electricity Network and the National Energy Commission as a stable sector regulator; the construction of the Maghreb-Europe gas pipeline, which heralded the advent of a stable natural gas supply in Spain; and the culmination of the deregulation of the energy sector.

According to the president of Naturgy, “geopolitics now has a fundamental role, including energy regulation”. Reynés said that over 20 regulatory changes were made in the energy sector in 2022, demonstrating the “huge importance of regulatory aspects in a sector that is always transforming.

The energy sector is at a crossroads, the so-called energy trilemma, which is simply the need to make environmental and sustainability objectives compatible while guaranteeing supply, all within a framework of reasonable and affordable prices for society”, said the president of the energy company.

Energy uncertainty

In their respective speeches, González and Aznar agreed on the uncertain future of the energy sector stemming from the process of shaping the new world order that started with the invasion of Ukraine, in which emerging countries, with China at the helm, will have a crucial role due to their positions in the renewable technology supply chain.

Regarding Spain, the two former both see the need to reach global agreements given  the role of energy regulation in guaranteeing security of supply and legal certainty, and advocated for public-private agreements to guarantee the energy transition.

According to Mr González, the state’s role as a regulatory factor for energy is “entirely unavoidable”, but he also insisted that this regulation must be based not only on major political agreements but also on solid public-private partnerships, and must encourage companies to invest despite the current regulatory uncertainty, “because only those who invest get ahead”.

Aznar warned against overregulation, arguing for a balance between “uncontrolled deregulation” and “unlimited interventionism” to give companies the legal certainty and freedom to investment they need.

When it comes to global energy policy, González said that “the US has refocused its energy policy, which is an important consideration; it is a stimulus policy with tax advantages for those who invest in decarbonising the economy and contribute to the country’s energy independence”, while here in Europe we lean more towards sanctions and regulations, “which hinders investment”.

Aznar says that there is a need for a “thorough strategic debate on what we want to do with energy and what our country’s and Europe’s objectives should be. Regarding the competition between the incumbent US government and the emerging power of China, Europe must reflect on its position, what it can do and our risks and opportunities”.