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ENERGY

Zara founder Amancio Ortega enters renewable energy sector

Spanish billionaire Amancio Ortega, founder of the biggest fast fashion group in the world, has entered the renewable energy sector with the purchase of a stake in a wind farm run by energy giant Repsol.

Amancio Ortega
Amancio Ortega is the founder of Inditex, which includes flagship store Zara, Zara Home, Massimo Dutti, Bershka, Oysho, Pull&Bear, Stradivarius, Uterqüe and Lefties. Photo: Miguel Riopa

Ortega’s investment holding Pontegadea will pay €245 million euros ($281 million) for a 49 percent stake in the Delta wind farm in the northern province of Zaragoza, Repsol said in a statement Thursday.

Opened in March, the wind farm will produce 992 gigawatt hours (GWh) of 100 percent renewable energy a year, the equivalent to the average annual consumption of 300,000 households, the Spanish firm added.

Pontegadea chief executive Roberto Cibeira said the deal “strengthens the environmental commitment that accompanies all the activities in our portfolio”.

Ortega’s investment holding in 2019 bought a five percent stake in Spanish gas grid operator Enagas, and it owns a five percent stake in Spanish electricity grid operator Red Electrica.

This is Pontegadea’s first operation in the renewables sector.

Demand for renewable energy assets has soared in recent years, with investors spending billions of dollars to gain exposure to the sector as governments promote low-carbon energy and crack down on fossil fuels to fight global warming.

Ortega’s Pontegadea owns a 59.3 percent stake in Zara owner Inditex, as well as investments worth billions of euros in prime office and shopping districts.

These are largely debt-free purchases using dividend payouts from Inditex.

Pontegadea’s global real estate empire includes offices used by Facebook and Amazon in Seattle and large swathes of London’s Oxford Street.

Amancio Ortega is the founder of Inditex, the biggest fashion group in the world, which includes flagship store Zara, Zara Home, Massimo Dutti, Bershka, Oysho, Pull&Bear, Stradivarius, Uterqüe and Lefties.

Now 85, he became a billionaire and Spain’s richest man at 65 when Inditex was listed in 2001. Funds from the flotation were used to set up Pontegadea, which is structured as a private limited company.

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ENERGY

How millions are being left out in the cold by Spain’s soaring energy prices

In her flat on the outskirts of Madrid, Pamela Ponce no longer turns on the heating despite the biting chill coming in through the windows.

How millions are being left out in the cold by Spain's soaring energy prices
Pamela Ponce at her home in Madrid. The 32-year-old says she hasn't been able to pay her electricity bills for the past three months. (Photo by OSCAR DEL POZO / AFP)

“The prices have gone up a lot, I have no choice,” sighs Ponce, a young Peruvian mother, her voice resigned.

On this bitterly cold January morning, the temperature outside is hovering around five degrees Celsius (41 degrees Fahrenheit). And inside, it’s barely much warmer.

“It can also be very cold inside, above all when there’s no sun,” she says, walking through the three rooms where she lives with her mother and two children in Leganes.

This 32-year-old says she hasn’t been able to pay her electricity bills for the past three months with prices in Spain soaring by a staggering 72 percent over the last year, one of the highest increases within the European Union.

The hike has been in part driven by Spain’s excessive dependence on gas to produce electricity and the lack of a major power provider like in many other countries to help keep prices in check through reduced tariffs.

“Before I was paying between €35 and €60 a month but now, it’s more than €100, without even mentioning gas which has also gone up,” explains Ponce, who hasn’t worked since catching Covid which left her with severe after-effects, notably affecting her left hand.

“I just don’t know what to do,” says the former cleaning lady who admits she’s reliant upon her ex-partner to pay the rent and buy food.

“I feel like I’m drowning,” she whispers, her voice choked with emotion.

According to Spanish government estimates, around 4.5 million people in Spain are affected by ‘energy poverty’, either because they’re incapable of paying the energy bills to cover their basic needs or because they have to put a large part of their earnings towards them. 

In an attempt to heat the flat, Pamela has bought a heater that runs off a gas bottle which she moves from room to room depending on what they need.

“It’s cheaper,” she says. But everything else is strictly rationed.

“My kids only take a shower every other day (and) I generally cook for 2 or 3 days at a time so I don’t have to turn the cooker on so much,” she explains.

SPAIN-ENERGY-SOCIAL-POVERTY

Electricity prices in Spain soared by a staggering 72 percent over the last year, one of the highest increases within the European Union. Photo: Oscar del Pozo/AFP

More and more families affected

And there are countless others like her.

“More and more families are struggling to pay their bills” and “have to chose between paying for food or light at the end of the month,” says Sara Casas, head of environmental issues at the Spanish Red Cross.

Last year, Spain’s left-wing government announced a series of tax cuts to try and bring down household bills but even this has not compensated for the huge rise in prices.

According to the UOC, Spain’s largest consumer organisation, the average annual home electricity bill in Spain has risen from 675 euros in 2020 to 949 euros in 2021, a rise of 41 percent.

The previous record jump, in 2018, was 18 percent.

Vulnerable people, such as “single mums with children, older people with a low income and migrants” are particularly badly hit because many “struggle to get benefits because there’s a lot of red tape and you have to bring in a lot of paperwork,” says Casas.

Layering up, homemade heaters

According to an awareness campaign being run by Medicos del Mundo, some 6.8 million of Spain’s 47 million residents are suffering to one degree or another from “energy poverty”.

Such a situation brings with it “a higher risk of suffering from chronic bronchitis, depression and anxiety,” the NGO says.

One of those struggling is Raul, a 55-year-old computer technician who lives with his wife, daughter and 82-year-old mother-in-law in the
northwestern city of A Coruña.

“Whenever we turn something on, we have to think about how much the bill will go up,” says Raul who hasn’t worked since suffering a stroke in March 2021, with the family living off his wife’s salary.

“My neurologist told me I should avoid stress but it’s very difficult when you don’t know if you’re going to be able to pay next month’s bills,” he says, admitting they have barely switched on the heating this winter, despite the cold and the humidity.

“We bought a heated blanket for my mother-in-law” and “inside the house, I always wear lots of jumpers or coats,” he says.

He has also been trying to cobble together a home-made heater.

“It’s a temporary solution,” shrugs Raul, who says he is keeping his fingers crossed “that the prices will eventually come down”.

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