Good morning, ladies and gentlemen, and a warm welcome to the First Half twenty twenty one Results Presentation, which will be hosted as always by our CEO, Jose Bogas and the CFO, Luca Pasa. Following the presentation, we will have the usual Q and A session open to those connected on the call and on the web. Thank you. And now let me hand over to Jose Bogas.
Thank you, Mar, and many thanks To our audience for being able to join us today, we sincerely hope that you and your families are in good health. Let us start with the main highlights of the period. The first half twenty twenty one has proven to be a complex An evolving period in which we managed to achieve an EBITDA of €1,900,000,000 We remain confident that the context And the economic condition will improve in the second half of the year where we expect a more positive performance based on managerial action put into effect. On the regulatory front, the European Commission has recently adopted its package of legislative proposal, a fit for 55 package that gives continuity to the acceleration in decarbonization, adopting a regulatory proposal that will enable emission reductions while promoting economic recovery. Sorry.
Furthermore, the investment in digitalization coupled with the restructuring provisions booked lately have allowed for a new standard of operational efficiency, which becomes a strong lever going forward. The progression in reshaping our company towards a cleaner and more sustainable business model is evident with the full mainland coal phase out at year end and the strong pipeline boost of 11 gigawatt since the beginning of the year, totaling now 53 gigawatt. Lastly, a final dividend of EUR 1.3160 per pair was paid in July, which on top of the €0.7 per share of the interim dividend already distributed in January, represents an outstanding dividend yield above 9% in 2021. Moving now to Slide number 3. On July 14, the European Commission presented a comprehensive package of legislative proposals Go pit455 package aimed at reaching the European Union emission reduction goal by 2,030 and to put it on track for the net zero emissions by 2,050.
With this focal point on carbon neutrality, the package sets very ambitious targets such a 55% reduction in CO2 emission by 2,030, sharing the effort in minus 40% and minus 51% between non ETS and ETS sector respectively and increase of renewable capacity to 40% by 2,030 from the current 32%. In order to secure This call a number of measures aiming to further restrict ETS have been put in place alongside a new carbon border mechanism and a new fund to protect vulnerable customers. All of these plans in parallel with the European Union Recovery Fund recently approved for Spain, out of which Spain will receive around €20,000,000,000 in 2021. The first run of €9,000,000,000 has already been approved in the form of an advance payment and the next will be settled before year end. In this sense, we have presented a solid plan with a list of projects representing €23,300,000,000 with Plaixas in a favorable position as our proposal perfectly fits with the referred objectives.
All in all, we strongly support that European initiative and its more ambitious target as they pave the way for further electrification and indirectly power grids, which is a key catalyst for a rapid and cost effective energy transition. On the Slide number 4, I would like to comment on the evolution of the scenario over the period which has been certainly the main driver of this set of results. During the Q2 of 2021, The money we've used in Spain started to show some signs of recovery from the economic effects of the pandemic after the weak start of the year. Indeed, cumulated mainland power demand in the first half increased by 5.5% or 5.1% is adjusted by calendar and temperature effect. Likewise, In Endesa's concession area, gross demand has increased by 4.5% or 3.8 in adjusted EBITDA.
These figures are driven by the increase in all segments, that is, industry services and the residential sector. As far as prices are concerned, our school prices in the 1st semester have doubled versus the same period of the previous year reaching €58.6 per megawatt hour, driven by the demand improvement, but mainly by the increase in the average gas, PBB prices and the high average CO2 prices in Europe, supported by the reforms to be introduced by the European authorities. On the first factor, several events came together to create a perfect That led gas references to further increase during this 1st semester. Among others, the change in the merit order in favor of The low level of gas reserves and cold winter in Asia, the increase in industrial activity and finally, The supply stress in Europe due to Russia and Ukraine's foreign tension and Norway's supply outage. Besides the electricity prices are expected besides the electricity prices are expected to remain high for the next few months.
As a matter of fact in July, despite the recent changes in tax section, the upward trend has not been reversed and average food prices at sharp pace the level of €100 per megawatt hour. The current estimate for the remaining gear point at €0.97 per megawatt hour, meaning that the average market price At the end of the year, it could be higher than €77 per megawatt hour, which would compare to €34 per megawatt hour average price in 2020. Forward power prices in 2022, 2023 are also affected by the increase in energy commodity Now on Slide number 5, we will dive more deeply on the reasons for this evolution. First of all, the rise of electricity prices has been driven mainly by the volatility of gas market worldwide and to a lesser extent by the from increasing CO2 on the back of the prospect of a tightening of emission permits. All in all, Out of the €30 per megawatt hour increase in fuel price, CO2 Evolspan explained €6 per megawatt hour, while The spike in gas would be responsible for 2021, 3.5 times more.
Considering these same underlying drivers, the evolution of prices in the rest of the European countries has been very similar, taking into account that Spain had an additional impact caused by the law 152012 taxes. Part of the renewable penetration will very likely mitigate such scenarios with lower prices in the long run. All of these have had a very important effect on customer, where a typical regulated bill has increased by 25% compared to the same period in 2020. It is important to note that Endesa doesn't benefit from this scenario as our sales were already hedged up lower OTC references and we sustained a negative impact for our structural In order to address this power price priority, a number of initiatives are being endorsed by the government aiming at lowering energy costs, the creation of the national palm for the sustainability of the energy sector. We highly welcome, as we believe will be a fundamental instrument to achieve the decarbonization of our energy system, a new methodology involving a simplification of the tariff structure applicable since June the 1st June 2021.
A Q2 clawback, the preliminary drug bill on which We will comment later. And finally, the temporary suppression of the 7% generation tax and the lowering of VAT, albeit neutral from economic standpoint for the sector would be positive as It will be helpful to reduce the excessive fiscal burden on the customer bills. Having said that, we believe There are other more efficient and permanent solutions that can be implemented such as the reform of the regulated tariff to protect domestic customer from such high market volatility. Moving on, as mentioned in the previous slide, One of the main proposals from the ministry is to mitigate the increase in fuel prices with CO2 clawback on all non GHG emitting production facilities, which went into effect before 2,005. Approval of the bill is expected before year end.
We believe that the drug bill is based on a speed of the flow or unfounded assumption that caused some reputational damage. The main ones are the But these assets are fully amortized and receive an over remuneration known as a win for profit benefiting from the high CO2 prices in the market. As a matter of fact, this is not the case. Indeed, since 2005, we have made substantial investment in these facilities and have esteemed continued and this proportional cost increase much higher than the CO2 effect. The so called windfall axis including the EMEA as well as the law 15, 2012, regional taxes and even the civil guard service cost among others.
All in all, around 30% to 40% of the full cost of nuclear and hydro plants is composed of these fixed Furthermore, Endesa and other stakeholders including the rating agencies denounced the risk of this proposal indicating that it is ineffective in solving the electricity price increase. We would remark in particular that it is a barrier between investment and jeopardizes compliance with the current epidemic targets, increased regulatory risk, uncertainty and legal In security due to possible future drawbacks, penalizes electricity and will hinder decarbonization At most oil and gas emissions are not subject to emission allowances. It increased also the rates of serious distortion in the market. The CMNC in its report on the draft deal released last June 29, pointed out some technical improvement quite aligned to our allegations, which we now expect to be taken into consideration by the government. Likewise, the And he proposes that the process obtained should be used to reduce the cost of energy for the electricity customers.
Nonetheless, as the process will provide time To introduce improvement to the legislation and will for the ministry to hear all to hear the different parties involved, We are confident and more reasonable outcome can be achieved especially for hydro and nuclear plants. Let's move now to Slide number 7, where thanks to our continued effort in decarbonization, Mainland renewable capacity represents around 45% of the total, well on track to reach the 62 target set out in our business plan. Likewise, CO2 free sources constitute 64% of our installed capacity on the peninsula. During this quarter, the growth Part of renewable capacity has remained almost flat, but addition will boost in the second half. We expect to fulfill the 0.7 gigawatt of forecasted capacity addition this year.
Total mainland output reached 22.7 terawatt hour, 1% higher than the last year. As a Consequence of the coal phase out, today thermal generation represent just 12% of the total mainland production, mostly from CCETs, which saw a strong increase in the load factor, plus 30% output that is 0.5 terawatt hour due to the low hydro availability during the period minus 21%, that is minus 1 terawatt hour. Furthermore, the combination of new wind and solar capacity, which came on steam at the end of 2020, a higher load factor allowed for an increase of 0.7 terawatt hours. In terms of emissions preproduction remain at 88% of the Mainland total output almost reaching the target set for 2023. On Page number 8, let's Look at the current situation of our pipeline, which will allow us to reach our commitment in renewable growth.
Our growth pipeline was further expanded to around 53 gigawatts from 42 gigawatts announced in full year 2020, maintaining a constant effort to fit our renewable project portfolio. Out of this growth figure, around 15% has TSO awarded connection points and 2.5 gigawatts are under execution, Considering the latter project and the mature pipeline, solar technology weighted in at around 70%. We are accelerating the construction of the 0.7 gigawatt of renewable capacity targeted for the year, expected to come into operation during the 2nd start. Based on our policy of developing batteries, Only with the deployment of renewable capacity, we have built a significant BESS pipeline of around 10 gigawatt, out of which 1.6 gigawatt is in a mature state. The aim will be to gradually incorporate The reason to new installed renewable capacity once regulation guarantees the competitiveness of this facility.
In network, and I am now on Slide number 9, Endesa's distributed energy increased by 9%, 4.1 when considering only distributed energy to own customers. Last year, significant cumulated investment effort has resulted in a sound improvement in all operational performance indicators. Also continued their downward trend in the period by 0.3% 12 points, while the time of interaction saw a decrease of 1%. Our continued focus on network digitization is one of the main drivers of these positive effects. We remain committed to becoming a best in class digital network operator, maintaining a continuous focused on quality and operational efficiency.
When it comes to retail and Endesa X On slide number 10, total energy sold rose by 2% on the back of an emerging recovery trend in economic activity and the differential Effect of last year's Q2 affected by the COVID outbreak and related lockdowns. By segment, both B2B and B2C sales as well as SCBP, that is the regulated tariff experienced an increase in sales. The most relevant was B2B by 3% and to a lesser stem B2C and the regulated tariff. Total power customers decreased by 2% or around 200,000, most of them in the regulated market as a consequence of high price volatility since this first half of the year impacting regulated tariffs. Moreover, on the free market since the second half Of 2020, we saw an increase of the competitive intensity that remain high, especially in the Q1 2021.
However, we are now witnessing some signs of a more rational approach. Proof of this change is that we have been able to revert the loss in the liberal segment where we have grown by 41,000 customers in the Q2. Regarding electricity mobility, we continue to deliver on our deployment plan of Charging points reaching a total of 8,000. The recent renewable of the A state plan to incentivize electric vehicles planned Moeb S3 for the 2021 to 2023 period provides for its support for the strategy for this strategy going forward. Concerning our energy management on the slide number 11, the unitary integrated margin resulted in EUR 26 €0.1 per megawatt hour, a 25 decrease versus the €0.35 per megawatt hour in the first half twenty twenty and minus 17%, excluding the positive store position effect in 2020.
Electricity sales in the liberalized business increased by 2%, recovering from 3rd half 2020 is strongly marked by the COVID pandemic. The evolution of the integrated marine has been clearly affected by the unfavorable market situation being the main factors behind the margin decrease To propose the lower generation margin mainly due to the application of the Catalan tax, weaker OTC references, lower income from thermal output and reduced hydro output. 2nd, the absence of the 4th position effect marked by a tough market context versus a very positive energy management in 2020. And lastly, Supply margin in line with previous year, where the increase in ancillary services and peak Off peak is offset by a higher tail and the recovery of the COVID effect affecting demand in 2020. The unitary margin remains flat at around €10 per megawatt hour.
The unitary integrated margin of €26,100,000 Now at our include €38,000,000 from Brent and CO2 hedging, which has been booked in non mainland business. Regarding forward sales, we have hedged for 2021 100% of our estimated price driven output at a price of around €71 per megawatt hour. Once we consider our total sales mix, the all in revenue, Including in index energy will reach €74 perneowatt hour. For 2022, hedge volumes stand at over 74% at an all in price of around €74 per megawatt hour that is EUR 3 per megawatt hour higher than 2021. For 2023, we have started the hedging process at prices similar to 2022, but volumes are still not relevant.
In terms of ESG on Slide number 12, let's comment on a few main highlights achieved during the period. Total gross CapEx attained €700,000,000 or a 15% increase when compared to last year. Each of our main strategic priorities has a direct impact on the SDG 7, 9 and 11 and in the wider scope of SDG 13 reaching a total of around EUR 85,000,000 of CapEx allocated to climate actions. We keep working on our different program in all of the 3 dimension of which we have attained new landmark such as the following. First, the creation of Endesa's Circular Economy Academy.
2nd, in distribution, we are proud to be the 1st electricity company to receive a North Zero Waste Certificate for our distribution activities in Aragon, Castilla, Leon and Galicia. We have been recognized for the 3rd consecutive year as the Ives 35 company that best reports on transparency and fiscal result with the maximum score possible as well as leader in financial information disclosure according to report of 2020. The deployment of all of our initiatives and the integration of the ESG scope across all areas has once again been recognized by the most prominent EHT ratings worldwide. Endesa recently obtained and share with our parent company Enel, the best score of all sector around the world in the VGL index. Likewise, in its last and very recent update, the Tutsi For Good index confirms our leading position in the conventional electricity chapter also fair with Enel.
And now let me hand over to Luca Pasa, who will give you the financial results.
Thank you, Pepe, and good morning, ladies and gentlemen. I would like to comment on the financial highlights of the period. I'm on Slide 14. Reported EBITDA stood at €1,879,000,000 decreasing 19%. On a like for like basis, once netted from the last year personnel provision effects, the EBITDA would have decreased only 4%.
Net ordinary income dropped by 26% year on year, reaching €832,000,000 3% lower once deducted the first half twenty twenty provision mentioned above. Funds from operation reached €492,000,000 51% down versus last year, mainly due to regulatory collection delays and other conjunction items as we will explain later on. Finally, net debt increased to €8,200,000,000 up by 19% versus full year 2020. Moving to the detailed analysis on the like for like EBITDA on slide 15. Let me now briefly set out the main drivers.
As already commented, like for like EBITDA stood at €1,879,000,000 minus 4% versus first half 2020. Generation and supply EBITDA decreased by 15% to €766,000,000 mainly affected by the market condition impacting in the business as we will explain later on. Distribution EBITDA declined by 3% at €956,000,000 Finally, non mainland generation EBITDA increased a sound 131 percent to €157,000,000 Moving into a deeper analysis, we are now on slide 16 on the regulated business. Like for like EBITDA increased by 5% to EUR 1,113,000,000 with a higher gross margin and a reduction in EUR 15,000,000 with a higher gross margin and a reduction of 6% in the fixed cost. Distribution margin decreased by 2%, mainly due to the application of the new remuneration parameters of the 2nd regulatory period.
The non mainland generation gross margin increased by 31%, thanks to the normalization of the negative margins in 2020 driven by the mismatch between the fuel cost reference for regulated revenues and the effective fuel cost, the lower regulation parameters, the absence of the positive reorganization booked in 2020 and the positive impact of Brent and CO2 hedging. Fixed costs were €22,000,000 lower once deducted the net provision release effect of last year, mainly due to lower maintenance cost in the islands. On the liberalized business on Slide 17, EBITDA reached euros 766,000,000, 15% decrease with 7% of lower gross margin and 4% increase in fixed Cost on a like for like basis, mainly as a consequence of the positive update of the workforce provisions booked last year, mitigated by the cost of the COVID recovery plan recorded in 2020. The liberalized electricity margin amounts to €1,294,000,000 positively affected by the recognition to Endesa of the right to be compensated for the CO2 clawback in 2006 for €188,000,000 booked in 2021 and by the ruling of the Supreme Court on the hydraulic canon law set in 15, twenty for €48,000,000 As Pepe commented before, generation margin decreased mainly due to the application of the Catalan tax, Weaker OTC references, lower income from thermal output and reduced hydro output.
In relation to the short positions, the negative results of the period has been mostly neutralized by the positive from Brent and CO2 hedging. Supply margin remained in line with the previous years, where the increase in the ancillary service and peak of peak was set by the COVID effect impacting demand in 2020. The unitary margin remains flat at around €10 megawatt hour. And the Green Power gross margin reached €210,000,000 plus 49%, thanks to the higher prices seen in the period and the new capacity in place driving a 30% increase in production. Gross margin Ingas fell €111,000,000 in first half twenty twenty one to €29,000,000 mainly affected by the negative mark to market due to the steep rebound of gas prices, which we expect to be diluted or fully neutralized Along the second half of the year as the contracts are being settled in a market where we expect gas prices who have already reached their maximum levels.
Endesa X contributes with €63,000,000 of gross margin aligned to first half twenty twenty and in line with full year guidance. Now moving to the next slide on the fixed cost evolution. Total reported fixed cost reached €967,000,000 a 0.4% increase on a like for like basis. Once deducted, no recurrent effects as the update of the provision for worst for restructuring plans in place, Indemnities and Tax and Labor related Risk and the Public Responsibility Plan for the health crisis of COVID-nineteen, Fixed cost would have decreased by 3%. This is mainly due to the several efficiency plans put in place in the previous years, crystallizing in a reduction of the average account by 4.5% in first half twenty twenty one versus last year with a low record of employees since 2014.
Thus, efficiency and others more than offset the positive inflation effect and perimeter and growth effects on costs. Moving now to slide number 19. A quick follow-up on our efficiency program, which is consistently proving to be effective across all our business lines. The new capacity put in operation in the last 12 months, its subsequent production increase and the cost optimization in renewables led to a solid decrease in user fixed cost reaching €16 megawatt hour in first half 2021 from €20 megawatt hour in 1st half 2020. In distribution, unitary costs remained flat in €41 end user despite the investment effort we are making in Smart Grids.
On the other hand, these investments, together with the digitalization initiatives of our processes, led us to expect further efficiencies. Lastly, in supply, we observed a slight increase in the cost to serve During the period, the Filomena storm and the accessory circular may have been the main causes of the increase in the number of interaction with our customers and therefore of the corresponding cost reserve. The opposite effect occurred in first half 2020 when the state of the Alarm due to COVID pandemic And the closure of the customer service point significantly reduced the balance of operations. In any case, our commitment to Digitalization of the business continues to lead forward as can be seen in the following KPI evolution. 16% growth in the number of digital contracts to 5,900,000, 31% increase in the number of e billing contracts reaching 5,500,000 e bills already exceeding the target for 2023.
The digital backdrop boosted by the COVID pandemic is behind the solid increase of digital interactions with our On the B and L evolution from EBITDA to net ordinary income, and I'm now on slide 20. D and A increased by 3% explained by the higher amortization mainly in renewables and distribution due to the investment effort carried out in the last year, partially compensated by minus €80,000,000 or lower bad debt, mainly as a consequence of the current scenario economic recovery in Iberia and the intensification of the collection management temporarily suspended in first half 2020 due to extraordinary measures adopted against COVID-nineteen. Net financial results were strongly affected by the financial revenues from interest rates for late payment in relation to Endesa Rai to be compensated for the 2006 CO2 Quebec and the hydrocarbon. This was partially offset by the financial update of Workforce and this monthly provision. The effective tax rate resulted in 29.4 Sorry, 24.9%, slightly lower than last year.
All in all, net ordinary income decreased by 26% over the period, minus 3% on a like for like basis. Before going to the rest of the K and L lines, Let me now take a look at our guidance for 2021. 2021 guidance is confirmed despite exceptional Despite the exceptional condition in this first half, also thanks to the nonrecurrent effects, which mitigated the extraordinary situation in first half and we expect obviously to normalize based on a more supportive performance in the second half of the year. We expect a second half very similar to the second half that we have experienced in 2020, I. E, €2,100,000,000 of EBITDA based on the improvement of the integrated margin with a short position more than offset by commodities hedging and better supply and generation margin coupled with renewable capacity addition.
Gas margin increased in the absence of any additional mark to market impact in the second half further progress in efficiencies and regulated business picking up pace in second half due to the seasonality and investment acceleration. The expected performance in second half will allow us to reiterate our guidance that we have announced last November, I. E. For €1,000,000,000 EBITDA and €1,700,000,000 of net ordinary income for the full year. Now moving to cash flow on slide 21.
Funds from operations decreased by 51% year on year, reaching €492,000,000 due to the following effects: lower EBITDA after provisions paid and net provision release of around minus €141,000,000 Working capital and others rose by 38%, mainly due to the increase of net balance of receivables and payable accounts as a consequence of collection delays related to the recently enforced royal decree on excess tolls and charges. The steel non cash items included in the first half 2021 EBITDA mainly the CO2 and hydrocarbon sentence and higher inventories, partially offset by the lower other non cash provision. Some of these effects are temporary and are expected to be recovered in the coming months. We're talking about between €350,000,000 €400,000,000 Income tax paid amounted to minus €85,000,000 minus €22,000,000 in the previous year, mainly due to the €73,000,000 corporate tax refund in first half twenty twenty corresponding to fiscal year 2018. Cash based CapEx, along to the previous year, led to the free cash flow negative to €368,000,000 In this period, EUR 521,000,000 lower than first half twenty twenty.
Nevertheless, as mentioned, we expect FFO to normalize in the second half of the year once we collect the aforementioned delays. Let's now take a look at net debt on slide 22. Net debt amount to €8,200,000,000 EUR 1,300,000,000 higher than full year 2020. The increase is clearly affected by the negative free cash flow explained before and the payment of the interim dividend against 2020 results paid in January. The regulatory working capital remained below last year's figures at €809,000,000 And by year end, we expect net debt to €8,500,000,000 Assuming regular working capital worsening to €935,000,000 and FFO in line with budget at €2,600,000,000 Our leverage gets stable with net debt to EBITDA ratio at 2.1 times on a like for like basis.
Our cost of debt reached extraordinarily low levels, maintaining at 1.7%, still marking historical minimum and one of the most competitive financing costs of European utilities. Another milestone to be remarked is a substantial increase in the coverage of debt maturities to a very comfortable 39 months. And now, let's take a deeper look in sustainable finance on slide 23. Sustainable Finance account for 49% of total gross financial debt and Endesa is fully confident to achieve the 60% goal in 2023. We have set new milestones in SUSTEREMA Finance by incorporating sustainability in all its new financial transactions.
As a result, All of Endesa's liquidity facilities are now SDG linked and the percentage of SDG linked bank guarantee lines have reached 95%. In its commitment to expand sustainability across all financial products, we also added 2 new sustainable financial instruments to its already high diversified portfolio like interest and swap as well as green project financing. And data's leading role as a promoter of SDG initiatives as earned widespread recognition in the financial community. And it's worth mentioning that we also been receiving at the sustainable loan the best sustainable loan for 2020 award by the Spanish Sustainable Finance Observatory, Oviso. And now let me hand over to Pepe for his final remarks.
Okay. Thank you, Luca. To close this presentation on Slide number 24, I would like to share some final remarks on our performance during this first half. 2021 guidance is confirmed, as Luca commented on before, despite the exceptional condition during this period. And thanks to the non recurring effects that have allowed us to mitigate this extraordinary situation that we expect to normalize back by a supportive second half.
In relation to the aforementioned regulatory initiative, We would like to express our willingness to collaborate with all institutions to find the most effective measures to alleviate the situation of exceptionally high prices that so negatively affect the final customer and therefore our economy. We keep advancing in our decarbonization and electrification process in an efficient way, lowering costs while moving steadily forward in meeting our objectives of fuel2 free emissions production. Andestar will play a key role in contributing to the Spanish economic recovery through solid plan presented to the government in relation to the recovery plan aimed at providing structural and long term value with a very positive impact both in terms of job creation and GDP increase. All this without leaving aside Endesa's commitment to the circular economy as the basis for a new sustainable economic model and its commitment to extend this culture within the company. Ladies and gentlemen, this concludes our 3rd half twenty twenty one results presentation.
Thank you very much For your attention and as always we are ready to take some questions.
Okay. Thank you, Pepe. Thank you, Luca. We are now open to answer any questions you may have. I will now hand over the floor to Ms.
Mar Martine. Okay. The first question comes from Harry Wybaud from Bank of America Merrill Lynch. Please, Harry, go ahead.
So 3 for me, please. First one is on the windfall Tax. Am I right to interpret from what you mentioned earlier that you do expect this tax to be passed? It seems Increasingly clear from all the companies that everyone thinks it will be passed. So I guess the question is, is it now a 100% certainty that there is going to be a tax In your view, that it's just going to be a modified one?
And have you had any sort of sense or feedback from government as to Which of the modifications they might be open to making to the tax? So that's the first one. Second one is on the improvement in the non mainland business. Could you just give us an idea as to how recurrent you expect that to be? It looks like you've booked some hedges inside that part of the business, which is I don't think you've done before.
So Just wanted to unpick a little bit the result there and see whether that's going to persist in the second half and into next year on non mainland. And then finally, just looking to next year and the year after, and you updated your you gave us your updated hedging prices. Can you give us any kind of flavor as to what the benefit might be of higher power in those future years? Obviously, you've taken some pain on Spot prices, and that's pretty visible here. But I guess it's not very explicit right now what the So it might be on power prices in 20222023.
So I don't know whether there's a rule of thumb or some kind of guideline you can give us To how material the improvement might be for the next 2 years on higher forward power prices? Thank you.
Thank you, Harry. And I will try just to answer the third one and then I will give to I will pass to Luca to answer the second and the third and to give More details in the first one. If I have understood well, you are saying about How we are going to deal with this Q2 clawback proposal and the taxes that we have in this paying we are paying now in the electric sector. First of all, let me say that What we have in Spain is a huge different. We have the same situation that all other countries in Europe.
But the huge difference for me is the rest of the European countries. Yes. Well, I'm saying The main difference between Spain and the rest of the European countries is the regulated tariff, which you know is indexed to the wholesale prices. And Therefore, Dovson protect domestic customer from the market volatility. So for me, this could be the first and the main actions in the future.
I'll take on the second and third question if you agree. So on Mainland, basically the expected in terms of performance for the second half is supported by demand recovery and seasonality demand is more pronounced, especially in Q3 in this business. Despite this recovery, full year recurring gross margin is expected to be slightly lower than what we expected. Basically, we are pointing to something higher than €500,000,000 of gross margin. We're going to be just below €500,000,000 of gross margin.
As a consequence obviously of an efficient regulation of fuel cost and recognition, especially in the gas basically consumption. Now what we book in terms of hedging, which is the €38,000,000 of Brent and CO2 is something that will be there still in the 2nd part of this year Because those positions are, let's say, cash is accounted in the islands, But it's something that it really depends in the future years whether we use the same strategy when it comes to basically Our overall share position. So to be honest, it's very difficult to give an answer for the future years. This year, they've been By this hedging which is accounted for cash flow hedging purposes in the islands. Then when it comes to the third questions, So our flavor on, I would say, 20222023 higher prices, Let's say effect.
I mean, as pointed out today, we have hedged 74% of 2022 at the moment at an oil price of €74 megawatt, which is already €3 megawatt higher than our hedging for 2021. We are pending to be hedged For 2022, 9.4 terawatt hours. And the OTC references at the moment are pointed to 68 megawatt hour Visavis basically our business plan assumption, which is the 48. So we have basically a 20 euro megawatt hour delta, which means If we manage to hedge at this level, that we will have a positive effect of €190,000,000 For 2023, to be honest, the AOTC reference was much lower, Much less liquid and let's say the part that needs to be hedged is much larger. So the effect could be larger, but obviously 2023 in terms of the majority of the pension will be done also after our business plan announcement where we are going to revise also a full price assumption.
But definitely we have, let me say, some positive support from this, I would say, higher forward prices vis a vis our business consumption for 20 20 2, 2023.
Okay. Thanks. So that was €100,000,000 €190, €190,000,000,000 right on sort of EBITDA impact, if I heard that correctly.
The difference between 68 OTC referenced today visavis business assumption of 48 Euro megawatt hour.
Okay. Thank you.
Okay. Thank you, Harry. I'm sorry because I think that we have some issues with the phone line. Hopefully, it has been solved. Okay.
The next question comes from Enrico Bartoli from Stifel. Please, Enrico, go ahead.
Yes. Hi, good morning. Thanks for taking my question. First one, I would like to go back to the CO2 Quebec issue. I was wondering if the measure is finally approved, if you have already mined some measures That could offset on your EBITDA the impact of the new tax.
And also from the Slide 6, Understand that you are positive on a possible improvement of the first proposal by the government. I was wondering How confident you are on this? And if you can provide us some indication of the impact that you expect on your EBITDA, should The proposal of the CMC be final approved by the Parliament. 2nd question is regarding the guidance 21. Sorry, Jose Bogas.
Sorry, Jose Bogas. If you can repeat the drivers that you expect in the second half of this year, I get that Yes, Gino, CO2 and fuel costs will be there also an improvement of the gas margins, but if you can a bit elaborate More on that point. And the last one is on also going back to the go back to CO2, there were some discussions Just in the industry about the profitability of nuclear plants. If you can elaborate a bit on where we are now and what you expect the impact would be From the implementation of the CO2 Quebec and if the CO2 Quebec is finally approved, if you would ask The government to revise the current plan for the phase out of the plants that are already been agreed in the past years. Thank you.
So let me try to give you an answer regarding the first and the third question, If I have understood well because the line, as you have said, it's not perfect. Well, Starting for the profitability, we are talking up here. Well, the problem is very clear. This debate arise because prices are high, that is. Let me say that all the European countries are facing exactly the same situation regarding spot prices, but nowhere a hotel debate like this is taking place.
Well, the reason is, as I have said before, at least in my opinion, these regulated tariffs. Having said that, Well, the second thing that they would like to say is that in our TANIA, That is the National Integrated Energy and Climate Plan that we have. In my opinion, it's very, very important The nuclear power plant also the hydro, but the nuclear given the premium capacity to the system. When you introduce some kind of taxes or reduction of the remuneration of this nuclear power plant, Well, you should take into account what could happen with the profitability of these I mean, more or less, People think that we have a win for profit in this asset. Let me say, Simply do not exist, but if they exist, they would assist, which is not the case.
They are more than compensated by the windfall taxes after the year 2,005. We are talking about something around €20, €21 per megawatt hour in the nuclear and €16 per megawatt hour in hydro. So we have let me say in the cash cost of the nuclear power plants, something around €45 Now that we're taking into account that 2021 are windfall taxes, let me say that again. In my opinion, the government should take into account this, because if the final proposal penalizes the nuclear and the hydro in that way that we are not able to recover the cash Of course, usually, while there is no viability for these assets in the future. The second thing that I would like to say is that the increase in the price CO2 is not the cause of this situation.
For me, this situation, which can last for many months, Yeah, affecting all the European countries is due to the natural gas. Natural gas for me is the real responsible of the pulp price increase. So we should focus In this problem, how to resolve at the level of the European Union, how to resolve this problem. I think that mistakenly, We have focused in the CO2 price mitigation when again the real target is natural gas. Well, also we could take, in my opinion, I care about this because this kind of merger could introduce regulatory instability and increase uncertainty and will create important distortion in the market and could be a barrier to invest.
Also, I said there are more efficient alternatives. Nevertheless, we are in an open dialogue with the ministry. And within that, yes, because the objective Of both, in that case, the ministry and also the utilities is the same for me. It's really just to fulfill get the objective set by the European Union. And let me say the fit for 55 That we have today challenges but achievable and that is our objective.
Our objective so I'm confident that at the end we will reach a solution that will really be helpful For all of us trying to reduce the impact to the customers and not penalizing without any sense the utilities and not putting risk in the evolution of the our PANIC. Luca, do you want to add anything or?
No, no. I mean, just confirming that we are pretty confident that the improvement will be substantial on the from the first The proposal given the discussion we are having currently with the ministry and other parties involved into this Basically, revision of the IFRS proposal. Anyhow, on the second question, you get on 2020 1, let me take the opportunity to basically repeat what I Said and give you some more granularity as I understood that the line was pretty bad. So we basically expect a more supportive performance in the 2nd year, Very similar to what we basically performed in the 2nd year of 2020, I. E.
€2,100,000,000 of EBITDA. And this is on the back of the improvement of the integrated margin with a short position that are more than offset by positive commodities hedging, Better supply and generation margin with obviously new renewable capacity additions, higher volumes and expected lower ancillary services cost, which is the 1st block. The gas margin increase in the absence of any additional mark to market impact in the second half and supported by the positive results from the re opener processes that we are currently undergoing and this is the 2nd block, further profits and efficiencies. And here basically we are targeting the best OpEx performance since 2014, which is €1,900,000,000 for the full year in terms of OpEx. And for the regulated business, speaking, our pace in second half due to seasonality and some more investment accelerating in the second part.
Now When it comes to the integrated margin, let me give you some granularity. We expect to reach €2,200,000,000 of gross margin for the full year, which implies basically a unitary margin of €29.5 megawatt hour, which is in line with our original guidance. And this is backed on generation margin that is expected to basically increase in second half to a full year figure of EUR 1,300,000,000 Mainly thanks to better thermal results, backed by combined cycles increased output, Suspension of 7% generation tax in the 3rd quarter, price effect and lower cost that are partially offset By lower volumes in mainly in hydro, because we are expecting basically a full hydro year just North of 6 terawatt hours vis a vis last year, it was 7.17 terawatt hours. In supply margin, we also expect to expand in the second half, The full year target of €900,000,000 gross margin and this is further demand recovery. The repricing of Contracts that are underway in the new price scenario jointly will lower cost.
The expected improvement of auxiliary services and the peak of peak cost paid in the supply And deposit resettlements to be booked in the second half. While for the short position, once netted by the expected positive results Coming from the already commodities hedges taken on Sotho and Brenta, we will end up slightly above €30,000,000 expected in the business plan for the full year. Finally, on gas margin, we basically significantly upgraded in the second half, the negative mark to market caused By the record high gas prices booked in the first half will be basically reaching the maximum impact now and is unlikely that prices will maintain this trend when the unit companies become basically settled. Retail will keep on yielding positive results in the second half although somehow more moderate. Renewal gas margin is expected to end up Just slightly below expectation, we had a target of €175,000,000 of gas gross margin for the full year.
We're expecting just something north of €150,000,000 for the full year. I won't comment distribution and islands which are basically on track with budget and efficiencies I've already commented on before. I guess this is pretty detailed for your second part of the year.
Okay. The next question comes from Alberto Gandolfi from Goldman Sachs. Please, Alberto, the line is yours.
Thank you, Maher, and good morning, everyone. Given the detailed explanation for the second half, I was Hoping I could ask about 2022. Particularly, I wanted to ask if it's still you believe it's still possible to grow EBITDA On a recurring basis, considering that there were quite a few one offs in 2021, the likely introduction of Maybe an improved carbon levy. And maybe if you can comment on how long it would take to reprice the retail portfolio. So that will be very helpful.
Or maybe just sticking to the unregulated business for this comment for 2022. The second question is more, again observing that there doesn't seem to be an EBITDA Partly because of the differences in margins between regulated and liberalized customers, but if I'm not mistaken, still nearly averaging nearly one Percentage point customer losses a quarter. So can you maybe comment on the dynamics in supply from a customer perspective? Are you letting go customers to protect margins? Do you think this is slowing down, accelerating?
Do you have any commercial plan to take back some customers? Maybe you can comment on the dynamics would be great. And the last one is On the back of the Fit for 55, would you expect the Spanish government to revise upward It's a National Energy and Climate Plan and I'm thinking in particular on investments in renewables and networks. Thank you so much.
Okay. Alberto, let me give you some color to your question and then Luca Explain better. Starting from the last one, the pit for 55, let me say that The PENIC and the recently approved climate change law are absolutely aligned to these packets and contemplate even more ambitious target in terms of renewables 42% or in NRE efficiency 39.5%. So we don't think or I don't think that the government of Spain is going to change anything in terms of investment for the future. The plan that we have is very I mean, the clinic is very challenging, but as I have said achievable.
And now we need just to go ahead with this plan. In terms of the customer dynamic, first of all, the good news is that it seems That we have reached a point in which there are signs of lower competition. Well, that is the strong competition, but lower. As we have said before, all of these started With a private world that I never think that could happen at this intensity in Spain. It's don't benefit anyone.
And I think that some companies are realizing this situation. And then they are trying just to well, slow the way in which we have been doing In the past, no? As well, war is usually executed by new entrants who normally, as I have said, do not seek to remain in the business, but to extract value quickly by selling the customer base. So when one of the main incumbents that should use these price work, but this usually due to a specific action, in my opinion, looking for some target in the short term Interest or what is worse in my opinion, a lack of idea. So ability to make an offer to customer that adds value to both the client, the customer and the company.
Nevertheless, we are happy because we have seen a reduction I mean the intensity. Well, we will continue with our strategy. We are trying just to improve our offer to our customer, trying to offer them more value. And we have tried to avoid just to go in this press war, But we have taken some action in the short medium term to mitigate the negative impact Our competitor strategy, well, the good news is that We are now seeing signs of a reduction. And this is one of the reasons why we think that the second half of the year could be better.
And in terms of the in the second half of the year twenty twenty, twenty twenty one. Let me give Luca Pasa, before just to answer. Sure.
I think Alberto is more focused on 2022. But basically, Alberto, I mean, is this a business from your question that can have basically an increasing growth in EBITDA From where we are today according to what is the environment today. I mean, my answer is clearly yes. Obviously, We need to couple with the regulatory environment, I. E.
If the levy, the clawback will basically be approved, It depends on the impact of this Quebec. But as I pointed out before, we still have more than 25% of basically our production to be hedged. And now the delta between what we see OTC references for 2022 and where is the business value assumption, it's €20. So we have at the moment a potential upside of €190,000,000 for 2022. We will see whether regulatory, Let's say changes will lead this potential upside.
Now as you probably remember, when we presented the plan back last year, Basically, the true price scenario was completely different. We went out with a curve up to €49,000,000 The forwards were just €5 on average below and we have been discussing for 3 months basically why we were thinking that the price should have increased A new analyst. We are basically thinking that we were too basically optimistic. Now we are in the opposite position. So I think This is a company that Enterprise business can definitely deliver more.
As far as the sub questions on this, I mean, how long do we take to deprice To validate customers, I can tell you that we have already started 2 large repricing up campaigns for this year that we deliver results already in 2022. And this ties back with the question to Pepe, I. E, do we basically Preserve margin or preserve customers. I think for us, it's really to strike a balance between the 2 In terms of the customer that we want to retain and basically the margins that we want to support. So To go back to your question, we expect still an expansion of the unitary margin for 2022.
And obviously, we need to basically couple what Come out in terms of new regulatory hurdles that we need to overcome.
Thank you, Alberto. Next question comes from Javier Suarez from Mediobanca.
Thank you. Thank you, Maria. Thank you for the presentation as well. Three remaining questions. The first one is on the regulatory proposal in Spain.
The question related is on the necessity to open the debate on the a possible modification of the marginal pricing system. So while the discussion is on the possible introduction of Saflor, I think that in an scenario in which Carbon prices are going to be significantly higher and renewable energy is more relevant in the pool as well, Maybe necessary to make an overall rethought for the system. Do you said that do you think that that debate on the Possible modification of the marginal pricing system and to put the basis for a system that works on a completely different basis is something that is necessary. That will be the first question. The second question is on the guidance.
I think that during the presentation, the company has confirmed the guidance for net income for 2021 at €1,700,000,000 If you can make any comment on the EBITDA and gross CapEx targets as well. And the current finance question is on the proposal that you have made under the record fund totaling €23,000,000,000 You can give us some details on the breakdown for those projects and which are the most promising ones. Thank you.
Okay. Javier, let me try to answer the first one and then I will give I work to Luca just to give you some details, breakdown of the recovery plans, our eligible Project and also the absolutely yes the way in which we are going just to reach our guidance. Well, modification of the margin of system, taking into account the carbon prices. Let me say that We use the same model all over Europe. We use That because we are convinced or Europe is convinced and I agree that the best way to allocate resources Or to optimize the system is the margin.
It is true that there are some kind of technologies that the variable costs are close to 0 They received the price of the the marginal price of the bull, but that is the way in which things Rand. And I think that there is no any reason. I have told that all this problem that we are living now with the increase in prices, we have focused on the CO2 price. Well, CO2 price will be high and will continue to be higher even higher just because It's what we have decide at the level of Europe just to reduce the emission of CO2. But on top of that, I should say that this is not the reason of this increase in the pool prices.
The real reason, as Hi, Jose Bogas. It's the natural gas. So if we want to resolve this problem going to the region, we should think about how to manage this increase in natural gas. That is the situation. 2nd, well, in the long run, I think that when we have only renewables, let's say that, There is no any signal that fix the price, the marginal price.
So we will need to tune the system in the future for sure. I'm trying to imagine that we will have something like Capacity payment that the let's say, the customer will contract and then the energy will be for free. But you will pay for the capital investment for the investment. And then the barrel cost will be Close to 0 and then we will change we need to change this. When it's going to be The right moment to do that, I think that at least in Spain and I think also in Europe, not before the year 2030 in my opinion.
During this A period of time what we will need is just to add some kind of payments like the capacity payment because The problem that we have is that we need to have some kind of capacity to support the supply in the year, let's say, 2,030, in which we are going just to shut down from nuclear power plants. Also, we have shut down coal power plants. And just because the increase in the renewable, The combined cycles are going to have a very low load factors. And then they will need to be paid For the capacity, if we want to maintain the combined cycle, yes, to give the security of supply to the system. So after the year 2030, I think that we need in Spain to introduce as soon as possible this capacity payment for The technology in general, because you shouldn't focus only in combined cycles, but let's say this is the combined cycle.
We need this to get to stay in the system. And second, thinking that in the long run, After the year 2030, probably we will need to train the whole system because we don't have The signal any signal because all the production will be renewable production And we will have the signal of price in the future.
Okay. When When it comes to the guidance on EBITDA for the 2nd part of the year, I think I was pretty clear in the previous answer, but basically we're expecting The performance of €2,100,000,000 EBITDA in the 2nd part of the year based on 4 main drivers. The first one is the improvement of the integrated margin with With the share position more than offset by the positive commodities hedging and better supply and generation margins with the new renewable capacity additions, Higher volumes and expected lower incentive services cost. The second block is gas margin increase in the absence of any additional mark to market impact in the second half and supported by the positive results from the re opener processes which are undergoing at the moment. Further progress in efficiencies where we target €1,900,000,000 of OpEx for the full year and obviously the regulated business picking up pace in the second half mainly on seasonality and acceleration of investments.
When it comes to gross CapEx, we are guiding €2,000,000,000 of gross CapEx expenditure for the full year, which is in line with the Budget, we record accounted only for €734,000,000 of capital spend during the 1st part of the year, but that's normally was in budget. We are going to accelerate our CapEx spend during the 2nd part of the year. And then on the third question, so on the recovery fund, as pointed out So slide number 3, we have €23,300,000,000 of projects. It's more than 120 projects And can be summarized in terms of the potential investment according to the different basically brackets. Renewables are €8,200,000,000 These are not trade renewables.
So you know that renewables per se are not eligible under the next generation EU. So they need to be basically either linked to batteries or with other, I would say, system or technologies in order for to make these investments innovative Under the eligible criteria, we have €4,600,000,000 in storage and flexibility. We have €3,700,000,000 Margarit, I. E. Basically Networks.
We have about €3,000,000,000 in hydrogen. I think we discussed the hydrogen plan also in the last results call. We have about €2,200,000,000 in refurbishment and efficiency and about €800,000,000 in sustainable mobility. And then we have about €900,000,000 in upgrading some of the existing thermal facilities. Now you also asked what is the probability or the most probable bucket in terms of these projects.
I think it's very difficult to give you an answer today. The Spanish government is starting as of now to prepare basically the different auctioning for the different areas. Hence, I think we will likely give you a more thorough questions towards at the end of this year. Now out of the EUR 23,300,000,000 obviously, we expect to get something in the region between 20% 30 Percent as I say our expectation.
Thank you, Javier. We move now to the following analyst, Manuel Palomo from Exane BNP.
Hello. Good morning. Thanks for taking my questions. I will have just maybe a couple of them. One is somehow related to the windfall profits, to the windfall profit tax and by the government and is whether you have requested or will request the extension of that nuclear plant whose life Was expiring in 2021.
My second question is sort of a follow-up on Javier's This question about the marginal price setting mechanism. And it's about This is what you mentioned about the capacity payments. It sounded a bit incoherent to request capacity payments When above 78% of the hours in the wholesale market, the price is fixed by gas. And finally, I would like to ask yes, to ask another question, which is about your expectation. If you could update on your expectation about Endesa installations and renewables in the coming Few years, but also about the market installation in renewables, about the Spanish market installation in renewables in the coming few years.
I try to understand whether Endesa is accelerating while maybe the market is overall slowing down a bit in terms of renewable installations. Thank you.
Okay, Manuel. I will try to answer but could you repeat the I will try to answer your question. Could you repeat the first one? It's about the windfall profit tax, But I have understood exactly the question.
Yes. I say it's somehow related Because at the beginning, you mentioned that you could request or not the extension of digital life of nuclear plants. And I know that one of them was Aspiring in 2021, you had to request that extension. My question is whether you have already requested or if you will request that extension?
Okay. Well, first of all, we are waiting, but we are absolutely confident in which we will reach As I have said, yes, because again, I think that we are absolutely aligned with the government in the objective that we are trying to reach. So at the end, we will to find the solution. And I hope that all these kind of discussions will be resolved with this way of doing things with the alignment between the government For the regulator and all the utilities. Talking about the marginal price, Well, it is right that now the one who which may really Fix the prices combined cycles.
And that is the reason why with these Very high gas prices the gas price is The main issue that really increased the price in the pool. I'm talking about the and then I will give the word to Luca. Talking about the renewables, I think that we have an ambitious and challenging renewable expansion plan. You remember 3.9 Gigawatt for the period 2021 to 2023, also something around 15 gigawatt by the year 2030. The testing are really achievable in accordance with Endesa and also the Enel Group technical capabilities and also our pipeline that we have more than 50 gigawatts.
Well, We will try to do this in a profitable way, trying to Give things without not making mistake. And being a vertically integrated company, Well, we think that we will have a higher stable margins, So we're in a better position than other geographies. Having said that, Well, just to reach something like 5,000 Now what each year has to get 50 gigawatt at the end of the year by the year 2,030, It is again challenging. I think that we need to improve many things in the future that Regarding to permit, regarding to total things. And perhaps this year 2020 and the year 2021, we could Yes, slowdown in the deployment of the renewables all over the system.
But at the end resolving some kind of Problems, we will in my opinion, we will reach the objective that we have at the level of Spain. And now Luca, do you want to add?
Yes. As far as our installation basically targets and pace, we are targeting 700 megawatt this year, which we are well on track to complete 1.4 giga next year and 1.7 in 2023. Now to your question whether we are, let's say, working to accelerate this space, obviously, this year is basically gone in the sense that what we are in execution today Will be sufficient to reach the 700 megawatt, but we are not increased this year, while for the rest of the business plan, the current business plan, planned 2020, 2020, 2023, yes, we are working to accelerate. Now whether we are going to deliver this acceleration or not is something that obviously We will see between now November, but definitely between the pipeline approaches that we have and the speed at which basically we are developing pipeline, We could be in a position to deliver on average more than the 1.5 gigawatt of annual additions that we are targeting also beyond 2023. So that's I'd say the work of management is to be in a position to accelerate our renewables installation going forward.
Thank you, Manuel. Next question comes from Javier Garrido from JPMorgan.
Just a couple of follow ups. First on your hedging for 2022. You have increased the volumes from 62% at the Q1 level to 74% now, but the price For the price driven output is stable at 74,000,000. You just spent my last hour. I would like to understand Why that's the case given the rise in the forward seen in the period, if it's due to some temporary reasons or it's because of rounding, You could elaborate on the reasons that will be very useful.
The second question is on the suspension of the 70% Energy tax in Q3, what's the impact you are estimating from that suspension? Could it be around €40,000,000 to €50,000,000 for Endesa? And then the final question is on net debt. Apologies, but I just wanted to confirm, you said Guidance is now €8,500,000,000 And if that is the case, Luca, what has driven the increase Same guidance versus I think it was EUR 8,200,000,000 in Q1? Thank you.
Well, I think Luca is perfect Yes, to answer that.
Sure. So when it comes to the third question net debt, the guidance is 8 point 5 and is based on a record working capital of €935,000,000 expected at the year end, which is €300,000,000 higher than what we budgeted for. So basically, we're expecting to recover our FFO at budget level, so €2,600,000,000 by year end. That's regarding working capital and that gives you basically the delta between the 8.2 and the 8.5 at the end of the year. Now If we can, obviously, and we are working to have a better regular working capital at year end, obviously, that will be reflected in a lower net That at TRN, but at the moment that's the estimate.
Then when it comes to the 7% generation tax, let's say, potential uplift or Positive effect, we are at the moment seeing in the region of €40,000,000 which is very similar to what we experienced back in The forward in the Q4 of 2018 and the Q1 of 2019 when it was suspended again. And then when it comes to the hedges, actually we have a slight improvement in the oil price of the hedges in the end. And to be honest, I mean, we have to, let's say, progress accordingly to what we see in terms of also So our sales. So that's why we are basically have increased the engine between the 60% I think it was 64% in the 1st quarter to the 74% now. Again, this is EUR 3 megawatt hour, the overall portfolio higher then what we hedged in 2021.
So there is already an uplift on the overall hedging visavis 2021. And as I said, what is left to be hedged is 9.4 terawatt hours in terms of volume and we are seeing Positive delta, €20 megawatt hour between our business assumption and OTC references. And I guess I answered the 3 questions. Yes.
Thank you, Javier. The next question comes from Lilian Stark from Morgan Stanley. Please, Lilian, go ahead.
Hi. Thank you for taking my questions. So I might have missed this in the presentation, but when you look at the customer acquisition cost And that was quite materially in the second in the first half, sorry, but you're still targeting a much lower as for 2023 within your business plan. I just wanted to understand a bit more what was the reason for the spike, but more importantly, Why do you expect that customer acquisition cost to come down? And the other question I had was on the working capital improvement.
Was there any Changes, particularly in terms of bad debt risk or you're not seeing much of bad debt at this point?
Okay. Okay, Lilian. In terms of the With regard to the first question and about the customer cost acquisition, Well, today, let me say, we are living in a situation in which prices all of there is a huge interest not only in the renewable, Also in the customer, we are seeing how oil and gas companies try to take a position in the Spanish market. On the one hand, it's we're very happy because that means that people and companies see a helpful business in the future. But just because of this, in my opinion, many companies are paying very high prices just because Yes, for this writing in renewables and also with the same in the in the customer base.
On the other hand, let me say that always I have said that in this business, in the energy business and Specifically in the electricity business, there are companies that want To be for loan in the business, another that are looking for to make to attract value as soon as possible. Well, I respect this situation. But I mean they are looking for how to create a pipeline and sell and just because there are a lot of demand, a very high price. And the same With the customer base, there are many companies that are trying to sell the customer base. And that is one of the reason of the increase in the The intensity of competition because they are not looking for having a helpful Yes.
Now they are looking for having a very high customer base just to sell that. So I mean, in the future, I think that we will see lower prices In terms of customer acquisitions, again, I always say that the way In my opinion, the way in which we should go ahead is try not to make many mistakes in the future. We think that we are a strong company that could really manage and deal this situation. And we want to last forever, let's say that. So we will be in this business now and in the future.
So we should take care about the market.
And if I may compliment, Lilian, the customer or the cost To acquire is actually not presented in our presentation, but to give you a sense we are arranging At €70.70 per customer. And that's slightly higher than the last year given Say the more investment we are doing in order to basically acquire more customer base. If you are referring to the cost to serve, which is your slide Basically, 2019, when we actually had an increase, which I tried to explain, but probably it wasn't clear enough. Basically the increase of the cost to serve from 10.2 to 11.1 on slide 19 is driven by the fact that there has been Basically an increase in terms of the number of interaction with our customers driven by the Filomena And the new access tariff circular, while last year actually we had basically all the restriction for COVID. So all the points the The final points to customers were basically closed, so the interaction were lower.
And that's why we have an increase in the cost to serve at least for this part of the year that obviously should, Let's say, face down in the rest part of this year and also for the rest of the business plan. When it comes to the working capital, Carlos, so the second part of your question, as I mentioned in the call, we have 3 main basically actually 2 main, but There are in 3 lines in terms of the effect that we are experiencing working capital negative that we'll recover. One is that we have to delay the basically bidding on the back of the new Royal Decino and excess tolls and charges and that is affecting first half for about €140,000,000 And then we have basically the 2 non cash items, which is the CO2-two thousand and six Slovak for €180,000,000 and €48,000,000 of the hydroquinone that we are expecting to be basically cash at year end. So by these three elements, We basically are going to recover all the delta that we have vis a vis last year in terms of working capital. And to part of your question whether we are seeing an improvement in bad debt, As I commented when on the net ordinary income basically slide, we have A release of €18,000,000 from the provision of bad debt on the expectation of the recovery of the 2nd part of the year, Given that obviously we provision much more basically in 2020 given the situation of COVID in 2020.
But at the moment, We are basically releasing €80,000,000 of provisions when it comes to bad debt for the remainder of the year.
Many thanks, Lilian. Next question comes from Jorge Guemaraes from Davy Capital. Please Jorge, go ahead.
Hi, good morning. Just two quick ones. Firstly, regarding the recovery of the hydro cannon, if you I assume you did EUR 48,000,000 in EBITDA level. Will be the all impact for the year this EUR 48,000,000 Or will it also have some impact in the second half? So are you expecting to recover more In the second half of the year or all of your recovery of the other can and is EUR 48,000,000 at EBITDA level.
And I understand that at financial level there is also an impact. During some back of the envelope, I got to EUR14 1,000,000 1.4. So it is correct, my number. And the second question is related to the suspension of the 7% generation tax. In the past, this was seen as a pass through to prices.
Prices usually went down when the 7% was cut. But now you are assuming that you're going to improve your EBITDA by €40,000,000 to €50,000,000 On the back of this reduction of tax, since these taxes reduced to reduce the power prices, don't you fear that If you appropriate the gain, at least in an open way, the government may decide to go Go for the companies and implement another tax to net out this effect. I mean, if the generation tax cut was aimed at reducing power prices and in the end of the day companies appropriate the gain, Isn't it the risk of the government imposing more taxes? Thanks. Sorry to follow-up question, but thank you very much.
Okay. Let me say only that as of the first half of the year twenty twenty one, we have recorded In terms of the hydraulic cannon, we have recovered the part we consider certain to be recovered. We will see how things evolve during the next month and we will take decisions. But in any case, Luca, could you explain a little bit?
Sure. The fact we recorded is related to the 20 13, hydrocanon, so we still have about €50,000,000 of potential recovery for 2014. However, this depends on basically the procedures in the court as it evolves throughout the next month. So to your question, whether we can book this remaining 2014 Edrocanon this year, to be honest, I don't have an answer today because it depends on the evolution of Then there was another question within the EdroCanon, which I didn't understand you referred to €40,000,000 but I didn't get the actual question, If you can probably just say it again. And to the final question, say, the suspension of the 7% generation tax, It generates a positive contribution to gross margin because we have already hedged our position when this becomes effective.
This becomes effective in the Q3 of this year and we have already fully hedged our production with final customers for the period. That's why there is a positive contribution. Now whether this could trigger other measures by the government, to be honest, I don't think so in the sense that The purpose of this measure is temporary and is to reduce put price given the situation of put price. And this has worked well back In 2018, it's working mildly this year because obviously the gas push up in prices supporting prices much higher, But definitely, let's say, some measures with that objective. Now if companies hedge their production 1, 1.5 or 2 years in advance is part of our strategy and nothing can be done about it.
And this is something again Also a part of our discussion on the potential new CO2 Globeca that needs to take into account the hedges already put Replaced by each company.
Jorge, I don't know if you want to repeat the part of your first question that we missed?
Yes. Can you hear me?
Okay. Yes, perfectly. Yes, perfectly.
I just wanted to clarify the impact on financial results of the hydro cannon.
Okay. Below basically EBITDA, it's EUR 11,000,000.
Okay. Thank you, Jorge. We move to the following questions comes from Jorge Alonso from Societe Generale.
Few questions remaining. Thank you. On the different tax, on the Catalan tax, are you taking any legal action? And do you foresee or do you Expect to I mean, a possibility to recover that in time. On the supply side, once again, Pepe, you were mentioning these dynamics of companies just not looking Into the long term, but I would just wanted to ask about your view, because we've seen as well Big companies are trying to establish like E and I, Total or even China 3 Gorges, targeting the retail segment in order to combine with renewable installation.
So you see really That this is the beginning probably of a new situation with much bigger players on the supply side. And the last one is regarding the batteries that you mentioned that batteries could be installed on leaf. There is some conditions and regulatory issues. So what are you referring to, the capacity markets Regulation or other things that should change in order for the batteries to be profitable? Thank you.
Okay. Jorge, let me give you some answers and then look at detail. About the Catalan tax, well, we are well, I think that we are right and we will win at the end, But we need just to follow the procedure, the legal procedure just to read this to recover these tax that we think is unconstitutional. With regard to the supply and the long term, Well, again, this is in my opinion. I think that oil and gas companies are paying a lot Yes, to entry in the energy or the electricity sector.
But according to that, In these companies for me are companies that will try to stay in the business for a long time. So I really highly welcome companies that will want to stay in the business. So we are not worried about the intensity of competition, the payment that they are doing now or how they are trying to take this position in the electricity sector because we are sure that we will try to be for a long term in this in that business. And then we will compete for sure that in a good faith in the sense that Trying just to give the best to the customer, but looking for the profitability also of the companies. In terms of the batteries, I would say that we need some kind of regulation in the future.
And I think that we will At this regulation very soon, very soon. Because of two reasons, one of them is that We need to develop and to deploy some kind of batteries just to really get experience to be how this technology evolves. And also, As you know, in DPNIC, we consider the current Spain considered 2.5 gigawatt of batteries That would be essential just to give the full capacity in the future, but They should be paid in a way in which we don't have yet. But I'm sure that the regulator are trying just to give this remuneration in the future. But in any case, Juka, Do you want to add anything?
No. Just on the Catalan tax, basically, I confirm that we She initiated the 1st judicial action against the settlement, the taxes paid quarterly on a quarterly basis starting from October 2020. And we have filed the appeal against the regulation governing the Cortaca, which the constitutionality of the same is highlighted. All in all, this is a lengthy process, so it could take more than 2 years to be resolved. But yes, to your questions, we have started also the second part for our judicial
appeal. Thank you, Jorge. We move now to the following questions
Very interesting questions. Just one clarification and one question for me. On the mark to market OPECas contracts, And maybe you said this already, but I've had some issues with the line. On the Q1, you had EUR 61,000,000 negative and nothing Nothing was mentioned in the second quarter or on the first half. Could you refer to that?
And what was the impact In the first half and also what is the expected impact for the year? And then a question on the storage projects that you have. You have quite increased your pipeline Projects from the Q1 to the first half. And I was wondering on the 1.6 gigawatts that you have already matured status, What kind of projects are we looking at? Is that batteries?
Or is it referring to hydrospumping or a combination of both? And what kind of time frame are we looking at the moment? Thank you. Okay. Regarding
the mark to market Contract, we are at €80,000,000 negative mark to market in the first half and we're expecting to basically neutralize or absorb all this Back to market as long as basically the contracts are being delivered goes to delivery. So basically zero impact towards year end. While for storage, the majority of the projects are actually batteries. You probably remember that in the plan, we have already 300 megawatt of batteries to be developed or basic jointly with some renewables installation. Now obviously, we need to create a pipeline today if you want to deliver even more, let me say, hybrid type of renewable solution with batteries going forward.
So that's more or less where the pipeline has grown recently. Now you probably and I think I've commented this in the past, Still the returns of renewable plants with batteries are slightly lower than normal Basically, renewable plant and that's because obviously there are there is no regulation at the moment for this kind of batteries. We're talking of 20% of the capacity of a plant type of batteries with, let's say, peaks of maximum 5 to 6 hours in terms of the technology. But at the moment, the majority of the pipeline is actually that one. Then obviously for hydro piping, we have few projects under the next generation EU Basically pipeline of projects and those will be basically put in place only if we get the grants out of next generation new funds.
Okay. Thank you, Gonzalo. This was the last question of our call. We have received several questions from the web, but most of them have been addressed during the conference. So there is only one question left that comes from Jose Gabriel from Barclays.
That is in relation to if we are expecting more acquisition of Solar Pipeline? Thank you.
Okay. The market is I hear Sameco. I hear Sameco. I can open the line.
Yes, me too.
Okay. Perfect. So basically what I was saying is that For operating assets, it's pretty compelling at the moment in the sense that there is a lot of activity. We've seen a transaction announced yesterday by ANI. There has been other transaction announced recently.
There has been the Pio Axuna, which has been probably the largest transaction in the market. So For us, we have, let's say, a very ample pipeline generated in house, but we always look at, let's Say other developers pipeline and a lot depends on the type of developer, the type of agreement we can strike with the developer and obviously evaluation. So there I can say that we are basically not leaving any stern unturned. And we have a discussion now with different parties in order to accelerate further our pipeline development, Ocean Solar.
Okay. We are done. Thank you, Pepe. Thank you, Luca. Thank you, everybody, for attending this conference call.
And just remind you that IFT is available to help you with any further questions you may have. And just to conclude, I would like to wish all of you a happy and well deserved holidays. And thank you very much for your attention. Bye.
Thank you.