Spain and Portugal propose to the European Commission limit the price of gas to 30 euros per megawatt hour until December 2022a request that is part of the ‘Iberian exception’ agreed in Brussels last week. The decision has been confirmed by Teresa Riberawhich has ensured that “we have a joint proposal“.
“We are working on a preliminary document with a double matching system. A first, for European countries, and another, for our market, with a cap,” explained the Minister for the Ecological Transition. In this line, she has clarified that “we have not yet done more than start the work with the Commission”, for which she asks for “tranquility”.
“We have only made the proposal of the price that we consider to be the lowest. That is the proposal that Spain and Portugal have made“, he indicated.
Objective: lower the price of electricity
According to the Portuguese newspaper Publicthe measure intends to set the price of the Iberian gas market (Mibgas) at 30 euros, a “normal” price of times before the current Ukrainian crisiswhich has caused an increase in energy prices that affects the EU countries.
Both countries explain that this cost must be “internalized by marginal technologies”, the most expensive, and will provide “lower” prices to the wholesale electricity market, as indicated in the document.
According to the document, this limit will be “temporary” and linked to “exceptional circumstances that are causing serious economic difficulties” in Portugal and Spain. Therefore, it will be in force until December 30, 2022. Thus, both countries propose apply it “to gas-fired combined cycle plants, coal-fired plants and cogeneration” the mix Iberian electric.
“Reduce electricity prices immediately”
The President of the Government, Pedro Sánchez, announced last Monday that this very week Spain and Portugal would present to Brussels a “exceptional and temporary” measure to set a reference price for gas, the amount of which he did not specify at the time, after achieving in the European Council on Friday an ‘Iberian exception’ that would allow lower electricity prices in both countries.
Then, he specified that “it does not mean subsidizing gas, it does not break the incentives for renewables or electricity flows between countries” and, as he explained, would allow Spain and Portugal to “significantly lower electricity prices immediately” and without “distorting” Europe’s electricity market.
In addition, he expressed confidence that it would be well received in Brussels: “I am convinced that the approval by the European Commission will take place in a very short period of time and the next day it will be approved in the Official State Gazette with immediate effects on citizens’ electricity bills,” said Sánchez.
Along these lines, he emphasized that “with this, we are going to further reduce the final price of electricity, which, without a doubt, will alleviate the effort that citizens are makingthe companies and the industries of our country”.