Brussels refuses to extend the Iberian exemption beyond this year and the Government is already satisfied

The European Commission has already informed Spain and Portugal. Extension of Iberian exception cannot go beyond this 2023, because it is the period when the temporary aid framework for the Ukrainian war was in effect. If the European Union does not extend this framework of special support measures, the cap on Iberian gas cannot go beyond the end of the year.

This was communicated last Wednesday by European Commission Competition Commissioner Margrethe Vestager to Teresa Ribera, Vice President and Minister for Ecological Transition, and her Portuguese counterpart, José Duarte Cordeiro, at their meeting last Wednesday, according to sources. Spanish government officials. The extension of the Iberian exception is still being reviewed by Commission technicians and they have not yet taken a decision.

“Totally Reasonable”

The so-called Iberian exception, which serves to control the electricity price in the Spanish market in the face of persistent increases in other EU countries, expires on 31 May. The Spanish Executive has announced his intention to extend it, at least until the end of 2024 or until the European Union agrees to a comprehensive reform of the operating rules of electricity markets.

After meeting with Commissioner VestagerThe Spanish Government “assumes a perfectly reasonable scenario” that the mechanism will only be extended by seven monthsBy the end of the year, as Ministry of Ecological Transition sources confirm. In any case, the Executive sees it as possible for the EU to expand the framework for interim aid for the war, which would allow the Iberian solution to be ultimately extended beyond 2023, or an agreement reached later this year. The Union will reform the electricity markets.

The government claims that, during Spain’s Presidency of the European Council in the second half of this year, it sees reaching an agreement for the structural reform of the electricity market in the EU as a “fully viable option”. The main problem and central strategy for Spain”, state ministry sources.

reform the market

The Spanish Government made an offer to Brussels Changing the current operating rules of the European electricity marketsThe one that sets prices with a marginal system (which sets the price of others with the latest and most expensive technology needed to meet demand) and pollutes the price of electricity from the skyrocketing natural gas prices during the energy crisis.

Spain, in practice, offered to keep the electricity produced by gas and coal plants in the existing daily and intraday market; this will claim compensation (capacity payments) as it is available in the highest demand. Renewable, nuclear and hydraulic would have a fixed price for years through contracts with the electrical system. The price they will charge renewable will be awarded by a system similar to existing government contractsnuclear and hydropower will be a price set by the regulator.

4.500 million savings

The wholesale electricity markets in Europe operate on marginalist systems; this means that the last production supply that satisfies the demand is the supply that determines the price of the others. The final offer is, in most cases, one made by gas mills, which have faced rapidly rising international prices during the energy crisis. raise the price of all electricity, including renewable or nuclear Those who do not support these extra costs due to the increase in gasoline.

Spain and Portugal impose maximum prices on offers that only combined cycle power plants (that burn gas to produce electricity) can submit in the electricity market. With this, the electricity market as a whole decouples from the gas price and includes its price. According to government calculations, Spanish consumers benefited from net savings of more than 4,500 million euros, thanks to the lower price set by the market thanks to the petrol ceiling.