Summit in Brussels to promote Spain and Portugal’s plan to reduce light

The negotiations are at a key moment when the European Commission must now decide whether to release the Iberian plan and with Madrid and Lisbon as he tries to overcome his doubts. Brussels on whether the cap of 30 euros per MWh for gas is too low to cause a high distortion in the electricity market and whether the intention to double-price to sell electricity to France at a higher price is in line with the regulatory community.

And in that context, a high-level meeting will be held this Tuesday to introduce the plan. Teresa Ribera, Vice-President and Minister of Ecological Transition, and José Duarte Corteiro, Portuguese Minister of Environment and Climate Action, will travel to Brussels to meet face-to-face with the European Commissioner for Competition and the Vice-President of the European Commission. As stated in the official agenda of the Community Steering Committee.

The target set by Madrid and Lisbon this month was the approval and operationalization of the gas price ceiling. But the Spanish Government acknowledges that the new target is to activate in May as positions approach, and clarifies the European Commission’s skepticism about how this maximum price will apply to lower electricity.

This was acknowledged by Vice President Ribera, who admitted last week that the new aspiration is to achieve success. OK Brussels and to be able to apply the maximum price in the coming weeks, but not before the end of April. The Spanish Government admits that there is “Technical issues not yet resolved” It is also pointed out that the negotiations on the Hispano-Portuguese plan with the European Commission and the Holy Week holidays slowed down the talks.

Acknowledging the possibility that the proposal from Spain and Portugal could undergo changes, Ribera said, “The European Commission wants to make sure that the proposal is the best and as robust as possible”. “When you go into a negotiation process in these circumstances, you know that there are very likely modulated, nuanced aspects (…) The main lines are what they are, and that’s basically what it is. We will find the deal final,” he said.

Spain and Portugal began recognizing the “Iberian exception” from their EU partners last month and allowing the two countries, which in practice have a jointly functioning electricity market, to take special measures to lower electricity prices. It’s a special treat for being an “energy island” that is more renewable than the rest of the EU but less internationally connected to the continent. The Madrid and Lisbon plan includes a maximum cap on the price of gas used to generate electricity. The aim is to get the lowest possible gas price, but a price acceptable to the European Commission to avoid major disruption to the rest of the EU countries.

In addition to the 30 Euro per MWh ceiling for gas price in the electricity market, Spain and Portugal propose a double price system so that electricity sold to France via international interconnection is made at the regular price that sets the price. With no cap on gas to avoid a rapid increase in exports to the neighboring country, taking advantage of the drop in prices in Spain. Likewise, the Iberian plan envisages that the difference between the actual generation cost of gas plants and the adjusted price determined by the market thanks to the cap, is charged as another expense of the electricity system and borne by the rest. generation technologies.