The European Commission has already started working on calculating the potential cost-benefit. limiting the impact of gas prices on the electricity bill, taking it as a starting point Iberian mechanism It was implemented by Spain and Portugal, as mandated by EU leaders at the last European summit. A preliminary analysis that gives some figures that will be reviewed this Tuesday by. energy ministers EU At the meeting in Luxembourg. According to the Brussels result, the so-called extension Iberian exemption for the whole EU will save around 13,000m euros although it has an unequal effect between Member States, depending on the weight of the gas in the energy mixtures.
According to the guidance document prepared by the Community Executive, a cap of 180 Euros per MWh on the benefits of marginal energies such as renewable or nuclear has already been adopted. 70,000 million euros will be collected. Going even further and also implementing a Spanish-Portuguese-like mechanism would add another 13,000 million euros to savings, resulting in a positive impact on inflation. As requested by several Member States, Brussels proposes to set a cap on the price of gas used to generate electricity “significantly higher” than that practiced in the Iberian Peninsula. Compared to 48.8 euros per MWh, a Between 100 and 120 Euro/MWh.
“This level of subsidy strikes a balance between ensuring the measure’s effectiveness in lowering electricity prices and lowering electricity prices. prevent gas plants from becoming financially attractive and increasing their use and the use of alternative production technologies is being reduced”, notes the Commission, about one of the great fears that make countries like Germany or the Netherlands completely reluctant to adopt the mechanism. In any case, the Commission emphasizes that with current gas prices (around 60 Euro/MWh) such a mechanism “wouldn’t yield any results”.
prevent electricity leakage
According to the Commission, the effectiveness of the model will largely depend on: prevent subsidized electricity from leaking to third countries such as the UK or Switzerland. YeahThey warn that if this problem is not resolved, electricity generation from gas plants could skyrocket, with an increase of between 5,000 and 9,000 million cubic meters. Solving all this will require closing agreements with beneficiary countries to move the plan beyond EU borders or create a two-stage model. The problem with this option is: It will cause a significant change in the functioning of the electricity market and will also conflict with a number of international agreements. prohibiting the establishment of higher export prices, such as the cooperation agreement between the EU and the UK
Another problematic element is that the cost of the measure depends on the gas quota used by each Member State. “Member states that rely heavily on gas-fired power plants for their electricity systems will face the highest costs for the subsidies required. This will be the case, for example, in Germany, the Netherlands and Italy”, the Commission continues. Meanwhile, net gas importing countries will benefit from electricity subsidized by other Member States, meaning that “France will be the biggest net beneficiary”, the Commission said. Central and Eastern Europe will “probably” also register the “benefits” of a mechanism like Iberia..
Member States where it covers a significant part of electricity generation, such as the Baltic or Scandinavian countries, will benefit less, as the system will have no impact on long-term contracts. According to Brussels, the most effective way to respond to all these imbalances would be to create a European cost redistribution plan, although its design is complex due to the lack of reliable statistics and political challenges”.
More permanent solution
Based on this balance of gaps and co-legislators, the European Commission considers that changes in the design of the market can be quickly proposed and implemented. “It will provide a more durable solution to the European electricity bill’s over-reliance on highly volatile natural gas markets and provide consumers with the benefits of lower cost renewable energies in line with their participation in the electricity mix. The rapid assimilation required to eliminate Russian gas”, the Commission concludes.
While waiting for the discussion, the third vice president, Theresa RiveraHe has made it clear that Spain will support the countries that claim the measure for them.. “It is our obligation to support vulnerable states,” he said on arrival at the meeting. “There is no need to apply this mechanism today because the price of gas is below the limit we set in Spain and Portugal, but it works as reinsurance and if the gas price rises again, Spanish and Portuguese consumers will be protected. . . . “We understand that countries with electricity systems where gas and coal are scarce would like to benefit from a similar response,” he said.