The government wants to maintain the cap on gas during the energy crisis or until the European Union approves the reform that prepares the electricity market. The validity of the Iberian exception, which is the limit on the price of gas used in electricity generation and applied in Spain and Portugal, expires on May 31, but The Spanish Executive wants to extend it until at least the end of 2024.
This was confirmed by Teresa Ribera, Vice President and Minister of Ecological Transition, who wanted to preserve the impact that the Iberian exception had to reduce the price of electricity beyond the agreed timeframe with Brussels. New regulation in the electricity market to reduce the link between the price of electricity and the ups and downs of the rise in natural gas.
“We intend to ask for the Iberian exemption to be maintained during the energy crisis or until the electricity market is reformed and European regulation is updated. In an interview with Antena 3, Ribera stated that the Spanish Government’s plans include demanding an extension of the gas limit, “We want to continue this after May,” he said. “at least until the end of 2024”.
The mechanism, agreed by the Spanish and Portuguese governments with Brussels and in effect since 15 June, envisages imposing a 40 euros per megawatt hour (MWh) cap on the price of gas used to generate electricity for the first six months, and the Go to impose hikes. 5 Euros per month until ending at 70 Euros per MWh. The limit price applied since last January 1st is 45 Euros..
As Ribera admits, the Government’s aim is not only to get Brussels to extend the validity of the Iberian exemption, but also to allow the gas limit to be kept at a similar level to the current one. “The aim is to remain as it is today, Keep it as low as possible, like around 45 or 50 per MWh”, pointed to the vice president.
4,000 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 last offer is in most cases made by gas power plants, which suffer the skyrocketing gas prices during the energy crisis and raise the price of all electricity, as well as renewable or nuclear energy, which do not cover these extra costs. increase in gas.
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 4,000m euros Thanks to the lowest price marked by the market thanks to the gas cap.