The European Commission officially approved this Tuesday. extension ‘‘Iberian exception’reported by Spain and Portugal This April, with the aim of lowering wholesale prices in the Iberian electricity market. Measure to be in effect Until 31 December 2023acknowledges that the economies of both countries continue to experience “severe disturbance” and may continue to implement an adjustment mechanism should gas prices rise again. “With the changes approved today, Spain and Portugal will be able to continue to maintain affordable electricity prices for consumers in the Iberian Peninsula,” the competition commissioner said. Margrethe Vestager.
Measurement, already provisionally implemented“It balances the need to address high energy prices due to Russia’s invasion of Ukraine with its duty to protect the integrity of the single market. Extended and modified monthly price ceilings will allow for a softer exit from the measure and protect vulnerable consumers at the moment. At the same time”, Danish, extension and in a statement confirming that the changes are in line with EU state aid rules.
Brussels approved the mechanism to limit the price of gas used in electricity generation in June 2022, which ultimately allowed the wholesale price to fall. The first measure, which set a ceiling of 40 euros per megawatt hour (MWh) for the first six months, followed by an increase of 5 euros per month, expired on 31 May. With him, According to Madrid and Lisbon, they would have managed to save about 5,000 million between June and January 2023 last year..
While its initial intention was to extend the mechanism until the end of 2024, finally and given the temporary framework of public assistance, effect ukraine war will expire at the end of the year, both capitals notified Brussels in April a request for a seven-month extension until the end of 2023. The trajectory set by Brussels sets a ceiling of 56.1 euros in April, which will gradually increase until it reaches 65 euros in December.
“Price cap trajectory will be changed to achieve smooth and predictable phasing outThe Commission also confirms that buyers in the wholesale electricity market will be exempted from paying the adjustment fee for their volume between 1 June and 31 December 2023. electricity with which they have contracts to supply.
End consumers who are not registered as wholesale buyers in the electricity market will also be exempt from paying adjustment fees for their electricity purchases between May 1 and December 31, 2023 for those who have signed a financial guarantee agreement. For electricity price risks before 7 March 2023. The European Commission will ultimately decide whether the mechanism will be activated by the end of 2023, ie the maximum price will be below the gas market prices.
limited intermediate links
The Commission’s assessment Adopts the rules of the temporary crisis and transition framework and other types of price interventions, it is due to the special conditions of the wholesale electricity market in the Iberian Peninsula. Brussels, in particular, caused serious unease to the Spanish and especially to the “limited interconnection capacity of the Iberian Peninsula, the high exposure of consumers to wholesale electricity prices, as well as the great influence of gas in setting electricity prices”. Portuguese economies.
Therefore, Vestager’s team concludes that the measure is: “sufficient, necessary and proportionate”remains temporary and is “limited to the minimum required to deal with the severe disruption Spain and Portugal are facing in the economy, providing a hedge against price spikes in the Iberian electricity market in the context of the current volatile geopolitical situation”. Brussels is also at the forefront of the ‘Iberian exception’, although market dynamics have changed. protection mechanism In the event of rising gas prices, to protect vulnerable consumers and increase market stability.”
The Community Manager also will continue to minimize distortions in competition and avoid potential negative reflections. in the functioning of spot and futures electricity markets. In addition, in line with internal energy market rules, the amended measure does not lead to any cross-border restrictions on electricity trade or discrimination between Iberian and non-Iberian consumers.