The price of electricity began breaking records in the summer of 2021, with record daily levels triggering alarms and putting pressure on executives. So the first thing he did government As soon as Pedro Sánchez resumed his European political route, he would launch a diplomatic offensive in Brussels seeking solutions from Europe. First, with a letter from the vice presidents Nadia Calvino Y Theresa Rivera To the main European commissioners with a set of proposals for the European gas purchasing platform, strategic reserves, counter-speculation measures and reform of the electricity system. And then he raises the issue at every meeting and council of ministers. The strategy bore some fruit, and at the beginning of October four more countries –France, Greece, Romania and the Czech Republic– They signed a statement with Spain asking for a response from Europe.
October 2021: lukewarm response from Brussels
The first response from the European Commission came in mid-October in the form of a “toolbox” with a list of current measures to mitigate the impact of rising gas prices on electricity bills. Basically, tax breaks and measures to support the most vulnerable households and businesses, and a commitment to explore only voluntary gas purchases, but not to reform the marginal pricing system where the most expensive energy (gas in these times) determines the price of gas. others. At the time, the energy broker argued, “There is a general consensus that the marginal price model is the most efficient and most appropriate model for liberalized electricity markets”. Kadri Simson. A pitcher of cold water was confirmed for Spanish aspirations at Spain’s leaders’ summit on 21 and 22 October, where Spain came out empty-handed. Moreover, if not clarified, four days later nine countries –Germany, Austria, Netherlands, Denmark, Finland, Estonia, Latvia, Ireland and Luxembourg– put in writing their rejection of a temporary reform of the wholesale electricity market and chose the “temporary” and “selective” measures of the Commission. Spain responded shortly after asking Brussels for freedom to exit the electricity price system.
November 2021: A pitcher of cold water from the European regulator
The preliminary report commissioned by the European Commission to the Energy Regulatory Cooperation Agency (ACER) did not help, either. The analysis concludes whether central gas purchases will have a positive impact on prices, or whether maximizing price setting will be positive because it may put other targets at risk, although it may alleviate the situation in the short term.
February 2022: Russian War
The invasion of Ukraine, ordered by Vladimir Putin on February 24, turning point revealed the extreme weakness of a Europe that is politically and at the same time energetically dependent entirely on Russian gas. While Moscow has turned off the gas tap on other occasions in the past, after the orange revolution in Ukraine, the EU overnight found itself in an uncertain situation and unbearable blackmail. According to Commission estimates, gas flow from Russia in June 2022 was on average 30% lower than in 2016-2021 as a result of a series of “sudden, unintended and unilateral actions by Russia”. The latest working document condemning the interruption of supply to the Baltic states, Poland, Bulgaria or Finland, not forgetting the partial suspension of shipments to Germany, Austria, Denmark, Slovakia, the Netherlands or Italy.
March 2022: “Iberian exception” arrives
Despite the 27’s refusal to reform the electricity market and to separate gas and electricity prices, the war waged by Spain and Portugal bore fruit and both countries launched the so-called initiative. “Iberian exception”, set up a mechanism to allow intervention in the wholesale market to limit the price of gas used for electricity generation, due to its high level of renewable energy sources and limited links with the rest of Europe. After intense deliberation and despite the cold water test in ACER’s final report, which advised against redesigning the European electricity market and warned that further intervention would mean further deterioration, the Commission, Spain and Portugal reached an agreement in principle at the end of the study. April and Brussels authorized a mechanism in early June that will be in effect until 31 May 2023.
May 2022: Cutoff of Russian gas
The growing risk of gas shortages in Russia convinced the EU of the need to act on a plan that would completely reduce energy dependence on Moscow and diversify supply. The target is 100,000 million cubic meters of gas this year (out of 155,000 imported in 2021) and ending dependency in five years. A key element in this goal is the commitment two months in advance to fill up to 80% of the underground gas deposits before winter.
July-September: Gas and electricity savings plan
Fear of having to ration gas in the winter has come to Brussels to complete the set of measures with an emergency plan that includes measures to reduce gas consumption by 15% for the first time between August and March 2023, with the exceptions for Spain and Portugal (7% due to their few interconnections). a decrease). Measures include auctions to reduce the use of heating and air conditioning, opting for coal and nuclear if necessary, and offsetting industries aiming to reduce consumption. It takes all measures that do not serve to mitigate the stratospheric prices of electricity. A year after Spain offered to open this melon, Brussels accepted the challenge.