In mid October, Spain’s Head of Government, Pedro Sánchez, announced a bundle of grants designed to reduce the gas and electricity bills for households already anxious about planned price increases heading into winter. Although projections remained severe, only a fraction of the anticipated beneficiaries had signed up for the discounted rates, with 15,000 households applying for a 40 percent reduction on their electricity bill out of an original estimate of 1.5 million, and just 5,500 boiler owners participating in the subsidized gas rate TUR, far below the planned 1.6 million, according to the Ministry of Ecological Transition and Demographic Challenge.
Energy Minister Sarah Aagesen defended the government’s protection measures in presenting the winter energy consumption balance. The subsidized TUR rate managed to attract an additional 1.1 million users since its launch, bringing total TUR-eligible households to around 2.6 million. This mechanism has been in effect since October and is expected to continue through year end, though officials do not anticipate large fluctuations in buyer numbers, given that winter has largely passed. On average, homes with domestic hot water and heating systems save about 31 percent under this program, as calculated by the ministry led by Vice President Teresa Ribera. Current data show roughly 5.5 million contracts under the free market regime.
Separately, the Administrator designed a 40 percent discount on electricity bills for regulated-rate customers PVPC. The program, worth around 3 billion euros, aimed to support middle-class households affected by rising postwar prices in Ukraine who did not qualify for social bonuses. Eligibility targets those with annual incomes between 17,000 and 28,000 euros, depending on household size. Despite expectations for 1.5 million beneficiaries, the initiative reached only about 15,000 recipients.
Nonetheless, electricity customers in the PVPC segment benefited from measures such as gas price caps, achieving around 30 percent savings on their bills.
social bond
Overall, around 1.4 million households have benefited from the electricity social bonus, short of the 1.9 million target announced by Sánchez. This mechanism provides bill reductions ranging from 25 to 40 percent initially, depending on whether the consumer is deemed vulnerable or severely vulnerable, with the program peaking at 60 to 85 percent in October 2021. Payments are made by electricity companies and eligibility requires a regulated tariff PVPC.
Approximately 649,000 users are classified as vulnerable and about 717,000 as severely vulnerable. By March, these groups experienced reductions in electricity costs between 67 and 75 percent compared with pre-war levels. About 20 percent of beneficiaries considered vulnerable are extended families who receive benefits regardless of income. In mid March, Vice President and Minister Teresa Ribera announced adjustments to tighten eligibility criteria, focusing on household income and composition. The government continues to review the formula while identifying multiple scenarios to protect families of all kinds, as stated by Aagesen who underscored the ongoing effort to implement effective safeguards.
reduction in consumption
On the demand side, Spain committed to a voluntary overall reduction in gas consumption by 15 percent from August 1 to March 31, aligning with the broader European Union target. Grasping the latest figures from Enagas, the gas market operator, the country reported an 11 percent drop in consumption. This decline occurred even as exports increased due to the nuclear outage in France and drought conditions in Portugal. In Spain’s case, gas sales reached 9.4 TWh, with imports averaging 3.9 TWh over the same five-year period; exports to Portugal reached 3.8 TWh. Exports were buoyed by stronger connections with neighboring markets.
Taking export trends into account, gas demand fell by 21 percent. Considering a five-year import balance, the overall demand decrease sits around 23 percent. Regarding electricity, there was a 9.8 percent reduction in peak-hour consumption when measures to curb peak demand were applied. The government highlights these shifts as part of a broader effort to stabilize energy costs while maintaining reliability for households across Spain.