This discussion centers on Europe’s effort to reduce its heavy reliance on gas imports from Russia. The European Union has set a target to cut these imports significantly, aiming for a two-thirds reduction by year’s end. Within this context, the leading Spanish oil company highlighted the hurdles Europe faces as it seeks to substitute Russian gas, warning of potential difficulties that could arise during the next winter season.
Josu Jon Imaz, chief executive officer of Repsol, underscored the magnitude of the task. He noted that replacing a large portion of gas supply is not feasible in the near term. Speaking at a business gathering organized by a Basque employers’ association in Bilbao, he stated that a substantial amount of gas—hundreds of billions of cubic meters—currently imported from Russia cannot be replaced quickly. The discussion touched on the broader challenges Europe has confronted amid the pandemic and ongoing geopolitical tensions, and how these factors influence corporate strategies.
Imaz urged a concerted effort to decrease consumption and accelerate renewable generation as much as possible. He warned that there are security risks to supply that could have a dramatic impact in the coming months and emphasized the need to address these risks proactively through planning and resilient policy measures.
Gas Price Caps and Market Regulation
In light of ongoing price pressures, Imaz argued that temporarily capping gas prices could be a reasonable step to curb electricity costs in affected Iberian markets. He described Spain as a stable country and suggested that regulatory signals should be clear and predictable to support investment confidence. He also asserted that free markets and regulated markets should be distinguished, calling for a balanced regulatory approach that aligns consumer protection with producer incentives.
Looking at the price setting dynamics, Imaz discussed the idea of a fair compensation framework for gas producers that operate under combined-cycle conditions. He argued that during periods of price distortion, it is sensible to ensure producers receive a reasonable return that supports continued supply and market stability. He also acknowledged the government’s consideration of temporary measures as part of a broader strategy to maintain energy access for households and industries while renewable sources are expanded.
Regarding the Iberian peninsula, Imaz noted that while renewable energy will remain central, a blanket abandonment of traditional energy sources is unlikely. He described a scenario in which consumer interests are protected and energy reliability is preserved, even as the energy mix evolves toward greater green capacity.
Iberdrola and the Iberian Price Cap Debate
At the same event, Armando Martínez, the business general manager of Iberdrola, emphasized that Spain and Portugal’s approach to capping gas prices may not fully resolve the broader price challenge. He criticized the notion of a charge that is poorly designed within the regulated tariff framework, arguing that price volatility can disproportionately affect vulnerable customers if the tariff structure remains unstable. He highlighted that several vulnerable households experience daily fluctuations that complicate budgeting and family finances, a situation he described with a practical, human lens.
Martínez pointed out that energy costs have risen due to higher gas prices and stressed the importance of a tariff design that protects the most exposed consumers. He stressed that the energy system should not make vulnerable groups bear the burden alone, suggesting that targeted support might be necessary to prevent a widening social impact. He warned that abrupt changes to the rules of the game could send confusing signals to the market and to consumers alike, potentially slowing investment in the broader energy transition. He emphasized that Spain has a substantial portfolio of renewable assets, but policy messages must support continued growth rather than stall it in the name of price containment.
Overall, the discussion reflected that the energy landscape in Europe is undergoing rapid change. The focus remains on balancing affordability for households, reliability of supply for industry, and the long-term push toward cleaner energy. Industry leaders called for clear regulatory signals, stable policy environments, and pragmatic steps that recognize both short-term pressures and the strategic importance of a resilient, low-emission energy system for the region.