Iberian Price Cap: How the European Approval Shapes Spain’s Energy Bill

A day after the European Commission approved the Iberian mechanism to cap gas used for power generation at 40 to 70 euros per megawatt-hour, the national parliament moved quickly to enact the royal decree law that establishes the framework for this price intervention. The move, supported by a broad spectrum of parties and with key abstentions from the People’s Party and Vox, is set to take effect with the upcoming tender on June 14. The wholesale electricity market is expected to reflect the discount in the following days, and the government anticipates noticeable relief for consumers and industry starting mid-June, with projections of about a 15% reduction for households and 20% for industrial users. The measure still requires its first practical demonstration in the market, but optimism has grown that it will begin to influence prices in the near term. (Source: Europa Press)