The government gives the green light this Friday for an extraordinary mechanism aimed at capping the price of gas used to generate electricity. The cap is set at approximately 48.8 euro per megawatt hour (MWh) for the duration of twelve months in effect.
The measure, which will be approved in tandem by Spanish and Portuguese energy authorities, seeks to ease the bills of both households and companies whose rates are linked to the wholesale electricity market, often referred to as the pool. These are the groups most affected by the current energy market crisis and the surge in prices.
On the eve of the Extraordinary Council of Ministers, Prime Minister Pedro Sánchez confirmed that the gas price cap will initially be established at 40 euros per MWh. This price cap is intended to shield consumers amid the volatile market conditions of the prior quarter.
According to the cabinet’s calculations, the mechanism will help reduce invoices by about 30 percent for the average consumer whose bills are tied to a pool-indexed rate. In practical terms, it is expected to guarantee an average price of 48.8 euro per MWh for the coming twelve months, providing meaningful protection against price spikes.
Ribera expects the gas cap to be ready in a matter of days
Following approval by both Administrations, the mechanism will be sent to the energy regulator for immediate processing. Teresa Ribera, minister for Ecological Transition, explained that the European Commission must issue a delegation decision to enable the mechanism’s effective implementation.
The third vice-president of the government described the plan as one that should be fully operational within a short time frame, ranging from a few days to a few weeks.
On April 26, Spain and Portugal announced that they had reached a political agreement with the European Commission to cap the price of gas in the wholesale electricity market across the two countries.
Although the detailed mechanics remain to be finalized, the measure is expected to benefit about 40 percent of domestic consumers—those on the regulated rate, known as PVPC—roughly 11 million people, and up to 80 percent of industrial users whose bills are tied to the pool.
In broader terms, the initiative reflects a regional effort to stabilize energy costs by anchoring wholesale gas prices to a capped level, thereby reducing volatility for a significant portion of residential and industrial users. Observers note that the price protection hinges on coordinated cross-border action and quick regulatory alignment with European Union standards. The anticipated outcome is a steadier monthly energy expense for households and a more predictable cost environment for producers who rely on the pool-linked pricing framework, all while maintaining incentives for efficient energy use and investment in long-term energy resilience. At the same time, analysts warn that the cap must balance market signals with consumer relief to avoid unintended distortions in supply, gas procurement, and investment in future capacity. The overarching goal remains clear: dampen rapid price swings while preserving competitive dynamics in Spain’s and Portugal’s energy markets, as reported by official government briefs and confirmed by the European Commission’s ongoing oversight. Specific figures and operational timelines are subject to final regulatory alignment and formal adoption by the relevant authorities, with updates to follow as the process unfolds. (Source: official government statements; European Commission communications; energy market regulators; corroborating analyses from policy observers.)