The minister wants the limit to remain around 45 or 50 MWh as it is at the moment, taking into account that the reform of the electricity market in Europe could take “a long time”
There are still five months to go before the Iberian mechanism limiting gas prices comes to an end, but the third Vice President of the Government and Minister for Ecological Transition and for the Demographic Challenge, Teresa Ribera, has already pointed out this Monday that the government will ask Brussels to extend the ‘Iberian exception’ at least until the end of 2024, with a ceiling similar to the current one, of between 45 and 50 euros per megawatt hour (MWh).
The Iberian ceiling, which has been applied in Spain and Portugal since June 15, is a mechanism that limits the price of gas for electricity generation in order to lower the price of electricity. During the first six months of this measure, the price of gas was capped at EUR 40/MWh and from then on it will increase by EUR 5/MWh per month until May next year, when the validity of the solution expires.
Ribera stressed in statements to Antena 3 that until the reform of electricity market regulation takes place in Europe, which “could take a long time”, Spain “wants to continue to benefit” from the “Iberian exception”. “We will present to the Commission proposals for the modernization of the electrical system, but also for the extension of the Iberian derogation, beyond May 2023, until this crisis lasts and until the European regulation is updated (… ) We would like (the gas hood) in the lowest possible environment, 45 or 50 euros MWh, and that this can be extended at least until the end of 2024,” he indicated.
A few days ago, Ministry sources led by Ribera pointed out that the Spanish and Portuguese governments were studying measures to expand this mechanism and wanted to submit a new proposal to the European Commission, the body that has the final say in the exceptional price system will continue to exist after May 31 this year, the date on which it was allowed to apply it after the increase in energy prices last year.
The third vice president explained that the “ups and downs” in the price of electricity depend very much on how much gas it takes to produce, so that when a lot of renewable energy is generated, prices fall, but when more gas is needed is to produce electricity, prices rise.
For this reason, he has pushed for the need to adapt the European electrical system to reduce volatility in the price of electricity and make it cheaper. In Spain, he pointed out, this has been partially achieved with some of the measures taken, such as tax cuts and the “Iberian solution.”
In this sense, Ribera is confident that these measures, together with the debate on the modernization of the European electricity system, will contribute to “stability” of prices this year.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
