Portugal expects its new government to offer a gas limit that it will share with Spain

The Portuguese government says it is still “premature” to specify the margin that Spain and Portugal intend to offer this week to reduce the price of gas stations to lower the price of electricity bills, and points to an intermediate situation in which it finds itself. The Portuguese executive himself.

Pedro Sanchez and Antonio Costa reached the recognition of the Iberian exception at the European summit last week. Now is the time to take measurements.

A spokesman for the Portuguese Ministry of Environment and Climate Action said that the government of a neighboring country was in a “transitional state” and that it was “too early” to rule on the mechanism. A third vice president, Teresa Ribera, believed on Saturday that she would take office in a maximum of one month after the European Commission gives the green light.

While waiting for this price to be set, several Portuguese ministers will be in office until Wednesday afternoon, when the new government announced by Costa Rica will take office. One of the portfolios that will change hands is the portfolio of still Minister of the Environment, Joao Pedro Mato Fernandez, who said a few weeks ago that both countries would offer a 180 euro per megawatt hour (MWh) limit in the wholesale electricity market. (Then canceled).

Matos will be replaced by incumbent Parliamentary Secretary Duarte Cordeiro, who is considered one of the architects of the election campaign that gave Costa Rica an absolute majority in January. Yes, the current Secretary of Energy of Portugal Joao Galamba still remains in his post, with expanded functions.

This weekend, El Periódico assured government sources that the gas limit would be around 50 euros / megawatt-hour, half the current price of this raw material, although the range would be very wide: from this 50 euros to 100 euros. Its current price is slightly lower. According to the Spanish Ministry of Ecological Transition, this figure is not closed.

“The price of the ceiling we set on gas is the key to making that work work,” Social Rights and 2030 Minister Ione Bellara said on Monday, arguing that “the most reasonable thing” is to make it happen. 30 euros.

Because each euro translates into a gas price of two euros per cycle of bids, plus the cost of emission rights, Bellara said, “the final price will be around 100 euros in the wholesale market.” Facua Consumer Association protects the pool in half: 50 Euros in the final wholesale price.

Response plan

This benchmark price for gas, pending a response from Brussels, is an additional measure to the measures the Council of Ministers plans to approve this Tuesday as part of the war response plan announced by the Prime Minister this Monday. Pedro Sanchez said that “this week” Spain and Portugal are going to submit their proposal to the European Commission, which will allow “a significant reduction in” final electricity prices “immediately”. This lowering of the basin will have an immediate impact on the regulated rate known as PVPC, and on industries that directly purchase electricity in the basin.

As Sanchez announced, an extension to June 30 will be approved this Tuesday to reduce the mechanism approved in September to reduce redundancies for electricity companies due to the increase in gas, which will continue “with some modifications to enhance and adapt its efficiency. These are European guidelines.

This indicates a possible further strengthening of oversight of long-term contracts (which was left without this termination after the government amended its original ordinance) to confirm that they do not really enjoy the effect of increasing gas.

This Tuesday will also approve a reduction of the electricity tax to 55% (regulated part set by the government) by renewing the Renewable Energy, Cogeneration and Waste Premium Reimbursement Regime (the regime known as RECORE). Which will allow a pre-recovery of € 1,800 million. This will be the amount that companies had to repay from January 2023 due to high prices in the wholesale market.

Also, the government intends to increase the number of recipients of the Social Electricity Bonus by 600,000 households, with this discount increasing the number of households to 1.9 million, which will be automatically renewed. Ecological Transition does not specify these and other measures, which include extending the electricity tax reduction until June: VAT 10%, reduction of the electricity tax to a minimum, and suspension of the tax on electricity generation.

Sanchez also issued “other regulatory measures” that he did not specify “promoting and accelerating the deployment of renewable energy, saving energy and guaranteeing energy supply.” For the large energy industry, the € 500 million plan enables an 80% reduction in electricity bills, “to reach the maximum in CO2 compensation and to strengthen direct assistance to the sector”.

Vice President Ribera generally pointed out that the mechanism being developed by Spain and Portugal separates the gas from the wholesale electricity market price formation mechanism – which plays a key role as elDiario interactive interactive interactive interactive interactive interactive interactive interactive interactive interactive interactive interactive interactive interactive interactive interactive Gas for the wholesale electricity market will be allocated by Vice President Ribera. .es – and that their remuneration will be from the market itself and not from the general state budget.

This market has an entire hourly payment system for electricity. The idea of ​​the ministry is to distribute the gas tax among the other technologies in this hourly mechanism: only gas will be paid at the gas price and the rest of the technologies will continue to operate. According to the existing mechanism, which prioritizes cheaper and it grows until all the demand that the country requires every hour is met.

It is unclear whether this redistribution will accrue to the companies if the payment by the electricity system turns into a more tariff deficit (the difference between the electricity system revenue and regulated costs). Yes, it is impossible for the compensation to be included in the budget, which the government was working on before the European summit last week.

In order to prevent the export of electricity by using low prices in the Iberian wholesale market, work is underway on a dual line of electricity: one with France and the other for the Iberian market. But the price has not been decided yet, says Ecological Transition.