Brussels forces Spain to reform the draft regulated tariff to be applied in early 2023
The gas price ceiling is now official. The Staatsblad (BOE) published this Saturday the royal decree establishing the mechanism to limit the price of gas for electricity generation in the coming year to an average of 48.8 euros per megawatt hour (MWh).
And the decree includes a sanctions regime to prevent electricity companies from applying the measure and Spanish electricity bills starting to fall by about 30% as early as June. Although the BOE does not specify the economic level of these sanctions, it qualifies as “very serious violations” if the electric companies do not comply with the decision.
Companies must provide “detailed” information about their ‘retail’ contracts, that is, “not the contracts they sign with their marketer, but the real contracts that consumers pay,” said Ecological Transition Minister Teresa Ribera. In this way it will be possible to check that the high volume of extraordinary profits of energy companies “is no longer paid by consumers” and thus finance the gas ceiling.
As of today, marketers have a five day period to offer a “fixed picture” of their market demand exposed to the “spot” market and what proportion has coverage or fixed contracts. After that, there is still a period of seven days for the market and grid operator to put the procedures and systems for the application of the mechanism into practice.
The Royal Decree also includes the mandate to change the methodology for calculating the regulated rate (PVPC) to include references based on a basket of forward products and the daily and intraday market. In this way stability is combined with incentives for energy efficiency, storage and demand management. The new PVPC is expected to be applied from early 2023, reports the cabinet led by Teresa Ribera.
The approved mechanisms are added to the national and international actions launched by the government since the summer, at the beginning of the rise in energy prices due to the speculative rise in gas prices.
Although the decree, according to Ribera, will enter into force in “ten or fifteen days”, the average price of electricity on the wholesale market will fall by 5.6% this Saturday after Brussels has given its final approval to the text published in the BOE . is again below the level of 200 euros/MWh.
Specifically, the average price of the ‘pool’ on Saturday will be 192.55 euros/MWh, according to data from the Iberian Energy Market (OMIE), with a maximum peak between 21:00 and 22:00 of 241.87 euros and the minimum 136.59 euros between 3 and 4 pm
Yet it represents a price that is 168% higher than the EUR 71.5/MWh paid for electricity a year ago.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
