The reduction will go from 15% to 20% for households with a regulated rate and, according to Ecological Transition, will lead to a reduction in inflation by eight tenths
From next Tuesday, June 14, the price of daily electricity generation, which has caused so many shocks over the past year, will be curtailed after the European Union authorized Spain and Portugal to cap the cost of gas on the market. It will be the first day on which the so-called ‘pool’ will start to notice to what extent limiting the gas price to 40 euros/MWh – this Thursday above 85 euros/MWh – can lower the price of electricity.
Once the system is installed, consumers will notice it in their pocket a month later. In other words, it will not be until the electricity companies start issuing their bills in mid-July that households will see the full effect of the measure. Each company issues receipts depending on their own billing cycles, so July will be well underway when all customers will receive the measure.
The third vice president of the government and minister for the ecological transition and the demographic challenge, Teresa Ribera, assured yesterday that this mechanism “will be the same” in Spain and Portugal. At a press conference at the ministry, Ribera emphasized that, apart from “some specific differences, the rules are the same” for both countries, excluding the existence of some asymmetries, such as the fact that in Spain the extensions and renewals of contracts that were passed on to offset the costs of combined cycle installations, while in Portugal only renewal was considered as such, with renewals being exempt.
This gas cap of an average of 48 euros per megawatt hour (MWh) for a year for electricity generation will allow Spanish consumers to save between 15% and 20% of what they paid without the mechanism. Initially, the Executive estimated that the discount would be more than 30%. However, the negotiations with the European Commission and Portugal have resulted in a distribution of the costs of this measure among all consumers: those who are in the regulated market will take over from the first moment, with which the reduction will be less than the estimated ; and those in the free market will notice when their current contracts are renewed.
According to the European Commission, the measure entails state aid of EUR 8,400 million – EUR 6,300 million for Spain and EUR 2,100 million for Portugal – aimed at reducing wholesale electricity prices in the Iberian market (Mibel) by reducing the input costs of power plants. that are powered by fossil fuels. fuels.
With the measure, the government hopes to temper the price increases that Spain has suffered since the beginning of the year. Ribera estimates the cap will help reduce inflation in Spain by “about eight tenths or a point” in the coming months. Until May, inflation was 8.7%, according to previous data from the INE. Estimates suggest that up to 70% of this price increase is explained by energy costs, both electricity and other fuel-related products. However, Ribera has pointed out that it will be necessary to look at how the rest of the energy commodities behave, not just gas or oil.
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.
