Wednesday, 26 April 2023, 17:07
The 'Iberian exception', a measure brought in to keep electricity prices down throughout Spain and Portugal has been extended by Brussles until the end of the year. It has acted as an 'insurance scheme' in the electricity market which lowered the wholesale market price and kept electricity bills down for households and companies.
The European Commission on Tuesday, 25 April, approved its extension until the end of 2023, but with a slight change. A price cap of 55 euros was set, which would gradually increase to 65 euros in December.
Spain's Minister for Ecological Transition Teresa Ribera said the extension was a "very important" step for the Spanish government.
"It is positive news that confirms and closes the circle that allows us to have this additional insurance system for Spanish and Portuguese electricity consumers," she said.
The winter, with milder than expected temperatures, allowed for a high level of gas reserves to be maintained at a European level, which helped contain prices.
If energy costs remained at current levels, "the mechanism will most likely not be activated", Ribera said in March. But the European Commission's approval would provide Spanish and Portuguese consumers with an "additional safety net" against price surges.
The 'Iberian exception' was first introduced in June last year and capped gas used to generate electricity at 40 euros per megawatt hour (MWh). This price was maintained for the first six months and then increased by five euros per month. Between April and December, the increase would be more gradual, of 1.1 euros per month.
The Spanish and Portuguese authorities used part of the profits from the electricity trade between France and Spain to finance the system, as well as a levy imposed on buyers benefiting from the measure.
Brussels claimed it had led to total net savings of about €5 billion for the Spanish and Portuguese.
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