The European Commission on Tuesday gave its support to the extension of the Iberian exception. The measure, which makes it possible to reduce the impact of the increase in the cost of gas on the electricity bill of homes and companies in Spain and Portugal, will be extended until the end of the year, when the temporary aid framework for the war in Ukraine expires. The mechanism has also been slightly modified and will set a reference price of 55 euros, which will gradually increase until it reaches 65 euros in December.
The third vice president and minister for the Ecological Transition, Teresa Ribera, already announced a month ago that the Executive had the support of Brussels to extend this mechanism beyond March. And the statement is the definitive formal confirmation of this. Ribera stressed that this is a “very important” decision for the Government of Spain.
“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,” added Ribera.
The winter, with milder than expected temperatures, has made it possible to maintain a high level of gas reserves at the European level, which has contributed to containing prices. If energy costs remain at current levels, “most likely the mechanism will not activate,” Ribera said in March. However, the approval of the European Commission will allow Spanish and Portuguese consumers to have an “additional safety net” against price volatility.
5,000 million savings
The mechanism was first introduced in June last year and set a cap of 40 euros per megawatt hour (MWh) on gas used to generate electricity. That price was maintained for the first six months of application and then increased by five euros per month. Between April and December the rise will be more gradual, of 1.1 euros per month.
To finance it, the Spanish and Portuguese authorities have used part of the profits obtained from the electricity trade between France and Spain and a tax imposed on buyers who benefit from this measure. In total, Brussels maintains that the mechanism has allowed a total net saving of around 5,000 million euros for Spaniards and Portuguese.
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