The fourth vice president of the Government and Minister for the Ecological Transition and the Demographic Challenge, Teresa Ribera, has asked this Thursday for “prudence” when assessing the escalation in the price of electricity until the National Commission of Markets and Competition ( CNMC) issue its assessment of what happened in recent days, although it has opened itself to the possibility of exploring “cushion mechanisms” to mitigate high spikes in price.
Ribera, in statements to RNE, has ruled out, due to its complexity and difficulty in fitting into the “marginalist market” that exists in the EU, applying a formula such as establishing a fixed price for certain energies, such as hydro and nuclear, that some experts have brought to the table.
“I am not sure that a selection can be made of which technologies are rewarded, at what price and for which system outside the common framework. It is a delicate and complicated thing. Another question would be to assess whether there are some cushion mechanisms that allow mitigating this type of impact when such high peaks occur due to scarcity, but these things must be done with prudence ”, he indicated.
Asked about these “cushion mechanisms”, the vice president has indicated that the coalition government has committed to exploring this path to see if there are ways to alleviate the price increase in “infra-marginal” technologies that, in principle, are not affected due to the alteration of costs in the technologies that set the price for the entire market.
“It is true that the high price of CO₂ implies that the cost of generating energy with gas rises, but not the cost of generating with other technologies that do not emit CO₂. What happens is that the possibility of intervening there is delicate and complicated (…). We have to see what margin there may be within the marginalist markets that the EU designs as common regulation in all Member States ”, he stressed. In any case, Ribera has insisted that any measure adopted in this regard must be “solid” from a legal point of view, trustworthy for investors and energy players and for consumers.
Asked if the Government would be willing to lower the VAT of electricity to the most vulnerable consumers, the vice president has indicated that it is working on the definition of what is the minimum vital consumption of each of the households in two supplies that are considered “ absolutely key ”for the well-being of households: energy and water.
Once said minimum vital consumption has been identified, he explained, “it is possible to ask” if this section deserves a different tax treatment or if, on the contrary, an “extraordinary automatic support compensation mechanism” is sought.
Ribera has indicated that this debate on taxation is protected by the Treasury, although with contributions from his ministry, and has indicated that the public effort should focus on reducing the inequalities that have increased in recent years “and not so much on linear tax reductions for everyone, regardless of their income ”.