Spain confirms Iberian proposal of cap on wholesale electricity price
The governments of Spain and Portugal will present a joint proposal to other European Union members to limit the electricity price per megawatt hour (MWh) in the wholesale market to €180/MWh.
Spain’s minister for ecological transition confirmed on Thursday that the governments of Spain and Portugal intend to present a joint proposal to other European Union members to limit the electricity price per megawatt hour (MWh) in the wholesale market to €180/MWh.
Portugal’s minister of environment had last Tuesday already said that Portugal was negotiating with Spain to design a safeguard mechanism in the Iberian electricity market, Mibel, that would result in a net monthly saving of €1.1 billion for Portugal.
Speaking to radio Onda Cerro, Spain’s minister for ecological transition and the demographic challenge, Teresa Ribera, said that if just two years ago a benchmark price of €180/MWh “seemed like madness that would never be reached and today it is largely surpassed” then there is “little question that it should be the maximum limit we should accept in our market.”
In this scenario, she said, the Spanish government is waiting to take action to secure a response from the European Commission, in a move that she said can be seen as “an opportunity to build more Europe.” She stressed, however, that she will give a “national response” of decouple the gas from the electricity market if the EU delays taking action.
Portugal’s minister said on Tuesday that the proposal involves imposing a maximum price of €180/MWh on the spot market (daily and intraday) for electricity – which this month exceeded €500 for the first time.
He said that the new joint proposal could mean “a net monthly joint saving, shared between Portugal and Spain, of €5.7 billion, for a monthly extra cost of gas of €1.25 billion,” with “the net monthly Portuguese saving … around €1.100 billion, for a monthly extra cost of gas of around €250 million.”
There was a maximum price of €180/MWh set by Spain’s and Portugal’s regulators until 2019, when an EU directive prohibited the maintenance of caps for electricity companies’ offers on the wholesale market.
“We believe it is a European decision because the regulation is European,” said Ribeira. “What happens is that the analysis of the economic situation and the need to protect our citizens and industry leads us as a government to consider taking decisions to protect the national interest in case Europe is not up to the task in the type of measures that are adopted.”
