Brussels gives the green light to the extension of the Iberian exception until December 31

2023-04-25 12:28:46

The European Commission has formally approved this Tuesday the extension until December 31 this year’s call Iberian exception which allows Spain and Portugal to limit the price of gas in the wholesale electricity market, according to the institution in a statement.

Brussels had already transferred to the Government an opinion favorable to the measure and with its decision today confirms that the extension “complies with state aid rules” of the EU, as well as that the modifications introduced are “adequate, necessary and proportionate” to “cope with the serious disturbance of the economy that Spain and Portugal are facing”.

Specifically, the mechanism provides for the granting of “direct grants” to electricity producers in order to finance “part” of its cost and the payment is calculated daily as the difference between the price of natural gas and the ceiling established by the measure at each moment.

This payment is financed, recalls Brussels, through a fee charged to consumers who benefit from the measure and, to a lesser extent, through the so-called “congestion rents” obtained by Red Eléctrica as manager of the network in Spain. as a result of the electricity trade with France.

In this sense, the Community Executive stressed that, despite the fact that the price of gas has fallen Since the introduction of the measure a year ago, the Iberian exception continues to “serve as a protection mechanism” in the event of possible “sudden price increases” in the Iberian electricity market.

The European Commission recalls, along the same lines, the “particular circumstances” of the electricity market in the Iberian Peninsula, in particular its “limited interconnection capacity”the “high exposure” of consumers to the wholesale price of electricity and the “great influence of gas in price setting”.

In addition to the extension, the Government modified the trajectory of increases of said gas cap within the wholesale market, so that instead of ending at the 70 euros per megawatt/hour (MWh) foreseen in the previous version for the month of June , these increases are reduced so that the final price in December of this year is 65 euros.

In April, for example, it already stood at 56.1 euros MWh instead of going up to 60 euros initially planned and from now on it will rise to 57.2 euros in May, 58.3 euros in June, 59.4 euros in July, 60.6 euros in August, 61.7 euros in September, 62.8 euros in October , 63.9 euros in November and 65 euros in December.

In this regard, the analysis of the Community Executive highlights that the new price trajectory “allows a foreseeable and fluid progressive elimination” of the Iberian exception and that it will also expire “at a price level close to the prices currently forecast in the wholesale gas market by the end of 2023.”

On the other hand, the community authorities concluded that the measure “continues minimizing distortions of competition and avoiding possible negative repercussions on the operation of the spot and forward electricity markets”, as well as that “it does not give rise to any cross-border restriction on electricity trade or discrimination between Iberian and non-Iberian consumers”.