It has been more than half a year since Spain and Portugal put into operation the popularly known as ‘tope al gas’ to avoid the infection of rising gas prices on electricity bills. This measure has led to cumulative savings of 209 euros in 2022 for each of the spanish homes with a regulated electricity rate, according to a report developed by business school Esade under the title ‘The effects of the gas cap on prices, inflation and consumption six months later’, in which the operation of the Iberian mechanism is evaluated between June 15 and December 31, 2022.
The analysis estimates a average savings percentage in the receipt of the rate-regulated homes (PVPC) of 31.8%, which corresponds to an average of 209 euros per household and translates into a total of €2.110 million of savings by assuming that there are some 10 million electricity customers with this type of rate. This result leads the researchers to conclude that this exception has assumed that the year-on-year inflation is 0.4 points lower in Spain (8.3%) than it would have been without its application (8.7%), something that, in the researchers’ opinion, has been “decisive” for the Spanish positive differential compared to the Eurozone average (9 ,2%).
The result of 2,110 million savings affects only the set of users of the regulated market and not the free market (the other leg of the retail electricity market) where “it is more difficult to quantify” the lower spending, as explained by email by one of the authors of the report, the researcher at the Esade Center for Economic Policies, Natalia Collado Van-Baumberghen. In any case, the figure contrasts with those of the Ministry for Ecological Transition which estimates a saving of €4.5 billion in the same period, although in this case it refers to the difference between what would have been paid to the electricity generators without this ‘gas cap’ and what has been paid thanks to the mechanism.
The ‘cap on gas’ means establishing a maximum price between 40 and 70 euros per megawatt-hour(MW) at which the power plants that consume gas (combined cycles, coal and cogeneration) can sell electricity on the wholesale market. The benefit for consumers lies in the fact that the rest of the technologies (renewable, nuclear and hydraulic) will receive the maximum of that remuneration, while the companies that burn gas do not lose money when they are compensated for the difference between the real price of gas and that reference. maximum price. However, according to the report, precisely this compensation has caused a mayor use of gas in combined cycle plants, although they acknowledge that this difference was even greater in summer, due to the drought in the first half of 2022 that limited the possibility of using hydroelectric energy, while in autumn it was reduced.
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In addition to this greater use of gas precisely when what is sought is, in addition to reducing the price for Spanish consumers, to reduce the consumption of this raw material to reduce dependence on Russia, another side effect has been the increase in Spanish exports. Las interconnections energy works with the flow in favor of the country that has the most expensive energy. And the researchers argue that, without the cap on gas, the electricity price Spanish would have been slightly higher than the French price most of the time and not the other way around, as has happened in recent months, which would have prevented exports from skyrocketing, while imports instead of falling would have increased.
The ‘gas cap’ ends its application on May 31 of this year, when it would have been in existence for almost a year. However, the Spanish and Portuguese governments have already transmitted to the European Comission your intention to extend this exception until the end of the ukrainian war and the price volatility stops or until a problem develops. new electricity market in Europe. From Brussels they have warned that with the current market rules –time frame of validity of extraordinary actions due to the war in Ukraine– this exception could be extended at most Until december 31 of this year.