Brussels gives the green light to the plan of Spain and Portugal to limit the price of gas

BRUSSELS, June 8 (EUROPA PRESS) -

The European Commission has given the green light this Wednesday to the plan of Spain and Portugal to put a limit on the price of gas in the price formation system of the Iberian electricity market, which aims to reduce the cost of the electricity bill of consumers after the Russian military invasion of Ukraine.

The Community Executive has approved the aid plan of 8,400 million euros for both countries in the framework of the Russian military aggression against Ukraine, distributed in 6,300 million euros for Spain and 2,100 million euros for Portugal to reduce the costs of supplies of power plants powered by fossil fuels and, therefore, lower their production costs as well as the wholesale market price of electricity to the benefit of consumers.

Brussels has given its approval to this measure that can be applied until May 31, 2023, considering that the Spanish and Portuguese economies are experiencing "serious disturbances".

"The temporary measure that we approve today will allow Spain and Portugal to lower electricity prices for consumers who have been severely affected by the rise in electricity prices due to the Russian invasion of Ukraine", indicated the vice president of the European Commission and Commissioner for Competition, Margrethe Vestager, who added that in time, "the integrity of the single market will be preserved".

This aid will be executed in the form of a direct subsidy to electricity producers and will be used to finance the fuel costs of power plants - those of combined cycle or cogeneration -.

The daily payment will be calculated taking into account the difference between the price of natural gas on the markets and the limit set for gas for electricity production, that is, 48.8 euros/mWh in the twelve months that may remain in force. measure.

Specifically, the agreement reached with the Community Executive, and announced at the end of April, sets the average price of gas at around 50 euros/MWh, starting at 40 euros for the first six months and subsequently rising to 48.8 euros on average.

The figure contrasts with the current reference price in the market of more than 100 euros/MWh -as in the case of the Dutch TTF, a reference in Europe-. During the first semester of application of the measure, the price will be 40 euros/MWh, to then increase by 5 euros per month up to 70 euros/mWh after twelve months.