Price restriction on Iberian gas may last until 2024
2023.01.09 07:57
Price restriction on Iberian gas may last until 2024
By Kristina Sobol
Budrigannews.com – Energy Minister Teresa Ribera stated on Monday that Spain will seek permission from the European Union to extend its temporary cap on reference prices for and coal used by power plants until at least the end of 2024.
After the two countries reached a deal with the European Commission in the spring of 2022, the so-called Iberian mechanism was put into place in Spain and Portugal. Under this joint scheme, the power costs of fossil fuel plants are subsidized in an effort to reduce skyrocketing electricity prices.
In an interview with TV station Antena3, Ribera stated, “We intend to ask for the Iberian mechanism to be maintained for the duration of the energy crisis or until the electricity market is reformed and European regulation is updated.”
She went on to say, “We would like the gas cap to stay within the lower end of the range, about 45 or 50 euros per megawatt hour, at least until the end of 2024.”
The system’s current expiration date is May 31.
Ribera said that the power grid in the EU needs to be changed to make electricity cheaper and less volatile.
She added that Europe’s gas storage levels and prices had been supported by mild autumn and early winter temperatures.
Since their peak in August, Spain’s electricity prices have steadily decreased, in part due to increased wind energy production.
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The gas cap did not apply for a few days in October because prices were below the mechanism trigger price of 42.70 euros per MWh.
