electricity 36% cheaper than in France and 2,300 million savings

This Thursday, September 15, marks three months of the cap on gas, the so-called 'Iberian exception' which was launched in mid-June in Spain and Portugal to try to stop the rise in electricity prices. Sufficient time to take stock of how this mechanism has worked and whether or not it has led to savings for consumers.

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In this quarter, customers benefiting from the so-called regulated rate of the voluntary price for small consumers (PVPC) have paid 18% less than if this mechanism had not been implemented, according to calculations made by elDiario.es

Three months that include two heat waves and one of the hottest summers in recent years, which has accelerated the use of combined cycle plants. These are the ones that use gas and, therefore, the ones that cause the price of this raw material to have a greater impact on the electricity rate.

It is not that electricity has not risen in price, it is that it has done so 18% less than if the gas cap did not exist. In fact, August was the month with the most expensive light in history. On average, 300 euros MWh were paid, according to data published by the Iberian Energy Market Operator (OMIE). On August 31, the average price was 476.39 euros MWh, the second highest so far this year.

In the last three months as a whole, the average price paid by Spanish consumers with PVPC is around 268 euros MWh. A price that is 36% lower than what has been reached on average in France in this same period of time. It is also 27% lower than that of Germany and 41% less than what was paid at this time by Italian consumers. Precisely, France plans to limit the rise in prices of both gas and electricity to a maximum of 15% from 2023, according to Prime Minister Elisabeth Borne.

This cap on gas has not worked in a linear fashion throughout the summer. Specifically, there have been days, in mid-August, in which the savings for consumers in regulated rates touched 40%. In contrast, at the beginning of September it was around 10%.

Teresa Ribera: "It's working"

This three-month balance of the 'gas cap' was one of the topics discussed this Wednesday in the Congress of Deputies. The third vice president and minister for the Ecological Transition and the Demographic Challenge, Teresa Ribera, answered a parliamentary question about whether this mechanism is working.

"Every day a map comes out, there is a difference of between 30% and 40%" with respect to the average price paid in Spain compared to that reached in other European countries. "Even incorporating the adjustment, because we cannot force companies to sell at a loss," he added in reference to the compensation, which is marked day by day, that consumers pay gas companies as compensation for the cap.

“Even if we take into account what is the estimation of the future markets, the cost that is estimated to be paid for electricity in France in the last quarter is multiplied by five; and for three the one that is estimated to be paid in Germany”, Ribera listed. "These are good data, it has worked," she summarized.

Between June 15 and September 15, the cap on gas has resulted in "Spanish citizens saving 2,300 million euros", according to estimates by the Executive. “We have to continue working, at a national and European level”, in a context in which the European Union accepts and demands very similar measures“, Teresa Ribera deepened.

In addition, he recalled that this summer, Spain has had to provide 25% of the electricity consumed in Portugal, in one of the driest summers in recent years on the Iberian Peninsula, and has also sent electricity to France, which has half of its nuclear plants stopped, either for maintenance or for technical problems. “Due to the catastrophic state in which the French nuclear park is, it is importing as much as possible from all neighboring countries, everything it can. Even under these conditions, guaranteeing solidarity in the supply to our neighbors, our prices have been well below what they would have been in the absence of this mechanism”, concluded Ribera.