The Government is considering re-suspending the tax on electricity generation due to the escalation of the bill

The Government is considering re-suspending the 7% tax on electricity generation, as it did at the end of 2018, before the spectacular escalation of the electricity wholesale market, known as pool.

This is how the new electricity bill that comes into effect on Tuesday works

This is how the new electricity bill works

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The Minister for the Ecological Transition and fourth vice president, Teresa Ribera, pointed out this Wednesday in Congress that “it is not ruled out that in a tense situation like this one must go back to doing what we already did at the time”, the “suspension” of some tax figure “on an exceptional and provisional basis”, to “facilitate” consumers to “cope with” an increase in costs that has been attributed to the rising cost of fossil fuels.

The Government has already suspended this tax for 6 months, from October 2018 to April 2019. The tax contributes to the electricity system (it does not finance the public coffers) about 1,500 million annually. It taxes with 7% the value of the generation of all the plants and to a large extent it is transferred to the wholesale price (that is, the consumer ends up paying it).

The electricity companies have systematically appealed him in court, without success. It was endorsed by the European Justice last March and by the Constitutional Court in July 2017. It was introduced by the electricity reform of the Government of Mariano Rajoy in December 2012 to try to fix the tariff deficit, although the PP itself has been asking for its abolition for years.

“This Government must be sensitive and must care about consumers, so we do not rule out provisional measures until the reform of our energy taxation is rigorously and consistently addressed in depth,” said Ribera. “We have already done it and probably we will have to do it in the immediate future,” he pointed out during an urgent appeal by the PP to account for the increased cost of the receipt.

“We are extremely concerned about the evolution of the price of electricity, the gas price forecasts and the CO2 price forecasts and above all we are concerned about their impact on the receipt of families, industry and SMEs”, said the vice president , on the day the wholesale market marks the third highest price in history. The upward spiral has worsened after the entry into force, on June 1, of the new bill that penalizes the most expensive hours and in full pulse of the Government with the electricity companies to try to cut so-called “profits from the sky” that receive hydroelectric and nuclear technology due to the rising cost of CO2.

Ribera has said that the “structural problem” of the electricity market is fossil fuels, “the most expensive, which mark the price paid for all electricity in the wholesale market”, and “the only structural measure must be to leave to depend on fossil fuels “, which are” those that mark those prices that scare us so much “and” fall like a slab “on consumers” all over Europe “, although” in a particularly serious way “to the Iberian market due to its lower interconnection capacity.

The head of Ecological Transition has also announced that, together with the Ministry of Finance and the Ministry of Industry, Ecological Transition is preparing an extra allocation of 100 million euros in credits to compensate the industry for the spectacular rise in CO2 prices, which has led to the current escalation of the electric pool.

The vice president has defended the new electricity bill by hourly sections because it allows to encourage savings and efficiency and has not commented on the request of two ministers of United We can advance the cheapest section of the new bill to 10.00 p.m.

Ribera has pointed out that, beyond the possible extraordinary measures, the electricity market needs “structural” solutions, such as the bill that the Government has approved to remove the cost of premiums for renewables from the rate and charge it to the set of electricity consumers and the blueprint that plans to attack the so-called “benefits fallen from the sky” of hydro and nuclear. Those measures are not going to take effect anytime soon.

The vice president has defended that, despite the upward episode of these days, Spain has achieved a “historic” reduction in the price differential of its wholesale electricity market with respect to Germany and France in the last two and a half years. “Whoever buys electricity today for 2022 and 2023 in Spain is already making it cheaper,” he assured.


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