The most technical fringes slow down the endorsement of Brussels to the Iberian cap of gas
The President of the Government, Pedro Sánchez, and the Portuguese Prime Minister, Antonio Costa. /
The Commission, which wants to avoid a contagion effect to the rest of the EU, is still analyzing the proposal from Spain and Portugal, with the price of electricity stable
Three or four weeks, at the most. That was the deadline that the Government had for the European Commission to give the green light to the energy plan presented by Spain and Portugal to limit the price of gas in the wholesale market and that this cap would be reflected in the cost of electricity. But the clock is ticking and, for now, there is no sign that Brussels is going to authorize this measure in the coming days. Although the idea is apparently simple, the small print of this type of document is still going around the offices of the Belgian capital, where the big decisions on community matters are made.
The process needs many regulatory "adjustments", indicate sources close to that operation. Although "obstacles" are ruled out, it is necessary to update "technical aspects" so as not to leave a gap to the great fear that the European Commission has: a distortion in the European energy market. Theory says that the interconnections of the Iberian Peninsula with the rest of Europe are minimal, barely 3% of the total, according to the latest data from Red Eléctrica. And that electric autonomy - already known as the "Iberian exception" - is what would enable a double market: the purely internal one, for Spain and Portugal; and another to which electricity is sold to the rest of Europe, even if it is little electricity.
In fact, among the options that are being considered for the final document, there is a possible legal obligation to restrict the export of electricity to France, the territory through which the Iberian networks penetrate and connect with the rest of the EU. It would be about applying some limitations in that electric sale. Although how and when is yet to be decided.
What they do not doubt in the Executive is that finally the rest of the partners authorize this limitation of gas. The President of the Government, Pedro Sánchez, recalled yesterday that this proposal, under negotiation, will result in a reduction in the electricity bill, and he hopes that this measure can be closed as soon as possible with the Commission. While Europe is studying how to change the entire electricity market, the Iberian solution is temporary and would be in force, according to different sources consulted, until the end of this year. Because the market, given the current perspectives, does not expect a calm autumn in energy terms. On the 'benefits fallen from the sky' of the electricity companies, which in Spain have been cut to lower the electricity bill, Sánchez has considered "obvious" that they exist, despite the fact that the electricity companies deny it.
The Spanish-Portuguese proposal set the maximum price at 30 euros/MWh at which combined cycle plants (those that use gas to produce electricity) will be able to offer their energy in their market. The qualification for that limit was what allowed the last European Council at the end of March. But without setting prices. That is the closest reference to the 20 euros/MWh at which it was listed a year ago before the price crisis began.
At least until May
If the limit on gas caused a constant drop in the electricity price to around 100 euros/MWh, the average bill of 100 euros in March for a consumer covered by the regulated tariff (PVPC) would drop by up to 35%.
But for citizens to see their electricity bill reduced, there is still time. "I would ask for calm and patience," said Ribera after the first endorsement of the Council, with the more than clear reluctance of Germany or the Netherlands. Once obtained, the Council of Ministers will approve a decree with the measure. Only then would the gas limit begin to apply, and it would be throughout May when the cost of electricity should also drop, in the best of cases.
The only certain appointment in the calendar before the end of the month is that of April 27. Then, the meeting of the college of European commissioners is scheduled, a meeting in which the authorization of the Iberian plan will presumably be addressed.
Meanwhile, the average price of electricity in the wholesale market remains in a low environment after the record in March. For today it marks 112 euros/MWh. It is 8.6% higher than this Monday, when it fell to its minimum of 2022, at 103 euros. In any case, the price of electricity today will be 42% higher than the 79 euros/MWh of a year ago, when the costs began to skyrocket compared to those registered in the pandemic.
