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ARCHIVED - Price cap on gas in Spain extended until December
The so-called Iberian exception allows Spain and Portugal to lower energy prices
The Iberian exception, a measure approved by the European Commission (EC) last June to reduce energy costs in Spain and Portugal, will now be extended until December. As prices continue to rise amid sky-high inflation, this regulation caps the price of gas used in electricity production, drastically reducing energy bills for homes and businesses.
Although formal approval still has to arrive from Brussels, Minister of Ecological Transition, Teresa Ribera, has assured that the move has received “explicit support” from the EC and should be passed on Tuesday March 28.
The price cap came into force on June 15 and limits the cost of gas to an average of 48.80 euros in the wholesale market, which has a direct impact on electricity bills. It was originally agreed that Spain and Portugal would impose the Iberian exception for 12 months, but it will now remain in effect until at least December. However, the Spanish government hopes to keep the measure in place to some extent until the end of next year, with possible price caps of between 45 and 50 euros per megawatt hour.
Ms Ribera is currently in Brussels meeting with Energy Ministers from across the EU, and aside from the Iberian exception the delegates are expected to debate whether hydrogen produced with fossil fuels should be excluded from renewable energy targets.
The topic is a fraught one and Spain’s nose was put firmly out of joint last month when the EC came down on the side of France and voted in favour of including low-carbon hydrogen produced with nuclear power in the directive to encourage renewables.
As part of the objective of climate neutrality of the European Union by 2050, nations are trying to replace natural gas with renewable and low-carbon gases. To this end, the EU aims to produce 10 million tonnes of domestic renewable hydrogen by 2030 and import a further 10 million tonnes.
In other news: Price of gas canisters in Spain drops by 5%
Image: Freepik
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