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ARCHIVED - Spain announces plan to reduce electricity prices in 2022
December has been the most expensive month in history for energy in Spain
Electricity prices in Spain have broken all sorts of records already this year, and as 2021 marches towards its close, the situation shows no sign of improving, despite President Sanchez’s assurances that costs would go down. In fact, December so far has proven to be the most expensive month in history, with the wholesale value coming in at 14% more than November and 10% more than October.
Wednesday December 15 marks a new all-time high, with electricity costing a staggering 291.73 euros per MWh after six consecutive days of increases. With this in mind, Minister for Ecological Transition Teresa Ribera has announced that the government is considering a number of “fiscal measures” to ease the burden on customers in the new year, since the current tax breaks are set to expire on the 31st.
A significant reduction in VAT and the elimination of taxes on electricity has led to more stable rates and allowed many customers to reduce their bills somewhat, and Ms Ribera is confident that, with these measures, the commitment Mr Sanchez made in September that at the end of this year “all consumers” with average spending would pay “the same as in 2018” will come to fruition.
The minister was also quick to point out that the problem isn’t unique to Spain, as this Wednesday several countries, including France, Belgium, Austria and Hungary will pay above the odds for electricity.
The forecast for 2022 has both bad and good news: on the one hand, the experts believe that energy prices will continue to rise during the first quarter of next year, after which they should start to stabilise, but will still remain relatively high. To combat this, Spain has made a number of reform suggestions to the EU, and the European Commission is expected to discuss a centralised system for purchasing gas on Wednesday.
Closer to home, the Council of Ministers has approved a plan to promote renewable energy and hydrogen, which will require an investment of 16.3 billion euros and create 280,000 jobs. It is hoped that this initiative will reduce Spain’s dependency on fossil fuels from abroad, bringing the costs down substantially.
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