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ARCHIVED - Spain asks EU to extend Iberian Exception to maintain cheap energy rates
The government wants permission from Brussels to cap the price of gas in Spain until 2024
The so-called Iberian exception was adopted by Spain and Portugal last June 15 and allows the countries to cap the price of gas used for electricity production, thus drastically reducing the cost of household and business energy bills. In agreement with the EU, Spain has put a 40 euro/MWh ceiling on gas prices which will increase by five euros per month until May, when the measure will expire.
Given the ongoing financial turbulence, the Minister for Ecological Transition, Teresa Ribera, has indicated on Monday January 9 that the government plans to ask Brussels for an extension until at least the end of next year, or “until the crisis ends and the European regulations have been modernised”.
Spain has joined several other European countries in submitting proposals to the EU on ways to reform the electricity pricing system, but until this happens, the government is anxious that people continue to benefit from the reduced prices that the exception allows.
To this end, a request has been submitted to maintain the gas cap at around 45-50 euros per MWh.
Electricity prices are particularly volatile since the cost depends largely on how much gas is needed to produce it; when there is lots of renewable energy available, prices fall, but when more gas is required, the costs go up for householders. Spain is one of the leading producers in renewable energy sources but the European system is still in need of reform to guarantee stability in the market.
For 2020, the Spanish government has again prioritised the “fight against the climate emergency and the promotion of the ecological transition”, according to President Sánchez who wants to drive forward the use of green hydrogen even more this year.
At the moment, Spain is the fifth top producer of wind power and the eighth in renewable energy overall.
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