The Congress of Deputies has validated this Thursday the royal decree-law to limit the price of gas in the wholesale electricity market, after the majority of parties have shown their support and the PP, Vox and Junts have announced their abstention .
This mechanism has received 197 votes in favor, 143 abstentions -including those of the PP and Vox- and only two votes against, from Foro Asturias and Nueva Canarias.
The limitation to the price of gas in the electricity market, which will begin to apply next Tuesday when the prices for the following day for Spain and Portugal are matched in the wholesale market, will reduce between 15% and 20% the amount of the invoice of consumers with a regulated rate computed for the twelve months in which it will be applied, until May 31, 2023.
The measure will mean that the Government caps the price of gas for electricity generation at 48.80 euros/MWh and thus lowers the price of electricity, which is established by an auction system based on the highest generation price.
“Households and companies will begin to notice savings on their electricity bills immediately. Also in this crisis, protecting citizens and the productive fabric is our top priority,” Pedro Sánchez said on Twitter as soon as the measure was approved.
The Minister for the Ecological Transition, Teresa Ribera, has defined the mechanism as a “firewall” so that the price of gas, whose market price has increased fivefold in the last twelve months, continues to drive up electricity prices, whose average in the first four months of 2022 doubles that of 2021.
Ribera has highlighted that with this temporary measure the only electricity that will be paid at the cost of gas in those twelve months will be that generated with natural gas and not, as is the case now because it is a marginal market, in which all technologies charge the price of the last plant that matches the price, which, when there is not enough renewable or nuclear energy to cover demand, is a gas combined cycle.
The minister explained that the first to benefit from the measure are consumers with rates indexed to the market price, mostly those who have the regulated rate or PVPC, who have, among others, the beneficiaries of the social bond.
However, he has said that the measure will also benefit free market consumers, because with the expected reduction in the wholesale price, when they renew their contract, something that is usually done annually, the wholesale market price reference that will be lower .
The plants that produce electricity with gas will be compensated for the difference between the limit price (which will range from 40 euros/MWh in the first six months of the period and which will then go up five by five euros until reaching 70 euros/MWh in the last month) and the cost involved.
Despite the fact that they have finally abstained, both PP and Vox have harshly charged against the price limitation mechanism. “The Iberian exception is not a triumph, it is the unequivocal manifestation of a failure in energy policy,” replied the head of Energy of the PP, Guillermo Mariscal, who considers the cap “a radical intervention of the market.”
Likewise, it has warned of a cost in compensation to facilities with a price cap of 6,300 million at the current cost of gas, and an additional 1,500 million for each increase of 10 euros. “That is the result of your brilliant negotiation,” he has said.
For Vox, the mechanism to limit the price in these plants is still “a shell game”, “a scam”, “a mirage”, said its spokesperson for Ecological Transition, Mireia Borrás, questioning whether, by end, it will not end up causing even an increase in the bill: “We’ll see what’s left”.
The cost will be passed on to consumers who benefit from the measure at all times and term contracts signed before April 26, 2022, when the EC approved, albeit preliminary, the mechanism, will be exempt from paying the adjustment. Ribera said.
This way of defraying the cost of compensation has raised the discrepancy of many of the parliamentary groups and deputies who have intervened in the debate this Thursday in Congress.
In the case of the PP, his deputy Guillermo Mariscal has proposed that it be financed from the General State Budgets (PGE), as this group also proposes for other energy issues.
The minister also wanted to make it clear that, despite the fact that the difference in price between the Iberian and French electricity markets could cause an increase in demand from France and in exports to that country, Spanish consumers “are not going to subsidize the price of energy in France”, since there they will contribute to the payment of the adjustment to the same extent as Iberian consumers.
However, the PP deputy Guillermo Mariscal has said that with this adjustment France and Portugal will be “subsidized” with 1,400 million euros, and their companies will pay less for energy than the Spanish ones.
