Spain reduced the demand for natural gas by 19% between August of last year and February 28 of this year, compared to the consumption level of the same period in the last five years. Spain undertook with the European Union to reduce energy demand by 15% in the pre-alert phase (in which we are currently). In fact, if instead of taking into account only the national demand, the energy demand intended for export is also taken into account in the five-year period that Europe takes as a reference, the reduction in demand reaches 21%. In this comparison, it should be borne in mind that Spain was traditionally an energy importing country and that in 2022, for the first time, it became an exporter. In the same period – that is to say, since August – electricity consumption has fallen by 7%.
In any case, these data allow the Spanish Government to take heart from the energy saving measures implemented since August and for those contained in the More Energy Security Plan, which was approved in October, of which 47 measures have been activated, 64% of the total, as explained yesterday by the Secretary of State for Energy, Sara Aagesen, in a press conference to detail the balance of the energy measures approved by the Spanish Government.
In addition to the reduction in demand, Aagesen also highlighted the economic savings that have allowed the implementation of the Iberian mechanism, with which a cap is placed on the price of the gas used for the generation of electricity , between 40 and 70 euros per MWh. Since the beginning of the mechanism on June 15, 2022, the accumulated savings have already reached 5.1 billion euros. This is a mechanism that, in principle, expires on May 31, 2023, but which the Spanish and Portuguese governments have already asked Brussels to extend. In any case, it has not been applied for a few days now because the price of the MWh of gas in the reference market is below the threshold set by the mechanism. Yesterday it did not exceed 43 euros MWh, far from the 336 euros it reached in August.
It is a bearish trend that, according to the forecasts of the Repsol research service, is expected to continue during the remainder of the year, as explained yesterday by Antonio Merino, director of this research service, during the presentation of the 2022 Energy Yearbook. “I don’t expect volatility like that of 2022. Last year the risk premiums were trading on the uncertainty of what was going to happen with the sanctions in Russia. Now everything is clear. We know that Russia has been able to get its products through third countries and this has diluted the fear of shortages that existed a year ago”, he assured.
In the oil market the situation is a little more tense. “The consensus is that from the middle of the year there will be a shortage and this can bring the barrel up to 100 euros”, he says; although all forecasts depend on the intensity of China’s recovery. If it is very pronounced, the prices of all energies can skyrocket.
