Teresa Ribera, Spain's minster for ecological transition and demographic challenge

Request for cap on wholesale electricity price

Portugal and Spain will be presenting proposal to EU

Teresa Ribeira, Spain’s minister for ecological transition has confirmed today that the governments of Spain and Portugal intend to present a joint proposal to other European Union members to limit the electricity price per megawatt hour (MWh) in the wholesale market to €180/MWh.

João Pedro Matos Fernandes’, Portugal’s minister of environment, revealed Portugal has been negotiating with Spain to design a safeguard mechanism in the Iberian electricity market, Mibel, that would result in a net monthly saving of €1.1 billion euros for Portugal.

Speaking to radio Onda Cerro, Teresa Ribera said that if just two years ago a benchmark price of €180/MWh “seemed like madness that would never be reached and today it is largely surpassed” then there is “little question that it should be the maximum limit we should accept in our market.”

In this scenario, she said, the Spanish government is waiting to take action to secure a response from the European Commission, in a move that she said can be seen as “an opportunity to build more Europe.” She stressed, however, that she will give a “national response” to decouple gas from the electricity market if the EU delays taking action.

As Mr Matos Fernandes has explained, the maximum price of €180/MWh on the spot market (daily and intraday) exceeded €500 for the first time this month.

The new joint proposal could mean “a net monthly joint saving, shared between Portugal and Spain, of 5.7 billion euros, for a monthly extra cost of gas of 1.25 billion euros,” with “the net monthly Portuguese saving … around 1.100 billion euros, for a monthly extra cost of gas of around 250 million euros.”

Says Lusa, “there was a maximum price of €180/MWh set by Spain’s and Portugal’s regulators until 2019, when an EU directive prohibited the maintenance of caps for electricity companies’ offers on the wholesale market”.

In Teresa Ribeira’s mindset: “the analysis of the economic situation and the need to protect our citizens and industry leads us as a government to consider taking decisions to protect the national interest in case Europe is not up to the task in the type of measures that are adopted.”

Meantime, the prime ministers of Portugal, Spain, Italy and Greece will be meeting in Rome tomorrow to discuss the energy crisis.

Source: Lusa