The Government approves this Friday in a Minister council extraordinary mechanism to limit the price of gas for electricity productionwhich will be around 48.8 euros/megawatt hour (MWh) in the twelve months that it will be in force.
The measure, which will be approved simultaneously by the Spanish and Portuguese Executivesaims to alleviate the bills of consumers, domestic and industrial, with rates indexed to the wholesale electricity market or ‘pool’, those most affected by the current crisis and the rise in energy prices.
On the eve of the extraordinary Council of Ministers, the President of the Government, Pedro Sánchez, confirmed that the price cap for gas will initially be set at 40 euros/MWh “compared to the almost 80 euros on average that it has marked in the last quarter “.
The mechanism, which, according to the calculations of his cabinet, will allow to reduce the invoice around 30% for an average consumer with a rate indexed to the ‘pool’, “It will be valid for the next twelve months, guaranteeing an average price of 48.8 euros/MWh, which will represent significant protection.”
Once the two Executives give their approval, the mechanism will be forwarded “immediately” to the European Commission, which “must adopt a decision of the college of commissioners to make its application effective”, as explained these days by the Minister for the Ecological Transition, Teresa Ribera.
According to the third vice president of the Government, the idea is that this system is “fully operational in a few days, in a few weeks.”
On April 26, Spain and Portugal announced that they had reached a “political agreement” with the European Commission to limit the price of gas in the wholesale electricity market of the two countries, a raw material used by cycle plants combined to produce light.
In the absence of knowing the details, the mechanism will benefit 40% of domestic consumers -those that have a regulated rate or PVPC, about 11 million- and up to 80% of the industrial ones, whose invoices are linked to the ‘pool’.