History repeats itself just a month later. The factors that pushed the price of the electricity market to skyrocket in mid-June, coinciding with the start of the gas cap in Spain and Portugal, threaten to reproduce themselves in the coming days and the Government fears that a new spiral of price increases will be triggered.
In the next few days, a new heat wave is expected in Spain that will trigger energy consumption and reduce the intensity of renewable energy production (due to less wind and less efficiency of solar plants), while the great The gas pipeline linking Russia and Germany (Nord Stream) will be closed for maintenance work and will put pressure on gas prices and, with it, also on electricity prices.
The Vice President and Minister for the Ecological Transition, Teresa Ribera, has called on Spanish citizens to be “particularly cautious & rdquor; before the heat wave that is coming, the second in less than a month. In the press conference after the Council of Ministers, in addition to calling for health protection and fire prevention measures, Ribera has asked the company for a “prudent use & rdquor; of electricity consumptionin a scenario in which demand will rise and production with renewables will fall, with the consequent impact on the price of electricity.
The Government insists that the Spanish scenario is “more flattering & rdquor; than that of other European countries, with a certain risk to its security of gas supply from Russia and its impact on national electricity production. Germany has activated an alert level for possible supply cuts and has asked its population to reduce electricity and gas consumption, with recommendations on shower times or on turning off appliances at night to save.
The Spanish Executive and the energy sector itself have been emphasizing that there is no risk to the security of energy supply in the Spanish market, neither for gas (due to the consistent low exposure to Russia and for the diversification of suppliers) nor for electricity. But the Government and companies do recognize that the energy crisis will affect the Spanish market due to the rise in prices.
The scenario repeats
The long-awaited launch in mid-June of the gas cap – the star plan of Spain and Portugal to lower electricity that both countries fought in Brussels for weeks until they got the final ok – had disappointing results. A start was expected with substantial reductions in the price of electricity thanks to the implementation of the so-called Iberian exception, which implies that Spain and Portugal will impose for one year a maximum price on the gas used to produce electricity to thereby lower the price of the wholesale electricity market as a whole and prevent the high price of gas from contaminating what is paid for the electricity produced by the rest of the technologies.
But during the first bars of the measure, the final price of electricity that the 10 million households had to pay with a regulated electricity rate (Voluntary Price for the Small Consumer, PVPC) and the industries that buy energy directly in the electricity market chained rises. A Unexpected premiere as electricity demand soared as a result of the heat wave since the contribution of renewable plants fell.
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With more consumption and less renewables, the generation of gas plants shot up in June to record highs to cover all the necessary electricity production and did so at a time when the price of gas shot up due to the pulse of Vladimir Putin in Europe , cutting the supply of gas to large continental economies and when the system designed by the Governments of Spain and Portugal forces gas plants to pay compensation to cover their real production costs.
In the following weeks, between the end of June and the beginning of July, the effect of the Iberian exception has been noted, with the Spanish electricity market marking prices much lower than those of other European countries and with reductions in relation to the price that would have been registered without the measures having been adopted. But the new heat wave these days opens up a scenario that threatens to be too similar to that of a month ago.