{"id":134233,"date":"2023-04-27T03:00:02","date_gmt":"2023-04-27T01:00:02","guid":{"rendered":"https:\/\/www.cde.ual.es\/?p=134233"},"modified":"2023-04-26T13:54:01","modified_gmt":"2023-04-26T11:54:01","slug":"the-european-commission-extends-the-spanish-and-portuguese-measure-to-reduce-electricity-prices-until-the-end-of-the-year","status":"publish","type":"post","link":"https:\/\/www.cde.ual.es\/en\/the-european-commission-extends-the-spanish-and-portuguese-measure-to-reduce-electricity-prices-until-the-end-of-the-year\/","title":{"rendered":"The European Commission extends the Spanish and Portuguese measure to reduce electricity prices until the end of the year"},"content":{"rendered":"

The European Commission has approved, under State aid rules, the prolongation and amendments of a Spanish and Portuguese measure aimed at reducing the wholesale electricity prices in the Iberian market (\u2018MIBEL’) by lowering the input costs of fossil fuel-fired power stations.<\/strong><\/p>\n

\"\"<\/a>The amended measure, which will be in place until 31 December 2023, was approved under Article 107(3)(b) of the Treaty on the Functioning of the European Union (\u2018TFEU’), recognising that the Spanish and Portuguese economies are still experiencing a serious disturbance.<\/p>\n

The Spanish and Portuguese measure<\/strong><\/p>\n

In\u00a0June 2022<\/a>, the Commission approved a measure to lower the input costs of fossil fuel-fired power stations in Spain and Portugal with the aim of reducing their production costs and, ultimately, the price in the wholesale electricity market, to the benefit of consumers. The measure was set to expire on 31 May 2023.<\/p>\n

Under that measure, electricity producers receive a payment that operates as a direct grant to finance part of their fuel cost. The payment is calculated daily based on the price difference between the market price of natural gas and a gas price cap. Between June and December 2022, the price cap was set at \u20ac40\/MWh. After the first six months, the price cap was set to increase by \u20ac5 per month.<\/p>\n

The measure is financed by: (i) part of the so-called \u2018congestion income’ (i.e. the income obtained by the Spanish Transmission System Operator as result of cross-border electricity trade between France and Spain), and (ii) a charge (\u2018adjustment cost’) imposed by Spain and Portugal on buyers benefitting from the measure.<\/p>\n

The Spanish and Portuguese authorities submit that the total net savings (after taking account of adjustment cost) for Spanish and Portuguese consumers combined amounted to around \u20ac5 billion between June 2022 and January 2023.<\/p>\n

In April 2023, Spain and Portugal notified to the Commission their intention to prolong the original measure until 31 December 2023 with the following modifications:<\/p>\n