The Spanish government is trying to close any leaks in a proposal that it will submit to the European Commission in the coming days to separate the price of electricity from gas, which has skyrocketed to stratospheric levels in recent months. and power is drawn with it. Purpose: Brussels does not object to a plan that would impose a maximum cap on the price at which power plants offering natural gas and, perhaps, co-generation and coal plants as well.
According to sources in the Ministry of Ecological Transitions, Spain and Portugal are working on a system of double price matching, in an effort to limit the points of friction with the community executive as much as possible. The first will receive a price for international interconnection (with France), and the second will set an internal price (consumers who have a regulated rate, also known as PVPC, will pay). These same sources also deny that the maximum price for fossil fuel-fired plants has already been set, the vault key to the system being designed to lower prices.
With this dual appeal, the Spanish and Portuguese authorities pursued two goals: to prevent French consumers from benefiting from future limits on gas, which would significantly reduce the price on the Iberian market, and to commission technicians. A non-negotiable red line for Brussels to explain that this change in paradigm will bring no distortion to the rest of the European markets on the peninsula.
system will work Roughly speaking, as follows. First, an auction will be held that will offer the same price as the current market design: the combined cycle—the name given to gas plants—will continue to push the wholesale market upwards, and the price at which it will be offered electricity in the international market. . In this way, France—the only European country with which the Iberian electricity system has a direct connection—will no longer have an incentive to buy energy from Spain and face any pollution resulting from the changes implemented to the community electricity market. Will have. in the peninsula. Later, there would be innovation in relation to the current structure: the second would be matching, with combined cycles and – possibly – the remaining fossil power plants already collated, in order to reduce the cost faced by consumers.
“The contracts signed will not be changed according to the daily market, they will remain as they are and will be governed by the first match, while the second is what really matters to Spanish consumers,” emphasizes Jorge Morales de Labra, power sector expert and director of Proxima Energia marketer, who sees, however, “many technical details to be polished” in the proposal to be sent to Brussels.
He knows all the sides of the coin deeply.
Interrelationship between Spain and France is rare: 2.8%, far from the community objective (10%) that earned the Iberian Peninsula the idea of an “energy island” by the European Council and would allow it to establish draft changes. Its electricity market. Despite this limited interconnection, in recent weeks, with the French nuclear park at half the gas, Spanish combined cycles have been selling large amounts of electricity to the neighboring country to meet the neighboring country’s demand. Industry sources put the amount of gas used in this operation at the equivalent of two methane tankers per month.
That, with current prices: that figure will rise even more if the double matching scheme in which Madrid and Lisbon do not work – to take advantage of that price difference – handling interconnections in most time slots. “If you show the rest of the countries that your energy is cheap, they will demand all the energy that Spain produces through France,” he explains. Natalia Collado, specialist in regulated markets at EsadeEcPol, the Center for Economic Policies. “this system [en el que trabajan España y Portugal] This would be effective to preserve the incentives and not undermine the functioning of the rest of the European markets, which is what the European Commission is asking”, he says by telephone. It will remain, yes, “the unknown of what happens to hydraulics: at what cost do these plants offer from now on”.
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