Spain and Portugal have reached an agreement with the European Commission to separate the price of gas from the electricity bill. The two countries had offered 30 euros per megawatt hour, but the agreement with Brussels means starting with 40 euros, with an average of 50 euros in the period of application of the measure: 12 months.
Vice President Teresa Ribera and her Portuguese counterpart, José Duarte Cordeiro, announce the “political agreement” after a meeting with the European Vice President for Competition, Margrethe Vestager. From now on, it is pending to close the technical details. Ribera has relied on “having the support of the Commission to implement it immediately.”
Ribera hopes to finalize the agreement “in the next few days” to be approved in the “Council of Ministers next week.” According to the vice president, the measure will “enable industrialists, domestic consumers, to benefit from this decrease in wholesale market references. It is an agreement that protects us from turbulence and increases in the price of gas”.
Tuesday’s agreement comes a month after the agreement between the 27 heads of government of the EU. A political agreement that has not yet translated into action, because that afternoon of March 25 in Brussels was an important step in the ambitions of Spain and Portugal to face the energy crisis. But there were fringes, negotiations with the European Commission and pressure from energy companies to prevent the cap on gas.
“This is the operational development that materializes the two paragraphs of the conclusions of the European Council”, said Ribera: “The idea is that it goes through the Council of Ministers next week and is applied to the May bill. The low interconnections and the high presence of renewables made this agreement necessary. The European Commission has asked us to be flexible with interconnections to France, but has committed to being a more active player in advancing interconnection goals. From now on, when the debate arises on how to evolve the design of the European electricity market, the weight of interconnections is even more important than it has been up to now”.
Cordeiro has spoken of the need that, in his opinion, the European Commission has to “rethink” the current electricity price formation system, although this measure is temporary. “Either price formation is corrected” or interconnections are reinforced.
That March 25, the President of the Government, Pedro Sánchez, reached a political agreement that recognized a “specific treatment” for the Iberian Peninsula due to its poor interconnection with the rest of the EU, according to the words of the president of the European Commission, Ursula von der Leyen. But that specificity was not mentioned as such in the conclusions agreed upon at the European Council, and, in any case, the leaders transferred to the European Commission to give the go-ahead to the translation of the European singularity to the gas ceiling to lower the bill of the light.
That is, there was a long way to go. Both Sánchez and the Portuguese Prime Minister, António Costa, spoke that afternoon of “urgency”. And it is true that the conclusions summoned the European Commission to make a quick decision on the Iberian proposal, which was presented at the end of March. But it is now that the implementation of the agreement seems closer.
“One of the sensitive issues and how this mechanism could affect France”, said Ribera: “This is where the Commission has asked for flexibility so as not to put limits on borders. It is important to open the debate on how to evolve the European market to adapt to the needs we have”.