Brussels Limits Iberian Exception To 2023

Editorial Team

The European Commission limits a possible extension of the Iberian exception applied in Spain and Portugal to reduce the price of gas in electricity production only until the end of 2023.

As sources from the Ministry for the Ecological Transition and the Demographic Challenge explained to Servimedia, if it finally approved this extension, Brussels would partly accept the demand presented by Spain and Portugal, who wanted to be able to apply this measure until the end of 2024, while in Europe it is defined the new model of electricity price formation.

In fact, the Third Vice President and Minister for the Ecological Transition and the Demographic Challenge, Teresa Ribera, together with the Minister for the Environment and Climate Action of Portugal, José Duarte, met this Wednesday in Brussels with the Vice President of the European Commission and Commissioner of Competition, Margrethe Vestager, to raise this demand.

From Ecological Transition it is explained that, for the moment, work is being done at a technical level to assess the possibilities and that the commissioner stated that the time frame of the support measures for the war in Ukraine, such as the Iberian exception, only lasts until December of 2023.

According to Brussels

Consequently, according to Brussels, and as long as the EU does not modify this temporary framework of aid for Ukraine, the extension of the Iberian solution would have to abide by that temporary framework, if the technicians of the European Commission give the green light to the extension, something which has not yet occurred.

Ribera’s team considers this scenario “perfectly reasonable” although it plans to ensure that this temporary framework of aid for the war in Ukraine is extended in the future and, therefore, an eventual extension of the Iberian solution would also occur.

Another option is that during the semester of the Spanish Presidency of the EU, the structural reform of the electricity market in the EU could be achieved before the end of 2023. If this reform of the electricity market in Europe were achieved, the Iberian solution would be unnecessary, they defend from Transition.

As approved so far by Brussels, the Iberian exception will apply until June 30, 2023. It involves the payment of a direct subsidy to electricity producers in order to finance part of their fuel costs. The daily payment is calculated as the price difference between the market price of natural gas and a maximum limit of the gas price set at an average of 48.8 euros per megawatt during the period of validity of the measure.

More specifically, during the first six months of application of the measure, until December 31, the effective price limit was set at 40 euros. Starting in January, this limit will increase monthly by 5 euros per month.

This article is originally published on lavanguardia.com

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