Econostrum | Economic News in the Mediterranean

Brussels allows Spain and Portugal to cap fuel prices for power plants

Written by Arthur Maffren on Thursday, April 28th 2022 à 11:30 | Read 335 times

The European Commission has authorised the two countries to limit the price of gas used to produce electricity.

Cheaper electricity in Spain and Portugal from May. Photo BL.
Cheaper electricity in Spain and Portugal from May. Photo BL.
SPAIN/PORTUGAL. On Tuesday 26 April, Teresa Ribera and José Duarté, the Spanish and Portuguese Ministers for Ecology/Environment respectively, received the approval of Brussels to limit the price of electricity for twelve months by capping the price of gas used to power plants at an average of €50 per megawatt-hour.

The agreement is expected to have an impact on the cost of electricity from May. In Europe, for "non-regulated" contracts, it is calculated on the basis of the wholesale price of the raw material, generally gas. However, in Spain as in Portugal, renewable energies account for a significant share of electricity production. Coupling it to the price of gas therefore seems unfair to consumers.

France, thanks to its strong nuclear production, is in a comparable situation.



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