Portugal and Spain have already formally notified the European Commission of the temporary mechanism to limit the average price of gas in the Iberian Peninsula to 50 euros per MWh, the institution said, guaranteeing “commitment” with a rapid evaluation of the measure.
“Spain and Portugal have already formally notified the temporary emergency mechanism to mitigate the impact of fossil fuel prices on the wholesale price of electricity in the Iberian Electricity Market,” said an official source from the community executive in a response by written sent to the Portuguese agency. .
And, according to the same source, “the Commission is committed to quickly finalizing its evaluation.”
The main objective of the Commission is to reach legally sound decisions, urgently evaluating the compatibility of temporary emergency measures in the electricity market through an accelerated procedure, while at the same time guaranteeing, as requested by the European Council, that the measures reduce electricity prices in the local electricity market for companies and consumers without affecting commercial conditions” in the community space, he explains.
At a time of energy crisis, this formal notification allows Brussels now to assess the measure to which it has already given its political approval and then to issue a formal and final assessment.
In the response to Lusa, the official source of the European Commission adds that “the objective of the legislation is to allow Spain and Portugal to take proportionate and temporary measures to face exceptionally high levels of electricity prices, maintaining the incentives for a sustainable energy”. transition and preserve the integrity and benefits of the single market, without restrictions on cross-border flows”.
“The Commission takes note of the very exceptional circumstances that justify the adoption of the mechanism, including its specific design and its limited application time”, it concludes.
In mid-May, Lisbon and Madrid each approved this temporary emergency mechanism for the Iberian Peninsula, at a time of energy crisis, accentuated by the effects of the war in Ukraine on supply chains.
Previously, at the end of April, the Governments of Portugal and Spain reached a political agreement in Brussels with the European Commission for the establishment of a temporary mechanism that will allow the average price of gas to be set at 50 euros per MWh.
The Portuguese Government estimates that this limit will allow savings of up to 18% compared to the average price of the first four months of the year.
This measure will allow the temporary decoupling of gas and electricity prices in the Iberian Peninsula, which will thus benefit from an exception, as agreed at the March European Council.
The mechanism is expected to last around 12 months and will allow the average price of gas to be set at around 50 euros per megawatt, compared to the current market reference price of 90 euros, with prices starting at 40 euros.
In the current configuration of the European market, gas determines the global price of electricity when it is used, since all producers receive the same price for the same product, electricity, when it enters the network.
Source: Observadora
