Green light from the European Commission for the plan to reduce the price of electricity in the Iberian Peninsula
Following an evaluation according to EU state aid rules, the European Commission formally authorised the Spanish-Portuguese plan to lower electricity prices in Spain and Portugal.
In its opinion, it will allow both countries time to adopt reforms to improve the resilience of their electricity system and mitigate the impact of the energy crisis on end consumers.
This emergency measure, which is temporary until 31 May 2023 according to the Commission and worth 8.4 billion euros (6.3 billion for Spain), will go to reduce wholesale electricity prices in the Iberian market by reducing the cost of supplies for fossil fuel power plants.
The form of the aid shall be payment of a direct subsidy for electricity producers to finance part of their costs, and it sets a limit on the gas price of an average of €48.80/MWh while the measure is in place. According to Spanish government estimates, it will allow for a 15-20% reduction in the bills of consumers on a PVPC tariff.
This and other key European news, such as the rejection in the European Parliament plenary session of the draft report on the ETS proposal or the ECB's new monetary policy decisions, as well as a look at the main meetings in the European institutions during the week of June 13-17, can be found in our newsletter “The EU in Headlines”.
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