The Government hopes to have operational in a month the mechanism that separates the price of electricity and gas | Economy

One month. That is the term that the Spanish Government gives itself to have the system active with which they hope to separate the price of electricity from that of gas. After achieving on Friday that the European Council allowed an Iberian exception so that Spain and Portugal can intervene in the market -something that, a priori, community legislation does not allow-, the Spanish and Portuguese Ministries for the Ecological Transition are working these days against the clock to be able to send a proposal to Brussels in the next few days that limits the price at which combined cycles, the plants that burn natural gas to generate electricity, feed into the grid. Given that this is the source of energy that usually sets the highest price in most time slots, Madrid and Lisbon trust that this change will automatically lower the prices in the wholesale market faced by consumers who have a regulated rate. In Spain, these —which are bearing the brunt of the energy crisis— are 40% of the total.

“The Commission [Europea] You will need a few days or weeks to check that everything is correct or to recommend improvements. We calculate that in three or four weeks we could have a pronouncement and make it immediately operational, ”said the Third Vice President of the Government and Minister for the Ecological Transition, Teresa Ribera, in an interview granted to the 24-hour channel of Spanish Television. The EU Treaty, the great community legal framework, contemplates that the countries or regions of the bloc can —in very extraordinary circumstances and duly assessed: in the case of Spain and Portugal, their weak interconnections with the rest of the continent and their high share of renewables—temporarily cap energy prices.

With the new scheme, the plants that burn natural gas will have to continue pouring electricity into the system: without them, the demand could not be covered in many sections of the day, in which renewable and nuclear power are not enough. They will, yes, at a maximum price —still to be defined— that will have to be compensated later to ensure that all that offer does not disappear. “You have to pay for gas in any case, but we want that price not to be the same as the rest of the electricity produced. What we will do is separate the gas from the price formation mechanism”, he emphasized without giving more details about how it will be put into practice. The measure will have to be only temporary, and Spain and Portugal will have to show that competition is not excessively distorted, an EU red line in all areas.

As a result of the numerous speculations unleashed on how this gap between the capped price and the real cost of operation of combined cycles will be financed —which sources in the sector estimate, on average, at around 250 euros per megawatt hour (MWh) , although with a huge variation between one and another facilities, Ribera has assured that it will not be with public money: “It is not appropriate to do it through the Budgets [Generales del Estado], but through the electricity market”, has been committed. “It will be prorated in the rest of the technologies that are offered to the market: it will be a time adjustment that is made immediately after”, she has dropped. Executive sources also rule out that these changes will end up fattening the rate deficit: “It will be paid with money from the system itself,” they insist.

After criticism from the opposition, which considers Pedro Sánchez’s achievements at the summit of leaders of the Twenty-seven overestimated, Ribera has tried to value what was agreed: “It was essential that yesterday’s Council [en referencia al viernes] allowed to do this. If not, we would have been breaching the rules that order the ordinary operation of the European electricity markets as a whole”. “The European Council”, he has insisted”, “cannot make legally binding decisions: what has been agreed has been a political orientation for the Commission to authorize the mechanism of Spain and Portugal”.

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The possibility of imposing a limit on the price at which gas plants sell their electricity, the option that the Government has finally chosen after dropping its initial idea of ​​imposing an explicit cap on the wholesale market, was part of the range of six alternatives opened last week by the Community Executive. In order to put it into practice, however, both countries had to be considered an “energy island” compared to the rest of the continent.