Moncloa will ask to extend the cap on gas until the end of 2024 below €50

The Third Vice President of the Government and Minister of Ecological Transition and Demographic Challenge, Teresa Ribera, announced this Monday that Moncloa will ask Brussels to extend the cap on the price of gas until “at least” the end of 2024 and keep it as low as possible. between 45 and 50 euros per megawatt hour (MWH). The ‘Iberian exception’ that came into force in June, comes to an end 12 months later. Spain and Portugal managed to get the European institutions to authorize a maximum price of €40 pending the reform of the electricity market.

Ribera has indicated that Spain wants to “continue benefiting” from the gas cap while waiting for the reform of the electricity market to take place, which takes gas prices as a reference, which has caused the sharp rise in prices since the beginning of the Russian invasion of Ukraine. Specifically, the will of the Executive is that the extension of the ‘Iberian exception’ set a maximum of 50 euros, compared to the 70 that it will reach in May. “We would like (the gas cap) to remain at the lowest possible environment, 45 or 50 euros MWH, and that it can be extended at least until the end of 2024,” he said.

Therefore, the ceiling that the Government will finally propose to Brussels will be slightly higher than that advanced by the purple wing of the Council of Ministers. The Minister for Social Rights and the 2030 Agenda, Ione Belarra, pointed out last week that the PSOE had accepted his proposal to keep the gas cap at €40/WH in the new negotiation with Europe. However, neither Rivera’s ministry nor another socialist member of the Executive had made statements in this regard until now. This is a point of the utmost importance for both formations in the face of the 2023 electoral appointments, since the end of its validity coincides with the municipal elections and the rise in light could condition the results of the national ones.

It is great news that the PSOE has accepted our proposal to keep the gas cap at 40 euros and for longer, initiating a new negotiation with Brussels. Public intervention in strategic sectors is the most effective, in this case to control inflation.

— Ione Belarra (@ionebelarra) January 4, 2023

The person in charge of the energy portfolio has also emphasized the importance of modifying the energy market to “reduce the volatility of the price of electricity” and make it cheaper. The Council of Ministers will debate on Tuesday the Spanish proposal to carry out the reform, as announced by the Prime Minister, Pedro Sánchez, at the inauguration of the VII Conference of Ambassadors. The socialist leader has pointed out that this will have two purposes: to facilitate the use of renewable energies and to ensure that there is an equitable distribution of income between consumers and energy producers.

Along the same lines, Ribera has maintained that Spain wants to “provide proposals for the fundamental modification of the electricity market in Europe”, but that at the same time they are aware that this can take “a long time”. Therefore, the Government seeks that the Iberian Peninsula can appreciate this limit, meanwhile. “We have to modify our electrical system with more renewables, more storage, more security for investors and a lot of volatility for consumers”, he has maintained. Something that, he has indicated, the Executive has pursued with tax cuts and the reduction of costs in the transport of electricity.

Spain abandons green energy

For this reason, the minister has also highlighted the importance of investing in the development of renewable energy, since it pursues the same objective of having “lower and more stable” prices. In addition to discussing the proposal for Brussels, the meeting of ministers will approve a royal decree to regulate participation in the four of the eleven green hydrogen projects of the European Union that Spain is going to lead, which are endowed with 74 million euros. In the words of Sánchez, the country aspires for the ecological transition and the commitment to renewable energies to be one of its “reputational brands” abroad.

“If we have been able to grow, create jobs while reducing inflation with a gale against us, let’s imagine what the country can achieve when the wind blows in its favor,” said Sánchez, after noting that the country has “the best natural conditions ” and a “well established” industry for the development of the value chain in this sector. The head of the Executive has highlighted green hydrogen as an example, of which Spain concentrates 20% of the projects worldwide.

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