Spain is set to introduce a new calculation method before October 1 to introduce more stable prices and separate receipts from the wholesale market that approved the intervention yesterday.
“One of the conditions for the approval of the mechanism by The European Commission is an improvement of the present Voluntary Pricing for Small Consumers (PVPC), Thus, the adjustment mechanism is configured to be an exceptional measure, while it is rectified and applied effectively, which is not immediate. Thus begins the Fourth Preamble of the Royal Decree approved yesterday by the Government by which a mechanism is temporarily established. To intervene in the price of gas used in electricity generation.
The document, to which EL Mundo had access, shows that Brussels has forced the executive to present before the next 1st of October A calculation method that partly separates households from the wholesale electricity market with the aim of reducing the volatility of their bills and the impact of the war in Ukraine. This is something that the Ministry of Ecological Transitions started working on 8 months ago and eventually decided to move to freezers due to the opposite reaction from consumer associations such as Fekua, Power companies have been insisting for months that this is the real problem of the sector, but the Vice President Theresa Rivera As of now, they have left the matter to others to prioritize such as yesterday the market intervention mechanism was approved. The Commission has ordered it to rectify this discrepancy immediately, as Spain is the only country in Europe whose model is linked to the wholesale market.
In the midst of a conflict between the government and the president of Iberdrola, the Brussels reformation takes place, Ignacio Sanchez Gallen, precisely because of regulated tariffs. The Director of Electricity pointed out a few days ago that only “idiots” continued to benefit from PVPC with current wholesale market prices, words to which Ribera himself replied yesterday, assuring that they had caused “embarrassment” and that the regulated rate would be regulated. has defended. Has historically been cheaper than offers in the liberalized market.
The amendment would include that the new calculation of the regulated rate for small consumers is marked by a combination between the daily market wholesale price – as is currently the case – and the reference to futures market prices on a basket basis. Product Annual, quarterly and monthly markets. The goal is that the regulated rate could go into effect as early as 2023, with models designed before October.
What will be the effect of this new change? The first is that it adds more confusion to the home consumer, who doesn’t really know how his rate is configured after all the regulatory fluctuations in the sector over the past decade have been approved. And second, he will no longer be so aware of what time he starts the washing machine, because the price difference between the hours will be very small on his final bill. On a political level, the new model provides a break for Ribera and Pedro Sanchez By avoiding the ‘news penalty’ of facing record prices every day in the wholesale market.
The obligation to improve the domestic electricity rate is just one example of the conditioning that the Brussels appraisal has brought into the intervention mechanism for the price of used gas designed by Spain and Portugal. a measure with which the government itself promised up to 30% off on the domestic electricity bill, but which has become so decaffeinated that yesterday neither Ribeira himself nor sources in his ministry wanted to confirm what the impact would ultimately be.
The measure includes setting an average political price of 48 euros per megawatt hour for the gas used by thermal power plants. The difference between this context and the actual cost of this hydrocarbon in the world market—Spain produces only 0.3% of what it consumes—will have to be compensated for by power companies.
The final version of the text establishes that the difference will be paid by those who will benefit from it, that is, only by PVPC customers and other market indexed rates, and not by demand as a whole, as initially proposed. it was done. Government.. Portugal confirmed that it was the group of consumers who paid for the invention, as in its case 95% of households had a fixed price for electricity. This leads to the compensation that Endesa encrypted 6,000 million euro- greatly limit the effect of the remedy. Ribera and his team continue to assure that the “net effect” will be positive without quantifying how much, as other technologies such as nuclear or hydraulics will reduce their remuneration if the gas matches its offer at a lower price (the marginal market). Being) , the price at which the final offer is put is the price that all agents pay).
Finally, the government still does not clarify when the measure will go into effect 50 days after the European Council declared a success at the end of March. Although Spain and Portugal both approved it yesterday, the text includes a clause that suspends the application of the mechanism until the European Commission gives final approval to the proposal. It could happen in “days, a week or two weeks,” Ribera said yesterday. The government, in any case, is confident in the support after receiving the initial approval last Monday.
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