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France could buy electricity subsidized by Spanish consumers

The government is confused about the cap on the price of gas. Six months have passed since the executive first…

By admin , in news , at May 11, 2022

The government is confused about the cap on the price of gas. Six months have passed since the executive first announced its intention to reduce power this way. Spain allied itself with Portugal in mid-March, and since then the two countries have traveled to Brussels to negotiate and exchange documents. This Monday, the Portuguese Prime Minister, Antonio Costa, arrived to announce that the European Commission had given its support to the measure, and that Madrid and Lisbon will force the machinery to approve the measure the next day, The denial was not long in coming. The community executive revealed that it has yet to make a “formal” decision on the matter, scuttling Sanchez and Costa’s plans.

Details of the measure are still awaited in Brussels, awaiting official approval from consumers, power companies and neighboring countries. european commissioner for energy Margrethe Vestager Got your hands on the Iberian proposal. The Danish rejected the original idea of ​​Spain and Portugal, which aimed to hold two electricity auctions, one for the domestic market only (including a cap on the price of gas) and the other (without limits) exclusively for the sale of energy. for third countries.

Single auction for domestic customers and exports

finally just there will be an auction Who . will reduce the price of pool For everyone. Both for Spanish consumers and for the countries to which Spain sells internally generated electricity on a daily basis. France, and to a lesser extent Morocco, would benefit from capped prices. of Spanish electricity. But everything has a price, and Spanish users will be paying for it.

The government announced that Spain should allocate the compensation to companies with combined cycle plants (they generate electricity with gas as raw material) Out of pocket of customers, Most experts estimate that all users (both covered by the regulated rate and the free market rate) will be the ones who tolerate Increase in your receipt from that subsidy, In turn, the households under the purview of PVPC will benefit from the lack of electricity in the wholesale market.

On the shore is the amount of electricity – subsidized by Spanish customers – that our country will sell to neighboring countries. More than 2,153,034 MW of Spanish electricity sold to France in April At an average price of 191 Euro/MW. With the force entering the gas cap, pool could drop to 130-150 EUR/MWh, and Paris will start buying energy at that price, If we take as a reference the amount sold in April, Spain could lose 131.3 million euros.

Spain could force French tech companies to cover mismatch

However, sources in the region assure that french technology benefit from that mismatch they will cover the gap between the real gas and the buffer gas. The far-sighted thing – they emphasize – is that these companies assume the amount Spain will stop receiving. This is one of the most complex technical aspects, given the difficulty of elucidating the compensation mechanism.

On edge are Spanish users who have to renew their annual electricity contracts. Energy companies have already started transferring large price hikes, resulting in rally That the wholesale market has suffered during the last twelve months. These customers – once the measure is approved and if its cost is spread across all users – will receive a second letter informing them of a new surcharge on their bills.