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The Key to the Gas Price Range: How Does It Affect You?

Thief electricity price Again above 200 euros/MW, the government is preparing to approve extremes on the price of gas. Brusselswhich…

By admin , in news , at May 9, 2022

Thief electricity price Again above 200 euros/MW, the government is preparing to approve extremes on the price of gas. Brusselswhich received the technical proposal last Friday Madrid and Lisbon, the document continues with the “urgency” deliberations that outline the key issues of application of the measure. The intention of the executive is to include the rule in the Council of Ministers this Tuesday.

Why does gas make electricity more expensive?

power consumption . in Spain It is generated through the various energies involved in an auction. When demand is low, it can be covered through the production of renewable energy, which costs much less. That’s why, in recent weeks, there have been times when, at certain time intervals, pool It was hardly three or four euros/MWh.

still, When demand rises, the market tends to turn to electricity produced in combined cycle plants. (those who convert gas into electricity). It is in this stage, in which the price becomes more expensive. generating electricity from gas is the most expensive technology, and Prices jump as soon as they enter the market, Its cost marks the cost of an entire generation, regardless of the technology used in the mix.

What will be the impact of the gas cap on the electricity market?

To try to prevent part of the gas-generated electricity from contaminating the rest of the mixture, Spain You Portugal He proposed to limit its price. Initially limiting the price of gas to 40 euros and an average of 50 euros, the impact on the rest of the electricity generation will be less.

Most of the experts consulted say that the implementation of the measure will reduce pool Till then 130-150 Euro/MW, That is, the pollution of gas will be limited. during the twelve months in which the remedy is applicable.

50 EUR/MW for twelve months

Nevertheless, companies that generate that electricity through gas will be compensated. They will be paid the cost of production, but those who get electricity from renewable energy (produce cheaply) will stop selling it at a gas-doped price. On behalf of the executive, he has accused these companies of obtaining extraordinary profits. They deny it.

Who will benefit from stocking?

For consumers falling under regulated rate. At the end of 2021, More than ten million Spanish families He paid for the light that marked the daily market. They are the ones who have endured the historic rise in prices in recent months. In particular, it is 40% Spanish domestic consumers and 80% industry.

40% consumers are subscribed for regulated rate

There are 19.8 million users outside the measure who are covered by free market, Those who maintain a fixed price that can be reviewed annually have escaped the market volatility of the previous year and, moreover, benefited from government-approved tax cuts to reduce electricity costs.

Moncloa decided to reduce the temporary VAT from 21% to 10% and the electricity tax from 5.1% to 0.5%. This measure was applied to all invoices.

But… who will pay the cost of the remedy?

limiting the cost of gas production A mismatch between the cap and the actual price, The Minister of Ecological Transition, Teresa Ribera, confirmed that it would cost Considered “by energy consumers”.

In addition, the measure will be financed through the reduction of “extraordinary benefits to power companies that use other technologies (hydraulic or nuclear) that have not been affected.” In any case, these companies are expected to make an impact on their customers.

most likely Be all users who bear the cost, Both those who are set to benefit (regulated rates) and those who have enjoyed fixed prices during the energy crisis, have already started a massive increase in their annual contracts.