The Iberian mechanism to cap the price of gas has already allowed savings of 5,100 million

Spain accumulates savings of 5,100 million euros in gas bills, as a result of the application of the Iberian mechanism that since June 15 caps the price of gas for electricity production between 40 and 70 euros per megawatt hour.

Oliver Thansan
Oliver Thansan
17 March 2023 Friday 10:36
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The Iberian mechanism to cap the price of gas has already allowed savings of 5,100 million

Spain accumulates savings of 5,100 million euros in gas bills, as a result of the application of the Iberian mechanism that since June 15 caps the price of gas for electricity production between 40 and 70 euros per megawatt hour. This was confirmed this Friday by the Secretary of State for Energy, Sara Aagesen, during the presentation of the balance of the fifth month of validity of the 'Plan More Energy Security' (Plan SE).

The application of the Iberian mechanism, also called the Iberian exception, has led since its implementation to wholesale prices in the electricity market that have been 41% lower than in Italy, 34% lower than in France and 25% lower than in Italy. lower than in Italy, including the adjustment cost received by gas plants (the difference between the price marked for gas in the mechanism and the real price of MWh in the Dutch TTF reference market).

The savings take into account the strong increase in electricity exports to France and Portugal. In the case of France, which has a very relevant part of its nuclear park inoperative, exports rose to 8.2 TWh, compared to average imports of 3.5 TWh in the same period of the last five years. With Portugal, whose hydroelectric generation is greatly diminished by the drought, exports multiplied by five, reaching 2.5 TWh.

In this context, the price of gas has fallen by 68% compared to those registered at the peak of 2022 for the month of August.

In the balance made by Aagesen, the prominence of energy saving in the period of application of regulations stands out. Since mid-June, the demand for gas in Spain fell by 21% in February compared to the average registered in this month for the last five years, while the demand for electricity fell by 7% in the same period, which is equivalent to a saving of 21 days of consumption.

Spain promised to reduce energy demand by 15% during the term of the Iberian exception and according to Aagesen "the commitment is still valid".

Among the deployment of measures implemented by the More Energy Security Plan, the extraordinary bonus to the Single Regulated Tariff (TUR) has perhaps had the greatest impact. In total, the so-called cheap gas rate already has 2.5 million customers (at the closing date of February), which represents an increase of 1 million compared to those who had this rate contracted in June. One million customers who have saved up to 41% on their gas bill.

Within the framework of this More Security plan, the TUR was also created for neighboring communities. Its complex processing has delayed its implementation, although as specified by the Secretary of State, only in the month of February 964 neighboring communities have benefited from this rate for the first time.

In addition, Aagesen has highlighted that the Government's measures have managed to reduce the gas bill of vulnerable people by 67% compared to the prices of a year ago, a reduction that has risen to 76% for households with severe vulnerability.