The government of Spain approved a 12-month gas price cap to help bring electricity costs down in an extraordinary cabinet meeting on Friday morning.
The so-called “Iberian exception” to the EU price-setting mechanism is expected to allow Spain and Portugal to set a maximum rate of €40/MWh for the first six months and rise to just below an average of €50/MWh for the remaining six months.
The measure, which is yet to be formally greenlighted by the EU although government officials say it has its backing, should make electricity bills in the regulated PVPC market around “30% cheaper”.
This should bring wholesale electricity prices down to an average of €130/MWh – on May 13, the regulated market price averaged €202.99/MWh, peaking at €242.74.
