The 407% rise in the average price of the wholesale market or electricity pool in Spain, from 45.2 euros per megawatt/hour in the first quarter of 2021 to 229.4 euros in the same period of 2022, has had very significant repercussions. penalizing consumers, and has led many electricity-intensive companies to the point of interrupting their activity so as not to incur losses.
In this limit context, the intervention of gas prices agreed yesterday, for the time being only applicable to Spain and Portugal, is an unprecedented situation since the liberalization of the market. The reduction in the cost of electricity will be done by putting a maximum cap on the price of gas of 40 euros per megawatt (approximately half the current price), until it reaches 50 euros in twelve months. According to the Government, this cap will allow a reduction of up to 30% in the electricity bill. The scheme has the approval of the European Commission, and is presented as a temporary measure pending review by Brussels of the general rules for the operation of the marginal market and the proposals to decouple electricity prices from those of gas, which are largely responsible for the inflation of electricity costs. The drop in prices will undoubtedly be a relief for consumers, but now the key is to reform a system that is not working as it should. In this reform, it would be desirable for governments to critically review some of the decisions that have led to the current state of affairs, considering, among other possible strategies, new generation alternatives, such as nuclear, which can play an important role in the energy transition. The imperative in addition to achieving energy independence from Russia highlights the urgent need to review the entire energy framework in Europe. In short, the cap on gas is a reasonable patch if it were applied homogeneously in the EU, pending resolution of the major problem.