The monthly increase in the maximum price is reduced from 5 to 1.1 euros until reaching a maximum of 65 per megawatt hour


The European Commission has approved this Tuesday the modified extension of the ‘Iberian exception’ requested in April by Spain and Portugal, until December 31, 2023, recognizing that the Spanish and Portuguese economies are still experiencing a “serious disturbance” due to the increase of prices motivated by Russia’s war of aggression against Ukraine.

The Community Executive has already warned both Member States that this emergency measure could not be extended beyond December 31, the date on which the temporary framework of support measures for the war in Ukraine expires.

This confirmation from Brussels comes almost a month after the Council of Ministers approved the extension of the mechanism until the end of the year by virtue of a negotiation with the Commission, which had yet to formally adopt the extension.

The so-called ‘Iberian exception’, which expired on May 31, is a measure that the Community Executive approved in June 2022 to reduce the costs of inputs for power plants powered by fossil fuels in Spain and Portugal in order to reduce their production costs and, ultimately, the price on the wholesale electricity market for the benefit of consumers.

The mechanism established that electricity producers receive a payment that works as a direct subsidy to finance part of their fuel cost and that is calculated daily based on the price difference between the market price of natural gas and a maximum gas price. . Between June and December 2022, the maximum price was set at 40 euros per megawatt hour (MWh) and it was established that, after the first six months, the maximum price would increase by 5 euros per month.

However, the extension of the measure includes a modification of this price limit trajectory to achieve a “smooth and predictable progressive elimination”, in line with the gas market prices expected by the end of 2023. In this way, the price The maximum will be set at 56.1 euros per MWh hour for the month of April, and will increase 1.1 euros per month until reaching 65 euros per MWh in the month of December.