Spanish government announces measures to control electricity prices

Spanish government announces measures to control electricity prices

Teresa Ribera, the Minister for the Ecological Transition of Spain, announced today, Tuesday, December 14, that the government will introduce new measures in January, to combat the increasing price of electricity in the country.

This promise comes on the day that another record figure was announced. Tomorrow, Wednesday 15, the price of energy will reach €291/MWh. Saturday 11, Sunday 12, and Monday 13, have already broken electricity price records for those individual days of the week.

Experts are predicting that the price of electricity will break through the €300 barrier in the next few days. When that happens, it will mean that Spanish consumers will be paying 500 per cent more than the corresponding dates in 2020, when the price was around €43/MWh.

Fiscal aid for electricity, a measure which was adopted by the Government to alleviate the impact of the increase in costs, is due to expire. Measures included a reduction in VAT, and the elimination of excise taxes on electricity. Both of these expire on December 31, and will probably be extended, although other measures adapted to the market situation in January will be approved.

Despite the tense situation in the electricity markets, Ribera has ensured that the Government will fulfill the promise of President Pedro Sanchez. He had made a promise to the nation to close this year with a similar average electricity cost for all Spanish households as that of 2018.

She explained that the president’s calculation “is guaranteed” for domestic consumers. This, Ribera claimed, is because the measures approved by the Ministry for the ecological transition since last summer have allowed a 96 per cent reduction in the fixed costs that affect the regulated tariff, and the taxation to which electricity is subject in Spain.

With the price of electricity also affecting the macroeconomic forecasts of all agencies, in the same press conference, the first vice president, Nadia Calviño, said that she will not alter her projections for this year.

Calviño insisted that we live in an environment of “uncertainty” that affects the work of economists when making forecasts, and said nobody should be surprised if upward or downward revisions are published in the coming days, as reported by elespanol.com.

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