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Electricity: Portugal and Spain are negotiating a mechanism to provide 5.7 billion per month - Energy

Electricity: Portugal and Spain are negotiating a mechanism to provide 5.7 billion per month – Energy

The Minister of Environment announced this Tuesday, in a debate in the Standing Committee of the Assembly of the Republic, that the government is negotiating today with Spain a proposal with the aim of designing a preventive mechanism in the electricity market.

Noting that “the wholesale electricity market is under severe pressure due to the price of natural gas, which is capping prices and has never been seen before,” João Pedro Matos Fernandez argued that without this protective mechanism, “irreversible adverse effects could occur on the European textile industrial production”. And about families.

As announced in the debate over the price of fuel requested by the PCP, the Portuguese proposal includes a maximum price of €180/MWh on the spot market (both daily and per day) for electricity.

In the case of combined cycle natural gas plants with a proven variable cost, over €180/MWh, “it gets the cost differential,” he says.

The proposal also includes that the additional cost of natural gas “will be paid for by the European Compensation Fund or, if through national financing, through the tariff debt of the national electricity system”.

He said that all renewable stations are offered at their variable cost, except for hydro stations with storage, due to the dry hydrological year.

“With this proposal, at the Iberian level, a monthly bill of about 3,500 million euros will be obtained, compared to the current scenario, 9,200 million euros. In other words, this will result in a monthly net “joint savings”, shared between Portugal and Spain 5,700 million at a monthly gas cost of 1250 million,” said the minister.

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Matos Fernandez also specified that the monthly net “Portuguese savings” would be around 1,100 million euros, with a monthly gas cost of about 250 million.

The official admitted that a deficit is being created with this proposal, but stressed that “this is much less than the savings, and if it continues for several months, it will be worth it.”

“We will fight for Brussels to go beyond the ‘toolkit’ of generalities and accompany us in this proposal,” the environment minister also stated, but cautioned that “there are many opponents, among European countries.”