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Spain has approved a temporary cap on natural gas prices. “Will immediately reduce costs for 37% of individuals and 70% of industry”

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“With this decision, Spain is coordinating a structural change in European energy policy,” said Isabel Rodriguez, a spokeswoman for the Executive, informs Agerpres.

The cap will immediately reduce costs for 37 percent of individuals and 70 percent of industry, Energy Minister Teresa Ribera said.

“In the next 12 months, we will have a special protection system in the Iberian Peninsula, in the context of major volatility,” the official added.

Two weeks ago, Spain and Portugal reached an agreement with the European Commission to lower the price of electricity in the Iberian Peninsula, by virtue of a derogation that allows the two states to dissociate the price of electricity from that of natural gas.

Since the end of March, the European Union has authorized Spain and Portugal to take “exceptional measures” to reduce the price of natural gas used to produce electricity and thus reduce the energy bill of households, which is particularly high in both countries.

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The derogation was validated by the EU executive “taking into account the particular situation” of the two countries which have “energy packages composed mainly of renewable energies and taking into account the fact that there are very few interconnections with the European market”, he stressed. its President of the European Commission, Ursula von der Leyen.

As a first step, the price of natural gas used in electricity production will be capped at 40 euros per Megawatt-hour, with the aim of reaching an average of 50 euros per Megawatt-hour in the next 12 months.

Currently, on the wholesale market, the price of natural gas is around 90 euros per Megawatt-hour.

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The cost of energy has risen sharply in recent months in Spain and Portugal due to rules in the European electricity market, which are forcing producers to sell their energy at the price of the most expensive technology, which is currently that of gas-fired power plants.

The authorities in Madrid and Lisbon have started a fight against this system, which they consider unadapted to the energy reality of the Iberian Peninsula. But many European countries are hostile to the idea of ​​reform, fearing the impact it would have on competition within the EU.

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