Brussels assures that Spain and Portugal will be able to maintain the ‘Iberian exception’

Spain and Portugal will be able to maintain the “Iberian exception” that limits the price of gas used to generate electricity and will not have to replace it with the cap on renewables that the European Commission has proposed this Wednesday to alleviate the energy crisis. This has been confirmed by the Community Executive, which will also “carefully” evaluate with the Spanish authorities whether the tax on income from the electricity and energy sector that Spain is processing is compatible with the “solidarity contribution” from Brussels.

The Community Executive has today presented a legislative proposal that the European Union Ministers of Energy are expected to approve on September 30. This provides, among others, a maximum price of 180 euros per megawatt hour (MWh) for inframarginal electricity generation technologies: renewable, nuclear and lignite. That price is much higher than what is currently paid in Spain the MWh of renewables through a reduction mechanism, complementary to the “Iberian exception”, which sets in 67 euros the limit from which 90% of the income is deducted to avoid generating “profits from heaven”. For this reason, in Spain the renewable MWh is being remunerated at a price from 24 to 30 euros.

“Es very important to let the Member States continue with their ways of limiting gas if they have introduced one, this goes to Spain or Greece, for example”, said the European Commissioner for Energy, Kadri Simson, at a press conference. The maximum price chosen by Brussels is 180 euros/MWh because “the most expensive of the technologies inframarginal is lignite” and “the most expensive lignite generates around 180 euros per megawatt hour”, added the Eurocommissioner.

Other European sources have explained that the objective of Brussels is “to ensure that the income of the inframarginal is limited”, so that “if a Member State has a mechanism such as the Iberian or the Greek that achieves the same results, they can keep it in vigor”. The Commission’s calculations project that they would indeed achieve the desired results, according to the sources.

As for the deadlines, the Commission expects to definitively approve its limit on income from renewables at the end of the month and it would be in force until the end of March, although it can be extended, while the Iberian mechanism is approved until May. In parallel, the Commission will present “quite soon” a proposal for a far-reaching reform of the electricity market, although “implementing it will take a long time” Depending on these deadlines, they will try to marry the pieces of the puzzle, according to a senior Commission official.

33% tax on extraordinary profits

The tax that Spain is processing would levy a rate of 1.2% on the turnover of electricity, gas and oil companies. In contrast, Brussels is committed to a 33% tax on the extraordinary profits of companies that use fossil fuels, and not on their income. “Measures that are similar and also based on the same design parameters need to be evaluated and analyzed. In this case, on the one hand there is a measure on income and on the other hand a measure on benefits, so we have to carefully evaluate whether the goal and design are similar,” according to community sources.

The same sources added that the Community Executive is “aware” that “the Member States are interested in having as much flexibility as possible”, but added later that the regulation that is finally approved must be respected.

Source: LA INFORMACIÓN – Lo último by

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