Spain: Socialists Call Out Conservatives’ Gas Price Cap Stance

By Fernando Heller

(EurActiv) — Debate has erupted between the ruling Spanish socialist party (PSOE) and centre-right opposition Partido Popular (PP) after the latter’s EU political family, the European People’s Party (EPP), explicitly supported the Iberian exception to cap gas prices.

On Saturday, PSOE spokeswoman Pilar Alegría rejected PP’s criticism of the “Iberian exception” on electricity prices, a temporary measure agreed by the EU for Spain and Portugal, EURACTIV’s partner EFE reported.

The minister asked the leader of the PP, Alberto Núñez Feijóo, why while their European political comrades supported the initiative, his party opposed it:  “Mr Feijóo, the Iberian exception (Iberian scam as you call it) works, doesn’t it?” Alegría Tweeted.

“I ask this because your European partners are urgently asking for it for (all) Europe,” the Socialist spokeswoman added.

During the summer, the Commission authorised the “Iberian derogation” for Spain and Portugal, by which they can limit the impact of gas prices on electricity. Last week it was made clear that they can maintain the measure without having to replace it with the cap on renewables proposed by Brussels.

On Saturday, the EPP group in the European Parliament insisted on “urgent” measures to tackle the soaring cost of energy and, in particular, urged that the price of electricity should be decoupled from the price of gas.

Conservatives’ inconsistency with EU colleagues

As a “short term” measure, they called on the European Commission to “review” the mechanism on which energy prices in the EU are based, EFE reported.

“Solution: decouple the price of electricity from the price of gas,” they stressed.

Meanwhile, on Thursday, Spanish Prime Minister Pedro Sánchez criticised the fact that the PP will vote – in the EU – in favour of “the same measures” that it has previously opposed in Madrid.

The socialist prime minister recalled that the PP rejected the recently approved taxes on large energy companies and banks’ profits to alleviate the impact of inflation.

At a public event in Toledo, the Spanish prime minister and PSOE’s secretary-general defended the “Iberian exception” on Thursday.

Without the implementation of this extraordinary measure, Spanish households would be paying three times as much in electricity bills, Sánchez stressed.

Commission backs Spain and Portugal

The European Commissioner for Energy, Kadri Simson, stressed on Wednesday the importance of “letting Member States continue with their ways of limiting gas if they have introduced one; this goes for Spain or Greece, for example.”

This new proposal by the EU executive, which is expected to be finalised by EU energy ministers on 30 September, provides, among other things, a maximum price of €180 per megawatt-hour (MWh) for so-called infra-marginal electricity generation technologies: renewables, nuclear and lignite.

This price is much higher than the one currently paid in Spain for MWh of renewables through a reduction mechanism, complementary to the “Iberian exception,” which sets at €67 the limit above which 90% of revenues are deducted to avoid generating the so-called “windfall profits.’

The next general election in Spain is scheduled for December 2023, and municipal elections will be held in May 2023. Most opinion polls predict a victory for the Partido Popular.

In the second half of 2023, Spain will take over the presidency of the EU Council from Sweden.