Spain and Portugal limit gas prices for electricity generation to an average of 48.80 €/MWh
Spanish Energy Minister Teresa Ribera said that Spain and Portugal, as planned, on this Friday approved a gas price cap for electricity production at 48.80 €/MWh for 12 months.
For the first 6 months the limit will be 40.00 €/MWh, then the price may increase, but eventually the price will increase to an average of 48.80 €/MWh ovr the next 12 months. The Minister also added that this will lead to a significant drop in spot electricity prices - from an average annual price of 210.00 €/MWh up to 130.00 €/MWh.
In this way, consumers will pay the difference between the maximum (limit) and the market price for the gas used to produce electricity. According to the Minister, this will reduce costs for about 37% of domestic consumers and 70% of industrial.
It is worth noting that restrictions are more important for Spain than for Portugal, where gas prices affect a small number of consumers. The Spanish government sees price cuts as the easiest way to reduce inflation, which stood at 8.3% in April, lower than in March but still close to a record high.