Spain will seek European Union permission to extend its temporary cap on reference prices for natural gas and coal used by power plants until at least the end of 2024, Energy Minister Teresa Ribera said on Jan. 9.
The so-called Iberian mechanism, in place in Spain and Portugal after the two countries reached a deal with the European Commission in the spring of 2022, is a joint scheme through which fossil fuel plants' power costs are subsidized in a bid to bring down soaring electricity prices.
"We intend to ask for the Iberian mechanism to be maintained for the duration of the energy crisis or until the electricity market is reformed and European regulation is updated," Ribera said in an interview with TV station Antena3.
"We would like the gas cap to stay within the lower end of the range, about 45 or 50 euros per megawatt hour (MWH), extending it at least until the end of 2024," she added.
The system is currently set to expire on May 31.
Ribera said the E.U.'s power grid needs to be reformed to reduce price volatility and make electricity cheaper.
She added that mild temperatures in autumn and early winter had helped lower prices and support gas storage levels across Europe.
Electricity prices in Spain have fallen steadily since they peaked in August, partly due to higher wind energy production.
For a few days in October, the gas cap did not apply as prices were below the 40 euros ($42.70) per MWh mechanism trigger price.
Recommended Reading
Electric Hype vs. Hydraulic Reality: Advantages of Traditional Systems
2024-05-07 - Castrol's new fluid prevents gas hydrates in deepwater control systems.
E&P Highlights: May 6, 2024
2024-05-06 - Here’s a roundup of the latest E&P headlines, including technology milestones and new contract awards.
US Oil, Gas Rig Count Falls to Lowest Since January 2022
2024-05-03 - The oil and gas rig count, an early indicator of future output, fell by eight to 605 in the week to May 3, in the biggest weekly decline since September 2023.
Pemex Reports Lower 2Q Production, Net Income
2024-05-03 - Mexico’s Pemex reported both lower oil and gas production and a 91% drop in net income in first-quarter 2024, but the company also reduced its total debt to $101.5 billion, executives said during an earnings webcast with analysts.
Woodside’s GoM Trion Project Wins Social Impact Assessment Approval
2024-02-14 - Woodside Energy’s Trion is expected to start production in the Mexican sector of the Gulf of Mexico in 2028, and Woodside said the impact assessment will help the operator engage with local communities during the construction phase.