A new electricity tariff entered into force with our Spanish neighbors on Wednesday 15 June. Concretely, the megawatt hour goes from 214 euros to 165 euros. In other words, for a household which until now had a monthly electricity bill of 100 euros, the budget now amounts to around 80 euros. So it’s very significant. The measure concerns both individuals and companies, but to benefit from it immediately, you must have a price-indexed contract. This concerns approximately 11 million Spanish households, almost 40% of them. The others will have to wait for the annual renewal of their contract. The discount is greater if you consume during off-peak hours than during peak hours.
This measure, which also comes into force in Portugal, has been authorized for almost a year, until May 31, 2023. It has been dubbed the “Iberian derogation”. And it was granted last week by Brussels for two reasons, two peculiarities of Spain and Portugal. On the one hand, the two countries are somewhat isolated geographically from the rest of Europe, their electrical interconnections with the rest of the continent are therefore insufficient and they are therefore more sensitive to price variations. On the other hand, their energy mixes are mainly made up of renewable energies. There was therefore a form of injustice in Spain and Portugal suffering the brunt of the rise in gas prices.
The Spanish government has pleaded its cause all the more since inflation is very high in Spain. The rise in prices is very high: 8.7% over the last 12 months. In March, it was even 9.8% over one year, a record for almost 40 years. This outbreak does not only concern energy, it also affects fuels, food prices, as in France but worse. And the causes are the same: concerns related to the resumption of post-Covid activity and of course the war in Ukraine.
The socialist government of Pedro Sanchez, worried about social unrest, has already taken several measures to limit the impact of inflation: bonuses at the pump on fuel (an idea also taken up in France since), increase in income minimum, extension of tax cuts. This capping of electricity tariffs completes the system. It should reduce the amount of inflation by one point.
But this “Iberian derogation” asks questions for the other countries of the Union. Pricing at European level is not to everyone’s taste. The question, in particular, of the indexation of electricity prices to those of gas, is the subject of debate. In addition to Spain and Portugal, Italy and France plead for a reform of this system. While the countries of the North, the Netherlands, Germany, Denmark do not want to change anything. They wish to favor better energy interconnections on the continent and above all to plead for a policy of frugality, of less energy consumption. So we are still a long way from a structural European agreement on the subject.