The Iberian Peninsula will become an “energy island”

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Prime Minister António Costa succeeded, with His Spanish counterpart Pedro Sanchesto persuade the European Council that the Iberian Peninsula should receive preferential treatment in energy pricing.

Speaking at a joint press conference yesterday, Sanches explained: “We have achieved an important agreement which will be very beneficial for the Portuguese and the Spaniards: the Iberian exceptionality, its singularity in terms of energy policies, has finally been understood…”

Concretely, “from today, this means that we can present to the European Commission additional and temporary measures” which the commission should confirm “with an urgency that respects Community legislation” and allows the two countries to “reduce energy costs”.

European Commission President Ursula von der Leyen confirmed the news – but, as with the reduction of the IVA (from 23% to 13% currently), this cannot happen until it is “officially ratified” by the European Commission sometime next week.

Prime Minister Costa said the objective is “very clear: it is to ensure that the growth that gas is experiencing does not continue to have an impact on the rise in electricity prices… We will adopt measures to set a maximum price for gas, from which all other prices will not may not exceed”.

Stressing that the Iberian Peninsula is “an energetic island”, Costa added that this agreement will see “very significant savings for families, and great savings for businesses”.

Cheaper sources of renewable energy have “an increasing weight in setting prices, he admitted, but in times of increased demand, the country (like Spain) has to resort to other sources of energy. energy, namely gas.

In the current market configuration, gas determines the overall price of electricity when it is used, because all producers receive the same price for the same product when it enters the network.

With the approval given by the European Council, Portugal and Spain will be able to control consumer prices, provided that the two countries inform the European Commission before acting, and safeguard European competition.

Short-term measure only

Nevertheless, these are short-term measures to counter the energy crisis caused by Russia’s invasion of Ukraine.

In the longer term, Europe is seeking to reduce its dependence on Russian gas (to the point of no longer needing it).

And for this to really succeed, Prime Minister Costa returned to the subject of interconnections, to connect the Iberian Peninsula to the wider European energy system.

This has always been an ‘in the crucible’ plan – it just hasn’t been accepted so far.

With the latest European agreement with President Biden on imports of LNG (liquefied natural gas), it looks like portugal port of Sines will suddenly become strategic entry point for American gas in Europe after all. Outgoing Foreign Minister Augusto Santos Silva alluded to it last month.

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