Sánchez achieves his goal that the EU allows the 'Iberian exception' to curb energy prices

The very hard battle of Spain and Portugal in Brussels to lower electricity prices has borne fruit.

The EU is open to giving carte blanche to adopt measures to curb the energy price crisis at the national level, although the Commission reserves the last word to approve them.

Both countries have managed to get the rest of the community partners to understand their particularity as an "energy island" and to include a text change in the draft conclusions of the European Council that was held this Friday in Brussels that will allow Spain and Portugal to put temporary caps on the price of gas used to generate electricity, so it is expected to quickly lower the bill for consumers and businesses, in less than a month.

"Finally, the Iberian exception is recognized," said the Spanish president, Pedro Sánchez, euphoric although visibly exhausted in a joint appearance with the Portuguese prime minister, Antonio Costa.

"The European Commission will allow Spain and Portugal an exceptional, temporary measure that does not involve subsidizing gas, that does not alter the incentives for renewable energy, but that will allow both governments to lower energy prices."

Sánchez, who got up temporarily from the meeting at the moment of greatest tension to force an unblocking, thus managed to overcome resistance, especially from Germany, which flatly rejected the idea of ​​the Iberian exception.

"Sanchez has very successfully represented the interests of his country with his colleague Costa," admitted the German chancellor, the social democrat Olaf Scholz,

The President of the Commission, Ursula von der Leyen, who will play a fundamental role in the next steps to be taken, has emphasized the specific characteristics of Spain and Portugal: "The Iberian Peninsula has a very specific situation", she said in an appearance after the top.

“They have a high percentage of renewables, and that is very good, but very few interconnections.

That is why we agree that there should be special treatment”.

“The temporary nature of the measures and the level of electrical interconnectivity with the single electricity market will be taken into account”, includes the latest version of the text to which Sánchez alluded.

The measures will have to be temporary and Spain will have to show that they do not excessively distort competition.

The European Commission, for its part, undertakes to evaluate the interventions with an urgent procedure and to take into account the volume of market interconnection for its verdict, a variable that favors Spain, which only reaches 2.8%.

More information

The war in Ukraine, live

This final wording, according to the Spanish Government, will allow Spain and Portugal to present a proposal to the European Commission in a short time in which a cap is placed on the price of gas used to produce electricity in the Iberian Peninsula, and only for use internal.

In this way, it is expected that the bill will quickly drop because that price conditions the rest of the market, which is produced with much cheaper renewable or nuclear energy.

Gas only occupies 15% of the Spanish market but sets the price of everything.

The pact that has been reached at the summit includes a certain guarantee that the European Commission will accept these Spanish and Portuguese proposals when they arrive, because the conclusions approved after a very long negotiation allow it to do so.

That is why the phrase “the temporary nature of the measures and the level of electrical interconnectivity with the single electricity market will be taken into account” is so relevant.

As Spain and Portugal have it very low, this will allow the European Commission to approve this formula quickly.

Spain has had to guarantee that its solution does not touch the European market, it is exceptional and will finally consist of aid to compensate for the cap on the price of gas that will be set for the combined cycle plants that produce electricity.

The Spanish Government assures that this will quickly lower the electricity bill and will have a much lower cost than the benefit it will produce for citizens.

Sanchez has not wanted to give details of who will pay the compensation: "It will not be public aid to gas companies."

The compromise proposal arrived at the stroke of six in the afternoon, after several recesses, including one that the President of the Government of Spain, Pedro Sánchez, forced at noon, leaving the room and forcing the President of the Council, Charles Michel, to take a technical break.

“In the current context of very high electricity prices, the Commission is ready to urgently assess the compatibility [with Community regulations] of the temporary emergency measures in the electricity market notified by the Member States”, assures the new conclusion text.

“In assessing such compatibility, the Commission will also ensure, through an accelerated procedure, that the following conditions are met: the measures reduce spot electricity market prices for businesses and consumers and do not affect the conditions of the exchanges to an extent contrary to the common interest.

When carrying out this evaluation, the temporary nature of the measures and the level of electricity interconnectivity with the single electricity market will be taken into account.

The summit of the war – with Brussels reconverted into the “center of the free world”, in the words of Von der Leyen – has shed its skin on its second day.

Once the president of the United States, Joe Biden, has left, and the issues of Ukraine and the deepening of the sanctions against Russia have been settled, the meeting of the Twenty-seven has been converted into a single-theme meeting on the crisis of the prices of the Energy.

Spain has played the leading role on this occasion, and has finally achieved a good part of its objectives.

Since last summer, Sánchez has led a kind of entente of European countries hit by the skyrocketing rise in gas prices and its irremediable contagion to the rest of the energy sector.

Meanwhile, the community institutions have been changing their discourse: if a few months ago they claimed that it was a temporary issue and that the European energy market was working perfectly, now they have opened up to discuss extraordinary emergency measures to apply in the short term .

At this time, the figures of the energy blow are already being felt throughout the community block: in the last 12 months, the retail prices of natural gas and electricity have risen by 65% ​​and 30%, respectively, according to figures from the Community Executive .

And the situation seems to be aggravated by the war in Ukraine and the sanctions against Russia, where more than 40% of gas imports to the EU traditionally come from, which needs to bring 90% of the gas it consumes from outside its borders.

The panorama has changed at this event, with a large number of capitals already joining the current that advocates urgently intervening in the energy markets in some way.

The conclusions reflect that path traveled.

Countries like Italy, which advocate this intervention, have also been satisfied with a specific mention of the possibility of limiting prices.

"The important thing was to achieve a result that was not divisive," said Italian Prime Minister Mario Draghi.

“In a sense I am satisfied with the conclusions.”

He has also admitted that it will be necessary to invest in energy interconnections.

"Italy could be better connected with a conduit from Italy to Spain," he has suggested.

The conclusions that refer to energy are extensive.

A good number of countries – from Italy to Greece, through France and even Belgium – had specific demands.

And the final text seems to weave a balance to please everyone: it contains, for example, references to "national circumstances and the energy mix of the Member States" and instructs the Council and the Commission that, "as a matter of urgency", contact energy sector stakeholders to discuss how the European Commission's recent proposals to tackle the price crisis "would help reduce the price of gas and address its contagion effect on electricity markets, taking into account national circumstances.

This very week the European Commission has added fuel to the debate in the Council by presenting a menu with six possible options with which to act "in the short term" at a community or national level on prices: from setting a reference price in the wholesale market to set limits on these prices or create "aggregators" (suppliers who negotiate advantageous prices jointly and on behalf of others).

Many of these measures, just a few months ago, were considered little more than a free-market aberration in Brussels.

But the times are different.

"We are experiencing a war," says a source from the Council.

"These are exceptional circumstances."

And many of the leaders seem to have understood that those extraordinary circumstances also require additional measures.

With an eye on the coming winter, the Twenty-seven are also summoned to begin refilling the Union's gas stores "as soon as possible" and to "work together in the voluntary common purchase of gas" to use the enormous purchasing power of the community bloc.

Von der Leyen, in his appearance, has made reference to the strength of the Union, which Brussels has already used for the joint purchase of vaccines against covid.

“We have to join forces”, Von der Leyen advocated for a European approximation.

The German has ensured that the EU represents 75% of the world market for gas through pipelines.

"We have enormous purchasing power."

Follow all the international information on