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    The electricity sector asks Europe to impose a limit on gas prices, "the root of the problem".


    September 20, 2022 - CE Noticias Financieras

     

      The electricity sector has stressed the need to impose a limit in Europe on the price of natural gas, since it is "the root of the problem" of the current energy price crisis, which has increased after the outbreak of war in Ukraine due to Russia's invasion.

      At the IV Aelec Congress, Endesa's General Director of Institutional Relations and Regulation, José Casas, stated that Europeshould adopt this measure, since it has been "imposing measures on the electricity sector for a year" and it is necessary to have "a measure of 'cap' on gas that can solve this problem".

      The CEO of Iberdrola Spain, Mario Ruiz-Tagle, agreed on the need for the European Commission to move forward with the measure to set a price for natural gas, since "the problem is in the products we use to generate electricity". "Let's go to the root, because without that the solutions will be expensive, long-lasting and will generate distortion," he added.

      Likewise, the Iberdrola executive insistedthat any intervention carried out on companies "must be on profits" and not on turnover", as established in the tax with which the Spanish government seeks to tax energy companies.

      In the same sense, the CEO of EDP Spain, Ana Marques, stated that any measure should "always be on profits and not on income", since "most of the energy is negotiated in the market at a fixed price".

      Ruiz-Tagle also defended that energy markets should be "long-term markets, because if this is not the case, "external factors generate very severe fluctuations in a short time and the solutions are useless".

      The Iberian exception, an unsuccessful tool

      On the other hand, Casas was critical of the so-called 'Iberian exception' that came into force in June in Spain and Portugal to limit the price of natural gas used for electricity generation, as it has not proved to be a "successful" tool because "it has led to greater gas consumption".

      "We are going in the opposite direction, the signals that are being given with electricity tariffs are not being good, and by contrast in gas this Iberian exceptionality has led to a higher consumption of gas and have a subsidized TUR," he said.

      In addition, Casas warned of the impact of this tool in the electricity tariff, where the compensation is assumed among all consumers and is assuming that many customers with a fixed tariff "are having to pay a higher cost".

      For this reason, she asked that this compensation could be financed, either through income from CO2 auctions or through "future deficits to mitigate the impact on customers with fixed tariffs".

      In addition, Ana Marques defended that the measures in an exceptional situation such as the current one must have "a transitory and exceptional nature, since the market must work in a free way".

      Likewise, the CEO of EDP Spain highlighted the effort that the electricity sector has made in Spain in the decarbonization of the economy, being "greater than in other countries".

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