Portugal wants to extend the Iberian mechanism “maintaining the existing conditions”
“With regard to the Iberian mechanism, our starting position is to negotiate its extension with the European Commission, maintaining the existing conditions. […] For our country, for the industry that is exposed to the `spot` market [diário] is very positive”, said the Minister of Environment and Climate Action, Duarte Cordeiro, during a hearing in parliament, on the increase in energy prices, at the request of the Left Block.
In this sense, the official confirmed that he will meet with his Spanish counterpart, Teresa Ribera, on Wednesday, in Brussels.
At issue is the temporary Iberian mechanism in force since mid-June to place limits on the average price of gas in electricity production, which in the case of Portugal and Spain is around 60 euros per Megawatt-hour.
This instrument was requested from Brussels by Portugal and Spain last March due to the energy crisis and the war in Ukraine, which put even more pressure on the energy market.
Duarte Cordeiro rejected the idea put forward by Social Democrat deputy Hugo Carvalho, that the Iberian mechanism encourages the use of gas, at a time when the European Union has targets to increase energy from renewable sources, to the detriment of fossils.
The Minister of the Environment underlined that the increase in gas consumption was due to the drought that the country was experiencing last year, which accompanied hydroelectric production, but, with the recovery of water in the dams, with the rains in December, “this element will be corrected”, which “will increase the benefit” of the Iberian mechanism, “without creating any kind of incentive”.
“The mechanism has an advantage for Portugal, which is to protect those who are exposed [ao mercado diário]”, stressed the Minister of the Environment, guaranteeing that the “benefit is always greater than the cost, by definition”, because “it will seek unexpected gains from renewables and use them to lower the market price”.
Asked whether the mechanism benefits Spain more than Portugal, Duarte Cordeiro said that “Spain had an economy that was more unprotected” from changes in energy prices and, “naturally, it benefits more” from this protection system.
“There is no problem with this, simply the only assessment we have to make is whether we also gain from this protection. A protection that is not a detail, it is very significant”, defended the official.
The Minister of the Environment, Duarte Cordeiro, and his Spanish counterpart will travel to Brussels on Wednesday to submit the request for revision of the Iberian mechanism to limit the price of gas for electricity production.
The European source announced that Duarte Cordeiro and the Spanish Minister for Energy, Teresa Ribera, have a meeting at the European Commission, in Brussels (Belgium), which will start at 11:30 am local (10:30 am in Lisbon).
There is still no information on statements at the end of the meeting.
Today, Duarte Cordeiro announced, during a hearing in the Assembly of the Republic, that the European mechanism allowed a 20% reduction in the price of electricity, from the entry into force until the end of 2022, and generated a benefit of around 489 million euros.