Portugal and Spain will formally ask the European Commission on Wednesday to extend the temporary Iberian cap on prices for natural gas and coal used by power plants, the Portuguese Environment Minister Duarte Cordeiro said on Tuesday, according to Reuters.
Recognising that Iberia has weak energy links to the rest of Europe, the European Commission in May allowed the two countries to initially cap gas prices at 40 euros per megawatt-hour (MWh), with the price limit projected to average out at 50 euros ($53.97)over 12 months.
Cordeiro said that the request to extend the mechanism would be formally made on Wednesday at a meeting with the European Commission in Brussels.
With the cap, Portuguese electricity consumers saw a 20% reduction in the price of electricity, which allowed them to save around 489 million euros up until the end of 2022, Cordeiro said.
„Obviously we want to extend the Iberian mechanism on the same terms and principles … because it produced positive effects,” he said at a parliamentary hearing.
Last week, Spain’s Energy Minister Teresa Ribera, who will also be at Wednesday’s meeting in Brussels, said last week Spain would seek to extend the mechanism until at least the end of 2024.
Portugal only applies the mechanism to gas prices as it no longer has coal-fired power plants.
Spain and Portugal had convinced Brussels they should be allowed to intervene in their own electricity prices, which are often inflated by expensive fossil fuel even though Iberia has large amounts of renewable power and little interconnection with the rest of Europe.