The government agreed with European Commission (CE) change regulated tariff operation (PVPC), including links to futures markets, to reduce its exposure to the volatility of the wholesale electricity markets.
As such, the Government will pursue an adjustable rate reform that includes links from the futures markets, the futures basket, and the day and intraday markets, with the goal is that it will start to apply from the beginning of 2023.
As explained in the Ministry of Demographic Transformations and Demographic Problems, the new system will combine stability with incentives for energy efficiency, storage and demand management.
In this sense, the new system will make regulated tariff is more stable than the current systemand provide long-term markets with liquidity, which has traditionally not been the case in Spain.
It is one of the commitments that the executive has reached with Brussels to be able to approve this Friday a mechanism that will cap the price of natural gas used to generate electricity, a measure that will cut the wholesale price of electricity by about 40%.
The measure, which will initially affect domestic consumers on the regulated market – about 11 million households -, limit the price of natural gas to an average of 48.8 EUR/MWh over the next twelve months and reduce the wholesale price of electricity to 120-130 EUR/MWh.
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