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Spain Extends Temporary Cap on Gas Prices

Spain will ask the European Union for permission to extend its temporary cap on reference prices for natural gas and coal used by power plants until at least the end of 2024, according to Energy Minister Teresa Ribera.

Teresa Riberia
Teresa Riberia

The cap, known as the Iberian mechanism, is in place in Spain and Portugal and aims to subsidize fossil fuel plants' power costs to lower electricity prices. The system is set to expire on May 31.

Reforming the EU's Power Grid

In an interview with TV station Antena3, Ribera stated that the EU's power grid needs to be reformed to reduce price volatility and make electricity cheaper. She added that mild temperatures in autumn and early winter had helped lower prices and support gas storage levels across Europe. Electricity prices in Spain have steadily decreased since they peaked in August, partly due to increased wind energy production. For a few days in October, the gas cap did not apply as prices were below the 40 euros per MWh mechanism trigger price.