The electricity sector asks Brussels to set a limit on gas prices as "the root of the problem"

It also criticises the "Iberian exception" because it has not proved to be a "successful" tool due to the fact that "it has led to greater gas consumption"

PHOTO/FILE  -   European Commission

The electricity sector has stressed the need to impose a limit in Europe on the price of natural gas, as 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 4th Aelec Congress, Endesa's General Manager for Institutional Relations and Regulation, José Casas, said that Europe should adopt this measure, as it has been "imposing measures on the electricity sector for a year" and should have "a 'cap' measure for 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, as "the problem lies in the products we use to generate electricity". "Let's get to the root of the problem, because without this, the solutions will be expensive, long-lasting and will generate distortion", he added.

PHOTO/REUTERS – Electrical installation

The Iberdrola executive also insisted that any intervention carried out on companies "should be on profits and not on turnover", as established in the tax that the Spanish government is seeking to levy on energy companies.

In the same vein, the CEO of EDP Spain, Ana Marques, said that any measure should "always be on profits and not on revenues", since "most of the energy is traded on the market at a fixed price".

Ruiz-Tagle also argued 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 derogation, an unsuccessful tool

On the other hand, Casas criticised 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 due to the fact that "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 greater consumption of gas and they have a subsidised TUR," he said.

PHOTO/REUTERS – Electrical installation

Casas also warned of the impact of this tool on electricity tariffs, where compensation is borne by all consumers and is meaning that many customers with fixed tariffs "are having to pay a higher cost".

For this reason, he asked for this compensation to 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 argued that measures in an exceptional situation such as the current one should have "a transitory and exceptional nature, as the market must function freely".

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