Spain and Portugal broke ranks with the EU to give themselves the chance to cut their energy bills by 40%. This decision is allowed because the two southern European countries have a large amount of renewable energy and are not as dependent on fossil fuels as the rest of the continent.
This means that while the rest of the EU, which is much more linked to traditional fuels, has a wage cap of around €90 (£76.56) per megawatt hour, Spain and Portugal would cap their price at €50. € (£42.50). Currently, the Russian invasion of Ukraine is pushing the price of fossil fuels to record highs.
Addressing the Express, Rana Adib, executive director of REN21, a global community of renewable energy players, highlighted ways in which European countries can end their reliance on fossil fuels, especially those imported from Russia.
She said: “What governments need to do is massively build renewable energy generation capacity, invest in energy conservation and energy efficiency to bring down the cost of energy bills as quickly as possible. possible. When we look at the example of Portugal and Spain, it is very interesting.
“They have negotiated with the European Commission that they will essentially leave the European energy market mechanism for 12 months because the interconnection does not allow them to receive a lot of renewable electricity from the north. on its own renewable electricity capacity, the Spanish government expects to be able to reduce the cost of bills by 30-40%.
“The governments that are leading here really understand the opportunities around renewable energy and renewable electricity.”
After signing the agreement with the European Commission, Spain’s Energy Minister, Teresa Ribera, said: “It is important to have a tool that reduces our exposure to turbulence and volatility in the energy market. electricity and the price of gas at the moment”.
Ms Adib noted that under the European mechanism, “the reality is that for a unit of energy that you buy, you will pay the highest price on the market”.
Since renewable energy generation is much cheaper than fossil fuels, she noted that Iberian countries “now have the opportunity to define their market mechanism where basically for fossil fuels they will pay a price, and for renewable electricity they will pay another price.
“It is more a reflection of cost generation. As a result, they expect the price to fall by 30 to 40%, and they do this by integrating into the energy markets and into their electricity prices, their cost of production.