Energy costs have spiraled both in Spain and across the EU in recent months, with electricity costs in particular reaching record levels in the country.
This has placed a huge strain on the finances of Spanish consumers, but the good news is that the Spanish government are finally taking action to support those living in the country, by lowering costs. Here’s everything you need to know about energy costs in Spain, and how these changes might affect you:
An Official Statement
Spain’s Minister for the presidency, Félix Bolaños, released an official statement in which he said that the government would be introducing a raft of new measures with the sole intention of driving down the prices that consumers would pay for their energy. These measures would be introduced by the end of the month, and consumers would see prices for electricity, gas, and fuel lower on the 29th March.
There are several reasons for the rising energy costs, not least the current world events surrounding the conflict between Russia and the Ukraine. The Spanish government is determined to minimize the financial impact of these events, and these rising costs, for their own citizens.
What Are Current Energy Prices in Spain?
Energy prices in Spain are currently higher than they have ever been before. Wholesale prices for electricity in the country reached a record high of €544.98/MWh on 8th March. This was an incredible increase of just over 100 euros in a 24-hour period. During the hours of 7pm and 9pm on that evening, prices reached around €700 per Megawatt-hour. These figures are unsustainable, and if they continue at these levels, heating their homes could drive many Spaniards into poverty.
The Spanish government and Spanish energy firms are aware that this crisis is looming. Vice President and Minister of Ecological Transition, Teresa Ribera, has taken action to reduce this impact, and reported to the media on Thursday that she was working with Portugal on a proposal to set a maximum price for energy in the wholesale market of €180 per megawatt-hour. She has clarified that the Spanish government are prepared to work outside of the EU remit, if they did not take similar actions to reduce energy costs for their own citizens.
What is the Spanish Government Doing?
We don’t yet know exactly how the Spanish government intends to reduce energy costs in Spain. What we do know is that they are examining a number of different options, and that they are in talks with other EU partners to find a solution to the crisis.
On 24th and 24th March, Spanish representatives will be attending the European Summit in Brussels, and many partners are hoping that an EU-wide agreement to the energy crisis will be reached at this summit. But as we can see from the statement that has already been released, even without a universal agreement, the Spanish government still intend to reduce energy costs for their own citizens.
According to Mr Bolaños, "We are going to work to ensure that the consensus includes the European Union partners, and if there is no consensus, the government will also take measures. We are considering different ways of doing this, from state aid and taxes to capping prices and establishing a set energy price. Our objective is to protect families, companies, the self-employed, help those who have more difficulties due to the high price of energy. "
Is This Good News?
This is certainly good news for anyone living in Spain, particularly if you are already feeling the pinch of rising energy and fuel costs. It is also important that Minister Bolaños has acknowledged that the government is aware of “what it is costing to fill the tank, pay for electricity and keep homes warm". This awareness is essential for change to be introduced. Energy costs are continuing to soar across Spain, but these talks and actions indicate that these costs will fall, at least slightly, in the near-future.
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