Why the price of energy will fall in Spain and Portugal... and not in France

Maud Descamps edited by Ugo Pascolo 06:22, May 17, 2022

An energy bill reduced by 25% to 30%.

While inflation has become the main concern of the French and the government, even forcing the latter to extend ad hoc aid, the Iberian Peninsula will see its energy prices drop significantly.

No magic trick, but quite simply a derogation from the European Union which will allow Spain and Portugal to set the price of electricity and gas for households and industry themselves. .

A mechanism that makes Madrid and Lisbon hope for a 25% to 30% drop in the energy bill.

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Electricity prices deindexed from those of gas

While electricity prices are indexed to gas prices everywhere in the EU, the European Commission has granted a one-year derogation to these two countries.

Concretely, for 12 months, the two States will lower the price of gas, which will allow them to produce cheaper electricity.

And therefore to reduce the bill for households and for industry which has suffered a lot from soaring prices.

As to why Brussels made an exception for the peninsula, the answer lies in the lack of interconnections with the rest of Europe.

Spain and Portugal are only connected to France and therefore cannot benefit from other sources of energy, particularly from northern Europe.

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An exception that is not French

This lack of connection is an argument that France could not put forward to leave this single electricity market since we import and export electricity to five countries of the European Union.

The French will therefore not benefit

from the same advantage as the Spaniards and the Portuguese.