European Commission approves mechanism to cap gas prices and lower electricity prices in the Iberian Peninsula

2022.6.8

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The BOE will tomorrow publish an Order of the Minister for Ecological Transition and Demographic Challenge that will specify the date of application of the mechanism. It will take place next Tuesday, 14 June, and will affect the wholesale electricity market matching to be held that day to set prices for the following day, Wednesday 15 June. Tot his effect, electricity companies and the rest of the market players have sufficient time to present the financial guarantees to support their operations.

The Commission has approved the Iberian mechanism as set out in Royal Decree-Law 10/2022, the validation of which will be put to vote tomorrow in the Lower House of Parliament. During its 12-month period in force, it will lower household and business bills and protect them from the volatility of gas prices in international markets.

The Iberian mechanism is an extraordinary measure justified by the Iberian Peninsula's limited interconnection with the rest of Europe, which is disadvantageous for its integration into the European market. The agreement reached with the Commission to implement the mechanism includes actively working to reverse this unfavourable situation.

Non official translation

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