The Iberian press refuses to sell cheaper gas to France and Morocco

While Spain has just received European guarantees to cap the price of gas for power generation, the Iberian press is concerned that these low prices set by Brussels will benefit France and Morocco. The mere idea that the kingdom can buy cheaper gas does not please them.

If the idea of ​​Spain and Portugal was to create two gas markets, one with a local consumption subsidy and another with market prices similar to the rest of Europe, this proposal, considered unfair, was not confirmed at the level of the European Commission because of the energy crisis in Europe, especially since Madrid is about it asked to make European group purchases of energy.

Spain and Portugal, in their proposal aimed at reducing the impact of the increase in gas prices at world level for their two countries, have requested authorization from the European Commission to subsidize the production of production plants using fossil fuels (gas, coal and CHP plants) use ) to offset the increase in their fuel costs.

Madrid wanted to charge low local gas prices and resell energy at a high price to win on multiple counts as the world is in an energy crisis and the commission has been asked to contain a possible crisis in the Iberian country. But Brussels rejected this idea, where Spain would do well.

“Spanish will pay 2,100 million for France and Morocco to access gas limit,” headlined Spanish website Vozpopuli, estimating the cost of this refusal from Brussels, which would allow Spain’s neighboring countries to buy gas at the same price.

Convinced that Europe is “forcing Spain to maintain electricity exchanges with France and Morocco,” the site predicts that the indirect impact will be “an increase in exports to neighboring countries up to their maximum capacity.”

And to judge that the subsidy, which will lower gas consumption prices, will have an “attraction effect on neighboring countries”.

The energy sector expects that the deal negotiated with Brussels will result in an immediate significant reduction in the cost of fossil fuel production facilities and the consequent drop in the market price of electricity in Spain

Not accepting that France enjoys the same benefits, the media explain that the export capacity to France in 2021 was 20.9 terawatt hours (TWh), of which 7.8 TWh was exported while imports were 14.1 TWh.

The production of gas and coal-fired power plants in Spain is forecast to increase by 27.1 TWh to meet the increase in exports to France, the same source says.

And to estimate that Morocco could also take advantage of the situation since wholesale electricity prices would be subsidized and should buy 6.9 TWh of electricity, judging that the price in Spain would be “much lower than its own variable cost of production”.

Leave a Comment