Spanish government intervenes to halt record rise in energy prices

Spanish government intervenes to halt record rise in energy prices

Surging domestic energy prices are also an issue in other European countries, with Ribera recently sending a letter to the European Union’s executive branch stressing the need to change how the bloc’s electricity market works. The galloping price increases in Spain have brought public anger and pressure on the government from consumer associations.

Environment Minister Teresa Ribera said the government’s urgent measures are in response to an “unprecedented” situation which has emerged at a “sensitive” time — as the economy strives to recover from the effects of the COVID-19 pandemic and as winter approaches. Household electricity prices have climbed by 35% over the past year, Spain’s statistics agency said Tuesday. Wholesale electricity prices in Spain are currently more than 250% higher than one year ago.

The staggering rise continued Tuesday, when the average wholesale price smashed its previous record and reached 173 euros ($204) for a megawatt-hour of electricity — 19 euros ($22.4) more than the previous day. The increase will be felt keenly in Spanish households, which largely use flexible rates. The Spanish government’s package of measures to address the steep rise includes a new tax through March on energy companies’ windfall gains, which are a result of the way wholesale power prices are calculated.

Officials say that in daily power auctions the government pays all the megawatts it buys from different power sources at the highest price of them all. That is usually gas-generated electricity, whose price has soared. Consequently, even if power is produced from cheap renewable energy, the companies are getting paid for it at the same price as much more expensive gas — meaning artificially high prices and windfall gains. The government wants to tax those “exceptional gains,” hoping to collect 2.6 billion euros ($3 billion) over the next six months which will be passed on to consumers.

That measure brought a rebuke from Pablo Casado, the leader of the main opposition conservative Popular Party, who likened it to the “expropriation” of private assets. The measure also helped drive down the share prices of energy companies on the Madrid stock exchange Tuesday. Shares in Endesa, Spain’s biggest energy company, fell by 2.6% in morning trading. The government is also scrapping a 7% tax on power generation. Utility companies pass on the cost of that tax to their customers. A separate energy tariff on consumers is to be cut to 0.5% from 5.1%

The News Highlights

  • Spanish government intervenes to halt record rise in energy prices
  • Check the latest update on business news
Disclaimer: If you need to edit or update this news from compsmag then kindly contact us Learn more

For Latest News Follow us on Google News


Latest Headlines
  • Show all
  • Trending News
  • Popular By week
New Learning Management System Allows Flexible Consumption of Offensive Security’s Top-Tier Training Labs and Modules
New Learning Management System Allows Flexible Consumption of Offensive Security’s Top-Tier Training Labs and Modules
With the launch of Learn Unlimited, Offensive Security is introducing a new Fundamentals learning track that includes 100-level preparatory content tailored ...
Next Month, Motorola will release the Moto Tab 8 with stock Android
Next Month, Motorola will release the Moto Tab 8 with stock Android
Moto Tab 8: specifications The upcoming Motorola Moto Tab 8 is reportedly a rebranded Lenovo Tab M8 FHD launched back in October 2019. The only notable ...
Top 5 Reasons Why Android Users Refuse To Buy Apple’s 13
Will Apple ever actually release an iPhone 13? Rumors point to yes
Apple announced four new members, the iPhone 13 Mini, iPhone 13, iPhone 13 Pro and iPhone 13 Pro Max last week, ending months of speculation about whether ...
The best wooden headphone stands
The best wooden headphone stands
A solid headphone stand is key to any PC setup. One way to instantly take any setup to the next level is by not only adding a sleek and solid headphone stand ...
UNC Chapel Hill, ECU Negotiates with AmeriCorps in Cash Grant Dispute
UNC Chapel Hill, ECU Negotiates with AmeriCorps in Cash Grant Dispute
Specifically, the U.S. contended that the schools engaged in widespread violations of grant requirements, acted with reckless disregard in causing false ...
Gas price rise to drive more UK suppliers out of market, officials say
Gas price rise to drive more UK suppliers out of market, officials say
Natural gas prices have spiked as economies reopened from COVID-19 lockdowns and as high demand for liquefied natural gas in Asia pushed down supplies to ...
With the integration of the Vi Movies & TV App, the Vi App now doubles as an OTT app
With the integration of the Vi Movies & TV App, the Vi App now doubles as an OTT app
The integration is initially live for Android users, though it will soon be available for Vi consumers on iOS. Users can download the Vi App on their Android ...
Your coffee table can be turned into a wireless charger by Ikea Sjömärke
Your coffee table can be turned into a wireless charger by Ikea Sjömärke
The Sjömärke is a new $40 (around £30) wireless charging pad with a special trick. It’s designed not to have phones placed directly on it, but to extend its ...
2021-2027 Market Size for Surf Waterproof Earbuds and Headphones
2021-2027 Market Size for Surf Waterproof Earbuds and Headphones
Regional Analysis of Global Surf Waterproof Earphones & Headphones Market The “Global Surf Waterproof Earphones & Headphones Market Analysis to ...
Immokalee business owner sustains culture alive with Lozano’s Mexican Restaurant
Immokalee business owner sustains culture alive with Lozano’s Mexican Restaurant
“We rise up at 4:30 within the morning,” stated Gonzalez. “We begin making ready our rice, beans, corn tortillas. We begin cooking.” Lozano’s Mexican ...
Show next
Compsmag - Latest News from tech, business and health
Logo