The Third Vice President of the Government and Minister for the Ecological Transition, Teresa Ribera, estimated this Monday at 19% the reduction in gas demand since the entry into force of the Spanish energy saving plan, on August 1, compared to with the average of the last five years. If the higher export balance to neighboring countries is taken into account, that figure rises to 21%. In the case of electricity, the contraction is around 7%.
The cut in gas consumption is four percentage points higher than what is required by the Community Executive, which has demanded from Spain a 15% cut in its gas consumption in the current pre-alert phase, and also to the fall accumulated up to a year ago. month. However, after a “reasonably warm” autumn —which has made the use of heating less necessary and, therefore, has contributed to the general decline in demand both in homes and in industry—, Ribera has called for redoubling saving attitudes in the coming months: “It is important to continue reducing our consumption, with more intelligent management of demand”.
Asked to what extent the lower consumption of natural gas in Spain responds to the savings and contingency plans implemented by the Government in the second half of 2022 —and which have led, among other things, to a limitation of thermostats in shops and workplaces or turning off shop windows outside opening hours—, the number four The Spanish Executive has recognized that “it is difficult” to stipulate the degree of causality, but it does believe that the measures adopted “have been a factor” behind this change in trend in demand. Although other elements, such as the rise in prices or the substitution of gas for other fuels in some industrial segments —such as chemicals—, have also played an important role, Ribera clearly sees that there has been “a reaction on the part of society” following the energy crisis and the Russian invasion of Ukraine.
According to government figures, the Iberian mechanism (also known as the gas cap) and the reduction in taxes and charges have allowed savings on the electricity bill of around 34% in November compared to what they would pay domestic consumers in the absence of these measures. The fall is even greater —always according to the calculations of the Executive itself— in the case of vulnerable consumers (-64%) and severely vulnerable (-77%), who, in addition to benefiting from these measures, have seen how an additional discount was applied to them in the social bonus.
Exports to France and Portugal
Except for an unexpected turn in the less than three weeks remaining until the end of 2022, for the first time in five years the balance of the two gas transport tubes that link Spain and France under the Pyrenees will be an exporter. The same will happen with electricity: compared to a net import of more than 2,300 gigawatt hours (GWh) on average for that period, Spain has exported almost 5,300 since August, largely due to the paralysis that grips the French nuclear park. In the case of Portugal, exports have gone from an average of less than 500 GWh between August and November to more than 3,100 this year. The great ballast for the Portuguese generation has been the pressing drought, which has slowed down a vital hydroelectric activity in its energy matrix.
Underground natural gas deposits are today somewhat above 90% in Spain, a figure slightly higher than the European average and the equivalent of one month of consumption. To this figure must be added the storage of liquefied natural gas (LNG, in the jargon of the sector) in the ports, which reach an average filling of 65%, around 22 days of demand. And the price gap between the Iberian gas markets (Mibgas) and the Dutch (TTF, the European reference) “has been maintained in recent weeks” and has been around 33 euros per megawatt hour (MWh) since the beginning of the war.
“Very concerned” about the limit on the price of gas in the EU
In his appearance this Monday, Ribera expressed “enormous concern” about the latest proposal from the European Commission, which involves establishing a limit of 220 euros per MWh in the continental gas market. That value, she has emphasized, is “well above the gas reference” in the EU and would mean a “dangerous” normalization of a high price in the bloc.
The person in charge of Ecological Transition has described the negotiations of recent days as “complicated” and “tense”: while Spain and most southern nations are asking for more ambition, several central and northern countries see how their operators committed themselves in the summer to pay high prices that now “they have great difficulty absorbing.” However, she says, that is not “the best of answers” that the Twenty-seven should give: “The stability of financial markets is a very important principle, but it cannot be at the cost of endangering the industry and European families. If they cannot pay for gas at that price, there will surely be financial instability ”, she has predicted. If there is no agreement between ministers this Tuesday, Ribera has shown herself open to the issue ending up being negotiated by the heads of state and government at the summit on Thursday.
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