Electricity prices: extension of the “Iberian exception” until the end of 2023

Spain and Portugal have decided to extend until the end of 2023 their exceptional electricity price cap agreement, which was put in place to protect their consumers from the European tariff system.

Share:

The electricity price cap mechanism in Spain and Portugal has been extended until the end of 2023. This decision was announced by the Spanish government on March 28, 2023. The agreement was reached between Spain, Portugal and the European Commission and is called “Iberian exception”. This measure, originally scheduled to expire at the end of May, will be extended for an additional seven months until the end of December 2023.

The reasons that led to the implementation of this measure have not changed, according to the executive of Pedro Sanchez. Indeed, in June 2022, Madrid and Lisbon had obtained the approval of Brussels to leave the European tariff system because of their lack of interconnections with the rest of the European Union, which penalizes their consumers. The mechanism for capping the price of gas used in electricity generation has resulted in savings of almost 5 billion euros, according to the Spanish government.

The trigger level for this measure, which is currently 55 euros per MWh, will however be raised to 65 euros in December. The Spanish government does not rule out the possibility of extending this measure beyond December 2023. In January 2023, the government had expressed its desire for an extension until at least the end of 2024.

The price of electricity is set on the European markets by the “marginal cost” principle, which implies taking as a reference the price of the last production capacity used to balance the network, i.e. currently that of gas-fired power plants. This system is accused of driving up prices and several countries, such as Spain, France and Italy, want to reform it. Other countries, such as Austria and the Netherlands, prefer to rely on free competition or increased network interconnections on the continent to bring prices down.

Two weeks ago, the European Commission proposed ways to reform the European electricity market without fundamentally restructuring it, using long-term energy contracts for decarbonized energies to protect consumers from price volatility and encourage investment in renewables and nuclear power. This proposal is an alternative to the reforms proposed by some EU Member States.

Brazil, Mexico, Argentina, Colombia, Chile, and Peru significantly increase renewable electricity production, reaching nearly 70% of the regional electricity mix, according to a recent Wood Mackenzie study on Latin America's energy sector.
The Canadian government announces an investment of more than $40mn to fund 13 energy projects led by Indigenous communities across the country, aiming to improve energy efficiency and increase local renewable energy use.
The German Ministry of Economy plans to significantly expand aid aimed at reducing industrial electricity costs, increasing eligible companies from 350 to 2,200, at an estimated cost of €4bn ($4.7bn).
A major electricity blackout paralyzed large parts of the Czech Republic, interrupting transport and essential networks, raising immediate economic concerns, and highlighting the vulnerability of energy infrastructures to unforeseen technical incidents.
French greenhouse gas emissions are expected to rise by 0.2% in the first quarter of 2025, indicating a global slowdown in reductions forecast for the full year, according to Citepa, an independent organisation responsible for national monitoring.
The Republican budget bill passed by the U.S. Senate accelerates the phase-out of tax credits for renewable energies, favoring fossil fuels and raising economic concerns among solar and wind industry professionals.
Rapid growth in solar and wind capacities will lead to a significant rise in electricity curtailment in Brazil, as existing transmission infrastructure remains inadequate to handle this massive influx of energy, according to a recent study by consulting firm Wood Mackenzie.
In April 2025, fossil fuels represented 49.5% of South Korea's electricity mix, dropping below the symbolic threshold of 50% for the first time, primarily due to a historic decline in coal-generated electricity production.
The US Senate Finance Committee modifies the '45Z' tax credit to standardize the tax treatment of renewable fuels, thereby encouraging advanced biofuel production starting October 2025.
According to the 2025 report on global energy access, despite notable progress in renewable energy, insufficient targeted financing continues to hinder electricity and clean cooking access, particularly in sub-Saharan Africa.
While advanced economies maintain global energy leadership, China and the United States have significantly progressed in the security and sustainability of their energy systems, according to the World Economic Forum's annual report.
On the sidelines of the US–Africa summit in Luanda, Algiers and Luanda consolidate their energy collaboration to better exploit their oil, gas, and mining potential, targeting a common strategy in regional and international markets.
The UK's Climate Change Committee is urging the government to quickly reduce electricity costs to facilitate the adoption of heat pumps and electric vehicles, judged too slow to achieve the set climate targets.
The European Commission will extend until the end of 2030 an expanded state-aid framework, allowing capitals to fund low-carbon technologies and nuclear power to preserve competitiveness against China and the United States.
Japan's grid operator forecasts an energy shortfall of up to 89 GW by 2050 due to rising demand from semiconductor manufacturing, electric vehicles, and artificial intelligence technologies.
Energy-intensive European industries will be eligible for temporary state aid to mitigate high electricity prices, according to a new regulatory framework proposed by the European Commission under the "Clean Industrial Deal."
Mauritius seeks international investors to swiftly build a floating power plant of around 100 MW, aiming to secure the national energy supply by January 2026 and address current production shortfalls.
Madrid announces immediate energy storage measures while Lisbon secures its electrical grid, responding to the historic outage that affected the entire Iberian Peninsula in late April.
Indonesia has unveiled its new national energy plan, projecting an increase of 69.5 GW in electricity capacity over ten years, largely funded by independent producers, to address rapidly rising domestic demand.
French Minister Agnès Pannier-Runacher condemns the parliamentary moratorium on new renewable energy installations, warning of the potential loss of 150,000 industrial jobs and increased energy dependence on foreign countries.