The European Commission gave the green light this Friday for Spain to implement a multi-million euro anti-blackout mechanism to strengthen the electricity supply and avoid episodes like the one last April, when much of the Iberian Peninsula was left in the dark. The figures are enormous: the system approved under the EU state aid rules will cost 900 million annually, that is, 9 billion for the 10 years it is expected to last.
This is a proposal from the Spanish Government that only required the final authorization from Brussels and that, under this system, will allow payments to energy companies to inject electricity into the market or to industries to reduce consumption. In other words, it will allow Pedro Sánchez’s Executive to finance large energy companies with this money in exchange for increasing electricity production and carrying out additional injections into the market when necessary, as long as it is required by the operator Red Eléctrica.
Also read
These injections and their scope will be determined through auctions, and will be reflected in consumers’ electricity bills. In addition, it will also allow payments to large industries to reduce demand. The Commission has determined that this is a “necessary” and “proportionate” measure, with safeguards to prevent prices for consumers from rising excessively or cross-border competition from being distorted.
Unlike older mechanisms, this system will be open to “all projects, existing or new, that offer availability in times of scarcity.” These include new and existing generation projects, energy storage, and demand response operators, that is, those who reduce their consumption in times of scarcity.
“Now more than ever, we need a secure electricity supply across Europe. Capacity mechanisms can help ensure this security, provided they are designed in such a way as to avoid distortions of competition in energy markets,” said the Economy Commissioner, Valdis Dombrovskis.
“This new mechanism will help ensure that Spain has enough energy during periods of scarcity. Capacity providers will be selected through a competitive bidding process, which will guarantee effective competition,” he said in a statement.
The idea was born in 2023, when the current Executive Vice-President of the European Commission, Teresa Ribera, was heading the Ministry of Ecological Transition. However, Ribera has had nothing to do with this matter because she recused herself from the capacity mechanism upon starting her community mandate. Therefore, it was an idea prior to last year’s blackout, but it did highlight the need for Spain to equip itself with new emergency safeguards.
