Dissecting the ‘Iberian exception’
Is the Spanish gas price cap a success or failure?
The Spanish press is outraged. The government’s vaunted gas price cap — known as the ‘Iberian exception’ — has failed to lower energy bills. In fact, Spanish and Portuguese consumers seem to be paying more than they were before the mechanism was introduced. But there are mitigating circumstances: namely, a heatwave-induced power demand spike, and soaring EU gas prices. The upshot is an inconclusive outcome of the excepción ibérica, leaving the merits of intervention open to interpretation. So where does this leave hopes for meaningful reform of broken EU energy markets?
For a background briefing on marginal pricing in EU electricity markets, see ‘Clear as mud’ from May
If you’re curious about the wider EU discussion around electricity market reform, this hot-take is a good starting place
Today’s article dissects the impact of the gas price cap mechanism…