EU approves Spanish and Portuguese measures to lower electricity prices amid energy crisis

The European Commission has approved an amended measure put forward by Spain and Portugal that aims to lower wholesale electricity prices in the Iberian market by reducing input costs of fossil fuel-fired power stations. The measure has been approved under Article 107(3)(b) of the Treaty on the Functioning of the European Union until December 31, 2023. Electricity producers receive a payment that operates as a direct grant to finance part of their fuel cost. The measure is financed by part of the “congestion income” and an adjustment cost imposed by Spain and Portugal on buyers benefiting from the measure. The aim is to reduce production costs and ultimately the price in the wholesale electricity market for consumers.