Portugal and Spain’s governments profess to being concerned that recent ‘abnormal’ electricity price rises are turning power into a luxury item for an increasing number of households.
The astonishing 20% rise in recent weeks in wholesale electricity prices across the Iberian market is worrying the two countries' energy chiefs so much that they have done what all politicians do when they lack answers, they have "set up a working group, to study the situation.”
There is a possibility, however small, that each will move forward with reforms in the electricity market.
This announcement was made by Portugal’s Secretary of State for Energy, Jorge Seguro Sanches, and his Spanish counterpart João Dominguez Abascal.
This rise in tariffs "is not an easy situation to explain," said Abascal
"Considering that our dams have a lot more water, it does not make sense that electricity prices are 20% higher compared to a year when there was a drought," said Sanches.
Asked about the influence of the electricity companies on the problem, Abascal claimed that "the high prices are due to imperfections in the market, and not by any bad practices of the companies."
"The main objective is to ensure competition and smooth operation of the market," but not too urgently as neither committed to a deadline for the delivery of opinions by regulators.
"For us it is an urgent matter," said Seguro Sanches, aware there is a general election next autumn so he would hope to have some voter friendly news to coincide to the pre-election period.
Depending on the conclusions of this working group, the governments might move forward with reforms in the electricity market, "This is very important. And we do not exclude a change of rules if we reach the conclusion that the market is not working. The most important thing is to serve consumers," said Portugal’s Secretary of State for Energy who remains quite relaxed that his government charges domestic customers the top rate of 23% VAT on their energy bills.
Comments
28.25% is controlled by China's government:
China Three Gorges (Europe), S.A. owns 23.27% of EDP and CNIC Co., Ltd owns 4.98% Orise, S.a.r.l. is fully owned by Kindbright Holdings Corp. Limited, which in turn is fully owned by CNIC Co., Ltd. (formerly Guoxin International Investment Co., Ltd), which in turn is fully owned by People's Republic of China.
According to paragraph 1(b) of article 20 of the Portuguese Securities Code, which dictates the aggregation of China Three Gorges and CNIC Co., Ltd.'s shares, a total of 28.25% of voting rights are attributable to companies controlled by the People's Republic of China.
Only 2%of EDP is owned by Chinese investors.
Energy prices should be the lowest in Europe.