The end of record high Spanish energy prices is not yet in sight

by Deborah Cater
Record Spanish energy prices remain for forseeable future

The government is not using an emergency procedure to reduce the extremely high Spanish energy prices with immediate effect. It chooses to realise this through regular legislation. As a result, there is no direct effect.

Even before April, Spanish energy prices reached historically high levels. In the past year, electricity has become 45% (about €25 on average per month) more expensive. The Spanish consumer organisation FACUA warns electricity prices will rise further. Moreover, a reform has been implemented in the electricity bill, which means that they are now determined on the basis of off-peak, average and peak rates.

Major social and economic consequences

Many Spaniards struggle to pay their electricity bills. About 7.6% of the Spanish population suffers from energy poverty. They cannot heat their houses in the winter. The economic and social consequences of further price increases will therefore be significant.

No urgency

Last week, Spain’s Council of Ministers announced a reform which aims to cut Spanish households’ electricity bills by 4.8%. The reform should also prevent energy suppliers from passing on the higher costs of their CO2 emissions to consumers.

However, under the normal parliamentary procedure, this reform could take months. The government could have opted for a royal decree (el real decreto-ley) which they can implement urgently in exceptional situations. Despite the fact this accelerated procedure has already been used several times during the current parliamentary term, the Spanish government does not seem interested in it now.

ASSSA - health insurance in Spain

Earlier (2018), the Spanish government opted for a royal decree to lower the consumer’s electricity bill. This through an exemption from energy tax (7%) for a period of six months.

Why not a royal decree now?

Despite the fact there is an emergency situation, legal experts emphasise a royal decree may only be issued in exceptional circumstances. The Sánchez government has done this 89 times so far.  The Constitutional Court reprimanded the government as a result. 

According to various experts, the fact the Spanish government now does not want to make use of a royal decree could have a political as well as legal background. A royal decree has to be approved by the House of Representatives within one month of it being issued. And it is expected that not all Spanish political parties will agree to the bill. It is also assumed energy companies will object to such a measure.

New law delayed

Either way, analysts say a new regular law won’t be able to come into effect until 2022. In the meantime, energy specialists think energy prices will fall due to the rise of renewable energy. A solution may be in the offing, but the Spanish consumer is not helped by it now.

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