Spain takes aim at energy firms as bills surge

Photo: EPA

Spain's left-wing government agreed emergency measures to cut spiralling energy bills as electricity prices climb to record levels, news wires reported. It aims to channel €2.6bn in energy company profits to consumers and slash electricity taxes over the winter months, according to the BBC.

Energy bills are climbing across Europe as gas prices soar in particular, but it was Spain that moved first. It has seen some of the highest energy prices in Europe in recent weeks, prompting protests over the summer in a number of cities. Wholesale electricity prices rose during the summer months and have continued to climb, with reports of a record high of €172.8 per megawatt hour for Wednesday, 12.6% up on Tuesday.

Socialist Prime Minister Pedro Sánchez promised Spaniards that under his "shock plan" they would pay no more for their electricity than they did in 2018 plus inflation. Under the plan electricity taxes are being cut temporarily from 5.1% to the minimum 0.5% allowed under EU rules. Furthermore windfall gains for energy firms will be redirected to consumers and paying for infrastructure until next April.

Spain will raise funds by selling off a further €900m in carbon emissions permits this year, on top of the existing €1.1bn. Price caps on natural gas mean bills for 10.5m households will go up by around 4.4% instead of an estimated 28%. VAT on bills was already reduced in July. The hit shares in Endesa in particular, which slumped 5.1% on Tuesday.

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