Spain to introduce more measures to protect energy prices

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Spain to introduce more measures to protect energy prices

High-voltage power lines and an electricity pylon are pictured at dusk outside of Madrid, Spain, September 29th, 2021. MADRID, Oct 14 Reuters - Spain plans to introduce additional measures to a controversial bill that claws back profits from power companies in a bid to protect consumers from sky-high energy prices, Energy and Environment Minister Teresa Ribera said on Thursday.

Companies including wind energy leader Iberdrola IBE.MC have complained to the European Union about the decree, which was part of Spain's response to a global spike in electricity prices caused partly by high demand from economies recovering from COVID - 19, and low gas stocks. The bill originally envisaged the elimination of some 2.6 billion euros from the company earnings, but the cost is now likely to be higher because it is linked to gas prices which have climbed even more since it was introduced.

Ribera told lawmakers she hoped to come up with additional measures in the coming weeks, adding that on Twitter this would give more protection to vulnerable consumers and reasonable prices to industry She gave no further details on what the additional measures could be but shares in the most-affected companies had recovered some of the ground they lost since the decree was unveiled.

Iberdrola shares traded up more than 2% after having previously shed 7.5% of their market value since mid-September. Enel unit Iberdrola ELE.MC which has run only in Spain, unlike endesa ele.MC, increased more than 3%, having previously lost more than 10%.

It is a positive message to give regulatory security and speed up energy transition, but my question is whether the approved regulation could bring about precisely the opposite, said RBC Capital Markets director of European utility research.

I hope these words signal a return to more reasonable regulatory measures, he added.

After a heated debate, Congress ratified the Decree with 182 votes in favour and 150 against, although the regulation was technically well in vigor.