Last month, the European Commission gave its approval for an exception to their rules to allow Spain and Portugal to separate the price of gas from electricity for the next 12 months. The decision comes as energy companies around the globe are increasing monthly bill costs, with the price cap in the UK increasing by £693 from April 1.
The Spanish and Portuguese governments had been calling on Brussels since last summer to implement measures to reduce electricity prices which have skyrocketed as a result of an increased demand for gas, supply chain issues, and global tensions including the Russia-Ukraine war.
Typically, EU member states trade electricity on a wholesale market based on a system of marginal pricing which means everybody gets the same price for the electricity they are producing regardless of how it is produced.
The EU Commission states: “This model provides efficiency, transparency and incentives to keep costs as low as possible.”
But, the decision was made to allow Spain and Portugal to break these rules and allow them to cap prices to a maximum of €30 [£25.36] per megawatt hour because of their low interconnection with the rest of the world.
Spain’s Ecological Transition and the Demographic Challenge said: “All consumers will benefit from this agreement. The Commission has committed to working actively to increase interconnection for the Iberian Peninsula with the rest of Europe.”
But the political agreement has left leaders of other European countries questioning their rights to also cap energy prices.
Jean-Luc Melenchon, a member of the National Assembly of France, wrote on Twitter: “Spain and Portugal have decided to freeze electricity prices. This is a concrete disobedience to EU regulations.
“The EU said ‘We understand’. So it will understand that we cannot obey certain rules.”
He went on to say: “In a democracy, the last one to win has the final say.
“If we win, our programme will be implemented. Nothing will be negotiated with the head of state. When there is a problem, the Parliament will decide.”
Mr Melenchon’s comments come as The New Popular Ecological and Social Union (NUPES), a left-wing political coalition run by Jean-Luc Melenchon, present a “shared programme of government”.
On Thursday, May 19, Melenchon along with leaders from the PS, EELV and PC, reaffirmed their ambition to win the legislative elections.
In the lead up to the elections, NUPES have unveiled the 650 proposals of their common programme.
Fifteen days after the historic agreement between LFI, EELV, the PS and the PC, and a month before the election, Jean-Luc Melenchon unveiled the “shared program of government” of NUPES at a joint press conference where he shared the stage with the first secretary of the PS, Olivier Faure, the boss of EELV, Julien Bayou, but not the communist Fabien Roussel, who retained in his constituency and was represented by his spokesman Ian Brossat.
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Mr Mélenchon reaffirmed his ambition to win the legislative with the NUPES to impose a cohabitation to Emmanuel Macron and become Prime Minister.
The signatories of the agreement say they are “ready not to respect European rules, to disobey some, to temporarily derogate others – when they are in contradiction with the application of our program. But on NATO, the PS declares itself in favour of remaining in the organisation while LFI and the PC want France to leave its integrated command.