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ENERGY

Spain defends MidCat gas link after Macron brush-off

Building a gas pipeline across the Pyrenees mountains is "in Europe's interest" and a project that Spain will vigorously defend despite top-level French opposition, Spain's Energy Minister said Tuesday.

spain france energy midcat
Spanish Energy Minister Teresa Ribera said Macron "doesn't like the idea of a project he sees as being in the past", referring to the older MidCat plans. Photos: Ludovic MARIN, John THYS/AFP

With Russia withholding gas deliveries to most of Europe in reaction to sanctions over its invasion of Ukraine, there has been a resurgence of interest in a link to bring in much-needed supplies from Spain to the rest of the continent.

Plans for such a pipeline, known as MidCat, emerged a decade ago but were dropped in 2019 over regulatory and funding issues.

But Madrid is now pushing hard for the revival of the project with the full backing of Berlin, which has now had Russian gas deliveries via a key pipeline shut off for the indefinite future.

With six terminals, Spain has the biggest infrastructure in Europe to accept liquefied natural gas brought in by ship.

But there is currently only a very small link between the Spanish and French natural gas networks, limiting the possibility for Spain to send supplies onward to central Europe.

The MidCat would boost that capacity, but France has shown little interest in the project.

“There is no obvious need for it, there is no evidence of any need for it today nor in the future,” French President Emmanuel Macron said on Monday after talks with German Chancellor Olaf Scholz.

“I don’t understand why everyone is getting all worked up about (this pipeline) and saying it would resolve the gas crisis: it’s not true,” he told reporters.

“I’m not convinced we need more gas interconnections, which would have a bigger impact on the environment and ecosystems.”

His remarks did little to dampen Spain’s enthusiasm for the pipeline, with Energy Minister Teresa Ribera telling Onda Cero radio it was “in Europe’s interest”.

“There will be a debate, I don’t think we can rule it out solely based on a declaration by one country,” she said.

Although the MidCat pipeline would initially carry gas, Spain says it would ultimately be able to carry green hydrogen — a key energy source for the future.

Spain is hoping improved pipeline connectivity will open the way for it to become the European Union’s new hub for green hydrogen.

In his remarks, Macron raised “environmental concerns” about the pipeline, “which are not without foundation”, he said.

“All the experts are saying it’s wrong to say that a gas pipeline would be able to transport hydrogen in the future, that would have to involve a lot of extra heavy work,” he said.

But Ribera said Macron “doesn’t like the idea of a project he sees as being in the past”, referring to the older MidCat plans.

“In reality, what we’re saying is that if this third gas interconnection is built, it must be a pipeline that’s ready for the future,” she said.

La Vanguardia newspaper didn’t mince its words about the French leader’s “unpleasant” comments.

“Macron does not like the closer friendship between Spain and Germany,” it wrote.

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ELECTRICITY

The cheapest rates Spain’s electricity companies don’t want you to know about

Finding a cheaper tariff is one of the best ways to counteract skyrocketing electricity bills, but a leading consumer watchdog has warned Spain’s electricity providers are not always open to telling customers about the best deal they can get.

The cheapest rates Spain's electricity companies don't want you to know about

Like in many parts of the world, inflation triggered by the war in Ukraine has made the energy market incredibly volatile and sent household electricity bills soaring in Spain. The average bill reached €158 in August, an eye-watering increase of over 60 percent compared to 2021.

To give you some idea of just how much prices have risen in Spain, in August of 2020 the average electricity bill was €64, in 2021 it was €93, and in August 2022 €158.

According to recent figures from Eurostat, electricity bills in Spain have risen eight times more than in France and four times more than in Germany. Whereas the average Spanish household paid 60 percent more in August compared to 2021, in France it rose by just 7.7 percent and in Germany 16.6 percent.

The Spanish government has tried various methods to ease the burden on households. In June the tax (IVA) on electricity bills was cut from 21 percent to 10 percent, and then it was quickly reduced again from 10 percent to 5. The European Commission agreed to cap gas used for power generation at €40 per megawatt-hour known as the ‘Iberian Exception’, with the price limit projected to average out at €50 over the coming 12 months.

READ MORE: Spain to cut electricity tax by half to ease inflation pain 

The Spanish government predicted the measure — which will be in effect until May 31st 2023 — would lead to a reduction in household energy prices of up to 20 percent, yet it has done little to limit the rise of electricity bills so far.

READ MORE:

Unsurprisingly, many Spaniards are now seeking ways to cut down on their bills, whether it be by using the washing machine at certain times to take advantage of off-peak hours, or limiting their use of air-conditioning.

Another method of saving on electricity costs is finding cheaper tariffs.

Yet finding the more affordable rates can be difficult to do, and often the electricity companies make them deliberately difficult to get hold of. That’s according to Spain’s Organization of Consumers and Users (OCU), which have identified some of the cheapest tariffs on the market today. 

Understanding peak and off-peak

Spanish electricity companies offer different prices depending on the time of day you use your electrical appliances. The tariffs are often broken down into hora punta (peak time), hora llana (flat time), and hora valle (off-peak).

If you live in Spain, this is why you might’ve heard the incessant spinning of washing machines through the night in recent months. Nowadays many people simply wait until the weekend, when the tariffs are always off-peak.

So, if you’re thinking about switching, which are some of the best electricity rates you can find in Spain?

Repsol Tarifa Largo Plazo

According to the OCU, the Repsol Tarifa ‘Largo Plazo’ can only be found via this link, because the offer is actually hidden on the Repsol website. And for good reason, too. The Repsol tariff is among the best offers the  market in terms of price per kWh consumed, although the power for off-peak time is a little more than some of the other offers on the list.

The tariff is non-permanent, with a fixed price rate for 3 years.

kWh Prices

Price per kWh consumed: €0.17/kWh.

Peak hours: €29.90 per kW.
Off-peak hours: €29.90 per kW.

Iberdrola Online Plan

The Iberdrola Online Plan, which you can find here, is only available until September 30th, so be sure to take advantage of it as soon as possible.

Using Iberdrola’s online tool, you can select a kW rate and it will give you price estimates for the different values. If you’re environmentally minded, Iberdrola’s Online Plan claims to use 100 percent green electricity, so you can enjoy renewable energy and reduce your CO2 emissions.

There’s also 14 hours of savings during the night up until mid-morning.

This plan is only for customers who take out the contract online, as the name suggests, and features entirely electronic billing.

kWh Prices

Price per kWh consumed: €0.159353 + metered gas cost (in August €0.161529 /kWh).
Price per kW contracted during peak hours (fixed term): €30.66747.
Price per kW contracted during off-peak hours (fixed term): €4.104338. 

Not the prices will be revised in line with the Consumer Price Index (CPI) on January 1st. 

Octopus Energy

Octopus Energy tariffs are not permanent and is all done online, which allows you the flexibility to move around again in the future if you come across a better offer. Octopus offer two fixed prices:

Octopus 3: price per kWh consumed during peak hours is 0.254 €/kWh; at flat time 0.209 €/kWh; and at off-peak hours 0.185 €/kWh.

Octopus Relax: price per kWh consumed of 0.212 €/kWh.

kWh Prices (both Octopus tariffs) 

Peak hours (fixed term): €32.85.
Off-peak hours (fixed term): €6.57.

Iberdrola Special Plan

The Iberdrola Special Plan offers a 15 percent discount during the first year, and its kWh prices for both on and off-peak are competitive with other cheaper tariffs.

kWh Prices

Price per kWh consumed: €0.178662 (minus the 15 percent extra discount) but plus a gas metering cost (which in August was €0.161529/kWh.)

Peak hours (fixed term): €30.52381
Off-peak hours (fixed term): €3.512901

Endesa ‘One Luz’ Tariff 

Endesa is currently offering the ‘One Luz’ tariff, which offers a 10 percent discount on consumption and an additional 10 percent reduction throughout the first year.

kWh Prices

Price per kWh consumed: €0.189 (plus the 10 percent +10 percent discount) + the metered gas cost (which in August was €0.161529/KWh).

Peak hours (fixed term): €33.86.

Off-peak hours (fixed term): €7.9973

Total Energies

Another interesting option is Total Energies, who offer entirely personalised pricing plans. Basically, Total Energies want to attract your business by outdoing your current rate. In order to receive a quote and see how it stacks up against your current provider, you simply upload a copy of your current bill to the website and Total Energies make an offer, often bettering your current rate.

If they make an offer, Total Energies promise a discount lasting for 4 years, although the price on which the discount is fixed is only valid for 12 months.

READ MORE: 11 ways to cut costs as Spain’s electricity rates beat all-time price records

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