Spain will seek European Union permission to extend the temporary cap on base prices for natural gas and coal used by power plants until at least the end of 2024, said Minister of Energy Teresa Ribera, Reuters reported.

The so-called Iberian Mechanism, in place in Spain and Portugal after the two countries reached an agreement with the European Commission in the spring of 2022, is a collaborative scheme through which the electricity costs of fossil fuel power plants are subsidized in an attempt to reduce the price increase of fossil fuels. electricity.

The system currently expires on May 31st.

The EU electricity grid needs to be reformed to reduce price volatility and make electricity cheaper, she said.

She added that mild temperatures in the fall and early winter have helped drive prices down and maintain gas storage levels in Europe.

Electricity prices in Spain have been steadily declining since they peaked in August, due in part to increased wind power generation.