The year 2025 entered and the fiscal reduction of electricity ended in Spain, the same one that remained for three and a half years. We have gone from 5% to mitigate the effects of the energy crisis, to return to its general type of 21%. However, Brussels have other plans.
Brussels measure. The European Commission has presented an action plan to make energy more affordable in the EU. This includes a series of measures, such as energy reduction, in order to relieve electricity and energy costs for citizens and companies. The most outstanding measure is the proposal to apply a minimum VAT of 5% in electricity.
Reduce VAT. The objective is based on reducing short -term costs for consumers and companies. The energy commissioner, Dan Jørgensen, has estimated energy savings of 45,000 million in 2025, which will increase up to 130,000 million a year by 2030 and up to 260,000 million annually by 2040.
In addition, from the EU they seek to “turn the current situation” characterized by dependence on foreign fossil fuels, the existence of a fragmented electrical system and a continuous increase in system costs.
Gas dependence. The European Union has accelerated the emptying of its gas reserves in the last three years due to the energy crisis. The gas is being one of the great paradoxes of the war, because while European funds are destined for Ukraine to help it, gas and oil are still bought from Russia. This dependence increases the cost of electricity production, especially when gas is used as a primary generation source.
For its part, the Price of gas has returned to high levels similar to those of 2022, especially affecting industries such as chemistry and metallurgical, which depend on both and energy source and raw material. This increase has been driven by cold temperatures and a lower renewable energy generation. The forecasts indicate that, if the demand remains high and the cold climate persists, prices could continue to rise, which would impact the competitiveness and inflation of industrial products in Europe.
So renewables? Another point is clean energies, Europe has a great renewable capacity, but as We have mentioned in WorldOfSoftware, there are two factors that the EU still has to resolve: the famous “Dunkelflaute”, a period without wind or sun, which reduces the generation of renewables, and an aged electric grid, which hinders the transmission. These factors have made the dependence on fossil sources increase, raising costs. The consequences are reflected in a more volatile electricity market and the impact on consumers.
And what happens in Spain? The year began with a series of fiscal changes in the country, such as VAT increase. This return to previous tax levels (21%) after the fiscal reduction implemented to mitigate the energy crisis has raised short -term costs. Although this has not been the only rise, they have also increased the Electricity Tax (IEE) and the Tax on the Value of Electric Power Production (IVPEE).
However, a progressive reduction system in the social bonus for vulnerable homes has been proposed, which could mitigate the effects on the most affected by the rise. On the other hand, the fees options, such as the PVPC rate and fixed or variable rates in the free market, will allow consumers to adapt their consumption and select a rate that best suits their needs and patterns of use, which can help optimize costs despite fiscal increases.
Although Spain has advanced towards a greater proportion of renewable energy, factors such as tax rise, dependence on fossil fuels and an aging of the energy network still affect electricity costs
Image | Pxhere
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