Spain’s prime minister Pedro Sánchez said his country was on “the right side of history” when it comes to how it has handled the economic and social costs of previous energy crises.

He also accused fellow leaders of trying to exploit the crisis and rising oil and gas prices to roll back EU climate policies. 

“Unfortunately, some governments are using this crisis and the rise in electricity prices to weaken and undermine climate policies,” he said on arrival at the EU leaders summit in Brussels on Thursday (19 March). 

Ahead of the summit, ten member states, including Italy and Poland, called for changes to the EU’s carbon pricing system, saying industries already struggling with high energy costs could lose competitiveness if carbon prices keep rising.

Most of the signatories want to extend the existing free pollution allowances beyond 2034, or slow their planned phase-out beginning in 2028.

However, Italy’s rightwing PM Giorgia Meloni came to Brussels to scrap the system outright. 

“It is a measure that is needed now,” she told the press on Thursday.

But Sánchez said these governments had drawn the wrong conclusions from the crisis. 

Spain, where renewables now account for roughly 60 percent of electricity generation, had power prices of around €14 per megawatt-hour last weekend, he noted. 

“In Italy, Germany, and France, prices were above €100 per megawatt-hour,” he told the press. “That is no coincidence.”

“Spain is showing how commitment to renewables ensures our citizens, our industries and our businesses are experiencing less of an impact from gas prices,” said Sánchez. 

Research from energy think tank Ember confirms that Spain’s low costs are “largely” a function of the country’s strong solar and wind growth in recent years. 

Since 2019 the country has doubled wind and solar power, growing at a faster clip than any other country except Germany, a power market twice the size.  

This has made Spain considerably less vulnerable to fossil-fuel shocks than its European neighbours.

In Spain, gas influenced the price of electricity only 15 percent of the time this year, Ember reported last week, compared to 89 percent of the time in gas-reliant Italy. 

The Italian alternative

Italy has followed a different path and recently instituted a decree that reimburses power plants for the EU emission costs.

At the European level, Meloni told the Italian parliament she would ask Brussels to suspend or pause the system entirely “at least until fossil-fuel prices return to the levels they were at before the Middle East crisis.” 

But experts have said that this would have little effect because carbon prices make up the smallest part of average power bills, representing only 10 percent — less even than other costs such as VAT.

“The effect would be very small,” Beatrice Petrovich, senior energy analyst at Ember, told EUobserver. 

Even if it lowers costs for power plants somewhat, “the money comes from levies paid by families and small businesses,” she added. “And there is no guarantee that discounts at the power-plant level would be passed on to consumers. The Italian system isn’t robust in that.”