The war in Ukraine has not gone unnoticed at any time and its consequences have already begun to be felt in many countries on the European continent. In the case of Spain, the country is preparing to face the great effects that this war could cause, especially in the energy field. In this article we will explain the energy situation in Spain in 2022, let’s get to it!
What is happening with Spain and the energy system?
Spain has already assimilated that the consequences of this conflict, which is becoming more and more widespread, will have global consequences. Countries that were trying to get back on their feet after the pandemic’s heavy blow could have their economic recovery cut short, and that is not a good thing.
For Spain, the price of gas soared by more than 30% on the same day the conflict broke out and oil climbed to 100 dollars per barrel.
As the prices of these raw materials rise, Spaniards are expected to have to pay a very high energy consumption bill. This situation is currently being experienced by Spaniards as a reminder of what Putin’s attacks have generated.
As a result, inflation has been rising steadily, reaching up to 6.5% due to increases in gas prices and energy dependency.
For the time being, Spain is calm: Algeria is its main gas supplier and the ministers stressed that the supply is guaranteed. Similarly, 5% of Spain’s oil imports come from Russia. However, the armed conflict has meant that prices have risen, leading to skyrocketing inflation.
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Is a power outage expected?
The first thing that comes to mind is the possibility of an energy supply cut. It is no secret that Russia is the world’s largest gas producer and the second largest oil exporter after Saudi Arabia.
Forty percent of the gas used by the European Union comes from Russia, which means that Europe could have a hard time if Russia decides to make the cut. In Germany, for example, dependence on gas supplies is no less than 60%.
Spain, in this case, would not be so badly off, since the supply it receives from Russia is 6% and it has 6 liquefied gas regasification plants. For the country, the cut would not be a problem, analysts say, but this does not make it immune to ruthless oil and gas price rises.
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Price increases are ALREADY happening.
So far, the flow of gas and oil is running smoothly, but their price has gotten out of control, which may further complicate the situation. Its 60% increase has led to increases in electricity, which is rising at quite disturbing peaks, its price is above 200 megawatts/hour.
At this point, the domino effect begins: if gas goes up in price, so will electricity; if electricity goes up, so will inflation. So far, the products in which price increases may be reflected are transportation, electricity bills, food, heating services, among others.
Although Spain has made every effort to be as self-sufficient as possible, it is not without concerns. Recall that its economy depends on consumption and this was the key to its economic recovery after the pandemic.
And what about rising oil prices and Spain?
Spain is one of the countries most likely to be affected by the oil price roller coaster.
At least 35% of the energy consumed in Europe comes from oil, but in the case of Spain, this percentage is more than 40%. This would mean that the increase in the price of oil would cause Spain to suffer more than its neighbors.
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Spain is a strong country with a challenging economy, as are other member countries of the European Union. The consequences of the war will continue to be seen as long as the conflict drags on, so it is best to keep the country as prepared as possible for any eventuality.
To stay informed on these topics and more, do not hesitate to enter our TAS Consultancy blog. There, you will be able to find out about the current reality of the Spanish territory and much more.