The price of electricity fell to 273.43 euro/MWh

For PVPC customers, this price is add the average auction price in the wholesale market to the compensation that demand will pay to the combined cycle power plants with the application of the Iberian exception to limit the price of gas for electricity generation.

At the auction, the average electricity price in the wholesale market – the so-called ‘pool’ – will be 149.86 euro/MWh this Thursday, 2.89 euro less than today’s price (152.75 euro/MWh). A 1.89% drop, according to data from the Iberian Energy Market Operator (OMIE) collected by Europa Press.

this maximum electricity price for this, between 00:00 and 01:00 on 23 June, 186.5 Euros will be registered./MWh will be between 18:00 and 19:00, with a minimum of 124.32 euro/MWh for the day.

To this price of the ‘Pool’, 123.57 Euro/MWh compensation was added to the gas companies, which was 129.37 Euro/MWh this Wednesday. This compensation has to be paid by consumers benefiting from the measure, consumers of the regulated rate (PVPC), or consumers with an indexed rate despite being in the free market.

5.8% less without action

In the absence of the ‘Iberian exception’ mechanism that limits the gas price for electricity generation, the electricity price in Spain would average 290.26 euros/MWh; this is almost 17 euro/MWh more than compensation. Thus, on average, customers of the regulated rate will pay about 5.8% less.

Compared to a year ago, the electricity price for customers of the adjusted rate for this Thursday is 204.21% higher than the 89.88 Euro/MWh the pool marked as an average for 23 June 2022.

The Iberian mechanism, which came into force on 15 June, Limits gas price for electricity generation to an average of 48.8 Euros per MWh for a period of twelve months, thus covering the next winter when energy prices are more expensive.

Specifically, the ‘Iberian exception’ sets a path for natural gas for electricity generation at a price of 40 euros/MWh in the first six months, followed by a five-euro/MWh monthly increase until the end of the measure.

Government planned 15% reduction in receipt

In its calculations, the government capped the reduction in receipt for the average electricity consumer to 15.3%. Adopted the rate regulated by the PVPC during the 12-month period after the application of the approved cap on electricity generation from natural gas, as stated in the impact report supplied with the Decree and to which Europa Press has access.

For the industrial consumer who is fully exposed to the ‘spot’ price, the Government estimated a decline of between 18% and 20% in the first month of the mechanism, oscillating between 15% and 17% and between 13% and 15%. last.

‘Pool’ prices have a direct impact on the regulated rate – the so-called PVPC – at which nearly 11 million households are covered in the country, and serve as a benchmark for the other 17 million that are shrinking their supply. in the free market.

In fact, the National Markets and Competition Commission (CNMC) confirmed that in 2021, around 1.25 million people switched from PVPC to a free market rate at a fixed price, within the framework of the energy’s upward spiral.

VAT discount on electricity

Head of Government Pedro Sánchez announced at Congress this Wednesday that the decree that the Cabinet of Ministers will pass this Saturday to expand measures to mitigate the economic effects of the war in Ukraine will include a reduction in VAT on electricity from 10 percent to 5%.

A year ago this tax reduction from 21% to 10% was approved and will now be reduced to 5%. “With this, we’re going to protect our country’s families,” Sánchez said, urging other political forces in Congress to “rather than criticize and complain” to support the ratification of this new executive order.