Lots of wind, little cold and gasoline in tanks Europe Filled makeover led to the perfect cocktail. electricity price settling in the wholesale market at 124.24 euros per megawattnovember half hour this Lowest price since August 2021, Russia started to press the gas tap but not yet started the war. But the ‘good’ is short-lived and this Wednesday electricity is once again breaking the 200 euros-per-megawatt-hour limit it left behind in mid-October.
“Prices started to drop in mid-November and fell sharply after gas prices fell and the wind started blowing. But now the wind has stopped and the gas is rising again”, explains Francisco Valverde, consultant to Menta Energía. The expert estimates that this month’s bill will be the cheapest of the year, at a price of 70.5 euros for a consumer with 4.4 kilowatts of contracted electricity and a consumption of 3,500 kilowatt-hours per year. The same consumer paid his most expensive bill in February with 144.3 euros.
These data affect only nine million consumers in the regulated market, which has the only Voluntary Price for Small Consumer (PVPC) rate for social bonuses to rent. In the free market the conscience is endless, it can be higher or lower than the PVPC rate as it is a price agreed between the marketer and the consumer.
And what will happen in December? “The last month of one year and the first month of the next is usually a time when there is a lot of wind power, and this theoretically translates to a cheaper wholesale price than other technologies. But it is usually one of the most expensive months in the wholesale market.”, adds Valverde. Add to this the arrival of cold weather and the rise in gas prices due to how much storage is consumed in Spain and elsewhere. The only thing that can drive prices down a bit, Valverde says, will be new renewable energy generation, because around 4,000 new megawatts of wind and solar power were deployed last year.
Iberian exception
The price of electricity in Spain remains below the figures that began in mid-June, when the electricity market for the rest of Europe was capped at 40 euros per megawatt hour on gas. Thus, the average price in November in France is 191.88 euros, in Germany 173.63 euros, compared with 124.24 euros per megawatt-hour in this country; 180.41 euros in Belgium and 224.51 euros in Italy.
The duration of this mechanism is almost a year until 31 May 2023, but the upper limit of 40 euros per megawatt hour is only maintained for the first six months, which will expire on 15 December. As of that day, the maximum reference will increase by five euros per month, up to 70 euros per megawatt-hour at the end of the period. This means that by mid-December, the gas cap will rise to 45 euros per megawatt-hour, meaning less protection, because the price resulting from the wholesale market auction will be higher despite compensation being paid to the power plants. ie the burn gas should be lower.