The government plans to intervene in the electricity market and push prices up. A special cabinet session is scheduled for next Friday to approve a maximum price setting mechanism for gas and coal used to generate electricity, aiming to curb price increases. As the countdown begins for this measure, the wholesale electricity market has already raised the maximum legal price starting this Tuesday, in line with European Union rules.
On Tuesday, electricity companies, marketers, and traders bought and sold energy for the next day as bids moved to the new ceiling. Prices in the bids rose from 3,000 euros to 4,000 euros per megawatt hour. A new cap is already in effect across the European markets, including the Spanish market. The fork implementation caused some issues in one European market, delaying the final session results on the European level, according to financial confirmations.
The price of electricity may fall by 10.48% this Wednesday to 186.84 Euro/MWh
European regulations require market review when limits are exceeded. In everyday trading, price limits are revisited if the current cap is breached by a significant margin. This happened in France during a cold spell, when hourly prices reached 2,712.99 euros and 2,987.78 euros per MWh amid several nuclear plant outages.
Exorbitant price movements prompted a revision of the harmonized maximum and minimum price framework for compensation, triggering a rise in the maximum price by 1,000 euros in the European wholesale markets pool. This adjustment was reported in a regional newspaper and discussed within the same editorial group.
After the change, the trading range in European electricity markets spans from a minimum of -500 euros per MWh to a new maximum of 4,000 euros. Market participants and financial intermediaries note that these ceiling levels are unlikely to be reached in the Spanish market. The regulation serves to keep European markets functioning smoothly, without necessarily affecting the Spanish pool in a direct way.
So far, the highest price recorded in the Spanish electricity market was 544.98 euros per MWh for a day on the calendar, while the hourly peak reached around 700 euros between 19:00 and 20:00. There have been times when the price approached zero during periods of low demand and high renewable production, though negative prices have appeared in other European markets.
Spain and Portugal have resisted applying the broad price ranges set by the European Union. There have been proposals to the European Commission for a phased, border-focused approach over several years. Up to mid-year, Iberian markets operated with limits between 0 and 180 euros per MWh, but in recent months the same range has aligned with the rest of Europe.