Electricity prices for regulated rate customers linked to the wholesale market rise this Monday by nearly 26 percent
The average price for electricity on the wholesale market, measured at the Iberian level, is expected to rise by about 25.9 percent compared with Sunday. Provisional data from the Iberian Energy Market Operator and reported by Europa Press show a weekly peak near 242.29 euros per megawatt hour (MWh). This figure reflects the combined effect of the wholesale auction results and the compensation paid to gas-fired plants under the Iberian exemption policy, which aims to cap gas costs used in power generation.
The movement continues a trend of price increases following four days of downward movement. Earlier in the week the market hit a high of 476.39 euros per MWh on Wednesday, marking the second highest value since the Iberian exemption began, while still remaining well below the peak observed at the start of the week. For customers with regulated tariffs tied to the wholesale market, the record of 544.98 euros per MWh seen on March 8 remains a reference point just before the gas price cap took effect.
At the auction, the average price inside the wholesale market, commonly called the pool, stood at 188.53 euros per MWh for Monday. The daily maximum price is projected to reach 277 euros per MWh between 9:00 and 22:00, with a daily minimum near 121.19 euros per MWh in the 16:00 to 17:00 window. Together with the pool, an additional compensation of 53.76 euros per MWh is added, a payment directed to consumers benefiting from the measure. In the regulated tariff segment, these adjustments flow through to the price paid by households and small businesses; in the free market, price movements remain indexed to the market dynamics depending on each supplier’s contract terms.
In practical terms, the Iberian exemption reduces the gas price used to generate electricity, providing relief to consumers and helping stabilize bills during periods of volatility. The combined effect of the pool and the compensation means that the Monday price for many regulated customers is lower than it would be without the exemption, though it still marks a notable increase from the previous day. Analysts emphasize that this mechanism plays a crucial role in moderating wholesale volatility and guarding against sudden spikes in consumer bills observed during peak energy periods.
Industry observers note that the impact of the policy translates into a considerable gap between current prices and what would be expected without the exemption. Without the gas-cost cap, the electricity price across the Iberian market would hover around 296.13 euros per MWh, about 54 euros per MWh higher than the adjusted level seen today. On average, this implies an 18 percent reduction in the amount paid by consumers when the exemption is in force, underscoring the policy’s protective effect for households and small businesses during price swings.
The Iberian mechanism, which took effect on June 15, limits the price of natural gas used for electricity generation to an average of 48.8 euros per MWh over a twelve-month period. This framework is designed to provide a shield during the more expensive winter months when energy bills tend to rise. Specifically, the exemption governs gas-fired generation at a price of 40 euros per MWh, with a monthly increase of five euros per MWh during the first half year and a gradual continuation thereafter through the end of the policy period. Government officials have noted that the exemption has already delivered more than two billion euros in benefits to consumers in Spain and will remain in place through the end of August.