15% less
The Iberian mechanism that caps gas prices for electricity—in place since mid-June—continues to shape the Spanish energy bill. On Wednesday the consolidated price for regulated rate customers and wholesale buyers rose to 436.25 euros per megawatt hour (MWh), marking a 19.4% rebound from Tuesday. This marks a fresh high since the gas-price cap went into effect, underscoring how the Iberian framework is increasingly influencing electricity costs across the market. The figure was reported by the Iberian Energy Market Operator and compiled by Europa Press, reflecting the breath of the price signal across the system.
The price result combines the wholesale market pool with the compensation paid to power plants that operate on gas and the support embedded in the Iberian exception, which is designed to limit the gas price component of electricity generation under the wholesale market structure. This interaction manifests in a higher all-inclusive bill for beneficiaries of the exception as the mechanism continues to operate in mid-June. Earlier today, a supplementary price level of 365.33 euro per MWh had already been observed, illustrating the oscillation within the period and the ongoing impact of the cap on final household and industrial charges.
In the wholesale stage, the average price of electricity, known as the pool, settled at 186.95 euro/MWh for Wednesday. Within the day, the maximum reached 236.79 euro/MWh between 22:00 and 23:00, while the minimum dropped to 140.07 euro/MWh during the 17:00 to 18:00 interval. The pool price is then augmented by the compensation of 249.3 euro/MWh directed to gas-fired power plants and to regulated-rate (PVPC) customers, or those with indexed tariffs who remain in the free market. This top-up is financed by consumers benefiting from the mechanism and directly affects the final price paid.
The overall rise in electricity costs is driven by gas price dynamics tracked in the Dutch TTF market, a benchmark that has again traded near peak levels. The energy landscape has been sensitive to Gazprom’s announcements about reducing gas flows to Germany for a three-day window starting August 31, contributing to volatility in gas and power prices. In recent sessions, spot natural gas prices have shown strength, hovering above thresholds that feed into electricity pricing. These movements help explain why the Iberian mechanism, which seeks to shield consumers from wholesale volatility, continues to play a leading role in price formation at the European level.
Absent the Iberian mechanism, the Spanish electricity price would have averaged closer to 502.11 euro/MWh, a difference of roughly 65.86 euro/MWh, implying that regulated-rate customers could expect a notable saving of about 15% on average under the current framework. Across the rest of Europe, price levels are also elevated on this Wednesday, with France exceeding 645 euro/MWh, Germany over 624 euro/MWh, and Belgium around 611 euro/MWh, illustrating a continental pattern of high wholesale costs that the Iberian cap attempts to mitigate for final consumers.
The Iberian mechanism, activated on June 15, places a ceiling on the gas price component for electricity generation at an average of 48.8 euro per MWh over a rolling twelve-month period. This structure is designed to cushion households against severe price spikes during the upcoming winter when energy demand tends to rise. Specifically, the Iberian exception sets a path for natural gas to be used in electricity generation at an initial 40 euro/MWh, with an increase of five euro per MWh scheduled monthly for the first six months, followed by continued adjustments through the end of the measure’s term. This design aims to stabilize pricing while sustaining investment signals for the electricity supply mix as markets anticipate colder months and potential supply constraints.
Teresa Ribera, the third vice-president of the government and minister for Ecological Transition and Demographic Challenge, indicated in a public briefing that the Iberian exception has saved Spanish consumers a substantial sum during its two-month validity window, totaling around 1,383 million euros. This figure translates into meaningful daily savings for the community—roughly 22 million euros per day—thanks to the mechanism’s avoidance of higher wholesale costs translating into consumer prices. The ongoing performance of the measure is closely watched by policymakers and market participants alike as it continues to influence the affordability and reliability of electricity supplies across Spain and the broader Iberian market.
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